[G.R. No. 157594. March 9, 2010.]

TOSHIBA INFORMATION EQUIPMENT (PHILS.), INC., petitioner, vs. COMMISSIONER OF INTERNAL

REVENUE, respondent.

FACTS: Toshiba is a domestic corporation principally engaged in the business of manufacturing and exporting of electric machinery, equipment systems, accessories, parts, components, materials and goods of all kinds, including those relating to office automation and information technology and all types of computer hardware and software, such as but not limited to HDD-CD-ROM and personal computer printed circuit board. 

 It is registered with the Philippine Economic Zone Authority (PEZA) as an Economic Zone (ECOZONE) export enterprise in the Laguna Technopark, Inc., as evidenced by Certificate of Registration No. 95-99 dated September 27, 1995. 6 It is also registered with Regional District Office No. 57 of the Bureau of Internal Revenue (BIR) in San Pedro, Laguna, as a VAT-taxpayer with Taxpayer Identification No.

In its VAT returns for the first and second quarters of 1997, 8 filed on April 14, 1997 and July 21, 1997, respectively, Toshiba declared input VAT payments on its domestic purchases of taxable goods and services in the aggregate sum of P3,875,139.65, 9 with no zero-rated sales.

Toshiba subsequently submitted to the BIR on July 23, 1997 its amended VAT returns for the first and second quarters of 1997, 10 reporting the same amount of input VAT payments but, this time, with zero-rated sales totaling P7,494,677,000.00. 11

On March 30, 1999, Toshiba filed with the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center of the Department of Finance (DOF One-Stop Shop) two separate applications for tax credit/refund  of its unutilized input VAT payments for the first half of 1997 in the total amount of P3,685,446.73. 13

The next day, on March 31, 1999, Toshiba likewise filed with the CTA a Petition for Review 14 to toll the running of the two-year prescriptive period under Section 230 of the Tax Code of 1977, 15 as amended

The Commissioner of Internal Revenue (CIR) opposed the claim for tax refund/credit of Toshiba

Upon being advised by the CTA, 20 Toshiba and the CIR filed a Joint Stipulation of Facts and Issues, 21 wherein the opposing parties "agreed and admitted" that —

1.[Toshiba] is a duly registered value-added tax entity in accordance with Section 107 of the Tax Code, as amended.

2.[Toshiba] is subject to zero percent (0%) value-added tax on its export sales in accordance with then Section 100(a)(2)(A) of the Tax Code, as amended.

3.[Toshiba] filed its quarterly VAT returns for the first two quarters of 1997 within the legally prescribed period.

7.[Toshiba] is subject to zero percent (0%) value-added tax on its export sales.

8.[Toshiba] has duly filed the instant Petition for Review within the two-year prescriptive period prescribed by then Section 230 of the Tax Code. 

During the trial before the CTA, Toshiba presented documentary evidence in support of its claim for tax credit/refund, while the CIR did not present any evidence at all.

With both parties waiving the right to submit their respective memoranda, the CTA rendered its Decision in CTA Case No. 5762 on October 16, 2000 favoring Toshiba.

Both Toshiba and the CIR sought reconsideration of the foregoing CTA Decision.

Toshiba asserted in its Motion for Reconsideration  that it had presented proper substantiation for the P1,887,545.65 input VAT disallowed by the CTA.

On January 17, 2001, the CTA issued a Resolution 28 denying both Motions for Reconsideration of Toshiba and the CIR.

The CTA pointed out that Toshiba availed itself of the income tax holiday under the Omnibus Investments Code of 1987, so Toshiba was exempt only from income tax but not from other taxes such as VAT. As

1

a result, Toshiba was liable for output VAT on its export sales, but at zero percent (0%) rate, and entitled to the credit/refund of the input VAT paid on its purchases of goods and services relative to such zero-rated export sales.

Unsatisfied, the CIR filed a Petition for Review 29 with the Court of Appeals

In its Decision dated August 29, 2002, the Court of Appeals granted the appeal of the CIR, and reversed and set aside the Decision dated October 16, 2000 and the Resolution dated January 17, 2001 of the CTA.

Toshiba filed a Motion for Reconsideration but was denied.

Hence, Toshiba filed the instant Petition for Review

ISSUE: WON JUDICIAL ADMISSION IS PROPER.

HELD: The CIR judicially admitted that Toshiba was VAT-registered and its export sales were subject to VAT at zero percent (0%) rate.

More importantly, the arguments of the CIR that Toshiba was VAT-exempt and the latter's export sales were VAT-exempt transactions are inconsistent with the explicit admissions of the CIR in the Joint Stipulation of Facts and Issues (Joint Stipulation) that Toshiba was a registered VAT entity and that it was subject to zero percent (0%) VAT on its export sales.

The Joint Stipulation was executed and submitted by Toshiba and the CIR upon being advised to do so by the CTA at the end of the pre-trial conference held on June 23, 1999. 42 The approval of the Joint Stipulation by the CTA, in its Resolution 43 dated July 12, 1999, marked the culmination of the pre-trial process in CTA Case No. 5762.

Pre-trial is an answer to the clarion call for the speedy disposition of cases. Although it was discretionary under the 1940 Rules of Court, it was made mandatory under the 1964 Rules and the subsequent amendments in 1997. It has been hailed as "the most important procedural innovation in Anglo-Saxon justice in the nineteenth century." 44

The nature and purpose of a pre-trial have been laid down in Rule 18, Section 2 of the Rules of Court:

Sec. 2.Nature and purpose. — The pre-trial is mandatory. The court shall consider:

(a)The possibility of an amicable settlement or of a submission to alternative modes of dispute resolution;

(b)The simplification of the issues;

(c)The necessity or desirability of amendments to the pleadings;

(d)The possibility of obtaining stipulations or admissions of facts and of documents to avoid unnecessary proof;

(e)The limitation of the number of witnesses;

(f)The advisability of a preliminary reference of issues to a commissioner;

(g)The propriety of rendering judgment on the pleadings, or summary judgment, or of dismissing the action should a valid ground therefor be found to exist;

(h)The advisability or necessity of suspending the proceedings; and

(i)Such other matters as may aid in the prompt disposition of the action. (Emphasis ours.) HDCTAc

The admission having been made in a stipulation of facts at pre-trial by the parties, it must be treated as a Judicial admission. 45 Under Section 4, Rule 129 of the Rules of Court, a judicial admission requires no proof. The admission may be contradicted only by a showing that it was made through palpable mistake or that no such admission was made. The Court cannot lightly set aside a judicial admission especially when the opposing party relied upon the same and accordingly dispensed with further proof of the fact already admitted. An admission made by a party in the course of the proceedings does not require proof. 46

In the instant case, among the facts expressly admitted by the CIR and Toshiba in their CTA-approved Joint Stipulation are that Toshiba "is a duly registered value-added tax entity in accordance with Section 107 of the Tax Code, as amended [,]" 47 that "is subject to zero percent (0%) value-added tax on its export sales in accordance with then Section 100 (a) (2) (A) of the Tax Code, as amended." 48 The CIR was bound by these admissions, which he could not eventually contradict in his Motion for Reconsideration

2

of the CTA Decision dated October 16, 2000, by arguing that Toshiba was actually a VAT-exempt entity and its export sales were VAT-exempt transactions. Obviously, Toshiba could not have been subject to VAT and exempt from VAT at the same time. Similarly, the export sales of Toshiba could not have been subject to zero percent (0%) VAT and exempt from VAT as well.

The CIR cannot escape the bindingeffect of his judicial admissions.

The Court disagrees with the Court of Appeals when it ruled in its Decision dated August 29, 2002 that the CIR could not be bound by his admissions in the Joint Stipulation because (1) the said admissions were "made through palpable mistake" 49 which, if countenanced, "would result in falsehood, unfairness and injustice"; 50 and (2) the State could not be put in estoppel by the mistakes of its officials or agents. This ruling of the Court of Appeals is rooted in its conclusion that a "palpable mistake" had been committed by the CIR in the signing of the Joint Stipulation. However, this Court finds no evidence of the commission of a mistake, much more, of a palpable one.

Despite the absence of allegation and evidence by the CIR, the Court of Appeals, on its own, concluded that the admissions of the CIR in the Joint Stipulation were due to a palpable mistake based on the following deduction —

Scrutinizing the Answer filed by [the CIR], we rule that the Joint Stipulation of Facts and Issues signed by [the CIR] was made through palpable mistake. Quoting paragraph 4 of its Answer, [the CIR] states:

"4.He ADMITS the allegations contained in paragraph 5 of the petition only insofar as the cited provisions of Tax Code is concerned, but SPECIFICALLY DENIES the rest of the allegations therein for being mere opinions, arguments or gratuitous assertions on the part of [Toshiba] and/or because they are mere erroneous conclusions or interpretations of the quoted law involved, the truth of the matter being those stated hereunder.

xxx xxx xxx"

And paragraph 5 of the petition for review filed by [Toshiba] before the CTA states:

"5.Petitioner is subject to zero percent (0%) value-added tax on its export sales in accordance with then Section 100(a)(2)(A) of the Tax Code . . . . cEHSTC

xxx xxx xxx"

As we see it, nothing in said Answer did [the CIR] admit that the export sales of [Toshiba] were indeed zero-rated transactions. At the least, what was admitted only by [the CIR] concerning paragraph 4 of his Answer, is the fact that the provisions of the Tax Code, as cited by [Toshiba] in its petition for review filed before the CTA were correct. 

The Court of Appeals provided no explanation as to why the admissions of the CIR in his Answer in CTA Case No. 5762 deserved more weight and credence than those he made in the Joint Stipulation. The appellate court failed to appreciate that the CIR, through counsel, Atty. Biazon, also signed the Joint Stipulation; and that absent evidence to the contrary, Atty. Biazon is presumed to have signed the Joint Stipulation willingly and knowingly, in the regular performance of his official duties. Additionally, the Joint Stipulation 53 of Toshiba and the CIR was a more recent pleading than the Answer54 of the CIR. It was submitted by the parties after the pre-trial conference held by the CTA, and subsequently approved by the tax court. If there was any discrepancy between the admissions of the CIR in his Answer and in the Joint Stipulation, the more logical and reasonable explanation would be that the CIR changed his mind or conceded some points to Toshiba during the pre-trial conference which immediately preceded the execution of the Joint Stipulation. To automatically construe that the discrepancy was the result of a palpable mistake is a wide leap which this Court is not prepared to take without substantial basis.

The judicial admissions of the CIR in the Joint Stipulation are not intrinsically false, wrong, or illegal, and are consistent with the ruling onnthe VAT treatment of PEZA-registered enterprises in the previous Toshiba case.

There is no basis for believing that to bind the CIR to his judicial admissions in the Joint Stipulation — that

3

Toshiba was a VAT-registered entity and its export sales were zero-rated VAT transactions — would result in "falsehood, unfairness and injustice." The judicial admissions of the CIR are not intrinsically false, wrong, or illegal. On the contrary, they are consistent with the ruling of this Court in a previous case involving the same parties, Commissioner of Internal Revenue v. Toshiba Information Equipment (Phils.) Inc. 55 (Toshiba case), explaining the VAT treatment of PEZA-registered enterprises.

In light of the judicial admissions of  Toshiba, the CTA correctly confined itself to the other factual issues submitted for resolution by the parties.

In accord with the admitted facts — that Toshiba was a VAT-registered entity and that its export sales were zero-rated transactions — the stated issues in the Joint Stipulation were limited to other factual matters, particularly, on the compliance by Toshiba with the rest of the requirements for credit/refund of input VAT on zero-rated transactions. Thus, during trial, Toshiba concentrated on presenting evidence to establish that it incurred P3,875,139.65 of input VAT for the first and second quarters of 1997 which were directly attributable to its export sales; that said amount of input VAT were not carried over to the succeeding quarters; that said amount of input VAT has not been applied or offset against any output VAT liability; and that said amount of input VAT was properly substantiated by official receipts and invoices.  

WHEREFORE, the assailed Decision dated August 29, 2002 and the Resolution dated February 19, 2003 of the Court of Appeals in CA-G.R. SP No. 63047 are REVERSED and SET ASIDE, and the Decision dated October 16, 2000 of the Court of Tax Appeals in CTA Case No. 5762 is REINSTATED. Respondent Commissioner of Internal Revenue isORDERED to REFUND or, in the alternative, to ISSUE a TAX CREDIT CERTIFICATE in favor of petitioner Toshiba Information Equipment (Phils.), Inc. in the amount of P1,385,282.08, representing the latter's unutilized input VAT payments for the first and second quarters of 1997. No pronouncement as to costs.

SO ORDERED.

[G.R. No. 163217. April 18, 2006.]

CELESTINO MARTURILLAS, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.

Petitioner was charged with homicide in an Information dated November 5, 1998, worded as follows:

"[T]hat on or about November 4 1998, in the City of Davao, Philippines, and within the jurisdiction of this Honorable Court, the above-mentioned accused, armed with a gun, and with intent to kill, wilfully, unlawfully and feloniously shot one Artemio Pantinople, thereby inflicting fatal wound upon the latter which caused his death." 

The Facts

Version of the Prosecution

"Lito Santos, a forty-three-year old farmer and resident of Barangay Gatungan, Bunawan District, Davao City, testified that about 6:00 o'clock in the afternoon of November 4, 1998, he saw his neighbor and 'kumpare' Artemio Pantinople arrive on board a jeepney from Bunawan, Davao City. Artemio was carrying a truck battery, some corn bran and rice. They talked for a while concerning their livelihood afterwhich, Artemio proceeded to connect the battery to the fluorescent lamps in his store. Artemio's store was located about five (5) meters away from Lito's house. "After installing the battery to the fluorescent lamps, Artemio sat for a while on a bench located in front of his store. Then, Cecilia Santos, Lito's wife, called him and Artemio for supper. Artemio obliged. Lito, opting to eat later, served Artemio and Cecilia the food. After eating, Artemio returned to the bench and sat on it again together with his tree (3) children, namely: Janice, Saysay and Pitpit."Lito was eating supper in their kitchen when he heard a gunshot. From a distance of about ten (10) meters, he also noticed smoke and fire coming from the muzzle of a big gun. Moments later, he saw Artemio clasping his chest and staggering backwards to the direction of his (Lito's) kitchen. Artemio shouted to him, 'Tabangi ko Pre, gipusil ko ni kapitan,' meaning 'Help me, Pre, I was shot by the captain.' However, Lito did not approach Artemio right after the shooting incident because Cecilia warned him that he might also be shot.

4

"Lito did not see the person who shot Artemio because his attention was then focused on Artemio.

"Shortly, Lito saw Ernita Pantinople, the wife of Artemio, coming from her house towards the direction where Artemio was sprawled on the ground. Ernita was hysterical, jumping and shouting, 'Kapitan, bakit mo binaril and aking asawa.' She also repeatedly cried for help.

"Lito then went out of their house and approached Artemio who was lying dead near a banana trunk more than five (5) meters from his house. Some of their neighbors, namely: Antenero, Loloy Libre and Lapis answered Ernita's call for help and approached them.

"When the shooting incident happened about 7:30 in the evening of November 4, 1998, Lito's house was illumined by a lamp. Their kitchen has no walls. It is an open-type kitchen giving him an unobstructed view of Artemio who was about five (5) meters away from where he was positioned at that time. Although there was agemilina tree growing in the space in between his house and the store of Artemio, the same did not block his view of Artemio.

"At the same instance, Ernita was also in their kitchen preparing milk for her baby. Her baby was then lying on the floor of their kitchen. When she was about to put the bottle into the baby's mouth, she suddenly heard the sound of a gunburst followed by a shout, 'Help me Pre, I was shot by the captain.' She immediately pushed open the window of their kitchen and saw appellant wearing a black jacket and camouflage pants running towards the direction of the back portion of Lito's house. From there, appellant crossed the street and disappeared.

"Ernita saw appellant carrying with him a long firearm which looked like an M-14 rifle. Ernita also sensed that appellant had some companions with him because she heard the crackling sound of the dried leaves around the place. Ernita had a clear view of appellant at that time because their place was well-illumined by the full moon that night and by the two (2) fluorescent lamps in their store which were switched on at the time of the incident.

"Ernita immediately went out of their house and ran towards Artemio. Artemio tried to speak to her but he

could not do so because his mouth was full of blood. Upon seeing the pitiful sight of her husband, Ernita shouted several times, 'Kapitan, ngano nimo gipatay and akong bana.' She also repeatedly called her neighbors for help but only Lito Santos, Eufemio Antenero, Norman Libre and some residents of Poblacion Gatungan responded to her calls and approached them. She noted that no member of the CFO and CAFGU came to help them. Also, no barangay tanod came to offer them to help. cDIHES

"While waiting for the police, Ernita did not allow Artemio's body to be touched by anybody. After more than two (2) hours, the police arrived, together with a photographer by the name of Fe Mendez of Bunawan District, Davao City who took pictures of the crime scene.

"PO2 Mariano Operario, Investigation Officer of the Investigation Section of the Bunawan Police Station, Philippine National Police, Davao City, testified that about 9:05 in the evening of November 4, 1998, he received a report of an alleged shooting incident at Barangay Gatungan, Bunawan District in Davao City. Together with SPO1 Rodel C. Estrellan and a member of the mobile police patrol on board their mobile car, PO2 Operario proceeded immediately to the crime scene. They reached the crime scene about 10:00 o'clock in the evening of the same date. They found the lifeless body of Artemio sprawled on the ground. Ernita and Lito then approached PO2 Operario and informed him that appellant was the one responsible for the shooting.

"PO2 Operario stayed at the crime scene for about one (1) hour and waited for the funeral vehicle to pick up the body of Artemio. When the funeral hearse arrived, PO2 Operario told the crew to load Artemio's body into the vehicle. Thereafter, he then boarded again their mobile car together with Lito Santos.

"Armed with the information that appellant was the one responsible for the shooting of Artemio, PO2 Operario proceeded to the house of appellant and informed him that he was a suspect in the killing of Artemio. He then invited appellant to go with him to the police station and also to bring along with him his M-14 rifle. Appellant did not say anything. He just got his M-14 rifle and went with the police to the police station where he was detained the whole night of

5

November 4, 1998. Appellant did not also give any statement to anybody about the incident. The following day, appellant was transferred by the police to Tibungco Police Station where he was detained.

"Alicia Pantinople, the 44-year old sister of Artemio, testified that on the night of November 4, 1998, she was at home watching television. She heard a gunshot but did not mind it because she was already used to hearing the sound of guns fired indiscriminately in their place.

"After a few minutes, Junjun, a child and resident of Sitio Centro, Barangay Gatungan, Bunawan District, Davao City came knocking at their door. Junjun informed them that: 'Yoyo, Uncle Titing was shot,' referring to Artemio.

"Upon hearing the report, Alicia looked for some money thinking that it might be needed for Artemio's hospitalization because she expected Artemio to be still alive. Artemio's two (2) children, namely: Jonel and Genesis who were staying with her hurriedly left. She then ran to the place where her brother was shot and found Artemio's dead body on the ground surrounded by his four (4) children.

"At the Bunawan Police Station, Alicia was informed by the police that appellant was at Tibungco Police Station. She sent her male cousin to proceed to Tibungco Police Station to find out if appellant was indeed in the said place. However, her cousin immediately returned and informed her that appellant was not in Tibungco Police Station. She then went around the Bunawan Police Station and noticed a locked door. When she peeped through the hole of the said door, she saw appellant reclining on a bench about two and a half (2 1/2) meters away from the door. Appellant's left leg was on top of the bench while his right leg was on the ground. Appellant was wearing a brown shirt, black jacket and a pair of camouflage pants. He was also wearing brown shoes but he had no socks on his feet.

"At the police station, Alicia confronted appellant: 'Nong Listing I know that you can recognize my voice. It is me. Why did you kill my brother? What has he done wrong to you?' cASEDC

"Appellant did not answer her. Nevertheless, she was sure that appellant was awake because he was tapping the floor with his right foot.

"Dr. Danilo Ledesma, a medico-legal officer of the Davao City Health Department, conducted an autopsy on Artemio's cadaver about 9:30 in the morning of November 5, 1998 at the Rivera Funeral Homes located at Licanan, Lasang. His findings are summarized in his Necropsy Report No. 76:

'POSTMORTEM FINDINGS

''CAUSE OF DEATH: Gunshot wound of the chest.

Signed by: DANILO P. LEDESMA

Medico-Legal Officer IV'

"During the trial, Dr. Ledesma explained that Artemio died of a gunshot wound, 0.9 x 0.8 centimeters in size located about one (1) inch away from the centerline of Artemio's Adam's apple down to his navel and about 1:00 o'clock from his right nipple.

"The trajectory of the bullet passing through Artemio's body indicates that his assailant was in a lower position than Artemio when the gun was fired. Dr. Ledesma also found the wound of Artemio negative of powder burns indicating that the assailant was at a distance of more than twenty-four (24) inches when he fired his gun at Artemio. He did not also find any bullet slug inside the body of Artemio indicating that the bullet went through Artemio's body. Artemio's heart and lungs were lacerated and his stomach contained partially digested food particles indicating that he had just eaten his meal when he was shot.

"In the certificate of death of Artemio, Dr. Ledesma indicated that the cause of his death was a gunshot wound on the chest.

"5.After the defense presented its evidence, the case was submitted for decision." 9

Version of the Defense

On the other hand, petitioner presented the following statement of facts:

"9.This is a criminal case for Homicide originally lodged before the Regional Trial Court, Branch 10 of Davao City against herein Petitioner Celestino

6

Marturillas, former Barangay Captain of Gatungan, Bunawan District[,] Davao City and docketed as Criminal Case No. 42,091-98. The criminal charge against Petitioner was the result of a shooting incident in Barangay Gatungan, Bunawan District, Davao City which resulted in the slaying of Artemio Pantinople while the latter was on his way home in the evening of November 4, 1998. cDTIAC

"10.On that same evening at around 8:30 p.m. herein Petitioner former Barangay Captain Celestino Marturillas was roused from his sleep at his house in Barangay Gatungan, Bunawan District, Davao City by his wife since Kagawads Jimmy Balugo and Norman Libre (Barangay Kagawads of Gatungan, Bunawan District, Davao City) wanted to see him. Dazed after just having risen from bed, Petitioner was rubbing his eyes when he met the two Kagawads inside his house. He was informed that a resident of his barangay, Artemio Pantinople, had just been shot. Petitioner at once ordered his Kagawads to assemble the members of the SCAA (Special Civilian Armed [Auxiliary]) so that they could be escorted to the crime scene some 250 meters away.

"11.While approaching the store owned by the Pantinople's and not very far from where the deceased lay sprawled, Petitioner was met by Ernita Pantinople (wife of the deceased-Artemio Pantinople) who was very mad and belligerent. She immediately accused Petitioner of having shot her husband instead of Lito Santos who was his enemy. Petitioner was taken aback by the instant accusation against him. He explained that he just came from his house where he was roused by his Kagawads from his sleep. Not being able to talk sense with Ernita Pantinople, Petitioner and his companions backed off to avoid a heated confrontation. Petitioner instead decided to go back to his house along with his companions.

"12.Upon reaching his house, Petitioner instructed Kagawad Jimmy Balugo to contact the Bunawan Police Station and inform them what transpired. Not knowing the radio frequency of the local police, Kagawad Balugo instead radioed officials of nearby Barangay San Isidro requesting them to contact the Bunawan PNP for police assistance since someone was shot in their locality.

"13.Moments later, PO2 Mariano Operario and another police officer arrived at the house of Petitioner

and when confronted by the latter, he was informed by PO2 Operario that he was the principal suspect in the slaying of Artemio Pantinople. Upon their invitation, Petitioner immediately went with the said police officers for questioning at the Bunawan Police Station. He also took with him his government-issued M-14 Rifle and one magazine of live M-14 ammunition which Petitioner turned over for safe keeping with the Bunawan PNP. The police blotter showed that Petitioner surrendered his M-14 rifle with live ammunition to SPO1 Estrellan and PO3 Sendrijas of the Bunawan PNP at around 10:45 p.m. of November 4, 1998.

"14.When the shooting incident was first recorded in the Daily Record of Events of the Bunawan PNP it was indicated therein that deceased may have been shot by unidentified armed men viz:

'Entry No.DateTimeIncident/Events

22891104982105HSHOOTING INCIDENT-

'One Dominador Lopez 43 years old, married, farmer and a resident of Puro[k] 5, Barangay Gatungan, Davao City appeared at this Precinct and reported that shortly before this writing, one ARTEMIO PANTINOPLE, former barangay kagawad of Barangay Gatungan was allegedly shot to death by an unidentified armed men at the aforementioned Barangay. . . . .'

"15.The extract from the police blotter prepared by SPO2 Dario B. Undo dated November 9, 1998 already had a little modification indicating therein that deceased was shot by an unidentified armed man and the following entry was made.

'2105H: Shooting Incident: One Dominador Lopez, 43 years old, married, farmer and a resident of Purok 5, Barangay Gatungan Bunawan District, Davao City appeared at this Police Precinct and reported that prior to these writing, one Artemio Pantinople, former Barangay Kagawad of Barangay Gatungan was allegedly shot to death by unidentified armed man at the aforementioned barangay. . . . .'

"16.On November 5, 1998 at around 7:15 a.m. PO2 Mariano Operario indorsed with the Bunawan PNP an empty shell fired from a carbine rifle which was recovered by the said police officer from the crime

7

scene in the night of the incident. Owing to his pre-occupation in organizing and preparing the affidavits of the Complainant and her witnesses the previous evening, he was only able to indorse the same the following morning. At the same time, P/Chief Insp. Julito M. Diray, Station Commander of the Bunawan PNP made a written request addressed to the District Commander of the PNP Crime Laboratory requesting that a paraffin test be conducted on Petitioner and that a ballistics examination be made on the M-14 rifle which he surrendered to Bunawan PNP. EATcHD

"17.At around 9:30 a.m. of November 5, 1998, Dr. Danilo P. Ledesma, M.D., Medico-Legal Officer for Davao City conducted an autopsy on the cadaver of deceased and made the following Post-Mortem Findings contained in Necropsy Report No. 76 dated November 6, 1998, viz:

'CAUSE OF DEATH: Gunshot wound of the chest.'

"18.After the fatal shooting of deceased, Celestino Marturillas was subjected to paraffin testing by the PNP Crime Laboratory in Davao City at 10:30 a.m. November 5, 1998. The next day, November 6, 1998, the PNP Crime Laboratory released Physical Sciences Report No. C-074-98 regarding the paraffin test results which found Petitioner NEGATIVE for gunpowder nitrates based on the following findings of the PNP Crime Laboratory:

'FINDINGS:

'Qualitative examination conducted on the above-mentioned specimen gave NEGATIVE result to the test for the presence of gunpowder nitrates. . . .

'CONCLUSION:

'Both hands of Celestino Marturillas do not contain gunpowder nitrates.[.]'

"19.After preparing all the affidavits of Ernita Pantinople and her witnesses PO2 Mariano R. Operario Jr., the police officer as[s]igned to investigate the shooting of the deceased, prepared and transmitted, on November 5, 1998, a Complaint to the City Prosecution Office recommending that Petitioner be indicted for Murder, attaching therewith the Sworn Affidavits of Ernita O. Pantinople (Complainant), Lito D. Santos (witness) and the Sworn Joint Affidavit of

SPO1 Rodel Estrellan and PO2 Mariano R. Operario Jr. of the PNP.

"20.The following is the Affidavit-Complaint of Ernita Pantinople as well as the supporting affidavits of her witnesses all of which are quoted in full hereunder:

'Ernita Pantinople's Affidavit-Complaint dated November 5, 1998:

'That last November 4, 1998 at about 7:30 in the evening, I was attending and caring my baby boy at that time to let him sleep and that moment I heard first one gun shot burst after then somebody shouting seeking for help in Visayan words 'tabangi ko Pre gipusil ko ni Kapitan' I estimated a distance to more or less ten (10) meters away from my house;

'That I immediately peep at the windows, wherein I very saw a person of Brgy. Capt. Celestino Marturillas of Brgy. Gatungan, Bunawan District, Davao City, wearing black jacket and camouflage pants carrying his M-14 rifle running to the direction to the left side portion of the house of Lito Santos who was my neighbor respectively;

'That I hurriedly go down from my house and proceeded to the victims body, wherein when I came nearer I got surprised for the victim was my beloved husband;

'That I was always shouting in visayan words 'kapitan nganong imo mang gipatay and akong bana';

'That I let my husband body still at that placed until the police officers will arrived and investigate the incident; SEIDAC

'That I know personally Brgy. Capt. Celestino Marturillas for he is my nearby neighbor at that placed;

'That I am executing this affidavit to apprise the authorities concern of the truthfulness of the foregoing and my desire to file necessary charges against Celestino Marturillas.'

'Witness Affidavit of Lito Santos dated November 5, 1998 reads:

'I, LITO D. SANTOS, 43 yrs. old, married, farmer, a resident of Purok 5, Brgy. Gatungan, Bunawan District, Davao City after having been duly sworn to in accordance with law do hereby depose and say:

8

'That last November 4, 1998 at about 7:30 in the evening I was taking my dinner at the kitchen of my house and after finished eating I stood up then got a glass of water and at that time I heard one gun shot burst estimated to more or less ten (10) meters from my possession then followed somebody shouting seeking for help in Visayan words 'tabangi ko pre gipusil ko ni Kapitan';

'That I really saw the victim moving backward to more or less five (5) meters away from where he was shot then and there the victim slumped at the grassy area;

'That I immediately go out from my house and proceeded to the victims body, wherein, when I came nearer I found and identified the victim one Artemio Pantinople who was my nearby neighbor sprawled on his own blood at the grassy area;

'That no other person named by the victim other than Brgy. Capt. Celestino Marturillas of Brgy. Gatungan, Bunawan District, Davao City;

'That I am executing this affidavit to apprised the authorities concern of the true facts and circumstances that surrounds the incident.'

"21.Based on the Affidavits executed by Ernita Pantinople and Lito Santos, then 2nd Asst. City Prosecutor Raul B. Bendigo issued a Resolution on November 5, 1998 finding sufficient evidence to indict Appellant for the crime of Homicide and not Murder as alleged in Private Complainant's Affidavit Complaint. The Information states:

'Above-mentioned Accused, armed with a gun, and with intent to kill, willfully, unlawfully and feloniously shot one Artemio Pantinople, thereby inflicting fatal wound upon the latter which caused his death.

'CONTRARY TO LAW.'

xxx xxx xxx

"23.The theory of the Defense was anchored on the testimony of the following individuals:

'23.1Jimmy Balugo, was one of the Barangay Kagawads who went to the house of Petitioner after receiving a radio message from Brgy. Kagawad Glenda Lascuña that a shooting incident took place in their barangay. He also testified that together with

Kagawad Norberto Libre, he proceeded to the house of Petitioner to inform him of the shooting incident involving a certain Artemio 'Titing' Pantinople. After informing Petitioner about what happened, the latter instructed him and Norberto Libre to gather the SCAA's and to accompany them to the crime scene. He also narrated to the court that Petitioner and their group were not able to render any assistance at the crime scene since the widow and the relatives of deceased were already belligerent. As a result of which, the group of Petitioner including himself, went back to the former's house where he asked Petitioner if it would be alright to contact the police and request for assistance. He claimed that he was able to contact the Bunawan PNP with the help of the Barangay Police of Barangay San Isidro. aSEHDA

'23.2) Norberto Libre testified that in the evening of November 4, 1998, he heard a gunburst which resembled a firecracker and after a few minutes Barangay Kagawad Jimmy Balugo went to his house and informed him that their neighbor Titing Pantinople was shot. Kagawad Balugo requested him to accompany the former to go to the house of then Barangay Captain Celestino Marturillas; that he and Kagawad Balugo proceeded to the house of Petitioner and shouted to awaken the latter; that Barangay Captain Marturillas went out rubbing his eyes awakened from his sleep and was informed of the killing of Artemio Pantinople; that Petitioner immediately instructed them to fetch the SCAA and thereafter their group went to the crime scene.

'23.3) Ronito Bedero testified that he was in his house on the night Artemio Pantinop[l]e was shot. The material point raised by this witness in his testimony was the fact that he saw an unidentified armed man flee from the crime scene who later joined two other armed men near a nangka tree not far from where deceased was shot. All three later fled on foot towards the direction of the Purok Center in Barangay Gatungan. This witness noticed that one of the three men was armed with a rifle but could not make out their identities since the area where the three men converged was a very dark place. After the three men disappeared, he saw from the opposite direction Petitioner, Barangay Kagawad Jimmy Balugo and three (3) SCAA members going to the scene of the crime but they did not reach the crime scene. A little

9

later, he saw the group of Petitioner return to where they came from.

'23.4) Police C/Insp. Noemi Austero, Forensic Chemist of the PNP Crime Laboratory, testified that she conducted a paraffin test on both hands of Petitioner on November 5, 1999 at around 10:30 a.m. She also testified that Petitioner tested NEGATIVE for gunpowder nitrates indicating that he never fired a weapon at any time between 7:30 p.m. of November 4, 1999 until the next day, November 5, 1999. She also testified that as a matter of procedure at the PNP Crime Laboratory, they do not conduct paraffin testing on a crime suspect seventy two (72) hours after an alleged shooting incident. She also testified that based on her experience she is not aware of any chemical that could extract gunpowder nitrates from the hands of a person who had just fired his weapon.

'23.5) Dominador Lapiz testified that he lived on the land of the victim, Artemio Pantinople for ten (10) years. He was one of the first persons who went to the crime scene where he personally saw the body of deceased lying at a very dark portion some distance from the victim's house and that those with him at that time even had to light the place with a lamp so that they could clearly see the deceased. He also testified that there were many coconut and other trees and bananas in the crime scene. He also testified that the house of Lito Santos was only about four (4) meters from the crime scene, while the house of victim-Artemio Pantinople was about FIFTY (50) meters away. He testified that there was no lighted fluorescent at the store of deceased at the time of the shooting. He was also the one who informed Kagawad Glenda Lascuna about the shooting of Artemio Pantinople. His testimony also revealed that when the responding policemen arrived, Lito Santos immediately approached the policemen, volunteered himself as a witness and even declared that he would testify that it was Petitioner who shot Artemio Pantinople. EaDATc

'On cross-examination, this witness declared that the crime scene was very dark and one cannot see the body of the victim without light. On cross-examination, this witness also testified that Lito Santos approached the service vehicle of the responding policemen and volunteered to be a witness that Petitioner was the assailant of the victim, Artemio Pantinople. This

witness further testified that immediately after he went to the crime scene, the widow of the victim and the children were merely shouting and crying and it was only after the policemen arrived that the widow uttered in a loud voice, 'Kapitan nganong gipatay mo and akong bana?'

'23.6) Celestino Marturillas, former Barangay Captain of Barangay Gatungan, Bunawan District, Davao City testified that he learned of Pantinople's killing two hours later through information personally relayed to him by Kagawads Jimmy Balugo and Norberto Libre. He intimated to the Court that he did try to extend some assistance to the family of the deceased but was prevented from so doing since the wife of deceased herself and her relatives were already hostile with him when he was about to approach the crime scene. He also testified that he voluntarily went with the police officers who arrested him at his residence on the same evening after the victim was shot. He also turned over to police custody the M-14 rifle issued to him and voluntarily submitted himself to paraffin testing a few hours after he was taken in for questioning by the Bunawan PNP. Petitioner, during the trial consistently maintained that he is innocent of the charge against him.'" 10

Ruling of the Court of Appeals

The CA affirmed the findings of the RTC that the guilt of petitioner had been established beyond reasonable doubt. According to the appellate court, he was positively identified as the one running away from the crime scene immediately after the gunshot. This fact, together with the declaration of the victim himself that he had been shot by the captain, clearly established the latter's complicity in the crime.

 

No ill motive could be ascribed by the CA to the prosecution witnesses. Thus, their positive, credible and unequivocal testimonies were accepted as sufficient to establish the guilt of petitioner beyond reasonable doubt.

On the other hand, the CA also rejected his defenses of denial and alibi. It held that they were necessarily suspect, especially when established by friends or relatives, and should thus be subjected to the strictest scrutiny. At any rate, his alibi and denial cannot prevail

10

over the positive testimonies of the prosecution witnesses found to be more credible.

The appellate court upheld petitioner's conviction, as well as the award of damages. In addition, it awarded actual damages representing unearned income.

Hence, this Petition. 

The Issues

1) whether the prosecution's evidence is credible;

2) whether it is sufficient to convict him of homicide.

Under the first main issue, he questions the positive identification made by the prosecution witnesses; the alleged inconsistencies between their Affidavits and court testimonies; and the plausibility of the allegation that the victim had uttered, "Tabangi ko p're, gipusil ko ni kapitan" ("Help me p're, I was shot by the captain"), which was considered by the two lower courts either as his dying declaration or as part of res gestae.

Under the second main issue, petitioner contends that the burden of proof was erroneously shifted to him; that there should have been no finding of guilt because of the negative results of the paraffin test; and that the prosecution miserably failed to establish the type of gun used in the commission of the crime.

The Court's Ruling

The Petition is unmeritorious.

First Main Issue: Credibility of the Prosecution Evidence

Having laid that basic premise, the Court disposes seriatim the arguments proffered by petitioner under the first main issue.

Dying Declaration

Having established that the victim indeed uttered those words, the question to be resolved is whether they can be considered as part of the dying declaration of the victim.

Rule 130, Section 37 of the Rules of Court, provides:

"The declaration of a dying person, made under the consciousness of impending death, may be received in any case wherein his death is the subject of inquiry,

as evidence of the cause and surrounding circumstances of such death."

To be admissible, a dying declaration must

1) refer to the cause and circumstances surrounding the declarant's death;

2) be made under the consciousness of an impending death;

3) be made freely and voluntarily without coercion or suggestions of improper influence;

4) be offered in a criminal case, in which the death of the declarant is the subject of inquiry;

and 5) have been made by a declarant competent to testify as a witness, had that person been called upon to testify. 

Res Gestae

The fact that the victim's statement constituted a dying declaration does not preclude it from being admitted as part of the res gestae, if the elements of both are present. 48

Section 42 of Rule 130 of the Rules of Court provides:

"Part of the res gestae. — Statements made by a person while a startling occurrence is taking place or immediately prior or subsequent thereto with respect to the circumstances thereof, may be given in evidence as part of the res gestae. So, also, statements accompanying an equivocal act material to the issue, and giving it a legal significance, may be received as part of the res gestae."

Res gestae refers to statements made by the participants or the victims of, or the spectators to, a crime immediately before, during, or after its commission. 49 These statements are a spontaneous reaction or utterance inspired by the excitement of the occasion, without any opportunity for the declarant to fabricate a false statement. 50 An important consideration is whether there intervened, between the occurrence and the statement, any circumstance calculated to divert the mind and thus restore the mental balance of the declarant; and afford an opportunity for deliberation. 51

11

A declaration is deemed part of the res gestae and admissible in evidence as an exception to the hearsay rule, when the following requisites concur: 1) the principal act, the res gestae, is a startling occurrence; 2) the statements were made before the declarant had time to contrive or devise; and 3) the statements concerned the occurrence in question and its immediately attending circumstances. 52

All these requisites are present in this case. The principal act, the shooting, was a startling occurrence. Immediately after, while he was still under the exciting influence of the startling occurrence, the victim made the declaration without any prior opportunity to contrive a story implicating petitioner. Also, the declaration concerned the one who shot the victim. Thus, the latter's statement was correctly appreciated as part of the res gestae. DaHISE

Second Main Issue: Sufficiency of Evidence

. The totality of the evidence presented by the prosecution is sufficient to sustain the conviction of petitioner. The dying declaration made by the victim immediately prior to his death constitutes evidence of the highest order as to the cause of his death and of the identity of the assailant. 

First. Santos testified that he had heard a gunshot; and seen smoke coming from the muzzle of a gun, as well as the victim staggering backwards while shouting, "Help me p're, I was shot by the captain." This statement was duly established, and the testimony of Santos confirmed the events that had occurred. It should be understandable that"p're" referred to Santos, considering that he and the victim were conversing just before the shooting took place. It was also established that the two called each other "p're," because Santos was the godfather of the victim's child. 54

Second. Ernita testified that she had heard a gunshot and her husband's utterance, "Help me p're, I was shot by the captain," then saw petitioner in a black jacket and camouflage pants running away from the crime scene while carrying a firearm.

Third. Ernita's statement, "Captain, why did you shoot my husband?" was established as part of the res gestae.

Fourth. The version of the events given by petitioner is simply implausible. As the incumbent barangay captain, it should have been his responsibility to go immediately to the crime scene and investigate the shooting. Instead, he avers that when he went to the situs of the crime, the wife of the victim was already shouting and accusing him of being the assailant, so he just left. This reaction was very unlikely of an innocent barangay captain, who would simply want to investigate a crime. Often have we ruled that the first impulse of innocent persons when accused of wrongdoing is to express their innocence at the first opportune time. 

Fifth. The prosecution was able to establish motive on the part of petitioner. The victim's wife positively testified that prior to the shooting, her husband was trying to close a real estate transaction which petitioner tried to block. This showed petitioner's antagonism towards the victim. 

These pieces of evidence indubitably lead to the conclusion that it was petitioner who shot and killed the victim. This Court has consistently held that, where an eyewitness saw the accused with a gun seconds after the gunshot and the victim's fall, the reasonable conclusion is that the accused had killed the victim. 57 Further establishing petitioner's guilt was the definitive statement of the victim that he had been shot by the barangay captain.

Clearly, petitioner's guilt was established beyond reasonable doubt. To be sure, conviction in a criminal case does not require a degree of proof that, excluding the possibility of error, produces absolute certainty. 58 Only moral certainty is required or that degree of proof that produces conviction in an unprejudiced mind. 59

That some pieces of the above-mentioned evidence are circumstantial does not diminish the fact that they are of a nature that would lead the mind intuitively, or by a conscious process of reasoning, toward the conviction of petitioner.60 Circumstantial, vis-à-vis direct, evidence is not necessarily weaker 61 Moreover, the circumstantial evidence described above satisfies the requirements of the Rules of Court, which we quote:

"SEC. 4.Circumstantial evidence, when sufficient. — Circumstantial evidence is sufficient for conviction if:

12

(a)There is more than one circumstance; ADaEIH

(b)The facts from which the inferences are derived are proven; and

(c)The combination of all the circumstances is such as to produce a conviction beyond reasonable doubt." 62

Paraffin Test

Petitioner takes issue with the negative results of the paraffin test done on him. While they were negative, that fact alone did not   ipso facto   prove that he was innocent. Time and time again, this Court has held that a negative paraffin test result is not a conclusive proof that a person has not fired a gun.   63   In other words, it is possible to fire a gun and yet be negative for nitrates, as when culprits wear gloves, wash their hands afterwards, or are bathed in perspiration.   64 Besides, the prosecution was able to establish the events during the shooting, including the presence of petitioner at the scene of the crime. Hence, all other matters, such as the negative paraffin test result, are of lesser probative value.

[G.R. Nos. 118441-42. January 18, 2000.]

ARMANDO JOSE y PAZ and MANILA CENTRAL BUS LINES (MCL), represented by its General

Manager MR. DANILO T. DE DIOS, petitioners, vs. COURT OF APPEALS,

ROMMEL ABRAHAM, represented by his father FELIXBERTO ABRAHAM, JOSE MACARUBO and

MERCEDES MACARUBO, respondents.

SYNOPSIS

On February 22, 1985, at around six o'clock in the morning, petitioner Manila Central Bus Lines Corporation's (MCL) bus 203, then driven by petitioner Armando Jose, collided with a red Ford Escort car driven by John Macarubo on McArthur Highway in Marulas, Valenzuela, Metro Manila. As a result, the car was severely damaged while its driver, Jose Macarubo and its lone passenger, Rommel Abraham, were severely injured. Despite surgery, Macarubo failed to recover and died five days later. His lone passenger, Rommel Abraham survived but he became blind on the left eye. He also sustained a fracture on the forehead and multiple lacerations on the face which caused him to be hospitalized for a week.

Rommel Abraham, represented by his father, Felixberto, instituted a civil case against MCL and Armando Jose in the Regional Trial Court, Branch 172, Valenzuela. The spouses, Jose and Mercedes Macarubo, parents of the deceased John Macarubo, also filed their own suit for damages against MCL alone. On the other hand, MCL filed a third-party complaint against Juanita Macarubo, registered owner of the Ford Escort, on the theory that John Macarubo was negligent and that he was the "authorized driver" of Juanita Macarubo. The latter in turn filed a counterclaim for damages against MCL for damage to her car. The cases were consolidated and tried jointly. The trial court rendered judgment dismissing both civil cases against MCL and ruling favorably on the third-party complaint against Juanita Macarubo, ordering the latter to pay MCL actual damages and attorney's fees. Rommel Abraham, the Macarubo spouses, and third-party defendant Juanita Macarubo appealed to the Court of Appeals which rendered a decision reversing the decision of the trial court. Hence, the present petition.

The Supreme Court reversed the decision of the Court of Appeals. The Court also dismissed the two cases filed against MCL and Armando Jose as well as the third-party complaint filed against Juanita Macarubo. The Court upheld the trial court in relying on the photographs rather than on Rommel Abraham's testimony which was obviously biased and unsupported by any evidence. Physical evidence prevails over testimonial evidence, where the physical evidence established ran counter to the testimonial evidence. The Court also ruled that private respondents' failure to prove Jose's negligence during the trial is fatal to prove MCL's vicarious liability because before the presumption of the employer's negligence in the selection and supervision of its employees can arise, the negligence of the employee must first be established. With regard to the dismissal of the third-party complaint by MCL against Juanita Macarubo, the Court, however, held that the mere allegation of MCL that John Macarubo is the "authorized driver" without further alleging that he was the son, ward, employee, or pupil of the registered owner is not sufficient to make the latter vicariously liable for negligence under Article 2180 of the Civil Code. MCL should have presented evidence to prove that Juanita Macarubo was the employer of John

13

Macarubo or that she is in any way liable for John Macarubo's negligence under existing laws.

SYLLABUS

1.REMEDIAL LAW; EVIDENCE; PHYSICAL EVIDENCE PREVAILS OVER TESTIMONIAL EVIDENCE WHERE THE PHYSICAL EVIDENCE ON RECORD RAN COUNTER TO THE TESTIMONIAL EVIDENCE OF THE WITNESSES; CASE AT BAR. — The trial court was justified in relying on the photographs rather than on Rommel Abraham's testimony which was obviously biased and unsupported by any other evidence. Physical evidence is a mute but an eloquent manifestation of truth, and it ranks high in our hierarchy of trustworthy evidence. In criminal cases such as murder or rape where the accused stands to lose his liberty if found guilty, this Court has, in many occasions, relied principally upon physical evidence in ascertaining the truth. In People v. Vasquez, where the physical evidence on record ran counter to the testimonial evidence of the prosecution witnesses, we ruled that the physical evidence should prevail. In this case, the positions of the two vehicles, as shown in the photographs (Exhs. 1 to 3) taken by MCL line inspector Jesus Custodio about an hour and fifteen minutes after the collision, disputes Abraham's self-serving testimony that the two vehicles collided because Bus 203 invaded the lane of the Ford Escort and clearly shows that the case is exactly the opposite of what he claimed happened. Contrary to Abraham's testimony, the photographs show quite clearly that Bus 203 was in its proper lane and that it was the Ford Escort which usurped a portion of the opposite lane. The three photographs show the Ford Escort positioned diagonally on the highway, with its two front wheels occupying Bus 203's lane. As shown by the photograph marked Exhibit 3, the portion of MacArthur Highway where the collision took place is marked by a groove which serves as the center line separating the right from the left lanes. The photograph shows that the left side of Bus 203 is about a few feet from the center line and that the bus is positioned parallel thereto. This negates the claim that Bus 203 was overtaking another vehicle and, in so doing, encroached on the opposite lane occupied by the Ford Escort.

FACTS:

Petitioner Manila Central Bus Lines Corporation (MCL) is the operator-lessee of a public utility bus b. Bus 203 is owned by the Metro Manila Transit Corporation and is insured with the Government Service Insurance System.

On February 22, 1985, at around six o’clock in the morning, Bus 203, then driven by petitioner Armando Jose, collided with a red Ford Escort driven by John Macarubo on MacArthur Highway

. Bus 203 was bound for Muntinlupa, Rizal, while the Ford Escort was headed towards Malanday, Valenzuela on the opposite lane.

As a result of the collision, the left side of the Ford Escort’s hood was severely damaged while its driver, John Macarubo, and its lone passenger, private respondent Rommel Abraham, were seriously injured.

The driver and conductress of Bus 203 rushed Macarubo and Abraham to the nearby Fatima Hospital where Macarubo lapsed into a coma.

Despite surgery, Macarubo failed to recover and died five days later. Abraham survived, but he became blind on the left eye which had to be removed.

In addition, he sustained a fracture on the forehead and multiple lacerations on the face, which caused him to be hospitalized for a week.

Rommel Abraham, represented by his father, Felixberto, FILED A CASE for damages against petitioners MCL and Armando Jose in the Regional Trial Court.

On July 17, 1986, the spouses Jose and Mercedes Macarubo, parents of the deceased John Macarubo, filed their own suit for damages in the same trial court, where it was docketed as Civil Case No. 2428-V-86, against MCL alone.

On the other hand, MCL filed a third-party complaint against Juanita Macarubo, registered owner of the Ford Escort on the theory that John Macarubo was negligent and that he was the "authorized driver" of Juanita Macarubo.

The latter, in turn, filed a counterclaim for damages against MCL for the damage to her car. Civil Case No. 2206-V-85 and Civil Case No. 2428-V-86 were

14

consolidated and later tried jointly. The facts, as found by the trial court, are as follows:

After the party at 11 p.m., while both Rommel and John were en route home to Valenzuela from La Loma, the car encountered mechanical trouble and had to be repaired as its cross-joint was detached. The defect of a cross-joint is not minor and repair thereof would as testified to by Rommel lasted up to early dawn and the car started to run only after five o’clock in the morning. With lack of sleep, the strains of a party still on their bodies, and the attention to the repair coupled with the wait until the car was ready to run, are potentials in a driver for possible accident. The accident happened at 6:15 a.m. when the physical and mental condition of the driver John Macarubo was as expected not too fit for the driving as he could not anymore control the car. The desire to be home quick for the much needed sleep could have prompted him to overtake the preceding vehicle.

Indeed the pictures taken of the two vehicles (Exh. 1, 2 and 3) will clearly show that the MCL bus was at its proper lane and not in an overtaking position while the car driven by John Macarubo was positioned in a diagonal manner and crossed the line of the MCL, which is an indication of an overtaking act. If it were the bus that was overtaking at the time, the car would have been thrown farther away from the point of the impact.

Based on the foregoing facts, the trial court rendered judgment on September 28, 1989, dismissing both civil cases against MCL and ruling favorably on its third-party complaint against Juanita Macarubo, ordering the latter to pay MCL P54,232.12 as actual damages, P24,000.00 for lost income, and P10,000.00 as attorney’s fees.

Rommel Abraham, the Macarubo spouses, and third-party defendant Juanita Macarubo then appealed to the Court of Appeals.

WHEREFORE, the appealed decision is hereby REVERSED and the defendants-appellees MCL and Armando Jose are adjudged to pay jointly and severally.

Hence, this petition for review on certiorari.

ISSUE: Whether it was the driver of Bus 203 or that of the Ford Escort who was at fault for the collision of the two vehicles.\

HELD: It is well-settled that a question of fact is to be determined by the evidence offered to support the particular contention. 3 In the proceedings below, petitioners relied mainly on photographs, identified in evidence as Exhibits 1 to 3, showing the position of the two vehicles after the collision. On the other hand, private respondents offered the testimony of Rommel Abraham to the effect that the collision took place because Bus 203 invaded their lane. 4

The trial court was justified in relying on the photographs rather than on Rommel Abraham’s testimony which was obviously biased and unsupported by any other evidence. Physical evidence is a mute but an eloquent manifestation of truth, and it ranks high in our hierarchy of trustworthy evidence. 5 In criminal cases such as murder or rape where the accused stands to lose his liberty if found guilty, this Court has, in many occasions, relied principally upon physical evidence in ascertaining the truth. In People v. Vasquez, 6 where the physical evidence on record ran counter to the testimonial evidence of the prosecution witnesses, we ruled that the physical evidence should prevail. 7

In this case, the positions of the two vehicles, as shown in the photographs (Exhs. 1 to 3) taken by MCL line inspector Jesus Custodio about an hour and fifteen minutes after the collision, disputes Abraham’s self-serving testimony that the two vehicles collided because Bus 203 invaded the lane of the Ford Escort and clearly shows that the case is exactly the opposite of what he claimed happened. Contrary to Abraham’s testimony, the photographs show quite clearly that Bus 203 was in its proper lane and that it was the Ford Escort which usurped a portion of the opposite lane. The three photographs show the Ford Escort positioned diagonally on the highway, with its two front wheels occupying Bus 203’s lane. As shown by the photograph marked Exhibit 3, the portion of MacArthur Highway where the collision took place is marked by a groove which serves as the center line separating the right from the left lanes. The photograph shows that the left side of Bus 203 is about a few feet from the center line and that the bus is positioned parallel thereto. This negates the claim that Bus 203 was

15

overtaking another vehicle and, in so doing, encroached on the opposite lane occupied by the Ford Escort. cdasia

Indeed, Bus 203 could not have been overtaking another vehicle when the collision happened. It was filled with passengers, 8 and it was considerably heavier and larger than the Ford Escort. If it was overtaking another vehicle, it necessarily had to accelerate. The acceleration of its speed and its heavy load would have greatly increased its momentum so that the impact of the collision would have thrown the smaller and lighter Ford Escort to a considerable distance from the point of impact. Exhibit 1, however, shows that the Ford Escort’s smashed hood was only about one or two meters from Bus 203’s damaged left front. If there had been a great impact, such as would be the case if Bus 203 had been running at a high speed, the two vehicles should have ended up far from each other.

In discrediting the physical evidence, the appellate court made the following observations:

We cannot believe that it was the car which overtook another vehicle and proceeded to the lane occupied by the bus. There was a traffic jam on the "bus lane" while traffic was light on the "car lane." Indeed, we find it inconceivable that the car, occupying the lane without any traffic, would overtake and traverse a heavy traffic lane. 9 (Italics supplied.)

This is correct. However, the fact remains that when the Ford Escort finally came to a stop, it encroached on the opposite lane occupied by Bus 203.

Significantly, Rommel Abraham testified that on February 21, 1985, the night before the accident, he and John Macarubo went to a friend’s house in La Loma where they stayed until 11 p.m. 10 Abraham’s explanation as to why they did not reach Valenzuela until six o’clock in the morning of the next day when the accident happened indicates that the Ford Escort careened and slammed against Bus 203 because of a mechanical defect. Abraham told the court: 11

Thus, as Rommel Abraham himself admitted, the Ford Escort’s rear cross-joint was cut/detached. This mechanism controls the movement of the rear tires. Since trouble in the cross-joint affects a car’s maneuverability, the matter should have been treated

as a serious mechanical problem. In this case, when asked if they were able to repair the cross-joint, Abraham said "Ginawaan ng paraan, ma’am," by simply welding them just so they could reach home. His testimony indicates that the rear cross-joint was hastily repaired and that, at most, the kind of repairs made thereon were merely temporary; just enough to enable Abraham and Macarubo to reach home. Given such fact, the likelihood is that while the Ford Escort might not have been overtaking another vehicle, it actually strayed into the bus’ lane because of the defective cross-joint, causing its driver to lose control of the vehicle. prLL

The appellate court refused to give credence to the physical evidence on the ground that the photographs were taken an hour after the collision and that within such span of time the bus could have been moved because there was no showing that the driver left the scene of the accident. This is not correct. Constancia Gerolada, Bus 203’s conductress, testified that, immediately after the collision, she and bus driver, petitioner Armando Jose, took the injured driver and passenger of the Ford Escort to the Fatima Hospital. 12 This fact is not disputed by private respondents.

Rommel Abraham mentioned in his appellant’s brief in the appellate court a sketch of the scene of the accident allegedly prepared by one Patrolman Kalale, which shows Bus 203 to be occupying the Ford Escort’s lane. However, the records of this case do not show that such a sketch was ever presented in evidence in the trial court or that Patrolman Kalale was ever presented as a witness to testify on the sketch allegedly prepared by him. Under Rule 132, §3 of the Rules on Evidence, courts cannot consider any evidence unless formally offered by a party.

Finally, the appellate court also ruled that MCL failed to make a satisfactory showing that it exercised the diligence of a good father of a family in the selection and supervision of its bus driver, Armando Jose. 13 Under the circumstances of this case, we hold that proof of due diligence in the selection and supervision of employees is not required.

WHEREFORE, the decision of the Court of Appeals is REVERSED and the complaints filed in Civil Cases Nos. 2206-V-85 and 24428-V-86 against Manila Central Bus Lines and Armando Jose, as well as the

16

third-party complaint filed in Civil Case No. 2206-V-85 against Juanita Macarubo, are hereby DISMISSED. dctai

SO ORDERED.

[G.R. No. 145842. June 27, 2008.]

EDSA SHANGRI-LA HOTEL AND RESORT, INC., RUFO B. COLAYCO, RUFINO L. SAMANIEGO,

KUOK KHOON CHEN, and KUOK KHOON TSEN, petitioners, vs. BF

CORPORATION, respondent.

[G.R. No. 145873. June 27, 2008.]

CYNTHIA ROXAS-DEL CASTILLO, petitioner, vs. BF CORPORATION, respondent.

FACTS:

Before us are these two (2) consolidated petitions for review under Rule 45 to nullify certain issuances of the Court of Appeals (CA). AEIDTc

1. In the first petition, docketed as G.R. No. 145842, petitioners Edsa Shangri-la Hotel and Resort, Inc. (ESHRI), assail the Decision of CA affirming the Decision  (RTC), Branch 162 in Pasig City in Civil Case No. 63435 that ordered them to pay jointly and severally respondent BF Corporation (BF) a sum of money with interests and damages

2. In the second petition, docketed as G.R. No. 145873, petitioner Cynthia Roxas-del Castillo also assails the aforementioned CA Decision it adjudged her jointly and severally liable with ESHRI, et al. to pay the monetary award decreed in the RTC

Both petitions stemmed from a construction contract denominated as Agreement for the Execution of Builder's Work for the EDSA Shangri-la Hotel Project  that ESHRI and BF executed for the construction of the EDSA Shangri-la Hotel starting May 1, 1991.

Among other things, the contract stipulated for the payment of the contract price on the basis of the work

accomplished as described in the monthly progress billings.

Under this arrangement, BF shall submit a monthly progress billing to ESHRI which would then re-measure the work accomplished and prepare a Progress Payment Certificate for that month's progress billing. 

ESHRI laid out the collection procedure BF was to follow, to wit: (1) submission of the progress billing to ESHRI's Engineering Department; (2) following-up of the preparation of the Progress Payment Certificate with the Head of the Quantity Surveying Department; and (3) following-up of the release of the payment with one Evelyn San Pascual.

BF adhered to the procedures agreed upon in all its billings for the period from May 1, 1991 to June 30, 1992, submitting for the purpose the required Builders Work Summary, the monthly progress billings, including an evaluation of the work in accordance with the Project Manager's Instructions (PMIs) and the detailed valuations contained in the Work Variation Orders (WVOs) for final re-measurement under the PMIs.

BF said that the values of the WVOs were contained in the progress billings under the section "Change Orders". 

From May 1, 1991 to June 30, 1992, BF submitted a total of 19 progress billings following the procedure agreed upon. Based on Progress Billing Nos. 1 to 13, ESHRI paid BF PhP86,501,834.05. 

According to BF, however, ESHRI, for Progress Billing Nos. 14 to 19, did not re-measure the work done, did not prepare the Progress Payment Certificates, let alone remit payment for the inclusive periods covered. In this regard, BF claimed having been misled into working continuously on the project by ESHRI which gave the assurance about the Progress Payment Certificates already being processed.

After several futile attempts to collect the unpaid billings, BF filed before the RTC a suit for a sum of money and damages. 

In its defense, ESHRI claimed having overpaid BF for Progress Billing Nos. 1 to 13 and, by way of counterclaim with damages, asked that BF be ordered

17

to refund the excess payments. ESHRI also charged BF with incurring delay and turning up with inferior work accomplishment.

The RTC found for BF

RTC, on the main finding that BF, as plaintiff a quo, is entitled to the payment of its claim covered by Progress Billing Nos. 14 to 19 and to the retention money corresponding to Progress Billing Nos. 1 to 11, with interest in both instances, rendered judgment for BF.

ESHRI subsequently moved for reconsideration, but the motion was denied by the RTC, prompting ESHRI to appeal to the CA.

Pending the resolution of CA-G.R. CV No. 57399, the following events and/or incidents transpired:

(1)The trial court granted BF's motion for execution pending appeal. The account was garnished- 35 million

(2) CA a writ of preliminary injunction enjoining the trial court from carrying out its Order upon ESHRI's posting of a PhP1 million bond. In a supplemental resolution issued on the same day, the CA issued a writ of preliminary mandatory injunction directing the trial court judge and/or his branch sheriff acting under him (a) to lift all the garnishments and levy made under the enjoined order of execution pending appeal; (b) to immediately return the garnished deposits to PNB instead of delivering the same to ESHRI; and (c) if the garnished deposits have been delivered to BF, the latter shall return the same to ESHRI's deposit account.

(3)By a Decision dated June 30, 1997 in CA-G.R. SP No. 43187, the CA set aside the trial court's January 21, 1997 Order. The CA would later deny BF's motion for reconsideration. TASCEc

(4)Aggrieved, BF filed before this Court a petition for review of the CA Decision , the Court affirmed the assailed decision of the CA with the modification that the recovery of ESHRI's garnished deposits shall be against BF's bond. 11

We denied the motions for reconsideration of ESHRI and BF.

(5)Forthwith, ESHRI filed, and the CA by Resolution of August 13, 1999 granted, an application for restitution or damages against BF's bond. Consequently, BF and Stronghold Insurance Co., Inc., the bonding company, filed separate motions for reconsideration.

On November 12, 1999, in CA-G.R. CV No. 57399, the CA rendered a Decision resolving (1) the aforesaid motions of BF and its surety and (2) herein petitioners' appeal from the trial court's Decision dated September 23, 1996. AFFIRMED RTC.

ISSUE:

In G.R. No. 145842, petitioners ESHRI, et al. raise the following issues for our consideration: TaCDcE

I.Whether or not the [CA] committed grave abuse of discretion in disregarding issues of law raised by petitioners in their appeal [particularly in admitting in evidence photocopies of Progress Billing Nos. 14 to 19, PMIs and WVOs].

HELD: The petition has no merit.

Admissibility of Photocopies of Progress Billing Nos. 14 to 19, PMIs and WVOs

Petitioners fault the CA, and necessarily the trial court, on the matter of the admission in evidence of the photocopies of Progress Billing Nos. 14 to 19 and the complementing PMIs and the WVOs. According to petitioners, BF, before being allowed to adduce in evidence the photocopies adverted to, ought to have laid the basis for the presentation of the photocopies as secondary evidence, conformably to the best evidence rule.

Respondent BF, on the other hand, avers having complied with the laying-the-basis requirement. Defending the action of the courts below in admitting into evidence the photocopies of the documents aforementioned, BF explained that it could not present the original of the documents since they were in the possession of ESHRI which refused to hand them over to BF despite requests. cSEaDA

We agree with BF. The only actual rule that the term "best evidence" denotes is the rule requiring that the original of a writing must, as a general proposition, be produced 17 and secondary evidence of its contents is not admissible except where the original cannot be

18

had. Rule 130, Section 3 of the Rules of Court enunciates the best evidence rule:

SEC. 3.Original document must be produced; exceptions. — When the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself, except in the following cases:

(a)When the original has been lost or destroyed, or cannot be produced in court, without bad faith on the part of the offeror; EaHcDS

(b)When the original is in the custody or under the control of the party against whom the evidence is offered, and the latter fails to produce it after reasonable notice; (Emphasis added.)

Complementing the above provision is Sec. 6 of Rule 130, which reads:

SEC. 6. When original document is in adverse party's custody or control . — If the document is in the custody or under control of the adverse party, he must have reasonable notice to produce it. If after such notice and after satisfactory proof of its existence, he fails to produce the document, secondary evidence may be presented as in the case of loss. 

Secondary evidence of the contents of a written instrument or document refers to evidence other than the original instrument or document itself. 18 A party may present secondary evidence of the contents of a writing not only when the original is lost or destroyed, but also when it is in the custody or under the control of the adverse party. In either instance, however, certain explanations must be given before a party can resort to secondary evidence.

In our view, the trial court correctly allowed the presentation of the photocopied documents in question as secondary evidence. Any suggestion that BF failed to lay the required basis for presenting the photocopies of Progress Billing Nos. 14 to 19 instead of their originals has to be dismissed. The stenographic notes of the following exchanges between Atty. Andres and Atty. Autea, counsel for BF and ESHRI, respectively, reveal that BF had complied with the requirements: IDScTE

Four factual premises are readily deducible from the above exchanges,

to wit: (1) the existence of the original documents which ESHRI had possession of;

(2) a request was made on ESHRI to produce the documents;

(3) ESHRI was afforded sufficient time to produce them; and

(4) ESHRI was not inclined to produce them. IDcAHT

Clearly, the circumstances obtaining in this case fall under the exception under Sec. 3 (b) of Rule 130. In other words, the conditions sine qua non for the presentation and reception of the photocopies of the original document as secondary evidence have been met.

These are: (1) there is proof of the original document's execution or existence;

(2) there is proof of the cause of the original document's unavailability; and

(3) the offeror is in good faith. 

. When such party has the original of the writing and does not voluntarily offer to produce it or refuses to produce it, secondary evidence may be admitted.

[G.R. No. 160855. April 16, 2008.]

CONCEPCION CHUA GAW, petitioner, vs. SUY BEN CHUA and FELISA CHUA, respondents.

FACTS: Spouses Chua Chin and Chan Chi were the founders of three business enterprises namely: Hagonoy Lumber, Capitol Sawmill Corporation, and Columbia Wood Industries.

The couple had seven children, namely, Santos Chua; Concepcion Chua; Suy Ben Chua; Chua Suy Phen; Chua Sioc Huan; Chua Suy Lu; and Julita Chua.

On June 19, 1986, Chua Chin died, leaving his wife Chan Chi and his seven children as his only surviving heirs. At the time of Chua Chin's death, the net worth of Hagonoy Lumber was P415,487.20. 

19

On December 8, 1986, his surviving heirs executed a Deed of Partition, wherein the heirs settled their interest in Hagonoy Lumber as follows: one-half (1/2) thereof will pertain to the surviving spouse, Chan Chi, as her share in the conjugal partnership; and the other half, equivalent to P207,743.60, will be divided among Chan Chi and the seven children in equal pro indiviso shares equivalent to P25,967.00 each. 

 In said document, Chan Chi and the six children likewise agreed to voluntarily renounce and waive their shares over Hagonoy Lumber in favor of their co-heir, Chua Sioc Huan. 

In May 1988, petitioner Concepcion Chua Gaw and her husband, Antonio Gaw, asked respondent, Suy Ben Chua, to lend them P200,000.00 which they will use for the construction of their house in Marilao, Bulacan.

The parties agreed that the loan will be payable within six (6) months without interest. 

On June 7, 1988, respondent issued in their favor China Banking Corporation Check No. 240810 8 for P200,000.00 which he delivered to the couple's house in Marilao, Bulacan.

Antonio later encashed the check.

On August 1, 1990, their sister, Chua Sioc Huan, executed a Deed of Sale over all her rights and interests in Hagonoy Lumber for a consideration of P255,000.00 in favor of respondent. 

Meantime, the spouses Gaw failed to pay the amount they borrowed from respondent within the designated period. Respondent sent the couple a demand letter, 10 dated March 25, 1991, requesting them to settle their obligation with the warning that he will be constrained to take the appropriate legal action if they fail to do so.

Failing to heed his demand, respondent filed a Complaint for Sum of Money against the spouses Gaw with the RTC.

In their Answer (with Compulsory Counterclaim), the spouses Gaw contended that the P200,000.00 was not a loan but petitioner's share in the profits of Hagonoy Lumber, one of her family's businesses.

In his Reply, respondent averred that the spouses Gaw did not demand from him an accounting of Capitol Sawmills Corporation, Columbia Wood Industries, and Hagonoy Lumber. IT WAS A LOAN NOT A SHARE.

With leave of court, the spouses Gaw filed an Answer (with Amended Compulsory Counterclaim) wherein insisted that petitioner, as one of the compulsory heirs, is entitled to one-sixth (1/6) of Hagonoy Lumber, which the respondent has arrogated to himself.

In his Answer to Amended Counterclaim, respondent explained that his sister, Chua Sioc Huan, became the sole owner of Hagonoy Lumber when the heirs executed the Deed of Partition.

Defendants, in their reply,  countered that the documents on which plaintiff anchors his claim of ownership over Hagonoy Lumber were not true and valid agreements and do not express the real intention of the parties. They claimed that these documents are mere paper arrangements which were prepared only upon the advice of a counsel until all the heirs could reach and sign a final and binding agreement, which, up to such time, has not been executed by the heirs. 

During trial, the spouses Gaw called the respondent to testify as adverse witness under Section 10, Rule 132. On direct examination, respondent testified that Hagonoy Lumber was the conjugal property of his parents Chua Chin and Chan Chi, who were both Chinese citizens. He narrated that, initially, his father leased the lots where Hagonoy Lumber is presently located from his godfather, Lu Pieng, and that his father constructed the two-storey concrete building standing thereon. According to respondent, when he was in high school, it was his father who managed the business but he and his other siblings were helping him. Later, his sister, Chua Sioc Huan, managed Hogonoy Lumber together with their other brothers and sisters. He stated that he also managed Hagonoy Lumber when he was in high school, but he stopped when he got married and found another job. He said that he now owns the lots where Hagonoy Lumber is operating. 18

On cross-examination, respondent explained that he ceased to be a stockholder of Capitol Sawmill when he sold his shares of stock to the other stockholders on January 1, 1991. He further testified that Chua Sioc

20

Huan acquired Hagonoy Lumber by virtue of a Deed of Partition, executed by the heirs of Chua Chin

On re-direct examination, respondent stated that he sold his shares of stock in Capitol Sawmill for P254,000.00, which payment he received in cash. He also paid the purchase price of P255,000.00 for Hagonoy Lumber in cash, which payment was not covered by a separate receipt as he merely delivered the same to Chua Sioc Huan at her house in Paso de Blas, Valenzuela. Although he maintains several accounts at Planters Bank, Paluwagan ng Bayan, and China Bank, the amount he paid to Chua Sioc Huan was not taken from any of them. He kept the amount in the house because he was engaged in rediscounting checks of people from the public market. 20

On December 10, 1998, Antonio Gaw died due to cardio vascular and respiratory failure. 21

On February 11, 2000, the RTC rendered a Decision in favor of the respondent

The trial court further held that the validity and due execution of the Deed of Partition and the Deed of Sale, evidencing transfer of ownership of Hagonoy Lumber from Chua Sioc Huan to respondent, was never impugned. Although respondent failed to produce the originals of the documents, petitioner judicially admitted the due execution of the Deed of Partition, and even acknowledged her signature thereon, thus constitutes an exception to the best evidence rule. As for the Deed of Sale, since the contents thereof have not been put in issue, the non-presentation of the original document is not fatal so as to affect its authenticity as well as the truth of its contents. Also, the parties to the documents themselves do not contest their validity. Ultimately, petitioner failed to establish her right to demand an accounting of the operations of Hagonoy Lumber nor the delivery of her 1/6 share therein.

Aggrieved, petitioner appealed to the CA.

the CA affirmed the Decision of the RTC. 

The CA likewise found untenable petitioner's claim that Exhibits "H" (Deed of Sale) and Exhibit "I" (Deed of Partition) were merely temporary paper arrangements. The CA agreed with the RTC that

the testimony of petitioner regarding the matter was uncorroborated — she should have presented the other heirs to attest to the truth of her allegation. Instead, petitioner admitted the due execution of the said documents. Since petitioner did not dispute the due execution and existence of Exhibits "H" and "I", there was no need to produce the originals of the documents in accordance with the best evidence rule.  

On December 2, 2003, the CA denied the petitioner's motion for reconsideration for lack of merit. 

ISSUE:

III.THAT FINALLY, AS TO THE OTHER LEGAL IMPORTANT ISSUE RELATIVE TO CLAIM OR OWNERSHIP OF THE "HAGONOY LUMBER" FAMILY BUSINESS, CLEAR AND PALPABLE LEGAL ERROR HAS BEEN COMMITTED ON THE REQUIREMENTS AND CORRECT APPLICATION OF THE "BEST EVIDENCE RULE" UNDER SECTION 3, RULE 130 OF THE REVISED RULES OF COURT. 28

Petitioner, however, maintains that the RTC erred in admitting in evidence a mere copy of the Deed of Partition and the Deed of Sale in violation of the best evidence rule. In addition, petitioner insists that the Deed of Sale was not the result of bona fide negotiations between a true seller and buyer.

The "best evidence rule" as encapsulated in Rule 130, Section 3, 47 of the Revised Rules of Civil Procedure applies only when the content of such document is the subject of the inquiry. Where the issue is only as to whether such document was actually executed, or exists, or on the circumstances relevant to or surrounding its execution, the best evidence rule does not apply and testimonial evidence is admissible. Any other substitutionary evidence is likewise admissible without need to account for the original. 48 Moreover, production of the original may be dispensed with, in the trial court's discretion, whenever the opponent does not bona fide dispute the contents of the document and no other useful purpose will be served by requiring production. 49

Accordingly, we find that the best evidence rule is not applicable to the instant case. Here, there was no dispute as to the terms of either deed; hence, the RTC

21

correctly admitted in evidence mere copies of the two deeds. The petitioner never even denied their due execution and admitted that she signed the Deed of Partition. 50 As for the Deed of Sale, petitioner had, in effect, admitted its genuineness and due execution when she failed to specifically deny it in the manner required by the rules. 51 The petitioner merely claimed that said documents do not express the true agreement and intention of the parties since they were only provisional paper arrangements made upon the advice of counsel. 52Apparently, the petitioner does not contest the contents of these deeds but alleges that there was a contemporaneous agreement that the transfer of Hagonoy Lumber to Chua Sioc Huan was only temporary.

An agreement or the contract between the parties is the formal expression of the parties' rights, duties and obligations. It is the best evidence of the intention of the parties. 53 The parties' intention is to be deciphered from the language used in the contract, not from the unilateral post facto assertions of one of the parties, or of third parties who are strangers to the contract. 54 Thus, when the terms of an agreement have been reduced to writing, it is deemed to contain all the terms agreed upon and there can be, between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement. 55

WHEREFORE, premises considered, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CV No. 66790 dated May 23, 2003 and Resolution dated December 2, 2003 are AFFIRMED. 

[G.R. No. 146586. January 26, 2005.]

DEPARTMENT OF EDUCATION CULTURE and SPORTS, petitioner, vs. JULIA DEL ROSARIO,

MARIA DEL ROSARIO, PACENCIA DEL ROSARIO, and HEIRS OF

SANTOS DEL ROSARIO,respondents.

FACTS: Julia Del Rosario, Maria Del Rosario, Pacencia Del Rosario and the Heirs of Santos Del Rosario ("respondents") filed before the trial court a complaint for Recovery of Possession against petitioner Department of Education, Culture and Sports ("DECS").

Respondents alleged that they own a parcel of land with an area of 1,181 square meters ("Property") situated in Kaypombo, 4 Sta. Maria, Bulacan.

The Property was registered in 1976 in the name of respondents .Respondents alleged that the Kaypombo Primary School Annex ("KPPS") under DECS was occupying a portion of the Property through respondents' tolerance and that of their predecessors-in-interest. Respondents further alleged that KPPS refused to vacate the premises despite their valid demands to do so.

DECS countered that KPPS's occupation of a portion of the Property was with the express consent and approval of respondents' father, the late Isaias Del Rosario ("Isaias").

DECS claimed that some time in 1959 Isaias donated a portion ("Donated Site") of the Property to the Municipality of Sta. Maria ("Municipality") for school site purposes.

Atty. Ely Natividad, now a regional trial court judge ("Judge Natividad"), prepared the deed of donation and the acceptance. KPPS started occupying the Donated Site in 1962. At present, KPPS caters to the primary educational needs of approximately 60 children between the ages of 6 and 8. Because of the donation, DECS now claims ownership of the 650 square meter Donated Site. In fact, DECS renamed the school the Isaias Del Rosario Primary School.

During the pre-trial conference held on 3 September 1992, DECS admitted the existence and execution of TCT No. T-222432 (Exhibit "A"), Tax Declaration No. 6310 (Exhibit "B"), and the tax receipts in respondents' names for the years 1991 and 1992 (Exhibits "B-1" and "B-2").

On the other hand, respondents admitted the existence of Judge Natividad's affidavit that he prepared the deed of donation (Exhibit "1") and the tax declaration for 1985 in the Municipality's name (Exhibit "2"). Since there was no dispute that the Property was registered in respondents' names, the parties agreed to a reverse trial with DECS presenting its evidence first to prove that there was a valid donation to the Municipality. TSEAaD

22

DECS presented three witnesses: Ricardo Nicolas, Vidal De Jesus and Judge Natividad, all residents of Kaypombo, Sta. Maria, Bulacan. The trial court summarized the witnesses' testimonies, thus:

Defendant, represented by the Office of the Solicitor General, proceeded to present as its first witness, Ricardo Nicolas, 78 years old, widower, housekeeper and residing at [K]aypombo, Sta. Maria, Bulacan, since 1953 up to the present. He testified that during the duration of his residency in [K]aypombo, he came across a public elementary school (KPPS); that as far as he knows, the land occupied by the primary school was formerly owned by Isaias del Rosario who donated said land to the people of Sta. Maria, Bulacan in 1959; that the act of donating said land was made during a political meeting in his residence by Isaias del Rosario and in the presence of the then incumbent mayor; he actually saw Isaias del Rosario and Mayor Ramos sign a document which is a deed of donation in favor of the Municipality of Sta. Maria; that the signing was made in the presence of Judge Natividad who was then a municipal councilor; that Isaias del Rosario is now dead but his death occurred long after the construction of the KPPS and that Isaias del Rosario even witnessed the construction of the primary school.

Vidal de Jesus, the second witness for the defense, 65 years old, married, a barangay councilman of Kaypombo, Sta. Maria, Bulacan, and presently residing at No. 437 Kaypombo, Sta. Maria, Bulacan, testified that as barangay councilman, he was aware of the land problem of KPPS; that in 1991, the barangay council and the children of Isaias del Rosario had a meeting in the presence of Judge Natividad, during which, the latter told the children of Isaias del Rosario that the land had been donated by their father. The children agreed but requested that the school be renamed after their father's name; that the barangay council tried to secure a copy of the deed of donation from the Municipality of Sta. Maria, but according to the people at the municipal hall, when they transferred to the new municipal building, the deed got lost, only they were able to get a copy of the tax declaration in the name of the municipality of Sta. Maria, Bulacan (Exh. "2"), a certification to that effect was issued by the municipal mayor (Exh. "3"). They went to the DECS office in

Malolos, but could not likewise find a copy of the deed.

The last witness for the defense was Judge Eli Natividad, 63 years old, widower, resident of Kaypombo, Sta. Maria, Bulacan. He testified that KPPS is very near his house; that the land occupied by said school is formerly owned by Isaias del Rosario, a close relative; that as far as he knows, the municipality of Sta. Maria is now the owner of the land; that when he was still one of the incumbent municipal councilors of Sta. Maria in 1961, his relative Isaias del Rosario went to his house and told him that he wanted to have a primary school in their place as he saw the plight of small pupils in their place; that the elementary school then existing was very far from their place and Isaias del Rosario wanted to have a primary school to help these pupils; that Isaias delRosario was willing to donate a portion of the questioned lot for school site, so that said matter was relayed to the municipal council; he also testified that he prepared the deed of donation which was signed by Isaias delRosario in his residence which was accepted by the municipality of Sta. Maria, Bulacan through a resolution signed in the office of the secretary and the municipal mayor; that a copy of said resolution could not be found due to the transfer of the municipal hall from the old to the new building. 5

Respondents presented two witnesses: Eugenia R. Ignacio and Maria Del Rosario-Esteban, daughters of the late Isaias. The trial court summarized their testimonies, as follows:

For the plaintiffs, Eugenia R. Ignacio, 59, residing at Kaypombo, Sta. Maria, Bulacan testified that she knows the plaintiffs as they are her brothers/sisters; that their father Isaias del Rosario died on April 18, 1966 long after the construction of the school and that she does not know everything about the donation because her father never informed them of his dealings and she did not inquire from him about the occupancy of the lot by the school. DSIaAE

Maria del Rosario-Esteban, 66, residing at Pulang-lupa, Pandi, one of the plaintiffs herein, testified that she knows the property in question and that they own it by virtue of succession and that she cannot recall how the school was constructed on the land; that her parents never donated any property because that is

23

their only property. Also, she stated that their father told them that he just lent the property temporarily to the municipality and she never found any document conveying the lot in question to the municipality of Sta. Maria, Bulacan. 6

On 7 July 1993, the trial court rendered judgment dismissing respondents' complaint for recovery of possession

After a careful consideration of the facts at hand, taking into account the credibility and reasonableness of the testimonies of the witnesses, the court is of the opinion that the defense was able to prove the due execution of the deed of donation and its acceptance, as well as the loss of the same, in accordance with Rule 130[,] Sec. 4. It is recalled that Judge Eli Natividad, then a municipal councilor of Sta. Maria, testified that he was the person who prepared the deed of donation and later notarized the same, and that said deed was duly executed and signed before him and in his presence. Likewise, he affirmed that the municipal board of Sta. Maria, Bulacan, passed a resolution accepting the deed of donation in favor of the said municipality. Noteworthy is the rule that a recantation/recollection of witness is a form of secondary evidence to prove the existence/content of a document. Since the loss of the deed subject matter of this case was likewise duly proved by the defense, exerting the best possible efforts to locate or secure a copy of the same and without bad faith on its part, this Court is bent to give a greater weight to the secondary evidence adduced by the defense vis-à-vis the title in the name of the plaintiff[s], most particularly in this case, where the plaintiffs failed to make it appear that other and more secondary evidence is known to the defendant and can be produced by them.

 

Respondents appealed to the Court of Appeals. On 25 September 2000, the Court of Appeals rendered judgment as follows:

WHEREFORE, premises considered, the appealed decision is REVERSED and another one entered ordering the defendant to vacate the subject premises. 9

The appellate court denied DECS' motion for reconsideration in the Resolution dated 29 December 2000. Hence, this petition.

The Court of Appeals' Ruling

The Court of Appeals held that DECS failed to prove the existence and due execution of the deed of donation as well as the Resolution of the municipal council accepting the donation. The Court of Appeals was not fully satisfied that DECS or the Municipality had made a diligent search of the alleged "lost" deed of donation. Pertinent portions of the Court of Appeals' Decision read:

It is unfortunate that the Deed of Donation and the Resolution were not produced during the trial. The defendant alleged that these were lost when the Municipality transferred to a new building. The defendant resorted to proving the documents' existence through Sec. 5 of Rule 130 (B) of the Revised Rules on Evidence by relying on the testimony of the witnesses who were present during the execution of the lost documents. . . . .

xxx xxx xxx

The Court disagrees with the ruling of the lower court to the effect that the defendant was able to satisfy the foregoing requisites. The defense was not able to prove the due execution or existence of the deed of donation and the resolution, as well as the loss of these documents as the cause of their unavailability. CHaDIT

The Rule requires that the defendant must "prove its contents by a copy, or by a recital of its contents in some authentic document, or by the testimony of the witnesses in the order stated". However, the defendant proceeded with the last resort-testimony of the witnesses, without even showing any diligent effort to secure a copy of the deed of donation and the resolution. Note that Atty. Eli Natividad, then a municipal councilor of Sta. Maria, testified that he was the person who prepared the deed of donation and later notarized the same. He also affirmed that the municipal board of Sta. Maria, Bulacan passed a Resolution as he was a municipal councilor at that time such resolution was passed. He testified that he furnished the municipal government, the Division Office of Education in Bulacan, the court of Sta. Maria

24

a copy of the deed. However, the defendant only submitted an affidavit showing that the deed can no longer be located in the municipal government. There was no evidence to show that the defendant looked for a copy from the Clerk of Court of Sta. Maria, Bulacan. If it is true that Atty. Natividad notarized the deed, he should have a copy of it. In fact, such act of notarizing the deed should have been in his notarial register. This notarial register was supposed to be forwarded to the Clerk of Court of the Court of First Instance of the province and later, to the Chief of the National Library.

"Before secondary evidence of a writing may be introduced on the ground that the instrument has been lost there must be proof that a diligent search has been made in the place where it is most likely to be found and that the search has not been successful."

In the case at bar, this Court is not fully satisfied that a search was made or that there was diligence in the search. The lower court erred in hastily concluding that the loss of the document was sufficiently established when in fact, the defendant did not look for it in the office of the Clerk of Court and the National Library. Since there was no diligent search, this Court finds it hard to believe the defendant's theory that such documents existed because, for sure, if there really was a notarized deed or a resolution, there must be a copy.

"Secondary evidence of the contents of writings is admitted upon the theory that the original cannot be produced by the party by whom the evidence is offered within a reasonable time by the exercise of reasonable diligence. Until, however, the non-production of the primary evidence has been sufficiently accounted for, secondary evidence is not ordinarily admissible."

For this Court to affirm the ruling of the lower court based on testimonies alone will work injustice to the plaintiffs. 10

The Issue

In its memorandum, DECS raises the sole issue of —

WHETHER THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER FAILED TO PROVE THE DUE EXECUTION OR EXISTENCE

OF THE DEED OF DONATION AND THE RESOLUTION OF THE MUNICIPAL COUNCIL ACCEPTING THE DONATION, AS WELL AS THE LOSS OF THE DOCUMENTS AS THE CAUSE OF THEIR UNAVAILABILITY. 11

The Solicitor General contends that DECS had satisfactorily proven by secondary evidence the fact of donation, the existence and due execution of the deed of donation as well as the municipal council Resolution accepting the donation. DECS had also adequately proven the loss of these documents. According to the Solicitor General, based on the evidence presented in the trial court, DECS established that Isaias donated a parcel of land to the Municipality as the site of a school. Isaias executed a deed of donation, which then Atty. Eli Natividad notarized. There was a municipal council Resolution accepting the donation and expressing gratitude to Isaias. There was notice of this acceptance as DECS constructed the school on the Donated Site during the lifetime of the donor, without objection on his part. Since all the essential formalities had been followed, the donation made by Isaias long after the death of his wife Nieves Gumatay is valid and proven by secondary evidence.

The Court's Ruling

The petition lacks merit.

Best and Secondary Evidence

The best or primary evidence of a donation of real property is an authentic copy of the deed of donation with all the formalities required by Article 749 of the Civil Code. The duty to produce the original document arises when the subject of the inquiry are the contents of the writing in which case there can be no evidence of the contents of the writing other than the writing itself. Simply put, when a party wants to prove the contents of the document, the best evidence is the original writing itself. aCTcDS

A party may prove the donation by other competent or secondary evidence under the exceptions in Section 3, Rule 130 of the Revised Rules on Evidence. Section 3 reads:

SEC. 3.Original document must be produced; exceptions. — When the subject of inquiry is the

25

contents of a document, no evidence shall be admissible other than the original document itself, except in the following cases:

(a)When the original has been lost or destroyed, or cannot be produced in court, without bad faith on the part of the offeror;

(b). . .;

(c). . .;

(d). . . .

In relation to this, Section 5 of Rule 130 reads:

SEC. 5.When original document is unavailable. — When the original document has been lost or destroyed, or cannot be produced in court, the offeror, upon proof of its execution or existence and the cause of its unavailability without bad faith on his part, may prove its contents by a copy, or by a recital of its contents in some authentic document, or by the testimony of witnesses in the order stated.

Secondary evidence of the contents of a document refers to evidence other than the original document itself. 14 A party may introduce secondary evidence of the contents of a written instrument not only when the original is lost or destroyed, but also when it cannot be produced in court, provided there is no bad faith on the part of the offeror. However, a party must first satisfactorily explain the loss of the best or primary evidence before he can resort to secondary evidence. A party must first present to the court proof of loss or other satisfactory explanation for non-production of the original instrument. The correct order of proof is as follows: existence, execution, loss, contents, although the court in its discretion may change this order if necessary. 15

The testimony of Ricardo Nicolas may have established to some extent the existence of the deed of donation since he testified that he was present when Isaias and the mayor talked about the donation and that he witnessed the signing of the document. However, Ricardo Nicolas admitted during cross-examination that he did not read and did not have personal knowledge of the contents of the document that Isaias and the mayor supposedly signed. 16

In the same vein, Vidal De Jesus' testimony does not help to establish the deed of donation's existence, execution andcontents. He testified that he never saw the deed of donation. On cross-examination, Vidal De Jesus admitted that the information that Isaias donated the lot to the Municipality was only relayed to him by Judge Natividad himself. 17 If at all, DECS offered Vidal De Jesus' testimony to establish the loss of the deed of donation. Vidal de Jesus testified that the barangay council tried to get a copy of the deed but the Municipality informed the barangay council that the deed was lost when the municipal office was transferred to a new building. DECS also made a search in the DECS office in Malolos but this proved futile too.

This leaves us with Judge Natividad's testimony. Judge Natividad testified that he prepared and notarized the deed of donation. He further testified that there was a municipal council Resolution, signed in the Office of the Secretary and of the Mayor, accepting the donation and expressing gratitude to the donor. He furnished the municipal government, the DECS Division Office of Bulacan and the clerk of court of Sta. Maria a copy of the deed of donation.

DECS did not introduce in evidence the municipal council Resolution accepting the donation. There is also no proof that the donee communicated in writing its acceptance to the donor aside from the circumstance that DECS constructed the school during Isaias' lifetime without objection on his part. There is absolutely no showing that these steps were noted in both instruments.

WHEREFORE, we DENY the petition. The Decision dated 25 September 2000 and the Resolution dated 29 December 2000 of the Court of Appeals in CA-G.R. CV No. 43929 are AFFIRMED.

SO ORDERED.

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

ELEUTERIO SACIL, WILFREDO JUEGOS, PETRONILO CARCEDO and CESAR PACIENCIA,

petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION 4TH DIVISION, EQUITABLE-PCI

BANK and HELPMATE, INC., respondents.

26

FACTS: Equitable-PCI Bank (E-PCIBank), a banking entity duly organized and existing under and by virtue of Philippine laws, entered into a Contract for Services with HI, a domestic corporation primarily engaged in the business of providing janitorial and messengerial services.

Pursuant to their contract, HI shall hire and assign workers to E-PCIBank to perform janitorial/messengerial and maintenance services.

The contract was impliedly renewed year after year.

Petitioners Rolando Sasan, Sr., 5 Leonilo Dayday, 6 Modesto Aguirre, 7 Alejandro Ardimer, 8 Eleuterio Sacil, 9 Wilfredo Juegos, 10 Petronilo Carcedo, 11 and Cesar Peciencia 12 were among those employed and assigned to E-PCIBank at its branch along Gorordo Avenue, Lahug, Cebu City, as well as to its other branches in the Visayas. 13

Petitioners filed with the Arbitration Branch of the NLRC in Cebu City separate complaints 14 against E-PCIBank and HI for illegal dismissal, with claims for separation pay, service incentive leave pay, allowances, damages, attorney's fees and costs.

In their position papers, petitioners claimed that they had become regular employees of E-PCIBank with respect to the activities for which they were employed, having continuously rendered janitorial and messengerial services to the bank for more than one year; that E-PCIBank had direct control and supervision over the means and methods by which they were to perform their jobs; and that their dismissal by HI was null and void because the latter had no power to do so since they had become regular employees of E-PCIBank.

For its part, E-PCIBank averred that it entered into a Contract for Services with HI, an independent job contractor which hired and assigned petitioners to the bank to perform janitorial and messengerial services thereat. It was HI that paid petitioners' wages, monitored petitioners' daily time records (DTR) and uniforms, and exercised direct control and supervision over the petitioners and that therefore HI has every right to terminate their services legally.

E-PCIBank could not be held liable for whatever misdeed HI had committed against its employees. TSacCH

HI, on the other hand, asserted that it was an independent job contractor engaged in the business of providing janitorial and related services to business establishments, and E-PCIBank was one of its clients.

Petitioners were its employees, part of its pool of janitors/messengers assigned to E-PCIBank. The Contract for Services between HI and E-PCIBank expired on 15 July 2000.

E-PCIBank no longer renewed said contract with HI and, instead, bidded out its janitorial requirements to two other job contractors, Able Services and Puritan.

HI designated petitioners to new work assignments, but the latter refused to comply with the same. Petitioners were not dismissed by HI, whether actually or constructively, thus, petitioners' complaints before the NLRC were without basis.

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

HI is therefore a labor-only contractor and the real employer of petitioners is E-PCIBank which is held liable to petitioners

Aggrieved by the decision of Labor Arbiter Gutierrez, respondents E-PCIBank and HI appealed the same to the NLRC. in support of its allegation that it was a legitimate job contractor, HI submitted before the NLRC several documents which it did not present before Labor Arbiter Gutierrez. These are: CDESIA

1.Certificate of Filing of Certificate of Increase of Capital Stock, Certificate of Filing Amended Articles of Incorporation, and General Information Sheet Stock Corporation of HI showing therein that it increased its authorized capital stock from P1,500,000.00 to P20,000,000.00 on 12 March 1999 with the Securities and Exchange Commission;

2.Audited Financial Statement of HI showing therein that it has Total Assets of P20,939,935.72 as of 31 December 2000;

27

3.Transfer Certificate of Title No. 110173 and Tax Declaration No. GR2K-09-063-00582 registered under the name of HI showing that it has a parcel of land with Market Value of P1,168,860.00 located along Rizal Avenue (now Bacalso Avenue), Cebu City, and

4.Tax Declaration No. GR2K-09-063-00583 registered under the name of HI showing that it has a commercial building constructed on the preceding lot located along Bacalso Avenue, Cebu City with market value of P2,515,170.00. 19

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

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

The charge of illegal dismissal was prematurely filed. The record shows that barely eight (8) days from 15 July 2001 when the complainants were placed on a temporary "off-detail", they filed their complaints on 23 July 2001 and amended their complaints on 22 August 2001 against the respondents on the presumption that their services were already terminated. Temporary "off-detail" is not equivalent to dismissal. . . . . 20

Petitioners' Motion for Reconsideration was denied by the NLRC in its Resolution dated 1 July 2003. 24 aHICDc

Distressed by the decision of the NLRC, petitioners sought recourse with the Court of Appeals by filing a Petition for Certiorari 25 under Rule 65 of the 1997 Rules of Civil Procedure docketed as CA-G.R. SP No. 79912.

In its Decision dated 24 April 2006, the Court of Appeals affirmed the findings of the NLRC that HI was a legitimate job contractor and that it did not illegally dismiss petitioners

ISSUE: WON COURT/NLRC MAY SUBMIT ADDITIONAL DOCUMENTARY EVIDENCE.

HELD: Technical rules of evidence are not binding in labor cases. Labor officials should use every reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process.

The submission of additional evidence before the NLRC is not prohibited by its New Rules of Procedure. After all, rules of evidence prevailing in courts of law or equity are not controlling in labor cases. The NLRC and labor arbiters are directed to use every and all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law and procedure all in the interest of substantial justice. In keeping with this directive, it has been held that the NLRC may consider evidence, such as documents and affidavits, submitted by the parties for the first time on appeal. The submission of additional evidence on appeal does not prejudice the other party for the latter could submit counter-evidence. 31

In Clarion Printing House, Inc. v. National Labor Relations Commission, 32 we again emphasized that:

[T]he NLRC is not precluded from receiving evidence, even for the first time on appeal, because technical rules of procedure are not binding in labor cases.

The settled rule is that the NLRC is not precluded from receiving evidence on appeal as technical rules of evidence are not binding in labor cases. In fact, labor officials are mandated by the Labor Code to use every and all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process. Thus, in Lawin Security Services v. NLRC, and Bristol Laboratories Employees' Association-DFA v. NLRC, we held that even if the evidence was not submitted to the labor arbiter, the fact that it was duly introduced on appeal to the NLRC is enough basis for the latter to be more judicious in admitting the same, instead of falling back on the mere technicality that said evidence can no longer be considered on appeal. Certainly, the first course of action would be more consistent with equity and the basic notions of fairness. TIAEac

For the same reasons, we cannot find merit in petitioners' protestations against the documentary

28

evidence submitted by HI because they were mere photocopies. Evidently, petitioners are invoking the best evidence rule, espoused in Section 3, Rule 130 of the Rules of Court. It provides that:

Section 3. — Original document must be produced; exceptions. — When the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself . . . .

The above provision explicitly mandates that when the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself. Notably, certified true copies of these documents, acceptable under the Rules of Court 33 were furnished to the petitioners. Even assuming that petitioners were given mere photocopies, again, we stress that proceedings before the NLRC are not covered by the technical rules of evidence and procedure as observed in the regular courts. Technical rules of evidence do not apply if the decision to grant the petition proceeds from an examination of its sufficiency as well as a careful look into the arguments contained in position papers and other documents. 34

Petitioners had more than adequate opportunity when they filed their motion for reconsideration before the NLRC, their Petition to the Court of Appeals and even to this Court, to refute or present their counter-evidence to the documentary evidence presented by HI. Having failed in this respect, petitioners cannot now be heard to complain about these documentary evidences presented by HI upon which the NLRC and the Court of Appeals based its finding that HI is a legitimate job contractor.

The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, a fair and reasonable opportunity to explain one's side. It is also an opportunity to seek a reconsideration of the action or ruling complained of. It is not the denial of the right to be heard but denial of the opportunity to be heard that constitutes violation of due process of law. Petitioners herein were afforded every opportunity to be heard and to seek reconsideration of the adverse judgment against them. They had every opportunity to strengthen their positions by presenting their own substantial evidence to controvert those submitted by E-PCIBank and HI

before the NLRC, and even before the Court of Appeals. It cannot win its case by merely raising unsubstantiated doubt or relying on the weakness of the adverse parties' evidence.

29