SECOND DIVISION

[G.R. No. 131724. February 28, 2000]

MILLENIUM INDUSTRIAL COMMERCIAL CORPORATION, petitioner, vs. JACKSON TAN, respondent. Jjjuris

D E C I S I O N

MENDOZA, J.:

In December 1994, Millenium Industrial Commercial Corporation, petitioner herein, executed a Deed of Real Estate Mortgage[1] over its real property covered by TCT No. 24069 in favor of respondent Jackson Tan. The mortgage was executed to secure payment of petitioner's indebtedness to respondent in the amount of P2 million, without monthly interest, but which, at maturity date on June 10, 1995, was payable in the amount of P4 million.

On November 9, 1995, respondent filed against petitioner a complaint for foreclosure of mortgage in the Regional Trial Court, Branch 6, Cebu City. On November 21, 1995, summons and a copy of the complaint were served upon petitioner through a certain Lynverd Cinches, described in the sheriff's return, dated November 23, 1995, as "a Draftsman, a person of sufficient age and (discretion) working therein, he is the highest ranking officer or Officer-in-Charge of defendant's Corporation, to receive processes of the Court."[2]

Petitioner moved for the dismissal of the complaint on the ground that there was no valid service of summons upon it, as a result of which the trial court did not acquire jurisdiction over it. Petitioner invoked Rule 14, 13 of the 1964 Rules of Court and contended that service on Lynverd Cinches, as alleged in the sheriff's return, was invalid as he is not one of the authorized persons on whom summons may be served and that, in fact, he was not even its employee.[3]

Petitioner also sought the dismissal of the complaint against it on the ground that it had satisfied its obligation to respondent when the latter opted to be paid in shares of stock under the following stipulation in the mortgage contract:

That in the remote possibility of failure on the part of the mortgagor to pay the mortgage obligation and interest in cash, the MORTGAGEE at his option may demand that payment be made in the form of shares of stock of Millenium Industrial Commercial Corporation totaling at least 4,000,000 shares.[4]

Petitioner further prayed for "other reliefs just and equitable under the premises."[5] Jurismis

On December 15, 1995, the trial court denied petitioner's Motion to Dismiss. Its order stated:

This refers to the Motion to Dismiss, dated December 4, 1995, by defendant anchored on the following grounds:

1. That the Court had not acquired jurisdiction over the person of the defendant corporation because summons was served upon a person who is not known to or an employee of the defendant corporation.

2. That the obligation sought to be collected was already paid and extinguished.

By interposing the second ground, the defendant has availed of an affirmative defense on the basis of which the Court has to hear and receive evidence. For the Court to validly decide the said plea of the defendant it necessarily had to acquire jurisdiction over the person of the defendant. Thus, defendant is considered to have then abandoned its first ground and is deemed to have voluntarily submitted itself to the jurisdiction of the Court. It is a legal truism that voluntary appearance cures the defect of the summons, if any. The defendant's filing of the motion to dismiss by pleading therein the second ground amounts to voluntary appearance and it indeed cured the defect.

Wherefore, Motion to Dismiss is hereby denied for lack of merit.[6]

Petitioner moved for reconsideration, but its motion was denied by the trial court in its order, dated January 16, 1996, for failure of petitioner to raise any new ground. Petitioner then filed a petition for certiorari in the Court of Appeals, assailing the aforesaid orders of the trial court.

On September 18, 1997, the Court of Appeals dismissed the petition.[7] The appellate court ruled that although petitioner denied Lynverd Cinches' authority to receive summons for it, its actual receipt of the summons could be inferred from its filing of a motion to dismiss, hence, the purpose for issuing summons had been substantially achieved. Moreover, it was held, by including the affirmative defense that it had already paid its obligation and praying for other reliefs in its Motion to Dismiss, petitioner voluntarily submitted to the jurisdiction of the court.[8] Lexjuris

Hence, this petition for review. Petitioner raises the following issues:

I......WHETHER OR NOT SERVICE OF SUMMONS UPON A MERE DRAFTSMAN WHO IS NOT ONE OF THOSE UPON WHOM SUMMONS MAY BE SERVED IN CASE OF A DEFENDANT CORPORATION AS MENTIONED IN THE RULES IS VALID.

II......WHETHER OR NOT THE INCLUSION OF ANOTHER AFFIRMATIVE RELIEF IN A MOTION TO DISMISS ABANDONS AND WAIVES THE GROUND OF LACK OF

JURISDICTION OVER THE PERSON OF THE DEFENDANT THEREIN ALSO PLEADED UNDER PREVAILING LAW AND JURISPRUDENCE.

III......WHETHER OR NOT THERE IS A LEGAL GROUND TO GRANT PETITIONERS MOTION TO DISMISS THE COMPLAINT BELOW.

First. Petitioner objects to the application of the doctrine of substantial compliance in the service of summons for two reasons: (1) the enumeration of persons on whom service of summons on a corporation may be effected in Rule 14 13, is exclusive and mandatory; and (2) even assuming that substantial compliance is allowed, its alleged actual receipt of the summons is based on an unfounded speculation because there is nothing in the records to show that Lynverd Cinches actually turned over the summons to any of the officers of the corporation.[9] Petitioner contends that it was able to file a motion to dismiss only because of its timely discovery of the foreclosure suit against it when it checked the records of the case in the trial court.

The contention is meritorious.

Summons is the means by which the defendant in a case is notified of the existence of an action against him and, thereby, the court is conferred jurisdiction over the person of the defendant.[10] If the defendant is corporation, Rule 14, 13 requires that service of summons be made upon the corporations president, manager, secretary, cashier, agent, or any of its directors.[11] The rationale of the rule is that service must be made on a representative so integrated with the corporation sued as to make it a priori presumable that he will realize his responsibilities and know what he should do with any legal papers received by him.[12] Esmso

Petitioner contends that the enumeration in Rule 14, 13 is exclusive and that service of summons upon one who is not enumerated therein is invalid. This is the general rule.[13] However, it is settled that substantial compliance by serving summons on persons other than those mentioned in the above rule may be justified. In G & G Trading Corporation v. Court of Appeals,[14] we ruled that although the service of summons was made on a person not enumerated in Rule 14, 13, if it appears that the summons and complaint were in fact received by the corporation, there is substantial compliance with the rule as its purpose has been attained.

In Porac Trucking, Inc. v. Court of Appeals,[15] this Court enumerated the requisites for the application of the doctrine of substantial compliance, to wit: (a) there must be actual receipt of the summons by the person served, i.e., transferring possession of the copy of the summons from the Sheriff to the person served; (b) the person served must sign a receipt or the sheriff's return; and (c) there must be actual receipt of the summons by the corporation through the person on whom the summons was actually served.[16] The third requisite

is the most important for it is through such receipt that the purpose of the rule on service of summons is attained.

In this case, there is no dispute that the first and second requisites were fulfilled. With respect to the third, the appellate court held that petitioner's filing of a motion to dismiss the foreclosure suit is proof that it received the copy of the summons and the complaint. There is, however, no direct proof of this or that Lynverd Cinches actually turned over the summons to any of the officers of the corporation. In contrast, in our cases applying the substantial compliance rule,[17] there was direct evidence, such as the admission of the corporation's officers, of receipt of summons by the corporation through the person upon whom it was actually served. The question is whether it is allowable to merely infer actual receipt of summons by the corporation through the person on whom summons was served. We hold that it cannot be allowed. For there to be substantial compliance, actual receipt of summons by the corporation through the person served must be shown. Where a corporation only learns of the service of summons and the filing of the complaint against it through some person or means other than the person actually served, the service of summons becomes meaningless. This is particularly true in the present case where there is serious doubt if Lynverd Cinches, the person on whom service of summons was effected, is in fact an employee of the corporation. Except for the sheriff's return, there is nothing to show that Lynverd Cinches was really a draftsman employed by the corporation. Mse sm

Respondent casts doubt on petitioner's claim that it came to know about the summons and the complaint against it only after it learned that there was a pending foreclosure of its mortgage. There is nothing improbable about this claim. Petitioner was in default in the payment of its loan. It had received demand letters from respondent. Thus, it had reason to believe that a foreclosure suit would be filed against it. The appellate court was, therefore, in error in giving weight to respondent's claims. Receipt by petitioner of the summons and complaint cannot be inferred from the fact that it filed a Motion to Dismiss the case.

Second. We now turn to the issue of jurisdiction by estoppel. Both the trial court and the Court of Appeals held that by raising the affirmative defense of payment and by praying for other reliefs in its Motion to Dismiss, petitioner in effect waived its objection to the trial court's jurisdiction over it. We think this is error.

Our decision in La Naval Drug Corporation v. Court of Appeals[18] settled this question. The rule prior to La Naval was that if a defendant, in a motion to dismiss, alleges grounds for dismissing the action other than lack of jurisdiction, he would be deemed to have submitted himself to the jurisdiction of the court.[19] This rule no longer holds true. Noting that the doctrine of estoppel by jurisdiction must be unequivocal and intentional, we ruled in La Naval:

Jurisdiction over the person must be seasonably raised, i.e., that it is pleaded in a motion to dismiss or by way of an affirmative defense. Voluntary appearance shall be deemed a waiver of this defense. The assertion, however, of affirmative defenses shall not be construed as an estoppel or as a waiver of such defense.[20]

Third. Finally, we turn to the effect of petitioner's prayer for "other reliefs" in its Motion to Dismiss. In De Midgely v. Fernandos,[21] it was held that, in a motion to dismiss, the allegation of grounds other than lack of jurisdiction over the person of the defendant, including a prayer "for such other reliefs as" may be deemed "appropriate and proper" amounted to voluntary appearance. This, however, must be deemed superseded by the ruling in La Naval that estoppel by jurisdiction must be unequivocal and intentional. It would be absurd to hold that petitioner unequivocally and intentionally submitted itself to the jurisdiction of the court by seeking other reliefs to which it might be entitled when the only relief that it can properly ask from the trial court is the dismissal of the complaint against it. Ex sm

WHEREFORE, the decision of the Court of Appeals is REVERSED and the complaint against petitioner is DISMISSED.

SO ORDERED.

Republic of the PhilippinesSUPREME COURTManila

FIRST DIVISION

G.R. No. 184589 June 13, 2013

DEOGENES O. RODRIGUEZ, Petitioner, vs.HON. COURT OF APPEALS and PHILIPPINE CHINESE CHARITABLE ASSOCIATION, INC., Respondents.

D E C I S I O N

LEONARDO-DE CASTRO, J.:

This Petition for Certiorari under Rule 65 of the Rules of Court assails the Decision1 dated May 26, 2008 and Resolution2 dated September 17, 2008 of the Court of Appeals in CA-G.R. SP No. 101789 for having been rendered with grave abuse of discretion amounting to lack of jurisdiction. Said Decision and Resolution reversed and set aside the Orders dated April 10, 20073 and November 22, 200t of the Regional Trial Court (RTC), Branch 75, San Mateo, Rizal, in Land Registration (Reg.) Case No. N-5098 (LRC Rec. No. N-27619).

The Facts are as follows.

On January 29, 1965, Purita Landicho (Landicho) filed before the Court of First Instance (CFI) of Rizal an Application for Registration of a piece of land, measuring 125 hectares, located in Barrio Patiis, San Mateo, Rizal (subject property), which was docketed as Land Reg. Case No. N-5098.5 On November 16, 1965, the CFI rendered a Decision6 evaluating the evidence presented by the parties as follows:

It has been established by the evidence adduced by Landicho that the parcel of land under consideration was formerly several smaller parcels owned and possessed by the spouses Felix San Pascual and Juanita Vertudes, Ignacio Santos and Socorro Santos, Caconto Cayetano and Verneta Bartolome, Gavino Espiritu and Asuncion Cruz, and Lucio Manuel and Justina Ramos, all of whom in January 1960, executed instruments of conditional sale of their respective parcels of land in favor of Landicho, x x x, and on July 20, 1965 all of them executed jointly a final deed of absolute sale x x x which superseded the conditional sale. Gavino Espiritu, one of the vendors, fifty-five years old, farmer, resident of Barrio Geronimo, Montalban, Rizal, testified that he and his co-vendors have been in possession of the parcel of land since 1930 and that the possession of Landicho, together with her predecessors in interest, has been open, peaceful, continuous

and adverse against the whole world in the concept of an owner. It has also been established that the parcel of land is within the Alienable or Disposable Block-I of I.C. Project No. 26 of San Mateo, Rizal, x x x; that the parcel of land is classified as "montañoso" with an assessed value of P12,560.00 under Tax Dec. No. 7081, x x x, taxes due to which for the current year had been paid, x x x; and that the same is not mortgaged or affected by any encumbrance.

The oppositor did not present testimonial evidence but presented the report of investigation of Land Investigator Pedro R. Feliciano dated August 23, 1965, x x x which stated substantially that during the investigation and ocular inspection it has been ascertained that no public land application is involved and that no reservation is affected thereby, and therefore, he believed that the opposition already filed can be withdrawn; x x x, 1st Indorsement dated August 24, 1965 of the District Land Officer, District No. 7, Bureau of Lands, to the Director of Lands, recommending that, in view of said report of investigation, the opposition be withdrawn; and x x x, office memorandum of the Chief, Records Division, Bureau of Land, addressed to the Chief, Legal Division, dated September 23, 1965, to the effect that according to the records, plan Psu-201023 is not covered by any kind of public land application or patent.

It is therefore clear from the evidence on record that the applicant is entitled to the benefits provided by Section 48, of C.A. No. 141, as amended.7

In the end, the CFI decreed:

WHEREFORE, the Court hereby confirms the title of the applicant, Purita Landicho, of legal age, married to Teodorico Landicho, Filipino, resident of 74-A South 19th St., Quezon City, to the parcel of land under consideration and orders the registration thereof in her name and personal circumstances aforementioned.

The opposition of the Director of Lands is hereby dismissed.

Once this decision becomes final and executory, let the order for the issuance of the decree issue.8

Upon finality of its Decision dated November 16, 1965, the CFI issued an Order9 on December 22, 1965 directing the Commissioner of the Land Registration Commission (LRC) "to comply with Section 21 of Act No. 2347"10 on the issuance of a decree and original certificate of title (OCT).

Eventually, on July 11, 1966, Jose D. Santos (Santos), Register of Deeds (ROD) for the Province of Rizal, issued Transfer Certificate of Title (TCT) No. 16768111 in Landicho’s name covering the subject property. Notably, ROD Santos issued to Landicho a TCT rather than an OCT for the subject property; and although TCT No. 167681 stated that it was issued pursuant to Decree No.

1480, no other detail regarding the decree and the original registration of the subject property was filled out.

The subject property was thereafter sold several times, and as the old TCTs of the vendors were cancelled, new TCTs were accordingly issued to the buyers. The sale of the subject property could be traced from Landicho to Blue Chips Projects, Inc. (BCPI), which acquired TCT No. 344936 in its own name on November 10, 1971; then to Winmar Poultry Farm, Inc. (WPFI), TCT No. 425582, November 5, 1973; and finally, to herein respondent Philippine Chinese Charitable Association, Inc. (PCCAI), TCT No. 482970, July 15, 1975.12

Meanwhile, A. Doronila Resources Dev., Inc. (ADRDI)13 instituted Civil Case No. 12044, entitled A. Doronila Resources Dev., Inc. v. Court of Appeals, which was still pending before the RTC, Branch 167, of Pasig City as of 2008. ADRDI asserted ownership over the subject property, which was a portion of a bigger tract of land measuring around 513 hectares, covered by TCT No. 42999, dated February 20, 1956, in the name of said corporation. This bigger tract of land was originally registered in the name of Meerkamp Co. under OCT No. 301, pursuant to Decree No. 1480, GLRO Record No. 2429, issued on November 22, 1906. ADRDI caused the annotation of a notice of lis pendens (as regards Civil Case No. 12044) on TCT No. 344936 of BCPI. Subsequently, based on the ruling of this Court in A. Doronila Resources Dev., Inc. v. Court of Appeals,14 ADRDI was also able to have its notice of adverse claim over the subject property annotated on TCT Nos. 344936 and 425582 of BCPI and WPFI, respectively. ADRDI subsequently transferred the subject property to Amado Araneta (Araneta) to whom TCT No. 70589 was issued on March 25, 1983.

On November 14, 1996, Landicho executed a Deed of Absolute Sales (sic) over the subject property in favor of herein petitioner Deogenes O. Rodriguez (Rodriguez). Two years later, on June 1, 1998, Landicho died.

Seven years hence, or on May 18, 2005, Rodriguez filed an Omnibus Motion before the RTC, Branch 75, of San Mateo, Rizal, in Land Reg. Case No. N-5098. Rodriguez alleged therein that the Decision dated November 16, 1965 and Order dated December 22, 1965 of the CFI in Land Reg. Case No. N-5098 which confirmed Landicho’s title over the subject property has not been executed. Rodriguez specifically stated that no decree of registration had been issued by the LRC Commissioner (now the Administrator of the Land Registration Authority [LRA]) and that no OCT had been ever issued by the ROD in Landicho’s name. As Landicho’ssuccessor-in-interest to the subject property, Rodriguez prayed that:

a. Upon the filing of the instant motion, the Clerk of Court of the Regional Trial Court of Pasig City be commanded to transmit to the Honorable Court the complete records and expediente of LRC No. x x x N-5098 (LRC Rec. No. N-27619);

b. After hearing, the Honorable Court give due course to the instant motions and issue an Order as follows:

i. Directing the Administrator of the Land Registration [Authority] to issue the Decree of Registration, in accordance with the tenor of the Decision dated November 16, 1965 x x x and the Order dated December 22, 1965 x x x, in the name of the petitioner [Rodriguez];

ii. Thereafter, ordering the Register of Deeds for Marikina City, through the Administrator of the Land Registration Administration as having direct supervisory authority there-over, to issue the

Original Certificate of Title containing the Technical Description as duly confirmed in the said Decision and Order x x x in the name of the herein petitioner [Rodriguez].

PETITIONER further prays for such other measures of relief as may be deemed just and equitable in the premises.15

In the course of the proceedings concerning the aforementioned Omnibus Motion, Rodriguez himself submitted as his Exhibit "GG" TCT No. 482970 of PCCAI but alleged that said certificate of title was fictitious. Thus, the RTC issued on November 3, 2006 a subpoena commanding PCCAI to appear at the hearing of Land Reg. Case No. N-5098 set on November 8, 2006 at 9:00 a.m.; to bring its TCT No. 482970 and Tax Declaration No. SM-02-0229; and to testify in connection therewith.

On November 17, 2006, PCCAI filed before the RTC a Verified Motion for Leave to Intervene in Land Reg. Case No. N-5098. PCCAI justified its intervention by arguing that it was an indispensable party in the case, having substantial legal interest therein as the registered owner of the subject property under TCT No. 482970. PCCAI likewise pointed out that Rodriguez himself submitted a copy of TCT No. 482970, only alleging that said certificate was fictitious. PCCAI averred that Rodriguez maliciously failed to allege in his Omnibus Motion that TCT No. 482970 remains valid and subsisting, there being no direct action or final court decree for its cancellation. Rodriguez’s Omnibus Motion constituted a collateral attack on the title of PCCAI, which is not sanctioned by law and jurisprudence. Consequently, PCCAI asked the RTC to allow its intervention in Land Reg. Case No. N-5098 so it could protect its vested rights and interests over the subject property; to note and admit its Answer-in-Intervention; and to deny Rodriguez’s Omnibus Motion for utter lack of merit.

The RTC favorably acted on Rodriguez’s Omnibus Motion in an Order dated April 10, 2007, reasoning as follows:

Initially, the issue of jurisdiction arose particularly as to whether this Court may take cognizance of the instant case previously assigned to the CFI Pasig and, subsequently, rule upon the Omnibus Motion of [Rodriguez] despite the lapse of more than forty (40) years after the finality of the Decision of November 16, 1965.

Clearly, this Court has jurisdiction because, as earlier stated, the proceedings in this Court is merely a continuation of the land registration proceedings commenced in the CFI Pasig. More importantly, with the creation of this Court under the provisions of the Judiciary Reorganization Law, all cases involving properties within its territorial jurisdiction, specifically in San Mateo, Rizal, were transferred to this Court (Sec. 44, Batas Pambansa Blg. 129).

Consequently, there is no legal impediment for this Court to reiterate the Decision dated November 16, 1965 and the Order dated December 22, 1966 because the Rules on execution of Judgment pertaining to civil cases are not applicable to this kind of proceedings. A final and executory judgment in a land registration case, being merely declaratory in nature, does not prescribe. (Sta. Ana vs. Menla, 1 SCRA 1294; Heirs of Cristobal Marcos vs. de Banuvar, 25 SCRA 316; vda. De Barroga vs. Albano, 157 SCRA 131; Cacho v. Court of Appeals, 269 SCRA 159)

Secondly, a more important issue was put to fore—whether this Court may issue a writ of execution directing the Land Registration Authority (LRA) to issue a decree of registration over the subject property and the Register of Deeds of the Province of Rizal to issue an original certificate of title in the name of [Rodriguez].

Consistency dictates and being a mere continuation of the CFI Pasig proceedings, this Court can only reiterate the directives in the Order dated December 22, 196[5]. It cannot, however, issue, as prayed for, a writ of execution directing the issuance of a decree of registration and an original certificate of title in the name of [Rodriguez].

Finally, during the proceedings in this case, this Court was made aware of the existence of claimants to the subject property. However, this Court cannot, at this time and in this proceedings, rule on the legality or illegality of these claims of ownership. It is best that these claims be ventilated in appropriate proceedings specifically sought to for this purpose.16 (Underscoring deleted.)

The RTC decreed thus:

WHEREFORE, premises considered, the Order dated December 22, 1966 of the Court of First Instance of Pasig, Branch 6, is hereby REITERATED. The Land Registration Authority is directed to issue a decree of registration while the Register of Deeds of the Province of Rizal is likewise directed to issue an

original certificate of title of the subject property, both in favor and in the name of applicant Purita Landicho, of legal age, married to Teodorico Landicho, Filipino and a resident of 74-A South 19th St., Quezon City, after compliance with issuance requirements and procedures.17

PCCAI filed a Motion for Reconsideration of the aforequoted Order of the RTC. The RTC resolved both the Motion for Leave to Intervene with the attached Answer-in-Intervention and Motion for Reconsideration of PCCAI in another Order dated November 22, 2007. The trial court held:

This Court after receiving evidence that a Decision was rendered in favor of the applicants spouses Landicho as owner in fee simple of the subject parcels of land, and that no title was issued pursuant to the said Decision which has become final and executory even after an Order to that effect was issued, merely reiterated the said Order for the implementation of the Decision dated November 16, 1966, signed by the Hon. Andres Reyes as Judge. In other words, Intervention would not be allowed after the Decision has become final and executory. The issue in the instant Petition is the issuance of a decree of registration and nothing more is being tried.

WHEREFORE, premises considered, the Motion For Leave To Intervene and the Motion for Reconsideration filed by the PCCAI are both DENIED.18

The LRA, upon receipt of a copy of the RTC Order dated April 10, 2007, filed a Manifestation dated February 4, 2008 informing the trial court that it cannot comply with said Order since there were already two existing titles covering the subject property, i.e., TCT No. 70589 of Araneta (traced back to OCT No. 301 of Meerkamp Co.) and TCT No. 482970 of PCCAI (traced back to Landicho’s TCT No. 167681); and to issue a decree of registration and OCT in Landicho’s name would only further aggravate the problem of double titling. The LRA also explained that the ROD issued a TCT, rather than an OCT, to Landicho for the subject property in 1966, following the Order dated July 7, 1966 of then LRC Commissioner Antonio H. Noblejas (Noblejas), who took cognizance of the fact that the subject property, as part of a bigger parcel of land, was already registered under OCT No. 301 in the name of Meerkamp Co., pursuant to Decree No. 1480 under GLRO Record No. 2429 issued in 1906. LRC Commissioner Noblejas additionally stated in his Order that:

The new transfer certificate of title to be issued by virtue hereof is deemed to have been derived from Transfer Certificate of Title No. N-1. (Under Decree No. 1480 dated November 22, 1906) which should be deemed cancelled with respect to the said property and that the issuance of the same has been effected without the presentation of the owners duplicate of subsisting certificate of title.19 (Emphasis deleted.)

At around the same time, PCCAI filed a Petition for Certiorari and Prohibition before the Court of Appeals, docketed as CA-G.R. SP No. 101789, assailing the Orders dated April 10, 2007 and November 22, 2007 of the RTC for having been issued without or in excess of jurisdiction and/or with grave abuse of discretion amounting to lack or excess of jurisdiction. PCCAI acknowledged that it is the ministerial duty of the RTC to issue a writ of execution for a final and executory decision/order; however, PCCAI argued that when subsequent facts and circumstances transpired which renders the execution of the final and executory decision/order unjust or inequitable, then the trial court should refrain from issuing a writ of execution. PCCAI likewise asserted that the RTC, as a land registration court, did not have the jurisdiction to resolve conflicting claims of ownership over the subject property. PCCAI lastly maintained that it was an indispensable party in Land Reg. Case No. N-5098 and that it should have been allowed by the RTC to intervene during the hearing of Rodriguez’s Omnibus Motion for the execution of the Decision dated November 16, 1965 and Order dated December 22, 1965 of the CFI.

The Court of Appeals, in a Decision dated May 26, 2008, found merit in the Petition of PCCAI. The appellate court gave great weight and credence to the Manifestation dated February 8, 2008 of the LRA reporting the double titling and conflicting claims over the subject property. The Court of Appeals held that:

The Land Registration Authority, being the repository of land registration documents and the administrative agency with the necessary expertise concerning land registration matters, We cannot but agree with the above-quoted Manifestation. Moreover, from the above facts admitted by the parties and the LRA, it cannot be denied that there are conflicting claims on the ownership of the property which cannot be passed upon by the lower court as a land registration court for lack of jurisdiction.20

The Court of Appeals additionally opined that the intervention of PCCAI in Land Reg. Case No. N-5098 was proper given the circumstances:

Anent the issue of intervention, in the case of Information Technology of the Philippines vs. Comelec, G.R. 159139, August 22, 2006, the following doctrine was enunciated, to wit:

"The basic doctrinal rule is that final judgments may no longer be modified, except only to correct clerical errors or mistakes, or when the judgment is void, or if supervening events or circumstances that transpire after the finality of the decision render its execution unjust and inequitable. In the interest of substantial justice, this Court has allowed exceptions to this rule. A person who has a legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or

of an officer thereof, may, with leave of court, be allowed to intervene in the action."

We are not unmindful that [PCCAI] filed its Intervention when the decision of the case was already final and executory and during the execution stage of the case. However, the supervening event which is the issuance of a decree of registration which was already implemented and enforced upon the order of the Administrator of the LRC way back in July 11, 1966 when the LRC issued TCT No. 167861 in the name of Purita Landicho instead of an OCT makes the said intervention proper and well-taken.

From the foregoing, it appears absurd and senseless that an OCT be issued in favor of Mr. Rodriguez. Furthermore, it is in the paramount interest of justice that the assailed orders be not implemented, [PCCAI] being an indispensable party in the execution and/or implementation of the said orders. The non-execution of the said orders will prevent further disarray, confusion and complexity on the issue of who is or who should be the real owner of the subject land which is a matter that can be threshed out in a proper case for quieting of title between adverse claimants.21

Based on the foregoing, the appellate court adjudged:

All told, the assailed orders were issued with grave abuse of discretion amounting to lack or in excess of jurisdiction.

WHEREFORE, the assailed orders are REVERSED AND SET ASIDE. Accordingly, [Rodriguez, RTC Presiding Judge Josephine ZarateFernandez, the LRA Administrator, and Marikina City ROD] are enjoined to cease and desist from implementing the said orders pending the outcome of a proper case before an appropriate court where the issue of ownership of the subject land can be put to rest.22

Rodriguez moved for reconsideration of the foregoing Decision but was denied by the Court of Appeals in a Resolution dated September 17, 2008.

Aggrieved, Rodriguez sought recourse from this Court through the present Petition, arguing that:

I

THE [COURT OF APPEALS] HAD ACTED WITHOUT JURISDICTION WHEN IT RENDERED AN OPEN-ENDED JUDGMENT.

A

THE [COURT OF APPEALS] HAD ABDICATED ITS JURISDICTION TO RESOLVE DISPUTES ON THE MERE MANIFESTATION OF THE LRA THAT THERE WERE ISSUES OF OWNERSHIP WHICH HAVE FIRST TO BE RESOLVED.

B

THE [COURT OF APPEALS] HAS RESOLVED AN ISSUE WHICH WAS IRRELEVANT AND IMMATERIAL OR HAD OTHERWISE BEEN RESOLVED.

II

THE [COURT OF APPEALS] HAD COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OF JURISDICTION IN RULING THAT THE [PCCAI] HAD LEGAL STANDING TO PREVENT OR SUSPEND THE OPERATION OF THE LAND REGISTRATION LAWS BY WAY OF THE ISSUANCE OF THE ORDER DIRECTING THE LAND REGISTRATION ADMINISTRATOR TO COMPLY WITH THE ORDER DATED DECEMBER 16, 1965.

A

THE [PCCAI] HAD NO RIGHT TO INTERVENE IN LRC NO. N-5098.

B.

THE [PCCAI] CANNOT CLAIM BUYER IN GOOD FAITH STATUS AS ITS TITLE WAS DEFECTIVE ON ITS FACE.

III

[RODRIGUEZ] IS ENTITLED TO THE CORRECTIVE AND PREROGATIVE WRIT OF CERTIORARI TO INSURE THAT THE LAND REGISTRATION LAWS ARE PROPERLY AND FULLY IMPLEMENTED.23

The instant Petition has no merit.

At the outset, the Court finds unmeritorious Rodriguez’s claim that the Court of Appeals rendered an open-ended judgment. In the dispositive portion of its Decision dated May 26, 2008, the Court of Appeals clearly and categorically "REVERSED AND SET ASIDE" the Orders dated April 10, 2007 and November 22, 2007 of the RTC in Land Reg. Case No. N-5098. The cease and desist order of the appellate court in the second line of the same dispositive portion is therefore a superfluity. Obviously, by reversing and setting aside the foregoing Orders, there is nothing more to implement. The phrase "pending the outcome of a proper case before an appropriate court where the issue of ownership of the subject land can be put to rest,"24 does not mean that the very same Orders which were reversed and set aside by the Court of Appeals could later on be

revived or reinstated; rather it means that the remedies sought by Rodriguez can be litigated and granted in an appropriate proceeding by a court with proper jurisdiction.

To clarify matters, it must be stressed that the issue brought before the Court of Appeals did not involve the question of the ownership. The appellate court only concerned itself with the proper execution of the November 16, 1965 Decision in Land Reg. Case No. N-5098 but, due to the intricacy of the matter, was compelled to take notice of the controversy between Rodriguez and PCCAI, both of whom trace back their titles to Landicho. In view of these conflicting claims, Rodriguez now avers that because ROD Santos issued TCT No. 167681 for the subject property in Landicho’s name, the November 16, 1965 Decision in Land Reg. Case No. N-5098 was not validly implemented since no OCT was issued.25 Corollary to this, Rodriguez posits that PCCAI is not a buyer in good faith of the subject property and that the latter’s TCT No. 482970 is spurious. PCCAI, on the other hand, insists that the issuance of TCT No. 167681 to Landicho, from which its own TCT No. 482970 may be traced back, was a valid execution of the said CFI decision.

The LRA, in its Manifestation dated February 4, 2008 filed before the RTC, explained that a TCT was issued to Landicho because the subject property, as part of a bigger parcel of land, was already covered by Decree No. 1480 and OCT No. 301 dated November 22, 1906 in the name of Meerkamp Co. In other words, Landicho’s TCT No. 167681 is a derivative of Decree No. 1480 and OCT No. 301 of Meerkamp Co. which were cancelled to the extent of the subject property.

Complicating the matter further is the pendency of Civil Case No. 12044 in the RTC, Branch 167, Pasig City. Not only is PCCAI questioning the right of Rodriguez to the issuance of an OCT pursuant to the November 16, 1965 Decision and December 22, 1965 Order of the CFI in Land Reg. Case No. N-5098, it is also defending the validity of TCT No. 482970 (which is a derivative of TCT No. 167681 issued to Landicho) against Araneta who holds TCT No. 70589 (which is a derivative of Meerkamp Co.’s OCT No. 301). In view of the foregoing, issuing an OCT covering the subject property to Rodriguez would give rise to a third certificate of title over the same property. Such act would only cause more confusion and complication, rather than the preservation, of the Torrens system of registration.

The real purpose of the Torrens system is to quiet title to land and to stop forever any question as to its legality. Once a title is registered, the owner may rest secure, without the necessity of waiting in the portals of the court, or sitting on the "mirador su casa," to avoid the possibility of losing his land. A Torrens title is generally a conclusive evidence of the ownership of the land referred to therein. A strong presumption exists that Torrens titles are regularly issued and that they are valid.26 In this case, PCCAI is the registered owner of the subject property under TCT No. 482970, which could be traced back to TCT No. 16781

issued to Landicho. As between PCCAI and Rodriguez, the former is better entitled to the protection of the Torrens system. PCCAI can rely on its TCT No. 482970 until the same has been annulled and/or cancelled.

Section 48 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, explicitly provides that "a certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law."

In Decaleng v. Bishop of the Missionary District of the Philippine Islands of Protestant Episcopal Church in the United States of America,27 the Court declared that a Torrens title cannot be attacked collaterally, and the issue on its validity can be raised only in an action expressly instituted for that purpose. A collateral attack is made when, in another action to obtain a different relief, the certificate of title is assailed as an incident in said action.

Land Reg. Case No. N-5098 was an application for registration of the subject property instituted by Landicho before the CFI, which was granted by the CFI in its Decision dated November 16, 1965. Rodriguez, asserting that he was Landicho’s lawful successor-in-interest, filed an Omnibus

Motion before the RTC in Land Reg. Case No. N-5098 seeking the issuance of a decree of registration and an OCT in his name for the subject property pursuant to the said CFI judgment. Rodriguez acknowledged the existence of TCT No. 482970 of PCCAI for the same property, but he simply brushed aside said certificate of title for allegedly being spurious. Still, Rodriguez did not pray that TCT No. 482970 be declared void and/or cancelled; and even if he did, the RTC had no jurisdiction to grant such relief in a land registration case. Rodriguez’s Omnibus Motion in Land Reg. Case No. N-5098, under the circumstances, is a collateral attack on said certificate, which is proscribed under Section 48 of the Property Registration Decree.

If Rodriguez wants to have a decree of registration and OCT issued in his (or even in Landicho’s name) for the subject property, he should have directly challenged the validity of the extant TCT No. 482970 of PCCAI for the very same property in an action specifically instituted for such purpose (i.e., petition for annulment and/or cancellation of title, petition for quieting of title) and pray the said certificate of title be annulled or canceled. The proper court in an appropriate action can try the factual and legal issues involving the alleged fatal defects in Landicho’s TCT No. 167681 and/or its derivative TCTs, including TCT No. 482970 of PCCAI; the legal effects of Landicho’s sale of the subject property to BCPI (the predecessor-in-interest of PCCAI) in 1971 and also to Rodriguez in 1996; and the good faith or bad faith of PCCAI, as well as Rodriguez, in purchasing the subject property. The resolution of these issues will ultimately be determinative of who between Rodriguez and PCCAI is the rightful owner of the subject property.

Clearly, the Court of Appeals cannot be faulted for according weight and credence to the Manifestation dated February 4, 2008 of the LRA.

The LRA exists for the sole purpose of implementing and protecting the Torrens system of land titling and registration.28 In particular, it is tasked with the following functions:

(1) Issue decrees of registration pursuant to final judgments of the courts in land registration proceedings and cause the issuance by the Registrars of Land Titles and Deeds of the corresponding certificates of title;

(2) Be the central repository of records relative to original registration of lands titled under the Torrens system, including subdivision and consolidation plans of titled lands; and

(3) Extend assistance to courts in ordinary and cadastral land registration proceedings and to the other agencies of the government in the implementation of the land reform program.29

The duty of LRA officials to issue decrees of registration is ministerial in the sense that they act under the orders of the court and the decree must be in conformity with the decision of the court and with the data found in the record. They have no discretion in the matter. However, if they are in doubt upon any point in relation to the preparation and issuance of the decree, these officials ought to seek clarification from the court. They act, in this respect, as officials of the court and not as administrative officials, and their act is the act of the court. They are specifically called upon to "extend assistance to courts in ordinary and cadastral land registration proceedings."30

In Ramos v. Rodriguez,31 the LRA filed a motion for reconsideration of the decision and order of the land registration court respectively granting registration of a parcel of land and directing the issuance of a decree of registration for the same. According to the LRA, there was already an existing certificate of title for the property. The land registration court granted the motion for reconsideration of the LRA and set aside its earlier decision and order. On appeal, the Court declared that the land registration court did not commit grave abuse of discretion in reversing itself because it was merely following the recommendation of the LRA, which was then acting as an agent of the court.

In another case, Spouses Laburada v. Land Registration Authority,32 the Court refused to issue a writ of mandamus compelling the LRA to issue a decree of registration as ordered by a land registration court. The Court took into account the LRA report that the parcels of land were already registered and held:

That the LRA hesitates in issuing a decree of registration is understandable. Rather than a sign of negligence or nonfeasance in the performance of its duty, the LRA’s reaction is reasonable, even imperative. Considering the probable duplication of titles over the same parcel of land, such issuance may contravene the policy and the purpose, and thereby destroy the integrity, of the Torrens system of registration.33

The LRA, in this case, filed the Manifestation dated February 4, 2008 to inform the RTC that the subject property is already covered by two TCTs, both "uncancelled and extant[;]" and for this reason, the LRA cannot comply with the RTC Order dated April 10, 2007, directing the issuance of a decree of registration and an OCT for the same property in Landicho’s name, as it would "further aggravate the already existing problem of double titling." In filing said Manifestation, the LRA was only faithfully pursuing its mandate to protect the Torrens system and performing its function of extending assistance to the RTC as regards Land Reg. Case No. N-5098. Contrary to Rodriguez’s assertion, the Court of Appeals did not abdicate its jurisdiction when it granted the Petition for Certiorari and Prohibition of PCCAI largely based on the Manifestation of the LRA, since the LRA filed such a Manifestation as an officer of the court.

Finally, intervention is governed by Rule 19 of the Rules of Court, pertinent provisions of which read:

SECTION 1. Who may intervene. – A person who has a legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof may, with leave of court, be allowed to intervene in the action. The court shall consider whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the intervenor’s rights may be fully protected in a separate proceeding.

SECTION 2. Time to intervene. – The motion to intervene may be filed at any time before rendition of judgment by the trial court. A copy of the pleading-in-intervention shall be attached to the motion and served on the original parties.

The subject property is presently covered by TCT No. 482970 in the name of PCCAI.1âwphi1 As the registered owner, PCCAI clearly has a legal interest in the subject property. The issuance of another certificate of title to Rodriguez will adversely affect PCCAI, constituting a cloud on its TCT No. 482970.

Although Rule 19 is explicit on the period when a motion to intervene may be filed, the Court allowed exceptions in several cases, viz:

This rule, however, is not inflexible. Interventions have been allowed even beyond the period prescribed in the Rule, when demanded by the higher

interest of justice. Interventions have also been granted to afford indispensable parties, who have not been impleaded, the right to be heard even after a decision has been rendered by the trial court, when the petition for review of the judgment has already been submitted for decision before the Supreme Court, and even where the assailed order has already become final and executory. In Lim v. Pacquing, the motion for intervention filed by the Republic of the Philippines was allowed by this Court to avoid grave injustice and injury and to settle once and for all the substantive issues raised by the parties.

In fine, the allowance or disallowance of a motion for intervention rests on the sound discretion of the court after consideration of the appropriate circumstances. We stress again that Rule 19 of the Rules of Court is a rule of procedure whose object is to make the powers of the court fully and completely available for justice. Its purpose is not to hinder or delay, but to facilitate and promote the administration of justice.34 (Citations omitted.)

The particular circumstances of this case similarly justify the relaxation of the rules of procedure on intervention. First, the interests of both PCCAI and Rodriguez in the subject property arose only after the CFI Decision dated November 16, 1965 in Land Reg. Case No. N-5098 became final and executory. PCCAI bought the subject property from WPFI on November 13, 1973 and was issued TCT No. 482970 for the same on July 15, 1975; while Rodriguez bought the subject property from Landicho on November 14, 1996. Second, as previously discussed herein, both PCCAI and Rodriguez trace their titles back to Landicho. Hence, the intervention of PCCAI could not unduly delay or prejudice the adjudication of the rights of Landicho, the original party in Land Reg. Case No. N-5098. Third, the latest proceedings in Land Reg. Case No. N-5098 involved Rodriguez’s Omnibus Motion, filed before the RTC on May 18, 2005, in which he prayed for the execution of the November 16, 1965 Decision of the CFI. PCCAI moved to intervene in the case only to oppose Rodriguez’s Omnibus Motion on the ground that the subject property is already registered in its name under TCT No. 482970, which originated from Landicho’s TCT No. 167681. And fourth, after learning of Rodriguez’s Omnibus Motion in Land Reg. Case No. N-5098 via the November 3, 2006 subpoena issued by the RTC, PCCAI was reasonably expected to oppose the same. Such action was the most opportune and expedient remedy available to PCCAI to prevent the RTC from ordering the issuance of a decree of registration and OCT in Rodriguez’s name. For this reason, the RTC should have allowed the intervention of PCCAI.

ACCORDINGLY, the instant Petition is DISMISSED. The Decision dated May 26, 2008 of the Court of Appeals in CA-G.R. SP No. 101789, reversing and setting aside the Orders dated April 10, 2007 and November 22, 2007 of the Regional Trial Court, Branch 75 of San Mateo, Rizal in Land Reg. Case No. N-5098, is AFFIRMED with the MODIFICATION deleting the second sentence of the dispositive portion for being a superfluity.Costs against petitioner. SO ORDERED.

THIRD DIVISION

[G.R. No. 138739. July 6, 2000]

RADIOWEALTH FINANCE COMPANY, petitioner, vs. Spouses VICENTE and MA. SUMILANG DEL ROSARIO, respondents.

D E C I S I O N

PANGANIBAN, J.:

When a demurrer to evidence granted by a trial court is reversed on appeal, the reviewing court cannot remand the case for further proceedings. Rather, it should render judgment on the basis of the evidence proffered by the plaintiff. Inasmuch as defendants in the present case admitted the due execution of the Promissory Note both in their Answer and during the pretrial, the appellate court should have rendered judgment on the bases of that Note and on the other pieces of evidence adduced during the trial.

The Case

Before us is a Petition for Review on Certiorari of the December 9, 1997 Decision[1] and the May 3, 1999 Resolution[2] of the Court of Appeals in CA-GR CV No. 47737. The assailed Decision disposed as follows:

WHEREFORE, premises considered, the appealed order (dated November 4, 1994) of the Regional Trial Court (Branch XIV) in the City of Manila in Civil Case No. 93-66507 is hereby REVERSED and SET ASIDE. Let the records of this case be remanded to the court a quo for further proceedings. No pronouncement as to costs.[3]

The assailed Resolution denied the petitioners Partial Motion for Reconsideration.[4]

The Facts

The facts of this case are undisputed. On March 2, 1991, Spouses Vicente and Maria Sumilang del Rosario (herein respondents), jointly and severally executed, signed and delivered in favor of Radiowealth Finance Company (herein petitioner), a Promissory Note[5] for P138,948. Pertinent provisions of the Promissory Note read:

FOR VALUE RECEIVED, on or before the date listed below, I/We promise to pay jointly and severally Radiowealth Finance Co. or order the sum of ONE HUNDRED THIRTY EIGHT THOUSAND NINE HUNDRED FORTY EIGHT Pesos (P138,948.00) without need of notice or demand, in installments as follows:

P11,579.00 payable for 12 consecutive months starting on ________ 19__ until the amount of P11,579.00 is fully paid. Each installment shall be due every ____ day of each month. A late payment penalty charge of two and a half (2.5%) percent per month shall be added to each unpaid installment from due date thereof until fully paid.

x x x x x x x x x

It is hereby agreed that if default be made in the payment of any of the installments or late payment charges thereon as and when the same becomes due and payable as specified above, the total principal sum then remaining unpaid, together with the agreed late payment charges thereon, shall at once become due and payable without need of notice or demand.

x x x x x x x x x

If any amount due on this Note is not paid at its maturity and this Note is placed in the hands of an attorney or collection agency for collection, I/We jointly and severally agree to pay, in addition to the aggregate of the principal amount and interest due, a sum equivalent to ten (10%) per cent thereof as attorneys and/or collection fees, in case no legal action is filed, otherwise, the sum will be equivalent to twenty-five (25%) percent of the amount due which shall not in any case be less than FIVE HUNDRED PESOS (P500.00) plus the cost of suit and other litigation expenses and, in addition, a further sum of ten per cent (10%) of said amount which in no case shall be less than FIVE HUNDRED PESOS (P500.00), as and for liquidated damages.[6]

Thereafter, respondents defaulted on the monthly installments. Despite repeated demands, they failed to pay their obligations under their Promissory Note.

On June 7, 1993, petitioner filed a Complaint[7] for the collection of a sum of money before the Regional Trial Court of Manila, Branch 14.[8] During the trial, Jasmer Famatico, the credit and collection officer of petitioner, presented in evidence the respondents check payments, the demand letter dated July 12, 1991, the customers ledger card for the respondents, another demand letter and Metropolitan Bank dishonor slips. Famatico admitted that he did not have personal knowledge of the transaction or the execution of any of these pieces of documentary evidence, which had merely been endorsed to him.

On July 4, 1994, the trial court issued an Order terminating the presentation of evidence for the petitioner.[9] Thus, the latter formally offered its evidence and exhibits and rested its case on July 5, 1994.

Respondents filed on July 29, 1994 a Demurrer to Evidence[10] for alleged lack of cause of action. On November 4, 1994, the trial court dismissed[11] the complaint for failure of petitioner to substantiate its claims, the evidence it had presented being merely hearsay.

On appeal, the Court of Appeals (CA) reversed the trial court and remanded the case for further proceedings.

Hence, this recourse.[12]

Ruling of the Court of Appeals

According to the appellate court, the judicial admissions of respondents established their indebtedness to the petitioner, on the grounds that they admitted the due execution of the Promissory Note, and that their only defense was the absence of an agreement on when the installment payments were to begin. Indeed, during the pretrial, they admitted the genuineness not only of the Promissory Note, but also of the demand letter dated July 12, 1991. Even if the petitioners witness had no personal knowledge of these documents, they would still be admissible if the purpose for which [they are] produced is merely to establish the fact that the statement or document was in fact made or to show its tenor[,] and such fact or tenor is of independent relevance.

Besides, Articles 19 and 22 of the Civil Code require that every person must -- in the exercise of rights and in the performance of duties -- act with justice, give all else their due, and observe honesty and good faith. Further, the rules on evidence are to be liberally construed in order to promote their objective and to assist the parties in obtaining just, speedy and inexpensive determination of an action.

Issue

The petitioner raises this lone issue:

The Honorable Court of Appeals patently erred in ordering the remand of this case to the trial court instead of rendering judgment on the basis of petitioners evidence.[13]

For an orderly discussion, we shall divide the issue into two parts: (a) legal effect of the Demurrer to Evidence, and (b) the date when the obligation became due and demandable.

The Courts Ruling

The Petition has merit. While the CA correctly reversed the trial court, it erred in remanding the case "for further proceedings."

Consequences of a Reversal, on Appeal, of a Demurrer to Evidence

Petitioner contends that if a demurrer to evidence is reversed on appeal, the defendant should be deemed to have waived the right to present evidence, and the appellate court should render judgment on the basis of the evidence submitted by the plaintiff. A remand to the trial court "for further proceedings" would be an outright defiance of Rule 33, Section 1 of the 1997 Rules of Court.

On the other hand, respondents argue that the petitioner was not necessarily entitled to its claim, simply on the ground that they lost their right to present evidence in support of their defense when the Demurrer to Evidence was reversed on appeal. They stress that the CA merely found them indebted to petitioner, but was silent on when their obligation became due and demandable.

The old Rule 35 of the Rules of Court was reworded under Rule 33 of the 1997 Rules, but the consequence on appeal of a demurrer to evidence was not changed. As amended, the pertinent provision of Rule 33 reads as follows:

SECTION 1. Demurrer to evidence.After the plaintiff has completed the presentation of his evidence, the defendant may move for dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. If his motion is denied, he shall have the right to present evidence. If the motion is granted but on appeal the order of dismissal is reversed he shall be deemed to have waived the right to present evidence.[14]

Explaining the consequence of a demurrer to evidence, the Court in Villanueva Transit v. Javellana[15] pronounced:

The rationale behind the rule and doctrine is simple and logical. The defendant is permitted, without waiving his right to offer evidence in the event that his motion is not granted, to move for a dismissal (i.e., demur to the plaintiffs evidence) on the ground that upon the facts as thus established and the applicable law, the plaintiff has shown no right to relief. If the trial court denies the dismissal motion, i.e., finds that plaintiffs evidence is sufficient for an award of judgment in the absence of contrary evidence, the case still remains before the trial court which should then proceed to hear and receive the defendants evidence so that all the facts and evidence of the contending parties may be properly placed before it for adjudication as well as before the appellate courts, in case of appeal. Nothing is lost. The doctrine is but in line with the established procedural precepts in the conduct of trials that the trial court liberally receive all proffered evidence at the trial to enable it to render its decision with all possibly relevant proofs in the record, thus assuring that the appellate courts upon appeal have all the material before them necessary to make a correct judgment, and avoiding the need of remanding the case for retrial or reception of improperly excluded evidence, with the possibility thereafter of still another

appeal, with all the concomitant delays. The rule, however, imposes the condition by the same token that if his demurrer is granted by the trial court, and the order of dismissal is reversed on appeal, the movant losses his right to present evidence in his behalf and he shall have been deemed to have elected to stand on the insufficiency of plaintiffs case and evidence. In such event, the appellate court which reverses the order of dismissal shall proceed to render judgment on the merits on the basis of plaintiffs evidence. (Underscoring supplied)

In other words, defendants who present a demurrer to the plaintiffs evidence retain the right to present their own evidence, if the trial court disagrees with them; if the trial court agrees with them, but on appeal, the appellate court disagrees with both of them and reverses the dismissal order, the defendants lose the right to present their own evidence.[16] The appellate court shall, in addition, resolve the case and render judgment on the merits, inasmuch as a demurrer aims to discourage prolonged litigations.[17]

In the case at bar, the trial court, acting on respondents demurrer to evidence, dismissed the Complaint on the ground that the plaintiff had adduced mere hearsay evidence. However, on appeal, the appellate court reversed the trial court because the genuineness and the due execution of the disputed pieces of evidence had in fact been admitted by defendants.

Applying Rule 33, Section 1 of the 1997 Rules of Court, the CA should have rendered judgment on the basis of the evidence submitted by the petitioner. While the appellate court correctly ruled that the documentary evidence submitted by the [petitioner] should have been allowed and appreciated xxx, and that the petitioner presented quite a number of documentary exhibits xxx enumerated in the appealed order,[18] we agree with petitioner that the CA had sufficient evidence on record to decide the collection suit. A remand is not only frowned upon by the Rules, it is also logically unnecessary on the basis of the facts on record.

Due and Demandable Obligation

Petitioner claims that respondents are liable for the whole amount of their debt and the interest thereon, after they defaulted on the monthly installments.

Respondents, on the other hand, counter that the installments were not yet due and demandable. Petitioner had allegedly allowed them to apply their promotion services for its financing business as payment of the Promissory Note. This was supposedly evidenced by the blank space left for the date on which the installments should have commenced.[19] In other words, respondents theorize that the action for immediate enforcement of their obligation is premature because its fulfillment is dependent on the sole will of

the debtor. Hence, they consider that the proper court should first fix a period for payment, pursuant to Articles 1180 and 1197 of the Civil Code.

This contention is untenable. The act of leaving blank the due date of the first installment did not necessarily mean that the debtors were allowed to pay as and when they could. If this was the intention of the parties, they should have so indicated in the Promissory Note. However, it did not reflect any such intention.

On the contrary, the Note expressly stipulated that the debt should be amortized monthly in installments of P11,579 for twelve consecutive months. While the specific date on which each installment would be due was left blank, the Note clearly provided that each installment should be payable each month.

Furthermore, it also provided for an acceleration clause and a late payment penalty, both of which showed the intention of the parties that the installments should be paid at a definite date. Had they intended that the debtors could pay as and when they could, there would have been no need for these two clauses.

Verily, the contemporaneous and subsequent acts of the parties manifest their intention and knowledge that the monthly installments would be due and demandable each month.[20] In this case, the conclusion that the installments had already became due and demandable is bolstered by the fact that respondents started paying installments on the Promissory Note, even if the checks were dishonored by their drawee bank. We are convinced neither by their avowals that the obligation had not yet matured nor by their claim that a period for payment should be fixed by a court.

Convincingly, petitioner has established not only a cause of action against the respondents, but also a due and demandable obligation. The obligation of the respondents had matured and they clearly defaulted when their checks bounced. Per the acceleration clause, the whole debt became due one month (April 2, 1991) after the date of the Note because the check representing their first installment bounced.

As for the disputed documents submitted by the petitioner, the CA ruling in favor of their admissibility, which was not challenged by the respondents, stands. A party who did not appeal cannot obtain affirmative relief other than that granted in the appealed decision.[21]

It should be stressed that respondents do not contest the amount of the principal obligation. Their liability as expressly stated in the Promissory Note and found by the CA is P13[8],948.00[22] which is payable in twelve (12) installments at P11,579.00 a month for twelve (12) consecutive months. As correctly found by the CA, the "ambiguity" in the Promissory Note is clearly attributable to human error.[23]

Petitioner, in its Complaint, prayed for 14% interest per annum from May 6, 1993 until fully paid. We disagree. The Note already stipulated a late payment penalty of 2.5 percent monthly to be added to each unpaid installment until fully paid. Payment of interest was not expressly stipulated in the Note. Thus, it should be deemed included in such penalty.

In addition, the Note also provided that the debtors would be liable for attorneys fees equivalent to 25 percent of the amount due in case a legal action was instituted and 10 percent of the same amount as liquidated damages. Liquidated damages, however, should no longer be imposed for being unconscionable.[24] Such damages should also be deemed included in the 2.5 percent monthly penalty. Furthermore, we hold that petitioner is entitled to attorneys fees, but only in a sum equal to 10 percent of the amount due which we deem reasonable under the proven facts.[25]

The Court deems it improper to discuss respondents' claim for moral and other damages. Not having appealed the CA Decision, they are not entitled to affirmative relief, as already explained earlier.[26]

WHEREFORE, the Petition is GRANTED. The appealed Decision is MODIFIED in that the remand is SET ASIDE and respondents are ordered TO PAY P138,948, plus 2.5 percent penalty charge per month beginning April 2, 1991 until fully paid, and 10 percent of the amount due as attorneys fees. No costs.

SO ORDERED.

THIRD DIVISION

[A.M. No. MTJ-03-1513. November 12, 2003]

Spouses JAIME and PURIFICACION MORTA, complainants vs. Judge ANTONIO C. BAGAGAN, Municipal Trial Court, Guinobatan, Albay; and Sheriff DANILO O. MATIAS, Regional Trial Court, Branch 14, Ligao, Albay, respondents.

D E C I S I O N

PANGANIBAN, J.:

Unreasonable delay in resolving motions opens a judge to administrative sanctions. Likewise, a sheriff is administratively liable for delayed implementation of a writ of execution and failure to render the required reports thereon. These are necessary lessons from the time-honored principle that justice delayed is justice denied.

The Case and the Facts

In their Administrative Complaint[1] dated July 26, 2001, Spouses Jaime and Purificacion Morta Sr. charged Judge Antonio C. Bagagan of the Municipal Trial Court (MTC) of Guinobatan, Albay with gross ignorance of the law, incompetence, bias and delay. They also indicted Sheriff Danilo O. Matias of the Regional Trial Court (RTC) of Ligao, Albay (Branch 14) with gross ignorance of the law, negligence and connivance with the defendants in Civil Case Nos. 481 and 482 (MTC, Guinobatan, Albay). The Office of the Court Administrator (OCA) summarized the factual antecedents as follows:

x x x [In] a Complaint-Affidavit dated July 26, 2001 (with enclosures), x x x [Spouses] Jaime and Purificacion Morta[,] through their counsel[,] Atty. Rodolfo R. Paulino[,] charg[ed] [Respondent] Judge Antonio C. Bagagan and Sheriff Danilo O. Matias with gross ignorance of the law and procedure, incompetence, bias and delay in the disposition of Civil Case No. 481, entitled Jaime Morta, Sr. and Purficacion Padilla vs. Jamie Occidental and Atty. Mariano Baranda, Jr., for Damages with Prayer for a Writ of Preliminary Injunction, and Civil Case No. 482 entitled Jaime Morta, Sr. and Purficacion Padilla vs. Jamie Occidental, Atty. Mariano Baranda, Jr. and Daniel Corral, for Damages with Prayer for a Writ of Preliminary Injunction.

Complainants, who are the plaintiffs in the aforementioned civil cases, allege[d] that on March 29, 1994[,] the Municipal Trial Court [of] Guinobatan, Albay rendered a decision in their favor. The decretal portion of the decision reads:

WHEREFORE, in view of the foregoing considerations, judgment is rendered in favor of the plaintiffs and against the defendants in both cases as follows:

1) Ordering the defendants not to molest and disturb the peaceful possession of the plaintiffs in the lands in question situated at San Rafael, Guinobatan;

2) Condemning the defendants in Civil Case No. 481 to jointly and severally pay the plaintiffs the total amount of P8,130.00 representing the value of the coconuts, pili nuts and anahaw leaves and for the destroyed plants;

3) Ordering the defendants in Civil Case No. 481 jointly and severally to reimburse the plaintiffs the amount of P202.00 as legal expenses incurred in filing their suit;

4) Condemning the defendants in Civil Case No. 482 jointly and severally to pay the plaintiffs the total amount of P9,950.00 representing the value of the coconuts and anahaw leaves;

5) Ordering the said defendants in Civil Case No. 482 to jointly and severally reimburse the plaintiffs the sum of P202.00 as legal expenses in filing this suit.

The defendants appealed to the Regional Trial Court [of] Ligao, Albay. In its decision dated August 10, 1994, the Regional Trial Court [RTC] dismissed the aforesaid cases on the ground that the claims for damages are tenancy-related problems which fall under the original and exclusive jurisdiction of the Department of Agrarian Reform Adjudicatory Board (DARAB). On September 9, 1994, the plaintiffs filed a petition for review with the Court of Appeals assailing the decision of the RTC. However, in its decision dated May 31, 1995, the Court of Appeals affirmed the lower courts ruling that the cases fall within the original and exclusive jurisdiction of DARAB. Thereafter, the First Division of this Court, acting on the petition for review on certiorari filed by the plaintiffs, rendered its decision dated June 10, 1999 in G.R. No. 123417 affirming the decision of the Municipal Trial Court, Guinobatan, Albay in Civil Case Nos. 481 and 482 and thereby setting aside the decision of the Court of Appeals in CA-GR SP No. 35300 and that of the Regional Trial Court in Civil Cases Nos. 1751 and 1752.

They now complain that despite the fact that the decision of the Supreme Court in the aforesaid case had already become final and executory, the respondent Judge still refused to issue a writ of possession in their favor.

Complainants further allege that on June 6, 2000 they filed a motion to cite Jaime Occidental for contempt of court. Although more than one (1) year had already elapsed since the motion was filed in the respondent Judges sala, the same had remained unresolved up to the filing of the instant complaint.

As against the respondent Sheriff, the complainants aver[red] that through his ignorance, negligence and connivance with the defendants, he failed to execute in full the writ of execution that had been previously issued by the court in Civil

Case Nos. 481 and 482. Moreover, it took respondent Sheriff a long time before he finally submitted his Sheriff's Return of Service on the Writ of Execution.[2]

In his Answer/Comment[3] dated April 2, 2002, respondent judge explained that he had denied complainants Motion for the issuance of a writ of possession because, by the time Civil Case Nos. 481 and 482 were finally decided by this Court on June 10, 1999, they had already been ousted from the lots in question pursuant to the Decisions in DARAB Case No. 2413 and Civil Case No. 1920. In Civil Case No. 1920, respondent judge ordered complainants to vacate the disputed lots. A Writ of Execution/Demolition was thereafter issued on January 29, 1998. On the other hand, the DARAB Decision, which became final and executory on October 27, 1998, directed them to cease and desist from disturbing the peaceful possession of therein Petitioner Jaime Occidental.

Regarding the alleged delay in the resolution of the Motion for Contempt filed by complainants, respondent judge contended that an ocular inspection and a hearing had been conducted by his court as early as June 16, 2000, to determine if their Motion had any basis. With the consent of their counsel, the hearing had to be deferred, however, pending receipt of the Sheriffs Report in Civil Case No. 1920.

For his part, Respondent Sheriff Matias admitted in his Comment[4] dated April 18, 2002, that there was delay in the full implementation of the Writ of Execution in Civil Case Nos. 481 and 482. Explaining that the delay was due to his heavy workload and thus unintentional, he begged for compassion from this Court.

Evaluation and Recommendation of the OCA

The OCA found that the explanation of respondent judge for not granting the Motion for Execution, filed by complainants, was sufficient. According to the court administrator, the records showed that they had indeed been evicted from the lots they were claiming when Civil Case Nos. 481 and 482 were finally decided by the Supreme Court on June 10, 1999.[5] Moreover, it emphasized that this Court had merely affirmed the Decision of the MTC insofar as the award of damages was concerned.

As to complainants Motion to cite Occidental in contempt, the OCA held that the delay was due primarily to the need of the court to clarify some important matters, not to the negligence or partiality of respondent. Accordingly, it recommended that the charges against him be dismissed for lack of merit.

On the other hand, the OCA found that Sheriff Matias had failed to implement the Writ of Execution promptly and efficiently. It recommended that he be ordered to pay a fine of P1,000, with a warning that a repetition of the same or a similar act in the future would be dealt with more severely.

The Courts Ruling

We modify the OCAs findings and recommended penalties, consistent with Rule 140 of the Revised Rules of Court and the Revised Uniform Rules on Administrative Cases in the Civil Service.

Administrative Liability

We agree with the OCA that respondent judge acted correctly in not issuing a writ of execution/possession. His action was consistent with the Decision of this Court in GR No. 123417 affirming that of the MTC as to damages. Besides, the latters Order directing defendants not to molest complainants in their peaceful possession was rendered moot when they were ousted from the disputed lots by virtue of the final and executory judgments in Civil Case No. 1920 and DARAB Case No. 2413. Indeed, the execution of a final judgment may be refused, as in this case, when there has been a change in the situation of the parties that would make its execution inequitable.[6]

The delay in the resolution of complainants Motion, however, is an altogether different matter. The Code of Judicial Conduct enjoins trial court judges, as paragons of justice in the first instance, to dispose of the courts business promptly[7] and to decide cases and motions within the required periods.[8] Section 15(1) of Article VIII of the Constitution mandates them to do so within three months from the date of submission for decision or final resolution. This Court, through Administrative Circular No. 1,[9] also specifically requires all of them to act promptly on all motions and interlocutory matters pending before their courts.[10]

Hence, it is well-settled that the unexplained failure of judges to decide cases and resolve motions and incidents within the reglementary period of 90 days, which is fixed by the Constitution and the law, renders them administratively liable.[11] We have stressed often enough that delay in the administration of justice undermines the faith of the people in the judiciary, which is expected to hear their supplications promptly. Delay reinforces in the mind of litigants the impression that the wheels of justice grind ever so slowly.[12] As the time-honored principle goes, justice delayed is justice denied.

In this case, respondent judge never resolved the Motion, filed on June 6, 2000, to cite Defendant Occidental for contempt. While it is true that the former immediately conducted an ocular inspection of the area to determine if the Motion had any basis, this act served only to mitigate his infraction, but not absolve him from it. The Sheriffs Return of Service of the Writ of Demolition issued in Civil Case No. 1920 would have clarified whether or not Occidental had already been fully restored in possession. But while its absence was a valid

reason to defer action on the contempt Motion at the outset, it was certainly not an excuse for the prolonged inaction.

Had respondent judge been so minded, he would have requested a copy of the Sheriffs Report, so that he could rule on the Motion with dispatch. He has not satisfactorily explained his failure to do so, considering that the Writ of Demolition issued in Civil Case No. 1920 had been fully executed as early as February 25, 1998, and the return thereon made on March 17, 1998.[13]

With respect to the charges against respondent sheriff, we agree with the OCA that he was remiss in his duty to implement the Writ fully in Civil Case Nos. 481 and 482. Time and time again, we have impressed upon those tasked to implement court orders and processes to see to it that the final stage in the litigation process -- the execution of judgment -- be carried out promptly. They should exert every effort and indeed consider it their bounden duty to do so, in order to ensure the speedy and efficient administration of justice.[14] A decision that is left unexecuted or delayed indefinitely because of the sheriffs inefficiency or negligence remains an empty victory on the part of the prevailing party.[15] For this reason, any inordinate delay in the execution of judgment is truly deplorable and cannot be countenanced by the Court.

There is no mistaking the mandatory character of the period prescribed under Section 14 of Rule 39 of the Revised Rules of Court on the Return of a Writ of Execution, which reads:

SEC. 14. Return of writ of execution. The writ of execution shall be returnable to the court issuing it immediately after the judgment has been satisfied in part or in full. If the judgment cannot be satisfied in full within thirty (30) days after his receipt of the writ, the officer shall report to the court and state the reason therefor. Such writ shall continue in effect during the period within which the judgment may be enforced by motion. The officer shall make a report to the court every thirty (30) days on the proceedings taken thereon until the judgment is satisfied in full, or its effectivity expires. The returns or periodic reports shall set forth the whole of the proceedings taken, and shall be filed with the court and copies thereof promptly furnished the parties.

A similar rule is stated in Administrative Circular No. 12 dated October 1, 1985, and incorporated in the Manual for Clerks of Court.[16] According to this Circular, all sheriffs and deputy sheriffs shall submit to the judge concerned a report on actions taken on all writs and processes assigned to them within 10 days from receipt.

Per the records of this case, a Writ of Execution was issued on November 22, 1999 in Civil Case Nos. 481 and 482.[17] Respondent Sheriffs Return of Service[18] of that Writ was filed only on May 25, 2000, however, or six months thereafter. There is nothing in the records showing that he submitted before

then a periodic report on the actions he had taken on the Writ every 30 days from the date of receipt as required. On the contrary, the Report indicates that the Writ was partially executed on December 15-28, 1999 and January 11, 2000; and that the damages adjudged were partly paid in the amount of P3,500 plus one unit of Karaoke machine. But it was only on May 25, 2000, that this matter was reported to the trial court.

The excuse proffered by respondent sheriff -- heavy workload -- cannot absolve him from administrative sanctions.[19] As an officer of the court, he should at all times show a high degree of professionalism in the performance of his duties.[20] He has failed to observe that degree of dedication required of him as a sheriff. The charge of connivance is, however, dismissed for lack of basis.

Although the OCA recommended that Respondent Judge Bagagan be absolved of all charges, we find him guilty of undue delay[21] in resolving a pending motion, an infraction that also constitutes a violation of a Court circular.[22] Under Section 11(B) of Rule 140 of the Revised Rules of Court, this less serious charge[23] may be sanctioned by a fine of more than P10,000, but not exceeding P20,000.

As to Sheriff Matias, we find him guilty of simple neglect of duty,[24] a less grave offense under the Revised Uniform Rules on Administrative Cases in the Civil Service. This infraction is punishable by a suspension of one month and one day to six months.[25] But under the circumstances, we find it inadvisable to suspend respondent sheriff, considering that his work would be left unattended in his absence. Instead, we adopt our previous ruling in Aquino v. Lavadia [26] imposing a fine equivalent to his one-month salary, so that he can finally implement the subject Writ and perform his other duties.

WHEREFORE, Judge Antonio C. Bagagan of the Municipal Trial Court of Guinobatan, Albay, is found guilty of unreasonable delay and is FINED P11,000 with a stern warning that a repetition of the same or a similar act in the future shall be dealt with more severely. On the other hand, Sheriff Danilo O. Matias of the Regional Trial Court of Ligao, Albay (Branch 14), is ordered to pay a fine equivalent to his one-month salary, with a similar warning of stiffer sanctions for the same or a similar act.

SO ORDERED.

FIRST DIVISION

[G.R. No. 148198 October 1, 2003]

PEOPLE OF THE PHILIPPINES, appellee, vs. ELIZABETH BETH CORPUZ, appellant.

D E C I S I O N

YNARES-SANTIAGO, J.:

This is an appeal from the decision[1] of the Regional Trial Court of Manila, Branch 54, in Criminal Case No. 99-176637 finding appellant Elizabeth Corpuz guilty beyond reasonable doubt of Illegal Recruitment in Large Scale constituting economic sabotage under Sec. 6 (l) and (m) in relation to Sec. 7(b) of R.A. No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of l995, and sentencing her to life imprisonment and to pay a fine of P500,000.00.

The Information against appellant reads as follows:

That sometime in July 1998 in the City of Manila and within the jurisdiction of this Honorable Court, the above-named accused, representing herself to have the capacity to contract, enlist and transport workers abroad, did then and there willfully, unlawfully and feloniously recruit for a fee the following persons, namely: BELINDA CABANTOG, CONCEPCION SAN DIEGO, ERLINDA PASCUAL AND RESTIAN SURIO for employment abroad without first obtaining the required license and/or authority from the Philippine Overseas Employment Administration and said accused failed to actually deploy without valid reasons said complainants abroad and to reimburse the expenses incurred by them in connection with their documentation and processing for purposes of deployment abroad to their damage and prejudice.

CONTRARY TO LAW.[2]

When arraigned on March 21, 2000, appellant pleaded not guilty. Whereupon, trial on the merits ensued.

The facts of the case are as follows:

In June 1998, private complainants Belinda Cabantog, Concepcion San Diego, Erlinda Pascual and Restian Surio went to Alga-Moher International Placement Services Corporation at 1651 San Marcelino Street, Malate, Manila to apply for employment as factory workers in Taiwan. They were accompanied by a certain Aling Josie who introduced them to the agencys President and General Manager Mrs. Evelyn Gloria H. Reyes.[3] Mrs. Reyes asked them to accomplish the

application forms. Thereafter, they were told to return to the office with P10,000.00 each as processing fee.[4]

On July 30, 1998, private complainants returned to the agency to pay the processing fees. Mrs. Reyes was not at the agency that time, but she called appellant on the telephone to ask her to receive the processing fees. Thereafter, appellant advised them to wait for the contracts to arrive from the Taiwan employers.[5]

Two months later, nothing happened to their applications. Thus, private complainants decided to ask for the refund of their money from appellant[6] who told them that the processing fees they had paid were already remitted to Mrs. Reyes. When they talked to Mrs. Reyes, she told them that the money she received from appellant was in payment of the latters debt. Thus, on January 13, 1999, private complainants filed their complaint with the National Bureau of Investigation[7] which led to the arrest and detention of appellant.

On March 23, 2000, while the case was before the trial court, private complainants received the refund of their processing fees from appellants sister-in-law. Consequently, they executed affidavits of desistance[8] from participation in the case against appellant.

For her part, appellant resolutely denied having a hand in the illegal recruitment and claimed that she merely received the money on behalf of Mrs. Reyes, the President/General Manager of Alga-Moher International Placement Services Corporation, where she had been working as secretary for three months prior to July 30, 1998. On that day, Mrs. Reyes called her on the telephone and told her to receive private complainants processing fees. In compliance with the order of her employer and since the cashier was absent, she received the processing fees of private complainants, which she thereafter remitted to Mrs. Reyes. She had no knowledge that the agencys license was suspended by the POEA on July 29, 1998.[9]

On November 16, 2000, the trial court rendered the assailed decision, the dispositive portion of which reads:

WHEREFORE, in view of the above observations and findings accused Elizabeth Beth Corpuz is hereby found guilty of the offense charged in the Information for violation of Sec. 6 (l), (m) in relation to Sec. 7 (b) of R.A. 8042 without any mitigating nor aggravating circumstances attendant to its commission, without applying the benefit of the Indeterminate Sentence Law, Elizabeth Beth Corpuz is hereby sentenced to suffer a life imprisonment and to pay a fine of P500,000.00.

Her body is hereby committed to the custody of the Director of the Bureau of Correction for Women, Mandaluyong City thru the City Jail Warden of Manila.

She shall be credited with the full extent of her preventive imprisonment under Art. 29 of the Revised Penal Code.

No pronouncement of civil liability is hereby made since all the complainants have been refunded of the fees.

SO ORDERED.[10]

In this appeal, appellant raises the following assignment of errors:

THE TRIAL COURT ERRED IN CONVICTING THE ACCUSED IN THAT:

A. THE PROSECUTION FAILED TO PROVE BEYOND REASONABLE DOUBT THAT THE ACCUSED REPRESENTED HERSELF TO HAVE THE CAPACITY TO CONTRACT, ENLIST AND TRANSPORT WORKERS ABROAD, OR UNLAWFULLY RECRUIT THE COMPLAINANTS FOR A FEE.

B. THE PROSECUTION FAILED TO PROVE BEYOND REASONABLE DOUBT THAT THE ACCUSED HAS MANAGEMENT CONTROL OVER ALGA-MOHERs RECRUITMENT BUSINESS.[11]

The Information charged appellant for Illegal recruitment in large scale under Section 6 (l) and (m) of R.A. No. 8042, otherwise known as Migrant Workers and Overseas Filipinos Act of 1995, which reads:

SECTION 6. Definition. For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment abroad, whether for profit or not, when undertaken by a non-licensee or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines: Provided, That any such non-licensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed so engaged. It shall likewise include the following acts, whether committed by any person, whether a non-licensee, non-holder, licensee or holder of authority:

x x x x x x x x x

(l) Failure to actually deploy without valid reason as determined by the Department of Labor and Employment; and

(m) Failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the worker's fault. Illegal

recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage.

x x x x x x x x x

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring or confederating with one another. It is deemed committed in large scale if committed against three (3) or more persons individually or as a group.

The persons criminally liable for the above offenses are the principals, accomplices and accessories. In case of juridical persons, the officers having control, management or direction of their business shall be liable.

Appellant contends that she is not liable for the foregoing illegal recruitment activities considering that she was merely an employee having no control over the recruitment business of the Alga-Moher International Placement Services Corporation and that she did not actually recruit the private complainants. Moreover, she did not appropriate for her own use the processing fees she received and she had no knowledge that the agencys license was suspended by the POEA.

The trial court convicted appellant based on its findings that despite the suspension of the agencys license, appellant still convinced the applicants to give their money with the promise to land a job abroad. Moreover, as the registered secretary of the agency she had management control of the recruitment business.

It is axiomatic that findings of facts of the trial court, its calibration of the collective testimonies of witnesses and probative weight thereof and its conclusions culled from said findings are accorded by this Court great respect, if not conclusive effect, because of the unique advantage of the trial court in observing and monitoring at close range, the conduct, deportment and demeanor of the witnesses as they testify before the trial court.[12] However, this principle does not apply if the trial court ignored, misunderstood or misconstrued cogent facts and circumstances of substance which, if considered, would alter the outcome of the case.[13] The exception obtains in this case.

The records of the case show that Alga-Moher International Placement Service Corporation is a licensed land-based recruitment agency. Its license was valid until August 24, 1999.[14] Likewise, appellant was its registered secretary while Mrs. Evelyn Gloria H. Reyes is its President/General Manager.[15] Part of its regular business activity is to accept applicants who desire to work here or abroad. Appellant, as secretary of the agency, was in charge of the custody and documentation of the overseas contracts.

On July 30, 1998, appellant received the processing fees of the private complainants since the cashier was absent that day. Her receipt of the money was in compliance with the order of her employer, Mrs. Reyes. She did not convince the applicants to give her their money since they went to the agency precisely to pay the processing fees upon the earlier advice of Mrs. Reyes. Private complainant Belinda Cabantog testified as follows:

FISCAL BALLENA:

Q. Please tell the Court how did it happen that you went to the said agency?

A. When someone brought us there and introduced to the owner, Sir.

Q. And who is this friend or person you said you know who accompanied you?

A. Aling Josie, Sir.

Q. What is her full name?

A. I do not know, Sir.

Q. And who is this owner to whom you were introduced?

A. Mrs. Evelyn Ty, Sir.

Q. And why do you know this Ty was the owner?

A. Because she is the friend of Aling Josie, Sir.

Q. Now, after the introduction to this owner what happened?

A. We were told to fill up the application form by Mrs. Evelyn Ty, Sir.

Q. And after filling up this application form, what did you do with the same?

A. We went home and we were asked to come back, Sir.

Q. Now, did you come back?

A. Yes, Sir.

Q. When did you come back?

A. July 30, Sir.

COURT:

Q. What year?

A. 1998, Your Honor.

FISCAL BALLENA:

Q. What happened when you come back?

A. When we came back we brought along the processing fee they needed, Sir.

Q. Why did you bring this processing fee?

A. We were required to bring it for the smooth processing of the papers, Sir.

Q. Who required you to bring this processing fee?

A. Mrs. Evelyn Ty, Sir.

Q. Now, when you came back what happened?

A. She was not at the office so she called up by phone and told us to give the money, Sir.

Q. And to whom did to give the money?

A. Beth Corpuz, Sir.[16]

From the foregoing testimony, it is clear that all appellant did was receive the processing fees upon instruction of Mrs. Reyes. She neither convinced the private complainants to give their money nor promised them employment abroad.

Moreover, as stated in the last sentence of Section 6 of RA 8042, the persons who may be held liable for illegal recruitment are the principals, accomplices and accessories. In case of juridical persons, the officers having control, management or direction of their business shall be liable.

In the case at bar, we have carefully reviewed the records of the case and found that the prosecution failed to establish that appellant, as secretary, had control, management or direction of the recruitment agency. Appellant started her employment with the agency on May 1, 1998 and she was tasked to hold and document employment contracts from the foreign employers.[17] She did not entertain applicants and she had no discretion over how the business was managed.[18] The trial courts finding that appellant, being the secretary of the

agency, had control over its business, is not only non sequitur but has no evidentiary basis.

An employee of a company or corporation engaged in illegal recruitment may be held liable as principal, together with his employer, if it is shown that he actively and consciously participated in illegal recruitment. Settled is the rule that the existence of the corporate entity does not shield from prosecution the corporate agent who knowingly and intentionally causes the corporation to commit a crime. The corporation obviously acts, and can act, only by and through its human agents, and it is their conduct which the law must deter. The employee or agent of a corporation engaged in unlawful business naturally aids and abets in the carrying on of such business and will be prosecuted as principal if, with knowledge of the business, its purpose and effect, he consciously contributes his efforts to its conduct and promotion, however slight his contribution may be. The law of agency, as applied in civil cases, has no application in criminal cases, and no man can escape punishment when he participates in the commission of a crime upon the ground that he simply acted as an agent of any party. The culpability of the employee therefore hinges on his knowledge of the offense and his active participation in its commission. Where it is shown that the employee was merely acting under the direction of his superiors and was unaware that his acts constituted a crime, he may not be held criminally liable for an act done for and in behalf of his employer.[19]

Anent the issue of whether or not appellant knowingly and intentionally participated in the commission of the crime charged, we find that she did not.

In the appreciation of evidence in criminal cases, it is a basic tenet that the prosecution has the burden of proof in establishing the guilt of the accused for the offense with which he is charged.[20] Ei incumbit probation qui dicit non qui negat, i.e., he who asserts, not he who denies, must prove.[21] The conviction of appellant must rest not on the weakness of his defense, but on the strength of the prosecutions evidence.[22]

In the case at bar, the prosecution failed to adduce sufficient evidence to prove appellants active participation in the illegal recruitment activities of the agency. As already established, appellant received the processing fees of the private complainants for and in behalf of Mrs. Reyes who ordered her to receive the same. She neither gave an impression that she had the ability to deploy them abroad nor convinced them to part with their money. More importantly, she had no knowledge that the license was suspended the day before she received the money. Their failure to depart for Taiwan was due to the suspension of the license, an event which appellant did not have control of. Her failure to refund their money immediately upon their demand was because the money had been remitted to Mrs. Reyes on the same day she received it from them.

While we strongly condemn the pervasive proliferation of illegal job recruiters and syndicates preying on innocent people anxious to obtain employment abroad, nevertheless, we find the pieces of evidence insufficient to prove the guilt of appellant beyond reasonable doubt. They do not pass the requisite moral certainty, as they admit of the alternative inference that other persons, not necessarily the appellant, may have perpetrated the crime. Where the evidence admits of two interpretations, one of which is consistent with guilt, and the other with innocence, the accused must be acquitted. Indeed, it would be better to set free ten men who might be probably guilty of the crime charged than to convict one innocent man for a crime he did not commit.[23]

WHEREFORE, in view of the foregoing, the decision of the Regional Trial Court Regional Trial Court of Manila, Branch 54, in Criminal Case No. 99-176637 finding appellant Elizabeth Corpuz guilty beyond reasonable doubt of Illegal Recruitment in Large Scale constituting economic sabotage under Sec. 6 (l) and (m) in relation to Sec. 7(b) of R.A. No. 8042, is REVERSED and SET ASIDE. Appellant Elizabeth Corpuz is ACQUITTED of the offense charged on the ground of reasonable doubt. The Superintendent of the Correctional Institution for Women is directed to cause the immediate release of appellant unless she is lawfully held for another offense, and to inform this Court of the date of her release, or the ground for her continued confinement, within ten days from notice.

SO ORDERED.