IBM PHILIPPINES, INC.

G.R. No. 117221 April 13, 1999

IBM PHILIPPINES, INC., VIRGILIO L. PEÑA, and VICTOR V. REYES, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and ANGEL D. ISRAEL, respondents.

MENDOZA, J

This is a petition or certiorari to set aside the decision, ¹ dated April 15, 1994, of the National Labor Relations Commission (NLRC) finding private respondent to have been illegally dismissed and ordering his reinstatement and the payment of his wages from August 1991 until he is reinstated.

Petitioner IBM Philippines, Inc. (IBM) is a domestic corporation engaged in the business of selling computers and computer services. Petitioners Virgilio L. Peña and Victor V. Reyes were ranking officers of IBM during the period pertinent to this case.

On April 1, 1975, private respondent Angel D. Israel commenced employment with IBM as Office Products Customer Engineer. For the next sixteen (16) years, he occupied two other positions in the company, ² received numerous award, ³ and represented the company in various seminars and conferences in and out of the country. ⁴

On February 1, 1990, private respondent was assigned to the team supervised by petitioner Reyes.

On June 27, 1991, petitioner Reyes handed a letter to private respondent informing the latter that his employment in the company was to be terminated effective July 31, 1991 on the ground of habitual tardiness and absenteeism. The letter states, thus:

June 27, 1991

Mr. Angel D. Israel

Present

Dear Angel,

This refers to our previous discussion regarding your habitual absences and tardiness the last of which was on June 26, 1991.

Your records will attest to the fact that on several occasions, your attention has been called to your habitual tardiness and non-observance of standing office procedures regarding attendance. Despite several opportunities given to you, you cannot seem to reform your ways and attitude on the matter of attendance. Considering that we area service-oriented company, you can appreciate that we cannot allow such a situation to continue lest we put the best interest of the Company in jeopardy.1âwphi1.nêt

Much to our regret, therefore, pleased (sic) be advised that the Company is terminating your employment effective July 31, 1991.

You are requested to report to Personnel Department at your earliest convenience for the settlement of any money or benefits due you.

Very truly yours,

(Sgd) V.V. REYES

Business Manager

cc. L.L. Abano

Alleging that his dismissal was without just cause and due process, private respondent filed a complaint with the Arbitration Branch of the Department of Labor and Employment (DOLE) on July 18, 1991.

In his position paper filed on September 6, 1991, he claimed that he was not given the opportunity to be heard and that he was summarily dismissed from employment based on charges which had not been duly proven. ⁵

Petitioners denied private respondent's claims. It was alleged that several conferences were held by the management with private respondent because of the latter's unsatisfactory performance in the company and he was given sufficient warning and opportunity to "reform and improve his attitude toward attendance," ⁶ but to their regret, he never did. It was alleged that private respondent was constantly told of his poor attendance record and inefficiency through the company's internal electronic mail (e-mail) system. According to petitioners, this system allows paperless or "telematic" ⁷ communication among IBM personnel in the company offices here and abroad. An employee is assigned a "User ID" and the corresponding password is provided by the employee himself and, theoretically, known only to him. Employees are then expected to turn on their computers everyday, "log in" to the system by keying in their respective IDs and passwords in order to access and read the messages sent to and stored in the computer system. To reply, an employee types in or encodes his message-response and sends the same to the intended recipient, also via the computer system. The system automatically records the time and date each message was sent and received, including the identification of the sender and receiver thereof. All messages are recorded and stored in computer disks. ⁸

Attached to petitioners' position paper were copies of print-outs of alleged computer entries/messages sent by petitioner Reyes to private respondent through IBM's internal computer system. The following is a summary of the contents of the print-ours which mostly came from petitioner Reyes' computer:

(a) Private respondent was admonished when he would miss out on meetings with clients and failed to attend to important accounts, such as that of Hella Philippines; ⁹

(b) Petitioner Reyes conducted consultations with private respondent concerning the latter's work habits; ¹⁰

(c) A new policy of requiring employees to be at the office at 8:30 a.m. every morning was adopted and employers were no longer allowed to sign out of the office by phone; ¹¹

(d) Petitioner Reyes would type into his computer the records of the security guard which reflect private respondent's daily tardiness and frequent absences; ¹²

(e) Private respondent was admonished when he failed to respond to instructions from his superiors; ¹³

(f) IBM Australia, contacted by Hella Australia, once asked about the reported lack of attention given to Hella Philippines. ¹⁴ Private respondent directly answered IBM Australia, through telematic memo, and reported that Hella Philippines was deferring its computer plan and decided to use micros in the meantime; ¹⁵

(g) The said response was denied by Hella Australia which later made it clear that it would be buying "anything but IBM"; ¹⁶ and

(h) While private respondent showed some improvement after consultations where he allegedly admitted his shortcomings, petitioner Reyes reported that he (private respondent) would eventually slide back to his old ways despite constant counselling and repeated warnings that he would be terminated if he would not improve his work habits. ¹⁷

Through these computer print-ours calling private respondent's attention to his alleged tardiness and absenteeism, petitioner sought to prove that private respondent was sufficiently notified of the charges against him and was guilty thereof because of his failure to deny the said charges.

On March 13, 1992, the labor arbiter rendered a decision finding private respondent to have been terminated for cause and accordingly dismissing the complaint. Considering, however, the ground for termination as well as private respondent's long record of service to the company, the arbiter ordered the award of separation pay at the rate equivalent to one-half (1/2) month salary for every year of service. The dispositive portion of the decision reads —

WHEREFORE, judgment is hereby rendered in this case declaring respondent IBM Phils., Inc. not guilty of the charge of illegal dismissal. However, respondent company is directed to pay complainant Israel the sum of Two Hundred Forty Eight Thousand (P248,000.00) as separation pay. All other claims are denied for lack of merit.

It appears, however, that prior to the release of the labor arbiter's decision at 11:21 a.m. on March 26, 1992, private respondent had filed a "Manifestation And Motion To Admit Attached New Evidence For The Complainant" which was received by the Arbitration Branch at 10:58 a.m. of the same day. The evidence consisted of private respondent's Daily Time Records (DTRs) for the period June 1, 1990 to August 31, 1990 and pay slips for the period January 1990 to June 1991 showing that private respondent did not incur any unexcused absences, that he was not late on any day within the period and that no deduction was made from his salary on account of tardiness or absences.

Private respondent appealed to the NLRC which, on April 15, 1994, reversed the labor arbiter's decision and found private respondent's dismissal illegal. The NLRC ruled: (1) that the computer print-outs which petitioners presented in evidence to prove that private respondent's office attendance was poor were insufficient to show that the latter was guilty of habitual absences and tardiness; and (2) that private respondent was not heard in his defense before the issuance of the final notice of dismissal. ¹⁸ The dispositive portion of the NLRC's decision reads:

WHEREFORE, the Decision dated March 13, 1992 is hereby SET ASIDE and a new one entered declaring the dismissal of the complainant as illegal. Respondent (sic) are hereby ordered to reinstate complainant to his former position without loss of his seniority rights and to pay backwages starting August 1991 until reinstated at the rate of P40,516.65 a month including all its benefits and bonuses.

Presiding Commissioner Edna Bonto-Perez dissented on the ground she found that petitioners have presented strong and convincing documentary evidence that private respondent was guilty of habitual tardiness and absences. She was also of the opinion that private respondent was sufficiently warned before he was actually dismissed. ¹⁹

Petitioners moved for a reconsideration, but their motion was denied in a resolution, dated July 20, 1994. Hence, this petition for certiorari. Petitioners contend that —

1. THE NATIONAL LABOR RELATIONS COMMISSION COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK Of JURISDICTION IN HOLDING THAT NO JUST CAUSE EXISTS NOR WAS THERE DUE PROCESS OBSERVED IN THE DISMISSAL OF THE PRIVATE RESPONDENT BECAUSE THE COMPUTER PRINTOUTS WHICH PROVE JUST CAUSE AND DUE PROCESS ARE NOT ADMISSIBLE IN EVIDENCE.

2. THE NATIONAL LABOR RELATIONS COMMISSION COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR EXCESS OF ITS JURISDICTION IN HOLDING THAT EVEN IF THE COMPUTER PRINTOUTS WERE ADMISSIBLE, PETITIONER FAILED TO SATISFY DUE PROCESS.

We find petitioners' contention to be without merit.

First. Petitioners argue that the computer print-outs submitted by them need not be identified or authenticated according to the rules of procedure in regular courts in order for the same to be admissible in evidence. They contend that technical rules of evidence do not apply to administrative/labor cases ²⁰ and because of a relaxation of the rules of evidence, private respondent was in fact allowed by the labor arbiter to adduce additional evidence even after a decision had been rendered. ²¹

It is indeed true that administrative agencies, such as the NLRC, are not bound by the technical rules of procedure and evidence in the adjudication of cases. ²² This was the reason private respondent was allowed to submit additional evidence even after the case was deemed submitted for resolution by the labor arbiter. The practice of admitting additional evidence on appeal in labor cases has been sanctioned by this Court. ²³

However, the liberality of procedure in administrative actions is subject to limitations imposed by basic requirements of due process. As this Court said in Ang Tibay v. CIR, ²⁴ the provision for flexibility in administrative procedure "does not go so far as to justify orders without a basis in evidence having rational probative value." More specifically, as held in Uichico v. NLRC: ²⁵

It is true that administrative and quasi-judicial bodies like the NLRC are not bound by the technical rules of procedure in the adjudication of cases. However, this procedural rule should not be construed as a license to disregard certain fundamental evidentiary rules. While the rules of evidence prevailing in the courts of law or equity are not controlling in proceedings before the NLRC, the evidence presented before it must at least have a modicum of admissibility for it to be given some probative value. The Statement of Profit and Losses submitted by Crispa, Inc. to prove its alleged losses, without the accompanying signature of a certified public accountant or audited by an independent auditor, are nothing but self-serving documents which ought to be treated as a mere scrap of paper devoid of any probative value.

The computer print-outs, which constitute the only evidence of petitioners, afford no assurance of their authenticity because they are unsigned. The decisions of this Court, while adhering to a liberal view in the conduct of proceedings before administrative agencies, have nonetheless consistently required some proof of authenticity or reliability as condition for the admission of documents.

In Rizal Workers Union v. Ferrer-Calleja, ²⁶ this Court struck down the decision of the Director of Labor Relations which was based on an unsigned and unidentified manifesto. It was held:

From even a perfunctory assessment, it becomes apparent that the "evidence" upon which said decision is professedly based does not come up to that standard of substantiality.

It is of course also a sound and settled rule that administrative agencies performing quasi-judicial functions are unfettered by the rigid technicalities of procedure observed in the courts of law, and this so that disputes brought before such bodies may be resolved in the most expeditious and inexpensive manner possible. But what is involved here transcends mere procedural technicality and concerns the more paramount principles and requirements of due process, which may not be sacrificed to speed or expediency. . . The clear message of [Article 221 of the Labor Code] is that even in the disposition of labor cases, due process must never be subordinated to expediency or dispatch. Upon this principle, the unidentified documents relied upon by respondent Director must be seen and taken for what they are, mere inadmissible hearsay. They cannot, by any stretch of reasoning, be deemed substantial evidence of the election frauds complained of.

Likewise, in the case of EMS Manpower & Placement Services v.
NLRC, ²⁷ the employer submitted a photocopy of a telex which supposedly shows that the employee was guilty of "serious misconduct" and which became the basis of her dismissal. This Court ruled that the telex, a "single document, totally uncorroborated and easily concocted or fabricated to suit one's personal interest and purpose," ²⁸ was insufficient to uphold the employer's defense.

In Jarcia Machine Shop and Auto Supply, Inc. v. NLRC, this Court held as incompetent unsigned daily time records presented to prove that the employee was neglectful of his duties:

Indeed, the [DTRs] annexed to the present petition would tend to establish private respondent's neglectful attitude towards his work duties as shown by repeated and habitual absences and tardiness and propensity for working undertime for the year 1992. But the problem with these DTRs is that they are neither originals nor certified true copies. They are plain photocopies of the originals, if the latter do exist. More importantly, they are not even signed by private respondent nor by any of the employer's representatives. . . . ²⁹

In the case at bar, a specimen of the computer print-out submitted by petitioners reads:

Date and time 10/12/90 09:23:1

From: REYES VV — MNLVM1

To: ISRAEL — MNLRVM Israel, A.D.

SEC: I IBM INTERNAL USE ONLY

Subject:

Angel, have been trying to pin you down for a talk the past couple of days. Whatever happened to our good discussion 2 weeks ago? I thought you would make an effort to come in on time from then on? If you have problems which prevent you from coming in on time, let me know because I would really like to help if I can. The sum of all your quotas is less than mine so I really need all of you pitching in. Kindly take a look at your proofs in-tray as there are some to do's which are pending. Acts such as St. Louis U. and NEECO should be worth looking into as they've been inquiring about upgrading their very old boxes. If you are too tied up for these accounts do let me know so I can reassign. By Monday morning please. Let's give it that final push for the branch!.

——————————————————————————————

Regard from the APPLICATION MNLVM 1 (REYES VV)

SYSTEMS MARKETING group T (832) 8192-279

Victor V. Reyes — Marketing Manager

——————————————————————————————

Not one of the 18 print-out copies submitted by petitioners was ever signed, either by the sender or the receiver. There is thus no guarantee that the message sent was the same message received. As the Solicitor General pointed out, the messages were transmitted to and received nor by private respondent himself but his computer. ³⁰

Neither were the print-outs certified or authenticated by any company official who could properly attest that these came from IBM's computer system or that the data stored in the system were not and/or could not have been tampered with before the same were printed out. It is noteworthy that the computer unit and system in which the contents of the print-outs were stored were in the exclusive possession and control of petitioners since after private respondent was served his termination letter, he had no more access to his computer. ³¹

Second. Even if the computer print-outs were admissible, they would not suffice to show that private respondent's dismissal was justified.

Petitioners' contention is that private respondent was repeatedly warned through computer messages for coming in late or not reporting at all to the office during the period May 1990 — June 1991 but he never denied the allegavtions. Therefore, he must be deemed to have admitted these allegations. ³² But the burden of proving that the dismissal was for just cause is on petitioners. They cannot simply rely on any admission by private respondent implied from his failure to deny the alleged computer messages to him which he denied he had ever received. On the other hand, private respondent's additional evidence, consisting of DTRs and reporting pay slips, show that he did not incur unexcused absences or tardiness or that he suffered deduction in pay on account of such absences or tardiness.

Indeed, petitioners could have easily proven their allegations by presenting private respondent's DTRs. Since these were in petitioners' possession, their non-production thereof raises the presumption that if presented they would be adverse to petitioners. This is precisely what the best evidence rule guards against.

The purpose of the rule requiring the production of the best evidence is the prevention of fraud, because if a party is in possession of such evidence and withholds it, and seeks to substitute inferior evidence in its place, the presumption naturally arises that the better evidence is withheld for fraudulent purposes which its production would expose and defeat. ³³

Private respondent's DTRs for the period June 1, 1990 — August 30, 1990 ³⁴ show that while his attendance record may not have been perfect, it was at least satisfactory. The days when private respondent did not report to the office were credited either as vacation or as sick leaves. On days when he was away on business trips, his destination was shown. The DTRs were signed by petitioner Victor Reyes.

It is said that the DTRs presented were only for the period when private respondent's attendance was excellent; he took care not to submit his DTRs for other months during which he was often late in coming to office. ³⁵ As the Solicitor General has pointed out, however, it was precisely during that period of June 1, 1990 — August 30, 1990 when, according to the print-outs submitted by petitioners, private respondent was often late or absent.

Nor is there proof to support petitioners' allegation that it was private respondent's secretary and not him who often signed the attendance sheet. ³⁶ Indeed, petitioners did not present private respondent's secretary or, at the very least, attach an affidavit sworn to by her to prove their allegations and thus dispute the DTRs presented by private respondent. This, notwithstanding ample opportunity to do so. On the other hand, as already stated, the DTRs, showing private respondent's good attendance, were signed by petitioner Victor Reyes himself, and no good reason has been shown why they cannot be relied upon in determining private respondent's attendance.

Third. Even assuming the charges of habitual tardiness and absenteeism were true, such offenses do not warrant private respondent's dismissal. He has not been shown to have ever committed any infraction of company rules during his sixteen-year stint in the company. Although it is alleged that he failed to attend important client meetings and gave false representations to a valued client to cover his tracks, there is no record finding him guilty of such offenses. Dismissal has always been regarded as the ultimate penalty. ³⁷ The fact that lapses in private respondent's attendance record may have occurred only during his final year in the company, after a long period of exemplary performance, makes petitioners' contention dubious. While it is true that long years of service is no guarantee against dismissal for wrongdoing, ³⁸ at least the employee's record does provide an index to his work. In case doubt exists between the evidence presented by the employer and that presented by the employee, the scales of justice must be tilted in favor of the latter. ³⁹

Fourth. The print-outs likewise failed to show that private respondent was allowed due process before his dismissal.

The law requires an employer to furnish the employee two written notices before termination of his employment may be ordered. The first notice must inform him of the particular acts or omissions for which his dismissal is sought, the second of the employer's decision to dismiss the employee after he has been given the opportunity to be heard and defend himself. ⁴⁰

These requirements were not observed in this case. As noted earlier, there is no evidence that there was an exchange of communication between petitioners and private respondent regarding the latter's supposed substandard performance. Private respondent has consistently denied, however, that he was ever advised of the charges hurled against him. The so-called one-on-one consultations or "personal counsellings" mentioned in the print-outs between petitioner Reyes and private respondent concerning the latter's work habits do not satisfy the requirements of due process, as we had occasion to say in Pono v. NLRC. ⁴¹

Consultations or conferences may not be a substitute for the actual holding of a hearing. Every opportunity and assistance must be accorded to the employee by the management to enable him to prepare adequately for his defense, including legal representation. ⁴²

In Ruffy v. NLRC, ⁴³ this Court held that what would qualify as sufficient or "ample opportunity," as required by law, would be "every kind of assistance that management must accord to the employee to enable him to prepare adequately for his defense." No such opportunity was given to private respondent in this case. He was simply served his termination notice without being heard in his defense.

Fifth. Petitioners allege that the NLRC, after concluding that the evidence submitted by them were not properly identified or authenticated, should have remanded the case to the arbiter for "clarificatory" hearing.

A formal hearing was not de rigueur. The 1994 Rules of Procedure of the NLRC, §4 provides:

Immediately after the submission by the parties of their position papers/memorandum, the Labor Arbiter shall, motu proprio, determine whether there is need for a formal trial or hearing. At this stage, he may, at his discretion and for the purpose of making such determination, ask clarificatory questions to further elicit facts or information, including but not limited to the subpoena of relevant documentary evidence, if any, from any party or witness.

As held by the NLRC:

Aside from these computer print-outs, respondents have not presented any other evidence to prove that complainant was ever called for investigation nor his side heard prior to receipt of the termination letter dated June 27, 1991. In fact, even if we consider these computer print-outs, respondents still failed to satisfy the requirements of procedure due process. . . . In this particular case, we observe that there is failure on the part of respondents to prove the existence of a legal cause. The evidence presented before the Labor Arbiter did not sufficiently and clearly support the allegation of respondents that complainant committed habitual absences and tardiness resulting into inefficiency. ⁴⁴

In spite of this finding, petitioners failed to adduce additional evidence when they moved for a reconsideration of the NLRC decision or when they filed the instant petition. Despite the opportunities afforded them, petitioners failed to substantiate their allegations. Neither have they shown sufficient reasons to convince this Court that, if the case were to be remanded to the arbiter or a formal hearing, they would be able to present evidence which they could not have presented during the initial stages of this case. As we held in Megascope General Services v. NLRC: ⁴⁵

As regards petitioner's contention that a hearing has to be conducted to be fully ventilate the issues in the case, . . . [s]uffice it to state that nonverbal devices such as written explanations, affidavits, position papers or other pleadings can establish just as clearly and concisely an aggrieved party's defenses. Petitioner was amply provided with the opportunity to present evidence that private respondents were not its employees. Indeed, it was petitioner's failure to present substantial evidence to buttress its claims that worked to its disadvantage and not the absence of a full-blown hearing before the public respondent.

WHEREFORE, the petition is DISMISSED and the decision of the NLRC, dated April 15, 1994, is hereby AFFIRMED.1âwphi1.nêt

SO ORDERED.

Bellosillo, Puno, Quisumbing and Buena, JJ., concur.

Footnotes

1 NLRC NCR Case No. 00-01-04250-91; NLRC CA No. 003134-92.

2 Office Products Marketing Represenative: July 1, 1977 — December 31, 1982; Data Proceessing Marketing Representative: January 1, 1983 — July 31, 1991.

3 In 1977, he received the Customer Engineering Excellence in Service Award. He was also a consistent member of the Hundred Percent Club fom 1979 to 1990. See NLRC Decision, p. 7; Petition, Annex U; Comment-Private Respondent, p. 4; Rollo, pp. 103, 146.

4 Comment-Private Respondent, pp. 4-5; Rollo, pp. 146-147.

5 Comment-NLRC, pp. 2-4; Rollo, pp. 209-211.

6 Comment-NLRC, p. 4; Rollo, p. 211.

7 The word "telematic" is not yet found in regular English dictionaries. According to petitioners, it is derived from the French word telematique which is used in communications to refer to the combination of computers and telecommunications for data processing and information. See Note 1, Petition, p. 43; Rollo, p. 44.

8 Petition, pp. 36-37; Rollo, pp. 37-38.

9 Petition, Annexes A, I, and J; Rollo, pp. 64, 73-74.

10 Ibid., Annexes B and C; Rollo, pp. 65-67.

11 Id., Annexes H and P; Rollo, pp. 72, 81.

12 Id., Annexes Q and Q-1; Rollo, pp. 82-83.

13 Id., Annexes D, E, F, and G; Rollo, pp. 68-71.

14 Id., Annex K; Rollo, p.76.

15 Id., Annex L; Rollo, p. 77.

16 Id., Annexes M and N; Rollo, pp. 78-79.

17 Id., Annexes R and S; Rollo, pp. 84-85.

18 NLRC Decision, pp. 6-7; Rollo, pp. 102-103.

19 See Petition, Annex W-1; Rollo, pp. 106-107.

20 Petition, p. 43; Rollo, p. 44.

21 Reply, p. 4; Rollo, p. 246.

22 LABOR CODE, Art. 221; Jarcia Machine Shop and Auto Supply v. NLRC, 266 SCRA 97 (1997).

23 Gañete v. NLRC, 250 SCRA 259, 266 (1995); Bristol Laboratories Employees' Association v. NLRC 187 SCRA 118, 121 (1990).

24 69 Phil. 635, 643 (1940).

25 273 SCRA 35, 44-45 (1997).

26 186 SCRA 431 (1990).

27 276 SCRA 117 (1997).

28 Supra, at 121.

29 266 SCRA at 104.

30 Comment-NLRC, p. 10; Rollo, p. 217.

31 Comment, p. 10; Rollo, p. 152.

32 Petition, pp. 45, 47; Rollo, pp. 46, 58.

33 7 VICENTE V. FRANCISCO, THE REVISED RULES OF COURT IN THE PHILIPPINES 121-122 (1973).

34 Comment-Private Respondent, Annexes A to A-3; Rollo, pp. 165-168.

35 Petition, p. 41; Rollo, p. 42.

36 Petition, p. 14; Rollo, p. 17.

37 Philippine Long Distance Telephone Company v. National Labor Relations Commission and Enrique Gabriel, G.R. No. 106947, February 11, 1999 citing Pantranco North Express, Inc. v. National Labor Relations Commission, 252 SCRA 237, 243 (1996).

38 Philippine Air Lines v. National Labor Relations Commssion, 198 SCRA 748, 762 (1991).

39 Triple Eight Integrated Services, Inc. v. National Labor Relations Commission, G.R. No. 129584, December 3, 1998.

40 Rule XIV, Book V, Omnibus Rules Implementing the Labor Code; National Service Corporation v. Third Division, NLRC, Credo v. NLRC, 168 SCRA 122, 128-129 (1988).

41 275 SCRA 611 (1997).

42 Id., at 619.

43 182 SCRA 365, 369-370 (1990).

44 Rollo, pp. 100-101, 102.

45 274 SCRA 147, 155 (1991) (Emphasis added).

REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES (DENR),

G.R. No. 172931               June 18, 2009
REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES (DENR), Petitioner,
vs.
REGIONAL TRIAL COURT, BRANCH 18, ROXAS CITY, CAPIZ, RIZAL RECIO, TERESITA RECIO, PACIENCIA RECIO, and HEIR OF OSCAR RECIO, HARRIET VILLANUEVA vda. DE RECIO, and the REGISTER OF DEEDS, ROXAS CITY, CAPIZ, Respondents.

D E C I S I O N

QUISUMBING, J.:

This petition for review on certiorari, filed by the Department of Environment and Natural Resources on behalf of the Republic of the Philippines (RP), seeks to annul and set aside the Decision¹ dated May 25, 2006 of the Court of Appeals, Cebu City, 18th Division, in CA-G.R. SP No. 72691. The Court of Appeals had dismissed RP’s petition for annulment of judgment² of the Decision³ dated September 14, 1984 of the Regional Trial Court (RTC) of Roxas City, Branch 18, which ordered the confirmation and registration of title to Lot No. 900 of the Pilar Cadastre, LRC Cadastral Record No. 50963 located at Marita, Pilar, Capiz in the names of the applicants and private respondents herein Rizal Recio, Teresita L. Recio, Paciencia L. Recio, and the only heir of Oscar L. Recio, his mother, Harriet Villanueva Vda. de Recio.

The undisputed facts are as follows:

On September 14, 1984, said RTC rendered a decision in Land Registration Case (LRC) No. N-785 granting the Application for Registration of Title⁴ dated June 20, 1977 filed by Rizal Recio for himself and in behalf of his brother Oscar Recio and sisters Teresita Recio and Paciencia Recio. The RTC decreed:

WHEREFORE, judgment is hereby rendered ordering the confirmation and registration of title to land, Lot No. 900 of Pilar Cadastre, LRC Cadastral Record No. 50963 situated in Marita, Municipality of Pilar, Province of Capiz, Island of Panay, described in the technical description (Exhibit "E") and the approved plan AP-06-000028 (Exhibit "X") in the names of the applicants Rizal Recio, of legal age, married to Alita B. Lañada, with residence in Loctugan Hills, Roxas City; Teresita L. Recio, of legal age, Filipino, married to Pio Acelentaba and a resident of Panay, Capiz; Paciencia L. Recio, of legal age, Filipino, married to Nestor Donado and a resident of Dayao, Roxas City, and to the only heir of Oscar L. Recio, his mother Harriet Villanueva Vda. de Recio, who is of legal age, Filipino, a widow and a resident of Roxas City, and a decree may issue after this decision shall have become final.

SO ORDERED.⁵

The abovementioned decision became final, and pursuant thereto, Original Certificate of Title (OCT) No. 0-2107⁶ covering the 11,189-square meter piece of land, was issued in the Recios’ names on April 17, 1985.

In 1997, a number of occupants of Lot No. 900, namely Joselito Alba, Virginia Bengora, Teodosia Alba, Celso Bullos, Elizabeth Barrosa, Noel Gallardo, Paquita Ducit and Arturo Borleo filed a protest before the DENR, Roxas City against the issuance of OCT No. 0-2107 on the ground that the land covered therein is within forest lands or timberlands, hence it cannot be the subject of private appropriation.

Acting on the protest, Lorna L. Jomento, Special Investigator II of the Lands Management Department (LMD), DENR, Region VI, Iloilo City conducted an ocular inspection and investigation on the status of Lot No. 900.

On January 19, 1998, Jomento rendered a written report⁷ that Lot No. 900 falls within the forest lands of Project No. 20-A, established on January 17, 1986 under Forestry Administrative Order No. 4-1777, per Land Classification (LC) Map No. 3132.⁸ Jomento recommended that an action be instituted in the proper court for the cancellation of OCT No. 0-2107.

On September 9, 2002, RP, represented by the DENR, through the Office of the Solicitor General (OSG), filed a petition for annulment of judgment before the Court of Appeals seeking to annul the Decision dated September 14, 1984 on the ground that the RTC had no jurisdiction to adjudicate title over the subject parcel of land which forms part of the public forest.⁹ In the petition, the OSG cited Section 14¹⁰ of Presidential Decree No. 1529¹¹ which allows the court to adjudicate only alienable and disposable lands of the public domain in favor of those who have successfully acquired title to said lands by acquisitive prescription. The OSG argued that the trial court exceeded its jurisdiction when it adjudicated the subject land which is forest land and, accordingly, its decision is null and void.¹²

In their Answer to the Petition for Annulment of Judgment,¹³ the Recios argued that the RTC of Roxas City, Branch 18 has jurisdiction over the case. They contended that petitioner hastily and negligently filed the petition without first examining the records of LRC No. N-785 and despite its knowledge of their duly approved Plan LRC-SWO-14402 for Lot No. 900 of the Pilar Cadastre. They pointed out that said approved plan clearly showed that Lot No. 900 was not within LC Project No. 20-A, but LC Project No. 20 which was duly certified as alienable and disposable on September 28, 1960 as per BFD Map LC-2401. They also argued that the Decision dated September 14, 1984, has been declared final and executory, and OCT No. 0-2107 has been issued on April 17, 1985, in their names. Hence, LRC No. N-785 is already a closed case and res judicata has set in.¹⁴

On September 24, 2003, the Court of Appeals issued a Resolution¹⁵ directing the Executive Judge of the RTC in Roxas City to conduct a pre-trial conference and reception of evidence. However, since the Executive Judge presides in the same branch where the decision in LRC No. N-785 was rendered, the incident was assigned by raffle to another judge in the RTC of Roxas City.¹⁶ In a Report and Recommendation¹⁷ dated December 13, 2005, Judge Juliana C. Azarraga, RTC of Roxas City, Branch 15, recommended that the petition for annulment of judgment be dismissed.1avvphi1

Subsequently, on May 25, 2006, the Court of Appeals dismissed the petition for lack of sufficient evidence. The decision states:

After going over the evidence offered by both parties, the Court finds it proper to dismiss the petition.

Petitioner failed to sufficiently prove its allegation that Lot 900 forms part of the forest lands of the public domain. The evidence offered by the petitioner that Lot 900 falls within forest lands consists only of the testimonies of its two witnesses, the written report of Lorna Jomento (Exhibit A), and the ordinary photocopy of the sketch plan of Lot 900 (Exhibit E) and the verification (Exhibit E-1) appearing on it.

The mere photocopy of the sketch plan of Lot 900 (Exhibit E) as well as the verification (Exhibit E-1) appearing thereon is without probative value and inadmissible in evidence pursuant to the best evidence rule. In Philippine Banking Corporation vs. Court of Appeals, the Supreme Court held:

"The Best Evidence Rule provides that the court shall not receive any evidence that is merely substitutionary in its nature, such as photocopies, as long as the original evidence can be had. Absent a clear showing that the original writing has been lost, destroyed or cannot be produced in court, the photocopy must be disregarded, being unworthy of any probative value and being an inadmissible evidence."

The testimonies of petitioner’s two witnesses and the written report of Lorna Jomento, a Special Investigator, stating that based on the records Lot 900 falls within the forest lands reserved for fishpond created under Project 20-A dated January 17, 1986 under Forestry Administrative Order No. 4-1777 per Land Classification Map No. 3132 do not overcome the Certification (Exhibit 1-D for private respondents) dated November 8, 1976 of the then Bureau of Forest Development, Department of Natural Resources (now DENR, the representative of herein petitioner) certifying that Lot 900 falls within the alienable and disposable land Block LC Project No. 20 of Pilar, Capiz certified as such on September 28, 1960 per BFD Map LC-2401. If, indeed, Lot 900 falls within the forest lands reserved for fishpond purposes created under Project 20-A dated January 17, 1986 under Forestry Administrative Order No. 4-1777 per Land Classification Map No. 3132, petitioner should have presented such land classification map indicating that Lot 900 lies therein and not in Block LC No. 20 of Pilar Cadastre per BFD Map LC-4201 as stated in the Certification dated November 8, 1976 of the then Bureau of Forest Development, Department of Natural Resources.

Thus, for failure of the petitioner to adduce sufficient evidence to prove its allegation that Lot 900 falls within the forest lands the petition has to be dismissed.

WHEREFORE, premises considered, the instant petition is hereby DISMISSED.
SO ORDERED.¹⁸
Hence, this petition.
Petitioner raises the following issues for our resolution:

WHETHER THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE PETITION FOR THE ANNULMENT OF JUDGMENT OF THE REGIONAL TRIAL COURT, BRANCH 18, IN ROXAS CITY BECAUSE:

A. SAID RTC JUDGMENT WAS ISSUED WITHOUT JURISDICTION AS IT ALLOWED THE REGISTRATION OF INALIENABLE LAND IN FAVOR OF PRIVATE INDIVIDUALS.

B. PETITIONER HAD … DISCHARGE[D] THE BURDEN OF ESTABLISHING THE INALIENABLE AND INDISPOSABLE CHARACTER OF SUBJECT PARCEL OF LAND BY THE QUANTUM OF EVIDENCE REQUIRED BY LAW.¹⁹

Simply stated, the issues raised are: (1) Did the RTC act without jurisdiction in allowing the registration of the subject land? And (2) Did petitioner fail to discharge the burden of establishing the inalienable character of the land?

Petitioner, through the OSG, contends in its Memorandum²⁰ that it is a well-entrenched rule that the classification of public lands is an exclusive prerogative of the executive department of the government and not of the courts.²¹ In this case, it was ascertained in the investigation conducted by Special Investigator Jomento that the land in question falls within the forest land reserved for fishpond purposes created under Project No. 20-A dated January 17, 1986, under Forestry Administrative Order No. 4-1777 per Land Classification (LC) Map No. 3123 dated August 25, 1983. The land, therefore, is inalienable and indisposable and can never be subject to appropriation. The OSG reiterates that under Section 14 of P.D. No. 1529, the court is allowed to adjudicate only "alienable and disposable lands of the public domain" in favor of those who have successfully acquired title thereto by acquisitive prescription. In adjudicating forest land in favor of the private respondents, the RTC of Roxas City, Branch 18 exceeded its jurisdiction, and its decision confirming title to the subject land in favor of private respondents is null and void and should have been annulled by the Court of Appeals.²² Petitioner also argues that the claim of private respondents that the present appeal is barred by res judicata is incorrect since the present petition ultimately seeks the nullification of the decision of the RTC of Roxas City, Branch 18, allowing the registration of inalienable land in their favor.²³

The OSG also argues that it had discharged the burden of establishing the inalienable character of the subject parcel of land by the quantum of evidence required. The actual presentation of LC Map No. 3132 is no longer necessary because the determination of the nature and character of public land in a land investigation conducted by government authorities on land classification is binding on the courts.²⁴ It further argues that Special Investigators Lorna L. Jomento and Eugenio B. Bernas were merely performing their official duties as special land investigators of the LMD, DENR, Region VI, in Iloilo City when they conducted an investigation on the land in question; hence, in the absence of any evidence showing that said special investigators were biased in favor of one party, their testimonies and the investigation report should be accorded the presumption of regularity in the performance of their duties as public officers.²⁵

Private respondents, in their Memorandum²⁶ dated June 14, 2007, for their part maintain that the Decision dated September 14, 1984 had become final, the Land Registration Commission had issued a final decree of registration after one year and OCT No. 0-2017 was issued by the Register of Deeds of Capiz in their names on May 14, 1985. The decision in LRC No. N-785 has therefore become the law between RP, the applicants and the whole world, and is already a closed case that could no longer be revived in subsequent unnecessary litigations.²⁷

As to the first issue, did the RTC act without jurisdiction in allowing the registration of inalienable land?

Petitioner contends that the RTC acted without jurisdiction in allowing the registration of the subject land because the land is forest land and thus, inalienable. Verily, jurisprudence is replete with cases which iterate that forest lands or forest reserves are not capable of private appropriation, and possession thereof, however long, cannot convert them into private property.²⁸

If indeed the subject land is forest land, then the decision of the RTC is void. A void judgment may be assailed or impugned at any time either directly or collaterally, by means of a petition filed in the same case or by means of a separate action, or by resisting such judgment in any action or proceeding wherein it is invoked.²⁹

Moreover, an action for reversion filed by the State to recover property registered in favor of any party which is part of the public forest or of a forest reservation never prescribes. Verily, non-disposable public lands registered under the Land Registration Act may be recovered by the State at any time and the defense of res judicata would not apply as courts have no jurisdiction to dispose of such lands of the public domain.³⁰

Under the facts and circumstances of this case, however, we disagree with petitioner that the subject land is inalienable.lawphil

At the time of application for registration of the subject land by the Recios in 1977, the land was classified as alienable public land. The Recios presented a Certification³¹ dated November 8, 1976 from the then Bureau of Forest Development certifying that the subject land containing an area of 11,189 square meters and described as Lot No. 900, Pilar Cadastre is found to be within the alienable and disposable land block of LC Project No. 20 of Pilar, Capiz certified as such on September 28, 1960 per BFD Map LC-2401. In contrast, petitioner presented Jomento’s report which stated that Lot No. 900 falls within forest lands for fishpond development of Project 20-A, established on January 17, 1986 under Forestry Administrative Order No. 4-1777 per LC Map No. 3132.³²

It is clear that at the time the Recios filed their application for registration of title in 1977 and at the time the RTC rendered its decision in 1984, the land was not inalienable forest land but was alienable land. Hence, the RTC had jurisdiction to adjudicate title to the land.

As to the second issue, we agree with the Court of Appeals that petitioner failed to discharge the burden of establishing the inalienable character of the land.

In an action to annul a judgment, the burden of proving the judgment’s nullity rests upon the petitioner. The petitioner has to establish by clear and convincing evidence that the judgment being challenged is fatally defective.³³

The Court of Appeals ruled that petitioner failed to sufficiently prove its allegation that Lot No. 900 forms part of the forest lands of the public domain since its evidence consists only of the testimonies of two witnesses, a written report of Jomento, and a photocopy of the sketch plan of Lot No. 900. It ruled that a mere photocopy is without probative value and inadmissible in evidence and petitioner should have presented a land classification map indicating where Lot No. 900 lies to refute the Certification dated November 8, 1976 of the then Bureau of Forest Development.

The ruling of the Court of Appeals, based on the abovementioned findings of fact, is upheld by this Court. The jurisdiction of this Court in cases brought before it from the Court of Appeals is limited to reviewing or revising errors of law. The findings of facts of the latter are conclusive for it is not the function of this Court to analyze and weigh such evidence all over again.³⁴ Our jurisdiction is in principle limited to reviewing errors of law that might have been committed by the Court of Appeals. Factual findings of courts, when adopted and confirmed by the Court of Appeals, are final and conclusive on this Court unless these findings are not supported by the evidence on record.³⁵

Finding no reason to deviate from the ruling of the Court of Appeals that petitioner failed to adduce sufficient evidence to prove its allegation that Lot No. 900 falls within forest lands, we affirm such ruling.

WHEREFORE, the petition is DENIED. The Decision dated May 25, 2006 of the Court of Appeals, Cebu City, Eighteenth Division, in CA-G.R. SP No. 72691 is AFFIRMED.

No pronouncement as to costs.
SO ORDERED.
LEONARDO A. QUISUMBING
Associate Justice
WE CONCUR:

CONSUELO YNARES-SANTIAGO^*
Associate Justice

MINITA V. CHICO-NAZARIO** Associate Justice

TERESITA J. LEONARDO-DE CASTRO*** Associate Justice

ARTURO D. BRION
Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO
Chief Justice

Footnotes

^* Designated member of the Second Division per Special Order No. 645 in place of Associate Justice Conchita Carpio Morales who is on official leave.

^** Designated member of the Second Division per Special Order No. 658.

^*** Designated member of the Second Division per Special Order No. 635 in view of the retirement of Associate Dante O. Tinga.

¹ Rollo, pp. 37-44. Penned by Executive Justice Arsenio J. Magpale, with Associate Justices Vicente L. Yap and Apolinario D. Bruselas, Jr. concurring.

² CA rollo, pp. 1-13.

³ Id. at 34-37. Penned by Judge Jonas A. Abellar.

⁴ Records, pp. 135-138.

⁵ CA rollo, p. 19.

⁶ Id. at 38-39.

⁷ Records, pp. 237-238.

⁸ Id. at 241.

⁹ CA rollo, p. 7.

¹⁰ SEC. 14. Who may apply.− The following persons may file in the proper Court of First Instance an application for registration of title to land, whether personally or through their duly authorized representatives:

(1) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier.

(2) Those who have acquired ownership of private lands by prescription under the provisions of existing laws.

x x x x

¹¹ Property Registration Decree, done on June 11, 1978.

¹² CA rollo, pp. 8-9.

¹³ Id. at 22A-28.

¹⁴ Id. at 25.

¹⁵ Records, pp. 2-3. Penned by Associate Justice Edgardo F. Sundiam, with Associate Justices B.A. Adefuin Dela-Cruz and Marina L. Buzon concurring.

¹⁶ Id. at 5.

¹⁷ Id. at 331-342.

¹⁸ Rollo, pp. 42-44.

¹⁹ Id. at 126-127.

²⁰ Id. at 116-140. Dated June 27, 2007.

²¹ Id. at 127.

²² Id. at 129-130.

²³ Id. at 130.

²⁴ Id. at 132-133.

²⁵ Id. at 136.

²⁶ Id. at 78-85.

²⁷ Id. at 84.

²⁸ De la Cruz v. Court of Appeals, G.R. No. 120652, February 11, 1998, 286 SCRA 230, 236.

²⁹ Ang Lam v. Rosillosa and Santiago, 86 Phil. 447, 452 (1950).

³⁰ Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols Vda. de Palanca v. Republic, G.R. No. 151312, August 30, 2006, 500 SCRA 209, 220.

³¹ Records, p. 139-A.

³² Id. at 237.

³³ Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols Vda. de Palanca v. Republic, supra note 30, at 220.

³⁴ Alipoon v. Court of Appeals, G.R. No. 127523, March 22, 1999, 305 SCRA 118, 127.

³⁵ Producers Bank of the Philippines v. Court of Appeals, G.R. No. 115324, February 19, 2003, 397 SCRA 651, 658-659.

SALUN-AT MARQUEZ and NESTOR DELA CRUZ

G.R. No. 168387               August 25, 2010

SALUN-AT MARQUEZ and NESTOR DELA CRUZ, Petitioners,
vs.
ELOISA ESPEJO, ELENITA ESPEJO, EMERITA ESPEJO, OPHIRRO ESPEJO, OTHNIEL ESPEJO, ORLANDO ESPEJO, OSMUNDO ESPEJO, ODELEJO ESPEJO and NEMI FERNANDEZ, Respondents.

D E C I S I O N

DEL CASTILLO, J.

When the parties admit the contents of written documents but put in issue whether these documents adequately and correctly express the true intention of the parties, the deciding body is authorized to look beyond these instruments and into the contemporaneous and subsequent actions of the parties in order to determine such intent.

Well-settled is the rule that in case of doubt, it is the intention of the contracting parties that prevails, for the intention is the soul of a contract, not its wording which is prone to mistakes, inadequacies, or ambiguities. To hold otherwise would give life, validity, and precedence to mere typographical errors and defeat the very purpose of agreements.

This Petition for Review on Certiorari¹ assails the October 7, 2003 Decision,² as well as the May 11, 2005 Resolution³ of the Court of Appeals (CA) in CA G.R. SP No. 69981. The dispositive portion of the appellate court’s Decision reads:

WHEREFORE, finding reversible error committed by the Department of Agrarian Reform Adjudication Board, the instant petition for review is GRANTED. The assailed Decision, dated 17 January 2001, rendered by the Department of Agrarian Reform Adjudication Board is hereby ANNULLED and SET ASIDE. The Decision of the Department of Agrarian Reform Adjudication Board of Bayombong[,] Nueva Vizcaya, dated 17 March 1998, is REINSTATED. Costs against respondents.

SO ORDERED.⁴

The reinstated Decision of the Department of Agrarian Reform Adjudication Board (DARAB) of Bayombong, Nueva Vizcaya, in turn, contained the following dispositive portion:

Accordingly, judgment is rendered:

1. Finding [respondents] to be the owner by re-purchase from RBBI [of] the Murong property covered by TCT No. [T-]62096 (formerly TCT No. 43258);

2. Ordering the cancellation of TCT with CLOA Nos. 395 and 396 in the name[s] of Salun-at Marquez and Nestor de la Cruz respectively, as they are disqualified to become tenants of the Lantap property;

3. Directing RBBI to sell through VOS the Lantap property to its rightful beneficiary, herein tenant-farmer Nemi Fernandez under reasonable terms and conditions;

4. Ordering RBBI to return the amount paid to it by Nestor and Salun-at; and ordering the latter to pay 20 cavans of palay per hectare at 46 kilos per cavan unto [respondents] plus such accrued and unpaid rentals for the past years as may be duly accounted for with the assistance of the Municipal Agrarian Reform Officer of Bagabag, Nueva Vizcaya who is also hereby instructed to assist the parties execute their leasehold contracts and;

5. The order to supervise harvest dated March 11, 1998 shall be observed until otherwise modified or dissolved by the appellate body.

SO ORDERED.⁵

Factual Antecedents

Respondents Espejos were the original registered owners of two parcels of agricultural land, with an area of two hectares each. One is located at Barangay Lantap, Bagabag, Nueva Vizcaya (the Lantap property) while the other is located in Barangay Murong, Bagabag, Nueva Vizcaya (the Murong property). There is no dispute among the parties that the Lantap property is tenanted by respondent Nemi Fernandez (Nemi)⁶ (who is the husband⁷ of respondent Elenita Espejo (Elenita), while the Murong property is tenanted by petitioners Salun-at Marquez (Marquez) and Nestor Dela Cruz (Dela Cruz).⁸

The respondents mortgaged both parcels of land to Rural Bank of Bayombong, Inc. (RBBI) to secure certain loans. Upon their failure to pay the loans, the mortgaged properties were foreclosed and sold to RBBI. RBBI eventually consolidated title to the properties and transfer certificates of title (TCTs) were issued in the name of RBBI. TCT No. T-62096 dated January 14, 1985 was issued for the Murong property. It contained the following description:

Beginning at a point marked I on plan H-176292, S. 44034 W. 1656.31 m. more or less from B.L.L.M. No 1, Bagabag Townsite, K-27,

thence N. 28 deg. 20 ‘E., 200.00 m. to point 2;

thence S. 61 deg. 40 ‘E., 100.00 m. to point 3;

thence S. 28 deg. 20 ‘W., 200.00 m. to point 4;

thence N. 61 deg. 40 ‘W., 100.00 m. to point 1; point of beginning;

Containing an area of 2.000 hectares. Bounded on the northeast, by Road; on the southeast, and southwest by public land; and on the northwest by Public Land, properties claimed by Hilario Gaudia and Santos Navarrete. Bearings true. Declination 0131 ‘E. Points referred to are marked on plan H-176292. Surveyed under authority of sections 12-22 Act No. 2874 and in accordance with existing regulations of the Bureau of Lands by H.O. Bauman Public Land Surveyor, [in] December 1912-March 1913. Note: All corners are Conc. Mons. 15x15x60 cm. This is Lot No. 79-A=Lot No. 159 of Bagabag Townsite, K-27.⁹

Subsequently, TCT No. T-62836 dated June 4, 1985 was issued for the Lantap property and contained the following description:

Beginning at a point marked "1" on plan H-105520, N. 80 deg. 32 ‘W., 1150.21 m. from BLLM No. 122, Irrigation project,

thence N. 61 deg. 40’E., 200.00 m. to point 2;

thence N. 28 deg. 20’E, 100.00 m. to point 3;

thence S. 61 deg. 40’E, 200.00 m. to point 4;

thence S. 28 deg. 20’W, 100.00 m. to point 1; point of beginning; containing an area of 2.0000 hectares. Bounded on the northeast, southeast, and southwest by Public land; and on the northwest by Road and public land. Bearings true. Declination 0 deg. 31’E., points referred to are marked on plan H-105520. Surveyed under authority of Section 12-22, Act No. 2874 and in accordance with existing regulations of the Bureau of Lands, by H.O. Bauman Public Land Surveyor, [in] Dec. 1912-Mar. 1913 and approved on January 6, 1932. Note: This is Lot No. 119-A Lot No. 225 of Bagabag Townsite K-27. All corners are B.I. Conc. Mons. 15x60 cm.¹⁰

Both TCTs describe their respective subjects as located in "Bagabag Townsite, K-27," without any reference to either Barangay Lantap or Barangay Murong.

On February 26, 1985, respondents Espejos bought back one of their lots from RBBI. The Deed of Sale¹¹ described the property sold as follows:

x x x do hereby SELL, TRANSFER, and CONVEY, absolutely and unconditionally x x x that certain parcel of land, situated in the Municipality of Bagabag, Province of Nueva Vizcaya, and more particularly bounded and described as follows, to wit:

Beginning at a point marked "1" on plan x x x x Containing an area of 2.000 hectares. Bounded on the NE., by Road; on the SE., and SW by Public Land; and on the NW., by Public Land, properties claimed by Hilario Gaudia and Santos Navarrete. Bearing true. Declination 013 ‘B. Points referred to are marked on plan H-176292.

of which the Rural Bank of Bayombong (NV) Inc., is the registered owner in fee simple in accordance with the Land Registration Act, its title thereto being evidenced by Transfer Certificate of Title No. T-62096 issued by the Registry of Deeds of Nueva Vizcaya.

As may be seen from the foregoing, the Deed of Sale did not mention the barangay where the property was located but mentioned the title of the property (TCT No. T-62096), which title corresponds to the Murong property. There is no evidence, however, that respondents took possession of the Murong property, or demanded lease rentals from the petitioners (who continued to be the tenants of the Murong property), or otherwise exercised acts of ownership over the Murong property. On the other hand, respondent Nemi (husband of respondent Elenita and brother-in-law of the other respondents), continued working on the other property -- the Lantap property -- without any evidence that he ever paid rentals to RBBI or to any landowner. The Deed of Sale was annotated on TCT No. T-62096 almost a decade later, on July 1, 1994.¹²

Meanwhile, on June 20, 1990, RBBI, pursuant to Sections 20¹³ and 21¹⁴ of Republic Act (RA) No. 6657,¹⁵ executed separate Deeds of Voluntary Land Transfer (VLTs) in favor of petitioners Marquez and Dela Cruz, the tenants of the Murong property. Both VLTs described the subject thereof as an agricultural land located in Barangay Murong and covered by TCT No. T-62836 (which, however, is the title corresponding to the Lantap property).¹⁶

After the petitioners completed the payment of the purchase price of P90,000.00 to RBBI, the DAR issued the corresponding Certificates of Land Ownership Award (CLOAs) to petitioners Marquez¹⁷ and Dela Cruz¹⁸ on September 5, 1991. Both CLOAs stated that their subjects were parcels of agricultural land situated in Barangay Murong.¹⁹ The CLOAs were registered in the Registry of Deeds of Nueva Vizcaya on September 5, 1991.

On February 10, 1997 (more than 10 years after the Deed of Sale in favor of the respondents and almost seven years after the execution of VLTs in favor of the petitioners), respondents filed a Complaint²⁰ before the Regional Agrarian Reform Adjudicator (RARAD) of Bayombong, Nueva Vizcaya for the cancellation of petitioners’ CLOAs, the deposit of leasehold rentals by petitioners in favor of respondents, and the execution of a deed of voluntary land transfer by RBBI in favor of respondent Nemi. The complaint was based on respondents’ theory that the Murong property, occupied by the petitioners, was owned by the respondents by virtue of the 1985 buy-back, as documented in the Deed of Sale. They based their claim on the fact that their Deed of Sale refers to TCT No. 62096, which pertains to the Murong property.

Petitioners filed their Answer²¹ and insisted that they bought the Murong property as farmer-beneficiaries thereof. They maintained that they have always displayed good faith, paid lease rentals to RBBI when it became the owner of the Murong property, bought the same from RBBI upon the honest belief that they were buying the Murong property, and occupied and exercised acts of ownership over the Murong property. Petitioners also argued that what respondents Espejos repurchased from RBBI in 1985 was actually the Lantap property, as evidenced by their continued occupation and possession of the Lantap property through respondent Nemi.

RBBI answered²² that it was the Lantap property which was the subject of the buy-back transaction with respondents Espejos. It denied committing a grave mistake in the transaction and maintained its good faith in the disposition of its acquired assets in conformity with the rural banking rules and regulations.

OIC-RARAD Decision²³

The OIC-RARAD gave precedence to the TCT numbers appearing on the Deed of Sale and the VLTs. Since TCT No. T-62096 appeared on respondents’ Deed of Sale and the said title refers to the Murong property, the OIC-RARAD concluded that the subject of sale was indeed the Murong property. On the other hand, since the petitioners’ VLTs referred to TCT No. T-62836, which corresponds to the Lantap property, the OIC-RARAD ruled that petitioners’ CLOAs necessarily refer to the Lantap property. As for the particular description contained in the VLTs that the subject thereof is the Murong property, the OIC-RARAD ruled that it was a mere typographical error.

Further, since the VLTs covered the Lantap property and petitioners are not the actual tillers thereof, the OIC-RARAD declared that they were disqualified to become tenants of the Lantap property and ordered the cancellation of their CLOAs. It then ordered RBBI to execute a leasehold contract with the real tenant of the Lantap property, Nemi.

The OIC-RARAD recognized that petitioners’ only right as the actual tillers of the Murong property is to remain as the tenants thereof after the execution of leasehold contracts with and payment of rentals in arrears to respondents.

DARAB Decision²⁴

Upon appeal filed by petitioners, the DARAB reversed the OIC-RARAD Decision. It ruled that in assailing the validity of the CLOAs issued to petitioners as bona fide tenant-farmers, the burden of proof rests on the respondents. There being no evidence that the DAR field personnel were remiss in the performance of their official duties when they issued the corresponding CLOAs in favor of petitioners, the presumption of regular performance of duty prevails. This conclusion is made more imperative by the respondents’ admission that petitioners are the actual tillers of the Murong property, hence qualified beneficiaries thereof.

As for respondents’ allegation that they bought back the Murong property from RBBI, the DARAB ruled that they failed to support their allegation with substantial evidence. It gave more credence to RBBI’s claim that respondents repurchased the Lantap property, not the Murong property. Respondents, as owners of the Lantap property, were ordered to enter into an agricultural leasehold contract with their brother-in-law Nemi, who is the actual tenant of the Lantap property.

The DARAB ended its January 17, 2001 Decision in this wise:

We find no basis or justification to question the authenticity and validity of the CLOAs issued to appellants as they are by operation of law qualified beneficiaries over the landholdings; there is nothing to quiet as these titles were awarded in conformity with the CARP program implementation; and finally, the Board declares that all controverted claims to or against the subject landholding must be completely and finally laid to rest.

WHEREFORE, premises considered and finding reversible errors[,] the assailed decision is ANNULLED and a new judgment is hereby rendered, declaring:

1. Appellants Salun-at Marquez and Nestor Dela Cruz as the bona fide tenant-tillers over the Murong property and therefore they are the qualified beneficiaries thereof;

2. Declaring Transfer Certificate of Title (TCT) Nos. 395 and 396 issued in the name of [farmer-beneficiaries] Salun-at Marquez and Nestor Dela Cruz respectively, covered formerly by TCT No. 62096 (TCT No. 43258) of the Murong property as valid and legal;

3. Ordering the co-[respondents] to firm-up an agricultural leasehold contract with bona fide tenant-tiller Nemi Fernandez over the Lantap property, [the latter] being the subject matter of the ‘buy back’ arrangement entered into between [respondents] and Rural Bank of Bayombong, Incorporated, and other incidental matters are deemed resolved.

SO ORDERED.²⁵
Ruling of the Court of Appeals

In appealing to the CA, the respondents insisted that the DARAB erred in ruling that they repurchased the Lantap property, while the petitioners were awarded the Murong property. They were adamant that the title numbers indicated in their respective deeds of conveyance should control in determining the subjects thereof. Since respondents’ Deed of Sale expressed that its subject is the property with TCT No. T-62096, then what was sold to them was the Murong property. On the other hand, petitioners’ VLTs and CLOAs say that they cover the property with TCT No. T-62836; thus it should be understood that they were awarded the Lantap property. Respondents added that since petitioners are not the actual tillers of the Lantap property, their CLOAs should be cancelled due to their lack of qualification.

The CA agreed with the respondents. Using the Best Evidence Rule embodied in Rule 130, Section 3, the CA held that the Deed of Sale is the best evidence as to its contents, particularly the description of the land which was the object of the sale. Since the Deed of Sale expressed that its subject is the land covered by TCT No. T-62096 – the Murong property – then that is the property that the respondents repurchased.

The CA further ruled that as for petitioners’ VLTs, the same refer to the property with TCT No. T-62836; thus, the subject of their CLOAs is the Lantap property. The additional description in the VLTs that the subject thereof is located in Barangay Murong was considered to be a mere typographical error. The CA ruled that the technical description contained in the TCT is more accurate in identifying the subject property since the same particularly describes the properties’ metes and bounds.

Both the RBBI²⁶ and petitioners²⁷ filed their respective motions for reconsideration, which were separately denied.²⁸

On June 22, 2004, RBBI filed a separate Petition for Review on Certiorari, docketed as G.R. No. 163320, with this Court.²⁹ RBBI raised the issue that the CA failed to appreciate that respondents did not come to court with clean hands because they misled RBBI to believe at the time of the sale that the two lots were not tenanted. RBBI also asked that they be declared free from any liability to the parties as it did not enrich itself at anyone’s expense. RBBI’s petition was dismissed on July 26, 2004 for lack of merit. The said Resolution reads:

Considering the allegations, issues[,] and arguments adduced in the petition for review on certiorari, the Court Resolves to DENY the petition for lack of sufficient showing that the Court of Appeals had committed any reversible error in the questioned judgment to warrant the exercise by this Court of its discretionary appellate jurisdiction in this case.³⁰

Their Motion for Reconsideration was likewise denied with finality.³¹ Entry of judgment was made in that case on December 15, 2004.³²

On July 27, 2005,³³ petitioners filed the instant petition.

Issues

Rephrased and consolidated, the parties present the following issues for the Court’s determination:

I

What is the effect of the final judgment dismissing RBBI’s Petition for Review on Certiorari, which assailed the same CA Decision

II

Whether the CA erred in utilizing the Best Evidence Rule to determine the subject of the contracts

III

What are the subject properties of the parties’ respective contracts with RBBI

Our Ruling

Propriety of the Petition

Respondents maintain that the instant petition for review raises factual issues which are beyond the province of Rule 45.³⁴

The issues involved herein are not entirely factual. Petitioners assail the appellate court’s rejection of their evidence (as to the contractual intent) as inadmissible under the Best Evidence Rule. The question involving the admissibility of evidence is a legal question that is within the Court’s authority to review.³⁵

Besides, even if it were a factual question, the Court is not precluded to review the same. The rule that a petition for review should raise only questions of law admits of exceptions, among which are "(1) when the findings are grounded entirely on speculations, surmises, or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misappreciation of facts; (5) when the findings of fact are conflicting; (6) when, in making its findings, the same are contrary to the admissions of both appellant and appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondent; and (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record."³⁶

In the instant case, we find sufficient basis to apply the exceptions to the general rule because the appellate court misappreciated the facts of the case through its erroneous application of the Best Evidence Rule, as will be discussed below. Moreover, the disparate rulings of the three reviewing bodies below are sufficient for the Court to exercise its jurisdiction under Rule 45.

First Issue
Dismissal of RBBI’s appeal

Respondents maintain that the Court’s earlier dismissal of RBBI’s petition

for review of the same CA Decision is eloquent proof that there is no reversible error in the appellate court’s decision in favor of the respondents.³⁷

We are not persuaded. This Court dismissed RBBI’s earlier petition in G.R. No. 163320 because it failed to convincingly demonstrate the alleged errors in the CA Decision. The bank did not point out the inadequacies and errors in the appellate court’s decision but simply placed the responsibility for the confusion on the respondents for allegedly misleading the bank as to the identity of the properties and for misrepresenting that the two lots were not tenanted. Thus, RBBI argued that respondents did not come to court with clean hands.

These arguments were ineffectual in convincing the Court to review the appellate court’s Decision. It is the appellant’s responsibility to point out the perceived errors in the appealed decision. When a party merely raises equitable considerations such as the "clean hands" doctrine without a clear-cut legal basis and cogent arguments to support his claim, there should be no surprise if the Court is not swayed to exercise its appellate jurisdiction and the appeal is dismissed outright. The dismissal of an appeal does not always and necessarily mean that the appealed decision is correct, for it could simply be the result of the appellant’s inadequate discussion, ineffectual arguments, or even procedural lapses.

RBBI’s failure to convince the Court of the merits of its appeal should not prejudice petitioners who were not parties to RBBI’s appeal, especially because petitioners duly filed a separate appeal and were able to articulately and effectively present their arguments. A party cannot be deprived of his right to appeal an adverse decision just because another party had already appealed ahead of him,³⁸ or just because the other party’s separate appeal had already been dismissed.³⁹

There is another reason not to bind the petitioners to the final judgment against RBBI. RBBI executed the transfer (VLTs) in favor of petitioners prior to the commencement of the action. Thus, when the action for cancellation of CLOA was filed, RBBI had already divested itself of its title to the two properties involved. Under the rule on res judicata, a judgment (in personam) is conclusive only between the parties and their successors-in-interest by title subsequent to the commencement of the action.⁴⁰ Thus, when the vendor (in this case RBBI) has already transferred his title to third persons (petitioners), the said transferees are not bound by any judgment which may be rendered against the vendor.⁴¹

Second Issue
Is it correct to apply the Best Evidence Rule?

Citing the Best Evidence Rule in Rule 130, Section 3, the CA held that the Deed of Sale between respondents and RBBI is the best evidence as to the property that was sold by RBBI to the respondents. Since the Deed of Sale stated that its subject is the land covered by TCT No. T-62096 – the title for the Murong property – then the property repurchased by the respondents was the Murong property. Likewise, the CA held that since the VLTs between petitioners and RBBI refer to TCT No. T-62836 – the title for the Lantap property – then the property transferred to petitioners was the Lantap property.

Petitioners argue that the appellate court erred in using the best evidence rule to determine the subject of the Deed of Sale and the Deeds of Voluntary Land Transfer. They maintain that the issue in the case is not the contents of the contracts but the intention of the parties that was not adequately expressed in their contracts. Petitioners then argue that it is the Parol Evidence Rule that should be applied in order to adequately resolve the dispute.

Indeed, the appellate court erred in its application of the Best Evidence Rule. The Best Evidence Rule states that when the subject of inquiry is the contents of a document, the best evidence is the original document itself and no other evidence (such as a reproduction, photocopy or oral evidence) is admissible as a general rule. The original is preferred because it reduces the chance of undetected tampering with the document.⁴²

In the instant case, there is no room for the application of the Best Evidence Rule because there is no dispute regarding the contents of the documents. It is admitted by the parties that the respondents’ Deed of Sale referred to TCT No. T-62096 as its subject; while the petitioners’ Deeds of Voluntary Land Transfer referred to TCT No. T-62836 as its subject, which is further described as located in Barangay Murong.

The real issue is whether the admitted contents of these documents adequately and correctly express the true intention of the parties. As to the Deed of Sale, petitioners (and RBBI) maintain that while it refers to TCT No. T-62096, the parties actually intended the sale of the Lantap property (covered by TCT No. T-62836).

As to the VLTs, respondents contend that the reference to TCT No. T-62836 (corresponding to the Lantap property) reflects the true intention of RBBI and the petitioners, and the reference to "Barangay Murong" was a typographical error. On the other hand, petitioners claim that the reference to "Barangay Murong" reflects their true intention, while the reference to TCT No. T-62836 was a mere error. This dispute reflects an intrinsic ambiguity in the contracts, arising from an apparent failure of the instruments to adequately express the true intention of the parties. To resolve the ambiguity, resort must be had to evidence outside of the instruments.

The CA, however, refused to look beyond the literal wording of the documents and rejected any other evidence that could shed light on the actual intention of the contracting parties. Though the CA cited the Best Evidence Rule, it appears that what it actually applied was the Parol Evidence Rule instead, which provides:

When the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon and there can be, between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement.⁴³

The Parol Evidence Rule excludes parol or extrinsic evidence by which a party seeks to contradict, vary, add to or subtract from the terms of a valid agreement or instrument. Thus, it appears that what the CA actually applied in its assailed Decision when it refused to look beyond the words of the contracts was the Parol Evidence Rule, not the Best Evidence Rule. The appellate court gave primacy to the literal terms of the two contracts and refused to admit any other evidence that would contradict such terms.

However, even the application of the Parol Evidence Rule is improper in the case at bar. In the first place, respondents are not parties to the VLTs executed between RBBI and petitioners; they are strangers to the written contracts. Rule 130, Section 9 specifically provides that parol evidence rule is exclusive only as "between the parties and their successors-in-interest." The parol evidence rule may not be invoked where at least one of the parties to the suit is not a party or a privy of a party to the written document in question, and does not base his claim on the instrument or assert a right originating in the instrument.⁴⁴

Moreover, the instant case falls under the exceptions to the Parol Evidence Rule, as provided in the second paragraph of Rule 130, Section 9:

However, a party may present evidence to modify, explain or add to the terms of the written agreement if he puts in issue in his pleading:

(1) An intrinsic ambiguity, mistake or imperfection in the written agreement;
(2) The failure of the written agreement to express the true intent and agreement of the parties thereto;
x x x x (Emphasis supplied)

Here, the petitioners’ VLTs suffer from intrinsic ambiguity. The VLTs described the subject property as covered by TCT No. T-62836 (Lantap property), but they also describe the subject property as being located in "Barangay Murong." Even the respondents’ Deed of Sale falls under the exception to the Parol Evidence Rule. It refers to "TCT No. T-62096" (Murong property), but RBBI contended that the true intent was to sell the Lantap property. In short, it was squarely put in issue that the written agreement failed to express the true intent of the parties.

Based on the foregoing, the resolution of the instant case necessitates an examination of the parties’ respective parol evidence, in order to determine the true intent of the parties. Well-settled is the rule that in case of doubt, it is the intention of the contracting parties that prevails, for the intention is the soul of a contract,⁴⁵ not its wording which is prone to mistakes, inadequacies, or ambiguities. To hold otherwise would give life, validity, and precedence to mere typographical errors and defeat the very purpose of agreements.

In this regard, guidance is provided by the following articles of the Civil Code involving the interpretation of contracts:

Article 1370. If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control.

If the words appear to be contrary to the evident intention of the parties, the latter shall prevail over the former.

Article 1371. In order to judge the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered.

Rule 130, Section 13 which provides for the rules on the interpretation of documents is likewise enlightening:

Section 13. Interpretation according to circumstances. – For the proper construction of an instrument, the circumstances under which it was made, including the situation of the subject thereof and of the parties to it, may be shown, so that the judge may be placed in the position of those whose language he is to interpret.1âwphi1

Applying the foregoing guiding rules, it is clear that the Deed of Sale was intended to transfer the Lantap property to the respondents, while the VLTs were intended to convey the Murong property to the petitioners. This may be seen from the contemporaneous and subsequent acts of the parties.

Third issue

Determining the intention of the parties
regarding the subjects of their contracts

We are convinced that the subject of the Deed of Sale between RBBI and the respondents was the Lantap property, and not the Murong property. After the execution in 1985 of the Deed of Sale, the respondents did not exercise acts of ownership that could show that they indeed knew and believed that they repurchased the Murong property. They did not take possession of the Murong property. As admitted by the parties, the Murong property was in the possession of the petitioners, who occupied and tilled the same without any objection from the respondents. Moreover, petitioners paid leasehold rentals for using the Murong property to RBBI, not to the respondents.

Aside from respondents’ neglect of their alleged ownership rights over the Murong property, there is one other circumstance that convinces us that what respondents really repurchased was the Lantap property. Respondent Nemi (husband of respondent Elenita) is the farmer actually tilling the Lantap property, without turning over the supposed landowner’s share to RBBI. This strongly indicates that the respondents considered themselves (and not RBBI) as the owners of the Lantap property. For if respondents (particularly spouses Elenita and Nemi) truly believed that RBBI retained ownership of the Lantap property, how come they never complied with their obligations as supposed tenants of RBBI’s land? The factual circumstances of the case simply do not support the theory propounded by the respondents.

We are likewise convinced that the subject of the Deeds of Voluntary Land Transfer (VLTs) in favor of petitioners was the Murong property, and not the Lantap property. When the VLTs were executed in 1990, petitioners were already the tenant-farmers of the Murong property, and had been paying rentals to RBBI accordingly. It is therefore natural that the Murong property and no other was the one that they had intended to acquire from RBBI with the execution of the VLTs. Moreover, after the execution of the VLTs, petitioners remained in possession of the Murong property, enjoying and tilling it without any opposition from anybody. Subsequently, after the petitioners completed their payment of the total purchase price of P90,000.00 to RBBI, the Department of Agrarian Reform (DAR) officials conducted their investigation of the Murong property which, with the presumption of regularity in the performance of official duty, did not reveal any anomaly. Petitioners were found to be in actual possession of the Murong property and were the qualified beneficiaries thereof. Thus, the DAR officials issued CLOAs in petitioners’ favor; and these CLOAs explicitly refer to the land in Barangay Murong. All this time, petitioners were in possession of the Murong property, undisturbed by anyone for several long years, until respondents started the controversy in 1997.

All of these contemporaneous and subsequent actions of RBBI and petitioners support their position that the subject of their contract (VLTs) is the Murong property, not the Lantap property. Conversely, there has been no contrary evidence of the parties’ actuations to indicate that they intended the sale of the Lantap property. Thus, it appears that the reference in their VLT to TCT No. T-62836 (Lantap property) was due to their honest but mistaken belief that the said title covers the Murong property. Such a mistake is not farfetched considering that TCT No. T-62836 only refers to the Municipality of Bayombong, Nueva Vizcaya, and does not indicate the particular barangay where the property is located. Moreover, both properties are bounded by a road and public land. Hence, were it not for the detailed technical description, the titles for the two properties are very similar.

The respondents attempt to discredit petitioners’ argument that their VLTs were intrinsically ambiguous and failed to express their true intention by asking why petitioners never filed an action for the reformation of their contract.⁴⁶ A cause of action for the reformation of a contract only arises when one of the contracting parties manifests an intention, by overt acts, not to abide by the true agreement of the parties.⁴⁷ It seems fairly obvious that petitioners had no cause to reform their VLTs because the parties thereto (RBBI and petitioners) never had any dispute as to the interpretation and application thereof. They both understood the VLTs to cover the Murong property (and not the Lantap property). It was only much later, when strangers to the contracts argued for a different interpretation, that the issue became relevant for the first time.

All told, we rule that the Deed of Sale dated February 26, 1985 between respondents and RBBI covers the Lantap property under TCT No. T-62836, while the Deeds of Voluntary Land Transfer and TCT Nos. CLOA-395 and CLOA-396 of the petitioners cover the Murong property under TCT No. T-62096. In consequence, the CA’s ruling against RBBI should not be executed as such execution would be inconsistent with our ruling herein. Although the CA’s decision had already become final and executory as against RBBI with the dismissal of RBBI’s petition in G.R. No. 163320, our ruling herein in favor of petitioners is a supervening cause which renders the execution of the CA decision against RBBI unjust and inequitable.

WHEREFORE, the Petition for Review on Certiorari is GRANTED. The assailed October 7, 2003 Decision, as well as the May 11, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 69981 are REVERSED and SET ASIDE. The January 17, 2001 Decision of the DARAB Central Office is REINSTATED. The Deed of Sale dated February 26, 1985 between respondents and Rural Bank of Bayombong, Inc. covers the Lantap property under TCT No. T-62836, while the Deeds of Voluntary Land Transfer and TCT Nos. CLOA-395 and CLOA-396 of the petitioners cover the Murong property under TCT No. T-62096. The Register of Deeds of Nueva Vizcaya is directed to make the necessary corrections to the titles of the said properties in accordance with this Decision. Costs against respondents.

SO ORDERED.
MARIANO C. DEL CASTILLO
Associate Justice
WE CONCUR:

RENATO C. CORONA
Chief Justice
Chairperson

PRESBITERO J. VELASCO, JR. Associate Justice

TERESITA J. LEONARDO-DE CASTRO Associate Justice

JOSE PORTUGAL PEREZ
Associate Justice

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice

Footnotes
¹ Rollo of G.R. No. 168387, pp. 10-26.

² Id. at 27-35; penned by Associate Justice Perlita J. Tria Tirona and concurred in by Associate Justices Portia Alino-Hormachuelos and Rosalinda Asuncion-Vicente.

³ Id. at 36-37.
⁴ Id. at 34.

⁵ Regional Agrarian Reform Adjudicator’s (RARAD’s) Decision dated March 17, 1998, pp. 4-5; DARAB records, pp. 101-102.

⁶ CA Decision, pp. 5-6; rollo of G.R. No. 168387, pp. 32-33. Respondents’ Memorandum, p. 7; id. at 125.

⁷ DARAB records, p. 57.

⁸ CA Decision, pp. 5-6; rollo of G.R. No. 168387, pp. 32-33. Respondents’ Memorandum, p. 7; id. at 125.

⁹ DARAB records, p. 74.
¹⁰ Id. at 69.
¹¹ Id. at 71-72.

¹² Entry No. 229242 - DEED OF ABSOLUTE SALE executed by the Rural Bank of Bayombong, NV, Inc., represented by Manager, Romeo F. Ramos, Jr., in favor of ELOISA ESPEJO, ELENITA ESPEJO, EMERITA ESPEJO, OPHIRO ESPEJO, OTHANIEL ESPEJO, ODELEJO ESPEJO, ORLANDO ESPEJO, OSMONDO ESPEJO, for the sum of P9,562 notarized by Miguel M. Guevara, Notary Public; under Doc. No. 51; Page No. 11; Book XIV; Series of 1985 dated February 26, 1985 and inscribed July 1, 1994 at 10:45 A.M. (Id. at 74).

¹³ Section 20. Voluntary Land Transfer. – Landowners of agricultural lands subject to acquisition under this Act may enter into a voluntary arrangement for direct transfer of their lands to qualified beneficiaries x x x:

¹⁴ Section 21. Payment of Compensation by Beneficiaries under Voluntary Land Transfer. – Direct payment in cash or in kind may be made by the farmer-beneficiary to the landowner under terms to be mutually agreed upon by both parties, which shall be binding upon them, upon registration with and approval by the DAR. Said approval shall be considered given, unless notice of disapproval is received by the farmer-beneficiary within 30 days from the date of registration. x x x

¹⁵ Comprehensive Agrarian Reform Law of 1988.

¹⁶ "That the LANDOWNER voluntarily transfer his ownership over a parcel of agricultural land and covered by R.A. 6657 and opted to be paid directly by the FARMER-BENEFICIARY. The said agricultural land is situated at Murong, Reservation Bagabag, Nueva Vizcaya and particularly described as follows:

OCT/TCT No. T-62836
x x x x (CA rollo, pp. 93 and 96)

¹⁷ TCT No. CLOA - 395 (DARAB records, p. 84). Registered with the Land Registration Authority on September 5, 1991.

¹⁸ TCT No. CLOA - 396 (Id. at 85). Registered with the Land Registration Authority on September 5, 1991.

¹⁹ TO ALL WHOM THESE PRESENTS SHALL COME, GREETINGS:

WHEREAS, pursuant to the provisions of Republic Act No. 6657, dated June 10, 1988, INSTITUTING A COMPREHENSIVE AGRARIAN REFORM PROGRAM TO PROMOTE SOCIAL JUSTICE AND INDUSTRIALIZATION AND PROVIDING THE MECHANISM FOR ITS IMPLEMENTATION, there is hereby awarded unto SALUN-AT MARQUEZ [and NESTOR DELA CRUZ], a parcel of agricultural land situated in Barangay Murong, Municipality of Bagabag, Province of Nueva Vizcaya, Island of Luzon, Philippines, containing an area of TEN THOUSAND (10,000 sq. m.) square meters, more or less, which is now more particularly bounded and described at the back hereof.

x x x x
Reference: This certificate is a transfer from Transfer Certificate of Title No. T-62836.
(Id. at 84-85).
²⁰ Id. at 1-8. Docketed as DARAB Case No. II-162-NV-97.
²¹ Id. at 21-25.
²² Id. at 11-13.
²³ Id. at 79-83.
²⁴ Id. at 145-132. Docketed as DARAB Case No. 7554.
²⁵ DARAB Decision, pp. 13-14; id. at 133-132.
²⁶ CA rollo, pp. 142-147.
²⁷ Id. at 247-254.

²⁸ Resolution dated March 19, 2004 (Id. at 153) denying RBBI’s Motion for Reconsideration; Resolution dated May 11, 2005 (Id. at 257-258) denying herein petitioners’ Motion for Reconsideration.

²⁹ Id. at 178-190. Entitled Rural Bank of Bayombong, Inc. represented by its President/General Manager Romeo F. Ramos, Jr., vs. Eloisa Espejo, et al.

³⁰ Rollo of G.R. No. 163320, p. 91.
³¹ Id. at 107.
³² Id. at 108.

³³ Upon petitioners’ motion, the Court issued a Resolution on July 20, 2005 granting petitioners a thirty- (30) day extension to file the Petition for Review on Certiorari. (Rollo of G.R. No. 168387, p. 8)

³⁴ Respondents’ Memorandum, p. 9; id. at 127.

³⁵ See People v. Exala, G.R. No. 76005, April 23, 1993, 221 SCRA 494, 499; People v. Judge Señeris, 187 Phil. 558, 560 (1980); People v. Alarcon, 78 Phil. 732, 737 (1947).

³⁶ Reyes v. Montemayor, G.R. No. 166516, September 3, 2009, 598 SCRA 61, 74. Emphasis supplied.

³⁷ Respondents’ Memorandum, p. 10; rollo of G.R. No. 168387, p. 128.
³⁸ See Borromeo v. Court of Appeals, 162 Phil. 430, 438 (1976).

³⁹ See Citibank, N.A. (Formerly First National City Bank) v. Sabeniano, G.R. No. 156132, October 16, 2006, 504 SCRA 378, 403-405.

⁴⁰ Rules of Court, Rule 39, Section 47 (b).
⁴¹ See De Leon v. De Leon, 98 Phil. 589, 591-592 (1956).

⁴² The Best Evidence Rule comes into play when a reproduction of the original or oral evidence is offered to prove the contents of a document. "The purpose of the rule requiring the production of the best evidence is the prevention of fraud, because if a party is in possession of [the best] evidence and withholds it, and seeks to substitute inferior evidence in its place, the presumption naturally arises that the better evidence is withheld for fraudulent purposes which its production would expose and defeat." Asuncion v. National Labor Relations Commission, 414 Phil. 329, 339 (2001).

⁴³ Rules of Court, Rule 130, Section 9, first paragraph.
⁴⁴ Lechugas v. Court of Appeals, 227 Phil. 310, 319 (1986).

⁴⁵ Kilosbayan, Inc. v. Guingona, Jr., G.R. No. 113375, May 5, 1994, 232 SCRA 110, 143.

⁴⁶ Respondents’ Memorandum, p. 16; rollo of G.R. No. 168387, p. 134.

⁴⁷ Multi-Realty Development Corporation v. Makati Tuscany Condominium Corporation, G.R. No. 146726, June 16, 2006, 491 SCRA 9, 30-31, citing Tormon v. Cutanda, 119 Phil. 84, 87-88 (1963).