PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
ROGELIO BAYOTAS y CORDOVA, accused-appellant.

The Solicitor General for plaintiff-appellee.

Public Attorney's Office for accused-appellant.

ROMERO, J.:

In Criminal Case No. C-3217 filed before Branch 16, RTC Roxas City, Rogelio Bayotas y Cordova
was charged with Rape and eventually convicted thereof on June 19, 1991 in a decision penned by
Judge Manuel E. Autajay. Pending appeal of his conviction, Bayotas died on February 4, 1992 at
the National Bilibid Hospital due to cardio respiratory arrest secondary to hepatic encephalopathy
secondary to hipato carcinoma gastric malingering. Consequently, the Supreme Court in its
Resolution of May 20, 1992 dismissed the criminal aspect of the appeal. However, it required the
Solicitor General to file its comment with regard to Bayotas' civil liability arising from his commission
of the offense charged.

In his comment, the Solicitor General expressed his view that the death of accused-appellant did not
extinguish his civil liability as a result of his commission of the offense charged. The Solicitor
General, relying on the case of People v. Sendaydiego 1 insists that the appeal should still be
resolved for the purpose of reviewing his conviction by the lower court on which the civil liability is
based.

Counsel for the accused-appellant, on the other hand, opposed the view of the Solicitor General
arguing that the death of the accused while judgment of conviction is pending appeal extinguishes
both his criminal and civil penalties. In support of his position, said counsel invoked the ruling of the
Court of Appeals in People v. Castillo and Ocfemia 2 which held that the civil obligation in a criminal
case takes root in the criminal liability and, therefore, civil liability is extinguished if accused should
die before final judgment is rendered.

We are thus confronted with a single issue: Does death of the accused pending appeal of his
conviction extinguish his civil liability?

In the aforementioned case of People v. Castillo, this issue was settled in the affirmative. This same
issue posed therein was phrased thus: Does the death of Alfredo Castillo affect both his criminal
responsibility and his civil liability as a consequence of the alleged crime?

It resolved this issue thru the following disquisition:

Article 89 of the Revised Penal Code is the controlling statute. It reads, in part:

Art. 89. How criminal liability is totally extinguished. — Criminal

liability is totally extinguished:
 1. By the death of the convict, as to the personal penalties; and as to
the pecuniary penalties liability therefor is extinguished only when the
death of the offender occurs before final judgment;

With reference to Castillo's criminal liability, there is no question. The law is plain.
Statutory construction is unnecessary. Said liability is extinguished.

The civil liability, however, poses a problem. Such liability is extinguished only when
the death of the offender occurs before final judgment. Saddled upon us is the task of
ascertaining the legal import of the term "final judgment." Is it final judgment as
contradistinguished from an interlocutory order? Or, is it a judgment which is final
and executory?

We go to the genesis of the law. The legal precept contained in Article 89 of the
Revised Penal Code heretofore transcribed is lifted from Article 132 of the Spanish El
Codigo Penal de 1870 which, in part, recites:

La responsabilidad penal se extingue.

1. Por la muerte del reo en cuanto a las penas personales siempre, y

respecto a las pecuniarias, solo cuando a su fallecimiento no hubiere
recaido sentencia firme.

xxx xxx xxx

The code of 1870 . . . it will be observed employs the term "sentencia firme." What is
"sentencia firme" under the old statute?

XXVIII Enciclopedia Juridica Española, p. 473, furnishes the ready answer: It says:

SENTENCIA FIRME. La sentencia que adquiere la fuerza de las

definitivas por no haberse utilizado por las partes litigantes recurso
alguno contra ella dentro de los terminos y plazos legales concedidos
al efecto.

"Sentencia firme" really should be understood as one which is definite. Because, it is

only when judgment is such that, as Medina y Maranon puts it, the crime is confirmed
— "en condena determinada;" or, in the words of Groizard, the guilt of the accused
becomes — "una verdad legal." Prior thereto, should the accused die, according to
Viada, "no hay legalmente, en tal caso, ni reo, ni delito, ni responsabilidad criminal
de ninguna clase." And, as Judge Kapunan well explained, when a defendant dies
before judgment becomes executory, "there cannot be any determination by final
judgment whether or not the felony upon which the civil action might arise exists," for
the simple reason that "there is no party defendant." (I Kapunan, Revised Penal
Code, Annotated, p. 421. Senator Francisco holds the same view. Francisco,
Revised Penal Code, Book One, 2nd ed., pp. 859-860)

The legal import of the term "final judgment" is similarly reflected in the Revised
Penal Code. Articles 72 and 78 of that legal body mention the term "final judgment"
in the sense that it is already enforceable. This also brings to mind Section 7, Rule
116 of the Rules of Court which states that a judgment in a criminal case becomes
 final "after the lapse of the period for perfecting an appeal or when the sentence has
been partially or totally satisfied or served, or the defendant has expressly waived in
writing his right to appeal."

By fair intendment, the legal precepts and opinions here collected funnel down to one
positive conclusion: The term final judgment employed in the Revised Penal Code
means judgment beyond recall. Really, as long as a judgment has not become
executory, it cannot be truthfully said that defendant is definitely guilty of the felony
charged against him.

Not that the meaning thus given to final judgment is without reason. For where, as in
this case, the right to institute a separate civil action is not reserved, the decision to
be rendered must, of necessity, cover "both the criminal and the civil aspects of the
case." People vs. Yusico (November 9, 1942), 2 O.G., No. 100, p. 964. See
also: People vs. Moll, 68 Phil., 626, 634; Francisco, Criminal Procedure, 1958 ed.,
Vol. I, pp. 234, 236. Correctly, Judge Kapunan observed that as "the civil action is
based solely on the felony committed and of which the offender might be found
guilty, the death of the offender extinguishes the civil liability." I Kapunan, Revised
Penal Code, Annotated, supra.

Here is the situation obtaining in the present case: Castillo's criminal liability is out.
His civil liability is sought to be enforced by reason of that criminal liability. But then, if
we dismiss, as we must, the criminal action and let the civil aspect remain, we will be
faced with the anomalous situation whereby we will be called upon to clamp civil
liability in a case where the source thereof — criminal liability — does not exist. And,
as was well stated in Bautista, et al. vs. Estrella, et al., CA-G.R.
No. 19226-R, September 1, 1958, "no party can be found and held criminally liable in
a civil suit," which solely would remain if we are to divorce it from the criminal
proceeding."

This ruling of the Court of Appeals in the Castillo case 3 was adopted by the Supreme Court in the
cases of People of the Philippines v. Bonifacio Alison, et al., 4 People of the Philippines v. Jaime
Jose, et al. 5 and People of the Philippines v. Satorre 6 by dismissing the appeal in view of the death
of the accused pending appeal of said cases.

As held by then Supreme Court Justice Fernando in the Alison case:

The death of accused-appellant Bonifacio Alison having been established, and

considering that there is as yet no final judgment in view of the pendency of the
appeal, the criminal and civil liability of the said accused-appellant Alison was
extinguished by his death (Art. 89, Revised Penal Code; Reyes' Criminal Law, 1971
Rev. Ed., p. 717, citing People v. Castillo and Ofemia C.A., 56 O.G. 4045);
consequently, the case against him should be dismissed.

On the other hand, this Court in the subsequent cases of Buenaventura Belamala v. Marcelino
Polinar 7 and Lamberto Torrijos v. The Honorable Court of Appeals 8 ruled differently. In the former,
the issue decided by this court was: Whether the civil liability of one accused of physical injuries who
died before final judgment is extinguished by his demise to the extent of barring any claim therefore
against his estate. It was the contention of the administrator-appellant therein that the death of the
accused prior to final judgment extinguished all criminal and civil liabilities resulting from the offense,
in view of Article 89, paragraph 1 of the Revised Penal Code. However, this court ruled therein:
 We see no merit in the plea that the civil liability has been extinguished, in view of the
provisions of the Civil Code of the Philippines of 1950 (Rep. Act No. 386) that
became operative eighteen years after the revised Penal Code. As pointed out by the
Court below, Article 33 of the Civil Code establishes a civil action for damages on
account of physical injuries, entirely separate and distinct from the criminal action.

Art. 33. In cases of defamation, fraud, and physical injuries, a civil

action for damages, entirely separate and distinct from the criminal
action, may be brought by the injured party. Such civil action shall
proceed independently of the criminal prosecution, and shall require
only a preponderance of evidence.

Assuming that for lack of express reservation, Belamala's civil action for damages
was to be considered instituted together with the criminal action still, since both
proceedings were terminated without final adjudication, the civil action of the
offended party under Article 33 may yet be enforced separately.

In Torrijos, the Supreme Court held that:

xxx xxx xxx

It should be stressed that the extinction of civil liability follows the extinction of the
criminal liability under Article 89, only when the civil liability arises from the criminal
act as its only basis. Stated differently, where the civil liability does not exist
independently of the criminal responsibility, the extinction of the latter by death, ipso
facto extinguishes the former, provided, of course, that death supervenes before final
judgment. The said principle does not apply in instant case wherein the civil liability
springs neither solely nor originally from the crime itself but from a civil contract of
purchase and sale. (Emphasis ours)

xxx xxx xxx

In the above case, the court was convinced that the civil liability of the accused who was
charged with estafa could likewise trace its genesis to Articles 19, 20 and 21 of the Civil
Code since said accused had swindled the first and second vendees of the property subject
matter of the contract of sale. It therefore concluded: "Consequently, while the death of the
accused herein extinguished his criminal liability including fine, his civil liability based on the
laws of human relations remains."

Thus it allowed the appeal to proceed with respect to the civil liability of the accused, notwithstanding
the extinction of his criminal liability due to his death pending appeal of his conviction.

To further justify its decision to allow the civil liability to survive, the court relied on the following
ratiocination: Since Section 21, Rule 3 of the Rules of Court 9 requires the dismissal of all money
claims against the defendant whose death occurred prior to the final judgment of the Court of First
Instance (CFI), then it can be inferred that actions for recovery of money may continue to be heard
on appeal, when the death of the defendant supervenes after the CFI had rendered its judgment. In
such case, explained this tribunal, "the name of the offended party shall be included in the title of the
case as plaintiff-appellee and the legal representative or the heirs of the deceased-accused should
be substituted as defendants-appellants."
It is, thus, evident that as jurisprudence evolved from Castillo to Torrijos, the rule established was
that the survival of the civil liability depends on whether the same can be predicated on sources of
obligations other than delict. Stated differently, the claim for civil liability is also extinguished together
with the criminal action if it were solely based thereon, i.e., civil liability ex delicto.

However, the Supreme Court in People v. Sendaydiego, et al. 10 departed from this long-established
principle of law. In this case, accused Sendaydiego was charged with and convicted by the lower
court of malversation thru falsification of public documents. Sendaydiego's death supervened during
the pendency of the appeal of his conviction.

This court in an unprecedented move resolved to dismiss Sendaydiego's appeal but only to the
extent of his criminal liability. His civil liability was allowed to survive although it was clear that such
claim thereon was exclusively dependent on the criminal action already extinguished. The legal
import of such decision was for the court to continue exercising appellate jurisdiction over the entire
appeal, passing upon the correctness of Sendaydiego's conviction despite dismissal of the criminal
action, for the purpose of determining if he is civilly liable. In doing so, this Court issued a Resolution
of July 8, 1977 stating thus:

The claim of complainant Province of Pangasinan for the civil liability survived
Sendaydiego because his death occurred after final judgment was rendered by the
Court of First Instance of Pangasinan, which convicted him of three complex crimes
of malversation through falsification and ordered him to indemnify the Province in the
total sum of P61,048.23 (should be P57,048.23).

The civil action for the civil liability is deemed impliedly instituted with the criminal
action in the absence of express waiver or its reservation in a separate action (Sec.
1, Rule 111 of the Rules of Court). The civil action for the civil liability is separate and
distinct from the criminal action (People and Manuel vs. Coloma, 105 Phil. 1287; Roa
vs. De la Cruz, 107 Phil. 8).

When the action is for the recovery of money and the defendant dies before final
judgment in the Court of First Instance, it shall be dismissed to be prosecuted in the
manner especially provided in Rule 87 of the Rules of Court (Sec. 21, Rule 3 of the
Rules of Court).

The implication is that, if the defendant dies after a money judgment had been
rendered against him by the Court of First Instance, the action survives him. It may
be continued on appeal (Torrijos vs. Court of Appeals, L-40336, October 24, 1975;
67 SCRA 394).

The accountable public officer may still be civilly liable for the funds improperly
disbursed although he has no criminal liability (U.S. vs. Elvina, 24 Phil. 230;
Philippine National Bank vs. Tugab, 66 Phil. 583).

In view of the foregoing, notwithstanding the dismissal of the appeal of the deceased
Sendaydiego insofar as his criminal liability is concerned, the Court Resolved to
continue exercising appellate jurisdiction over his possible civil liability for the money
claims of the Province of Pangasinan arising from the alleged criminal acts
complained of, as if no criminal case had been instituted against him, thus making
applicable, in determining his civil liability, Article 30 of the Civil Code . . . and, for
that purpose, his counsel is directed to inform this Court within ten (10) days of the
names and addresses of the decedent's heirs or whether or not his estate is under
 administration and has a duly appointed judicial administrator. Said heirs or
administrator will be substituted for the deceased insofar as the civil action for the
civil liability is concerned (Secs. 16 and 17, Rule 3, Rules of Court).

Succeeding cases 11 raising the identical issue have maintained adherence to our ruling
in Sendaydiego; in other words, they were a reaffirmance of our abandonment of the settled rule that
a civil liability solely anchored on the criminal (civil liability ex delicto) is extinguished upon dismissal
of the entire appeal due to the demise of the accused.

But was it judicious to have abandoned this old ruling? A re-examination of our decision
in Sendaydiego impels us to revert to the old ruling.

To restate our resolution of July 8, 1977 in Sendaydiego: The resolution of the civil action impliedly
instituted in the criminal action can proceed irrespective of the latter's extinction due to death of the
accused pending appeal of his conviction, pursuant to Article 30 of the Civil Code and Section 21,
Rule 3 of the Revised Rules of Court.

Article 30 of the Civil Code provides:

When a separate civil action is brought to demand civil liability arising from a criminal
offense, and no criminal proceedings are instituted during the pendency of the civil
case, a preponderance of evidence shall likewise be sufficient to prove the act
complained of.

Clearly, the text of Article 30 could not possibly lend support to the ruling in Sendaydiego. Nowhere
in its text is there a grant of authority to continue exercising appellate jurisdiction over the accused's
civil liability ex delicto when his death supervenes during appeal. What Article 30 recognizes is an
alternative and separate civil action which may be brought to demand civil liability arising from a
criminal offense independently of any criminal action. In the event that no criminal proceedings are
instituted during the pendency of said civil case, the quantum of evidence needed to prove the
criminal act will have to be that which is compatible with civil liability and that is, preponderance of
evidence and not proof of guilt beyond reasonable doubt. Citing or invoking Article 30 to justify the
survival of the civil action despite extinction of the criminal would in effect merely beg the question of
whether civil liability ex delicto survives upon extinction of the criminal action due to death of the
accused during appeal of his conviction. This is because whether asserted in
the criminal action or in a separate civil action, civil liability ex delicto is extinguished by the death of
the accused while his conviction is on appeal. Article 89 of the Revised Penal Code is clear on this
matter:

Art. 89. How criminal liability is totally extinguished. — Criminal liability is totally
extinguished:

1. By the death of the convict, as to the personal penalties; and as to pecuniary

penalties, liability therefor is extinguished only when the death of the offender occurs
before final judgment;

xxx xxx xxx

However, the ruling in Sendaydiego deviated from the expressed intent of Article 89. It allowed
claims for civil liability ex delicto to survive by ipso facto treating the civil action impliedly instituted
with the criminal, as one filed under Article 30, as though no criminal proceedings had been filed but
merely a separate civil action. This had the effect of converting such claims from one which is
dependent on the outcome of the criminal action to an entirely new and separate one, the
prosecution of which does not even necessitate the filing of criminal proceedings. 12 One would be
hard put to pinpoint the statutory authority for such a transformation. It is to be borne in mind that in
recovering civil liability ex delicto, the same has perforce to be determined in the criminal action,
rooted as it is in the court's pronouncement of the guilt or innocence of the accused. This is but to
render fealty to the intendment of Article 100 of the Revised Penal Code which provides that "every
person criminally liable for a felony is also civilly liable." In such cases, extinction of the criminal
action due to death of the accused pending appeal inevitably signifies the concomitant extinction of
the civil liability. Mors Omnia Solvi. Death dissolves all things.

In sum, in pursuing recovery of civil liability arising from crime, the final determination of the criminal
liability is a condition precedent to the prosecution of the civil action, such that when the criminal
action is extinguished by the demise of accused-appellant pending appeal thereof, said civil action
cannot survive. The claim for civil liability springs out of and is dependent upon facts which, if true,
would constitute a crime. Such civil liability is an inevitable consequence of the criminal liability and
is to be declared and enforced in the criminal proceeding. This is to be distinguished from that which
is contemplated under Article 30 of the Civil Code which refers to the institution of a separate civil
action that does not draw its life from a criminal proceeding. The Sendaydiego resolution of July 8,
1977, however, failed to take note of this fundamental distinction when it allowed the survival of the
civil action for the recovery of civil liability ex delicto by treating the same as a separate civil action
referred to under Article 30. Surely, it will take more than just a summary judicial pronouncement to
authorize the conversion of said civil action to an independent one such as that contemplated under
Article 30.

Ironically however, the main decision in Sendaydiego did not apply Article 30, the resolution of July
8, 1977 notwithstanding. Thus, it was held in the main decision:

Sendaydiego's appeal will be resolved only for the purpose of showing his criminal
liability which is the basis of the civil liability for which his estate would be liable. 13

In other words, the Court, in resolving the issue of his civil liability, concomitantly made a
determination on whether Sendaydiego, on the basis of evidenced adduced, was indeed guilty
beyond reasonable doubt of committing the offense charged. Thus, it upheld Sendaydiego's
conviction and pronounced the same as the source of his civil liability. Consequently, although
Article 30 was not applied in the final determination of Sendaydiego's civil liability, there was a
reopening of the criminal action already extinguished which served as basis for Sendaydiego's civil
liability. We reiterate: Upon death of the accused pending appeal of his conviction, the criminal
action is extinguished inasmuch as there is no longer a defendant to stand as the accused; the civil
action instituted therein for recovery of civil liability ex delicto is ipso facto extinguished, grounded as
it is on the criminal.

Section 21, Rule 3 of the Rules of Court was also invoked to serve as another basis for
the Sendaydiego resolution of July 8, 1977. In citing Sec. 21, Rule 3 of the Rules of Court, the Court
made the inference that civil actions of the type involved in Sendaydiego consist of money claims,
the recovery of which may be continued on appeal if defendant dies pending appeal of his conviction
by holding his estate liable therefor. Hence, the Court's conclusion:

"When the action is for the recovery of money" "and the defendant dies before final
judgment in the court of First Instance, it shall be dismissed to be prosecuted in the
manner especially provided" in Rule 87 of the Rules of Court (Sec. 21, Rule 3 of the
Rules of Court).
 The implication is that, if the defendant dies after a money judgment had been
rendered against him by the Court of First Instance, the action survives him. It may
be continued on appeal.

Sadly, reliance on this provision of law is misplaced. From the standpoint of procedural law, this
course taken in Sendaydiego cannot be sanctioned. As correctly observed by Justice Regalado:

xxx xxx xxx

I do not, however, agree with the justification advanced in

both Torrijos and Sendaydiego which, relying on the provisions of Section 21, Rule 3
of the Rules of Court, drew the strained implication therefrom that where the civil
liability instituted together with the criminal liabilities had already passed beyond the
judgment of the then Court of First Instance (now the Regional Trial Court), the Court
of Appeals can continue to exercise appellate jurisdiction thereover despite the
extinguishment of the component criminal liability of the deceased. This
pronouncement, which has been followed in the Court's judgments subsequent and
consonant to Torrijos and Sendaydiego, should be set aside and abandoned as
being clearly erroneous and unjustifiable.

Said Section 21 of Rule 3 is a rule of civil procedure in ordinary civil actions. There is
neither authority nor justification for its application in criminal procedure to civil
actions instituted together with and as part of criminal actions. Nor is there any
authority in law for the summary conversion from the latter category of an ordinary
civil action upon the death of the offender. . . .

Moreover, the civil action impliedly instituted in a criminal proceeding for recovery of civil liability ex
delicto can hardly be categorized as an ordinary money claim such as that referred to in Sec. 21,
Rule 3 enforceable before the estate of the deceased accused.

Ordinary money claims referred to in Section 21, Rule 3 must be viewed in light of the provisions of
Section 5, Rule 86 involving claims against the estate, which in Sendaydiego was held liable for
Sendaydiego's civil liability. "What are contemplated in Section 21 of Rule 3, in relation to Section 5
of Rule 86, 14 are contractual money claims while the claims involved in civil liability ex delicto may
include even the restitution of personal or real property." 15 Section 5, Rule 86 provides an exclusive
enumeration of what claims may be filed against the estate. These are: funeral expenses, expenses
for the last illness, judgments for money and claim arising from contracts, expressed or implied. It is
clear that money claims arising from delict do not form part of this exclusive enumeration. Hence,
there could be no legal basis in (1) treating a civil action ex delicto as an ordinary contractual money
claim referred to in Section 21, Rule 3 of the Rules of Court and (2) allowing it to survive by filing a
claim therefor before the estate of the deceased accused. Rather, it should be extinguished upon
extinction of the criminal action engendered by the death of the accused pending finality of his
conviction.

Accordingly, we rule: if the private offended party, upon extinction of the civil liability ex
delicto desires to recover damages from the same act or omission complained of, he must subject to
Section 1, Rule 111 16 (1985 Rules on Criminal Procedure as amended) file a separate civil action,
this time predicated not on the felony previously charged but on other sources of obligation. The
source of obligation upon which the separate civil action is premised determines against whom the
same shall be enforced.
If the same act or omission complained of also arises from quasi-delict or may, by provision of law,
result in an injury to person or property (real or personal), the separate civil action must be filed
against the executor or administrator 17 of the estate of the accused pursuant to Sec. 1, Rule 87 of
the Rules of Court:

Sec. 1. Actions which may and which may not be brought against executor or
administrator. — No action upon a claim for the recovery of money or debt or interest
thereon shall be commenced against the executor or administrator; but actions to
recover real or personal property, or an interest therein, from the estate, or to enforce
a lien thereon, and actions to recover damages for an injury to person or property,
real or personal, may be commenced against him.

This is in consonance with our ruling in Belamala 18 where we held that, in recovering damages for
injury to persons thru an independent civil action based on Article 33 of the Civil Code, the same
must be filed against the executor or administrator of the estate of deceased accused and not
against the estate under Sec. 5, Rule 86 because this rule explicitly limits the claim to those for
funeral expenses, expenses for the last sickness of the decedent, judgment for money and claims
arising from contract, express or implied. Contractual money claims, we stressed, refers only
topurely personal obligations other than those which have their source in delict or tort.

Conversely, if the same act or omission complained of also arises from contract, the separate civil
action must be filed against the estate of the accused, pursuant to Sec. 5, Rule 86 of the Rules of
Court.

From this lengthy disquisition, we summarize our ruling herein:

1. Death of the accused pending appeal of his conviction extinguishes his criminal liability as well as
the civil liability based solely thereon. As opined by Justice Regalado, in this regard, "the death of
the accused prior to final judgment terminates his criminal liability and only the civil
liability directly arising from and based solely on the offense committed, i.e., civil liability ex
delicto in senso strictiore."

2. Corollarily, the claim for civil liability survives notwithstanding the death of accused, if the same
may also be predicated on a source of obligation other than delict. 19 Article 1157 of the Civil Code
enumerates these other sources of obligation from which the civil liability may arise as a result of the
same act or omission:

a) Law 20

b) Contracts

c) Quasi-contracts

d) . . .

e) Quasi-delicts

3. Where the civil liability survives, as explained in Number 2 above, an action for recovery therefor
may be pursued but only by way of filing a separate civil action and subject to Section 1, Rule 111 of
the 1985 Rules on Criminal Procedure as amended. This separate civil action may be enforced
either against the executor/administrator or the estate of the accused, depending on the source of
obligation upon which the same is based as explained above.

4. Finally, the private offended party need not fear a forfeiture of his right to file this separate civil
action by prescription, in cases where during the prosecution of the criminal action and prior to its
extinction, the private-offended party instituted together therewith the civil action. In such case, the
statute of limitations on the civil liability is deemed interrupted during the pendency of the criminal
case, conformably with provisions of Article 1155 21 of the Civil Code, that should thereby avoid any
apprehension on a possible privation of right by prescription. 22

Applying this set of rules to the case at bench, we hold that the death of appellant Bayotas
extinguished his criminal liability and the civil liability based solely on the act complained of, i.e.,
rape. Consequently, the appeal is hereby dismissed without qualification.

WHEREFORE, the appeal of the late Rogelio Bayotas is DISMISSED with costs de oficio.

SO ORDERED.
BOBIE ROSE V. FRIAS, represented by her Attorney-in-fact, MARIE F. FUJITA, Petitioner,
vs.
FLORA SAN DIEGO-SISON, Respondent.

DECISION

AUSTRIA-MARTINEZ, J.:

Before us is a Petition for Review on Certiorari filed by Bobie Rose V. Frias represented by her
Attorney-in-fact, Marie Regine F. Fujita (petitioner) seeking to annul the Decision1 dated June 18,
2002 and the Resolution2 dated September 11, 2002 of the Court of Appeals (CA) in CA-G.R. CV
No. 52839.

Petitioner is the owner of a house and lot located at No. 589 Batangas East, Ayala Alabang,
Muntinlupa, Metro Manila, which she acquired from Island Masters Realty and Development
Corporation (IMRDC) by virtue of a Deed of Sale dated Nov. 16, 1990.3 The property is covered by
TCT No. 168173 of the Register of Deeds of Makati in the name of IMRDC.4

On December 7, 1990, petitioner, as the FIRST PARTY, and Dra. Flora San Diego-Sison
(respondent), as the SECOND PARTY, entered into a Memorandum of Agreement5 over the
property with the following terms:

NOW, THEREFORE, for and in consideration of the sum of THREE MILLION PESOS
(₱3,000,000.00) receipt of which is hereby acknowledged by the FIRST PARTY from the SECOND
PARTY, the parties have agreed as follows:

1. That the SECOND PARTY has a period of Six (6) months from the date of the execution
of this contract within which to notify the FIRST PARTY of her intention to purchase the
aforementioned parcel of land together within (sic) the improvements thereon at the price of
SIX MILLION FOUR HUNDRED THOUSAND PESOS (₱6,400,000.00). Upon notice to the
FIRST PARTY of the SECOND PARTY’s intention to purchase the same, the latter has a
period of another six months within which to pay the remaining balance of ₱3.4 million.

2. That prior to the six months period given to the SECOND PARTY within which to decide
whether or not to purchase the above-mentioned property, the FIRST PARTY may still offer
the said property to other persons who may be interested to buy the same provided that the
amount of ₱3,000,000.00 given to the FIRST PARTY BY THE SECOND PARTY shall be
paid to the latter including interest based on prevailing compounded bank interest plus the
amount of the sale in excess of ₱7,000,000.00 should the property be sold at a price more
than ₱7 million.

3. That in case the FIRST PARTY has no other buyer within the first six months from the
execution of this contract, no interest shall be charged by the SECOND PARTY on the P3
million however, in the event that on the sixth month the SECOND PARTY would decide not
to purchase the aforementioned property, the FIRST PARTY has a period of another six
months within which to pay the sum of ₱3 million pesos provided that the said amount shall
earn compounded bank interest for the last six months only. Under this circumstance, the
amount of P3 million given by the SECOND PARTY shall be treated as [a] loan and the
property shall be considered as the security for the mortgage which can be enforced in
accordance with law.

x x x x.6
Petitioner received from respondent two million pesos in cash and one million pesos in a post-dated
check dated February 28, 1990, instead of 1991, which rendered said check stale.7 Petitioner then
gave respondent TCT No. 168173 in the name of IMRDC and the Deed of Absolute Sale over the
property between petitioner and IMRDC.

Respondent decided not to purchase the property and notified petitioner through a letter8 dated
March 20, 1991, which petitioner received only on June 11, 1991,9 reminding petitioner of their
agreement that the amount of two million pesos which petitioner received from respondent should be
considered as a loan payable within six months. Petitioner subsequently failed to pay respondent the
amount of two million pesos.

On April 1, 1993, respondent filed with the Regional Trial Court (RTC) of Manila, a complaint10 for
sum of money with preliminary attachment against petitioner. The case was docketed as Civil Case
No. 93-65367 and raffled to Branch 30. Respondent alleged the foregoing facts and in addition
thereto averred that petitioner tried to deprive her of the security for the loan by making a false
report11 of the loss of her owner’s copy of TCT No. 168173 to the Tagig Police Station on June 3,
1991, executing an affidavit of loss and by filing a petition12 for the issuance of a new owner’s
duplicate copy of said title with the RTC of Makati, Branch 142; that the petition was granted in an
Order13dated August 31, 1991; that said Order was subsequently set aside in an Order dated April
10, 199214 where the RTC Makati granted respondent’s petition for relief from judgment due to the
fact that respondent is in possession of the owner’s duplicate copy of TCT No. 168173, and ordered
the provincial public prosecutor to conduct an investigation of petitioner for perjury and false
testimony. Respondent prayed for the ex-parte issuance of a writ of preliminary attachment and
payment of two million pesos with interest at 36% per annum from December 7, 1991, ₱100,000.00
moral, corrective and exemplary damages and ₱200,000.00 for attorney’s fees.

In an Order dated April 6, 1993, the Executive Judge of the RTC of Manila issued a writ of
preliminary attachment upon the filing of a bond in the amount of two million pesos.15

Petitioner filed an Amended Answer16 alleging that the Memorandum of Agreement was conceived
and arranged by her lawyer, Atty. Carmelita Lozada, who is also respondent’s lawyer; that she was
asked to sign the agreement without being given the chance to read the same; that the title to the
property and the Deed of Sale between her and the IMRDC were entrusted to Atty. Lozada for
safekeeping and were never turned over to respondent as there was no consummated sale yet; that
out of the two million pesos cash paid, Atty. Lozada took the one million pesos which has not been
returned, thus petitioner had filed a civil case against her; that she was never informed of
respondent’s decision not to purchase the property within the six month period fixed in the
agreement; that when she demanded the return of TCT No. 168173 and the Deed of Sale between
her and the IMRDC from Atty. Lozada, the latter gave her these documents in a brown envelope on
May 5, 1991 which her secretary placed in her attache case; that the envelope together with her
other personal things were lost when her car was forcibly opened the following day; that she sought
the help of Atty. Lozada who advised her to secure a police report, to execute an affidavit of loss and
to get the services of another lawyer to file a petition for the issuance of an owner’s duplicate copy;
that the petition for the issuance of a new owner’s duplicate copy was filed on her behalf without her
knowledge and neither did she sign the petition nor testify in court as falsely claimed for she was
abroad; that she was a victim of the manipulations of Atty. Lozada and respondent as shown by the
filing of criminal charges for perjury and false testimony against her; that no interest could be due as
there was no valid mortgage over the property as the principal obligation is vitiated with fraud and
deception. She prayed for the dismissal of the complaint, counter-claim for damages and attorney’s
fees.
Trial on the merits ensued. On January 31, 1996, the RTC issued a decision,17 the dispositive portion
of which reads:

WHEREFORE, judgment is hereby RENDERED:

1) Ordering defendant to pay plaintiff the sum of P2 Million plus interest thereon at the rate of
thirty two (32%) per cent per annum beginning December 7, 1991 until fully paid.

2) Ordering defendant to pay plaintiff the sum of ₱70,000.00 representing premiums paid by
plaintiff on the attachment bond with legal interest thereon counted from the date of this
decision until fully paid.

3) Ordering defendant to pay plaintiff the sum of ₱100,000.00 by way of moral, corrective
and exemplary damages.

4) Ordering defendant to pay plaintiff attorney’s fees of ₱100,000.00 plus cost of litigation.18

The RTC found that petitioner was under obligation to pay respondent the amount of two million
pesos with compounded interest pursuant to their Memorandum of Agreement; that the fraudulent
scheme employed by petitioner to deprive respondent of her only security to her loaned money when
petitioner executed an affidavit of loss and instituted a petition for the issuance of an owner’s
duplicate title knowing the same was in respondent’s possession, entitled respondent to moral
damages; and that petitioner’s bare denial cannot be accorded credence because her testimony and
that of her witness did not appear to be credible.

The RTC further found that petitioner admitted that she received from respondent the two million
pesos in cash but the fact that petitioner gave the one million pesos to Atty. Lozada was without
respondent’s knowledge thus it is not binding on respondent; that respondent had also proven that in
1993, she initially paid the sum of ₱30,000.00 as premium for the issuance of the attachment bond,
₱20,000.00 for its renewal in 1994, and ₱20,000.00 for the renewal in 1995, thus plaintiff should be
reimbursed considering that she was compelled to go to court and ask for a writ of preliminary
attachment to protect her rights under the agreement.

Petitioner filed her appeal with the CA. In a Decision dated June 18, 2002, the CA affirmed the RTC
decision with modification, the dispositive portion of which reads:

WHEREFORE, premises considered, the decision appealed from is MODIFIED in the sense that the
rate of interest is reduced from 32% to 25% per annum, effective June 7, 1991 until fully paid.19

The CA found that: petitioner gave the one million pesos to Atty. Lozada partly as her commission
and partly as a loan; respondent did not replace the mistakenly dated check of one million pesos
because she had decided not to buy the property and petitioner knew of her decision as early as
April 1991; the award of moral damages was warranted since even granting petitioner had no hand
in the filing of the petition for the issuance of an owner’s copy, she executed an affidavit of loss of
TCT No. 168173 when she knew all along that said title was in respondent’s possession; petitioner’s
claim that she thought the title was lost when the brown envelope given to her by Atty. Lozada was
stolen from her car was hollow; that such deceitful conduct caused respondent serious anxiety and
emotional distress.

The CA concluded that there was no basis for petitioner to say that the interest should be charged
for six months only and no more; that a loan always bears interest otherwise it is not a loan; that
interest should commence on June 7, 199120 with compounded bank interest prevailing at the time
the two million was considered as a loan which was in June 1991; that the bank interest rate for
loans secured by a real estate mortgage in 1991 ranged from 25% to 32% per annum as certified to
by Prudential Bank,21 that in fairness to petitioner, the rate to be charged should be 25% only.

Petitioner’s motion for reconsideration was denied by the CA in a Resolution dated September 11,
2002.

Hence the instant Petition for Review on Certiorari filed by petitioner raising the following issues:

(A) WHETHER OR NOT THE COMPOUNDED BANK INTEREST SHOULD BE LIMITED TO

SIX (6) MONTHS AS CONTAINED IN THE MEMORANDUM OF AGREEMENT.

(B) WHETHER OR NOT THE RESPONDENT IS ENTITLED TO MORAL DAMAGES.

(C) WHETHER OR NOT THE GRANT OF CORRECTIVE AND EXEMPLARY DAMAGES

AND ATTORNEY’S FEES IS PROPER EVEN IF NOT MENTIONED IN THE TEXT OF THE
DECISION.22

Petitioner contends that the interest, whether at 32% per annum awarded by the trial court or at 25%
per annum as modified by the CA which should run from June 7, 1991 until fully paid, is contrary to
the parties’ Memorandum of Agreement; that the agreement provides that if respondent would
decide not to purchase the property, petitioner has the period of another six months to pay the loan
with compounded bank interest for the last six months only; that the CA’s ruling that a loan always
bears interest otherwise it is not a loan is contrary to Art. 1956 of the New Civil Code which provides
that no interest shall be due unless it has been expressly stipulated in writing.

We are not persuaded.

While the CA’s conclusion, that a loan always bears interest otherwise it is not a loan, is flawed since
a simple loan may be gratuitous or with a stipulation to pay interest,23 we find no error committed by
the CA in awarding a 25% interest per annum on the two-million peso loan even beyond the second
six months stipulated period.

The Memorandum of Agreement executed between the petitioner and respondent on December 7,
1990 is the law between the parties. In resolving an issue based upon a contract, we must first
examine the contract itself, especially the provisions thereof which are relevant to the
controversy.24 The general rule is that if the terms of an agreement are clear and leave no doubt as
to the intention of the contracting parties, the literal meaning of its stipulations shall prevail.25 It is
further required that the various stipulations of a contract shall be interpreted together, attributing to
the doubtful ones that sense which may result from all of them taken jointly.26

In this case, the phrase "for the last six months only" should be taken in the context of the entire
agreement. We agree with and adopt the CA’s interpretation of the phrase in this wise:

Their agreement speaks of two (2) periods of six months each. The first six-month period was given
to plaintiff-appellee (respondent) to make up her mind whether or not to purchase defendant-
appellant’s (petitioner's) property. The second six-month period was given to defendant-appellant to
pay the P2 million loan in the event that plaintiff-appellee decided not to buy the subject property in
which case interest will be charged "for the last six months only", referring to the second six-month
period. This means that no interest will be charged for the first six-month period while appellee was
making up her mind whether to buy the property, but only for the second period of six months after
appellee had decided not to buy the property. This is the meaning of the phrase "for the last six
months only". Certainly, there is nothing in their agreement that suggests that interest will be
charged for six months only even if it takes defendant-appellant an eternity to pay the loan.27

The agreement that the amount given shall bear compounded bank interest for the last six months
only, i.e., referring to the second six-month period, does not mean that interest will no longer be
charged after the second six-month period since such stipulation was made on the logical and
reasonable expectation that such amount would be paid within the date stipulated. Considering that
petitioner failed to pay the amount given which under the Memorandum of Agreement shall be
considered as a loan, the monetary interest for the last six months continued to accrue until actual
payment of the loaned amount.

The payment of regular interest constitutes the price or cost of the use of money and thus, until the
principal sum due is returned to the creditor, regular interest continues to accrue since the debtor
continues to use such principal amount.28 It has been held that for a debtor to continue in possession
of the principal of the loan and to continue to use the same after maturity of the loan without
payment of the monetary interest, would constitute unjust enrichment on the part of the debtor at the
expense of the creditor.29

Petitioner and respondent stipulated that the loaned amount shall earn compounded bank interests,
and per the certification issued by Prudential Bank, the interest rate for loans in 1991 ranged from
25% to 32% per annum. The CA reduced the interest rate to 25% instead of the 32% awarded by
the trial court which petitioner no longer assailed.
1awphi1.nét

In Bautista v. Pilar Development Corp.,30 we upheld the validity of a 21% per annum interest on a
₱142,326.43 loan. In Garcia v. Court of Appeals,31 we sustained the agreement of the parties to a
24% per annum interest on an ₱8,649,250.00 loan. Thus, the interest rate of 25% per annum
awarded by the CA to a ₱2 million loan is fair and reasonable.

Petitioner next claims that moral damages were awarded on the erroneous finding that she used a
fraudulent scheme to deprive respondent of her security for the loan; that such finding is baseless
since petitioner was acquitted in the case for perjury and false testimony filed by respondent against
her.

We are not persuaded.

Article 31 of the Civil Code provides that when the civil action is based on an obligation not arising
from the act or omission complained of as a felony, such civil action may proceed independently of
the criminal proceedings and regardless of the result of the latter.32

While petitioner was acquitted in the false testimony and perjury cases filed by respondent against
her, those actions are entirely distinct from the collection of sum of money with damages filed by
respondent against petitioner.

We agree with the findings of the trial court and the CA that petitioner’s act of trying to deprive
respondent of the security of her loan by executing an affidavit of loss of the title and instituting a
petition for the issuance of a new owner’s duplicate copy of TCT No. 168173 entitles respondent to
moral damages. Moral damages may be awarded in culpa contractual or breach of contract cases
1a\^/phi 1.net

when the defendant acted fraudulently or in bad faith. Bad faith does not simply connote bad
judgment or negligence; it imports a dishonest purpose or some moral obliquity and conscious doing
of wrong. It partakes of the nature of fraud.33
The Memorandum of Agreement provides that in the event that respondent opts not to buy the
property, the money given by respondent to petitioner shall be treated as a loan and the property
shall be considered as the security for the mortgage. It was testified to by respondent that after they
executed the agreement on December 7, 1990, petitioner gave her the owner’s copy of the title to
the property, the Deed of Sale between petitioner and IMRDC, the certificate of occupancy, and the
certificate of the Secretary of the IMRDC who signed the Deed of Sale.34 However, notwithstanding
that all those documents were in respondent’s possession, petitioner executed an affidavit of loss
that the owner’s copy of the title and the Deed of Sale were lost.

Although petitioner testified that her execution of the affidavit of loss was due to the fact that she was
of the belief that since she had demanded from Atty. Lozada the return of the title, she thought that
the brown envelope with markings which Atty. Lozada gave her on May 5, 1991 already contained
the title and the Deed of Sale as those documents were in the same brown envelope which she gave
to Atty. Lozada prior to the transaction with respondent.35 Such statement remained a bare
statement. It was not proven at all since Atty. Lozada had not taken the stand to corroborate her
claim. In fact, even petitioner’s own witness, Benilda Ynfante (Ynfante), was not able to establish
petitioner's claim that the title was returned by Atty. Lozada in view of Ynfante's testimony that after
the brown envelope was given to petitioner, the latter passed it on to her and she placed it in
petitioner’s attaché case36and did not bother to look at the envelope.37

It is clear therefrom that petitioner’s execution of the affidavit of loss became the basis of the filing of
the petition with the RTC for the issuance of new owner’s duplicate copy of TCT No. 168173.
Petitioner’s actuation would have deprived respondent of the security for her loan were it not for
respondent’s timely filing of a petition for relief whereby the RTC set aside its previous order granting
the issuance of new title. Thus, the award of moral damages is in order.

The entitlement to moral damages having been established, the award of exemplary damages is
proper.38Exemplary damages may be imposed upon petitioner by way of example or correction for
the public good.39 The RTC awarded the amount of ₱100,000.00 as moral and exemplary damages.
While the award of moral and exemplary damages in an aggregate amount may not be the usual
way of awarding said damages,40 no error has been committed by CA. There is no question that
respondent is entitled to moral and exemplary damages.

Petitioner argues that the CA erred in awarding attorney’s fees because the trial court’s decision did
not explain the findings of facts and law to justify the award of attorney’s fees as the same was
mentioned only in the dispositive portion of the RTC decision.

We agree.

Article 220841 of the New Civil Code enumerates the instances where such may be awarded and, in
all cases, it must be reasonable, just and equitable if the same were to be granted.42 Attorney's fees
as part of damages are not meant to enrich the winning party at the expense of the losing litigant.
They are not awarded every time a party prevails in a suit because of the policy that no premium
should be placed on the right to litigate.43 The award of attorney's fees is the exception rather than
the general rule. As such, it is necessary for the trial court to make findings of facts and law that
would bring the case within the exception and justify the grant of such award. The matter of
attorney's fees cannot be mentioned only in the dispositive portion of the decision.44 They must be
clearly explained and justified by the trial court in the body of its decision. On appeal, the CA is
precluded from supplementing the bases for awarding attorney’s fees when the trial court failed to
discuss in its Decision the reasons for awarding the same. Consequently, the award of attorney's
fees should be deleted.
WHEREFORE, in view of all the foregoing, the Decision dated June 18, 2002 and the Resolution
dated September 11, 2002 of the Court of Appeals in CA-G.R. CV No. 52839 are AFFIRMED with
MODIFICATION that the award of attorney’s fees is DELETED.

No pronouncement as to costs.

SO ORDERED.
REYNALDO V. TUANDA, Mayor of the Municipality of Jimalalud, Negros Oriental,
HERMINIGILDO FABURADA, (former Vice-Mayor), SANTOS A. VILLANUEVA, Incumbent
Member of the Sangguniang Bayan, MANUEL LIM, NICANOR R. AGOSTO, ERENIETA K.
MENDOZA MAXIMINO A. VIERNES, HACUBINA V. SERILLO, ILUMINADO D. ESTRELLANES,
and FORMER MEMBERS OF THE SANGGUNIANG BAYAN OF JIMALALUD, NEGROS
ORIENTAL, petitioners,
vs.
THE HONORABLE SANDIGANBAYAN, (THIRD DIVISION), BARTOLOME BINAOHAN and
DELIA ESTRELLANES, respondents.

KAPUNAN, J.:

Petitioners institute this special civil action for certiorari and prohibition under Rule 65 of the Revised
Rules of Court to set aside the resolution of the Sandiganbayan dated 17 February 1992 and its
orders dated 19 August 1992 and 13 May 1993 in Criminal Case No. 16936 entitled "People of the
Philippines versus Reynaldo Tuanda, et al." denying petitioners' motion for suspension of their
arraignment.

The present controversy arose from the following antecedents:

On 9 February 1989, private respondents Delia Estrellanes and Bartolome Binaohan were
designated as industrial labor sectoral representative and agricultural labor sectoral representative
respectively, for the Sangguniang Bayan of Jimalalud, Province of Negros Oriental by then Secretary
Luis T. Santos of the Department of Local Government. Private respondents Binaohan and
Estrellanes took their oath of office on 16 February 1989 and 17 February 1989, respectively.

Subsequently, petitioners filed an undated petition with the Office of the President for review and
recall of said designations. The latter, however, in a letter dated 20 March 1989, denied the petition
and enjoined Mayor Reynaldo Tuanda to recognize private respondents as sectoral representatives.

On 4 May 1990, private respondents filed a petition for mandamus with the Regional Trial Court of
Negros Oriental, Branch 35, docketed as Special Civil Action No. 9661, for recognition as members
of the Sangguniang Bayan. It was dismissed on 23 July 1991.

Thereafter, on 20 June 1991, petitioners filed an action with the Regional Trial Court of Dumaguete
City to declare null and void the designations of private respondents as sectoral representatives,
docketed as Civil Case No. 9955 entitled "Reynaldo Tuanda, et al. versus Secretary of the
Department of Local Government, et al."

On 21 July 1991, an information was filed before the Sandiganbayan, docketed as Criminal Case
No. 16936 entitled "People of the Philippines versus Reynaldo Tuanda, et al." charging petitioners
thus:

INFORMATION

The undersigned Special Prosecution Officer of the Special Prosecutor, hereby

accuses REYNALDO V. TUANDA, HERMENEGILDO G. FABURADA, MANUEL
LIM, NICANOR P. AGOSTO, ERENIETA K. MENDOZA, MAXIMO VIERNES,
 HACUBINA V. SERILLO, and SANTOS A. VILLANUEVA of Violation of Section 3(e)
of R.A. No. 3019, as amended, committed as follows:

That during the period from February 1989 to February 1991 and
subsequent thereto, in the Municipality of Jimalalud, Negros Oriental,
and within the jurisdiction of this Honorable Court, accused, all public
officers, Mayor REYNALDO V. TUANDA, Vice-Mayor
HERMENEGILDO G. FABURADA, Sangguniang Members MANUEL
LIM, NICANOR P. AGOSTO, ERENIETA K. MENDOZA, MAXIMO A.
VIERNES, HACUBINA V. SERILLO, ILUMINADO D. ESTRELLANES
and SANTOS A. VILLANUEVA while in the performance of their
official functions and taking advantage of their public positions, with
evident bad faith, manifest partiality, and conspiring and
confederating with each other did, then and there, wilfully and
unlawfully cause undue injury to Sectoral Members Bartolome M.
Binaohan and Delia T. Estrellanes by refusing to pay despite demand
the amount of NINETY FIVE THOUSAND THREE HUNDRED FIFTY
PESOS (P95,350.00) and ONE HUNDRED EIGHT THOUSAND
NINE HUNDRED PESOS (P108,900.00) representing respectively
their per diems, salaries and other privileges and benefits, and such
undue injury continuing to the present to the prejudice and damage of
Bartolome Binaohan and Delia Estrellanes.

CONTRARY TO LAW. 1

On 9 September 1991, petitioners filed a motion with the Sandiganbayan for suspension of the
proceedings in Criminal Case No. 16936 on the ground that a prejudicial question exists in Civil
Case No. 9955 pending before the Regional Trial Court of Dumaguete City.2

On 16 January 1992, the Regional Trial Court rendered a decision declaring null and void ab
initio the designations issued by the Department of Local Government to the private respondents as
sectoral representatives for having been done in violation of Section 146 (2) of B.P. Blg. 337,
otherwise known as the Local Government Code.3

The trial court expounded thus:

The Supreme Court in the case of Johnny D. Supangan Jr. v. Luis T. Santos, et al.,
G.R. No. 84663, along with 7 companion cases of similar import, (G.R. Nos. 05012,
87601, 87602, 87792, 87935, 88072, and 90205) all promulgated on August 24,
1990, ruled that:

B.P. Blg. 337 explicitly required that before the President (or the
Secretary of the Department of Local Government) may appoint
members of the local legislative bodies to represent the Industrial and
Agricultural Labor Sectors, there must be a determination to be made
by the Sanggunian itself that the said sectors are of sufficient number
in the city or municipality to warrant representation after consultation
with associations and persons belonging to the sector concerned.

The Supreme Court further ruled —

 For that matter, the Implementing Rules and Regulations of the Local
Government Code even prescribe the time and manner by which
such determination is to be conducted by the Sanggunian.

Consequently, in cases where the Sanggunian concerned has not yet

determined that the Industrial and Agricultural Labor Sectors in their
particular city or municipality are of sufficient number to warrant
representation, there will absolutely be no basis for the
designation/appointments.

In the process of such inquiry as to the sufficiency in number of the sector concerned
to warrant representation, the Sanggunian is enjoined by law (B.P. Blg. 337) to
consult with associations and persons belonging to the sector concerned.
Consultation with the sector concerned is made a pre-requisite. This is so
considering that those who belong to the said sector are the ones primarily interested
in being represented in the Sanggunian. In the same aforecited case, the Supreme
Court considers such prior determination by the Sanggunian itself (not by any other
person or body) as a condition sine qua non to a valid appointment or designation.

Since in the present case, there was total absence of the required prior determination
by the Sangguniang Bayan of Jimalalud, this Court cannot help but declare the
designations of private defendants as sectoral representatives null and void.

This verdict is not without precedence. In several similar cases, the Supreme Court
invariably nullified the designations where the requirements of Sec. 146 (2), B.P. Blg.
337 were not complied with. Just to cite one case, the Supreme Court ruled:

There is no certification from the Sangguniang Bayan of Valenzuela

that the sectors concerned are of sufficient number to warrant
representation and there was no consultation whatsoever with the
associations and persons belonging to the Industrial and Agricultural
Labor Sectors. Therefore, the appointment of private respondents
Romeo F. Bularan and Rafael Cortez are null and void (Romeo
Llanado, et al. v. Hon. Luis Santos, et al., G.R. No. 86394, August 24,
1990).4

Private respondents appealed the aforestated decision to the Court of Appeals, docketed as CA-
G.R. CV No. 36769, where the same is currently pending resolution.

Meanwhile, on 17 February 1992, respondent Sandiganbayan issued a resolution denying the

motion for suspension of proceedings filed by petitioners. Said respondent Sandiganbayan:

Despite the pendency of Civil Case No. 9955 of the Regional Trial Court of Negros
Oriental, it appears, nevertheless, that the private complainants have been rendering
services on the basis of their respective appointments as sectoral members of the
Sangguniang Bayan of the Municipality of Jimalalud, Negros Oriental; and that their
said appointments enjoy the presumption of regularity. Having rendered such
services, the private complainants are entitled to the salaries attached to their office.
Even assuming arguendo that the said Regional Trial Court shall later decide that the
said appointments of the private complainants are null and void, still the private
complainants are entitled to their salaries and compensation for service they have
actually rendered, for the reason that before such judicial declaration of nullity, the
 private complainants are considered at least de facto public officers acting as such
on the basis of apparently valid appointments issued by competent authorities. In
other words, regardless of the decision that may be rendered in Civil Case
No. 9955, the private complainants are entitled to their withheld salaries for the
services they have actually rendered as sectoral representatives of the said
Sangguniang Bayan. Hence, the decision that may be rendered by the Regional Trial
Court in Civil Case No. 9955 would not be determinative of the innocence or guilt of
the accused.

WHEREFORE, the subject Petition for the Suspension of Proceedings in Virtue of

Prejudicial Question filed by the accused through counsel, is hereby DENIED for lack
of merit.

SO ORDERED.5

Petitioners filed a motion for reconsideration of the aforementioned resolution in view of the decision
promulgated by the trial court nullifying the appointments of private respondents but it was, likewise,
denied in an order issued by respondent Sandiganbayan on 19 August 1992 on the justification that
the grounds stated in the said motion were a mere rehash of petitioners' original motion to hold the
case in abeyance.6 The dispositive portion of its order reads as follows:

WHEREFORE, in view of the foregoing, the arraignment of the accused which was
scheduled today is cancelled. Mayor Reynaldo Tuanda, Hermenegildo Faburada,
Nicanor P. Agosto, Erenieta K. Mendoza, Hacubina V. Serillo and Iluminado
Estrellanes are, however, hereby ordered to show cause in writing within ten (10)
days from service hereof why they should not be cited for contempt of court for their
failure to appear in court today for arraignment.

In case of an adverse resolution on the motion to quash which is to be filed by the

counsel for the defense, set this case for arraignment, pre-trial and trial on January 4
& 5, 1993, on all dates the trial to start at 8:30 o'clock in the morning.

SO ORDERED.7

On 19 February 1993, respondent Sandiganbayan issued an order holding consideration of all

incidents pending the issuance of an extended resolution.8

No such resolution, however, was issued and in its assailed order dated 13 May 1992, respondent
Sandiganbayan set the arraignment of petitioners on 30 June 1993. The dispositive portion of the
order reads:

WHEREFORE, considering the absence of the accused from the scheduled hearing
today which We deem to be excusable, reset this case for arraignment on June 30,
1993 and for trial on the merits on June 30 and July 1 and 2, 1993, on all dates the
trial to start at 8:30 o'clock in the morning.

Give proper notice to the accused and principal counsel, Atty. Alfonso Briones.
Considering that the accused come all the way from Himalalud, Negros Oriental, no
postponement will be allowed.

SO ORDERED.9
Hence, this special civil action for certiorari and prohibition where petitioners attribute to respondent
Sandiganbayan the following errors:

A. The Respondent Court committed grave abuse of discretion in denying petitioners'

motions for the suspension of the proceedings in Criminal Case No. 16936 in spite of
the pendency of a prejudicial issue before the Court of Appeals in CA-G.R. CV No.
36769;

B. The Respondent Court acted without or in excess of jurisdiction in refusing to

suspend the proceedings that would entail a retrial and rehearing by it of the basic
issue involved, i.e., the validity of the appointments of private respondents and their
entitlement to compensation which is already pending resolution by the Court of
Appeals in C.A. G.R. CV No. 36769; and

C. The Respondent Court committed grave abuse of discretion and/or acted without
or in excess of jurisdiction in effectively allowing petitioners to be prosecuted under
two alternative theories that private respondents are de jure and/or de facto officers
in violation of petitioners' right to due process.10

In sum, the only issue in the case at bench is whether or not the legality or validity of private
respondents' designation as sectoral representatives which is pending resolution in CA-G.R. No.
36769 is a prejudicial question justifying suspension of the proceedings in the criminal case against
petitioners.

A prejudicial question is one that must be decided before any criminal prosecution may be instituted
or before it may proceed (see Art. 36, Civil Code) because a decision on that point is vital to the
eventual judgment in the criminal case. Thus, the resolution of the prejudicial question is a logical
antecedent of the issues involved in said criminal case.11

A prejudicial question is defined as that which arises in a case the resolution of which is a logical
antecedent of the issue involved therein, and the cognizance of which pertains to another tribunal.
The prejudicial question must be determinative of the case before the court but the jurisdiction to try
and resolve the question must be lodged in another court or tribunal.12 It is a question based on a fact
distinct and separate from "the crime but so intimately connected with it that it determines the guilt or
innocence of the accused, and for it to suspend the criminal action, it must appear not only that said
case involves facts intimately related to those upon which the criminal prosecution would be based
but also that in the resolution of the issue or issues raised in the civil case, the guilt or innocence of
the accused would necessarily be determined. It comes into play generally in a situation where a
civil action and a criminal action are both pending and there exists in the former an issue which must
be preemptively resolved before the criminal action may proceed, because howsoever the issue
raised in the civil action is resolved would be determinative juris et de jure of the guilt or innocence of
the accused in the criminal case."13

The rationale behind the principle of prejudicial question is to avoid two conflicting decisions.14 It has
two essential elements:

(a) the civil action involves an issue similar or intimately related to the issue raised in
the criminal action; and

(b) the resolution of such issue determines whether or not the criminal action may
proceed.15
Applying the foregoing principles to the case at bench, we find that the issue in the civil case, CA-
G.R. CV No. 36769, constitutes a valid prejudicial question to warrant suspension of the arraignment
and further proceedings in the criminal case against petitioners.

All the elements of a prejudicial question are clearly and unmistakably present in this case. There is
no doubt that the facts and issues involved in the civil action (No. 36769) and the criminal case (No.
16936) are closely related. The filing of the criminal case was premised on petitioners' alleged
partiality and evident bad faith in not paying private respondents' salaries and per diems as sectoral
representatives, while the civil action was instituted precisely to resolve whether or not the
designations of private respondents as sectoral representatives were made in accordance with law.

More importantly, ,the resolution of the civil case will certainly determine if there will still be any
reason to proceed with the criminal action.

Petitioners were criminally charged under the Anti-Graft & Corrupt Practices Act (RA 3019, sec, 3[e])
due to their refusal, allegedly in bad faith and with manifest partiality, to pay private respondents'
salaries as sectoral representatives. This refusal, however, was anchored on petitioners' assertion
that said designations were made in violation of the Local Government Code (B.P. Blg. 337) and
thus, were null and void. Therefore, should the Court of Appeals uphold the trial court's decision
declaring null and void private respondents' designations as sectoral representatives for failure to
comply with the provisions of the Local Government Code (B.P. Blg. 337, sec. 146[2]), the charges
against petitioners would no longer, so to speak, have a leg to stand on. Petitioners cannot be
accused of bad faith and partiality there being in the first place no obligation on their part to pay
private respondents' claims. Private respondents do not have any legal right to demand salaries, per
diems and other benefits. In other words, the Court of Appeals' resolution of the issues raised in the
civil action will ultimately determine whether or not there is basis to proceed with the criminal case.

Private respondents insist that even if their designations are nullified, they are entitled to
compensation for actual services rendered.16 We disagree. As found by the trial court and as borne
out by the records, from the start, private respondents' designations as sectoral representatives have
been challenged by petitioners. They began with a petition filed with the Office of the President
copies of which were received by private respondents on 26 February 1989, barely eight (8) days
after they took their oath of office.17 Hence, private respondents' claim that they have actually
rendered services as sectoral representatives has not been established.

Finally, we find unmeritorious respondent Sandiganbayan's thesis that even in the event that private
respondents' designations are finally declared invalid, they may still be considered de facto public
officers entitled to compensation for services actually rendered.

The conditions and elements of de facto officership are the following:

1) There must be a de jure office;

2) There must be color of right or general acquiescence by the public; and

3) There must be actual physical possession of the office in good faith.18

One can qualify as a de facto officer only if all the aforestated elements are present. There can be
no de facto officer where there is no de jure office, although there may be a de facto officer in a de
jure office.19
WHEREFORE, the resolution dated 17 February 1992 and orders dated 19 August 1992 and 13
May 1993 of respondent Sandiganbayan in Criminal Case No. 16936 are hereby SET ASIDE.
Respondent Sandiganbayan is enjoined from proceeding with the arraignment and trial of petitioners
in Criminal Case No. 16936 pending final resolution of CA-G.R. CV No. 36769.

SO ORDERED.
MEYNARDO L. BELTRAN, petitioner, vs. PEOPLE OF THE PHILIPPINES,
and HON. JUDGE FLORENTINO TUAZON, JR., being the Judge of the
RTC, Branch 139, Makati City, respondents.

DECISION

BUENA, J.:

This petition for review, filed under Rule 45 of the 1997 Rules of Civil
Procedure, seeks to review and set aside the Order dated January 28, 1999
issued by Judge Florentino A. Tuazon, Jr. of the Regional Trial Court of
Makati City, Branch 139 in Special Civil Case No. 98-3056, entitled "Meynardo
Beltran vs. People of the Philippines and Hon. Judge Alden Cervantes of the
Metropolitan Trial Court of Makati city, Branch 61." The said Order denied
petitioners prayer for the issuance of a writ of preliminary injunction to enjoin
Judge Cervantes from proceeding with the trial of Criminal Case No. 236176,
a concubinage case against petitioner on the ground that the pending petition
for declaration of nullity of marriage filed by petitioner against his wife
constitutes a prejudicial question.

The antecedent facts of the case are undisputed:

Petitioner Meynardo Beltran and wife Charmaine E. Felix were married on

June 16, 1973 at the Immaculate Concepcion Parish Church in Cubao,
Quezon City. [1]

On February 7, 1997, after twenty-four years of marriage and four

children, petitioner filed a petition for nullity of marriage on the ground of
[2]

psychological incapacity under Article 36 of the Family Code before Branch 87

of the Regional Trial Court of Quezon City. The case was docketed as Civil
Case No. Q-97-30192. [3]

In her Answer to the said petition, petitioner's wife Charmaine Felix alleged
that it was petitioner who abandoned the conjugal home and lived with a
certain woman named Milagros Salting. Charmaine subsequently filed a
[4]

criminal complaint for concubinage under Article 334 of the Revised Penal
[5]

Code against petitioner and his paramour before the City Prosecutor's Office
of Makati who, in a Resolution dated September 16, 1997, found probable
cause and ordered the filing of an Information against them. The case,
[6]

docketed as Criminal Case No. 236176, was filed before the Metropolitan Trial
Court of Makati City, Branch 61.
On March 20, 1998, petitioner, in order to forestall the issuance of a warrant
for his arrest, filed a Motion to Defer Proceedings Including the Issuance of
the Warrant of Arrest in the criminal case. Petitioner argued that the pendency
of the civil case for declaration of nullity of his marriage posed a prejudicial
question to the determination of the criminal case. Judge Alden Vasquez
Cervantes denied the foregoing motion in the Order dated August 31, 1998.
[7]

Petitioner's motion for reconsideration of the said Order of denial was likewise
denied in an Order dated December 9, 1998.

In view of the denial of his motion to defer the proceedings in the concubinage
case, petitioner went to the Regional Trial Court of Makati City, Branch 139
on certiorari, questioning the Orders dated August 31, 1998 and December 9,
1998 issued by Judge Cervantes and praying for the issuance of a writ of
preliminary injunction. In an Order dated January 28, 1999, the Regional
[8] [9]

Trial Court of Makati denied the petition for certiorari. Said Court subsequently
issued another Order dated February 23, 1999, denying his motion for
[10]

reconsideration of the dismissal of his petition.

Undaunted, petitioner filed the instant petition for review.

Petitioner contends that the pendency of the petition for declaration of nullity
of his marriage based on psychological incapacity under Article 36 of the
Family Code is a prejudicial question that should merit the suspension of the
criminal case for concubinage filed against him by his wife.

Petitioner also contends that there is a possibility that two conflicting decisions
might result from the civil case for annulment of marriage and the criminal
case for concubinage. In the civil case, the trial court might declare the
marriage as valid by dismissing petitioner's complaint but in the criminal case,
the trial court might acquit petitioner because the evidence shows that his
marriage is void on ground of psychological incapacity. Petitioner submits that
the possible conflict of the courts' ruling regarding petitioner's marriage can be
avoided, if the criminal case will be suspended, until the court rules on the
validity of marriage; that if petitioner's marriage is declared void by reason of
psychological incapacity then by reason of the arguments submitted in the
subject petition, his marriage has never existed; and that, accordingly,
petitioner could not be convicted in the criminal case because he was never
before a married man.

Petitioner's contentions are untenable.

The rationale behind the principle of prejudicial question is to avoid two
conflicting decisions. It has two essential elements: (a) the civil action involves
an issue similar or intimately related to the issue raised in the criminal action;
and (b) the resolution of such issue determines whether or not the criminal
action may proceed. [11]

The pendency of the case for declaration of nullity of petitioner's marriage is

not a prejudicial question to the concubinage case. For a civil case to be
considered prejudicial to a criminal action as to cause the suspension of the
latter pending the final determination of the civil case, it must appear not only
that the said civil case involves the same facts upon which the criminal
prosecution would be based, but also that in the resolution of the issue or
issues raised in the aforesaid civil action, the guilt or innocence of the
accused would necessarily be determined.

Article 40 of the Family Code provides:

"The absolute nullity of a previous marriage may be invoked for

purposes of remarriage on the basis solely of a final judgment
declaring such previous marriage void."

In Domingo vs. Court of Appeals, this Court ruled that the import of said
[12]

provision is that for purposes of remarriage, the only legally acceptable basis
for declaring a previous marriage an absolute nullity is a final judgment
declaring such previous marriage void, whereas, for purposes of other than
remarriage, other evidence is acceptable. The pertinent portions of said
Decision read:

"xxx Undoubtedly, one can conceive of other instances where a

party might well invoke the absolute nullity of a previous marriage
for purposes other than remarriage, such as in case of an action
for liquidation, partition, distribution and separation of property
between the erstwhile spouses, as well as an action for the
custody and support of their common children and the delivery of
the latters' presumptive legitimes. In such cases, evidence needs
must be adduced, testimonial or documentary, to prove the
existence of grounds rendering such a previous marriage an
absolute nullity. These needs not be limited solely to an earlier
final judgment of a court declaring such previous marriage void."

So that in a case for concubinage, the accused, like the herein petitioner need
not present a final judgment declaring his marriage void for he can adduce
evidence in the criminal case of the nullity of his marriage other than proof of a
final judgment declaring his marriage void.

With regard to petitioner's argument that he could be acquitted of the charge

of concubinage should his marriage be declared null and void, suffice it to
state that even a subsequent pronouncement that his marriage is void from
the beginning is not a defense.

Analogous to this case is that of Landicho vs. Reloval cited in Donato vs.
[13]

Luna where this Court held that:

[14]

"xxx Assuming that the first marriage was null and void on the
ground alleged by petitioner, that fact would not be material to the
outcome of the criminal case. Parties to the marriage should not
be permitted to judge for themselves its nullity, for the same must
be submitted to the judgment of the competent courts and only
when the nullity of the marriage is so declared can it be held as
void, and so long as there is no such declaration the presumption
is that the marriage exists. Therefore, he who contracts a second
marriage before the judicial declaration of nullity of the first
marriage assumes the risk of being prosecuted for bigamy."

Thus, in the case at bar it must also be held that parties to the marriage
should not be permitted to judge for themselves its nullity, for the same must
be submitted to judgment of the competent courts and only when the nullity of
the marriage is so declared can it be held as void, and so long as there is no
such declaration the presumption is that the marriage exists for all intents and
purposes. Therefore, he who cohabits with a woman not his wife before the
judicial declaration of nullity of the marriage assumes the risk of being
prosecuted for concubinage. The lower court therefore, has not erred in
affirming the Orders of the judge of the Metropolitan Trial Court ruling that
pendency of a civil action for nullity of marriage does not pose a prejudicial
question in a criminal case for concubinage.

WHEREFORE, for lack of merit, the instant petition is DISMISSED.

SO ORDERED.
 PHILIPPINE AGILA G.R. No. 134887
SATELLITE, INC. represented
by MICHAEL C. U. DE Present:
GUZMAN,
Petitioner, QUISUMBING, J., Chairperson,
CARPIO,
CARPIO MORALES,
- versus - TINGA, and
VELASCO, JR., JJ.

SEC. Promulgated:
JOSEFINA TRINIDADLICHAUCO July 27, 2006
and the HON. OMBUDSMAN,
Respondents.
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CARPIO MORALES, J.:

On June 6, 1994, a Memorandum of Understanding[1] (MOU) was entered into by a

consortium of private telecommunications carriers and the Department of
Transportation and Communications (DOTC) represented by then Secretary Jesus
B. Garcia, Jr. relative to the launching, ownership, operation and management of a
Philippine satellite by a Filipino-owned or controlled private consortium or
corporation.

Pursuant to Article IV of the MOU, the consortium of private telecommunications

carriers formed a corporation and adopted the corporate name Philippine Agila
Satellite, Inc. (PASI), herein petitioner.
By letter[2] dated June 28, 1996, PASI president Rodrigo A. Silverio (Silverio)
requested the then DOTC Secretary Amado S. Lagdameo, Jr. for official government
confirmation of the assignment of Philippine orbital slots 161E and 153E to PASI
for its AGILA satellites.
In response to Silverios letter, Secretary Lagdameo, by letter [3] dated July 3, 1996,
confirmed the governments assignment of Philippine orbital slots 161E and 153E to
PASI for its AGILA satellites.

PASI thereupon undertook preparations for the launching, operation and

management of its satellites by, among other things, obtaining loans, increasing its
capital, conducting negotiations with its business partners, and making an initial
payment of US$ 3.5 million to Aerospatiale, a French satellite manufacturer.

Michael de Guzman (de Guzman), PASI President and Chief Executive Officer
(CEO), later informed Jesli Lapuz (Lapuz), President and CEO of the Landbank of
the Philippines, by letter[4] of December 3, 1996, of the governments assignment to
PASI of orbital slots 161E and 153E and requested the banks confirmation of its
participation in a club loan in the amount of US$ 11 million, the proceeds of which
would be applied to PASIs interim satellite.

It appears that Lapuz sent a copy of De Guzmans letter to then DOTC

Undersecretary Josefina T. Lichauco, (Lichauco) who, by letter [5] of December 5,
1996, wrote Lapuz as follows:

1. Kindly be informed that there is simply no basis for Michael de

Guzman to allege that the DOTC has assigned two (2) slots to PASI.
He conveniently neglected to attach as another annex, in addition to
Sec. Lagdameos letter of 3 July 1996 (Annex A) the letter of 28 June
(Annex B) in response to which the July 3rd letter had been sent to
PASI. Annex B precisely provides that one slot (153 E, to which the
interim satellite was supposed to migrate) was to be used for the
migration of the Russian satellite in time for the APEC
Leaders Summit. This particular endeavor was not successful. The
interim satellite Gorizont never moved from its orbital location of
130E Longitude. Annex C is a letter from an official of the Subic Bay
Satellite Systems Inc., with its attachments, addressed to me stating
that as of the 13th of November, no such voyage to 153E orbital slot
had been commenced. In fact DHI hid this fact from me, and in fact
stated that Gorizont had already moved and was on its way to 153E.
 Since this timely migration did not happen in time for the APEC
Leaders Meeting on 24 November, this 153E Longitude slot can no
longer be assigned to PASI.

The other slot 161E Longitude is the one that can be made available
for PASIs eventual launch, in 1998 most likely, in exchange for one
free satellite transponder unit utilization, for all requirements of
Government. These have yet to be embodied in a contract between
PASI and the DOTC.

2. I understand from my meeting with DHI/PASI this morning, and from

the de Guzman letter you sent to me, that the latter are still interested
in pursuing their interim satellite project and are applying for a loan
with your bank. Of course they can always pursue this as a business
venture of DHI/PASI which is their own corporate business decision.
The DOTC supports this venture but they will be getting only one
orbital slot for both the Interim Satellite Project and for the Launch
Project. I understand from todays meeting with them that this is
technically feasible.

3. As regards the use of the name Agila, Mr. de Guzmans allegation that
DHI/PASI has registered Agila as a corporate alias/trademark is
FALSE. There is no such thing as registration of a corporate alias. Nor
for that matter can the trade name of a satellite be registered for just
any satellite, where it was the President who chose the name for the
first Philippine satellite in orbit. No one else coined that name but he.
He has therefore given the name Agila I to the Mabuhay satellite now
in orbit at 144E, being the first Philippine satellite in orbit. He made
this announcement in the presence of all the APEC Heads of State just
before the presentation to him of the Manila Action Plan for
APEC. (Underscoring supplied)

Lichauco subsequently issued, in December 1997, a Notice of Offer[6] for several

orbital slots including 153E.

PASI, claiming that the offer was without its knowledge and that it
subsequently came to learn that another company whose identity had not been
disclosed had submitted a bid and won the award for orbital slot 153E, filed on
January 23, 1998 a complaint[7] before the Regional Trial Court (RTC) of
Mandaluyong City against Lichauco and the Unknown Awardee, for injunction to
enjoin the award of orbital slot 153E, declare its nullity, and for damages.

PASI also filed on February 23, 1998 a complaint before the Office of the
Ombudsman against Secretary Josefina Trinidad Lichauco. In his affidavit-
complaint, de Guzman charged Lichauco with gross violation of Section 3(e) of
Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt Practices
Act, as amended, reading:

(e) Causing any undue injury to any party, including the Government, or
giving any private party any unwarranted benefits, advantage or
preference in the discharge of his official, administrative or judicial
functions through manifest partiality, evident bad faith or gross
inexcusable negligence. This provision shall apply to officers and
employees of officers or government corporations charged with the
grant of licenses or permits or other concessions.

The complaint was docketed as OMB Case No. 0-98-0416. The Evaluation and
Preliminary Investigation Bureau (EPIB) of the Office of the Ombudsman, by
Evaluation Report[8] dated April 15, 1998, found the existence of a prejudicial
question after considering that the case filed with the RTC involves facts intimately
related to those upon which the criminal prosecution would be based and that the
guilt or the innocence of the accused would necessarily be determined in the
resolution of the issues raised in the civil case. It thus concluded that the filing of the
complaint before the Ombudsman is premature since the issues involved herein are
now subject of litigation in the case filed with the RTC, and accordingly
recommended its dismissal. Then Ombudsman Aniano A. Desierto approved
on April 24, 1998 the recommendation of the EPIB.

PASI moved to reconsider[9] the dismissal of the complaint, but was denied by
Order[10] dated July 17, 1998.

In the meantime, a motion to dismiss the civil case against respondent was denied by
the trial court. On elevation of the order of denial to the Court of Appeals, said court,
by Decision dated February 21, 2000, ordered the dismissal of the case. This Court,
by Decision dated May 3, 2006, ordered the reinstatement of the case, however.[11]

PASI is now before this Court via petition for review on certiorari, arguing that the
Ombudsman erred in dismissing the complaint.

In issue are 1) whether there exists a prejudicial question and, if in the affirmative,
2) whether the dismissal of the complaint on that account is in order.

Section 7, Rule 111 of the Rules on Criminal Procedure provides:

Section 7. Elements of prejudicial question. The elements of a prejudicial
question are: (a) the previously instituted civil action involves an issue
similar or intimately related to the issue raised in the subsequent criminal
action, and (b) the resolution of such issue determines whether or not the
criminal action may proceed.

The rationale for the principle of prejudicial question is that although it does
not conclusively resolve the guilt or innocence of the accused, it tests the sufficiency
of the allegations in the complaint or information in order to sustain the further
prosecution of the criminal case.[12] Hence, the need for its prior resolution before
further proceedings in the criminal action may be had.

PASI concedes that the issues in the civil case are similar or intimately related
to the issue raised in the criminal case. It contends, however, that the resolution of
the issues in the civil case is not determinative of the guilt or innocence of Lichauco,
it arguing that even if she is adjudged liable for damages, it does not necessarily
follow that she would be convicted of the crime charged.
To determine the existence of a prejudicial question in the case before the
Ombudsman, it is necessary to examine the elements of Section 3(e) of R.A. 3019
for which Lichauco was charged and the causes of action in the civil case.

Section 3(e) of R.A. 3019 which was earlier quoted has the following elements:

1. The accused is a public officer discharging administrative or official

functions or private persons charged in conspiracy with them;
 2. The public officer committed the prohibited act during the
performance of his official duty or in relation to his public position;

3. The public officer acted with manifest partiality, evident bad faith or
gross, inexcusable negligence; and

4. His action caused undue injury to the Government or any private

party, or gave any party any unwarranted benefit, advantage or
preference to such parties.[13]

The civil case against Lichauco on the other hand involves three causes of
action. The first, for injunction, seeks to enjoin the award of orbital slot 153E, the
DOTC having previously assigned the same to PASI; the second, for declaration of
nullity of award, seeks to nullify the award given to the undisclosed bidder for being
beyond Lichaucos authority; and the third, for damages arising from Lichaucos
questioned acts.

If the award to the undisclosed bidder of orbital slot 153E is, in the civil case,
declared valid for being within Lichaucos scope of authority to thus free her from
liability for damages, there would be no prohibited act to speak of nor would there
be basis for undue injury claimed to have been suffered by petitioner. The finding
by the Ombudsman of the existence of a prejudicial question is thus well-taken.

Respecting the propriety of the dismissal by the Ombudsman of the complaint

due to the pendency of a prejudicial question, PASI argues that since the Rules of
Procedure of the Office of the Ombudsman is silent on the matter, the Rules of Court,
specifically Section 6, Rule 111 of the Rules of Court, which now reads:

SECTION 6. Suspension by reason of prejudicial question. A petition for

suspension of the criminal action based upon the pendency of a prejudicial
question in a civil action may be filed in the office of the prosecutor or the
court conducting the preliminary investigation. When the criminal action
has been filed in court for trial, the petition to suspend shall be filed in the
same criminal action at any time before the prosecution
rests. (Underscoring supplied),
applies in a suppletory character.

The Ombudsman, on the other hand, argues that the above-quoted provision of
the Rules of Court applies to cases which are at the preliminary or trial stage and not
to those, like the case subject of the present petition, at the evaluation stage.

The Ombudsman goes on to proffer that at the evaluation stage, the

investigating officer may recommend any of several causes of action including
dismissal of the complaint for want of palpable merit or subjecting the complaint to
preliminary investigation, and the evaluation of the complaint involves the discretion
of the investigating officer which this Court cannot interfere with.

While the evaluation of a complaint involves the discretion of the investigating

officer, its exercise should not be abused[14] or wanting in legal basis.

Rule II, Section 2 of the Rules of Procedure of the Office of the Ombudsman
reads:

SECTION 2. Evaluation. Upon evaluating the complaint, the

investigating officer shall recommend whether it may be:

a) dismissed outright for want of palpable merit;

b) referred to respondent for comment;
c) indorsed to the proper government office or agency which has
jurisdiction over the case;
d) forwarded to the appropriate office or official for fact-finding
investigation;
e) referred for administrative adjudication; or
f) subjected to a preliminary investigation. (Underscoring
supplied)

From the above-quoted provision, a complaint at the evaluation stage may be

dismissed outright only for want of palpable merit. Want of palpable merit obviously
means that there is no basis for the charge or charges. If the complaint has prima
facie merit, however, the investigating officer shall recommend the adoption of any
of the actions enumerated above from (b) to (f).[15]
When, in the course of the actions taken by those to whom the complaint is endorsed
or forwarded, a prejudicial question is found to be pending, Section 6, Rule 111 of
the Rules of Court should be applied in a suppletory character.[16] As laid down
in Yap v. Paras,[17] said rule directs that the proceedings may only
be suspended, not dismissed, and that it may be made only upon petition, and not
at the instance of the judge alone or as in this case, the investigating officer.
To give imprimatur to the Ombudsmans dismissal of petitioners criminal complaint
due to prejudicial question would not only run counter to the provision of Section 6
of Rule 111 of the Rules of Court. It would sanction the extinguishment of criminal
liability, if there be any, through prescription under Article 89 vis a vis Articles 90
and 91 of the Revised Penal Code which respectively read:

ART. 89. How criminal liability is totally extinguished. Criminal liability is

totally extinguished:

1. By the death of the convict, as to the personal penalties; and as

to pecuniary penalties, liability therefore is extinguished only when the
death of the offender occurs before final judgment;
2. By service of the sentence;
3. By amnesty, which completely extinguishes the penalty and all
its effects;
4. By absolute pardon;
5. By prescription of the crime;
6. By prescription of the penalty;
7. By the marriage of the offended woman, as provided in Article
344 of this Code. (Underscoring supplied)

ART. 90. Prescription of crimes. Crimes punishable by

death, reclusion perpetua or reclusion temporal shall prescribe in twenty
years.

Crimes punishable by other afflictive penalties shall prescribe in

fifteen years.
 Those punishable by a correctional penalty shall prescribe in ten
years; with the exception of those punishable by arresto mayor, which
shall prescribe in five years.

The crime of libel or other similar offenses shall prescribe in one

year.

The offenses of oral defamation and slander by deed shall prescribe

in six months.

Light offenses prescribe in two months.

When the penalty fixed by law is a compound one, the highest

penalty shall be made the basis of the application of the rules contained in
the first, second, and third paragraphs of this article. x x x

ART. 91. Computation of prescription of offenses. The period of

prescription shall commence to run from the day on which the crime is
discovered by the offended party, the authorities, or their agents, and shall
be interrupted by the filing of the complaint or information, and
shall commence to run again when such proceedings terminate without
the accused being convicted or acquitted, or are unjustifiably stopped
for any reason not imputable to him.

x x x x (Emphasis and underscoring supplied)

WHEREFORE, the Order dated July 17, 1998 of respondent Ombudsman

dismissing OMB Case No. 0-98-0416 against respondent then Secretary Josefina
Trinidad Lichauco is SET ASIDE.

The Ombudsman is ORDERED to REINSTATE to its docket for further

proceedings, in line with the foregoing ratiocination, OMB Case No. 0-98-0416.

SO ORDERED
JESSE Y. YAP, Petitioner,
vs.
HON. MONICO G. CABALES, Presiding Judge, Regional Trial Court, Branch 35, General
Santos City; MUNICIPAL TRIAL COURT, Branch 1, General Santos City; COURT OF
APPEALS, PEOPLE OF THE PHILIPPINES, JOVITA DIMALANTA and MERGYL
MIRABUENO, Respondents.

DECISION

PERALTA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court with prayer for the
issuance of a writ of preliminary injunction and/or issuance of status quo order seeking to annul and
set aside the Resolution1 of the Court of Appeals (CA) dated July 17, 2003 denying petitioner's
motion for reconsideration of the Decision2 dated April 30, 2003 in CA-G.R. SP No. 68250.

The facts of the case are as follows:

Petitioner Jesse Y. Yap and his spouse Bessie Yap are engaged in the real estate business through
their company Primetown Property Group.

Sometime in 1996, petitioner purchased several real properties from a certain Evelyn Te (Evelyn). In
consideration of said purchases, petitioner issued several Bank of the Philippine Islands (BPI)
postdated checks to Evelyn. Thereafter, spouses Orlando and Mergyl Mirabueno and spouses
Charlie and Jovita Dimalanta, rediscounted the checks from Evelyn.

In the beginning, the first few checks were honored by the bank, but in the early part of 1997, when
the remaining checks were deposited with the drawee bank, they were dishonored for the reason
that the "Account is Closed." Demands were made by Spouses Mirabueno and Spouses Dimalanta
to the petitioner to make good the checks. Despite this, however, the latter failed to pay the amounts
represented by the said checks.

On December 8, 1997, Spouses Mirabueno filed a civil action for collection of sum of money,
damages and attorney's fee with prayer for the issuance of a writ of preliminary attachment against
petitioner before the Regional Trial Court (RTC) of General Santos City, docketed as Civil Case No.
6231.3 On December 15, 1997, Spouses Dimalanta followed suit and instituted a similar action,
which was docketed as Civil Case No. 6238.4

Subsequently, on various dates, the Office of the City Prosecutor of General Santos City filed
several informations for violation of Batas Pambansa Bilang (B.P. Blg.) 22 against the petitioner with
the Municipal Trial Court in Cities (MTCC), General Santos City. The criminal complaints were
docketed as Criminal Case Nos. 34873, 34874, 34862 to 34869, and Criminal Case No. 35522-I.5

In the criminal cases, petitioner filed separate motions to suspend proceedings on account of the
existence of a prejudicial question and motion to exclude the private prosecutor from participating in
the proceedings.6 Petitioner prayed that the proceedings in the criminal cases be suspended until the
civil cases pending before the RTC were finally resolved.

The MTCC, in its Orders7 dated June 21, 2000 and July 4, 2000, denied the motions for lack of merit.
Petitioner filed a Partial Motion for Reconsideration8 relative to Criminal Case Nos. 34873, 34874,
34862 to 34869 and a Motion for Reconsideration of the Part of the Order Denying the Motion to
Suspend Proceedings on Account of the Existence of a Prejudicial Question relative to Criminal
Case No. 35522-I.9 The subsequent motions were denied in the Order10 dated October 18, 2000.

Aggrieved, petitioner filed a Petition for Certiorari with a Prayer for the Issuance of a Writ of
Preliminary Injunction11before the RTC, docketed as SPL. Civil Case No. 539, imputing grave abuse
of discretion on the part of the MTCC Judge. On July 2, 2001, the RTC issued an Order12 denying
the petition.

Petitioner then filed a Motion for Reconsideration,13 which was denied in an Order dated October 18,
2001.14

Thereafter, petitioner filed with the CA a Petition for Certiorari Prohibition and Mandamus with
Urgent Prayer for the Issuance of Status Quo Order and Writ of Preliminary Injunction,15 docketed as
CA-G.R. SP No. 68250.

On April 30, 2003, the CA rendered a Decision16 dismissing the petition for lack of merit. The CA
opined that Civil Case Nos. 6231 and 6238 did not pose a prejudicial question to the prosecution of
the petitioner for violation of B.P. Blg. 22.

The CA ruled:

In the instant case, a careful perusal of Civil Cases Nos. 6231 and 6238 reveals that the issue
involved therein is not the validity of the sale as incorrectly pointed out by the petitioner, but it is,
whether or not the complainants therein are entitled to collect from the petitioner the sum or the
value of the checks which they have rediscounted from Evelyn Te. It behooves this Court to state
that the sale and the rediscounting of the checks are two transactions, separate and distinct from
each other. It so happened that in the subject civil cases it is not the sale that is in question, but
rather the rediscounting of the checks. Therefore, petitioner's contention that the main issue involved
in said civil cases is the validity of the sale stands on hollow ground. Furthermore, if it is indeed the
validity of the sale that is contested in the subject civil cases, then, We cannot fathom why the
petitioner never contested such sale by filing an action for the annulment thereof or at least invoked
or prayed in his answer that the sale be declared null and void. Accordingly, even if Civil Cases Nos.
6231 and 6238 are tried and the resolution of the issues therein is had, it cannot be deduced
therefrom that the petitioner cannot be held liable anymore for violation of B.P. Blg. 22.17

Petitioner filed a Motion for Reconsideration,18 which was denied in the Order19 dated July 17, 2003.

Hence, the petition assigning the following errors:

1. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THERE IS NO

PREJUDICIAL QUESTION IN THE CIVIL CASES (FOR COLLECTION OF SUMS OF
MONEY INSTITUTED BY PRIVATE RESPONDENTS OVER CHECKS ISSUED BY THE
PETITIONER, CIVIL CASE NOS. 6238 AND 6231) THAT WOULD WARRANT
SUSPENSION OF THE CRIMINAL CASES (CASE NO. 35522-1, FOR VIOLATION OF B.P.
22, SUBJECT OF WHICH ARE THE VERY SAME CHECKS).

2. THE HONORABLE COURT OF APPEALS ERRED IN NOT GRANTING THE PRAYER

FOR THE ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION AND/OR STATUS
QUO ORDER.20
The main contention of the petitioner is that a prejudicial question, as defined by law and
jurisprudence, exists in the present case. It is the petitioner's assertion that Civil Case Nos. 6231 and
6238 for collection of sum of money and damages were filed ahead of the criminal cases for violation
of B.P. Blg. 22. He further alleged that, in the pending civil cases, the issue as to whether private
respondents are entitled to collect from the petitioner despite the lack of consideration, is an issue
that is a logical antecedent to the criminal cases for violation of B.P. Blg. 22. For if the court rules
that there is no valid consideration for the check's issuance, as petitioner contends, then it
necessarily follows that he could not also be held liable for violation of B.P. Blg. 22.

Petitioner further avers that B.P. Blg. 22 specifically requires, among other elements, that the check
should have been issued for account or for value. There must be a valid consideration; otherwise, no
violation of the said law could be rightfully pursued. Petitioner said that the reason for the dishonor of
the checks was his order to the drawee bank to stop payment and to close his account in order to
avoid necessary penalty from the bank. He made this order due to the failure of Evelyn to deliver to
him the titles to the purchased properties to him.

On the other hand, the Office of the Solicitor General (OSG) contends that there is no prejudicial
question in Civil Case Nos. 6231 and 6238 which would warrant the suspension of the proceedings
in the criminal cases for violation of B.P. Blg. 22 against the petitioner. The issue in the civil cases is
not the validity of the sale between the petitioner and Evelyn, but whether the complainants therein
are entitled to damages arising from the checks. These checks were issued by the petitioner in favor
of Evelyn, who, thereafter, negotiated the same checks to private complainants. The checks were
subsequently dishonored due to insufficiency of funds. The OSG maintains that the resolution of
such issue has absolutely no bearing on the issue of whether petitioner may be held liable for
violation of B.P. Blg. 22.21

The present case hinges on the determination of whether there exists a prejudicial question that
necessitates the suspension of the proceedings in the MTCC.

We find that there is none and, thus, we resolve to deny the petition.

A prejudicial question generally exists in a situation where a civil action and a criminal action are
both pending, and there exists in the former an issue that must be preemptively resolved before the
latter may proceed, because howsoever the issue raised in the civil action is resolved would be
determinative juris et de jure of the guilt or innocence of the accused in the criminal case. The
rationale behind the principle of prejudicial question is to avoid two conflicting decisions. It has two
essential elements: (i) the civil action involves an issue similar or intimately related to the issue
raised in the criminal action; and (ii) the resolution of such issue determines whether or not the
criminal action may proceed.22

If both civil and criminal cases have similar issues, or the issue in one is intimately related to the
issues raised in the other, then a prejudicial question would likely exist, provided the other element
or characteristic is satisfied. It must appear not only that the civil case involves the same facts upon
which the criminal prosecution would be based, but also that the resolution of the issues raised in
the civil action would be necessarily determinative of the guilt or innocence of the accused. If the
resolution of the issue in the civil action will not determine the criminal responsibility of the accused
in the criminal action based on the same facts, or if there is no necessity that the civil case be
determined first before taking up the criminal case, the civil case does not involve a prejudicial
question.23 Neither is there a prejudicial question if the civil and the criminal action can, according to
law, proceed independently of each other.24
The issue in the criminal cases is whether the petitioner is guilty of violating B.P. Blg. 22, while in the
civil case, it is whether the private respondents are entitled to collect from the petitioner the sum or
the value of the checks that they have rediscounted from Evelyn. lavvphil

The resolution of the issue raised in the civil action is not determinative of the guilt or innocence of
the accused in the criminal cases against him, and there is no necessity that the civil case be
determined first before taking up the criminal cases.

In the aforementioned civil actions, even if petitioner is declared not liable for the payment of the
value of the checks and damages, he cannot be adjudged free from criminal liability for violation of
B.P. Blg. 22. The mere issuance of worthless checks with knowledge of the insufficiency of funds to
support the checks is in itself an offense.25

In Jose v. Suarez,26 the prejudicial question under determination was whether the daily interest rate
of 5% was void, such that the checks issued by respondents to cover said interest were likewise void
for being contra bonos mores, and thus the cases for B.P. Blg. 22 will no longer prosper. In resolving
the issue, We ruled that "whether or not the interest rate imposed by petitioners is eventually
declared void for being contra bonos mores will not affect the outcome of the BP Blg. 22 cases
because what will ultimately be penalized is the mere issuance of bouncing checks. In fact, the
primordial question posed before the court hearing the B.P. Blg. 22 cases is whether the law has
been breached; that is, if a bouncing check has been issued."

Further, We held in Ricaforte v. Jurado,27 that:

The gravamen of the offense punished by B.P. Blg. 22 is the act of making and issuing a worthless
check; that is, a check that is dishonored upon its presentation for payment. In Lozano v. Martinez,
we have declared that it is not the non-payment of an obligation which the law punishes. The law is
not intended or designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit, under
pain of penal sanctions, the making and circulation of worthless checks. Because of its deleterious
effects on the public interest, the practice is proscribed by the law. The law punishes the act not as
an offense against property, but an offense against public order. In People v. Nitafan, we said that a
check issued as an evidence of debt - though not intended to be presented for payment - has the
same effect as an ordinary check and would fall within the ambit of B.P. Blg. 22.

xxxx

x x x The mere act of issuing a worthless check - whether as a deposit, as a guarantee or even as
evidence of pre-existing debt - is malum prohibitum.

To determine the reason for which checks are issued, or the terms and conditions for their issuance,
will greatly erode the faith the public reposes in the stability and commercial value of checks as
currency substitutes, and bring about havoc in trade and in banking communities. So what the law
punishes is the issuance of a bouncing check and not the purpose for which it was issued or the
terms and conditions relating to its issuance. The mere act of issuing a worthless check is malum
prohibitum.28

Moreover, petitioner's reliance on Ras v. Rasul29 is misplaced. The case of Ras involves a complaint
for nullification of a deed of sale on the ground of an alleged double sale. While the civil case was
pending, an information for estafa was filed against Ras (the defendant in the civil case) arising from
the same alleged double sale, subject matter of the civil complaint. The Court ruled that there was a
prejudicial question considering that the defense in the civil case was based on the very same facts
that would be determinative of the guilt or innocence of the accused in the estafa case.
The instant case is different from Ras, inasmuch as the determination of whether the petitioner is
liable to pay the private respondents the value of the checks and damages, will not affect the guilt or
innocence of the petitioner because the material question in the criminal cases is whether petitioner
had issued bad checks, regardless of the purpose or condition of its issuance.

Guided by the following legal precepts, it is clear that the determination of the issues involved in Civil
Case Nos. 6231 and 6238 for collection of sum of money and damages is irrelevant to the guilt or
innocence of the petitioner in the criminal cases for violation of B.P. Blg. 22.

In addition, petitioner's claim of lack of consideration may be raised as a defense during the trial of
the criminal cases against him. The validity and merits of a party’s defense and accusation, as well
as the admissibility and weight of testimonies and evidence brought before the court, are better
ventilated during trial proper.

Precisely, the reason why a state has courts of law is to ascertain the respective rights of the parties,
to examine and to put to test all their respective allegations and evidence through a well designed
machinery termed "trial."Thus, all the defenses available to the accused should be invoked in the
trial of the criminal cases. This court is not the proper forum that should ascertain the facts and
decide the case for violation of B.P. Blg. 22 filed against the petitioner.

In fine, the CA committed no reversible error in affirming the decision of the RTC.

WHEREFORE, the petition is DENIED and the Decision dated April 30, 2003 and the Resolution
dated July 17, 2003 of the Court of Appeals in CA-G.R. SP No. 68250 are AFFIRMED.

SO ORDERED.
DREAMWORK CONSTRUCTION, INC., Petitioner,
vs.
CLEOFE S. JANIOLA and HON. ARTHUR A. FAMINI, Respondents.

DECISION

VELASCO, JR., J.:

The Case

Petitioner Dreamwork Construction, Inc. seeks the reversal of the August 26, 2008 Decision1 in SCA
No. 08-0005 of the Regional Trial Court (RTC), Branch 253 in Las Piñas City. The Decision affirmed
the Orders dated October 16, 20072 and March 12, 20083 in Criminal Case Nos. 55554-61 issued by
the Metropolitan Trial Court (MTC), Branch 79 in Las Piñas City.

The Facts

On October 18, 2004, petitioner, through its President, Roberto S. Concepcion, and Vice-President
for Finance and Marketing, Normandy P. Amora, filed a Complaint Affidavit dated October 5,
20044 for violation of Batas Pambansa Bilang 22 (BP 22) against private respondent Cleofe S.
Janiola with the Office of the City Prosecutor of Las Piñas City. The case was docketed as I.S. No.
04-2526-33. Correspondingly, petitioner filed a criminal information for violation of BP 22 against
private respondent with the MTC on February 2, 2005 docketed as Criminal Case Nos. 55554-61,
entitled People of the Philippines v. Cleofe S. Janiola.

On September 20, 2006, private respondent, joined by her husband, instituted a civil complaint
against petitioner by filing a Complaint dated August 20065 for the rescission of an alleged
construction agreement between the parties, as well as for damages. The case was filed with the
RTC, Branch 197 in Las Piñas City and docketed as Civil Case No. LP-06-0197. Notably, the
checks, subject of the criminal cases before the MTC, were issued in consideration of the
construction agreement.

Thereafter, on July 25, 2007, private respondent filed a Motion to Suspend Proceedings dated July
24, 20076 in Criminal Case Nos. 55554-61, alleging that the civil and criminal cases involved facts
and issues similar or intimately related such that in the resolution of the issues in the civil case, the
guilt or innocence of the accused would necessarily be determined. In other words, private
respondent claimed that the civil case posed a prejudicial question as against the criminal cases.

Petitioner opposed the suspension of the proceedings in the criminal cases in an undated
Comment/Opposition to Accused’s Motion to Suspend Proceedings based on Prejudicial
Question7 on the grounds that: (1) there is no prejudicial question in this case as the rescission of the
contract upon which the bouncing checks were issued is a separate and distinct issue from the issue
of whether private respondent violated BP 22; and (2) Section 7, Rule 111 of the Rules of Court
states that one of the elements of a prejudicial question is that "the previously instituted civil action
involves an issue similar or intimately related to the issue raised in the subsequent criminal action";
thus, this element is missing in this case, the criminal case having preceded the civil case.

Later, the MTC issued its Order dated October 16, 2007, granting the Motion to Suspend
Proceedings, and reasoned that:
Should the trial court declare the rescission of contract and the nullification of the checks issued as
the same are without consideration, then the instant criminal cases for alleged violation of BP 22
must be dismissed. The belated filing of the civil case by the herein accused did not detract from the
correctness of her cause, since a motion for suspension of a criminal action may be filed at any time
before the prosecution rests (Section 6, Rule 111, Revised Rules of Court).8

In an Order dated March 12, 2008,9 the MTC denied petitioner’s Motion for Reconsideration dated
November 29, 2007.

Petitioner appealed the Orders to the RTC with a Petition dated May 13, 2008. Thereafter, the RTC
issued the assailed decision dated August 26, 2008, denying the petition. On the issue of the
existence of a prejudicial question, the RTC ruled:

Additionally, it must be stressed that the requirement of a "previously" filed civil case is intended
merely to obviate delays in the conduct of the criminal proceedings. Incidentally, no clear evidence
of any intent to delay by private respondent was shown. The criminal proceedings are still in their
initial stages when the civil action was instituted. And, the fact that the civil action was filed after the
criminal action was instituted does not render the issues in the civil action any less prejudicial in
character.10

Hence, we have this petition under Rule 45.

The Issue

WHETHER OR NOT THE COURT A QUO SERIOUSLY ERRED IN NOT PERCEIVING GRAVE
ABUSE OF DISCRETION ON THE PART OF THE INFERIOR COURT, WHEN THE LATTER
RULED TO SUSPEND PROCEEDINGS IN CRIM. CASE NOS. 55554-61 ON THE BASIS OF
"PREJUDICIAL QUESTION" IN CIVIL CASE NO. LP-06-0197.11

The Court’s Ruling

This petition must be granted.

The Civil Action Must Precede the Filing of the

Criminal Action for a Prejudicial Question to Exist

Under the 1985 Rules on Criminal Procedure, as amended by Supreme Court Resolutions dated
June 17, 1988 and July 7, 1988, the elements of a prejudicial question are contained in Rule 111,
Sec. 5, which states:

SEC. 5. Elements of prejudicial question. — The two (2) essential elements of a prejudicial question
are: (a) the civil action involves an issue similar or intimately related to the issue raised in the
criminal action; and (b) the resolution of such issue determines whether or not the criminal action
may proceed.

Thus, the Court has held in numerous cases12 that the elements of a prejudicial question, as stated
in the above-quoted provision and in Beltran v. People,13 are:

The rationale behind the principle of prejudicial question is to avoid two conflicting decisions. It has
two essential elements: (a) the civil action involves an issue similar or intimately related to the issue
raised in the criminal action; and (b) the resolution of such issue determines whether or not the
criminal action may proceed.

On December 1, 2000, the 2000 Rules on Criminal Procedure, however, became effective and the
above provision was amended by Sec. 7 of Rule 111, which applies here and now provides:

SEC. 7. Elements of prejudicial question.—The elements of a prejudicial question are: (a) the
previously instituted civil action involves an issue similar or intimately related to the issue raised in
the subsequent criminal action, and (b) the resolution of such issue determines whether or not the
criminal action may proceed. (Emphasis supplied.)

Petitioner interprets Sec. 7(a) to mean that in order for a civil case to create a prejudicial question
and, thus, suspend a criminal case, it must first be established that the civil case was filed previous
to the filing of the criminal case. This, petitioner argues, is specifically to guard against the situation
wherein a party would belatedly file a civil action that is related to a pending criminal action in order
to delay the proceedings in the latter.

On the other hand, private respondent cites Article 36 of the Civil Code which provides:

Art. 36. Pre-judicial questions which must be decided before any criminal prosecution may be
instituted or may proceed, shall be governed by rules of court which the Supreme Court shall
promulgate and which shall not be in conflict with the provisions of this Code. (Emphasis supplied.)

Private respondent argues that the phrase "before any criminal prosecution may be instituted or may
proceed" must be interpreted to mean that a prejudicial question exists when the civil action is filed
either before the institution of the criminal action or during the pendency of the criminal action.
Private respondent concludes that there is an apparent conflict in the provisions of the Rules of
Court and the Civil Code in that the latter considers a civil case to have presented a prejudicial
question even if the criminal case preceded the filing of the civil case.

We cannot agree with private respondent.

First off, it is a basic precept in statutory construction that a "change in phraseology by amendment
of a provision of law indicates a legislative intent to change the meaning of the provision from that it
originally had."14 In the instant case, the phrase, "previously instituted," was inserted to qualify the
nature of the civil action involved in a prejudicial question in relation to the criminal action. This
interpretation is further buttressed by the insertion of "subsequent" directly before the term criminal
action. There is no other logical explanation for the amendments except to qualify the relationship of
the civil and criminal actions, that the civil action must precede the criminal action.

Thus, this Court ruled in Torres v. Garchitorena15 that:

Even if we ignored petitioners’ procedural lapse and resolved their petition on the merits, we hold
that Sandiganbayan did not abuse its discretion amounting to excess or lack of jurisdiction in
denying their omnibus motion for the suspension of the proceedings pending final judgment in Civil
Case No. 7160. Section 6, Rule lll of the Rules of Criminal Procedure, as amended, reads:

Sec. 6. Suspension by reason of prejudicial question. - A petition for suspension of the criminal
action based upon the pendency of a prejudicial question in a civil action may be filed in the office of
the prosecutor or the court conducting the preliminary investigation. When the criminal action has
been filed in court for trial, the petition to suspend shall be filed in the same criminal action at any
time before the prosecution rests.

Sec. 7. Elements of prejudicial question. - The elements of a prejudicial question are: (a) the
previously instituted civil action involves an issue similar or intimately related to the issue raised in
the subsequent criminal action, and (b) the resolution of such issue determines whether or not the
criminal action may proceed.

Under the amendment, a prejudicial question is understood in law as that which must precede the
criminal action and which requires a decision before a final judgment can be rendered in the criminal
action with which said question is closely connected. The civil action must be instituted prior to the
institution of the criminal action. In this case, the Information was filed with the Sandiganbayan
ahead of the complaint in Civil Case No. 7160 filed by the State with the RTC in Civil Case No. 7160.
Thus, no prejudicial question exists. (Emphasis supplied.)

Additionally, it is a principle in statutory construction that "a statute should be construed not only to
be consistent with itself but also to harmonize with other laws on the same subject matter, as to form
a complete, coherent and intelligible system."16 This principle is consistent with the maxim,
interpretare et concordare leges legibus est optimus interpretandi modus or every statute must be so
construed and harmonized with other statutes as to form a uniform system of jurisprudence.17 1 a vv p h i l

In other words, every effort must be made to harmonize seemingly conflicting laws. It is only when
harmonization is impossible that resort must be made to choosing which law to apply.

In the instant case, Art. 36 of the Civil Code and Sec. 7 of Rule 111 of the Rules of Court are
susceptible of an interpretation that would harmonize both provisions of law. The phrase "previously
instituted civil action" in Sec. 7 of Rule 111 is plainly worded and is not susceptible of alternative
interpretations. The clause "before any criminal prosecution may be instituted or may proceed" in
Art. 36 of the Civil Code may, however, be interpreted to mean that the motion to suspend the
criminal action may be filed during the preliminary investigation with the public prosecutor or court
conducting the investigation, or during the trial with the court hearing the case.

This interpretation would harmonize Art. 36 of the Civil Code with Sec. 7 of Rule 111 of the Rules of
Court but also with Sec. 6 of Rule 111 of the Civil Code, which provides for the situations when the
motion to suspend the criminal action during the preliminary investigation or during the trial may be
filed. Sec. 6 provides:

SEC. 6. Suspension by reason of prejudicial question.—A petition for suspension of the criminal
action based upon the pendency of a prejudicial question in a civil action may be filed in the office of
the prosecutor or the court conducting the preliminary investigation. When the criminal action has
been filed in court for trial, the petition to suspend shall be filed in the same criminal action at any
time before the prosecution rests.

Thus, under the principles of statutory construction, it is this interpretation of Art. 36 of the Civil Code
that should govern in order to give effect to all the relevant provisions of law.

It bears pointing out that the circumstances present in the instant case indicate that the filing of the
civil action and the subsequent move to suspend the criminal proceedings by reason of the presence
of a prejudicial question were a mere afterthought and instituted to delay the criminal proceedings.

In Sabandal v. Tongco,18 we found no prejudicial question existed involving a civil action for specific
performance, overpayment, and damages, and a criminal complaint for BP 22, as the resolution of
the civil action would not determine the guilt or innocence of the accused in the criminal case. In
resolving the case, we said:

Furthermore, the peculiar circumstances of the case clearly indicate that the filing of the civil case
was a ploy to delay the resolution of the criminal cases. Petitioner filed the civil case three years
after the institution of the criminal charges against him. Apparently, the civil action was instituted as
an afterthought to delay the proceedings in the criminal cases.19

Here, the civil case was filed two (2) years after the institution of the criminal complaint and from the
time that private respondent allegedly withdrew its equipment from the job site. Also, it is worth
noting that the civil case was instituted more than two and a half (2 ½) years from the time that
private respondent allegedly stopped construction of the proposed building for no valid reason. More
importantly, the civil case praying for the rescission of the construction agreement for lack of
consideration was filed more than three (3) years from the execution of the construction agreement.

Evidently, as in Sabandal, the circumstances surrounding the filing of the cases involved here show
that the filing of the civil action was a mere afterthought on the part of private respondent and
interposed for delay. And as correctly argued by petitioner, it is this scenario that Sec. 7 of Rule 111
of the Rules of Court seeks to prevent. Thus, private respondent’s positions cannot be left to stand.

The Resolution of the Civil Case Is Not

Determinative of the Prosecution of the Criminal Action

In any event, even if the civil case here was instituted prior to the criminal action, there is, still, no
prejudicial question to speak of that would justify the suspension of the proceedings in the criminal
case.

To reiterate, the elements of a prejudicial question under Sec. 7 of Rule 111 of the Rules of Court
are: (1) the previously instituted civil action involves an issue similar or intimately related to the issue
raised in the subsequent criminal action; and (2) the resolution of such issue determines whether or
not the criminal action may proceed.

Petitioner argues that the second element of a prejudicial question, as provided in Sec. 7 of Rule
111 of the Rules, is absent in this case. Thus, such rule cannot apply to the present controversy.

Private respondent, on the other hand, claims that if the construction agreement between the parties
is declared null and void for want of consideration, the checks issued in consideration of such
contract would become mere scraps of paper and cannot be the basis of a criminal prosecution.

We find for petitioner.

It must be remembered that the elements of the crime punishable under BP 22 are as follows:

(1) the making, drawing, and issuance of any check to apply for account or for value;

(2) the knowledge of the maker, drawer, or issuer that at the time of issue there are no
sufficient funds in or credit with the drawee bank for the payment of such check in full upon
its presentment; and
 (3) the subsequent dishonor of the check by the drawee bank for insufficiency of funds or
credit, or dishonor for the same reason had not the drawer, without any valid cause, ordered
the bank to stop payment.20

Undeniably, the fact that there exists a valid contract or agreement to support the issuance of the
check/s or that the checks were issued for valuable consideration does not make up the elements of
the crime. Thus, this Court has held in a long line of cases21 that the agreement surrounding the
issuance of dishonored checks is irrelevant to the prosecution for violation of BP 22. In Mejia v.
People,22 we ruled:

It must be emphasized that the gravamen of the offense charge is the issuance of a bad check. The
purpose for which the check was issued, the terms and conditions relating to its issuance, or any
agreement surrounding such issuance are irrelevant to the prosecution and conviction of petitioner.
To determine the reason for which checks are issued, or the terms and conditions for their issuance,
will greatly erode the faith the public reposes in the stability and commercial value of checks as
currency substitutes, and bring havoc in trade and in banking communities. The clear intention of the
framers of B.P. 22 is to make the mere act of issuing a worthless check malum prohibitum.

Lee v. Court of Appeals23 is even more poignant. In that case, we ruled that the issue of lack of
valuable consideration for the issuance of checks which were later on dishonored for insufficient
funds is immaterial to the success of a prosecution for violation of BP 22, to wit:

Third issue. Whether or not the check was issued on account or for value.

Petitioner’s claim is not feasible. We have held that upon issuance of a check, in the absence of
evidence to the contrary, it is presumed that the same was issued for valuable consideration.
Valuable consideration, in turn, may consist either in some right, interest, profit or benefit accruing to
the party who makes the contract, or some forbearance, detriment, loss or some responsibility, to
act, or labor, or service given, suffered or undertaken by the other side. It is an obligation to do, or
not to do in favor of the party who makes the contract, such as the maker or indorser.

In this case, petitioner himself testified that he signed several checks in blank, the subject check
included, in exchange for 2.5% interest from the proceeds of loans that will be made from said
account. This is a valuable consideration for which the check was issued. That there was neither a
pre-existing obligation nor an obligation incurred on the part of petitioner when the subject check
was given by Bautista to private complainant on July 24, 1993 because petitioner was no longer
connected with Unlad or Bautista starting July 1989, cannot be given merit since, as earlier
discussed, petitioner failed to adequately prove that he has severed his relationship with Bautista or
Unlad.

At any rate, we have held that what the law punishes is the mere act of issuing a bouncing check,
not the purpose for which it was issued nor the terms and conditions relating to its issuance. This is
because the thrust of the law is to prohibit the making of worthless checks and putting them into
circulation.24 (Emphasis supplied.)

Verily, even if the trial court in the civil case declares that the construction agreement between the
parties is void for lack of consideration, this would not affect the prosecution of private respondent in
the criminal case. The fact of the matter is that private respondent indeed issued checks which were
subsequently dishonored for insufficient funds. It is this fact that is subject of prosecution under BP
22.lawphil.net
Therefore, it is clear that the second element required for the existence of a prejudicial question, that
the resolution of the issue in the civil action would determine whether the criminal action may
proceed, is absent in the instant case. Thus, no prejudicial question exists and the rules on it are
inapplicable to the case before us.

WHEREFORE, we GRANT this petition. We hereby REVERSE and SET ASIDE the August 26,
2008 Decision in SCA No. 08-0005 of the RTC, Branch 253 in Las Piñas City and the Orders dated
October 16, 2007 and March 12, 2008 in Criminal Case Nos. 55554-61 of the MTC, Branch 79 in
Las Piñas City. We order the MTC to continue with the proceedings in Criminal Case Nos. 55554-61
with dispatch.

No costs.

SO ORDERED.
JOSELITO R. PIMENTEL, G.R. No. 172060
Petitioner,
Present:

CARPIO, J., Chairperson,

- versus - PERALTA,
BERSAMIN,*
ABAD, and
VILLARAMA, JR.,** JJ.
MARIA CHRYSANTINE
L. PIMENTEL and PEOPLE Promulgated:
OF THE PHILIPPINES,
Respondents. September 13, 2010
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

CARPIO, J.:

The Case

Before the Court is a petition for review[1] assailing the Decision[2] of the Court of
Appeals, promulgated on 20 March 2006, in CA-G.R. SP No. 91867.

The Antecedent Facts

The facts are stated in the Court of Appeals decision:

On 25 October 2004, Maria Chrysantine Pimentel y Lacap (private respondent) filed
an action for frustrated parricide against Joselito R. Pimentel (petitioner), docketed
as Criminal Case No. Q-04-130415, before the Regional Trial Court of Quezon City,
which was raffled to Branch 223 (RTC Quezon City).

On 7 February 2005, petitioner received summons to appear before the Regional

Trial Court of Antipolo City, Branch 72 (RTC Antipolo) for the pre-trial and trial of
Civil Case No. 04-7392 (Maria Chrysantine Lorenza L. Pimentel v. Joselito
Pimentel) for Declaration of Nullity of Marriage under Section 36 of the Family
Code on the ground of psychological incapacity.

On 11 February 2005, petitioner filed an urgent motion to suspend the proceedings

before the RTC Quezon City on the ground of the existence of a prejudicial
question. Petitioner asserted that since the relationship between the offender and the
victim is a key element in parricide, the outcome of Civil Case No. 04-7392 would
have a bearing in the criminal case filed against him before the RTC Quezon City.

The Decision of the Trial Court

The RTC Quezon City issued an Order dated 13 May 2005[3] holding that the
pendency of the case before the RTC Antipolo is not a prejudicial question that
warrants the suspension of the criminal case before it. The RTC Quezon City held
that the issues in Criminal Case No. Q-04-130415 are the injuries sustained by
respondent and whether the case could be tried even if the validity of petitioners
marriage with respondent is in question. The RTC Quezon City ruled:

WHEREFORE, on the basis of the foregoing, the Motion to Suspend

Proceedings On the [Ground] of the Existence of a Prejudicial Question
is, for lack of merit, DENIED.

SO ORDERED.[4]

Petitioner filed a motion for reconsideration. In its 22 August 2005 Order,[5] the
RTC Quezon City denied the motion.

Petitioner filed a petition for certiorari with application for a writ of preliminary
injunction and/or temporary restraining order before the Court of Appeals, assailing
the 13 May 2005 and 22 August 2005 Orders of the RTC Quezon City.

The Decision of the Court of Appeals

In its 20 March 2006 Decision, the Court of Appeals dismissed the petition. The
Court of Appeals ruled that in the criminal case for frustrated parricide, the issue is
whether the offender commenced the commission of the crime of parricide directly
by overt acts and did not perform all the acts of execution by reason of some cause
or accident other than his own spontaneous desistance. On the other hand, the issue
in the civil action for annulment of marriage is whether petitioner is psychologically
incapacitated to comply with the essential marital obligations. The Court of Appeals
ruled that even if the marriage between petitioner and respondent would be declared
void, it would be immaterial to the criminal case because prior to the declaration of
nullity, the alleged acts constituting the crime of frustrated parricide had already
been committed. The Court of Appeals ruled that all that is required for the charge
of frustrated parricide is that at the time of the commission of the crime, the marriage
is still subsisting.

Petitioner filed a petition for review before this Court assailing the Court of Appeals
decision.

The Issue

The only issue in this case is whether the resolution of the action for annulment of
marriage is a prejudicial question that warrants the suspension of the criminal case
for frustrated parricide against petitioner.

The Ruling of this Court

The petition has no merit.

Civil Case Must be Instituted

Before the Criminal Case

Section 7, Rule 111 of the 2000 Rules on Criminal Procedure[6] provides:

Section 7. Elements of Prejudicial Question. - The elements of a prejudicial

question are: (a) the previously instituted civil action involves an issue
similar or intimately related to the issue raised in the subsequent criminal
action and (b) the resolution of such issue determines whether or not the
criminal action may proceed.
The rule is clear that the civil action must be instituted first before the filing of the
criminal action. In this case, the Information[7] for Frustrated Parricide was dated 30
August 2004. It was raffled to RTC Quezon City on 25 October 2004 as per the
stamped date of receipt on the Information. The RTC Quezon City set Criminal Case
No. Q-04-130415 for pre-trial and trial on 14 February 2005. Petitioner was served
summons in Civil Case No. 04-7392 on 7 February 2005.[8] Respondents
petition[9] in Civil Case No. 04-7392 was dated 4 November 2004 and was filed on
5 November 2004. Clearly, the civil case for annulment was filed after the filing of
the criminal case for frustrated parricide. As such, the requirement of Section 7, Rule
111 of the 2000 Rules on Criminal Procedure was not met since the civil action was
filed subsequent to the filing of the criminal action.

Annulment of Marriage is not a Prejudicial Question

in Criminal Case for Parricide

Further, the resolution of the civil action is not a prejudicial question that would
warrant the suspension of the criminal action.

There is a prejudicial question when a civil action and a criminal action are both
pending, and there exists in the civil action an issue which must be preemptively
resolved before the criminal action may proceed because howsoever the issue raised
in the civil action is resolved would be determinative of the guilt or innocence of the
accused in the criminal case.[10] A prejudicial question is defined as:

x x x one that arises in a case the resolution of which is a logical antecedent

of the issue involved therein, and the cognizance of which pertains to
another tribunal. It is a question based on a fact distinct and separate from
the crime but so intimately connected with it that it determines the guilt or
innocence of the accused, and for it to suspend the criminal action, it must
appear not only that said case involves facts intimately related to those
upon which the criminal prosecution would be based but also that in the
resolution of the issue or issues raised in the civil case, the guilt or
innocence of the accused would necessarily be determined.[11]

The relationship between the offender and the victim is a key element in the crime
of parricide,[12] which punishes any person who shall kill his father, mother, or child,
whether legitimate or illegitimate, or any of his ascendants or descendants, or his
spouse.[13] The relationship between the offender and the victim distinguishes the
crime of parricide from murder[14] or homicide.[15] However, the issue in the
annulment of marriage is not similar or intimately related to the issue in the criminal
case for parricide. Further, the relationship between the offender and the victim is
not determinative of the guilt or innocence of the accused.

The issue in the civil case for annulment of marriage under Article 36 of the Family
Code is whether petitioner is psychologically incapacitated to comply with the
essential marital obligations. The issue in parricide is whether the accused killed the
victim. In this case, since petitioner was charged with frustrated parricide, the issue
is whether he performed all the acts of execution which would have killed
respondent as a consequence but which, nevertheless, did not produce it by reason
of causes independent of petitioners will.[16] At the time of the commission of the
alleged crime, petitioner and respondent were married. The subsequent dissolution
of their marriage, in case the petition in Civil Case No. 04-7392 is granted, will have
no effect on the alleged crime that was committed at the time of the subsistence of
the marriage. In short, even if the marriage between petitioner and respondent is
annulled, petitioner could still be held criminally liable since at the time of the
commission of the alleged crime, he was still married to respondent.

We cannot accept petitioners reliance on Tenebro v. Court of Appeals[17] that the

judicial declaration of the nullity of a marriage on the ground of psychological
incapacity retroacts to the date of the celebration of the marriage insofar as
the vinculumbetween the spouses is concerned x x x. First, the issue in Tenebro is
the effect of the judicial declaration of nullity of a second or subsequent marriage
on the ground of psychological incapacity on a criminal liability for bigamy. There
was no issue of prejudicial question in that case. Second, the Court ruled
in Tenebro that [t]here is x x x a recognition written into the law itself that such a
marriage, although void ab initio, may still produce legal consequences.[18] In fact,
the Court declared in that case that a declaration of the nullity of the second marriage
on the ground of psychological incapacity is of absolutely no moment insofar as the
States penal laws are concerned.[19]
In view of the foregoing, the Court upholds the decision of the Court of Appeals. The
trial in Criminal Case No. Q-04-130415 may proceed as the resolution of the issue
in Civil Case No. 04-7392 is not determinative of the guilt or innocence of petitioner
in the criminal case.

WHEREFORE, we DENY the petition. We AFFIRM the 20 March 2006

Decision of the Court of Appeals in CA-G.R. SP No. 91867.
SO ORDERED.
RAFAEL JOSE-CONSING, JR., Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

BERSAMIN, J.:

An independent civil action based on fraud initiated by the defrauded party does not raise a
prejudicial question to stop the proceedings in a pending criminal prosecution of the defendant for
estafa through falsification. This is because the result of the independent civil action is irrelevant to
the issue of guilt or innocence of the accused.

The Case

On appeal is the amended decision promulgated on August 18, 2003,1 whereby the Court of Appeals
(CA) granted the writ of certiorari upon petition by the State in C.A.-G.R. No. 71252 entitled People
v. Han. Winlove M Dumayas, Presiding Judge, Branch 59, Regional Trial Court, Makati City and
Rafael Consing, Jr., and set aside the assailed order issued on November 26, 2001 by the Regional
Trial Court (RTC), Branch 59, in Makati City deferring the arraignment of petitioner in Criminal Case
No. 00-120 entitled People v. Rafael Consing, Jr. upon his motion on the ground of the existence of
a prejudicial question in the civil cases pending between him and the complainant in the trial courts
in Pasig City and Makati City.

Antecedents

Petitioner negotiated with and obtained for himself and his mother, Cecilia de la Cruz (de la Cruz)
various loans totaling ₱18,000,000.00 from Unicapital Inc. (Unicapital). The loans were secured by a
real estate mortgage constituted on a parcel of land (property) covered by Transfer Certificate of
Title (TCT) No. T-687599 of the Registry of Deeds for the Province of Cavite registered under the
name of de la Cruz.2 In accordance with its option to purchase the mortgaged property, Unicapital
agreed to purchase one-half of the property for a total consideration of ₱21,221,500.00. Payment
was effected by off-setting the amounts due to

Unicapital under the promissory notes of de la Cruz and Consing in the amount of ₱18,000,000.00
and paying an additional amount of ₱3,145,946.50. The other half of the property was purchased by
Plus Builders, Inc. (Plus Builders), a joint venture partner of Unicapital.3

Before Unicapital and Plus Builders could develop the property, they learned that the title to the
property was really TCT No. 114708 in the names of Po Willie Yu and Juanito Tan Teng, the parties
from whom the property had been allegedly acquired by de la Cruz. TCT No. 687599 held by De la
Cruz appeared to be spurious.4

On its part, Unicapital demanded the return of the total amount of ₱41,377,851.48 as of April 19,
1999 that had been paid to and received by de la Cruz and Consing, but the latter ignored the
demands.5

On July 22, 1999, Consing filed Civil Case No. 1759 in the Pasig City Regional Trial Court (RTC)
(Pasig civil case) for injunctive relief, thereby seeking to enjoin Unicapital from proceeding against
him for the collection of the ₱41,377,851.48 on the ground that he had acted as a mere agent of his
mother.
On the same date, Unicapital initiated a criminal complaint for estafa through falsification of public
document against Consing and de la Cruz in the Makati City Prosecutor’s Office.6

On August 6, 1999, Unicapital sued Consing in the RTC in Makati City (Civil Case No. 99-1418) for
the recovery of a sum of money and damages, with an application for a writ of preliminary
attachment (Makati civil case).7

On January 27, 2000, the Office of the City Prosecutor of Makati City filed against Consing and De la
Cruz an information for estafa through falsification of public document in the RTC in Makati City
(Criminal Case No. 00-120), which was assigned to Branch 60 (Makati criminal case).8

On February 15, 2001, Consing moved to defer his arraignment in the Makati criminal case on the
ground of existence of a prejudicial question due to the pendency of the Pasig and Makati civil
cases. On September 25, 2001, Consing reiterated his motion for deferment of his arraignment,
citing the additional ground of pendency of CA-G.R. SP No. 63712 in the CA. On November 19,
2001, the Prosecution opposed the motion.9

On November 26, 2001, the RTC issued an order suspending the proceedings in the Makati criminal
case on the ground of the existence of a prejudicial question, and on March 18, 2001, the RTC
denied the Prosecution’s motion for reconsideration.10

The State thus assailed in the CA the last two orders of the RTC in the Makati criminal case via
petition for certiorari (C.A.-G.R. SP No. 71252).

On May 20, 2003, the CA promulgated its decision in C.A.-G.R. SP No. 71252,11 dismissing the
petition for certiorari and upholding the RTC’s questioned orders, explaining:

Is the resolution of the Pasig civil case prejudicial to the Cavite and Makati criminal cases?

We hold that it is. The resolution of the issue in the Pasig case, i.e. whether or not private
respondent may be held liable in the questioned transaction, will determine the guilt or innocence of
private respondent Consing in both the Cavite and Makati criminal cases.

The analysis and comparison of the Pasig civil case, Makati criminal case, Makati civil case and
Cavite criminal case show that: (1) the parties are identical; (2) the transactions in controversy are
identical; (3) the Transfer Certificate of Titles (TCT) involved are identical; (4) the questioned Deeds
of Sale/Mortgage are identical; (5) the dates in question are identical; and (6) the issue of private
respondent’s culpability for the questioned transactions is identical in all the proceedings.

As discussed earlier, not only was the issue raised in the Pasig civil case identical to or intimately
related to the criminal cases in Cavite and Makati. The similarities also extend to the parties in the
cases and the TCT and Deed of Sale/ Mortgage involved in the questioned transactions.

The respondent Judge, in ordering the suspension of the arraignment of private respondent in the
Makati case, in view of CA-G.R. SP No. 63712, where Unicapital was not a party thereto, did so
pursuant to its mandatory power to take judicial notice of an official act of another judicial authority. It
was also a better legal tack to prevent multiplicity of action, to which our legal system abhors.

Applying the Tuanda ruling, the pendency of CA-G.R. SP No. 63712 may be validly invoked to
suspend private respondent’s arraignment in the Makati City criminal case, notwithstanding the fact
that CA-G.R. SP No. 63712 was an offshoot, merely, in the Cavite criminal case.12
In the meanwhile, on October 13, 1999, Plus Builders commenced its own suit for damages against
Consing (Civil Case No. 99-95381) in the RTC in Manila (Manila civil case).13

On January 21, 2000, an information for estafa through falsification of public document was filed
against Consing and De la Cruz in the RTC in Imus, Cavite, docketed as Criminal Case No. 7668-00
and assigned to Branch 21 (Cavite criminal case). Consing filed a motion to defer the arraignment
on the ground of the existence of a prejudicial question, i.e., the pendency of the Pasig and Manila
civil cases. On January 27, 2000, however, the RTC handling the Cavite criminal case denied
Consing’s motion. Later on, it also denied his motion for reconsideration. Thereafter, Consing
commenced in the CA a special civil action for certiorari with prayer for the issuance of a temporary
restraining order (TRO) and/or writ of preliminary injunction (C.A.-G.R. SP No. 63712), seeking to
enjoin his arraignment and trial in the Cavite criminal case. The CA granted the TRO on March 19,
2001, and later promulgated its decision on May 31, 2001, granting Consing’ petition for certiorari
and setting aside the January 27, 2000 order of the RTC, and permanently enjoining the RTC from
proceeding with the arraignment and trial until the Pasig and Manila civil cases had been finally
decided.

Not satisfied, the State assailed the decision of the CA in this Court (G.R. No. 148193), praying for
the reversal of the May 31, 2001 decision of the CA. On January 16, 2003, the Court granted the
petition for review in G.R. No. 148193, and reversed and set aside the May 31, 2001 decision of the
CA,14 viz:

In the case at bar, we find no prejudicial question that would justify the suspension of the
proceedings in the criminal case (the Cavite criminal case). The issue in Civil Case No. SCA 1759
(the Pasig civil case) for Injunctive Relief is whether or not respondent (Consing) merely acted as an
agent of his mother, Cecilia de la Cruz; while in Civil Case No. 99-95381 (the Manila civil case), for
Damages and Attachment, the question is whether respondent and his mother are liable to pay
damages and to return the amount paid by PBI for the purchase of the disputed lot. Even if
respondent is declared merely an agent of his mother in the transaction involving the sale of the
questioned lot, he cannot be adjudged free from criminal liability. An agent or any person may be
held liable for conspiring to falsify public documents. Hence, the determination of the issue involved
in Civil Case No. SCA 1759 for Injunctive Relief is irrelevant to the guilt or innocence of the
respondent in the criminal case for estafa through falsification of public document.

Likewise, the resolution of PBI’s right to be paid damages and the purchase price of the lot in
question will not be determinative of the culpability of the respondent in the criminal case for even if
PBI is held entitled to the return of the purchase price plus damages, it does not ipso facto follow
that respondent should be held guilty of estafa through falsification of public document. Stated
differently, a ruling of the court in the civil case that PBI should not be paid the purchase price plus
damages will not necessarily absolve respondent of liability in the criminal case where his guilt may
still be established under penal laws as determined by other evidence.

Moreover, neither is there a prejudicial question if the civil and the criminal action can, according to
law, proceed independently of each other. Under Rule 111, Section 3 of the Revised Rules on
Criminal Procedure, in the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code, the
independent civil action may be brought by the offended party. It shall proceed independently of the
criminal action and shall require only a preponderance of evidence. In no case, however, may the
offended party recover damages twice for the same act or omission charged in the criminal action.

Thus, in Rojas v. People, the petitioner was accused in a criminal case for violation of Article 319 of
the Revised Penal Code, for executing a new chattel mortgage on personal property in favor of
another party without consent of the previous mortgagee. Thereafter, the offended party filed a civil
case for termination of management contract, one of the causes of action of which consisted of
petitioner having executed a chattel mortgage while the previous chattel mortgage was still valid and
subsisting. Petitioner moved that the arraignment and trial of the criminal case be held in abeyance
on the ground that the civil case was a prejudicial question, the resolution of which was necessary
before the criminal proceedings could proceed. The trial court denied the suspension of the criminal
case on the ground that no prejudicial question exist. We affirmed the order of the trial court and
ruled that:

… the resolution of the liability of the defendant in the civil case on the eleventh cause of action
based on the fraudulent misrepresentation that the chattel mortgage the defendant executed in favor
of the said CMS Estate, Inc. on February 20, 1957, that his D-6 "Caterpillar" Tractor with Serial No.
9-U-6565 was "free from all liens and encumbrances" will not determine the criminal liability of the
accused in the said Criminal Case No. 56042 for violation of paragraph 2 of Article 319 of the
Revised Penal Code. . . . (i) That, even granting for the sake of argument, a prejudicial question is
involved in this case, the fact remains that both the crime charged in the information in the criminal
case and the eleventh cause of action in the civil case are based upon fraud, hence both the civil
and criminal cases could proceed independently of the other pursuant to Article 33 of the new Civil
Code which provides: "In cases of defamation, fraud and physical injuries, a civil action for damages,
entirely separate and distinct from the criminal action shall proceed independently of the criminal
prosecution, and shall require only a preponderance of evidence." (j) That, therefore, the act of
respondent judge in issuing the orders referred to in the instant petition was not made with "grave
abuse of discretion."

In the instant case, Civil Case No. 99-95381, for Damages and Attachment on account of the alleged
fraud committed by respondent and his mother in selling the disputed lot to PBI is an independent
civil action under Article 33 of the Civil Code. As such, it will not operate as a prejudicial question
that will justify the suspension of the criminal case at bar.15

Turning back to the Makati criminal case, the State moved for the reconsideration of the adverse
decision of the CA, citing the ruling in G.R. No. 148193, supra, to the effect that the Pasig and
Manila civil cases did not present a prejudicial question that justified the suspension of the
proceedings in the Cavite criminal case, and claiming that under the ruling in G.R. No. 148193, the
Pasig and Makati civil cases did not raise a prejudicial question that would cause the suspension of
the Makati criminal case.

In his opposition to the State’s motion for reconsideration, Consing contended that the ruling in G.R.
No. 148193 was not binding because G.R. No. 148193 involved Plus Builders, which was different
from Unicapital, the complainant in the Makati criminal case. He added that the decision in G.R. No.
148193 did not yet become final and executory, and could still be reversed at any time, and thus
should not control as a precedent to be relied upon; and that he had acted as an innocent attorney-
in-fact for his mother, and should not be held personally liable under a contract that had involved
property belonging to his mother as his principal.

On August 18, 2003, the CA amended its decision, reversing itself. It relied upon the ruling in G.R.
No. 148193, and held thusly:

CA-G.R. SP No. 63712 is similar with the case at bench. The transactions in controversy, the
documents involved; the issue of the respondent’s culpability for the questioned transactions are all
identical in all the proceedings; and it deals with the same parties with the exception of private
complainant Unicapital.
However, the Supreme Court, upon review of CA-G.R. SP No. 63712, People of the Philippines vs.
Rafael Jose Consing, Jr. (G.R. No. 148193, January 16, 2003) held that "Civil Case No. 99-95381,
for Damages and attachment on account of alleged fraud committed by respondent and his mother
in selling the disputed lot to Plus Builders, Inc. is an independent civil action under Article 33 of the
Civil Code. As such, it will not operate as a prejudicial question that will justify the suspension of the
criminal case at bar." In view of the aforementioned decision of the Supreme Court, We are thus
amending Our May 20, 2003 decision.

WHEREFORE, the petitioner’s motion for reconsideration is GRANTED. The Orders dated
November 26, 2001 and March 18, 2002 issued by the respondent Judge are hereby REVERSED
and SET ASIDE. Respondent Judge is hereby ordered to proceed with the hearing of Criminal Case
No. 00-120 with dispatch.

SO ORDERED.16

Consing filed a motion for reconsideration,17 but the CA denied the motion through the second
assailed resolution of December 11, 2003.18

Hence, this appeal by petition for review on certiorari.

Issue

Petitioner reiterates his contention that the decision in G.R. No. 148193 was not controlling in
relation to C.A.-G.R. No. 71252, which involved Plus Builders, not Unicapital, the complainant in
Criminal Case No. 00-120. He posits that in arriving at its amended decision, the CA did not consider
the pendency of the Makati civil case (Civil Case No. 99-1418), which raised a prejudicial question,
considering that the resolution of such civil action would include the issue of whether he had falsified
a certificate of title or had willfully defrauded Unicapital, the resolution of either of which would
determine his guilt or innocence in Criminal Case No. 00-120.

In its comment,19 the Office of the Solicitor General (OSG) counters that Unicapital brought the
Makati civil case as an independent civil action intended to exact civil liability separately from
Criminal Case No. 00-120 in a manner fully authorized under Section 1(a) and Section 2, Rule 111
of the Rules of Court.20 It argues that the CA correctly took cognizance of the ruling in G.R. No.
148193, holding in its challenged amended decision that the Makati civil case, just like the Manila
civil case, was an independent civil action instituted by virtue of Article 33 of the Civil Code; that the
Makati civil case did not raise a prejudicial question that justified the suspension of Criminal Case
No. 00-120; and that as finally settled in G.R. No. 148193, the Pasig civil case did not also raise any
prejudicial question, because the sole issue thereat was whether Consing, as the mere agent of his
mother, had any obligation or liability toward Unicapital.

In his reply,21 Consing submits that the Pasig civil case that he filed and Unicapital’s Makati civil case
were not intended to delay the resolution of Criminal Case No. 00-120, nor to pre-empt such
resolution; and that such civil cases could be validly considered determinative of whether a
prejudicial question existed to warrant the suspension of Criminal Case No. 00-120.

Did the CA err in reversing itself on the issue of the existence of a prejudicial question that warranted
the suspension of the proceedings in the Makati criminal case?

Ruling
The petition for review on certiorari is absolutely meritless.

Consing has hereby deliberately chosen to ignore the firm holding in the ruling in G.R. No. 148193 to
the effect that the proceedings in Criminal Case No. 00-120 could not be suspended because the
Makati civil case was an independent civil action, while the Pasig civil case raised no prejudicial
question. That was wrong for him to do considering that the ruling fully applied to him due to the
similarity between his case with Plus Builders and his case with Unicapital.

A perusal of Unicapital’s complaint in the Makati civil case reveals that the action was predicated on
fraud. This was apparent from the allegations of Unicapital in its complaint to the effect that Consing
and de la Cruz had acted in a "wanton, fraudulent, oppressive, or malevolent manner in offering as
security and later object of sale, a property which they do not own, and foisting to the public a
spurious title."22 As such, the action was one that could proceed independently of Criminal Case No.
00-120 pursuant to Article 33 of the Civil Code, which states as follows:

Article 33. In cases of defamation, fraud, and physical injuries a civil action for damages, entirely
separate and distinct from the criminal action, may be brought by the injured party. Such civil action
shall proceed independently of the criminal prosecution, and shall require only a preponderance of
evidence.

It is well settled that a civil action based on defamation, fraud and physical injuries may be
independently instituted pursuant to Article 33 of the Civil Code, and does not operate as a
prejudicial question that will justify the suspension of a criminal case.23 This was precisely the Court’s
thrust in G.R. No. 148193, thus:

Moreover, neither is there a prejudicial question if the civil and the criminal action can, according to
law, proceed independently of each other. Under Rule 111, Section 3 of the Revised Rules on
Criminal Procedure, in the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code, the
independent civil action may be brought by the offended party. It shall proceed independently of the
criminal action and shall require only a preponderance of evidence. In no case, however, may the
offended party recover damages twice for the same act or omission charged in the criminal action.

xxxx

In the instant case, Civil Case No. 99-95381, for Damages and Attachment on account of the alleged
fraud committed by respondent and his mother in selling the disputed lot to PBI is an independent
civil action under Article 33 of the Civil Code. As such, it will not operate as a prejudicial question
that will justify the suspension of the criminal case at bar.24

Contrary to Consing’s stance, it was not improper for the CA to apply the ruling in G.R. No. 148193
to his case with Unicapital, for, although the Manila and Makati civil cases involved different
complainants (i.e., Plus Builders and Unicapital), the civil actions Plus Builders and Unicapital had
separately instituted against him were undeniably of similar mold, i.e., they were both based on
fraud, and were thus covered by Article 33 of the Civil Code. Clearly, the Makati criminal case could
not be suspended pending the resolution of the Makati civil case that Unicapital had filed.

As far as the Pasig civil case is concerned, the issue of Consing’s being a mere agent of his mother
who should not be criminally liable for having so acted due to the property involved having belonged
to his mother as principal has also been settled in G.R. No. 148193, to wit:

In the case at bar, we find no prejudicial question that would justify the suspension of the
proceedings in the criminal case (the Cavite criminal case). The issue in Civil Case No. SCA 1759
(the Pasig civil case) for Injunctive Relief is whether or not respondent (Consing) merely acted as an
agent of his mother, Cecilia de la Cruz; while in Civil Case No. 99-95381 (the Manila civil case), for
Damages and Attachment, the question is whether respondent and his mother are liable to pay
damages and to return the amount paid by PBI for the purchase of the disputed lot. Even if
respondent is declared merely an agent of his mother in the transaction involving the sale of the
questioned lot, he cannot be adjudged free from criminal liability. An agent or any person may be
held liable for conspiring to falsify public documents. Hence, the determination of the issue involved
in Civil Case No. SCA 1759 for Injunctive Relief is irrelevant to the guilt or innocence of the
respondent in the criminal case for estafa through falsification of public document.25 (Words in
parentheses supplied; bold underscoring supplied for emphasis)

WHEREFORE, the Court AFFIRMS the amended decision promulgated on August 18, 2003; and
ORDERS petitioner to pay the costs of suit.

SO ORDERED.
CARMEN QUIMIGUING, Suing through her parents, ANTONIO QUIMIGUING and JACOBA
CABILIN, plaintiffs-appellants,
vs.
FELIX ICAO, defendant-appellee.

Torcuato L. Galon for plaintiffs-appellants.

Godardo Jacinto for defendant-appellee.

REYES, J.B.L., J.:

Appeal on points of law from an order of the Court of First Instance of Zamboanga del Norte (Judge
Onofre Sison Abalos, presiding), in its Civil Case No. 1590, dismissing a complaint for support and
damages, and another order denying amendment of the same pleading.

The events in the court of origin can be summarized as follows:

Appellant, Carmen Quimiguing, assisted by her parents, sued Felix Icao in the court below. In her
complaint it was averred that the parties were neighbors in Dapitan City, and had close and
confidential relations; that defendant Icao, although married, succeeded in having carnal intercourse
with plaintiff several times by force and intimidation, and without her consent; that as a result she
became pregnant, despite efforts and drugs supplied by defendant, and plaintiff had to stop
studying. Hence, she claimed support at P120.00 per month, damages and attorney's fees.

Duly summoned, defendant Icao moved to dismiss for lack of cause of action since the complaint did
not allege that the child had been born; and after hearing arguments, the trial judge sustained
defendant's motion and dismissed the complaint.

Thereafter, plaintiff moved to amend the complaint to allege that as a result of the intercourse,
plaintiff had later given birth to a baby girl; but the court, sustaining defendant's objection, ruled that
no amendment was allowable, since the original complaint averred no cause of action. Wherefore,
the plaintiff appealed directly to this Court.

We find the appealed orders of the court below to be untenable. A conceived child, although as yet
unborn, is given by law a provisional personality of its own for all purposes favorable to it, as
explicitly provided in Article 40 of the Civil Code of the Philippines. The unborn child, therefore, has a
right to support from its progenitors, particularly of the defendant-appellee (whose paternity is
deemed admitted for the purpose of the motion to dismiss), even if the said child is only "en ventre
de sa mere;" just as a conceived child, even if as yet unborn, may receive donations as prescribed
by Article 742 of the same Code, and its being ignored by the parent in his testament may result in
preterition of a forced heir that annuls the institution of the testamentary heir, even if such child
should be born after the death of the testator Article 854, Civil Code).

ART. 742. Donations made to conceived and unborn children may be accepted by
those persons who would legally represent them if they were already born.

ART. 854. The preterition or omission of one, some, or all of the compulsory heirs in
the direct line, whether living at the time of the execution of the will or born after the
 death of the testator, shall annul the institution of heir; but the devises and legacies
shall be valid insofar as they are not inofficious.

If the omitted compulsory heirs should die before the testator, the institution shall be
effectual, without prejudice to the right of 'representation.

It is thus clear that the lower court's theory that Article 291 of the Civil Code declaring that support is
an obligation of parents and illegitimate children "does not contemplate support to children as yet
unborn," violates Article 40 aforesaid, besides imposing a condition that nowhere appears in the text
of Article 291. It is true that Article 40 prescribing that "the conceived child shall be considered born
for all purposes that are favorable to it" adds further "provided it be born later with the conditions
specified in the following article" (i.e., that the foetus be alive at the time it is completely delivered
from the mother's womb). This proviso, however, is not a condition precedent to the right of the
conceived child; for if it were, the first part of Article 40 would become entirely useless and
ineffective. Manresa, in his Commentaries (5th Ed.) to the corresponding Article 29 of the Spanish
Civil Code, clearly points this out:

Los derechos atribuidos al nasciturus no son simples expectativas, ni aun en el

sentido tecnico que la moderna doctrina da a esta figura juridica sino que
constituyen un caso de los propiamente Ilamados 'derechos en estado de
pendenci'; el nacimiento del sujeto en las condiciones previstas por el art. 30, no
determina el nacimiento de aquellos derechos (que ya existian de antemano), sino
que se trata de un hecho que tiene efectos declarativos. (1 Manresa, Op. cit., page
271)

A second reason for reversing the orders appealed from is that for a married man to force a woman
not his wife to yield to his lust (as averred in the original complaint in this case) constitutes a clear
violation of the rights of his victim that entitles her to claim compensation for the damage caused.
Says Article 21 of the Civil Code of the Philippines:

ART. 21. Any person who wilfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the
damage.

The rule of Article 21 is supported by Article 2219 of the same Code:

ART 2219. Moral damages may be recovered in the following and analogous cases:

(3) Seduction, abduction, rape or other lascivious acts:

xxx xxx xxx

(10) Acts and actions referred to in Articles 21, 26, 27, 28 ....

Thus, independently of the right to Support of the child she was carrying, plaintiff herself had a cause
of action for damages under the terms of the complaint; and the order dismissing it for failure to state
a cause of action was doubly in error.

WHEREFORE, the orders under appeal are reversed and set aside. Let the case be remanded to
the court of origin for further proceedings conformable to this decision. Costs against appellee Felix
Icao. So ordered.
 CONTINENTAL STEEL G.R. No. 182836
MANUFACTURING
CORPORATION,
Petitioner, Present:

- versus - CARPIO, J.,

Chairperson,
HON. ACCREDITED CHICO-NAZARIO,
VOLUNTARY ARBITRATOR VELASCO, JR.,
ALLAN S. MONTAO and NACHURA, and
NAGKAKAISANG PERALTA, JJ.
MANGGAGAWA NG CENTRO
STEEL CORPORATION-
SOLIDARITY OF UNIONS IN Promulgated:
THE PHILIPPINES FOR
EMPOWERMENT AND
REFORMS (NMCSC-SUPER),
Respondents. October 13, 2009
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J.:

Before Us is a Petition for Review on Certiorari, under Rule 45 of the Rules

of Court, assailing the Decision[1] dated 27 February 2008 and the
Resolution[2] dated 9 May 2008 of the Court of Appeals in CA-G.R. SP No. 101697,
affirming the Resolution[3] dated 20 November 2007 of respondent Accredited
Voluntary Arbitrator Atty. Allan S. Montao (Montao) granting bereavement leave
and other death benefits to Rolando P. Hortillano (Hortillano), grounded on the death
of his unborn child.

The antecedent facts of the case are as follows:

 Hortillano, an employee of petitioner Continental Steel Manufacturing
Corporation (Continental Steel) and a member of respondent Nagkakaisang
Manggagawa ng Centro Steel Corporation-Solidarity of Trade Unions in the
Philippines for Empowerment and Reforms (Union) filed on 9 January 2006, a claim
for Paternity Leave, Bereavement Leave and Death and Accident Insurance for
dependent, pursuant to the Collective Bargaining Agreement (CBA) concluded
between Continental and the Union, which reads:

ARTICLE X: LEAVE OF ABSENCE

xxxx

Section 2. BEREAVEMENT LEAVEThe Company agrees to grant a

bereavement leave with pay to any employee in case of death of the employees
legitimate dependent (parents, spouse, children, brothers and sisters) based on the
following:

2.1 Within Metro Manila up to Marilao, Bulacan - 7 days

2.2 Provincial/Outside Metro Manila - 11 days

xxxx

ARTICLE XVIII: OTHER BENEFITS

xxxx

Section 4. DEATH AND ACCIDENT INSURANCEThe Company shall

grant death and accidental insurance to the employee or his family in the following
manner:

xxxx

4.3 DEPENDENTSEleven Thousand Five Hundred Fifty Pesos

(Php11,550.00) in case of death of the employees legitimate dependents (parents,
spouse, and children). In case the employee is single, this benefit covers the
legitimate parents, brothers and sisters only with proper legal document to be
presented (e.g. death certificate).[4]

The claim was based on the death of Hortillanos unborn child. Hortillanos
wife, Marife V. Hortillano, had a premature delivery on 5 January 2006 while she
was in the 38th week of pregnancy.[5] According to the Certificate of Fetal Death
dated 7 January 2006, the female fetus died during labor due to fetal Anoxia
secondary to uteroplacental insufficiency.[6]

Continental Steel immediately granted Hortillanos claim for paternity leave

but denied his claims for bereavement leave and other death benefits, consisting of
the death and accident insurance.[7]

Seeking the reversal of the denial by Continental Steel of Hortillanos claims

for bereavement and other death benefits, the Union resorted to the grievance
machinery provided in the CBA. Despite the series of conferences held, the parties
still failed to settle their dispute,[8] prompting the Union to file a Notice to Arbitrate
before the National Conciliation and Mediation Board (NCMB) of the Department
of Labor and Employment (DOLE), National Capital Region (NCR).[9] In a
Submission Agreement dated 9 October 2006, the Union and Continental Steel
submitted for voluntary arbitration the sole issue of whether Hortillano was entitled
to bereavement leave and other death benefits pursuant to Article X, Section 2

and Article XVIII, Section 4.3 of the CBA.[10] The parties mutually chose Atty.
Montao, an Accredited Voluntary Arbitrator, to resolve said issue.[11]

When the preliminary conferences again proved futile in amicably settling the
dispute, the parties proceeded to submit their respective Position
Papers, [12] Replies,[13] and Rejoinders[14] to Atty. Montao.

The Union argued that Hortillano was entitled to bereavement leave and other
death benefits pursuant to the CBA. The Union maintained that Article X, Section 2
and Article XVIII, Section 4.3 of the CBA did not specifically state that
the dependent should have first been born alive or must have acquired juridical
personality so that his/her subsequent death could be covered by the CBA death
benefits. The Union cited cases wherein employees of MKK Steel Corporation
(MKK Steel) and Mayer Steel Pipe Corporation (Mayer Steel), sister companies of
Continental Steel, in similar situations as Hortillano were able to receive death
benefits under similar provisions of their CBAs.

The Union mentioned in particular the case of Steve L. Dugan (Dugan), an

employee of Mayer Steel, whose wife also prematurely delivered a fetus, which had
already died prior to the delivery. Dugan was able to receive paternity leave,
bereavement leave, and voluntary contribution under the CBA between his union
and Mayer Steel.[15] Dugans child was only 24 weeks in the womb and died before
labor, as opposed to Hortillanos child who was already 37-38 weeks in the womb
and only died during labor.

The Union called attention to the fact that MKK Steel and Mayer Steel are
located in the same compound as Continental Steel; and the representatives of MKK
Steel and Mayer Steel who signed the CBA with their respective employees unions
were the same as the representatives of Continental Steel who signed the existing
CBA with the Union.

Finally, the Union invoked Article 1702 of the Civil Code, which provides
that all doubts in labor legislations and labor contracts shall be construed in favor of
the safety of and decent living for the laborer.

On the other hand, Continental Steel posited that the express provision of the
CBA did not contemplate the death of an unborn child, a fetus, without legal
personality. It claimed that there are two elements for the entitlement to the benefits,
namely: (1) death and (2) status as legitimate dependent, none of which existed in
Hortillanos case. Continental Steel, relying on Articles 40, 41 and 42[16] of the Civil
Code, contended that only one with civil personality could die. Hence, the unborn
child never died because it never acquired juridical personality. Proceeding from the
same line of thought, Continental Steel reasoned that a fetus that was dead from the
moment of delivery was not a person at all. Hence, the term dependent could not be
applied to a fetus that never acquired juridical personality. A fetus that was delivered
dead could not be considered a dependent, since it never needed any support, nor did
it ever acquire the right to be supported.

Continental Steel maintained that the wording of the CBA was clear and
unambiguous. Since neither of the parties qualified the terms used in the CBA, the
legally accepted definitions thereof were deemed automatically accepted by both
parties.The failure of the Union to have unborn child included in the definition
of dependent, as used in the CBA the death of whom would have qualified the
parent-employee for bereavement leave and other death benefits bound the Union to
the legally accepted definition of the latter term.

Continental Steel, lastly, averred that similar cases involving the employees
of its sister companies, MKK Steel and Mayer Steel, referred to by the Union, were
irrelevant and incompetent evidence, given the separate and distinct personalities of
the companies. Neither could the Union sustain its claim that the grant of
bereavement leave and other death benefits to the parent-employee for the loss of an
unborn child constituted company practice.
 On 20 November 2007, Atty. Montao, the appointed Accredited Voluntary
Arbitrator, issued a Resolution[17] ruling that Hortillano was entitled to bereavement
leave with pay and death benefits.

Atty. Montao identified the elements for entitlement to said benefits, thus:

This Office declares that for the entitlement of the benefit of bereavement leave
with pay by the covered employees as provided under Article X, Section 2 of the
parties CBA, three (3) indispensable elements must be present: (1) there is death;
(2) such death must be of employees dependent; and (3) such dependent must be
legitimate.

On the otherhand, for the entitlement to benefit for death and accident
insurance as provided under Article XVIII, Section 4, paragraph (4.3) of the parties
CBA, four (4) indispensable elements must be present: (a) there is death; (b) such
death must be of employees dependent; (c) such dependent must be legitimate; and
(d) proper legal document to be presented.[18]

Atty. Montao found that there was no dispute that the death of an employees
legitimate dependent occurred. The fetus had the right to be supported by the parents
from the very moment he/she was conceived. The fetus had to rely on another for
support; he/she could not have existed or sustained himself/herself without the
power or aid of someone else, specifically, his/her mother. Therefore, the fetus was
already a dependent, although he/she died during the labor or delivery. There was
also no question that Hortillano and his wife were lawfully married, making their
dependent, unborn child, legitimate.

In the end, Atty. Montao decreed:

WHEREFORE, premises considered, a resolution is hereby rendered

ORDERING [herein petitioner Continental Steel] to pay Rolando P. Hortillano the
amount of Four Thousand Nine Hundred Thirty-Nine Pesos (P4,939.00),
representing his bereavement leave pay and the amount of Eleven Thousand Five
Hundred Fifty Pesos (P11,550.00) representing death benefits, or a total amount
of P16,489.00

The complaint against Manuel Sy, however, is ORDERED DISMISSED

for lack of merit.

All other claims are DISMISSED for lack of merit.

 Further, parties are hereby ORDERED to faithfully abide with the herein
dispositions.

Aggrieved, Continental Steel filed with the Court of Appeals a Petition for
Review on Certiorari,[19] under Section 1, Rule 43 of the Rules of Court, docketed
as CA-G.R. SP No. 101697.

Continental Steel claimed that Atty. Montao erred in granting Hortillanos

claims for bereavement leave with pay and other death benefits because no death of
an employees dependent had occurred. The death of a fetus, at whatever stage of
pregnancy, was excluded from the coverage of the CBA since what was
contemplated by the CBA was the death of a legal person, and not that of a fetus,
which did not acquire any juridical personality. Continental Steel pointed out that its
contention was bolstered by the fact that the term death was qualified by the
phrase legitimate dependent. It asserted that the status of a child could only be
determined upon said childs birth, otherwise, no such appellation can be had. Hence,
the conditions sine qua non for Hortillanos entitlement to bereavement leave and
other death benefits under the CBA were lacking.

The Court of Appeals, in its Decision dated 27 February 2008, affirmed Atty.
Montaos Resolution dated 20 November 2007. The appellate court
interpreted death to mean as follows:

[Herein petitioner Continental Steels] exposition on the legal sense in which

the term death is used in the CBA fails to impress the Court, and the same is
irrelevant for ascertaining the purpose, which the grant of bereavement leave and
death benefits thereunder, is intended to serve. While there is no arguing with
[Continental Steel] that the acquisition of civil personality of a child or fetus is
conditioned on being born alive upon delivery, it does not follow that such event of
premature delivery of a fetus could never be contemplated as a death as to be
covered by the CBA provision, undoubtedly an event causing loss and grief to the
affected employee, with whom the dead fetus stands in a legitimate
relation. [Continental Steel] has proposed a narrow and technical significance to
the term death of a legitimate dependent as condition for granting bereavement
leave and death benefits under the CBA. Following [Continental Steels] theory,
there can be no experience of death to speak of. The Court, however, does not share
this view. A dead fetus simply cannot be equated with anything less than loss of
human life, especially for the expectant parents. In this light, bereavement leave
and death benefits are meant to assuage the employee and the latters immediate
family, extend to them solace and support, rather than an act conferring legal status
 or personality upon the unborn child. [Continental Steels] insistence that the
certificate of fetal death is for statistical purposes only sadly misses this crucial
point.[20]

Accordingly, the fallo of the 27 February 2008 Decision of the Court of Appeals
reads:

WHEREFORE, premises considered, the present petition is hereby

DENIED for lack of merit. The assailed Resolution dated November 20, 2007 of
Accredited Voluntary Arbitrator Atty. Allan S. Montao is hereby AFFIRMED and
UPHELD.

With costs against [herein petitioner Continental Steel].[21]

In a Resolution[22] dated 9 May 2008, the Court of Appeals denied the Motion
for Reconsideration[23] of Continental Steel.

Hence, this Petition, in which Continental Steel persistently argues that the CBA is
clear and unambiguous, so that the literal and legal meaning of death should be
applied. Only one with juridical personality can die and a dead fetus never acquired
a juridical personality.

We are not persuaded.

As Atty. Montao identified, the elements for bereavement leave under Article X,
Section 2 of the CBA are: (1) death; (2) the death must be of a dependent, i.e., parent,
spouse, child, brother, or sister, of an employee; and (3) legitimate relations of the
dependent to the employee. The requisites for death and accident insurance under
Article XVIII, Section 4(3) of the CBA are: (1) death; (2) the death must be of a
dependent, who could be a parent, spouse, or child of a married employee; or a
parent, brother, or sister of a single employee; and (4) presentation of the proper
legal document to prove such death, e.g., death certificate.

It is worthy to note that despite the repeated assertion of Continental Steel that
the provisions of the CBA are clear and unambiguous, its fundamental argument for
denying Hortillanos claim for bereavement leave and other death benefits rests on
the purportedly proper interpretation of the terms death and dependent as used in the
CBA. If the provisions of the CBA are indeed clear and unambiguous, then there is
no need to resort to the interpretation or construction of the same. Moreover,
Continental Steel itself admitted that neither management nor the Union sought to
define the pertinent terms for bereavement leave and other death benefits during the
negotiation of the CBA.
The reliance of Continental Steel on Articles 40, 41 and 42 of the Civil Code
for the legal definition of death is misplaced. Article 40 provides that a conceived
child acquires personality only when it is born, and Article 41 defines when a child
is considered born. Article 42 plainly states that civil personality is extinguished by
death.

First, the issue of civil personality is not relevant herein. Articles 40, 41 and
42 of the Civil Code on natural persons, must be applied in relation to Article 37 of
the same Code, the very first of the general provisions on civil personality, which
reads:

Art. 37. Juridical capacity, which is the fitness to be the subject of legal
relations, is inherent in every natural person and is lost only through death. Capacity
to act, which is the power to do acts with legal effect, is acquired and may be lost.

We need not establish civil personality of the unborn child herein since his/her
juridical capacity and capacity to act as a person are not in issue. It is not a question
before us whether the unborn child acquired any rights or incurred any obligations
prior to his/her death that were passed on to or assumed by the childs parents. The
rights to bereavement leave and other death benefits in the instant case pertain
directly to the parents of the unborn child upon the latters death.

Second, Sections 40, 41 and 42 of the Civil Code do not provide at all a
definition of death. Moreover, while the Civil Code expressly provides that civil
personality may be extinguished by death, it does not explicitly state that only those
who have acquired juridical personality could die.

And third, death has been defined as the cessation of life.[24] Life is not synonymous
with civil personality. One need not acquire civil personality first before he/she
could die. Even a child inside the womb already has life. No less than the
Constitution recognizes the life of the unborn from conception,[25] that the State
must protect equally with the life of the mother. If the unborn already has life, then
the cessation thereof even prior to the child being delivered, qualifies as death.

Likewise, the unborn child can be considered a dependent under the CBA. As
Continental Steel itself defines, a dependent is one who relies on another for support;
one not able to exist or sustain oneself without the power or aid of someone
else. Under said general definition,[26] even an unborn child is a dependent of its
parents. Hortillanos child could not have reached 38-39 weeks of its gestational life
without depending upon its mother, Hortillanos wife, for sustenance. Additionally,
it is explicit in the CBA provisions in question that the dependent may be the parent,
spouse, or child of a married employee; or the parent, brother, or sister of a single
employee. The CBA did not provide a qualification for the child dependent, such
that the child must have been born or must have acquired civil personality, as
Continental Steel avers. Without such qualification, then child shall be understood
in its more general sense, which includes the unborn fetus in the mothers womb.

The term legitimate merely addresses the dependent childs status in relation
to his/her parents. In Angeles v. Maglaya,[27] we have expounded on who is a
legitimate child, viz:

A legitimate child is a product of, and, therefore, implies a valid and

lawful marriage. Remove the element of lawful union and there is strictly
no legitimate filiation between parents and child. Article 164 of the Family
Code cannot be more emphatic on the matter: Children conceived or born
during the marriage of the parents are legitimate. (Emphasis ours.)

Conversely, in Briones v. Miguel,[28] we identified an illegitimate child to be

as follows:

The fine distinctions among the various types of illegitimate

children have been eliminated in the Family Code. Now, there are only
two classes of children -- legitimate (and those who, like the legally
adopted, have the rights of legitimate children) and illegitimate. All
children conceived and born outside a valid marriage are illegitimate,
unless the law itself gives them legitimate status. (Emphasis ours.)

It is apparent that according to the Family Code and the afore-cited

jurisprudence, the legitimacy or illegitimacy of a child attaches upon his/her
conception. In the present case, it was not disputed that Hortillano and his wife were
validly married and that their child was conceived during said marriage, hence,
making said child legitimate upon her conception.
Also incontestable is the fact that Hortillano was able to comply with the fourth
element entitling him to death and accident insurance under the CBA, i.e.,
presentation of the death certificate of his unborn child.

Given the existence of all the requisites for bereavement leave and other death
benefits under the CBA, Hortillanos claims for the same should have been granted
by Continental Steel.

We emphasize that bereavement leave and other death benefits are granted to an
employee to give aid to, and if possible, lessen the grief of, the said employee and
his family who suffered the loss of a loved one. It cannot be said that the parents
grief and sense of loss arising from the death of their unborn child, who, in this case,
had a gestational life of 38-39 weeks but died during delivery, is any less than that
of parents whose child was born alive but died subsequently.

Being for the benefit of the employee, CBA provisions on bereavement leave and
other death benefits should be interpreted liberally to give life to the intentions
thereof. Time and again, the Labor Code is specific in enunciating that in case of
doubt in the interpretation of any law or provision affecting labor, such should be
interpreted in favor of labor.[29] In the same way, the CBA and CBA provisions
should be interpreted in favor of labor. In Marcopper Mining v. National Labor
Relations Commission,[30] we pronounced:

Finally, petitioner misinterprets the declaration of the Labor Arbiter

in the assailed decision that "when the pendulum of judgment swings to
and fro and the forces are equal on both sides, the same must be stilled in
favor of labor." While petitioner acknowledges that all doubts in the
interpretation of the Labor Code shall be resolved in favor of labor, it
insists that what is involved-here is the amended CBA which is essentially
a contract between private persons. What petitioner has lost sight of is the
avowed policy of the State, enshrined in our Constitution, to accord
utmost protection and justice to labor, a policy, we are, likewise, sworn to
uphold.

In Philippine Telegraph & Telephone Corporation v. NLRC [183 SCRA

451 (1990)], we categorically stated that:

When conflicting interests of labor and capital are to be

weighed on the scales of social justice, the heavier influence of the
latter should be counter-balanced by sympathy and compassion the
law must accord the underprivileged worker.
 Likewise, in Terminal Facilities and Services Corporation v. NLRC [199
SCRA 265 (1991)], we declared:

Any doubt concerning the rights of labor should be resolved

in its favor pursuant to the social justice policy.

IN VIEW WHEREOF, the Petition is DENIED. The Decision dated 27

February 2008 and Resolution dated 9 May 2008 of the Court of Appeals in CA-
G.R. SP No. 101697, affirming the Resolution dated 20 November 2007 of
Accredited Voluntary Arbitrator Atty. Allan S. Montao, which granted to Rolando
P. Hortillano bereavement leave pay and other death benefits in the amounts of Four
Thousand Nine Hundred Thirty-Nine Pesos (P4,939.00) and Eleven Thousand Five
Hundred Fifty Pesos (P11,550.00), respectively, grounded on the death of his unborn
child, are AFFIRMED. Costs against Continental Steel Manufacturing
Corporation.

SO ORDERED.
MANUELA AZUCENA MAYOR, Petitioner
vs.
EDWIN TIU and DAMIANA CHARITO MARTY, Respondents

DECISION

MENDOZA, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the October
5, 20111 and September 24, 20122 Resolutions of the Court of Appeals (CA) in CA-G.R. SP No.
06256, which dismissed the petition filed by Remedios Tiu (Remedios) and Manuela Azucena
Mayor (Manuela) for procedural infirmities. The said CA petition challenged the January 20,
20113 and June 10, 20114 Orders of the Regional Trial Court, Branch 6, Tacloban City (RTC-Br.
6), in Sp. Proc. No. 2008-05-30, a case for Probate of Last Will and Testament and Issuance of
Letters of Testamentary.

The Antecedents:

On May 25, 2008, Rosario Guy-Juco Villasin Casilan (Rosario), the widow of the late Primo
Villasin (Primo), passed away and left a holographic Last Will and Testament,5 wherein she named
her sister, Remedios Tiu (Remedios), and her niece, Manuela Azucena Mayor (Manuela), as
executors. Immediately thereafter, Remedios and Manuela filed a petition for the probate of
Rosario's holographic will6 with prayer for the issuance of letters testamentary (probate
proceedings). The petition was raffled to the Regional Trial Court, Branch 9, Tacloban City (RTC-Br.
9) and docketed as Sp. Proc. No. 2008-05-30. They averred that Rosario left properties valued at
approximately ₱2.5 million.

On May 29, 2008, respondent Damiana Charito Marty (Marty) claiming to be the adopted daughter
of Rosario, filed a petition for letters of administration before the RTC, Branch 34, Tacloban
City (RTC- Br. 34), docketed as Sp. Proc. No. 2008-05-32, but it was not given due course because
of the probate proceedings. Per records, this dismissal is subject of a separate proceeding filed by
Marty with the CA Cebu City, docketed as CA-G.R. SP No. 04003.7

On June 12, 2008, in its Order,8 the RTC-Br. 9 found the petition for probate of will filed by Remedios
and Manuela as sufficient in form and substance and set the case for hearing.

Consequently, Marty filed her Verified Urgent Manifestation and Motion,9 dated June 23, 2008,
stating that Remedios kept the decedent Rosario a virtual hostage for the past ten (10) years and
her family was financially dependent on her which led to the wastage and disposal of the properties
owned by her and her husband, Primo. Marty averred that until the alleged will of the decedent could
be probated and admitted, Remedios and her ten (10) children had no standing to either possess or
control the properties comprising the estate of the Villasins. She prayed for the probate court to: 1)
order an immediate inventory of all the properties subject of the proceedings; 2) direct the tenants of
the estate, namely, Mercury Drug and Chowking, located at Primrose Hotel, to deposit their rentals
with the court; 3) direct Metro bank, P. Burgos Branch, to freeze the accounts in the name of
Rosario, Primrose Development Corporation (Primrose) or Remedios; and 4) lock up the Primrose
Hotel in order to preserve the property until final disposition by the court.

On July 8, 2008, Remedios and Manuela filed their Comment/Opposition10 to the urgent
manifestation averring that Marty was not an adopted child of the Villasins based on a certification
issued by the Office of the Clerk of Court of Tacloban City, attesting that no record of any adoption
proceedings involving Marty existed in their records. They also argued that the probate court had no
jurisdiction over the properties mistakenly claimed by Marty as part of Rosario's estate because
these properties were actually owned by, and titled in the name of, Primrose. Anent the prayer to
direct the tenants to deposit the rentals to the probate court, Remedios and Manuela countered that
the probate court had no jurisdiction over properties owned by third persons, particularly by
Primrose, the latter having a separate and distinct personality from the decedent's estate.

In her Reply,11 dated July 15, 2008, Marty cited an order of the Court of First Instance of Leyte (CF!
Leyte) in SP No. 1239,12 claiming that as early as March 3, 1981, the veil of corporate entity of
Primrose was pierced on the ground that it was a closed family corporation controlled by Rosario
after Primo's death. Thus, Marty alleged that "piercing" was proper in the case of Rosario's estate
because the incorporation of Primrose was founded on a fraudulent consideration, having been done
in contemplation of Primo's death.

Further, on July 22, 2008, in her Opposition to the Petition for the Approval of the Will of the Late
Rosario Guy-Juco Villasin Casilan,13 Marty impugned the authenticity of her holographic will.

Meanwhile, Edwin Tiu (Edwin), a son of Remedios, also filed his Opposition,14 dated June 13, 2008.

After a protracted exchange of pleadings, the parties submitted their respective memoranda.

The January 14, 2009 Order

In its January 14, 2009 Order,15 the RTC-Br. 9 granted the motion of Marty and appointed the OIC
Clerk of Court as special administrator of the Estate. The Probate Court also ordered Mercury Drug
and Chowking to deposit the rental income to the court and Metrobank to freeze the bank accounts
mentioned in the motion of Marty. The doctrine of piercing the corporate veil was applied in the case
considering that Rosario had no other properties that comprised her estate other than Primrose.
According to the probate court, for the best interest of whoever would be adjudged as the legal heirs
of the Estate, it was best to preserve the properties from dissipation.

On January 22, 2009, Remedios and Manuela filed their Motion for Inhibition16 on the ground of their
loss of trust and confidence in RTC-Br. 9 Presiding Judge Rogelio C. Sescon (Judge Sescon) to
dispense justice. Later, they also filed their Motion for Reconsideration Ad Cautelam,17 dated
February 3, 2009, arguing that Rosario's estate consisted only of shares of stock in Primrose and not
the corporation itself. Thus, the probate court could not order the lessees of the corporation to remit
the rentals to the Estate's administrator. With regard to the appointment of a special administrator,
Remedios and Manuela insisted that it be recalled. They claimed that if ever there was a need to
appoint one, it should be the two of them because it was the desire of the decedent in the will
subject of the probation proceedings.

In its Order,18 dated March 27, 2009, the RTC-Br. 9 denied the motion for reconsideration for lack of
merit and affirmed its January 14, 2009 Order. The presiding judge, Judge Sescon, also granted the
motion for inhibition and ordered that the records of the case be referred to the RTC Executive
Judge for reraffling. The case was later re-raffled to RTC-Br.6, Judge Alphinor C. Serrano, presiding
judge.

Aggrieved by the denial of their motion for reconsideration, Remedios and Manuela filed a petition
for certiorari with the CA in Cebu City, docketed as CA-G.R. S.P. No. 04254, assailing the January
14, 2009 and March 27, 2009 Orders of the RTC-Br. 9.19

Ruling of the CA
In its October 16, 2009 Decision,20 the CA reversed the assailed orders of the RTC Br. 9, except as
to the appointment of a special administrator insofar as this relates to properties specifically
belonging to the "Estate." It held that Primrose had a personality separate and distinct from the
estate of the decedent and that the probate court had no jurisdiction to apply the doctrine of
piercing the corporate veil.

According to the CA, nowhere in the assailed orders of the probate court was it stated that its
determination of the title of the questioned properties was only for the purpose of determining
whether such properties ought to be included in the inventory. When the probate court applied the
doctrine of "piercing," in effect, it adjudicated with finality the ownership of the properties in favor of
the Estate. The CA stated that RTC-Br. 9 had no jurisdiction to adjudicate ownership of a property
claimed by another based on adverse title; and that questions like this must be submitted to a court
of general jurisdiction and not to a probate court.

The CA added that assuming that the probate court's determination on the issue of ownership was
merely intended to be provisional, Marty's contentions still had no merit. The properties, which she
claimed to be part of the estate of Rosario and over which she claimed co-ownership, comprised of
real properties registered under the Torrens system. As such, Primrose was considered the owner
until the titles to those properties were nullified in an appropriate ordinary action. The CA further
stated that the RTC erroneously relied on the order issued by the CFI Leyte in 1981, in the probate
proceedings involving the estate of Primo. Whatever determination the CFI made at the time
regarding the title of the properties was merely provisional, hence, not conclusive as to the
ownership.

By reason of the favorable decision by the CA, Remedios and Manuela filed their Motion to Partially
Revoke the Writ of Execution Enforcing the January 14, 2009 Order of the Honorable Court and
Manifestation in Compliance with the October 21, 2009 Order (Ad Cautelam),21 dated October 27,
2009.

In its Order,22 dated November 17, 2009, the RTC-Br. 6 partially granted the motion as it revoked the
power of the special administrator to oversee the day-to-day operations of Primrose. It also revoked
the order with respect to Mercury Drug and Chowking, reasoning out that the said establishments
dealt with Primrose, which had a personality distinct and separate from the estate of the decedent. In
the said order, Atty. Blanche A. Salino nominated by oppositors Marty and Edwin, was appointed
special administrator to oversee the day-to-day operations of the estate. The same order also upheld
the January 14, 2009 Order, as to the conduct and inventory of all the properties comprising the
estate.

This order was not questioned or appealed by the parties.

Omnibus Motion

On September 24, 2010, or almost ten (10) months after the November 17, 2009 Order of the
probate court was issued, Marty, together with her new counsel, filed her Omnibus Motion,23 praying
for the probate court to: 1) order Remedios and Manuela to render an accounting of all the
properties and assets comprising the estate of the decedent; 2) deposit or consign all rental
payments or other passive income derived from the properties comprising the estate; and 3) prohibit
the disbursement of funds comprising the estate of the decedent without formal motion and approval
by the probate court.

Ruling of the RTC-Br. 6

In its January 20, 2011 Order, the RTC-Br. 6 granted Marty's Omnibus Motion. Although it agreed
with the October 16, 2009 CA Decision reversing the January 14, 2009 Order of the RTC-Br. 9,
nonetheless, it acknowledged the urgency and necessity of appointing a special administrator.
According to the probate court, considering that there was clear evidence of a significant decrease of
Rosario's shares in the outstanding capital stock of Primrose,24prudence dictated that an inquiry into
the validity of the transfers should be made. A final determination of this matter would be outside the
limited jurisdiction of the probate court, but it was likewise settled that the power to institute an action
for the recovery of a property claimed to be part of the estate was normally lodged with the executor
or administrator. Thus, the probate court disposed:

WHEREFORE, for the reasons aforestated, and so as not to render moot any action that the special
administrator, or the regular administrator upon the latter's qualification and appointment, may deem
appropriate to take on the matter (i.e. Whether or not to institute in the name of the estate the
appropriate action for the recovery of the shares of stock), this Court hereby GRANTS Oppositor
Marty's Omnibus Motion, dated September 24, 2010, and thus hereby:

1. DIRECTS petitioners, either individually or jointly, to: (a) RENDER AN ACCOUNTING of all the
properties and assets comprising the estate of the decedent that may have come into their
possession; and, (b) DEPOSIT OR CONSIGN all the rentals payments or such other passive
incomes from the properties and assets registered in the name of Primrose Development
Corporation, including all income derived from the Primrose Hotel and the lease contracts with
Mercury Drug and Chowking Restaurant, both within fifteen (15) days from receipt of this Order;

2. DIRECTS the Special Administrator to take possession and charge of the properties comprising
the decedent's estate, specially those pertaining to the sharesholding of the decedent in Primrose
Development Corporation, to determine whether or not action for the recovery of the shares of stock
supposedly transferred from the decedent to petitioners Remedios Tiu, Manuela Azucena Mayor
should be instituted in the name of the estate against the said transferees and to submit a Report on
the foregoing matters to this Court, within fifteen (15) days from receipt of this Order; and,

3. ORDERS that no funds comprising the estate of the decedent shall be disbursed without formal
Motion therefor, with the conformity of the Special Administrator, duly approved by this Court.

SO ORDERED.25 [Underscoring supplied]

The partial motion for reconsideration of the above order filed by Remedios and Manuela was
denied in the other assailed order of the RTC-Br. 6, dated June 10, 2011.26

Dissatisfied, Remedios and Manuela availed of the special civil action of certiorari under Rule 65,
and filed a petition before the CA.

Action by the CA

The CA, however, in its October 5, 2011 Resolution,27 dismissed the same based on the following
infirmities: 1) there was no proper proof of service of a copy of the petition on the respondents which
was sent by registered mail; 2) petitioners failed to indicate on the petition the material date when
the motion for reconsideration was filed; 3) the copy of the assailed order was not certified true and
correct by the officer having custody of the original copy; and 4) the serial number of the commission
of the notary public, the province-city where he was commissioned, the office address of the notary
public and the roll of attorney's number were not properly indicated on the verification and
certification of non-forum shopping.
Remedios and Manuela moved for reconsideration of the assailed CA resolution, but to no avail, as
the appellate court denied the motion in its September 24, 2012 Resolution.

Hence, this petition before the Court, filed only by Manuela as Remedios had also passed away, and
anchored on the following

GROUNDS

I.

THE HONORABLE COURT OF APPEALS COMMITTED GROSS AND REVERSIBLE ERROR IN

THE APPLICATION OF LAW AND THE RULES WARRANTING REVIEW WHEN IT MISAPPLIED
SECTION 13, RULE 13 OF THE RULES OF COURT AND DECLARED THAT THERE WAS NO
PROPER PROOF OF SERVICE BY REGISTERED MAIL.

II.

THE HONORABLE COURT OF APPEALS COMMITTED GROSS AND REVERSIBLE ERROR IN

THE APPLICATION OF LAW AND THE RULES WARRANTING REVIEW WHEN IT MISAPPLIED
JURISPRUDENCE AND RULE 65 AND IT HELD THAT PETITIONER MAYOR DID NOT COMPLY
WITH THE MATERIAL DATE RULE.

III.

THE HONORABLE COURT OF APPEALS COMMITTED GROSS AND REVERSIBLE ERROR IN

THE APPLICATION OF LAW AND THE RULES WARRANTING REVIEW WHEN IT DECLARED
THAT PETITIONER MAYOR FAILED TO COMPLY WITH THE REQUIREMENT OF SECTION 1,
RULE 65 FOR FAILING TO ATTACH CERTIFIED TRUE COPY OF THE ORDER OF THE TRIAL
COURT.

IV.

THE HONORABLE COURT OF APPEALS COMMITTED GROSS AND REVERSIBLE ERROR IN

THE APPLICATION OF LAW AND THE RULES WARRANTING REVIEW WHEN IT DECLARED
THAT PETITIONER MAYOR DID NOT COMPLY WITH THE REQUIREMENT OF VERIFICATION
AND CERTIFICATION AGAINST FORUM SHOPPING.

V.

THE HONORABLE COURT OF APPEALS COMMITTED GROSS AND REVERSIBLE ERROR IN

THE APPLICATION OF LAW AND THE RULES WARRANTING REVIEW WHEN IT ALLOWED
TECHNICALITIES TO BE USED TO DEFEAT SUBSTANTIAL RIGHT OF THE PARTIES.

VI.

PETITIONERS HA VE GOOD CAUSE AND A MERITORIOUS CASE AGAINST HEREIN

RESPONDENTS AS PARAGRAPH l(B) OF THE DISPOSITIVE PORTION OF THE FIRST
ASSAILED ORDER SHOULD HA VE BEEN REVERSED BECAUSE IT OVERTURNS THE
DECISION OF THE COURT OF APPEALS DATED 16 OCTOBER 2009 WHICH HAS LONG
BECOME FINAL AND EXECUTORY.28
Petitioner Manuela argued that:

1) There was actual compliance with Section 13, Rule 13 of the Rules of Court. The CA
petition was accompanied by a notarized affidavit of service and filing of registered mail. At
the time the petition was filed, this was the best evidence of the service. The other registry
receipts for the other parties were also attached to the petition. Further, the available registry
return card was furnished the CA in the motion for reconsideration.29

2) The failure of the petition to comply with the rule on a statement of material dates could be
excused because the dates were evident from the records.30

3) The petitioner went to the RTC of Tacloban to secure certified true copies of the assailed
orders. Only the stamped name of the Clerk of Court, however, appeared thereon, because
the particular branch had no stamp pad which had the phrase for certification. The branch
did not even have a typewriter in order to affix the phrase on the copies. These inadequacies
could not be attributed to the petitioners.31

4) The lack of information pertaining to the notary public in the verification and certification
against forum-shopping should not invalidate the same because, again, it was not
attributable to the parties.32

5) Technicalities should never be used to defeat the substantive rights of a party.33

In its January 23, 2013 Resolution34 the Court ordered the respondents to file their respective
comments. Marty, in her Comment, insisted that the petitioner failed to comply with the procedural
requirements as stated by the CA.35

In her Reply to Comment,36 petitioner Manuela clarified that the affidavit of service was executed on
August 31, 2011, which was after the petition was signed by the lawyers and after it was verified by
the petitioner herself. After contesting Marty's arguments on the alleged procedural infirmities of the
petitions with the CA and this Court, Manuela asserted that the final and executory October 16, 2009
Decision of the CA already held that Primrose had a personality separate and distinct from the
estate of decedent Rosario.

Meanwhile, in his Manifestation,37 dated May 29, 2013, Edwin affirmed that he and Manuela decided
to patch up their differences and agreed to settle amicably. Accordingly, he manifested that he was
withdrawing from the case pursuant to their agreement.

On June 18, 2014, Manuela filed her Motion for Issuance of Temporary Restraining Order and Writ
of Preliminary Injunction38 on the ground that a flurry of orders had been issued by the RTC-Br. 6 in
the implementation of the assailed January 20, 2011 Order, such as the Order,39 dated May 27,
2013, wherein the probate court vaguely ordered "the inventory of the exact extent of the 'decedent's
estate."' Then another order was issued appointing an auditing firm to conduct an inventory/audit of
the Estate including the rentals and earnings derived from the lease of Mercury Drug and Chowking
Restaurant, as tenants of Primrose.40 According to petitioner Manuela, although an inventory of the
assets of the decedent was proper, the probate court ordered an inventory of the assets of Primrose,
a separate and distinct entity. Manuela asserts that it was clearly in error.

In her Supplement to the Motion for Issuance of Temporary Restraining Order and Writ of
Preliminary Injunction,41dated June 17, 2013, Manuela informed the Court that the inventory and
accounting of Primrose would already commence on June 19, 2013.
Marty filed her Opposition,42 dated July 3, 2013, stating that the petition of Manuela had been
rendered moot and academic as the probate court had declared her as the sole heir of Rosario and
appointed her administrator of the estate. She argued that an injunctive relief would work injustice to
the estate because of the total assimilation by petitioner of the shareholdings of the decedent in
Primrose and her share in the corporation's income corresponding to her shareholdings.

Finding that the requisites for preliminary injunctive relief were present,43 the Court issued the
TRO44 in favor of Manuela on October 14, 2013. At the outset, the Court was convinced that the
rights of Primrose sought to be protected by the grant of injunctive relief were material and
substantial and the TRO was issued in order to prevent any irreparable damage to a corporate entity
that could arise from the conduct of an accounting by the court-appointed inventory.

The Court's Ruling

The Court now resolves the subject case by the issuance of a permanent injunction, as prayed for by
petitioner Manuela. This position is supported by law and jurisprudence, as follows:

First. Artificial persons include (1) a collection or succession of natural persons forming a
corporation; and (2) a collection of property to which the law attributes the capacity of having rights
and duties. This class of artificial persons is recognized only to a limited extent in our law. Example
is the estate of a bankrupt or deceased person.45From this pronouncement, it can be gleaned that the
estate of the deceased person is a juridical person separate and distinct from the person of the
decedent and any other corporation. This status of an estate comes about by operation of law. This
is in consonance with the basic tenet under corporation law that a corporation has a separate
personality distinct from its stockholders and from other corporations to which it may be connected.46

Second. The doctrine of piercing the corporate veil has no relevant application in this case. Under
this doctrine, the court looks at the corporation as a mere collection of individuals or an aggregation
of persons undertaking business as a group, disregarding the separate juridical personality of the
corporation unifying the group. Another formulation of this doctrine is that when two business
enterprises are owned, conducted and controlled by the same parties, both law and equity will, when
necessary to protect the rights of third parties, disregard the legal fiction that two corporations are
distinct entities and treat them as identical or as one and the same.47 The purpose behind piercing a
corporation's identity is to remove the barrier between the corporation and the persons comprising it
to thwart the fraudulent and illegal schemes of those who use the corporate personality as a shield
for undertaking certain proscribed activities.48

Here, instead of holding the decedent's interest in the corporation separately as a stockholder, the
situation was reversed. Instead, the probate court ordered the lessees of the corporation to remit
rentals to the estate's administrator without taking note of the fact that the decedent was not the
absolute owner of Primrose but only an owner of shares thereof. Mere ownership by a single
stockholder or by another corporation of all or nearly all of the capital stocks of a corporation is not of
itself a sufficient reason for disregarding the fiction of separate corporate personalities.49 Moreover, to
disregard the separate juridical personality of a corporation, the wrongdoing cannot be presumed,
but must be clearly and convincingly established.50

Third. A probate court is not without limits in the determination of the scope of property covered in
probate proceedings. In a litany of cases, the Court had defined the parameters by which a probate
court may extend its probing arms in the determination of the question of title in probate
proceedings. In Pastor, Jr. vs. Court of Appeals,51 the Court explained that, as a rule, the question of
ownership was an extraneous matter which the probate court could not resolve with finality. Thus, for
the purpose of determining whether a certain property should, or should not, be included in the
inventory of estate properties, the probate court may pass upon the title thereto, but such
determination is provisional, not conclusive, and is subject to the final decision in a separate action
to resolve title. It is a well-settled rule that a probate court or one in charge of proceedings, whether
testate or intestate, cannot adjudicate or determine title to properties claimed to be part of the estate
but which are equally claimed to belong to outside parties. It can only determine whether they
should, or should not, be included in the inventory or list of properties to be overseen by the
administrator. If there is no dispute, well and good; but if there is, then the parties, the administrator
and the opposing parties have to resort to an ordinary action for a final determination of the
conflicting claims of title because the probate court cannot do so.52

In this case, respondent Marty argues that the subject properties and the parcel of land on which
these were erected should be included in the inventory of Rosario's estate. More so, the arrears from
the rental of these properties were later on ordered to be remitted to the administrator of the estate
grounded on the allegation that Rosario had no other properties other than her interests in Primrose.
To the Court's mind, this holding of the probate court was in utter disregard of the undisputed fact
the subject land is registered under the Torrens system in the name of Primrose, a third person who
may be prejudiced by the orders of the probate court. In Valera vs. Inserto:53 the Court stated:

xxx, settled is the rule that a Court of First Instance (now Regional Trial Court), acting as a probate
court, exercises but limited jurisdiction, and thus has no power to take cognizance of and determine
the issue of title to property claimed by a third person adversely to the decedent, unless the claimant
and all the other parties having legal interest in the property consent, expressly or impliedly, to the
submission of the question to the probate court for adjudgment, or the interests of third persons are
not thereby prejudiced, the reason for the exception being that the question of whether or not a
particular matter should be resolved by the Court in the exercise of its general jurisdiction or of its
limited jurisdiction as a special court (e.g. probate, land registration, etc.), is in reality not a
jurisdictional but in essence of procedural one, involving a mode of practice which may be waived.

xxxx

xxx These considerations assume greater cogency where, as here, the Torrens title to the
property is not in the decedent's names but in others, a situation on which this Court has
already had occasion to rule.54 [Emphasis and underscoring supplied]

Thus, the probate court should have recognized the incontestability accorded to the Torrens title of
Primrose over Marty's arguments of possible dissipation of properties. In fact, in the given setting,
even evidence purporting to support a claim of ownership has to yield to the incontestability of a
Torrens title, until after the same has been set aside in the manner indicated in the law itself. In other
words, the existence of a Torrens title may not be discounted as a mere incident in special
proceedings for the settlement of the estate of deceased persons. Put clearly, if a property covered
by Torrens title is involved, "the presumptive conclusiveness of such title should be given due
weight, and in the absence of strong compelling evidence to the contrary, the holder thereof should
be considered as the owner of the property in controversy until his title is nullified or modified in an
appropriate ordinary action, particularly, when as in the case at bar, possession of the property itself
is in the persons named in the title."55

Additionally, Presidential Decree (P.D.) No. 152956 proscribes a collateral attack on a Torrens title:

Sec. 48. Certificate not subject to collateral attack. - A certificate of title shall not be subject to
collateral attack. It cannot be altered, modified or cancelled except in a direct proceeding in
1âwphi1

accordance with law.

In Cuizon vs. Ramolete,57 the property subject of the controversy was duly registered under the
Torrens system. To this, Court categorically stated:

Having been apprised of the fact that the property in question was in the possession of third parties
and more important, covered by a transfer certificate of title issued in the name of such third
parties, the respondent court should have denied the motion of the respondent administrator
and excluded the property in question from the inventory of the property of the estate. It had
no authority to deprive such third persons of their possession and ownership of the
property. 58 xxx [Emphasis and underscoring supplied]

A perusal of the records of this case would show that that no compelling evidence was ever
presented to substantiate the position of Marty that Rosario and Primrose were one and the same,
justifying the inclusion of the latter's properties in the inventory of the decedent's properties. This has
remained a vacant assertion. At most, what Rosario owned were shares of stock in Primrose. In
turn, this boldly underscores the fact that Primrose is a separate and distinct personality from the
estate of the decedent. Inasmuch as the real properties included in the inventory of the estate of
Rosario are in the possession of, and are registered in the name of, Primrose, Marty's claims are
bereft of any logical reason and conclusion to pierce the veil of corporate fiction.

Fourth. The probate court in this case has not acquired jurisdiction over Primrose and its properties.
Piercing the veil of corporate entity applies to determination of liability not of jurisdiction; it is
basically applied only to determine established liability. It is not available to confer on the court a
jurisdiction it has not acquired, in the first place, over a party not impleaded in a case.59 This is so
because the doctrine of piercing the veil of corporate fiction comes to play only during the trial of the
case after the court has already acquired jurisdiction over the corporation. Hence, before this
doctrine can be even applied, based on the evidence presented, it is imperative that the court must
first have jurisdiction over the corporation.60

Hence, a corporation not impleaded in a suit cannot be subject to the court's process of piercing the
veil of its corporate fiction. Resultantly, any proceedings taken against the corporation and its
properties would infringe on its right to due process.

In the case at bench, the probate court applied the doctrine of piercing the corporate veil
ratiocinating that Rosario had no other properties that comprise her estate other than her shares in
Primrose. Although the probate court's intention to protect the decedent's shares of stock in
Primrose from dissipation is laudable, it is still an error to order the corporation's tenants to remit
their rental payments to the estate of Rosario.

Considering the above disquisition, the Court holds that a permanent and final injunction is in order
in accordance with Section 9, Rule 58 of the Rules of Court which provides that "[i]f after the trial of
the action it appears that the applicant is entitled to have the act or acts complained of permanently
enjoined, the court shall grant a final injunction perpetually restraining the party or person enjoined
from the commission or continuance of the act or acts or confirming the preliminary mandatory
injunction." Undoubtedly, Primrose stands to suffer an irreparable injury from the subject order of the
probate court.

WHEREFORE, the petition is GRANTED. The Temporary Restraining Order, dated June 14, 2013,
is hereby made PERMANENT, effective immediately. The Regional Trial Court, Branch 6, Tacloban
City, is ENJOINED from enforcing and implementing its January 20, 2011 and June 10, 2011
Orders, insofar as the corporate properties of Primrose Development Corporation are concerned, to
avert irreparable damage to a corporate entity, separate and distinct from the Estate of Rosario Guy-
Juco Villasin Casilan.