Question of Fact vs. Question of Law; Rule 45, petition for review on certiorari

 "At the outset, the Court reiterates that in a petition for review on certiorari under Rule 45 of the Rules of Court, its jurisdiction is generally limited to reviewing errors of law. Section 1, Rule 45 of the Rules of Court states that the petition filed shall raise only questions of law which must be distinctly set forth. The Court explained the difference between a question of fact and a question of law in this wise:

A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact.24

Here, petitioner argues that the CA erred in holding that the instant ejectment suit is not proper due to the contrasting claims of ownership by both parties. In other words, petitioner is raising the issue of whether the court can resolve an ejectment suit even if both parties claim ownership of the subject property. Clearly, the issue raised is a question of law.

Still, the Court will have to pass upon the factual findings in the case considering the conflicting or contradictory25 decisions of the CA and RTC; thus, the Court is constrained to make its own factual findings in order to resolve the issue presented before it."

G.R. No. 229076, September 16, 2020 

MA. LUZ TEVES ESPERAL, PETITIONER, VS. MA. LUZ TROMPETA-ESPERAL AND LORENZ ANNEL BIAOCO, RESPONDENTS.

Link: https://lawphil.net/judjuris/juri2020/sep2020/gr_229076_2020.html

Seafarer's death benefit

"SC: Only Legal Spouse, Children May Receive Seafarer Death Benefits

July 2, 2024

The Supreme Court has ruled that benefits arising from a seafarer’s death under the Philippine Overseas Employment Administration (POEA) contract should be awarded only to the surviving legitimate spouse, despite being long estranged from the seafarer, alongside the seafarer’s legitimate and illegitimate children.

Thus held the Supreme Court’s Third Division in a Decision penned by Associate Justice Alfredo Benjamin S. Caguioa ordering the release of death benefits due the heirs of deceased seafarer Pedrito G. Macalinao (Pedrito).

Pedrito married Cerena in 1981. They had one child, Cindy. However, the spouses separated in fact after four years.

In 1990, with his marriage to Cerena still subsisting, Pedrito married Elenita. They had two children, Kenneth and Kristel.

Cerena herself contracted a second marriage in 1992, with Rene Paredes.

Elenita and Pedrito, a seafarer, lived together until his death in 2015 onboard the vessel of Excel Marine Co. Ltd./Fair Shipping Corporation (Excel Marine). His death benefits amounted to PHP 4,506,309.52, the only property he left upon his death.

In 2016, Cerena and Cindy filed before the Regional Trial Court (RTC) a petition for the settlement of Pedrito’s estate, which included as a secondary issue the declaration of nullity of Pedrito and Elenita’s marriage.

The RTC ruled that the death benefits formed part of Pedrito’s estate and that under POEA Memorandum Circular No. 10, series of 2010 (POEA MC), they shall be divided among the beneficiaries in accordance with the rules on succession. The RTC held that Elenita, despite being the nominated beneficiary, is not entitled to Pedrito’s death benefits since their marriage is bigamous and void.

The Court of Appeals affirmed the RTC.

The Supreme Court, however, held that the death benefits do not form part of Pedrito’s estate. Under Article 781 of the Civil Code, what forms part of the estate is property existing at the time of death.

However, in the case of the death benefits from the employment contract between Excel Marine and Pedrito, these benefits only arose upon Pedrito’s death and did not exist at the time of his death.

As to the division of the proceeds from the death benefits, Section 20.B.(3) of the POEA MC states that benefits for the seafarer’s death are payable to the seafarer’s beneficiaries consistent with the rules of succession under the Civil Code.

Such benefits are payable to the legal heirs not as inheritance but as proceeds from a death benefit.

The beneficiaries, however, must be determined in accordance with the rules of compulsory and intestate succession.

The Court held that Elenita is disqualified as a beneficiary since she is not Pedrito’s legal spouse, and their marriage was clearly bigamous and void from the beginning. Elenita’s supposed lack of knowledge of Pedrito’s subsisting marriage to Cerena is not a defense.

That Cerena herself entered into a bigamous marriage with another does not validate Pedrito and Elenita’s bigamous marriage. This, along with the fact that Cerena has been separated from Pedrito for 30 years, likewise does not disqualify Cerena, Pedrito’s legal wife, as one of his beneficiaries.

The Court acknowledged that, unlike the Social Security Act, Government Service Insurance System Law, and the Workmen’s Compensation Act, the POEA MC does not apply the test of dependency in determining the qualified beneficiary. However, this perceived gap in the law is for Congress to address, not the Court.

As to the distribution of the benefits among the legal heirs, the Court clarified that when the concurring primary compulsory heirs are the surviving spouse, one legitimate child, and illegitimate children, Article 892 of the Civil Code shall apply, subject to Article 895 of the same law, as amended by Article 176 of the Family Code.

Under Article 892, if only one legitimate child survives, the surviving spouse shall be entitled to one-fourth of the estate. On the other hand, Article 895, as amended by the Family Code, provides that if illegitimate children survive with legitimate children, the shares for each of the former shall consist of one-half of the share of each legitimate child, provided that the share of the surviving spouse must first be fully satisfied.

The Court further clarified that the correct approach would be to determine and satisfy first the share of each legitimate child/ren, then the share of the surviving spouse in relation to the  number of legitimate children. Finally, the share of the illegitimate child/ren will be taken from the remaining free portion of the hereditary estate.

Thus, in the present case, the Court ordered that the proceeds from Pedrito’s death benefits be distributed as follows: one-fourth to Cerena; one-half to Cindy; one-eighth to Kenneth; and one-eighth to Kristel. (Courtesy of the Supreme Court Public Information Office)

FULL TEXT of G.R. No. 250613 (Macalinao v. Macalinao), April 3, 2024 at: https://sc.judiciary.gov.ph/250613-elenita-v-macalinao-kenneth-v-macalinao-and-kristel-v-macalinao-vs-cerina-a-k-a-cerena-n-macalinao-and-cindy-n-macalinao/

Concurring and Dissenting Opinion of Associate Justice Maria Filomena D. Singh at: https://sc.judiciary.gov.ph/250613-concurring-and-dissenting-opinion-justice-maria-filomena-d-singh/."

Supreme Court 

Insufficient prosecution evidence

 

G.R. No. 130189 June 25, 1999

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.

DOMINGO R. MULETA, accused-appellant.

https://lawphil.net/judjuris/juri1999/jun1999/gr_130189_1999.html

 

"Sufficiency of Evidence for the Prosecution

Having ruled the alleged confession as unconstitutional and inadmissible, we now determine whether the other pieces of evidence — all circumstantial in nature — would be sufficient to overturn yet another constitutional right: to be presumed innocent unless otherwise proven.

The rule is that ". . . in the absence of direct-proof, conviction may be based on circumstantial evidence, but to warrant such conviction, the following requisites must concur: (1) there is more than one circumstance; (2) the facts from which the inferences are derived are proven; and (3) the combination of all the circumstances is such as to produce a conviction beyond reasonable

doubt. 41

Here, the solicitor general, as well as the trial court, posits that the conviction of the appellant was sufficiently warranted by the aggregate of the following circumstantial evidence:

1. The appellant was familiar with the place where the crime was perpetrated.

2. The appellant left work around 9:30 on the evening of April 29, 1993 and did not return home until the morning of April 30, 1993.

3. The appellant, during the victim's wake, became hysterical and allegedly uttered: "Patawarin mo ako Charo, ikaw kasi lumaban pa, nakakahiya ako, mabuti pang mamatay na," after which drank "chlorox."

We do not agree. At the outset, we stress that a careful review of the records of this case reveals that these pieces of circumstantial evidence were controverted by the defense and, even more important, they were not sufficiently established. 42

Despite the efforts of the fiscal during cross-examination, 43 the appellant consistently denied that he worked in the place where the victim's body was found. Also, the prosecution failed to prove that he was at work around 9:30 p.m. on April 29, 1993 and that he went home on April 30, 1993. 44 All it could present was the testimony of NBI Agent Ely Tolentino, who merely testified on what appellant's co-workers related to him: that appellant left work earlier. 45 This is clearly hearsay. The affidavits of these co-workers do not help the prosecution's case, since they themselves were not presented during the trial. An affidavit is hearsay if the affiant is not presented in court and subjected to cross-examination. 46 Besides, the appellant's wife, Emelinda Muleta, stated categorically that her husband was with her at home on April 29 and 30, 1993. 47 The appellant himself steadfastly affirmed this during his cross-examination. 48

The appellant's rather strange behavior during the wake was, according to his testimony, due to his perceived failure to take care of his niece. 49 This was corroborated by the testimony of Danilo Delgado. 50 Moreover, the defense claims that the words he said during the wake were ambiguous. "Patawarin mo ako Charito" could have meant that the appellant was blaming himself for being unable to protect the victim. "Ikaw kasi lumaban pa" could have connoted frustration with what he imagined could have saved the life of his niece. "Nakakahiya ako, mabuting mamatay na" also shows the appellant's for blaming himself inutile, indicating his desire to take his own worthless life. If these words merit anything, it is this: it places the appellant under suspicion. But suspicion or accusation is not synonymous with guilt. 51

Most importantly, even if we were to assume that all the foregoing were proven, they are still not enough to establish an unbroken chain leading inexorably to the guilt of the appellant. That the appellant could have been familiar with the place where the body was found did not legally prove anything. That he left work at 9:30 p.m. on April 29, 1993 did not necessarily mean he was at the scene of the crime. So many other possible conclusions could be made regarding this circumstance. As for his statements during the wake, they are ambiguous.

We have said that "[i]n the absence of an eyewitness, the guilt of an accused may be established by circumstantial evidence. Such evidence, however, must still pass the test of moral certainty. When inadequate and uncorroborated, circumstantial evidence cannot sustain a conviction. Specifically, where the state's evidence does not constitute an unbroken chain leading beyond reasonable doubt to the guilt of the accused, the constitutional presumption of innocence prevails and the accused is entitled to an acquittal." 52 Thus, in People v. Bato, 53 the pieces of circumstantial evidence presented there — those showing that the accused brothers invited the victim (and his son) for a drink, suddenly tied his hands and took him away; after which his body was recovered from the river the next day — were ruled to be inadequate to sustain a conviction based on guilt beyond reasonable doubt. 54

In this case, the circumstantial evidence presented acquires significance only when taken together with the appellant's confession.

The pattern of the tapestry, 55 which the prosecution would want us to see, is bound by only a single thread — the confession of the appellant. Due to constitutional infirmity, that one strand has been cut, and thus the pattern disintegrates. The tapestry becomes an unreadable puzzle."

Invalid Waiver of Rights

 G.R. No. 130189 June 25, 1999

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.

DOMINGO R. MULETA, accused-appellant.

https://lawphil.net/judjuris/juri1999/jun1999/gr_130189_1999.html

 

"No Valid Waiver

The illegality of the alleged confession is further demonstrated by the fact that appellant exercised no satisfactory waiver of his rights. As stated in our earlier discussions, since he was not assisted by a lawyer when the waiver was made, there was no valid waiver to speak of. 36

Furthermore, even if we were to assume that the appellant was assisted by counsel when he waived his lights, the waiver itself was lamentably insufficient. After Atty. Daquiz was allegedly called to assist the appellant, she posited this question: "Gusto mo bang talikdan ang iyong mga karapatan na ibinibigay sa iyo ng ating Konstitusyon?" 37 To this appellant replied: "Tinatalikdan ko na po iyon dahil gusto ko nang ipagtapat ang pangyayari kay CHARITO DELGADO na pamangkin ko." 38

To the Court, this was not the waiver that the Constitution clearly and strictly required. Such waiver failed to show his understanding of his rights, his waiver of those rights, and the implications of his waiver. The waiver, in order to be valid, should have been in a language that clearly manifested his desire to do so. 39 The part of the sworn statement in which the accused "waived" his rights referred to them as "mga karapatan na ibinigay sa iyo ng ating Konstitusyon" and "iyon" — words that were utterly vague and insufficient to satisfy the Constitutional requirements. 40 As presented, the prosecution would have us refer to the first part of the sworn statement for guidance, as if it were a footnote saying "Please see first part." Such stratagem is woefully insufficient to constitute a waiver of rights cherished and enshrined in our basic law.

Moreover, Atty. Daquiz raised only one question: whether appellant would like to waive his rights. This was odd, because she had been called to assist appellant in making his confession, not his waiver. Atty. Daquiz made no effort to determine whether the accused was treated well, or the understood his rights. Such perfunctory, even cavalier, attempt falls short of constitutional requirements."

Rights of suspects

" Validity of Extrajudicial Confession

The appellant claims that "it is not true that [he] had executed an extra-judicial confession" 14. As correctly pointed out by the solicitor general, however, the appellant actually admits to the execution of the said confession, albeit without the assistance of counsel. But unlike the solicitor general, we are not ready to declare that such "ambivalence only indicates the unreliability of [appellant's] claim." 15 Indeed, confessions extracted without the assistance of counsel are taboo and useless in a court of law.

To be acceptable, extrajudicial confessions must conform to constitutional requirements. A confession is not valid and not admissible in evidence when it is obtained in violation of any of the following rights of persons under custodial investigation: to remain silent, to have independent and competent counsel preferably of their own choice, to be provided with counsel if they are unable to secure one, to be assisted by such counsel during the investigation, to have such counsel present when they decide to waive these rights, and to be informed of all these rights and of the fact that anything they say can and will be used against them in court. In People v. Santos, 16 we held:

A confession is not admissible unless the prosecution satisfactorily shows that it was obtained within the limits imposed by the 1987 Constitution. Section 12, Article III thereof, provides:

(1) Any person under investigation for the commission of an offense shall have the right to be informed of his right to remain silent and to have competent and independent counsel preferably of his own choice. If the person cannot afford the services of counsel, he must be provided with one. These rights cannot be waived except in writing and in the presence of counsel.

xxx xxx xxx

(3) Any confession or admission obtained in violation of this or section 17 hereof shall be inadmissible in evidence against him.

If the extrajudicial confession satisfies these constitutional standards, it is subsequently tested for voluntariness, i.e., if it was given freely — without coercion, intimidation, inducement, or false promises; and credibility, i.e., if it was consistent with the normal experience of mankind.

A confession that meets all the foregoing requisites constitutes evidence of a high order because no person of normal mind will knowingly and deliberately confess to be the perpetrator of a crime unless prompted by truth and conscience. 17 Otherwise, it is disregarded in accordance with the cold objectivity of the exclusionary rule. 18 (citations omitted)

Flagrantly violated in the present case were the appellant's right to be informed of his rights under custodial investigation, his right to counsel, as well as his right to have said counsel present during the waiver of his rights under custodial investigation."

G.R. No. 130189 June 25, 1999

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.

DOMINGO R. MULETA, accused-appellant.

 https://lawphil.net/judjuris/juri1999/jun1999/gr_130189_1999.html

Extrajudicial Confession

 "An extra-judicial confession extracted in violation of constitutionally enshrined rights is inadmissible in evidence. During custodial investigation, suspects have the rights, among others, (1) to remain silent, (2) to have an independent and competent counsel, (3) to be provided with such counsel, if unable to secure one, (4) to be assisted by one in case of waiver, which should be in writing, of the foregoing; and (5) to be informed of all such rights and of the fact that anything he says can and will be used against him. Where the remaining pieces of evidence are insufficient to determine guilt with moral certainty, the appellant is entitled to an acquittal. A conviction must rest on the strength of the admissible evidence of the prosecution, not on the weakness or insufficiency of the defense."

G.R. No. 130189 June 25, 1999

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.

DOMINGO R. MULETA, accused-appellant.

 https://lawphil.net/judjuris/juri1999/jun1999/gr_130189_1999.html

 

Corruption in the Judiciary

 #Corruption in the #Judiciary cannot be solved by perfunctory administrative/disciplinary #investigations alone. #AdministrativeCases are Reactive, not Proactive. The Judiciary should have its own Internal Rules to encourage #whistleblowers and to grant them #immunity as they reveal corruption-related information and documents that only #insiders know. Further, it is time for the Judiciary to establish its own Internal #Intelligence and #CounterIntelligence Divisions in the #JudiciaryIntegrityBoard and/or the #OfficeoftheCourtAdministrator. The said judicial offices must be #regionalized, too. The Office of Judicial Marshalls take care only of the security of judicial officers and personnel exposed to death threats. They're not into corruption-linked Intelligence and Counter-Intelligence missions in the Judiciary. Three serious issues weaken the Judiciary and the #RuleofLaw, whether here in the Philippines or abroad: (1) #Delay in the #AdministrationofJustice.  

(2) #Graft and #Corruption. 

(3) Lack of #Independence. The rest of the problems facing the Judiciary are secondary, like Computerization, Construction of New Halls of Justice, Compensation, Retirement, Continuing Judicial Education, Recruitment, and other Routine Administrative Issues.

Atty. Manuel Laserna Jr. 

Loan interests and penalties

 "Ruling

The Petition has no merit. By virtue of their contract of loan, MCC agreed to lend money to respondents, who, in turn, bound themselves to return the principal obligation plus pay monetary interest, which is the compensation for the use or forbearance of money.28 Under the principle of autonomy of contracts, parties to an agreement are allowed to establish such stipulations, clauses, terms, and conditions as they may deem convenient, provided that these are not contrary to law, morals, good customs, public order, or public policy.29

Here, MCC and respondents agreed on 23.36% per annum as monetary interest for the PHP 467,600.00 loan under the first promissory note, PN No. 7155. The stipulated interests were computed for the five-year duration of the loan as they formed part of the PHP 16,895.77 monthly amortization to be paid by respondents. PN No. 7155 also provided for the payment of "an interest of 1/10th of 1% for every day" the loan obligation remains unpaid, plus "penalty of 1.5% per month" and "collection fee of P100.00 added, all of which, if left unpaid, shall be compounded monthly on due date to become part of the total outstanding obligation."30

In this case, however, the RTC found that MCC imposed an additional 3% monthly interest, referred to as the EIR. During trial, MCC admitted that it was their company policy to charge 3% per month EIR for every delay. The EIR is on top of the stipulated 23.36% per annum monetary interest and the penalties of 1/10 of 1% per day and 1.5% per month penalty, all of which were compounded monthly as part of the outstanding balance.

Clearly, the Court cannot sustain the imposition of the compounded 3% monthly EIR. The evidence shows that the EIR was not indicated in PN No. 7155. MCC unilaterally imposed the EIR by simply inserting it in the disclosure statement. This is not valid and does not bind the respondents as it violates the mutuality of contracts under Article 1308 of the Civil Code, which states that the validity or compliance to the contract cannot be left to the will of one of the parties.31

The Court likewise rejects MCC's argument that the 3% monthly EIR may not be invalidated because the reduction of interest rates only apply to loans with open-ended terms, citing De la Paz v. L & J Development Company, Inc.32 Further, MCC cannot validly insist that respondents may not question the interest rates after agreeing to and benefiting from the proceeds of the loan.1aшphi1

In Megalopolis Properties, Inc. v. D 'Nhew Lending Corporation,33 the Court ruled that although there is no numerical limit on conscionability, the rate of 3% per month or 36% per annum is three times more than the 12% legal interest rate, and therefore, excessive and unconscionable. The rate of 36% per annum is also far greater than those previously upheld by the Court.34 Moreover, contrary to MCC's argument, we stressed in Megalopolis that the ruling in De la Paz did not in any way shield loan agreements with definite terms from scrutiny on conscionability. In De la Paz, the Court disallowed the creditor's claim for payment of monetary interests because of the absence of a written stipulation on interests as required under Article 195635 of the Civil Code. The fact that an interest of 6% per month was imposed on an open-ended loan wherein the period is unspecified only served to aggravate the outrageous amount being charged. At any rate, jurisprudence is settled that the willingness of the debtor in assuming an unconscionable rate of interest is inconsequential to its validity.36

When MCC and the respondents executed PN No. 7155 in September 2009, the legal interest rate was fixed at 12% per annum.37 This rate was considered the reasonable compensation for forbearance of money. As held in Spouses Abella v. Spouses Abella,38 while the contracting parties may depart from the legal interest rate, any deviation therefrom must be reasonable and fair. If the stipulated interest for a loan is more than twice the prevailing legal rate of interest, it is for the creditor to prove that this rate is justified under the prevailing market conditions.39 No justification was offered by MCC in this case.

In Chua v. Timan,40 the Court declared that stipulated interest rates ranging from 3% per month and higher are excessive, unconscionable, and void for being contrary to morals, if not against the law.41 Although Central Bank of the Philippines Circular No. 905-82 has effectively removed the interest ceilings prescribed under the Usury Law, still, lenders may not impose interest rates that would enslave the borrowers or hemorrhage their assets.42 Following these standards, the 3% per month or 36% per annum EIR cannot pass as reasonable. It is unacceptable particularly in this case where the EIR was charged on top of the stipulated 23.36% per annum monetary interest and the penalties of 1/10 of 1% per day and 1.5% per month, compounded monthly. As correctly pointed out by the trial court, MCC's scheme exponentially bloated the principal loan amount of PHP 467,600.00. It misled respondents into continuously paying on the belief that their balance was increasing because of several delayed payments.43

Likewise, the Court denies MCC's prayer to maintain the stipulated interest and charges in PN No. 7155 and hereby affirms the RTC and the CA's judgment equitably reducing the stipulated interest rate to the applicable 12% per annum legal interest. Even if we disregard the 3% per month or 36% per annum EIR, the Court sees that the stipulated interest rate of 23.36% per annum and the additional interest of 1/10 of 1% per day and 1.5% per month penalty, all compounded monthly, or roughly 42% per annum, is still excessive. Stipulations authorizing the imposition of iniquitous or unconscionable interest are contrary to morals, if not against the law. Under Article 140944 of the Civil Code, these contracts are inexistent and void from the beginning. They cannot be ratified nor the right to set up their illegality as a defense be waived. The unconscionable interest rate is therefore, nullified and is deemed not written in the contract of loan. For these reasons, and given the span of years counted from 2009 that are covered by the computation of interests, the reduction of the stipulated interest rates and penalties to the applicable 12% per annum legal interest is more equitable. This prevents the outstanding balance from increasing to an amount which disproportionately exceeds the PHP 467,600.00 principal debt.45 The Court is empowered to equitably reduce the penalties charged especially in respondents' case because of their substantial payments.46

Note however that only the EIR and stipulated interest rates and penalties are declared void for being unconscionable. The very nature of the parties' contract of loan entitles MCC to recover not only the principal amount, but also the payment of monetary interest from the respondents, as compensation for the use of the borrowed amount.47 Based on Article 142048 of the Civil Code, respondents' obligation to pay the principal and the interest subsists as this can be separated from the void interests rates and charges.

Now, in order to determine whether the RTC and the CA were correct in ruling that the entire principal obligation of PHP 467,600.00 under the first promissory note, PN 7155, has been fully paid by respondents, we apply the legal rate of 12% per annum, as monetary interest reckoned from the date of the contract, September 2009.49 We also deduct respondents' payments made until January 2014 amounting to a total of PHP 757,778.54,50 computed as follows:

X x x. 

As can be seen from the foregoing, the RTC and the CA correctly ruled that respondents had fully paid the entire obligation. The Court finds that the obligation was fully paid as early as August 2012 and there was even an overpayment of PHP 11,532.47 for that month. Since respondents continued the payments until January 2014, they have a total overpayment of PHP 203,532.47 for PN No. 7155.

Relative to this, the Court sustains the RTC and the CA's declaration that the second promissory note, PN No. 8351, is void for lack of consideration as it was only executed by respondents to cover the supposed "unpaid balance" in PN No. 7155. In this regard, we need to modify the RTC and the CA's judgment in order to reflect the correct amount of overpayment to be refunded to respondents. The total amount to be refunded to respondents must cover not only the payments made in PN No. 8351 in the amount of PHP 417,859.58,51 as awarded by the RTC and the CA, but also the overpayment in PN No. 7155 amounting to PHP 203,532.47, as shown in the computation above, plus legal interest of 6% per annum from the date of the filing of respondents' Complaint until finality, following Nacar v. Gallery Frames.52 All monetary awards will earn interest at the rate of 6% per annum from finality of this Decision until full payment.53

Finally, the Court affirms the CA's ruling that the foreclosure proceedings are void. Generally, the nullity of the unconscionable interests and charges does not affect the terms of the real estate mortgage. The creditor's right to foreclose the mortgage remains, and such right can be exercised upon the failure of the debtors to pay the debt due.54 In this case however, the principal loan obligation was extinguished by the full payment of the respondents. This act automatically terminates the real estate mortgage. Being a mere accessory contract, the mortgage cannot exist independently of the principal obligation.55 Considering that the mortgage ceased to exist, the new title, TCT No. 010-201900129856 of the Registry of Deeds for Parañaque City, issued in the name of MCC as a result of the foreclosure, is void. The title registered in the name of respondent Ramon, TCT No. 72248,57 was properly reinstated by the RTC and the CA.

ACCORDINGLY, the Petition is DENIED. The Decision dated July 6, 2021 and the Resolution dated December 22, 2021 of the Court of Appeals in CA-G.R. CV No. 115157 are AFFIRMED with MODIFICATION in that petitioner Manila Credit Corporation is further ordered to refund to respondents Ramon S. Viroomal and Anita S. Viroomal the overpayment in the amount of PHP 203,532.47 for PN No. 7155, in addition to the amount of PHP 417,859.58 for PN No. 8351, with legal interest of 6% per annum from the date of the filing of respondents' Complaint until finality. Legal interest at the rate of 6% per annum is likewise imposed on all the monetary awards, from the finality of this Decision until full payment.

SO ORDERED."

https://lawphil.net/judjuris/juri2023/jan2023/gr_258526_2023.html

SECOND DIVISION

[ G.R. No. 258526, January 11, 2023 ]

MANILA CREDIT CORPORATION, PETITIONER, VS. RAMON S. VIROOMAL AND ANITA S. VIROOMAL, OFFICE OF THE CLERK OF COURT AND EX-OFFICIO SHERIFF OF THE REGIONAL TRIAL COURT OF PARAÑAQUE CITY, AS REPRESENTED BY ATTY. JERRY R. TOLEDO AND SHERIFF ALEJANDRO P. ABREMATEA, AND THE REGISTER OF DEEDS OF PARAÑAQUE CITY, RESPONDENTS.

D E C I S I O N

LOPEZ, M., J.:

Exorbitant and unconscionable interests

"A contract that is freely executed has the force of law between the parties. This time-honored principle of autonomy in contracts is, however, not absolute. It is balanced by the governing rule in Article 1306 of the Civil Code which declares that parties may not stipulate on matters which are contrary to law, morals, good customs, public order, or public policy.1 Guided by this premise, the parties' principal loan of PHP 467,600.00, payable for five years at PHP 16,895.77 per month, inclusive of interests, which, later on condemned the debtors to pay the sum of PHP 1,175,638.12, yet still leaving more unpaid balance, cannot be upheld. The interests and penalties charged by the creditor are patently exorbitant and unconscionable; hence void.

Before us is a Petition for Review on Certiorari2 under Rule 45 of the Rules of Court, assailing the July 6, 2021 Decision3 and the December 22, 2021 Resolution4 of the Court of Appeals (CA) in CA-G.R. CV No. 115157, which affirmed the trial court's judgment declaring the interest rates imposed on respondents' loan void for being unconscionable and contrary to morals.5"

SECOND DIVISION

[ G.R. No. 258526, January 11, 2023 ]

MANILA CREDIT CORPORATION, PETITIONER, VS. RAMON S. VIROOMAL AND ANITA S. VIROOMAL, OFFICE OF THE CLERK OF COURT AND EX-OFFICIO SHERIFF OF THE REGIONAL TRIAL COURT OF PARAÑAQUE CITY, AS REPRESENTED BY ATTY. JERRY R. TOLEDO AND SHERIFF ALEJANDRO P. ABREMATEA, AND THE REGISTER OF DEEDS OF PARAÑAQUE CITY, RESPONDENTS.

https://lawphil.net/judjuris/juri2023/jan2023/gr_258526_2023.html

Chain of custody of evidence; planting of evidence

 "Further, even if the seized items are deemed admissible, the prosecution's case would still fail for violating the chain of custody rule.

In all cases involving dangerous drugs, great importance is put in ensuring that the identity and integrity of the corpus delicti, the drug itself, remains intact. This is due to the delicate nature of dangerous drugs and its susceptibility to being altered or tampered. This was elucidated in People v. Jaafar:77

Narcotic substances are not readily identifiable. To determine their composition and nature, they must undergo scientific testing and analysis. Narcotic substances are also highly susceptible to alteration, tampering, or contamination. It is imperative, therefore, that the drugs allegedly seized from the accused are the very same objects tested in the laboratory and offered in court as evidence. . . . 78 (Citations omitted)

It is also the vulnerability of dangerous drugs and the confidential manner by which it is produced and distributed which makes it a target of abuse by authorities during anti-narcotics operations, as explained in People v. Saragena:79

There is great possibility of abuse in drug cases, especially those involving miniscule amounts. This Court has recognized that buy-bust operations could be initiated based on dubious claims of shady persons. or that small amounts of illicit drugs could be planted as evidence on innocent individuals, in view of the secrecy surrounding drug deals in general. Thus:

"[B]y the very nature of anti-narcotics operations, the need for entrapment procedures, the use of shady characters as informants, the case with which sticks of marijuana or grams of heroin can be planted in pockets or hands of unsuspecting provincial hicks, and the secrecy that inevitably shrouds all drug deals, the possibility of abuse is great." Thus, the courts have been exhorted to be extra vigilant in trying drug cases lest an innocent person is made to suffer the unusually severe penalties for drug offenses[.]80 (Citation omitted)

Thus, to prevent any mishandling of the prohibited drug once it is confiscated, the rules on chain of custody were enacted in Section 21 of Republic Act No. 9165, as amended, which provides:

SECTION 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered Dangerous Drugs, Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals, Instruments/Paraphernalia and/or Laboratory Equipment. – The PDEA shall take charge and have custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursors and essential chemicals, as well as instruments/paraphernalia and/or laboratory equipment so confiscated, seized and/or surrendered, for proper disposition in the following manner:

(1) The apprehending team having initial custody and control of the drugs shall immediately after seizure and confiscation, physically inventory and photograph the same in the presence of the accused or the person/s from whom such items were confiscated and/or seized, or his/her representative or counsel, a representative from the media and the Department of Justice (DOJ), and any elected public official who shall be required to sign the copies of the inventory and be given a copy thereof: Provided, That the physical inventory and photograph shall be conducted at the place where the search warrant is served, or at the nearest police station or at the nearest office of the apprehending officer/team, whichever is practicable, in case of warrantless seizures: Provided, finally, That noncompliance of these requirements under justifiable grounds, as long as the integrity and the evidentiary value of the seized items are properly preserved by the apprehending officer/team, shall not render void and invalid such seizures and custody over said items.

This ensures that every link from the moment the dangerous drug is seized from the accused, until it is presented before the judge is accounted for. Any break or disruption in the chain would cast doubt on the identity and integrity of the seized item. Thus, it is essential for the prosecution to establish with moral certainty that the drug presented in court is the same drug confiscated from the accused.81 Failure to do so would render the evidence against the accused insufficient, resulting in an acquittal.82

Here, the prosecution miserably failed to establish that the police officers complied with the requirements laid down in Section 21.

First, the marking of evidence was not done immediately upon confiscation of the items from the accused-appellants. Records show that after SPO1 Bactad seized one clear plastic sachet from each of them, he did not mark any of it before putting them in his pants pockets.83 Similarly, PO2 Cruz did not mark the paraphernalia found on top of the table before putting them in a plastic. The marking was only done at the police station.

Due to these sequence of events, it cannot be said that the sachets were accurately marked. This is especially important for the criminal charges pertaining to the individual possession of dangerous drugs by each accused-appellant, as it cannot be determined from whom each sachet was confiscated. This immediately casts doubt on the identity of the seized objects from its seizure, the first link in the chain of custody.

Aside from this, marking and inventory were not done in the presence of the required witnesses, namely, representatives from the Department of Justice, a Barangay Kagawad, and a media representative. While Cabading and Alcantara signed the Confiscation Receipt, Cabading manifested that she was not present during the marking, inventorying, and photographing of the items.84 These are unacceptable lapses by the police authorities cause another break in the chain of custody.

This Court has established that an "ostensibly approximate compliance"85 to Section 21 of Republic Act. No. 9165 will not suffice to reach a conviction. It bears reiterating that each link of the chain of custody of the seized drug must be accounted for to show there was no "tampering, alteration, or substitution, may it be by accident or otherwise."86 The chain of custody rule requires actual compliance to prove with moral certainty the corpus delicti of the crime charged. Seeing as the prosecution neither established the identity of the seized items in each link of the chain of custody, nor preserved its integrity, accused-appellants must be acquitted.

We reiterate our statements in People v. Holgado,87

It is lamentable that while our dockets are clogged with prosecutions under Republic Act No. 9165 involving small-time drug users and retailers, we are seriously short of prosecutions involving the proverbial "big fish." We are swamped with cases involving small fry who have been arrested for miniscule amounts. While they are certainly a bane to our society, small retailers are but low-lying fruits in an exceedingly vast network of drug cartels. Both law enforcers and prosecutors should realize that the more effective and efficient strategy is to focus resources more on the source and true leadership of these nefarious organizations. Otherwise, all these executive and judicial resources expended to attempt to convict an accused for 0.05 gram of shabu under doubtful custodial arrangements will hardly make a dent in the overall picture. It might in fact be distracting our law enforcers from their more challenging task: to uproot the causes of this drug menace. We stand ready to assess cases involving greater amounts of drugs and the leadership of these cartels.88

This case was riddled by procedural infirmities from the moment the accused-appellants were apprehended to the moment the gavel was struck to convict them. While this court laments the proliferation of the use and distribution of illegal substances, it cannot support the haphazard and shoddy execution of government agents of their official tasks. We remind our police officers, as well as officers of the Court, that the constitutionally protected rights of the people must always prevail.

WHEREFORE, premises considered, the January 15, 2018 Decision of the Court of Appeals in CA-G.R. CR-HC No. 08489 is REVERSED and SET ASIDE. Accused-Appellants Jamal Rangaig y Ampuan, Saad Makairing y Lonto, and Michael Juguilon y Solis are hereby ACQUITTED for failure of the prosecution to prove their guilt beyond reasonable doubt and are ordered immediately RELEASED from detention, unless they are confined for any other lawful cause.

Let a copy of this Decision be furnished to the Director General of the Bureau of Corrections, Muntinlupa City, for immediate implementation. The Director General of the Bureau of Corrections is directed to report to this court, within five (5) days from receipt of this Decision, the action he has taken. Copies shall also be furnished to the Police General of the Philippine National Police and the Director General of Philippine Drug Enforcement Agency for their information.

The Regional Trial Court is also ordered to turn over the shabu subject of this case to the Dangerous Drugs Board for destruction in accordance with law.

SO ORDERED."

PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. JAMAL RANGAIG Y AMPUAN, SAAD MAKAIRING Y LONTO, AND MICHAEL JUGUILON Y SOLIS, ACCUSED-APPELLANTS, 

G.R. No. 240447, April 28, 2021. 

https://lawphil.net/judjuris/juri2021/apr2021/gr_240447_2021.html

Warrantless search, seizure and arrest

 "Similarly, in this case, after receiving a tip from an informant, the police officers proceeded to the abandoned nipa hut without conducting any prior surveillance or verification of the facts given by the informant. There, PO2 Cruz peeked through the door of the hut which was slightly ajar and found the accused-appellants about ten meters away, sitting beside a table with what seemed to be a clear plastic sachet on it along with other paraphernalia, such as foil. This prompted PO2 Cruz to signal his teammates to enter the house and apprehend accused-appellants.

Lastly, this case cannot be considered a valid warrantless arrest under Section 5(c) as accused-appellants were not fugitives fleeing the custody of a penal establishment at the time of their apprehension.

Corollary to warrantless arrests, this Court in Lapi v. People,63 reiterated the different kinds of valid warrantless search and seizure, thus:

1. Warrantless search incidental to a lawful arrest recognized under Section 12. Rule 126 of the Rules of Court and by prevailing jurisprudence:

2. Seizure of evidence in "plain view"

. . . .

3. Search of a moving vehicle. Highly regulated by the government, the vehicle's inherent mobility reduces expectation of privacy especially when its transit in public thoroughfares furnishes a highly reasonable suspicion amounting to probable cause that the occupant committed a criminal activity;

4. Consented warrantless search;

5. Customs search;

6. Stop and Frisk; and

7. Exigent and Emergency Circumstances."64

The first type of valid warrantless search and seizure will not apply as there was no valid warrantless arrest to begin with.

Similarly, the second type of valid warrantless search and seizure known as seizure in plain view, does not apply in this case. The Plain View Doctrine is "usually applied where a police officer is not searching for evidence against the accused, but nonetheless inadvertently comes across an incriminating object[.]"65 To be valid, there must be a prior valid intrusion based on the valid warrantless arrest and, secondly, the evidence found must have been in plain view of the arresting officer and not inadvertently found.66

In United States case law, the plain view doctrine cannot be applied in one's curtilage, or the area immediately surrounding a person's home or dwelling where one has a reasonable expectation of privacy.67 This gives emphasis to the sanctity of the home which is accorded special protection in line with the '"right of the people to be secure in their persons, houses, papers, and effects."68 The concept of curtilage was explained in United States v. Dunn,69 in this wise:

[C]urtilage questions should be resolved with particular reference to four factors: the proximity of the area claimed to be curtilage to the home, whether the area is included within an enclosure surrounding the home, the nature of the uses to which the area is put, and the steps taken by the resident to protect the area from observation by people passing by. We do not suggest that combining these factors produces a finely tuned formula that when mechanically applied, yields a "correct" answer to all extent-of-curtilage questions. Rather, these factors are useful analytical tools only to the degree that, in any given case, they bear upon the centrally relevant consideration — whether the area in question is so intimately tied to the home itself that it should be placed under the home's “umbrella" of Fourth Amendment protection.

Thus, law enforcers may seize evidence and contraband that are in plain view, as long as the officer is in a place where he has a legal right to be, and the seizure does not involve entering one's home or curtilage.

Applied in this case, the fact that PO2 Cruz saw accused-appellants around a table through the slightly opened door of an abandoned nipa hut, in itself cannot be considered a violation of the sanctity of their home or curtilage as they could not have any expectation of privacy in their location. However, this does not change the fact that the buy-bust team were at the abandoned nipa hut on the strength of a single tip, without conducting prior surveillance. The plain view doctrine is only proper when the two requirements—a prior valid intrusion based on a valid warrantless arrest and that the evidence found was in plain view of the arresting officer—is met.

Here, the prosecution failed on the first requirement. There was no valid intrusion by the police officers as they did not have probable cause to enter the premises without a valid warrant of arrest or search warrant. It is apparent that PO2 Cruz's suspicion was anchored on the informant's tip they received earlier informing them of an on-going pot session in the area. Consequently, the act of peeping through an open door to ascertain what the accused-appellants were doing inside the house cannot be justified.

Illustrative is the case of People v. Bolasa,70 wherein the authorities proceeded to a certain house after being tipped off that Bolasa, among others, was packing drugs therein. After peeking through the window of the house and seeing and a man and a woman packing marijuana, the police entered the house, arrested the two, and seized the drugs and paraphernalia. There, this Court held that the arrests and resulting searches and seizures were invalid as the arresting officers did not have personal knowledge of the criminal activities in the house. It was further held that "[n]either can it be said that objects were seized in plain view [as the] the police officers intentionally peeped first through the window before they saw and ascertained the activities of accused-appellants inside the room."71

Nevertheless, this Court has held that peeping into a window may be deemed "plain view" if the law enforcement officer had prior justification for being at the position. In Miclat v. People,72 it was explained:

Objects falling in plain view of an officer who has a right to be in a position to have that view are subject to seizure even without a search warrant and may be introduced in evidence. The "plain view" doctrine applies when the following requisites concur: (a) the law enforcement officer in search of the evidence has a prior justification for an intrusion or is in a position from which he can view a particular area; (b) the discovery of evidence in plain view is inadvertent: (c) it is immediately apparent to the officer that the item he observes may be evidence of a crime, contraband or otherwise subject to seizure. The law enforcement officer must lawfully make an initial intrusion or properly be in a position from which he can particularly view the area. In the course of such lawful intrusion, he came inadvertently across a piece of evidence incriminating the accused. The object must be open to eye and hand and its discovery inadvertent[.]

It is clear, therefore, that an object is in plain view if the object itself is plainly exposed to sight. Since petitioners arrest is among the exceptions to the rule requiring a warrant before effecting an arrest and the evidence seized from the petitioner was the result of a warrantless search incidental to a lawful arrest, which incidentally was in plain view of the arresting officer, the results of the ensuing search and seizure were admissible in evidence to prove petitioner's guilt of the offense charged."73 (Emphasis supplied, citation omitted)

Unlike this case, in Miclat, the police authorities knew the identity of the person connected to drug activities and conducted surveillance before making a valid warrantless arrest. Thus, they had a prior justification for being in a position within view of the criminal activity. Had PO2 Cruz and the buy bust team first conducted proper surveillance before proceeding with the warrantless arrest, the subsequent search and seizure may have fallen under the "plain view" doctrine.

As such, the prosecution here failed to establish by sufficient, clear and convincing evidence that there was probable cause to execute a warrantless arrest, and concomitantly seize the confiscated items. It is apparent from their narration that their arrest of the accused-appellants and search thereafter was fueled solely by the informant's tip. Apart from this, there is no evidence to show that the police officers had personal knowledge that would allow them to infer anything suspicious.

There being no valid warrantless arrest on accused-appellants, their arrest is illegal, and the ensuing search as a result thereof, is likewise illegal.74 It must be noted that a person's right against unreasonable searches and seizures is constitutionally protected and must prevail over the campaign against illegal drugs. Warrantless arrests and seizures remain to be exceptions to the general rule and must be construed strictly against government agents.75 Since there is no justification for the absence of an arrest warrant or search warrant upon the premises, the subsequent items obtained from the unreasonable search and seizure must be excluded in evidence for being the proverbial fruit of a poisonous tree.

The corpus delicti for the crimes charged presented into evidence by the prosecution is deemed inadmissible. Such inadmissibility then prevents conviction and calls for the imm ediate acquittal of the accused-appellants.76"

PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. JAMAL RANGAIG Y AMPUAN, SAAD MAKAIRING Y LONTO, AND MICHAEL JUGUILON Y SOLIS, ACCUSED-APPELLANTS, 

G.R. No. 240447, April 28, 2021. 

https://lawphil.net/judjuris/juri2021/apr2021/gr_240447_2021.html

Double Jeopardy

 'Accused-appellants were charged and found guilty of illegal possession of dangerous drugs and illegal possession of dangerous drugs in a social gathering, which are penalized under Republic Act No. 9165 Article II, Sections 11 and 13, respectively.

Accused-appellants assert that the charge of the possession of illegal drugs is absorbed in the charge of possession of illegal drugs in social gatherings. Thus, charging and eventually convicting them of both offenses, separately, placed them in double jeopardy. We agree.

The constitutional prohibition against double jeopardy is provided in Article II, Section 21 of the Constitution:

No person shall be twice put in jeopardy of punishment for the same offense. If an act is punished by a law and an ordinance, conviction or acquittal under either shall constitute a bar to another prosecution for the same act.

This constitutional right is implemented in Rule 117, Section 7 of the Rules of Court which provides:

SECTION 7. Former conviction or acquittal; double jeopardy. — When an accused has been convicted or acquitted, or the case against him dismissed or otherwise terminated without his express consent by a court of competent jurisdiction, upon a valid complaint or information or other formal charge sufficient in form and substance to sustain a conviction and after the accused had pleaded to the charge, the conviction or acquittal of the accused or the dismissal of the case shall be a bar to another prosecution for the offense charged, or for any attempt to commit the same or frustration thereof, or for any offense which necessarily includes or is necessarily included in the offense charged in the former complaint or information. (Emphasis supplied)

Thus, the rule on double jeopardy protects the accused by prohibiting the state from charging or convicting a person of either the same offense or the same act. These two categories of double jeopardy is differentiated in People v. Quijada:43

Thirdly, our Bill of Rights deals with two (2) kinds of double jeopardy. The first sentence of clause 20, section 1, Article II I of the Constitution, ordains that “no person shall be twice put in jeopardy of punishment for the same offense." (italics in the original) The second sentence of said clause provides that "if an act is punishable by a law and an ordinance, conviction or acquittal under either shall constitute a bar to another prosecution for the same act." Thus, the first sentence prohibits double jeopardy of punishment for the same offense whereas, the second contemplates double jeopardy of punishment for the same act. Under the first sentence, one may be twice put in jeopardy of punishment of the same act, provided that he is charged with different offenses, or the offense charged in one case is not included in, or does not include, the crime charged in the other case. The second sentence applies, even if the offenses charged are not the same, owing to the fact that one constitutes a violation of an ordinance and the other a violation of a statute. If the two charges are based on one and the same act, conviction or acquittal under either the law or the ordinance shall bar a prosecution under the other. . . .

Elsewise stated, where the offenses charged are penalized either by different sections of the same statute or by different statutes, the important inquiry relates to the identity of offenses charged. The Constitutional protection against double jeopardy is available only where an identity is shown to exist between the earlier and the subsequent offenses charged. The question of identity or lack of identity of offenses is addressed by examining the essential elements of each of the two offenses charged, as such elements are set out in the respective legislative definitions of the offenses involved.44 (Emphasis supplied, citations omitted)

The test of identity of offenses in ascertaining whether double jeopardy exists has been used by this Court as early as 1954 in People v. F. Diaz45 as cited in Ivler v. Modesto-San Pedro,46 thus:

In the case of People v. F Diaz, G.R. No. L-6518, prom. March 30, 1954, the accused was charged in the municipal court of Pasay City with reckless driving under sec. 52 of the Revised Motor Vehicle Law, for having driven an automobile in a 'fast and reckless manner . . . thereby causing an accident.' After the accused had pleaded not guilty the case was dismissed in that court 'for failure of the Government to prosecute'. But some time thereafter the city attorney filed an information in the Court of First Instance of Rizal, charging the same accused with damage to property thru reckless imprudence. The amount of the damage was alleged to be P249.50. Pleading double jeopardy, the accused filed a motion, and on appeal by the Government we affirmed the ruling. Among other things we there said through Mr. Justice Montemayor —

The next question to determine is the relation between the first offense of violation of the Motor Vehicle Law prosecuted before the Pasay City Municipal Court and the offense of damage to property thru reckless imprudence charged in the Rizal Court of First Instance. One of the tests of double jeopardy is whether or not the second offense charged necessarily includes or is necessarily included in the offense charged in the former complaint or information (Rule 113, Sec. 9). Another test is whether the evidence which proves one would prove the other that is to say whether the facts alleged in the first charge if proven, would have been sufficient to support the second charge and vice versa; or whether one crime is an ingredient of the other[.]47

Applying this, We now examine the elements of the two crimes charged against accused-appellants.

The elements for illegal possession of dangerous drugs under Section 11 of Republic Act No. 9165 require: (1) the possession by the accused of an item or object identified to be a prohibited or dangerous drug; (2) that such possession is not authorized by law; and (3) that accused freely and consciously possessed the drug. On the other hand, Section 13 of the same law, requires the presence of the exact same elements with an addition of a fourth element: that the accused possessed the prohibited or dangerous drug during a social gathering or meeting, or in the company of at least two persons.48

Evidently, a charge for illegal possession in a social gathering absorbs one for illegal possession, as the former includes all the necessary elements in the latter. Petitioners correctly cited People v. Posada,49 which held that the sale of dangerous drugs absorbs the possession of it since all the elements of possession are inevitably integrated in its sale.

Since sale of dangerous drugs necessarily includes possession of the same, the accused-appellants should be convicted or possession. We have consistently ruled that possession of prohibited or dangerous drugs is absorbed in the sale thereof. Then Associate Justice Artemio Panganiban logically and clearly explained the rationale behind this ruling, to wit:

The prevailing doctrine is that possession of marijuana is absorbed in the sale thereof, except where the seller is further apprehended in possession of another quantity of the prohibited drugs not covered by or included in the sale and which are probably intended for some future dealings or use by the seller.

Possession is a necessary element in a prosecution for illegal sale of prohibited drugs. It is indispensable that the prohibited drug subject or the sale be identified and presented in court. That the corpus delicti of illegal sale could not be established without a showing that the accused possessed, sold and delivered a prohibited drug clearly indicates that possession is an element of the former. The same rule is applicable in cases of delivery of prohibited drugs and giving them away to another[.]50 (Citation omitted)

Here, just like in Posada, the violation of illegal possession of dangerous drugs is necessarily included in illegal possession of dangerous drugs in a social gathering. Thus, the prosecution erred when it filed separate informations for both charges, arguing that each charge pertain to separate and distinct sachets—a charge for illegal drugs in a social gathering for the clear plastic sachet found on the table, and another charge for possession of illegal drugs for the clear plastic sachets found in the pockets accused-appellants. The justification that the sachets found in the persons of accused-appellants were probably intended for some future dealing is purely conjecture and cannot stand.

Accordingly, charging and convicting the accused-appellants under Section 11, for illegal possession of dangerous drugs, and Section 13, for illegal possession of dangerous drugs in a social gathering, put them in double jeopardy.

As it stands, the acquittal of accused-appellants is in order. However, it is necessary to discuss the remaining issues regarding the conduct of the warrantless arrests, search and seizure, and observance of the chain of custody rule by the authorities for the guidance of bar and bench."

PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. JAMAL RANGAIG Y AMPUAN, SAAD MAKAIRING Y LONTO, AND MICHAEL JUGUILON Y SOLIS, ACCUSED-APPELLANTS, 

G.R. No. 240447, April 28, 2021. 

https://lawphil.net/judjuris/juri2021/apr2021/gr_240447_2021.html

Warrantless arrests

 "No less than the Constitution mandates that no arrest, search and seizure can be made without a valid warrant issued by a competent judicial authority. While jurisprudence and statute have created exceptions allowing warrantless arrests founded on probable cause, if a warrantless arrest is conducted outside of these exceptions, any evidence resulting therefrom will be deemed inadmissible in court. "

PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. JAMAL RANGAIG Y AMPUAN, SAAD MAKAIRING Y LONTO, AND MICHAEL JUGUILON Y SOLIS, ACCUSED-APPELLANTS, 

G.R. No. 240447, April 28, 2021. 

https://lawphil.net/judjuris/juri2021/apr2021/gr_240447_2021.html

Effect of appeal

 "It is well-settled that in criminal cases, an appeal throws the entire case wide open for review and the reviewing tribunal can correct errors, though unassigned in the appealed judgment, or even reverse the trial court's decision based on grounds other than those that the parties raised as errors. The appeal confers the appellate court full jurisdiction over the case and renders such court competent to examine records, revise the judgment appealed from, increase the penalty, and cite the proper provision of the penal law.42

Guided by the foregoing considerations, and as will be explained hereunder, the Court: (a) affirms accused-appellants' and their co-accused's conviction for Kidnapping for Ransom with Homicide of Dr. Andres, Sr.; and (b) acquits accused-appellants and their co-accused, except for Antonio, for the Murder of Major Arcega."

G.R. No. 242696, November 11, 2020 

PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. ZALDY BERNARDO Y ESPIRITU, MONROY FLORES Y CORPUZ, JESUS TIME Y CABESA, GILBERT PACPACO Y DIRECTO, GILBERT RAMIREZ Y DUNEGO, DANNY CORTEZ Y DONIETO, ROGELIO ANTONIO Y ABUJUELA, TOMMY CABESA Y VILLEGAS, AND MILA ANDRES GALAMAY, ACCUSED,

ZALDY BERNARDO Y ESPIRITU, MONROY FLORESYCORPUZ, DANNY CORTEZ Y DONIETO, AND MILA ANDRES GALAMAY, ACCUSED-APPELLANTS.

https://lawphil.net/judjuris/juri2020/nov2020/gr_242696_2020.html

Death of accused pending appeal

 "At the outset, it is well to note that during the pendency of this appeal, the Court received a letter38 dated May 8, 2019 from the Bureau of Corrections stating that one of the accused-appellants, Cortez, had already died on May 17, 2016, as evidenced by copies of his Death Report39 and Certificate of Death.40 In light of Cortez' supervening death, the Court is constrained to dismiss the instant criminal actions against him inasmuch as he can no longer stand as an accused herein. In the same vein, the civil action impliedly instituted for the recovery of the civil liability ex delicto is likewise ipso facto dismissed, grounded as it is on the criminal action. However, it is well to clarify that Cortez' civil liability, if any, in connection with his acts against the victims, may be based on sources other than delicts; in which case, the victims' heirs may file separate civil actions against Cortez' estate, as may be warranted by law and procedural rules.41 As such, the instant criminal cases must be declared closed and terminated as to Cortez in view of his supervening death. "

G.R. No. 242696, November 11, 2020 

PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. ZALDY BERNARDO Y ESPIRITU, MONROY FLORES Y CORPUZ, JESUS TIME Y CABESA, GILBERT PACPACO Y DIRECTO, GILBERT RAMIREZ Y DUNEGO, DANNY CORTEZ Y DONIETO, ROGELIO ANTONIO Y ABUJUELA, TOMMY CABESA Y VILLEGAS, AND MILA ANDRES GALAMAY, ACCUSED,

ZALDY BERNARDO Y ESPIRITU, MONROY FLORESYCORPUZ, DANNY CORTEZ Y DONIETO, AND MILA ANDRES GALAMAY, ACCUSED-APPELLANTS.

https://lawphil.net/judjuris/juri2020/nov2020/gr_242696_2020.html

This Court further elucidated that except for the most compelling reasons based on extraordinary circumstances, there must be a five-year minimum period before "dismissal or disbarment [can] be the subject of any kind of clemency."

"Issue

The core issue is whether Atty. Rojas should be disbarred for violating the Lawyer's Oath and the CPR.

Our Ruling

It is settled in jurisprudence that disciplinary proceedings against lawyers are sui generis. Neither purely civil nor purely criminal, they do not involve a trial of an action or a suit, but is rather an investigation by the Court into the conduct of one of its officers. Its primary objective is public interest, "and the real question for determination is whether or not the attorney is still a fit person to be allowed the privileges as such. Hence, in the exercise of its disciplinary powers, the Court merely calls upon members of the Bar to account for [their] actuations as [officers] of the Court with the end in view of preserving the purity of the legal profession and the proper and honest administration of justice by purging the profession of members who by their misconduct have proved themselves no longer worthy to be entrusted with the duties and responsibilities pertaining to the office of an attorney."41

Timely for resolution is the present complaint involving a lawyer allegedly perpetuating an illegal act of promoting instant annulment of marriage through fabricated judicial decisions.

The power of the Court to remove or suspend an attorney finds support in Section 27, Rule 138 of the Rules of Court, viz.:

Section 27 – Attorneys removed or suspended by Supreme Court on what grounds. — A member of the bar may be removed or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office, grossly immoral conduct, or by reason of his conviction of a crime involving moral turpitude, or for any violation of the oath which he is required to take before the admission to practice, or for a wilfull disobedience of any lawful order of a superior court, or for corruptly or wilfull appearing as an attorney for a party to a case without authority so to do. The practice of soliciting cases at law for the purpose of gain, either personally or through paid agents or brokers, constitutes malpractice. (Emphasis supplied)

Stripped of non-essentials, Atty. Rojas admitted his involvement in the reprehensible practice of perpetuating "annulment packages," albeit disavowing authorship and with the caveat that he only did so to help the complainant, and in the process, was also scammed by Santo.42 All these, regardless of his intention of presenting supposedly mitigating circumstances, besmirched the legal profession to the highest degree, by making a mockery of the judicial system. He simply violated his sworn oath to be honest, and to obey the law and the Constitution. It also created an impression to the public that the judicial process can be trifled with, and undermined the judicial processes of the courts.

The very wordings and the spirit of the Lawyer's Oath is a continuing undertaking every lawyer in the legal profession ought to live out, viz.:

Lawyer's Oath

I do solemnly swear that I will maintain allegiance to the Republic of the Philippines, I will support the Constitution and obey the laws as well as the legal orders of the duly constituted authorities therein; I will do no falsehood, nor consent to the doing of any in court; I will not wittingly or willingly promote or sue any groundless, false or unlawful suit, or give aid nor consent to the same; I will delay no man for money or malice, and will conduct myself as a lawyer according to the best of my knowledge and discretion, with all good fidelity as well to the courts as to my clients; and I impose upon myself these voluntary obligations without any mental reservation or purpose of evasion. So help me God. (Emphasis supplied)

Sec. 20 of Rule 138 reinforces the Lawyer's Oath and is crystal clear in its enumeration of the duties of every lawyer:

Section 20. Duties of attorneys. — It is the duty of an attorney:

(a) To maintain allegiance to the Republic of the Philippines and to support the Constitution and obey the laws of the Philippines.

(b) To observe and maintain the respect due to the courts of justice and judicial officers;

(c) To counsel or maintain such actions or proceedings only as appear to him to be just, and such defenses only as he believes to be honestly debatable under the law.

(d) To employ, for the purpose of maintaining the causes confided to him, such means only as are consistent with truth and honor, and never seek to mislead the judge or any judicial officer by an artifice or false statement of fact or law;

(e) To maintain inviolate the confidence, and at every peril to himself, to preserve the secrets of his client, and to accept no compensation in connection with his client's business except from him or with his knowledge and approval;

(f) To abstain from all offensive personality and to advance no fact prejudicial to the honor or reputation of a party or witness, unless required by the justice of the cause with which he is charged;

(g) Not to encourage either the commencement or the continuance of an action or proceeding, or delay any man's cause, from any corrupt motive or interest;

(h) Never to reject, for any consideration personal to himself, the cause of the defenseless or oppressed;

(i) In the defense of a person accused of crime, by all fair and honorable means, regardless of his personal opinion as to the guilt of the accused, to present every defense that the law permits, to the end that no person may be deprived of life or liberty, but by due process of law. (Emphasis supplied)

Atty. Rojas failed his Oath, especially considering his qualifications as a former officer of the IBP South Cotabato and General Santos Chapter, former law professor, and officer of various civic organizations.43 Atty. Rojas deliberately defiled the legal profession and was utterly remiss in his duties to the profession, to the society, and to the courts.

The Code, particularly Canon 1, requires the lawyer to uphold the Constitution, obey the laws of the land, and promote respect for law and legal processes. Rule 1.01 sets the path in doing so, viz.:

A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

Concomitantly, Atty. Rojas' actions likewise defied Canon 10 of the CPR which mandates that a lawyer owes candor, fairness, and good faith to the Court. This is magnified by Rule 10.01 stating:

A lawyer shall not do any falsehood, nor consent to the doing of any in Court; nor shall mislead, or allow the Court to be misled by any artifice.

The rules need not be further elaborated especially for a seasoned lawyer. What is unlawful, dishonest, immoral or deceitful conduct, doing any falsehood or consenting to its commission - are terms capable of estimation by a layperson but even more by a law practitioner.

Jurisprudence is replete with instances elaborating the rule. For emphasis, any act or omission that is contrary to, prohibited or unauthorized by, in defiance of, disobedient to, or disregards the law is "unlawful." "Unlawful" conduct does not necessarily imply the element of criminality although the concept is broad enough to include such element. To be "dishonest" means the disposition to lie, cheat, deceive, defraud or betray; be untrustworthy; lacking in integrity, honesty, probity, integrity in principle, fairness and straightforwardness. On the other hand, a conduct that is "deceitful" means as follows: Having the proclivity for fraudulent and deceptive misrepresentation, artifice, or device that is used upon another who is ignorant of the true facts, to the prejudice and damage of the party imposed upon. In order to be deceitful, the person must either have knowledge of the falsity or acted in reckless and conscious ignorance thereof, especially if the parties are not on equal terms, and was done with the intent that the aggrieved party act thereon, and the latter indeed acted in reliance of the false statement or deed in the manner contemplated to his or her injury.44

Fabricating a judicial decision or perpetuation of acts leading to such, undeniably comes within the prohibitive acts set by the CPR. Atty. Rojas, in actively and knowingly participating in the procurement of a fake decision in an annulment case undoubtedly violated the provisions of the CPR. He committed an unlawful act and disrespected the law and the legal processes. He deprived the judiciary to a rightful resolution of the case for annulment and have done so in defiance of truth, honor, and of the law.

In Manalang v. Atty. Buendia45 (Manalang), this Court disbarred a lawyer for fabricating a judicial decision granting annulment to the client. In the said case, the lawyer denied any participation and claimed to have only acted as an intermediary between the client and the lawyer who handled the annulment case. Such defenses were rejected by this Court and found the respondent lawyer to have violated the sworn duties under the Lawyer's Oath and the CPR by deliberately misleading and deceiving the client by fabricating a court decision. For such failure to uphold the standards required in the legal profession, and failure to perform the duties of competence and diligence required of lawyers, the Court held that the lawyer no longer deserves to be a member of the bar.46

Also in Manalang, this Court discussed analogous cases touching on the fabrication of judicial issuances, to wit:

Madria v. Rivera has analogous circumstances to this case. In Madria, petitioner obtained the legal services of respondent to help her with the annulment of her marriage. Respondent guaranteed he can obtain the decree of annulment without petitioner appearing in court. Months later, respondent informed petitioner that her petition had been granted and provided her a copy of the decision and a certificate of finality.

Petitioner's husband in that case, however, filed a complaint against her for allegedly fabricating the decision for the annulment of her marriage. It was then that petitioner learned that the decision and the certificate of finality were fabricated. Upon inquiring with the court, she found that her petition for annulment was actually dismissed and the signature in the alleged decision presented by respondent was forged.

In Madria, this Court disbarred respondent and explained that his act "not only violates the court and its processes, but also betrays the trust and confidence reposed in him by his client[.]" Therefore, disbarment was meted out for his failure to maintain and uphold the integrity of the Law Profession. In that case this Court held:

The respondent directly contravened the letter and spirit of Rules 1.01 and 1.02, Canon 1, and Rule 15.07, Canon 15 of the Code of Professional Responsibility[.]

[x x x x]

The respondent would shift the blame to his client. That a lay person like the complainant could have swayed a lawyer like the respondent into committing the simulations was patently improbable. Yet, even if he had committed the simulations upon the client's prodding, he would be no less responsible. Being a lawyer, he was aware of and was bound by the ethical canons of the Code of Professional Responsibility, particularly those quoted earlier, which would have been enough to deter him from committing the falsification, as well as to make him unhesitatingly frustrate her prodding in deference to his sworn obligation as a lawyer to always act with honesty and to obey the laws of the land. Surely, too, he could not have soon forgotten his express undertaking under his Lawyer's Oath to "do no falsehood, nor consent to its commission." Indeed, the ethics of the Legal Profession rightly enjoined every lawyer like him to act with the highest standards of truthfulness, fair play and nobility in the course of his practice of law. As we have observed in one case:

Public confidence in law and lawyers may be eroded by the irresponsible and improper conduct of a member of the bar. Thus, a lawyer should determine his conduct by acting in a manner that would promote public confidence in the integrity of the legal profession. Members of the Bar are expected to always live up to the standards embodied in the Code of Professional Responsibility as the relationship between an attorney and his client is highly fiduciary in nature and demands utmost fidelity and good faith.1âшphi1

[x x x x]

Falsifying or simulating the court papers amounted to deceit, malpractice or misconduct in office, any of which was already a ground sufficient for disbarment under Section 27, Rule 38 of the Rules of Court. The moral standards of the Legal Profession expected the respondent to act with the highest degree of professionalism, decency, and nobility in the course of their practice of law. That he turned his back on such standards exhibited his baseness, lack of moral character, dishonesty, lack of probity and general unworthiness to continue as an officer of the Court. (Citations omitted)

Similarly, in Billanes v. Latido, this Court disbarred a lawyer for similar misrepresentation and deceitful acts.

In Billanes, petitioner engaged the services of respondent for the annulment of his marriage with his estranged Filipino wife. About a month later, respondent informed petitioner that the annulment case had been filed and that the judge had rendered a decision in his favor. Respondent even showed a copy of the decision to the petitioner.

Believing his marriage was annulled, petitioner married an Australian national and applied for an Australian visa, attaching the purported decision supporting the annulment of his first marriage. The Australian Embassy, however, informed petitioner that the decision was fraudulent and its submission will result in the denial of his visa application. Petitioner then inquired with the court which supposedly rendered the decision. However, that court issued a certification stating that his annulment case was never filed and the documents furnished to him were fake. With these circumstances, respondent was disbarred. This Court explained:

Rule 1.01, Canon 1 of the CPR instructs that "as officers of the court, lawyers are bound to maintain not only a high standard of legal proficiency, but also of morality, honesty, integrity, and fair dealing." Indubitably, respondent fell short of such standard when he committed the afore-described acts of misrepresentation and deception against complainant. Such acts are not only unacceptable, disgraceful, and dishonorable to the legal profession; they further reveal basic moral flaws that make respondent unfit to practice law.

In Tan v. Diamante, the Court found the lawyer therein administratively liable for violating Rule 1.01, Canon 1 of the CPR as it was established that he, among others, falsified a court order. In that case, the Court deemed the lawyer's acts to be "so reprehensible, and his violations of the CPR are so flagrant, exhibiting his moral unfitness and inability to discharge his duties as a member of the bar." Thus, the Court disbarred the lawyer.

Similarly, in Taday v. Apoya, Jr., promulgated just last July 3, 2018, the Court disbarred the erring lawyer for authoring a fake court decision regarding his client's annulment case, which was considered as a violation also of Rule 1.01, Canon 1 of the CPR. In justifying the imposition of the penalty of disbarment, the Court held that the lawyer "committed unlawful, dishonest, immoral[,] and deceitful conduct, and lessened the confidence of the public in the legal system. Instead of being an advocate of justice, he became a perpetrator of injustice. His reprehensible acts do not merit him to remain in the rolls of the legal profession. Thus, the ultimate penalty of disbarment must be imposed upon him."47 (Citations omitted)

Guided by the above discussion, the conclusion is thus all too clear. Atty. Rojas should be held administratively liable and must be considered unfit for the practice of law. To highlight, "the right to practice law is not a natural or constitutional right but is in the nature of a privilege or franchise. It is limited to persons of good moral character with special qualifications duly ascertained and certified. The right does not only presuppose in its possessor integrity, legal standing and attainment, but also exercise a special privilege, highly personal and partaking of the nature of public trust."48

Atty. Rojas, while admitting his infractions, invokes leniency and supplicates that he be unqualifiedly absolved of his liability out of humanitarian reasons. He admits that his acceptance of the case transgressed the ethical yardstick but pleas to not be judged on that aspect alone and cited his accolades.49

Unfortunately for Atty. Rojas, We deny his supplication.

The practice of law is a privilege burdened with conditions and is reserved only for those who meet the twin standards of legal proficiency and morality. It is so delicately imbued with public interest that it is both a power and a duty of this Court to control and regulate in order to protect and promote public welfare.50

We cannot give Atty. Rojas a free pass. To give in to his plea is to make a travesty of the judicial system and the legal profession and to go against this Court's bounden duty to safeguard the public against erring lawyers. Lawyers who have been found to have violated their oath must be accountable for their actions and must face the consequences of their ill choices that affect the legal profession.

Moreover, this Court has already set the parameters for judicial clemency for both disrobed judges and disbarred lawyers in Re: Anonymous Letter Complaint Against Judge Ofelia T. Pinto (In Re: Pinto).51 The following guidelines are laid, thus:

1. There must be proof of remorse and reformation. These shall include but should not be limited to certifications or testimonials of the officer(s) or chapter(s) of the Integrated Bar of the Philippines, judges or judges['] associations and prominent members of the community with proven integrity and probity. A subsequent finding of guilt in an administrative case for the same or similar misconduct will give rise to a strong presumption of non-reformation;

2. Sufficient time must have lapsed from the imposition of the penalty to ensure a period of reformation;

3. The age of the person asking for clemency must show that he (or she) still has productive years ahead of him [or her] that can be put to good use by giving him [or her] a chance to redeem himself [or herself];

4. There must be a showing of promise (such as intellectual aptitude, learning or legal acumen or contribution to legal scholarship and the development of the legal system or administrative and other relevant skills), as well as potential for public service;

5. There must be other relevant factors and circumstances that may justify clemency.52

This Court further elucidated that except for the most compelling reasons based on extraordinary circumstances, there must be a five-year minimum period before "dismissal or disbarment [can] be the subject of any kind of clemency." Further, "[t]o be sure, the underlying impetus of establishing a default uniform period is to curtail the broadly subjective process of determining the appropriate period within which genuine remorse and reformation are perceived to have been attained. Conceptually, the [five-year] requirement is a reasonable estimation by the Court of the minimum period necessary for the [petitioning lawyer's] reflection of his or her past transgressions for which he or she was meted the ultimate penalty of disbarment. For clarity, the period is reckoned from the time the Court's resolution is promulgated since it is only by then that the lawyer becomes duly informed of his[/her] administrative liability and hence, would be able to begin atoning for his or her malpractice."53

Once this minimum requirement is complied with, however, it must be emphasized that the petition must show convincing proof of the petitioner's remorse and rehabilitation. For it is entirely possible that despite the minimum period of reflection set by the Court, which hence, renders him or her eligible to file a clemency petition, petitioner, throughout all these years, has not yet fully accepted the decision against him or her, or has failed to change his or her ways so as to warrant the mercy of the Court.

To expound, "[r]emorse and reformation must reflect how the claimant has redeemed [his or her] moral aptitude by clearly understanding the gravity and consequences of [his or her] conduct." Concomitantly, "there must be an acknowledgment of the wrongful actions and subsequent showing of sincere repentance and correction. This Court must see to it that the long period of dismissal moved the erring officers to reform themselves, exhibit remorse and repentance, and develop a capacity to live up again to the standards demanded from court officers."54 (Citations and emphasis omitted)

Considering the above requirements, We find that Atty. Rojas has not met the guidelines for this Court to consider clemency. He must first be held accountable, acknowledge his transgressions, and suffer the penalty therefor.

WHEREFORE, for violating the Lawyer's Oath and the Code of Professional Responsibility, Atty. Remegio P. Rojas is DISBARRED from the practice of law effective immediately upon his receipt of this Decision, and his name stricken off from the Roll of Attorneys."

EN BANC

[ A.C. No. 13226. October 04, 2022 ]

JOCELYN G. BARTOLOME, COMPLAINANT, VS. ATTY. REMIGIO P. ROJAS, RESPONDENT.

https://lawphil.net/judjuris/juri2022/oct2022/ac_13226_2022.html

To reiterate, the protection accorded to mortgagees in good faith cannot be extended to mortgagees of properties that are not yet registered or registered but not under the mortgagor’s name.

 "Validity of the mortgage

One of the requisites of a valid mortgage contract is ownership of the property being mortgaged.[77] Article 2085 of the Civil Code enumerates the requisites of a mortgage contract:

Art. 2085. The following requisites are essential to the contracts of pledge and mortgage:

(1) That they be constituted to secure the fulfilment of a principal obligation;

(2) That the pledgor or mortgagor be the absolute owner of the thing pledged or mortgaged;

(3) That the persons constituting the pledge or mortgage have the free disposal of their property, and in the absence thereof, that they be legally authorized for the purpose.

Third persons who are not parties to the principal obligation may secure the latter by pledging or mortgaging their own property.

Applying this provision and having established that Marietta acquired no valid title or ownership from Enrique over the undivided portions of the property, this court finds that no valid mortgage was executed over the same property in favor of DBP. Without a valid mortgage, there was also no valid foreclosure sale and no transfer of ownership of petitioners’ undivided portions to DBP.

In other words, DBP acquired no right over the undivided portions since its predecessor-in-interest was not the owner and held no authority to convey the property.

As in sales, an exception to this rule is if the mortgagee is a “mortgagee in good faith.”[78] This exception was explained in Torbela v. Rosario:

Under this doctrine, even if the mortgagor is not the owner of the mortgaged property, the mortgage contract and any foreclosure sale arising therefrom are given effect by reason of public policy. This principle is based on the rule that all persons dealing with property covered by a Torrens Certificate of Title, as buyers or mortgagees, are not required to go beyond what appears on the face of the title. This is the same rule that underlies the principle of "innocent purchasers for value." The prevailing jurisprudence is that a mortgagee has a right to rely in good faith on the certificate of title of the mortgagor to the property given as security and in the absence of any sign that might arouse suspicion, has no obligation to undertake further investigation. Hence, even if the mortgagor is not the rightful owner of, or does not have a valid title to, the mortgaged property, the mortgagee in good faith is, nonetheless, entitled to protection.[79]

DBP claims that it is covered by this exception. DBP is mistaken. The exception applies when, at the time of the mortgage, the mortgagor has already obtained a certificate of title under his or her name.[80] It does not apply when, as in this case, the mortgagor had yet to register the property under her name.[81]

The facts show that DBP disregarded circumstances that should have aroused suspicion. For instance, at the time of the mortgage with DBP, Marietta only had a tax declaration under her name to show that she was the owner of the property. A tax declaration, by itself, neither proves ownership of property nor grants title. Yet, DBP agreed to accept the property as security even though Marietta’s claim was supported only by the tax declaration, and a certificate of title was yet to be issued under her name.

Granting that Marietta was in possession of the property, DBP should have inquired further as to Marietta’s rights over the property since no certificate of title was issued to her. DBP took the risks attendant to the absence of a certificate of title. It should bear the burden of checking the ownership as well as the validity of the deed of sale. This is despite the eventual issuance of a certificate of title in favor of Marietta.

The rule on “innocent purchasers or [mortgagees] for value” is applied more strictly when the purchaser or the mortgagee is a bank. Banks are expected to exercise higher degree of diligence in their dealings, including those involving lands. Banks may not rely simply on the face of the certificate of title.

Thus, in Cruz v. Bancom Finance Corporation,[82] this court ruled that:

Respondent . . . is not an ordinary mortgagee; it is a mortgagee-bank. As such, unlike private individuals, it is expected to exercise greater care and prudence in its dealings, including those involving registered lands. A banking institution is expected to exercise due diligence before entering into a mortgage contract. The ascertainment of the status or condition of a property offered to it as security for a loan must be a standard and indispensable part of its operations.[83] (Citations omitted)

DBP failed to exercise the degree of diligence required of banks when it accepted the unregistered property as security for Marietta’s loan despite circumstances that should have aroused its suspicion.

Citing Blanco v. Esquierdo, DBP argued that since it did not participate in the dealings between Enrique and Marietta, it should be considered as an innocent mortgagee for value.

Blanco involves an alleged widow of the deceased who adjudicated to herself the deceased’s property and thereafter mortgaged the property to DBP.[84] The brothers and sisters of the deceased filed an action for the annulment of the affidavit executed by the alleged widow and the cancellation of the certificate of title under her name.[85] The trial court ordered the cancellation of the certificate of title issued to the alleged widow, including the registration of the mortgage deed.[86]

In Blanco, this court declared that DBP was a mortgagee in good faith, thus:

The trial court, in the decision complained of, made no finding that the defendant mortgagee bank was a party to the fraudulent transfer of the land to Fructuosa Esquierdo. Indeed, there is nothing alleged in the complaint which may implicate said defendant mortgagee in the fraud, or justify a finding that it acted in bad faith. On the other hand, the certificate of title was in the name of the mortgagor Fructuosa Esquierdo when the land was mortgaged by her to the defendant bank. Such being the case, the said defendant bank, as mortgagee, had the right to rely on what appeared in the certificate and, in the absence of anything to excite suspicion, was under no obligation to look beyond the certificate and investigate the title of the mortgagor appearing on the face of said certificate. (De Lara, et al. vs. Ayroso, 95 Phil., 185; 50 Off. Gaz., [10] 4838; Joaquin vs. Madrid, et al., 106 Phil., 1060). Being thus an innocent mortgagee for value, its right or lien upon the land mortgaged must be respected and protected, even if the mortgagor obtained her title thereto thru fraud.[87]

DBP’s reliance on Blanco is misplaced. In Blanco, the certificate of title had already been issued under the name of the mortgagor when the property was mortgaged to DBP. This is not the situation in this case.

To reiterate, the protection accorded to mortgagees in good faith cannot be extended to mortgagees of properties that are not yet registered or registered but not under the mortgagor’s name.

Therefore, the Regional Trial Court did not err in ordering the nullification of the documents of sale and mortgage. Contracts involving the sale or mortgage of unregistered property by a person who was not the owner or by an unauthorized person are void."

SECOND DIVISION

[ G.R. No. 193551. November 19, 2014 ]

HEIRS OF GREGORIO LOPEZ, REPRESENTED BY ROGELIA LOPEZ, ET AL., PETITIONERS, VS. DEVELOPMENT BANK OF THE PHILIPPINES [NOW SUBSTITUTED BY PHILIPPINE INVESTMENT TWO (SPV-AMC), INC.], RESPONDENTS.

https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/59904