Transfer of workers; balancing "management prerogative" and "security of tenure of workers": "In the resolution of whether the transfer of the respondents from one area of operation to another was valid, finding a balance between the scope and limitation of the exercise of management prerogative and the employees' right to security of tenure is necessary. We have to weigh and consider, on the one hand, that management has a wide discretion to regulate all aspects of employment, including the transfer and re-assignment of employees according to the exigencies of the business; and, on the other, that the transfer constitutes constructive dismissal when it is unreasonable, inconvenient or prejudicial to the employee, or involves a demotion in rank or diminution of salaries, benefits and other privileges, or when the acts of discrimination, insensibility or disdain on the part of the employer become unbearable for the employee, forcing him to forego her employment."

 

"In the resolution of whether the transfer of the respondents from one area of operation to another was valid, finding a balance between the scope and limitation of the exercise of management prerogative and the employees' right to security of tenure is necessary.[32] We have to weigh and consider, on the one hand, that management has a wide discretion to regulate all aspects of employment, including the transfer and re-assignment of employees according to the exigencies of the business;[33] and, on the other, that the transfer constitutes constructive dismissal when it is unreasonable, inconvenient or prejudicial to the employee, or involves a demotion in rank or diminution of salaries, benefits and other privileges, or when the acts of discrimination, insensibility or disdain on the part of the employer become unbearable for the employee, forcing him to forego her employment.[34]

In this case of constructive dismissal, the burden of proof lies in the petitioner as the employer to prove that the transfer of the employee from one area of operation to another was for a valid and legitimate ground, like genuine business necessity.[35] We are satisfied that the petitioner duly discharged its burden, and thus established that, contrary to the claim of the respondents that they had been constructively dismissed, their transfer had been an exercise of the petitioner's legitimate management prerogative.

To start with, the resignations of the account managers and the director of sales and marketing in the Manila office brought about the immediate need for their replacements with personnel having commensurate experiences and skills. With the positions held by the resigned sales personnel being undoubtedly crucial to the operations and business of the petitioner, the resignations gave rise to an urgent and genuine business necessity that fully warranted the transfer from the Nasugbu, Batangas office to the main office in Manila of the respondents, undoubtedly the best suited to perform the tasks assigned to the resigned employees because of their being themselves account managers who had recently attended seminars and trainings as such. The transfer could not be validly assailed as a form of constructive dismissal, for, as held in Benguet Electric Cooperative v. Fianza,[36] management had the prerogative to determine the place where the employee is best qualified to serve the interests of the business given the qualifications, training and performance of the affected employee.

Secondly, although the respondents' transfer to Manila might be potentially inconvenient for them because it would entail additional expenses on their part aside from their being forced to be away from their families, it was neither unreasonable nor oppressive. The petitioner rightly points out that the transfer would be without demotion in rank, or without diminution of benefits and salaries. Instead, the transfer would open the way for their eventual career growth, with the corresponding increases in pay. It is noted that their prompt and repeated opposition to the transfer effectively stalled the possibility of any agreement between the parties regarding benefits or salary adjustments.

Thirdly, the respondents did not show by substantial evidence that the petitioner was acting in bad faith or had ill-motive in ordering their transfer. In contrast, the urgency and genuine business necessity justifying the transfer negated bad faith on the part of the petitioner.

Lastly, the respondents, by having voluntarily affixed their signatures on their respective letters of appointment, acceded to the terms and conditions of employment incorporated therein. One of the terms and conditions thus incorporated was the prerogative of management to transfer and re-assign its employees from one job to another "as it may deem necessary or advisable," to wit:

The company reserves the right to transfer you to any assignment from one job to another, or from one department/section to another, as it may deem necessary or advisable.

Having expressly consented to the foregoing, the respondents had no basis for objecting to their transfer. According to Abbot Laboratories (Phils.), Inc. v. National Labor Relations Commission,[37] the employee who has consented to the company's policy of hiring sales staff willing to be assigned anywhere in the Philippines as demanded by the employer's business has no reason to disobey the transfer order of management. Verily, the right of the employee to security of tenure does not give her a vested right to her position as to deprive management of its authority to transfer or re-assign her where she will be most useful.[38]

In view of the foregoing, the NLRC properly appreciated the evidence and merits of the case in reversing the decision of the Labor Arbiter. As such, the CA gravely erred in declaring that the NLRC had gravely abused its discretion amounting to lack or excess of jurisdiction.

WHEREFORE, the Court REVERSES AND SETS ASIDE the decision of the Court of Appeals promulgated on January 10, 2011; REINSTATES the decision issued on December 14, 2009 by the National Labor Relations Commission; and ORDERS the respondents to pay the costs of suit.

SO ORDERED."

G.R. No. 197492, January 18, 2017. 

CHATEAU ROYALE SPORTS AND COUNTRY CLUB, INC., PETITIONER, VS. RACHELLE G. BALBA AND MARINEL N. CONSTANTE, RESPONDENTS.

https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/62724

Torts and Damages: "In order for Rico to maintain an action for the injuries which he claims to have sustained, he must establish that such injuries resulted from a breach of duty which Union Bank owed to him. In other words, there must be a concurrence of injury to Rico and the legal responsibility of the person causing it, i.e. Union Bank.64 "The underlying basis for the award of tort damages is the premise that an individual was injured in contemplation of law; thus there must first be a breach before damages may be awarded and the breach of such duty should be the proximate cause of the injury."

"A credit card is a form of credit accommodation granted by the credit card company to the card holder for the latter's use in the purchase of goods and services. The contract between the card company and the credit card holder is a simple loan arrangement. Although the relationship between the card company and the card holder is that of creditor-debtor28 which exists upon the acceptance by the cardholder of the terms of the card membership agreement, We explained in Pantaleon v. American Express International, Inc.29 that this creditor-debtor relationship arises only after the credit card issuer has approved the cardholder's purchase request. In other words, when the cardholder uses his or her credit card to pay for purchases, an offer to enter into loan agreement with the credit card company is made. Only when the card company approves the purchase request that the parties enter into a binding loan agreement in line with Article 1319 of the Civil Code.

The question now, therefore, is whether Union Bank has the obligation to approve all the purchase requests of Rico by virtue of the issuance of the credit card. Consequently, when the bank disapproved Rico's purchase request on November 20, 2005 at Gourdo's Restaurant, is Union Bank liable to pay moral damages allegedly due to the embarrassment and humiliation resulting from the credit card's dishonor?

To reiterate, "the use of a credit card to pay for a purchase is only an offer to the credit card company to enter into a loan agreement with the credit card holder. Before the credit card issuer accepts this offer, no obligation relating to the loan agreement exists between them."30 Thus, Union Bank has no obligation to enter into a loan agreement with Rico when the latter tendered his offer by using his Union Bank Visa credit card to pay for his purchase at Gourdo's Restaurant. Rico, cannot, therefore demand from Union Bank to loan him or to pay for his purchase at Gourdo's Restaurant by virtue of the issued Visa credit card. "A demand presupposes the existence of an obligation between the parties."31

While it is true that with the issuance of the credit card to Rico, Union Bank granted him a credit facility or a pre-approved amount which the card holder may use in his purchase of goods and services, this is not a demandable right which the card holder may hold against the credit card company as if he is entitled to be granted a loan whenever he or she wants to, or that the bank owes him or her money by the mere issuance of a credit card. Hence, Union Bank may or may not approve Rico's purchase requests based on the latter's credit standing, credit card history, and financial capability. Rico cannot demand that Union Bank should pay for his purchase in Gourdo's Restaurant through the use of the Visa credit card as if the bank is obliged to do so. The disapproval of the credit card transaction which allegedly caused him embarrassment and humiliation worthy of moral damages cannot be solely attributed to Union Bank when there is no demandable right to begin with. In the same manner, Rico is not compelled nor obliged to use his Union Bank Visa credit card to pay for any of his purchases.

However, We recognize that when Union Bank issued a Visa credit card to Rico, the parties entered into a contractual relationship governed by the terms and conditions found in the card membership agreement which constitute as the law between the parties.32 Hence, in case of breach thereof, moral damages may be recovered if any of the party is shown to have acted fraudulently or in bad faith.33 "Malice or bad faith implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity.34 However, a conscious or intentional design need not always be present because negligence may occasionally be so gross as to amount to malice or bad faith."35 Article 2220 of the Civil Code contemplates gross negligence as bad faith which would justify an award of moral damages.

The Terms and Conditions36 did not expressly state that Union Bank would honor all purchase requests of Rico at all times. Nonetheless, with the issuance of the credit card, Union Bank granted Rico credit card privileges which the latter may use in payment for goods and services. Thus, although the credit card company may disapprove the card holder's credit card transaction, it shall do so justifiably and within the bounds of laws and the credit card membership agreement. Otherwise, it would be futile to procure a credit card without a reasonable expectation that the card company will approve the card holder's purchase requests despite being in good credit standing and abiding by the terms and conditions.

A perusal of the records would show that Union Bank disapproved Rico's use of credit card on November 20, 2005 due to the latter's failure to pay the minimum amount due of his SOA dated October 16, 2005.37 However, Rico countered that he paid all his purchases in the total amount of P347.00, and that he was not liable for the other charges in the SOA dated October 16, 2005.

A further examination of the events that transpired before the disapproval of Rico's credit card transaction on November 20, 2005 would reveal that the cause of the inadvertent late payment charges and interests charged in the SOA dated October 16, 2005 was Rico's use of the credit card to pay for his Tiger Airways airline tickets on June 20, 2005 and June 29, 2005,38 which he allegedly cancelled as he did not want to pursue his travel anymore. As per Rico's letter dated June 30, 200539 addressed to Tiger Airways, he did not want to proceed with his flight to Singapore due to the absence of available seats when he tried to modify or change his return flight to Manila. Hence, even when the said airline tickets were already posted in his SOA dated July 15, 2005,40 Rico insisted that he cancelled the same and demanded Union Bank to refund the amount.41

However, as per Rico's letter dated July 4, 200542 to Tiger Airways, the airline refused to grant his demand to cancel the airline tickets because they were non-refundable. Thus, he stated in his letter that he would not pay his credit card for the allegedly cancelled tickets nor any change fees. In another letter dated July 7, 200543 to Tiger Airways, Rico insisted that he was not liable for any cancellation charges and change fees, and that he was not considering any option of flight change. He reiterated the same stance against Tiger Airways in his letter dated July 12, 2005.44

As a result, Rico did not pay Union Bank for the amount corresponding to the Tiger Airways airline tickets charged to his account. He even demanded from Union Bank to refund or reverse the amount charged in his credit card despite knowledge that the said transaction successfully pushed through and was not yet cancelled by Tiger Airways as per his letters dated July 4, 2005, July 7, 2005, and July 12, 2005. Clearly, he did not want to proceed with his flight but Tiger Airways refused to cancel his non-refundable tickets. The only option for Rico is to request the bank to cancel the transaction on the pretext of cancelled airline tickets.

In Union Bank's letter dated August 13, 200545 to Rico, the bank noted that Rico disputed the Tiger Airways airline tickets transaction posted in his SOA dated July 15, 2005. However, Union Bank advised him to coordinate the cancellation with Tiger Airways so it could facilitate its request of refund or reversal.46 In reply, Rico, in his letter dated August 25, 2005,47 demanded from the bank to reverse the amount of airline tickets or else he would not use the credit card.1a⍵⍴h!1

Nevertheless, Union Bank continued to charge the amount of the airline tickets in his succeeding SOAs, i.e. August 15, 200548 and September 15, 200549 with interest, charges, and/or other fees. Obviously, in the August 15, 2005 and September 15, 2005 SOAs, the cancellation of the airline tickets was not yet resolved which explains why Union Bank continued to charge Rico's credit card account.

However, in SOA dated October 16, 2005,50 Union Bank classified the airline tickets as disputed items but still continued to charge the said amount in Rico's account. Hence, the total amount due on SOA dated October 16, 2005 is P30,376.79, which includes the price of the airline tickets, with a minimum amount due of P500.00.51 Rico, however, insisting that he is not liable to pay the airline tickets as he claimed to have cancelled the same, only paid P347.00, or less than the minimum amount due.52

Thereafter, Union Bank made a credit adjustment on November 7, 200553 so as not to charge Rico with additional charges for the disputed transaction while undergoing the process of reversal or refund, if entitled. Clearly, in Union Bank's letter dated November 29, 2005,54 the disputed airline tickets transactions were not yet resolved but the bank made the necessary credit adjustment to avoid the running of additional charges or interests. The bank clarified that the said credit adjustment is not considered as payment and that Rico still needs to pay the minimum amount due to prevent the revocation of credit card privileges.55

Hence, even with the credit adjustment on November 7, 2005, Rico's transaction on November 20, 2005 was disapproved as he failed to pay the minimum amount due of P500 as billed in his SOA dated October 16, 2005 which was due on November 8, 2005. Finally, the cancellation of the airline tickets was resolved in Rico's favor. Thus, the SOA dated December 15, 2005 showed that Rico had no outstanding obligation to Union Bank. The bank also reversed all interests and charges charged against Rico's credit card account due to his failure to pay the amount of airline tickets.

Granting that the cancellation of the airline ticket was finally resolved in Rico's favor, it must be stressed that at the time of the purported embarrassing and humiliating incident, i.e., November 20, 2005, the said disputed transaction was not yet resolved. Thus, Union Bank had the right to revoke Rico's credit card privileges, and consequently disapprove the transaction in Gourdo's Restaurant. Union Bank further explained that the reversal of the amount of airline tickets was not considered as payment, and thus the bank system automatically put his account on "past due status" which caused the disapproval of Rico's transaction on November 20, 2005. As far as Union Bank is concerned, the disputed items were not yet resolved, and were part of the total outstanding obligation of the card holder. It is quite unfortunate for Rico to fault Union Bank for its failure to refund or reverse the amount of Tiger Airways airline tickets, when it was clear that the incident arose from his own decision to cancel his flight with Tiger Airways and insistence to refund or reverse the same.

Notably, "every credit card transaction involves three contracts, namely: (a) the sales contract between the credit card holder and the merchant or the business establishment which accepted the credit card; (b) the loan agreement between the credit card issuer and the credit card holder; and lastly, (c) the promise to pay between the credit card issuer and the merchant or business establishment."56

When Rico used his credit card to pay for his purchase of Tiger Airways airline tickets, three contracts were created, namely: (a) sales contract between Rico and Tiger Airways; (b) loan agreement between Rico and Union Bank; and (c) the promise to pay between Union Bank and Tiger Airways. When the said transaction was executed, Union Bank's promise to pay Tiger Airways arose. On the other hand, a creditor-debtor relationship was created between Union Bank and Rico, respectively. Thus, Union Bank had the right to demand the payment of the amount of airline tickets against Rico which the bank did so as indicated in its July, August, September, and October 2005 SOAs.

Rico's claim that the said airline tickets were already cancelled was belied by his own admission in his letters dated June 30, 2005,57 July 4, 2005,58 and July 12, 2005,59 to Tiger Airways demanding from the latter to cancel his non­-refundable flights from Manila to Singapore and vice versa. In return, Union Bank in its letter dated August 13, 2005,60 advised Rico to request the cancellation of the airline tickets from Tiger Airways, in order for Union Bank to process the reversal or refund of the amount charged in his account. Clearly, Union Bank cannot be considered to have breached its contract with Rico when the bank loaned him the money to pay for his purchase of airline tickets from Tiger Airways.

Rico, however, retorted in his letter dated August 13, 2005 to Union Bank, that he would not present any proof of cancellation of the said transaction with Tiger Airways as "the latter insists not to honor my cancellation of my flight reservation."61 Patently, Union Bank cannot be considered to have willfully put Rico's account on "past due status" in bad faith, when it was Rico himself who did not want to proceed with the already perfected and binding: (a) sales contract with Tiger Airways, and (b) loan agreement with Union Bank, from the mere fact that Rico used his credit card to pay for that subject purchase online. Consequently, Union Bank cannot just reverse nor refund the amount charged at the mere whim of the credit card holder who did not want to proceed with the flight he himself purchased from Tiger Airways.

Thus, Union Bank cannot be faulted when it continued to charge Rico with the amount of the airline tickets, pending investigation of the said disputed items. Rico knew fully well that the disputed airline tickets were still under the process of investigation by Union Bank, and that the said transactions were charged against his account as per SOA dated October 16, 2005. He also knew that as per SOA dated October 16, 2005, the minimum amount due to be paid is P500.00. As per the Terms and Conditions, in case of payment default, the right to use the credit card shall automatically be revoked which Union Bank did rightly so.

Regardless of the resolution of the cancellation of the airline tickets and the reversal of the interests and/or charges in Rico's favor, it bears stressing that when the alleged embarrassing situation happened on November 20, 2005, Rico was well aware of the pending dispute involving the airline tickets, and his nonpayment of the minimum amount which was due on or before November 8, 2005. Union Bank made no representation that the disputed items would be resolved in Rico's' favor. Also, it bears stressing that Union Bank is a business, and not a charity. It would be absurd to assume that Union Bank would simply accept Rico's representation that the disputed airline tickets were already cancelled, without conducting its own review and investigation, and thereby, open itself to a possible liability to Tiger Airways, when the debtor, Rico, refuses to pay Union Bank and insists on its cancellation.

Apropos, Union Bank cannot be considered grossly negligent in charging the amount of airline tickets against Rico's credit card account in the July to October SOAs, or prior to the final resolution of the dispute. Union Bank did not violate the Terms and Conditions, nor any legal duty, to pay for Rico's purchases using the credit card. Union Bank cannot also be considered grossly negligent when it automatically revoked Rico's credit card account when the latter failed to pay the minimum amount due pending the resolution of the disputed transactions. Insofar as Union Bank is concerned, Rico offered to enter into a loan agreement with Union Bank to pay for his Tiger Airways airline tickets and Union Bank, when it allowed the said transactions, accepted Rico's offer. Subsequently, a contract between Union Bank and Tiger Airways arose, such that, the former is obliged to pay the latter the amount of airline tickets purchased by Rico. In reviewing and investigating the alleged cancelled sales agreement between Rico and Tiger Airways, Union Bank is justified to protect itself as a business for profit.1âшphi1

Based on the foregoing, we find the disapproval of Rico's credit card on November 20, 2005 as justified and done in good faith. Union Bank neither breached its contract with Rico nor acted with willful intent to cause harm when it revoked Rico's credit card privileges when he failed to pay the minimum amount due on his SOA dated October 16, 2005. Nobody can be faulted for Rico's alleged humiliation or embarrassment in Gourdo's Restaurant but himself. Damnum absque injuria – there can be no damage without injury when the loss or harm was not the result of a violation of a legal duty. As held in BPI Express Card v. Court of Appeals:62

We do not dispute the findings of the lower court that private respondent suffered damages as a result of the cancellation of his credit card. However, there is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. In such cases, the consequences must be borne by the injured person alone, the law affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong. These situations are often called damnum absque injuria.

In other words, in order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such injuries resulted from a breach of duty which the defendant owed to the plaintiff — a concurrence of injury to the plaintiff and legal responsibility by the person causing it. The underlying basis for the award of tort damages is the premise that an individual was injured in contemplation of law. Thus, there must first be a breach of some duty and the imposition of liability for that breach before damages may be awarded; and the breach of such duty should be the proximate cause of the injury.63

In order for Rico to maintain an action for the injuries which he claims to have sustained, he must establish that such injuries resulted from a breach of duty which Union Bank owed to him. In other words, there must be a concurrence of injury to Rico and the legal responsibility of the person causing it, i.e. Union Bank.64 "The underlying basis for the award of tort damages is the premise that an individual was injured in contemplation of law; thus there must first be a breach before damages may be awarded and the breach of such duty should be the proximate cause of the injury."65

It is not enough that Rico merely suffered humiliation or embarrassment as a result of Union Bank's disapproval of the credit card transaction on November 20, 2005. "It is also required that a culpable act or omission was factually established, that proof that the wrongful act or omission of the defendant is shown as the proximate cause of the damage sustained by the claimant and that the case is predicated on any of the instances expressed or envisioned by Arts. 2219 and 2220 of the Civil Code."66

While Rico suffered humiliation or embarrassment from the disapproval of his credit card at Gourdo's Restaurant in front of his two guests, We are constrained to reverse the findings of the RTC and the CA that Union Bank was grossly negligent in revoking Rico's credit card privileges. Rico failed to convince Us that Union Bank breached any obligation that would make it answerable for his humiliation or embarrassment.

Hence, as it was Rico's own action, i.e., his resolve to cancel his flight with Tiger Airways, which was the proximate cause of his embarrassing and humiliating experience, We find the award of moral damages by the RTC and the CA clearly unjustified. With the deletion of the award of moral damages, we find no basis for the award of exemplary damages as it can only be awarded if Rico is entitled to moral, temperate, or compensatory damages.67 In the same vein, We must delete the award of attorney's fees and costs of litigation as Rico failed to show that he falls under one of the instances enumerated in Article 2208 of the Civil Code.

WHEREFORE, the petition is DENIED. The June 28, 2013 Decision and January 21, 2014 Resolution of the Court of Appeals in CA-G.R. CV No. 96400 are hereby REVERSED and SET ASIDE. The complaint for damages filed by petitioner Rex G. Rico before the Regional Trial Court, Parañaque City, Branch 195 docketed as Civil Case No. 06-0029 against respondent Union Bank of the Philippines, is hereby DISMISSED.

SO ORDERED."

G.R. No. 210928, February 14, 2022. 

REX G. RICO, PETITIONER, VS. UNION BANK OF THE PHILIPPINES, RESPONDENT.

https://lawphil.net/judjuris/juri2022/feb2022/gr_210928_2022.html

Insurance; illegitimate children as beneficiaries

 "In this case, it is clear from the petition filed before the trial court that, although petitioners are the legitimate heirs of Loreto, they were not named as beneficiaries in the insurance policies issued by Insular and Grepalife. The basis of petitioners’ claim is that Eva, being a concubine of Loreto and a suspect in his murder, is disqualified from being designated as beneficiary of the insurance policies, and that Eva’s children with Loreto, being illegitimate children, are entitled to a lesser share of the proceeds of the policies. They also argued that pursuant to Section 12 of the Insurance Code,19 Eva’s share in the proceeds should be forfeited in their favor, the former having brought about the death of Loreto. Thus, they prayed that the share of Eva and portions of the shares of Loreto’s illegitimate children should be awarded to them, being the legitimate heirs of Loreto entitled to their respective legitimes.

It is evident from the face of the complaint that petitioners are not entitled to a favorable judgment in light of Article 2011 of the Civil Code which expressly provides that insurance contracts shall be governed by special laws, i.e., the Insurance Code. Section 53 of the Insurance Code states—

SECTION 53. The insurance proceeds shall be applied exclusively to the proper interest of the person in whose name or for whose benefit it is made unless otherwise specified in the policy.

Pursuant thereto, it is obvious that the only persons entitled to claim the insurance proceeds are either the insured, if still alive; or the beneficiary, if the insured is already deceased, upon the maturation of the policy.20 The exception to this rule is a situation where the insurance contract was intended to benefit third persons who are not parties to the same in the form of favorable stipulations or indemnity. In such a case, third parties may directly sue and claim from the insurer.21

Petitioners are third parties to the insurance contracts with Insular and Grepalife and, thus, are not entitled to the proceeds thereof. Accordingly, respondents Insular and Grepalife have no legal obligation to turn over the insurance proceeds to petitioners. The revocation of Eva as a beneficiary in one policy and her disqualification as such in another are of no moment considering that the designation of the illegitimate children as beneficiaries in Loreto’s insurance policies remains valid. Because no legal proscription exists in naming as beneficiaries the children of illicit relationships by the insured,22 the shares of Eva in the insurance proceeds, whether forfeited by the court in view of the prohibition on donations under Article 739 of the Civil Code or by the insurers themselves for reasons based on the insurance contracts, must be awarded to the said illegitimate children, the designated beneficiaries, to the exclusion of petitioners. It is only in cases where the insured has not designated any beneficiary,23 or when the designated beneficiary is disqualified by law to receive the proceeds,24 that the insurance policy proceeds shall redound to the benefit of the estate of the insured.

In this regard, the assailed June 16, 2005 Resolution of the trial court should be upheld. In the same light, the Decision of the CA dated January 8, 2008 should be sustained. Indeed, the appellate court had no jurisdiction to take cognizance of the appeal; the issue of failure to state a cause of action is a question of law and not of fact, there being no findings of fact in the first place.25

WHEREFORE, the petition is DENIED for lack of merit. Costs against petitioners.

SO ORDERED."

HEIRS OF LORETO C. MARAMAG, represented by surviving spouse VICENTA PANGILINAN MARAMAG, Petitioners, vs. EVA VERNA DE GUZMAN MARAMAG, ODESSA DE GUZMAN MARAMAG, KARL BRIAN DE GUZMAN MARAMAG, TRISHA ANGELIE MARAMAG, THE INSULAR LIFE ASSURANCE COMPANY, LTD., and GREAT PACIFIC LIFE ASSURANCE CORPORATION, Respondents. G.R. No. 181132, June 5, 2009. 

https://lawphil.net/judjuris/juri2009/jun2009/gr_181132_2009.html

Grave oral defamation or slander

"The lone assignment of error (Brief for the Petitioners, p. 91), is as follows:

THAT THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE WORDS UTTERED BY THE PETITIONERS IN CONVERSATION WITH EACH OTHER AND WHILE IN THE HEAT OF ANGER CONSTITUTE GRAVE ORAL DEFAMATION INSTEAD OF MERELY LIGHT ORAL DEFAMATION.

In effect, counsel for petitioners abandoned all the assignments of error in the Court of Appeals, confined himself to only one, and practically admitted that the accused committed the crime charged although of a lesser degree that of slight oral defamation only, instead of grave oral defamation.

There is no dispute regarding the main facts that had given rise to the present case. Appellant-petitioner in this instant appeal, does not deny that the accused, on the occasion in question, uttered the defamatory words alleged in the information. Thus, the sole issue that the Court has to resolve is whether or not the defamatory words constitute serious oral defamation or simply slight oral defamation.

The term oral defamation or slander as now understood, has been defined as the speaking of base and defamatory words which tend to prejudice another in his reputation, office, trade, business or means of livelihood (33 Am. Jur. 39). Article 358, Revised Penal Code, spells out the demarcation line, between serious and slight oral defamations, as follows: "Oral defamation shall be punished by arresto mayor in its maximum period to prision correccional in its minimum period, if it is of a serious and insulting nature, otherwise, the penalty shall be arresto menor or a fine not exceeding 200 pesos." (Balite v. People, 18 SCRA 280 [1966]).

To determine whether the offense committed is serious or slight oral defamation, the Court adopted the following guidelines:

. . . We are to be guided by a doctrine of ancient respectability that defamatory words will fall under one or the other, depending upon, as Viada puts it, '...upon their sense and grammatical meaning judging them separately, but also upon the special circumstances of the case, antecedents or relationship between the offended party and the offender, which might tend to prove the intention of the offender at the time: ... Balite v. People, Ibid., quoting Viada, Codigo Penal, Quinta edicion, page 494).

Thus, in the same case cited where scurrilous words imputed to the offended party the crime of estafa, the Court ruled:

The scurrilous words imputed to the offended party the crime estafa. The language of the indictment strikes deep into the character of the victim; He 'has sold the union; he 'has swindled the money of the vendees; he 'received bribe money in the amount of P10,000.00 ... and another P6,000.00'; He 'is engaged in racketeering and enriching himself with the capitalists'; He 'has spent the funds of the union for his personal use.'

No amount of sophistry will take these statements out of the compass of grave oral defamation. They are serious and insulting. No circumstances need to be shown to upgrade the slander. . . .

In another case where a woman of violent temper hurled offensive and scurrilous epithets including words imputing unchastity against a respectable married lady and tending to injure the character of her young daughters, the Court ruled that the crime committed was grave slander:

The language used by the defendant was deliberately applied by her to the complainant. The words were uttered with evident intent to injure complainant, to ruin her reputation, and to hold her in public contempt, for the sake of revenge. One who will thus seek to impute vice or immorality to another, the consequences of which might gravely prejudice the reputation of the person insulted, in this instance apparently an honorable and respectable lady and her young daughters, all prominent in social circles, deserves little judicial sympathy. Certainly, it is time for the courts to put the stamp of their disapproval on this practice of vile and loud slander. (U.S. v. Tolosa, 37 Phil. 166 [1917]).

In a case where the accused, a priest, called the offended party a gangster, in the middle of a sermon, the court affirmed the conviction of the accused for slight slander (People v. Arcand 68 Phil. 601 [1939]). There was no imputation of a crime nor a vice or immorality in said case.

In the instant case, appellant-petitioner admitted having uttered the defamatory words against Atty. Vivencio Ruiz. Among others he called Atty. Ruiz, "estapador", which attributes to the latter the crime of estafa, a serious and insulting imputation. As stated by the Court in Balite v. People, supra, "no amount of sophistry will take these statements out of the compass of grave oral defamation . . . No circumstances need to be shown to upgrade the slander."

Defamatory words uttered specifically against a lawyer when touching on his profession are libelous per se. Thus, in Kleeberg v. Sipser (191 NY 845 [1934]), it was held that "where statements concerning plaintiff in his professional capacity as attorney are susceptible, in their ordinary meaning, of such construction as would tend to injure him in that capacity, they are libelous per se and (the) complaint, even in the absence of allegation of special damage, states cause of action." Oral statements that a certain lawyer is 'unethical,' or a false charge, dealing with office, trade, occupation, business or profession of a person charged, are slanderous per se (Kraushaar v. LaVin, 42 N.Y.S. 2d 857 [1943]; Mains v. Whiting 49 NW 559 [1891]; Greenburg v. De Salvo, 216 So. 2d 638 [1968]).

In Pollard v. Lyon (91 US 225 [1876]), the court there had occasion to divide oral slander, as a cause of action, into several classes, as follows:

(1) Words falsely spoken of a person which impute to the party the commission of some criminal offense involving moral turpitude for which the party, if the charge is true, may be indicted and punished;

(2) Words falsely spoken of a person which impute that the party is infected with some contagious disease, where, if the charge is true, it would exclude the party from society;

(3) Defamatory words falsely spoken of a person which impute to the party unfitness to perform the duties of an office or employment, or the want of integrity in the discharge of the duties of such office or employment;

(4) Defamatory words falsely spoken of a party which prejudice such party in his or her profession or trade; and

(5) Defamatory words falsely spoken of a person, which, though not in themselves actionable, occasion the party special damage."

In the instant case, appellant-petitioner imputed the crime of estafa against a prominent lawyer one-time Justice of the Peace and member of the Provincial Board of Nueva Ecija, a professor of law and for sometime a president of the Nueva Ecija Bar Association. As the scurrilous imputation strikes deep into the character of the victim, no special circumstance need be shown for the defamatory words uttered to be considered grave oral defamation Balite v. People, supra. In addition, the fact that the offended party is a lawyer, the totality of such words as "kayabang", "tunaw ang utak", "swapang at estapador", imputed against him has the import of charging him with dishonesty or improper practice in the performance of his duties, hence, actionable per se.

Petitioner argues that this Court in People v. Doronila (40 O.G. No. 15, Supp. 11, p. 231 [1941]) and People v. Modesto (40 O.G. No. 15, Supp. 11, p. 128 [1941]) ruled that defamatory words uttered in the heat of anger could only give rise to slight oral defamation (Rono, p. 13).

We disagree.

An examination of the rulings relied upon by petitioner showed that said cases were decided not by this Court but by the respondent court. Suffice it to say that said decisions do not bind this Court.

Nevertheless, the cases adverted to by petitioner would not in any manner help his cause. As pointed out by the Solicitor General, there was no reason for the petitioner to be angry at the offended party who was merely performing his duties as a lawyer in defense of his client. Petitioner's anger was not lawfully caused. (Brief for the Appellee, p. 7). The fact that the defamatory words were uttered by the petitioner without provocation by private respondent and taken seriously by the latter, renders inapplicable the cases relied upon by petitioner.

As a matter of fact, the scurrilous remarks were found by the respondent court to have been uttered in a loud voice, in the presence of at least ten (10) persons, taken seriously by the offended party and without provocation on his part.

WHEREFORE, the petition is Denied for lack of merit and the appealed decision Affirmed in toto.

SO ORDERED."

DANIEL VICTORIO and EXEQUIEL VICTORIO, petitioners, vs. THE HON. COURT OF APPEALS and THE PEOPLE OF THE PHILIPPINES, respondents. G.R. Nos. L-32836-37, May 3, 1989. 

https://lawphil.net/judjuris/juri1989/may1989/gr_l32836_37_1989.html

Damages against a party in default

"To adjudge damages, paragraph (d) of Section 3 of Rule 9 of the Rules of Court provides that a judgment against a party in default "shall not exceed the amount or be different in kind from that prayed for nor award unliquidated damages." The proscription against the award of unliquidated damages is significant, because it means that the damages to be awarded must be proved convincingly, in accordance with the quantum of evidence required in civil cases.

Unfortunately for petitioners, the grant of damages was not sufficiently supported by the evidence for the following reasons.

First, petitioners were not deprived of their property without cause. As correctly pointed out by the CA, Act No. 3135, as amended, does not require personal notice to the mortgagor.53 In the present case, there has been no allegation -- much less, proof -- of noncompliance with the requirement of publication and public posting of the notice of sale, as required by Áct No. 3135. Neither has there been competent evidence to show that the price paid at the foreclosure sale was inadequate.54 To be sure, there was no ground to invalidate the sale.

Second, as previously stated, petitioners have not convincingly established their right to damages on the basis of the purported agreement to repurchase. Without reiterating our prior discussion on this point, we stress that entitlement to actual and compensatory damages must be proved even under Section 3 of Rule 9 of the Rules of Court. The same is true with regard to awards for moral damages and attorney’s fees, which were also granted by the trial court.

In sum, petitioners have failed to convince this Court of the cogency of their position, notwithstanding the advantage they enjoyed in presenting their evidence ex parte. Not in every case of default by the defendant is the complainant entitled to win automatically.

WHEREFORE, this Petition is hereby DENIED and the assailed Decision and Resolution AFFIRMED. Costs against petitioners.

SO ORDERED."

ERLINDA GAJUDO, FERNANDO GAJUDO, JR., ESTELITA GAJUDO, BALTAZAR GAJUDO and DANILO ARAHAN CHUA, Petitioners, vs. TRADERS ROYAL BANK,1Respondent. G.R. No. 151098, March 21, 2006.

https://lawphil.net/judjuris/juri2006/mar2006/gr_151098_2006.html

Quantum of proof

 "First Issue: Quantum of Proof

Petitioners challenge the CA Decision for applying Section 3 of Rule 9 of the Rules of Court, rather than Section 1 of Rule 133 of the same Rules. In essence, petitioners argue that the quantum of evidence for judgments flowing from a default order under Section 3 of Rule 9 is not the same as that provided for in Section 1 of Rule 133.

For ease of discussion, these two rules will be reproduced below, starting with Section 3 of Rule 9 of the Rules of Court:

"Sec. 3. Default; declaration of. – If the defending party fails to answer within the time allowed therefor, the court shall, upon motion of the claiming party with notice to the defending party, and proof of such failure, declare the defending party in default. Thereupon, the court shall proceed to render judgment granting the claimant such relief as his pleading may warrant, unless the court in its discretion requires the claimant to submit evidence. Such reception of evidence may be delegated to the clerk of court.

"(a) Effect of order of default. – A party in default shall be entitled to notice of subsequent proceedings but not to take part in the trial.

"(b) Relief from order of default. – A party declared in default may at any time after notice thereof and before judgment file a motion under oath to set aside the order of default upon proper showing that his failure to answer was due to fraud, accident, mistake or excusable negligence and that he has a meritorious defense. In such case, the order of default may be set aside on such terms and conditions as the judge may impose in the interest of justice.

"(c) Effect of partial default. – When a pleading asserting a claim states a common cause of action against several defending parties, some of whom answer and the others fail to do so, the court shall try the case against all upon the answers thus filed and render judgment upon the evidence presented.

"(d) Extent of relief to be awarded. – A judgment rendered against a party in default shall not exceed the amount or be different in kind from that prayed for nor award unliquidated damages.

"(e) Where no defaults allowed. – If the defending party in an action for annulment or declaration of nullity of marriage or for legal separation fails to answer, the court shall order the prosecuting attorney to investigate whether or nor a collusion between the parties exists, and if there is no collusion, to intervene for the State in order to see to it that the evidence submitted is not fabricated."

We now quote Section 1 of Rule 133:

"SECTION 1. Preponderance of evidence, how determined. – In civil cases, the party having the burden of proof must establish his case by a preponderance of evidence. In determining where the preponderance or superior weight of evidence on the issues involved lies, the court may consider all the facts and circumstances of the case, the witnesses’ manner of testifying, their intelligence, their means and opportunity of knowing the facts to which they are testifying, the nature of the facts to which they testify, the probability or improbability of their testimony, their interest or want of interest, and also their personal credibility so far as the same may legitimately appear upon the trial. The court may also consider the number of witnesses, though the preponderance is not necessarily with the greater number."

Between the two rules, there is no incompatibility that would preclude the application of either one of them. To begin with, Section 3 of Rule 9 governs the procedure which the trial court is directed to take when a defendant fails to file an answer. According to this provision, the court "shall proceed to render judgment granting the claimant such relief as his pleading may warrant," subject to the court’s discretion on whether to require the presentation of evidence ex parte. The same provision also sets down guidelines on the nature and extent of the relief that may be granted. In particular, the court’s judgment "shall not exceed the amount or be different in kind from that prayed for nor award unliquidated damages."

As in other civil cases, basic is the rule that the party making allegations has the burden of proving them by a preponderance of evidence.19 Moreover, parties must rely on the strength of their own evidence, not upon the weakness of the defense offered by their opponent.20 This principle holds true, especially when the latter has had no opportunity to present evidence because of a default order. Needless to say, the extent of the relief that may be granted can only be as much as has been alleged and proved21 with preponderant evidence required under Section 1 of Rule 133.

Regarding judgments by default, it was explained in Pascua v. Florendo22 that complainants are not automatically entitled to the relief prayed for, once the defendants are declared in default. Favorable relief can be granted only after the court has ascertained that the relief is warranted by the evidence offered and the facts proven by the presenting party. In Pascua, this Court ruled that "x x x it would be meaningless to require presentation of evidence if every time the other party is declared in default, a decision would automatically be rendered in favor of the non-defaulting party and exactly according to the tenor of his prayer. This is not contemplated by the Rules nor is it sanctioned by the due process clause."23

The import of a judgment by default was further clarified in Lim Tanhu v. Ramolete.24 The following disquisition is most instructive:

"Unequivocal, in the literal sense, as these provisions [referring to the subject of default then under Rule 18 of the old Rules of Civil Procedure] are, they do not readily convey the full import of what they contemplate. To begin with, contrary to the immediate notion that can be drawn from their language, these provisions are not to be understood as meaning that default or the failure of the defendant to answer should ‘be interpreted as an admission by the said defendant that the plaintiff’s cause of action find support in the law or that plaintiff is entitled to the relief prayed for.’ x x x.

x x x x x x x x x

"Being declared in default does not constitute a waiver of rights except that of being heard and of presenting evidence in the trial court. x x x.

"In other words, a defaulted defendant is not actually thrown out of court. While in a sense it may be said that by defaulting he leaves himself at the mercy of the court, the rules see to it that any judgment against him must be in accordance with law. The evidence to support the plaintiff’s cause is, of course, presented in his absence, but the court is not supposed to admit that which is basically incompetent. Although the defendant would not be in a position to object, elementary justice requires that only legal evidence should be considered against him. If the evidence presented should not be sufficient to justify a judgment for the plaintiff, the complaint must be dismissed. And if an unfavorable judgment should be justifiable, it cannot exceed in amount or be different in kind from what is prayed for in the complaint."25

In sum, while petitioners were allowed to present evidence ex parte under Section 3 of Rule 9, they were not excused from establishing their claims for damages by the required quantum of proof under Section 1 of Rule 133. Stated differently, any advantage they may have gained from the ex parte presentation of evidence does not lower the degree of proof required. Clearly then, there is no incompatibility between the two rules."

ERLINDA GAJUDO, FERNANDO GAJUDO, JR., ESTELITA GAJUDO, BALTAZAR GAJUDO and DANILO ARAHAN CHUA, Petitioners, vs. TRADERS ROYAL BANK,1Respondent. G.R. No. 151098, March 21, 2006.

https://lawphil.net/judjuris/juri2006/mar2006/gr_151098_2006.html

Estafa, modified penalty under RA 10951

 "Penalty modifications

Republic Act No. 10951 (RA 10951) adjusted the amount or value of the property and damage upon which the penalties for crimes and offenses are based, and the fines imposed therefor. Section 85 thereof specifically provides for violations of Article 315, Paragraph 2(a) of the RPC:

SECTION 85. Article 315 of the same Act, as amended by Republic Act No. 4885, Presidential Decree No. 1689, and Presidential Decree No. 818, is hereby further amended to read as follows:

"ART. 315. Swindling (estafa). — Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished by:

x x x x

"3rd. The penalty of arresto mayor in its maximum period to prisión correccional in its minimum period, if such amount is over Forty thousand pesos (P40,000) but does not exceed One million two hundred thousand pesos (P1,200,000).

Seguritan v. People62 and People v. Dejolde, Jr.63 involved the application of RA 10951 on the third paragraph of Article 315, as amended. Both meted out the following penalty:

[I]n view of the recent enactment of RA 10951, there is a need to modify the penalties imposed by the CA insofar as the two counts of estafa, docketed as Criminal Case Nos. 27592-R and 27602-R, are concerned. For committing estafa involving the amounts of P440,000.00 and P350,000.00, Article 315 of the RPC, as amended by RA 10951, now provides that the penalty of arresto mayor in its maximun period to prision correccional in its minimum period shall be imposed if the amount involved is over P40,000.00 but does not exceed P1,200,000.00. There being no mitigating and aggravating circumstance, the maximum penalty should be one (1) year and one (1) day of prision correccional. Applying the Indeterminate Sentence Law, the minimum term of the indeterminate sentence is: arresto mayor in its minimum and medium periods, the range of which is one (1) month and one (1) day to four (4) months. Thus, the indeterminate penalty for each count of estafa should be modified to a prison term of two (2) months and one (1) day of arresto mayor, as minimum, to one (1) year and one (1) day of prision correccional, as maximum.

The RTC held Arriola criminally liable for Estafa under Article 315, Paragraph 2(a) for the amount of P437,000.00 and initially imposed the indeterminate penalty of four (4) years, two (2) months, and one (1) day of prision correccional, as minimum, to twenty (20) years of reclusion temporal, as maximum. In light of RA 10951 and the aforementioned recent pronouncements, Arriola's penalty is hereby modified to arresto mayor in its minimum period to prision correccional in its minimum period, further narrowed down to an indeterminate penalty of two (2) months and one (1) day of arresto mayor, as minimum, to one (1) year and one (1) day of prision correccional, as maximum.

WHEREFORE, the Petition is DENIED. The assailed August 5, 2011 Decision and January 3, 2012 Resolution of the Court of Appeals in CA-G.R. CR No. 31338 are AFFIRMED with MODIFICATIONS. Petitioner Luis T. Arriola is ORDERED to suffer the indeterminate penalty of two (2) months and one (1) day of arresto mayor, as minimum, to one (1) year and one (1) day of prision correccional, as maximum.

SO ORDERED."

G.R. No. 199975, February 24, 2020 

LUIS T. ARRIOLA, PETITIONER, V. PEOPLE OF THE PHILIPPINES, RESPONDENT.

https://lawphil.net/judjuris/juri2020/feb2020/gr_199975_2020.html

Equipoise Rule in Appreciation of Evidence

 "The equipoise rule is inapplicable in this case

Arriola maintains that he possessed a valid authority to sell the subject lot, which Candelaria denied. While hearsay, Arriola asserts his position that Candelaria only withheld such authority because they had a subsequent disagreement. There being a conflict between the versions of the prosecution and the defense, Arriola insists that the courts should have favored that of the latter, citing the equipoise rule.59 We differ.

The equipoise rule is inapplicable here. This criminal law principle is explained in brief in Tin v. People,60 a case relied on by Arriola:

Under this rule, where the evidence on an issue of fact is in equipoise or there is doubt on which side the evidence preponderates, the party having the burden of proof loses. The equipoise rule finds application if the inculpatory facts and circumstances are capable of two or more explanations, one of which is consistent with the innocence of the accused and the other consistent with his guilt, for then the evidence does not fulfill the test of moral certainty, arid does not suffice to produce a conviction. Briefly stated, the needed quantum of proof to convict the accused of the crime charged is found lacking. x x x61

Conviction rests not on the frailty of the defense but on the strength and sufficiency of the evidence of the prosecution. In this case, however, the scales of the evidence had already tilted heavily against the defense. We perceive no conflicting versions, as Arriola technically failed to set forth his own version in the first place. His guilt was finely established with the required quantum of proof, which is proof beyond reasonable doubt.

More importantly, this factual argument by Arriola is too bare and was raised too belatedly to be considered at this point. To recall, Arriola's direct testimony was stricken off the record for his consistent absences at the scheduled dates for his cross-examination. It was not even tendered as excluded evidence. Only on appeal that he advanced this argument. Even if time and procedure permitted it, Arriola, by his own admission, grounded his case solely and purely on hearsay. This is wholly insufficient to counter the already-compelling evidence presented against him by the prosecution."

G.R. No. 199975, February 24, 2020 

LUIS T. ARRIOLA, PETITIONER, V. PEOPLE OF THE PHILIPPINES, RESPONDENT.

https://lawphil.net/judjuris/juri2020/feb2020/gr_199975_2020.html

Good faith as a defense in Estafa

 "Good faith is "an elusive idea, taking on different meanings and emphases as we move from one context to another."56 It is, in general, a state of mind consisting in honesty in belief or purpose, faithfulness to one's duty or obligation, observance of reasonable commercial standards of fair dealing in a given trade or business, absence of intent to defraud or seek unconscionable advantage,57 or a belief in one's legal title or right.58 Being malum in se, and depending on the proven circumstances, good faith and lack of criminal intent are indeed available defenses against a prosecution for Estafa.

However, all-encompassing this definition is, good faith still cannot be appreciated in favor of Arriola. As earlier expounded, Arriola, a real estate broker, presented to Del Rosario an Authorization and a fax transmission clearly conveying mere permission from Candelaria to receive payment from Del Rosario. Despite knowledge of such information, and even going so far as to disclose the same to Del Rosario, Arriola continued to wield his ultra vires power to sell Candelaria's lot. This smacks of overt thoughtlessness, gross negligence, and fraudulent intentions in his professional dealings, imperiling the welfare of both his principal and the latter's client and culminating in the actual damage to Del Rosario. To attribute good faith to Arriola under these facts is to uphold injustice."

G.R. No. 199975, February 24, 2020 

LUIS T. ARRIOLA, PETITIONER, V. PEOPLE OF THE PHILIPPINES, RESPONDENT.

https://lawphil.net/judjuris/juri2020/feb2020/gr_199975_2020.html

Return of the amount owed will not cancel criminal liability for Estafa

 "Return of the amount owed to Del Rosario will not cancel Arriola's criminal liability for Estafa

Arriola insists that he manifested good faith when he returned Del Rosario's money, and that good faith is a defense against a charge for Estafa. Citing this Court's ruling in Salazar v. People,53 he also maintains that the transaction between Del Rosario and Candelaria was that of a sale, and his failure to deliver the title of the property in question only gave rise to a civil liability. We disagree.

The return by the accused of money belonging to the private complainant will not reverse a consummated act of Estafa. Quite the contrary, such action may even uphold a conviction. Section 27, Rule 130 of the Rules of Court states that in criminal cases, except those involving quasi-offenses or criminal negligence or those allowed by law to be compromised, an offer of compromise by the accused may be received in evidence as an implied admission of guilt. In this case, Arriola's initial attempts to reimburse Del Rosario through checks, coupled with the actual return of the latter's money after the RTC issued its judgment of conviction, may all be considered as unequivocal gestures to compromise and which can be measured against Arriola as his implied admission of guilt.

Moreover, Salazar v. People,54 which exonerated accused therein upon reconsideration and contemplated Estafa by misappropriation under Article 315, paragraph 1(b) of the RPC, finds no application here, as the present case involves Estafa by false pretenses under Article 315, paragraph 2(a) of the same law.

Even if so similarly situated, Salazar v. People55 declared that the transaction between the parties therein was simply that of sale, and a delay in the performance by a party to the contract entailed only a civil obligation to return the advance payment made by the other. No such sale of a piece of land transpired in this case due to Arriola's lack of authority to sell. There was no contract in the first place. Also, unlike in Salazar v. People, evidence of false pretenses and the resultant damage to Del Rosario clearly obtains against Arriola. This creates not just a civil obligation on Arriola to return Del Rosario's money, but also a correlative criminal liability for the perpetration of fraud on Del Rosario."

G.R. No. 199975, February 24, 2020 

LUIS T. ARRIOLA, PETITIONER, V. PEOPLE OF THE PHILIPPINES, RESPONDENT.

https://lawphil.net/judjuris/juri2020/feb2020/gr_199975_2020.html

Elements of ESTAFA by means of deceit

 "All the other elements of the crime also are undisputed. As laid down by jurisprudence, the elements of Estafa by means of deceit under Article 315, Paragraph 2(a) of the RPC are as follows:

(1) That there must be a false pretense or fraudulent representation as to the offender's power, influence, qualifications, property, credit, agency, business, or imaginary transactions;

(2) That such false pretense or fraudulent representation was made or executed prior to or simultaneously with the commission of the fraud;

(3) That the offended party relied on the false pretense, fraudulent act, or fraudulent means and was induced to part with his money or property; and

(4) That, as a result thereof, the offended party suffered damage.50

The first and second elements are already extant from the records. Anent the third and fourth elements, the CA succinctly concluded the same in the following manner:

Convinced of [Arriola]'s authority to sell the subject property, [Del Rosario] was induced by [Arriola]'s false pretenses to continue with the sale transaction though she had never met Candelaria personally. [Del Rosario] trusted [Arriola], prompting her to part with her money. She also signed the Deed of Absolute Sale, secure in the belief that she was engaged in an honest deal brokered by appellant on behalf of his principal, Candelaria.

As a result of the fraudulent transaction, [Del Rosario] lost a total amount of P437,000.00. x x x51

Case law instructs that "the gravamen of the [crime of Estafa] is the employment of fraud or deceit to the damage or prejudice of another."52 With the foregoing, Arriola's actuations toward Del Rosario snugly encapsulated this description." 

G.R. No. 199975, February 24, 2020 

LUIS T. ARRIOLA, PETITIONER, V. PEOPLE OF THE PHILIPPINES, RESPONDENT.

https://lawphil.net/judjuris/juri2020/feb2020/gr_199975_2020.html

Incomplete cross examination

 "When cross-examination is not and cannot be done or completed due to causes attributable to the party offering the witness, the uncompleted testimony is thereby rendered incompetent and inadmissible in evidence.47 From the record, Arriola had been granted sufficient opportunities to complete his cross-examination. He had been fairly warned and notified in the September 5, 2006 Order48 of the RTC that his cross-examination shall be reset for the last time, and that another failure to appear for cross-examination shall be cause for the striking off of his direct testimony. Due to causes known only to Arriola, he failed to even begin the same. Add to this that prior to his cross-examination, Arriola was already remiss in his attendance for various reasons in the hearings before the trial court.49"

G.R. No. 199975, February 24, 2020 

LUIS T. ARRIOLA, PETITIONER, V. PEOPLE OF THE PHILIPPINES, RESPONDENT.

https://lawphil.net/judjuris/juri2020/feb2020/gr_199975_2020.html

When the sale of a piece of land or any interest thereon is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.

 "When the sale of a piece of land or any interest thereon is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.29

This authority must be contained in a special power of attorney, that is, a specific written grant of authority in favor of an agent to sell a piece of land belonging to the principal. This is so because a special power of attorney is necessary to enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration.30 For the principal to confer the right upon an agent to sell real estate, a power of attorney must so express the powers of the agent in clear and unmistakable language. When there is any reasonable doubt that the language so used conveys such power, no such construction shall be given the document.31

The Authorization contained no such authority in favor of Arriola to sell Candelaria's lot. Assuming that the Authorization was genuine, its wordings gave Arriola nothing more than an authority to receive the payment for the supposed sale of Candelaria's lot. There was no explicit mention of any sale to be facilitated by Arriola. Despite such a patently defective Authorization, Arriola still volunteered information to Del Rosario that he was also the broker of Candelaria's lot and could negotiate the sale of the property.32

An authority to receive the payment cannot be impliedly construed as an authority to sell a piece of real property. Here, the Authorization was not in any way the special power of attorney contemplated and required by law. Being a real estate broker by profession, Arriola should be well-equipped with the basic knowledge on the technicalities in conveyances of real property for another person. This pretense can only be perceived as misleading, false, and fraudulent, as Arriola acted before Del Rosario as though there was an express grant of authority to sell Candelaria's lot in his name, when in fact there was none."

G.R. No. 199975, February 24, 2020 

LUIS T. ARRIOLA, PETITIONER, V. PEOPLE OF THE PHILIPPINES, RESPONDENT.

https://lawphil.net/judjuris/juri2020/feb2020/gr_199975_2020.html

Fraud vs. Deceit

"Fraud, in its general sense, is deemed to comprise anything calculated to deceive, including all acts, omissions, and concealment involving a breach of legal or equitable duty, trust, or confidence justly reposed, resulting in damage to another, or by which an undue and unconscientious advantage is taken of another. It is a generic term embracing all multifarious means which human ingenuity can device, and which are resorted to by one individual to secure an advantage over another by false suggestions or by suppression of truth and includes all surprise, trick, cunning, dissembling and any unfair way by which another is cheated. On the other hand, deceit is the false representation of a matter of fact whether by words or conduct, by false or misleading allegations, or by concealment of that which should have been disclosed which deceives or is intended to deceive another so that he shall act upon it to his legal injury. (Emphasis supplied)

The deceit and false pretenses committed by Arriola prior to the transfer of money, laid out by Del Rosario in open court, are as follows:

First, Arriola held himself out to Del Rosario as a duly authorized person to sell Candelaria's lot and showed her a letter apparently signed by Candelaria to that effect. However, Candelaria's alleged Authorization28 in favor of Arriola only stated the following:

A U T H O R I Z A T I O N

This is to authorize MR. LUIS T. ARRIOLA to receive for in my behalf any amount [from] MS. INGEBORG V. DEL ROSARIO pertaining to her purchase of my lot in Tag[ay]tay City covered by TCT No. 33184.

Done this 9th day of May, 2001 at Las Piñas City.

PACIENCIA G. CANDELARIA

(Emphasis supplied). "

G.R. No. 199975, February 24, 2020 

LUIS T. ARRIOLA, PETITIONER, V. PEOPLE OF THE PHILIPPINES, RESPONDENT.

https://lawphil.net/judjuris/juri2020/feb2020/gr_199975_2020.html

Hearsay evidence vs. Independently relevant statement

"Section 36, Rule 130 of the Rules of Court does declare hearsay as generally inadmissible testimonial evidence:

Section 36. Testimony generally confined to personal knowledge; hearsay excluded. — A witness can testify only to those facts which he knows of his personal knowledge; that is, which are derived from his own perception x x x

Evidence is called hearsay when its probative force depends, in whole or in part, on the competency and credibility of some persons other than the witness by whom it is sought to produce it.23 A person who introduces a hearsay statement is not obliged to enter into any particular stipulation, to answer any question, to solve any difficulties, to reconcile any contradictions, to explain any obscurities, to remove any ambiguities; and that he/she entrenches himself/herself in the simple assertion that he/she was told so, and leaves the burden entirely upon the dead or absent author. For this reason, the rule against hearsay testimony rests mainly on the ground that there was no opportunity to cross-examine the declarant.24

The hearsay rule, however, does not apply to independently relevant statements. People v. Umapas25 is instructive on the matter:

[W]hile the testimony of a witness regarding a statement made by another person given for the purpose of establishing the truth of the fact asserted in the statement is clearly hearsay evidence, it is otherwise if the purpose of placing the statement on the record is merely to establish the fact that the statement, or the tenor of such statement, was made. Regardless of the truth or falsity of a statement, when what is relevant is the fact that such statement has been made, the hearsay rule does not apply and the statement may be shown. As a matter of fact, evidence as to the making of the statement is not secondary but primary, for the statement itself may constitute a fact in issue or is circumstantially relevant as to the existence of such a fact. This is the doctrine of independently relevant statements x x x26 (Emphasis supplied)

Del Rosario's testimony can and will be admitted as evidence only for the purpose of proving that such statements regarding Arriola's lack of authority to sell the subject property were, in fact, made and uttered by Candelaria. This is circumstantially relevant to the instant case and within the competence of Del Rosario to confirm. Also, her perception on the conversation in question was adequately tested when she took the witness stand and was cross-examined by Arriola's counsel in open court. Hence, Del Rosario's account as to the fact of her conversation with Candelaria and the latter's stand against Arriola's authority to sell, irrespective of its veracity, is considered as an independently relevant statement that may properly be received as evidence against Arriola.

Nonetheless, the truth of such declarations by Candelaria, as heard by Del Rosario, is easily disce1nible from the evidence on record. Assessed with other established circumstances, Arriola's fraud is evident. As defined in People v. Balasa:27"

G.R. No. 199975, February 24, 2020 

LUIS T. ARRIOLA, PETITIONER, V. PEOPLE OF THE PHILIPPINES, RESPONDENT.

https://lawphil.net/judjuris/juri2020/feb2020/gr_199975_2020.html

Estafa by means of deceit

 "The courts below held Arriola criminally liable for Estafa by false deceits under Article 315, Paragraph 2(a) of the RPC, which provides:

Article 315. Swindling (estafa). -Any person who shall defraud another by any of the means mentioned hereinbelow x x x:

x x x x

2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud:

(a) By using a fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit, agency, business or transactions, or by means of other similar deceits.

Ordinarily, this Court desists from trifling with the findings of facts by the courts below. Findings by trial courts are generally accorded with great respect by the appellate courts, more so that the Supreme Court is not a trier of facts but of questions of law.

For this case, however, We defer to one of the prevailing exceptions listed by jurisprudence, that is, when the findings of fact by the trial court were conclusions without citation of specific evidence on which they are based.22 The courts below correctly convicted Arriola, but not much substantial discussion was made on the falsity of his representations and the documentary evidence thereof, which We now address.

The totality of circumstantial evidence sufficiently established Arriola's guilt for Estafa by means of deceit. "

G.R. No. 199975, February 24, 2020 

LUIS T. ARRIOLA, PETITIONER, V. PEOPLE OF THE PHILIPPINES, RESPONDENT.

https://lawphil.net/judjuris/juri2020/feb2020/gr_199975_2020.html

The alleged confession and the pictures of the supposed re-enactment are inadmissible as evidence because they were obtained in a manner contrary to law.

 "10. This Court, in the case of Morales vs. Ponce Enrile, 7 laid down the correct procedure for peace officers to follow when making an arrest and in conducting a custodial investigation, and which We reiterate:

7. At the time a person is arrested, it shall be the duty of the arresting officer to inform him of the reason for the arrest and he must be shown the warrant of arrest, if any. He shall be informed of his constitutional rights to remain silent and to counsel, and that any statement he might make could be used against him. The person arrested shall have the right to communicate with his lawyer, a relative, or anyone he chooses by the most expedient means — by telephone if possible — or by letter or messenger. It shall be the responsibility of the arresting officer to see to it that this is accomplished. No custodial investigation shall be conducted unless it be in the presence of counsel engaged by the person arrested, by any person on his behalf, or appointed by the court upon petition either of the detainee himself or by anyone on his behalf. The right to counsel may be waived but the waiver shall not be valid unless made with the assistance of counsel. Any statement obtained in violation of the procedure herein laid down, whether exculpatory or inculpatory, in whole or in part, shall be inadmissible in evidence.

11. There were no eyewitnesses, no property recovered from the accused, no state witnesses, and not even fingerprints of the accused at the scene of the crime. The only evidence against the accused is his alleged confession. It behooves Us therefore to give it a close scrutiny. The statement begins as follows:

I. TANONG: Ipinagbibigay-alam ko sa inyo ang inyong mga karapatan sa ilalim ng Saligang-Batas ng Pilipinas na kung inyong nanaisin ay maaaring hindi kayo magbigay ng isang salaysay, na hindi rin kayo maaaring pilitin o saktan at pangakuan upang magbigay ng naturang salaysay, na anuman ang inyong sasabihin sa pagsisiyasat na ito ay maaaring laban sa inyo sa anumang usapin na maaaring ilahad sa anumang hukuman o tribunal dito sa Pilipinas, na sa pagsisiyasat na ito ay maaaring katulungin mo ang isang manananggol at kung sakaling hindi mo kayang bayaran ang isang manananggol ay maaaring bigyan ka ng isa ng NBI. Ngayon at alam mo na ang mga ito nakahanda ka bang magbigay ng isang kusang-loob na salaysay sa pagtatanong na ito?

SAGOT: Opo.

12. Such a long question followed by a monosyllabic answer does not satisfy the requirements of the law that the accused be informed of his rights under the Constitution and our laws. Instead there should be several short and clear questions and every right explained in simple words in a dialect or language known to the person under investigation. Accused is from Samar and there is no showing that he understands Tagalog. Moreover, at the time of his arrest, accused was not permitted to communicate with his lawyer, a relative, or a friend. In fact, his sisters and other relatives did not know that he had been brought to the NBI for investigation and it was only about two weeks after he had executed the salaysay that his relatives were allowed to visit him. His statement does not even contain any waiver of right to counsel and yet during the investigation he was not assisted by one. At the supposed reenactment, again accused was not assisted by counsel of his choice. These constitute gross violations of his rights.

13. The alleged confession and the pictures of the supposed re-enactment are inadmissible as evidence because they were obtained in a manner contrary to law.

14. Trial courts are cautioned to look carefully into the circumstances surrounding the taking of any confession, especially where the prisoner claims having been maltreated into giving one. Where there is any doubt as to its voluntariness, the same must be rejected in toto.

15. Let a copy of this decision be furnished the Minister of Justice for whatever action he may deem proper to take against the investigating officers.

16. WHEREFORE, the judgment appealed from should be, as it is hereby, SET ASIDE, and another one entered ACQUITTING the accused Francisco Galit of the crime charged. Let him be released from custody immediately unless held on other charges. With costs de oficio.

17. SO ORDERED."

EN BANC

G.R. No. L-51770, March 20, 1985

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.

FRANCISCO GALIT, defendant-appellant.

https://lawphil.net/judjuris/juri1985/mar1985/gr_l51770_1985.html

Habeas Corpus: Under the judicial power of review and by constitutional mandate, in all petitions for habeas corpus the court must inquire into every phase and aspect of petitioner's detention from the moment petitioner was taken into custody up to the moment the court passes upon the merits of the petition. Only after such a scrutiny can the court satisfy itself that the due process clause of our Constitution has in fact been satisfied.

 "Power of the Courts.

18. The writ of habeas corpus has often been referred to as the great writ of liberty. It is the most expeditious way of securing the release of one who has been illegally detained. The privilege of the writ of habeas corpus may be suspended, but not the writ itself.

19. The Bill of Rights provides:

SECTION 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.

20. In Lansang vs.Garcia, 42 SCRA 448,473,We said:

In our resolution of October 5, 1972, We stated that 'a majority of the court 'had 'tentatively arrived at a consensus that it may inquire in order to satisfy itself of the existence of the factual bases for the issuance of Presidential Proclamations Nos. 889 and 889A ... and thus determine the constitutional sufficiency of such bases in the light of the requirements of Article III, sec. 1, par. 14, and Article VII, sec. 10, par. 2, of the Philippine Constitution ...' Upon further deliberation, the members of the Court are now unanimous in the conviction that it has the authority to inquire into the existence of said factual bases in order to determine the constitutional sufficiency thereof.

21. We reiterate this doctrine.

22. Furthermore, We hold that under the judicial power of review and by constitutional mandate, in all petitions for habeas corpus the court must inquire into every phase and aspect of petitioner's detention from the moment petitioner was taken into custody up to the moment the court passes upon the merits of the petition. Only after such a scrutiny can the court satisfy itself that the due process clause of our Constitution has in fact been satisfied.

23. The submission that a person may be detained indefinitely without any charges and the courts cannot inquire into the legality of the restraint goes against the spirit and letter of the Constitution and does violence to the basic precepts of human rights and a democratic society."

EN BANC

G.R. No. L-61016, April 26, 1983

IN THE MATTER OF THE PETITION FOR HABEAS CORPUS OF HORACIO R. MORALES, JR., petitioner,

vs.

MINISTER JUAN PONCE ENRILE, GEN. FABIAN C. VER and COL. GALILEO KINTANAR, respondents.

G.R. No. L-61107 April 26, 1983

IN THE MATTER OF THE PETITION FOR HABEAS CORPUS OF ANTONIO C. MONCUPA, JR. ANTONIO C. MONCUPA, JR., petitioner,

vs.

MINISTER JUAN PONCE ENRILE, GEN. FABIAN C. VER and COL. GALILEO KINTANAR, respondents.

https://lawphil.net/judjuris/juri1983/apr1983/gr_l_61016_1983.html

Rights of arrested person undergoing custodial investigation

 "4. If petitioners had been arrested in a communist country, they would have no rights to speak of. However, the Philippines is a republican state. Sovereignty resides in the people and all government authority emanates from them. 1 We have a Constitution framed by a constitutional convention and duly ratified by the people. We subscribe to the rule of law. We believe in human rights and we protect and defend them. Petitioners are entitled to the full enjoyment of all the rights granted to them by law. And this Court stands as the guarantor of those rights.

5. Our Constitution provides:

SEC. 20. No person shall be compelled to be a witness against himself. Any person under investigation for the commission of an offense shall have the right to remain silent and to counsel, and to be informed of such right. No force, violence, threat, intimidation, or any other means which vitiates the free will shall be used against him. Any confession obtained in violation of this section shall be inadmissible in evidence. 2

6. After a person is arrested and his custodial investigation begins a confrontation arises which at best may be termed unequal. The detainee is brought to an army camp or police headquarters and there questioned and cross-examined not only by one but as many investigators as may be necessary to break down his morale. He finds himself in a strange and un familiar surrounding, and every person he meets he considers hostile to him. The investigators are well-trained and seasoned in their work. They employ all the methods and means that experience and study has taught them to extract the truth, or what may pass for it, out of the detainee. Most detainees are unlettered and are not aware of their constitutional rights. And even if they were, the intimidating and coercive presence of the officers of the law in such an atmosphere overwhelms them into silence. Section 20 of the Bill of Rights seeks to remedy this imbalance.

7. At the time a person is arrested, it shall be the duty of the arresting officer to inform him of the reason for the arrest and he must be shown the warrant of arrest, if any. He shall be informed of his constitutional rights to remain silent and to counsel, and that any statement he might make could be used against him. The person arrested shall have the right to communicate with his lawyer, a relative, or anyone he chooses by the most expedient means-by telephone if possible or by letter or messenger. It shall be the responsibility of the arresting officer to see to it that this is accomplished. No custodial investigation shall be conducted unless it be in the presence of counsel engaged by the person arrested, by any person on his behalf, or appointed by the court upon petition either of the detainee himself or by anyone on his behalf. The right to counsel may be waived but the waiver shall not be valid unless made with the assistance of counsel. Any statement obtained in violation of the procedure herein laid down, whether exculpatory or inculpatory, in whole or in part, shall be inadmissible in evidence.

8. During the period of his detention, he shall have the right to confer with his counsel at any hour of the day or, in urgent cases, of the night, alone and privately, in the jail or any other place of custody. 3"

EN BANC

G.R. No. L-61016, April 26, 1983

IN THE MATTER OF THE PETITION FOR HABEAS CORPUS OF HORACIO R. MORALES, JR., petitioner,

vs.

MINISTER JUAN PONCE ENRILE, GEN. FABIAN C. VER and COL. GALILEO KINTANAR, respondents.

G.R. No. L-61107 April 26, 1983

IN THE MATTER OF THE PETITION FOR HABEAS CORPUS OF ANTONIO C. MONCUPA, JR. ANTONIO C. MONCUPA, JR., petitioner,

vs.

MINISTER JUAN PONCE ENRILE, GEN. FABIAN C. VER and COL. GALILEO KINTANAR, respondents.

https://lawphil.net/judjuris/juri1983/apr1983/gr_l_61016_1983.html

Respondent cannot seek reimbursement on the ground of equity where it is clear that he willingly and knowingly bought the property despite the constitutional prohibition.

 "The petition has merit.

Section 7, Article XII of the 1987 Constitution states:

Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.

Aliens, whether individuals or corporations, are disqualified from acquiring lands of the public domain. Hence, they are also disqualified from acquiring private lands. 9 The primary purpose of the constitutional provision is the conservation of the national patrimony. In the case of Krivenko v. Register of Deeds, 10 the Court held:

Under section 1 of Article XIII of the Constitution, "natural resources, with the exception of public agricultural land, shall not be alienated," and with respect to public agricultural lands, their alienation is limited to Filipino citizens. But this constitutional purpose conserving agricultural resources in the hands of Filipino citizens may easily be defeated by the Filipino citizens themselves who may alienate their agricultural lands in favor of aliens. It is partly to prevent this result that section 5 is included in Article XIII, and it reads as follows:

"Sec. 5. Save in cases of hereditary succession, no private agricultural land will be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines."

This constitutional provision closes the only remaining avenue through which agricultural resources may leak into aliens’ hands. It would certainly be futile to prohibit the alienation of public agricultural lands to aliens if, after all, they may be freely so alienated upon their becoming private agricultural lands in the hands of Filipino citizens. x x x

x x x x

If the term "private agricultural lands" is to be construed as not including residential lots or lands not strictly agricultural, the result would be that "aliens may freely acquire and possess not only residential lots and houses for themselves but entire subdivisions, and whole towns and cities," and that "they may validly buy and hold in their names lands of any area for building homes, factories, industrial plants, fisheries, hatcheries, schools, health and vacation resorts, markets, golf courses, playgrounds, airfields, and a host of other uses and purposes that are not, in appellant’s words, strictly agricultural." (Solicitor General’s Brief, p. 6.) That this is obnoxious to the conservative spirit of the Constitution is beyond question.

Respondent was aware of the constitutional prohibition and expressly admitted his knowledge thereof to this Court. 11 He declared that he had the Antipolo property titled in the name of petitioner because of the said prohibition. 12 His attempt at subsequently asserting or claiming a right on the said property cannot be sustained.

The Court of Appeals erred in holding that an implied trust was created and resulted by operation of law in view of petitioner’s marriage to respondent. Save for the exception provided in cases of hereditary succession, respondent’s disqualification from owning lands in the Philippines is absolute. Not even an ownership in trust is allowed. Besides, where the purchase is made in violation of an existing statute and in evasion of its express provision, no trust can result in favor of the party who is guilty of the fraud. 13 To hold otherwise would allow circumvention of the constitutional prohibition.

Invoking the principle that a court is not only a court of law but also a court of equity, is likewise misplaced. It has been held that equity as a rule will follow the law and will not permit that to be done indirectly which, because of public policy, cannot be done directly. 14 He who seeks equity must do equity, and he who comes into equity must come with clean hands. The latter is a frequently stated maxim which is also expressed in the principle that he who has done inequity shall not have equity. It signifies that a litigant may be denied relief by a court of equity on the ground that his conduct has been inequitable, unfair and dishonest, or fraudulent, or deceitful as to the controversy in issue. 15

Thus, in the instant case, respondent cannot seek reimbursement on the ground of equity where it is clear that he willingly and knowingly bought the property despite the constitutional prohibition.

Further, the distinction made between transfer of ownership as opposed to recovery of funds is a futile exercise on respondent’s part. To allow reimbursement would in effect permit respondent to enjoy the fruits of a property which he is not allowed to own. Thus, it is likewise proscribed by law. As expressly held in Cheesman v. Intermediate Appellate Court: 16

Finally, the fundamental law prohibits the sale to aliens of residential land. Section 14, Article XIV of the 1973 Constitution ordains that, "Save in cases of hereditary succession, no private land shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain." Petitioner Thomas Cheesman was, of course, charged with knowledge of this prohibition. Thus, assuming that it was his intention that the lot in question be purchased by him and his wife, he acquired no right whatever over the property by virtue of that purchase; and in attempting to acquire a right or interest in land, vicariously and clandestinely, he knowingly violated the Constitution; the sale as to him was null and void. In any event, he had and has no capacity or personality to question the subsequent sale of the same property by his wife on the theory that in so doing he is merely exercising the prerogative of a husband in respect of conjugal property. To sustain such a theory would permit indirect controversion of the constitutional prohibition. If the property were to be declared conjugal, this would accord to the alien husband a not insubstantial interest and right over land, as he would then have a decisive vote as to its transfer or disposition. This is a right that the Constitution does not permit him to have.

As already observed, the finding that his wife had used her own money to purchase the property cannot, and will not, at this stage of the proceedings be reviewed and overturned. But even if it were a fact that said wife had used conjugal funds to make the acquisition, the considerations just set out to militate, on high constitutional grounds, against his recovering and holding the property so acquired, or any part thereof. And whether in such an event, he may recover from his wife any share of the money used for the purchase or charge her with unauthorized disposition or expenditure of conjugal funds is not now inquired into; that would be, in the premises, a purely academic exercise. (Emphasis added)

WHEREFORE, in view of the foregoing, the instant petition is GRANTED. The Decision dated February 26, 2001 of the Court of Appeals in CA-G.R. CV No. 59321 ordering petitioner Elena Buenaventura Muller to reimburse respondent Helmut Muller the amount of P528,000 for the acquisition of the land and the amount of P2,300,000 for the construction of the house in Antipolo City, and the Resolution dated August 13, 2001 denying reconsideration thereof, are REVERSED and SET ASIDE. The August 12, 1996 Decision of the Regional Trial Court of Quezon City, Branch 86 in Civil Case No. Q-94-21862 terminating the regime of absolute community between the petitioner and respondent, decreeing a separation of property between them and ordering the partition of the personal properties located in the Philippines equally, is REINSTATED.

SO ORDERED."

G.R. No. 149615, August 29, 2006

IN RE: PETITION FOR SEPARATION OF PROPERTY ELENA BUENAVENTURA MULLER, Petitioner,

vs.

HELMUT MULLER, Respondent.

https://lawphil.net/judjuris/juri2006/aug2006/gr_149615_2006.html