Hi guys?

This blog contain my personal notes and digests.

Judgment.

Hello mis sexy and mis beautiful Angelica wahahaha don’t believe that o I mean Hi to you.

I don’t know what to say on this email that you have sent me but I agree to what you say.
I cannot post the content of your letter here cause it content can we say harsh or disrespectfull language against your instructor? so sorry.
But, before you make any decision, on whether you stop or continue on your study, can you read this story?
I don’t know if this will help you but this story give me a little strength or encouragement each time that I'm going to read it.
But before we proceed, to tell you the truth what happen to you in some of your subjects had happen to me before.
In fact, that is the reason why I was force to transfer to other university but lets not discuss that cause I might not be able to control my self and mention some language here that might offense the feelings of those adorable and respectable person?????????? Damn.
In fact, just last sem, I have an inc grade in one of my subject and when I inquire on that instructor why he gave me that grade, the first that he said was that I did not submit my examination paper though I submit ha?
Later when I said that I will just resubmit it together with the completion form, he said that he found my test paper and on the last day of completion, I inquire on why he did not submit my grade and I was surprise on what he said! He told me that I am not the one who is typing my answer, and when I said that he can ask those people there at the faculty whether that is true or not he said again that I failed in my exam!!!!!!!!!
So I conclude that he just don’t want to pass me and because of my disappointment, I just left but lets not discuss that further cause it make me sick. Crap!!!!! Damn.
I was able to save the question and my answer and I can post that here? But of course its easy to say that I have edited it.
You understand why I said that I am typing my answer if you will see me personally. In fact, I need someone who will read to me the question if I am taking my exam and maybe, you might alsow be one of those people who believe that I should not take this course.
I will upload my picture here or I will just email it to you so that you can see me even only in picture. Alright?
That is if you really don’t know me personally and I hope you don’t cause I don’t want being fooled.

And always bear this in mind, The best is yet to come.

Read this story.

This was told to me by a fellow passenger on a bus when I went home one time and I was able to find the text so I am telling it to you or to all the reader of this blog alsow cause it might help you in making your decision wahahahahahahahahahahaha.
Cause guys? Don’t judge your self but most of all don’t let other people judge you.
I mean don’t allow them to tell to you that you are wrong in your decision so this is what you should do.


This is one of my favorite story.
I should have post this on my other blog but I decided to post it here.





Judgement

Judgement means a stale state of mind. And the mind always wants judgement, because to be in an unknown process is always hazardous and uncomfortable.
Be very, very courageous, don't stop growing; live in the moment, simply stay in the flow of life.

This story happened in the days of Lao Tzu in China, and Lao Tzu loved it very much:

There was an old man in a village, very poor, but even kings were jealous of him because he had a beautiful white horse. Kings offered fabulous prizes
for the horse, but the man would say, "This horse is not a horse to me, he is a person. And how can you sell a person, a friend?" The man was poor, but
he never sold the horse.

One morning he found that the horse was not in the stable. The whole village gathered and said, "You foolish old man! We knew that someday the horse would
be stolen. It would have been better to sell it. What a misfortune!"

The old man said, "Don't go so far as to say that. Simply say that the horse is not in the stable. This is the fact; everything else is judgement. Whether
it is a misfortune or a blessing I don't know, because this is just a fragment. Who knows what is going to follow it?"

People laughed at the old man. They had always known he was a little crazy. But after fifteen days, suddenly one night the horse returned. He had not been
stolen, he had escaped into the wild. And not only had he return, he brought a dozen wild horses with him.

Again the people gathered and they said, "Old man, you were right. This was not a misfortune, it has indeed proved to be a blessing."

The old man said, "Again you are going too far. Just say that the horse is back... who knows whether it is a blessing or not?" It is only a fragment. You
read a single word in a sentence - how can you judge the whole book?"

This time the people could not say much, but inside they knew that he was wrong. Twelve beautiful horses had come.

The old man had an only son who started to train the horses. Just a week later he fell from a horse and his legs were broken. The people gathered again,
and again they judged. They said, "Again you proved right! It was a misfortune. Your only son has lost the use of his legs, and in your old age he was
your only support. Now you are poorer than ever."

The old man said, "You are obsessed with judgement. Don't go that far. Say only that my son had broken his legs. Life comes in fragments and more is never
given to you."

It happened that after a few weeks the country went to war, and all the young men of the town were forcibly taken for the military. Only the old man's
son was left because he was crippled. The whole town was crying and weeping, because it was a losing fight and they knew that most of the young people
would never come back. They came to the old man and they said, " You were right, old man - this has proved a blessing. Maybe your son is crippled, but
he is still with you. Our sons are gone forever."

The old man said again, "You go on and on judging. Nobody knows! Only say this, that your sons have been forced to enter the army and my son has not been
forced. But only God, who sees the total picture, knows whether it is a blessing or a misfortune."

Judge not, otherwise you will never become one with the total. With fragments you will be obsessed, with small things you will jump to conclusions. Once
you judge you have stopped growing. Judgement means a stale state of mind. And the mind always wants judgement, because to be in a process is always hazardous
and uncomfortable.

In fact, the journey never ends. One path ends, another begins: one door closes, another opens. You reach a peak; a higher peak is always there. God is
an endless journey. Only those who are so courageous that they don't bother about the goal, but are content with the journey, can be content to just live
in the moment and grow into it; only those are able to walk in the total.

So paano, ubos na ang aking shat at naiidlip na ako.

I have sent this already in your email


Good night and I hope that you will have a bad night mare o I mean a good dream. hahaha

Tests in determining whether the delegation of legislative power is valid

There are two accepted tests to determine whether or not there is a valid delegation of legislative power, viz, the completeness test and the sufficient standard test.

Under the first test, the law must be complete in all its terms and conditions when it leaves the legislature such that when it reaches
the delegate the only thing he will have to do is enforce it.
Under the sufficient standard test, there must be adequate guidelines or stations in the
law to map out the boundaries of the delegate's authority and prevent the delegation from running riot.

Both tests are intended to prevent a total transference of legislative authority to the delegate, who is not allowed to step into the shoes of the legislature and exercise a power essentially legislative.

The principle of non-delegation of powers is applicable to all the three major powers of the Government but is especially important in the case of the legislative power because of the many instances when its delegation is permitted. The occasions are rare when executive or judicial powers have to be delegated by the authorities to which they legally certain. In the case of the legislative power, however, such occasions have become more and more frequent, if not necessary. This had led to the observation that the delegation of legislative power has become the rule and its non-delegation the exception.

The reason is the increasing complexity of the task of government and the growing inability of the legislature to cope directly with the myriad problems demanding its attention. The growth of society has ramified its activities and created peculiar and sophisticated problems that the legislature cannot be expected reasonably to comprehend. Specialization even in legislation has become necessary. To many of the problems attendant upon present-day undertakings,
the legislature may not have the competence to provide the required direct and efficacious, not to say, specific solutions. These solutions may, however,
be expected from its delegates, who are supposed to be experts in the particular fields assigned to them.

The reasons given above for the delegation of legislative powers in general are particularly applicable to administrative bodies. With the proliferation
of specialized activities and their attendant peculiar problems, the national legislature has found it more and more necessary to entrust to administrative
agencies the authority to issue rules to carry out the general provisions of the statute. This is called the "power of subordinate legislation."

With this power, administrative bodies may implement the broad policies laid down in a statute by "filling in' the details which the Congress may not have
the opportunity or competence to provide. This is effected by their promulgation of what are known as supplementary regulations, such as the implementing
rules issued by the Department of Labor on the new Labor Code. These regulations have the force and effect of law.

My Opinion.

Someone had sent me an email and she is asking on what is my opinion on that decission of the Secretary of DOJ on that Maguindanao massacre case.

Well can I use our Filipino language in giving my opinion?


Kase hindi sa ipinagtatanggol ko yong sec. ng DOJ ha? Pero alam mo kase sa ilalim ng batas natin ay mayrong mga requirements o proseso tayong dapat sundin.

Susubukan kong ipaliwanag ito sa pamamagitan ng isang simpleng halimbawa ayos ba?
Hindi natin gagamitin yong kaso ng Maguindanao kase hindi natin alam kong ano ba talaga ang nangyari kung bakit nag decision yong Sec. ng Doj ng ganon at isa pa, mayron silang kani kanilang version: Yong mga prosecution at yong SEC ng DOJ.

Hal.

Hinuli ng mga polis si Juan sa kanyang bahay dahil sa sangkot siya sa pag bebenta ng pinagbabawal na droga pero hindi nila siya pinagsabihan kung ano yong kanyang mga karapatan sa ilalim n gating batas.

Pumasok sila sa kanyang bahay at kinuha yong mga drogang nandoon kahit walang search warrant muli sa korte.

Ngayon kung sa pagsisiyasat ng hukom, natuklasan niyang si Juan ay hindi napagsabihan ng kanyang mga karapatan sa ilalim ng batas ng siya ay huliin at basta nalang pumasok yong mga nanghuli sa kanya sa kanyang bahay ng sam samin yong mga drogang nandoon kahit walang utos o pahintulot mula sa korte, ay maaari niyang Ipag utos na pakawalan si Juan kahit totoong si Juan ay sangkot sa pagbebenta ng pinagbabawal na gamut at kahit pa may nakuhang mga pinagbabawal na droga sa kanyang bahay.


Ito ay gagawin niya dahil tungkolin yon ng Hukom kase sa ilalim n gating constitution o saligang batas, nakasaad na:

Section 2. The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature
and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally
by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to
be searched and the persons or things to be seized.

Hindi ko na ito isasalin sa Filipino kase baka maiba yong ibig sabihin at saka ang hirap? Wahahahahahahaha.

Sa katunayan kung mingsan ang dapat sisihin kung bakit nag lalabas ng decision ang hukom pabor doon sa inaakusahan o sige doon sa nakagawa ng krimen ay dahil kung hindi man sa kakulangan ng mga ebidensiya ay may mga depekto na man ang mga ito maaaring dahil sa paraan ng pagkuha ng mga ito o ano pa man.

Kaya nga kung mingsan ay may mga hukom na nag iinhibit o ayaw hawakan ang isang kaso lalo na kung ang nasasangkot ay isang taong malapit sa kanya kase hindi maiiwasan bang magduda ang mga tao kung yong decision niya ay pabor doon sa nasasangkot.


Sana’y kahit kaunti ay naliwanagan ka kung bakit mingsan, ang isang hukom o ang korte ay naglalabas ng ganong klase ng mga decision.

Nai email ko na rin ito sayo. I check mo nalang sayong inbox.

Have a nice shat.

EDENBERT MADRIGAL AND VIRGILIO MALLARI vs. COURT OF APPEALS AND JOSE MALLARI, G.R. No. 142944. April 15, 2005] In evidence subject.

Below this digest is the full text of the case.


FACTS:

1. Private respondent who is in need of money for his wife planned travel to the United States try to mortgage his residential lot with a two story building to the bank but his son convince him not to proceed but instead, assign to him a portion of the property assuring to his father that he will not dispose of the property without his father’s consent and that the latter could redeem the said property any time he acquires money so his father and his wife executed a deed of absolute sale where it appear that they have conveyed to there son the house and lot in question for a consideration of p50,000.

2. There son sold the house and lot to private respondent’s neighbor Idenbert Madrigal who demanded the private respondent to vacate the property in question so he came to know for the first time that his son had sold the house and lot.

3. Private respondent filed a complaint against his son and Madrigal for annulment, redemption and damages with prayer for preliminary injunction/temporary restraining order before the RTC of Olongapo city praying that the deed of absolute sail executed by him and his wife in favor of there son be declared null and void or in alternative, be allowed to redeem the property at a reasonable price.

4. The RTC rendered a decision ordering Madrigal to allow the private respondent to redeem the property based on the amount it was sold and this was affirmed by the CA who all deny there motion for reconsideration.

5. Petitioner filed a petition for review on certiorari before the Supreme Court.

ISSUE:

WHETHER OR NOT, THE DEED OF SALE EXECUTED BY PRIVATE RESPONDENT IN FAVOR OF PETITIONER IS ONE OF MORTGAGE.

According to the SC, Evidence clearly shows that there was indeed no intent to sell the subject property. Rather, what transpired between the parties, who were father and son, was only a mortgage involving P50,000.00 over a house and lot and there is the ruling of this Court in Lustan vs. CA to the effect that even if the document appears to be a sale, parol evidence may be resorted to if the same does not express the true intent of the parties.


THIRD DIVISION
[G.R. No. 142944. April 15, 2005]
EDENBERT MADRIGAL AND VIRGILIO MALLARI, petitioners, vs. THE COURT OF APPEALS AND JOSE MALLARI, respondents.
D E C I S I O N
GARCIA, J.:
Under consideration is this appeal by way of a petition for review on certiorari under Rule 45 of the Rules of Court to nullify and set aside the following issuances of the Court of Appeals in CA-G.R. CV No. 45488, to wit:
1. Decision dated 15 October 1999,[1] affirming an earlier decision of the Regional Trial Court at Olongapo City in a suit for annulment, redemption and damages with prayer for preliminary injunction and/or temporary restraining order, thereat commenced by the herein private respondent against the petitioners; and
2. Resolution dated 10 April 2000,[2] denying petitioners’ motion for reconsideration.
The case is cast against the following factual backdrop:
Private respondent Jose Mallari and his wife Fermina Mallari are the owners of a 340-square meter residential lot with a 2-storey residential house erected thereon, situated at Olongapo City. The couple had ten (10) children, five (5) of whom are staying with them in the same house while the other five (5) are either residing abroad or elsewhere in the Philippines.
In need of money for his wife’s planned travel to the United States, Jose thought of mortgaging the above property with a bank. However, his son Virgilio Mallari who is residing with his own family somewhere in San Ildefonso, Bulacan convinced Jose not to proceed with the intended mortgage and to instead assign to him a portion of the same property, assuring his father that the latter could continue in occupancy of the property and that he will allow his sister Elizabeth who operates a store thereat to continue with the same. Virgilio told his father, however, that he will occupy one of the rooms in the house in case he goes to Olongapo City on vacation and that he will renovate the other room and reserve it for his mother when she comes back from the States. Virgilio assured his father that he will not dispose of the property without his father’s consent and that the latter could redeem the said property any time he acquires money.
And so, finding no reason to doubt Virgilio’s words, Jose did not anymore proceed with his original idea of mortgaging the property with a bank. Instead, on 22 October 1987, he and his wife Fermina executed a document denominated as “Deed of Absolute Sale”, whereunder the couple appeared to have conveyed to their son Virgilio Mallari the house and lot in question for a consideration of P50,000.00 although the property easily commands much more at that time. Worse, the deed of conveyance described the properties sold as a one-storey residential house and the 135-square meter lot whereon it stands even as the subject properties actually consist of a 2-storey residential house sitting on a 340-square meter parcel of land.
Things turned for the worse to the unsuspecting Jose Mallari when, without his knowledge, his son Virgilio, via a document bearing date 25 June 1988 and entitled “Kasulatan ng Bilihang Tuluyan”, sold the same property for the same amount of P50,000.00 to Edenbert Madrigal, a longtime neighbor of the Mallaris in the area.
True enough, sometime thereafter, to Jose’s great shock, he was demanded by Edenbert Madrigal to vacate the subject property. It was then that Jose came to know for the first time of the sale of his property by his son Virgilio in favor of Edenbert Madrigal thru the aforementioned June 25, 1988 “Kasulatan ng Bilihang Tuluyan”.
It was against the foregoing backdrop of events when, on 7 September 1988, in the Regional Trial Court at Olongapo City, Jose Mallari filed against his son Virgilio Mallari and Edenbert Madrigal the complaint for annulment, redemption and damages with prayer for preliminary injunction/temporary restraining order in this case. In his complaint, docketed in the same court as Civil Case No. 481-0-88 and raffled to Branch 72 thereof, plaintiff Jose Mallari prayed that the Deed of Absolute Sale executed by him and his wife Fermina on 22 October 1987 in favor of their son Virgilio Mallari be declared null and void, or, in the alternative, that he be allowed to redeem the subject property at a reasonable price. He likewise prayed the court for a writ of preliminary injunction and/or to issue ex parte a temporary restraining order enjoining defendants Virgilio Mallari and Edenbert Madrigal from entering, demolishing or introducing improvements on the subject properties, plus an award of actual and moral damages and attorney’s fees.
After due proceedings, the trial court, in a decision dated 29 September 1993,[3] rendered judgment for plaintiff Jose Mallari by ordering defendant Edenbert Madrigal to allow the former to redeem the subject property based on the same amount it was sold to him by his co-defendant Virgilio Mallari, and for the two (2) defendants jointly and severally to pay plaintiff Jose Mallari moral and exemplary damages, attorney’s fees and the cost of suit. More specifically, the trial court’s decision dispositively reads:
“PREMISES CONSIDERED, this Court finds and so holds that since plaintiff has sufficiently established preponderance of evidence against the defendants, judgment is hereby rendered ordering defendant Edenbert Madrigal to allow plaintiff to redeem the subject property based on the consideration of sale marked as Exhibit ‘B’; and for defendants jointly and severally to pay plaintiff (1) moral damages in the sum of P15,000.00; (2) exemplary damages of P5,000.00; (3) P10,000.00 as attorney’s fees; and (4) to pay the cost of suit.
All claims of defendants are denied for lack of merit.
SO ORDERED.”
Obviously dissatisfied, both defendants went on appeal to the Court of Appeals whereat their recourse was docketed as CA-G.R. CV No. 45488.
As stated at threshold hereof, the Court of Appeals, in a decision dated 15 October 1999,[4] affirmed en toto the appealed decision of the trial court, thus:
WHEREFORE, finding that the lower court did not err in issuing the assailed Decision, this Court hereby AFFIRMS the same in its entirety.
SO ORDERED.
In time, appellants Virgilio Mallari and Edenbert Madrigal moved for a reconsideration but their motion was denied by the appellate court in its Resolution of 10 April 2000.[5]
Hence, their present recourse, submitting for our consideration the following issues:
“I
WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT THE QUESTIONED DEED OF SALE IS A MORTGAGE
II
WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT RULING THAT PETITIONER EDENBERT MADRIGAL WAS A BUYER ON (sic) GOOD FAITH
III
WHETHER OR NOT THE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL COURT’S DECISION AWARDING MORAL, EXEMPLARY DAMAGES AND ATTORNEY’S FEES IN FAVOR OF PRIVATE RESPONDENT”
We DENY.
Petitioners fault the two (2) courts below for construing the Deed of Absolute Sale executed by private respondent Jose Mallari and his wife Fermina Mallari in favor of their son Virgilio Mallari as an equitable mortgage and not as an outright sale as the document itself proclaims.
We rule and so hold that both courts correctly construed the aforementioned Deed of Absolute Sale as an equitable mortgage and not a sale, as it purports to be. As aptly pointed out by the Court of Appeals in its assailed decision of 15 October 1999, to which we are in full accord:
“xxx. Evidence clearly shows that there was indeed no intent to sell the subject property. Rather, what transpired between the parties, who were father and son, was only a mortgage involving P50,000.00 over a portion of a lot with a house in Olongapo City. Circumstances surrounding the transaction between [respondent Jose Mallari] and [petitioner] Virgilio Mallari pointed only to one thing, that [respondent Jose Mallari] was in need of money to finance the US trip of his wife and he planned to mortgage the subject property with a bank but he was prevailed by his son, herein [petitioner] Virgilio Mallari, not to proceed with his plan and he gave a tempting offer to his father which the latter cannot refuse. In dire need of money, coupled with the fact that the one who offered help was his son who agreed to all the conditions such as, the property will not be disposed without the consent of [respondent]; petitioner [Virgilio Mallari]will renovate a room which will be used by his mother upon her return from the US; [petitioner Virgilio Mallari] will allow his sister to continue using a portion of the property as a store; one room will be for [petitioner Virgilio Mallari’s] use while on vacation; and [respondent Jose Mallari] would redeem the property as soon as his finances will improve and for [petitioner Virgilio Mallari] to return the same, [respondent Jose Mallari] signed a document, a Deed of Sale, although the agreement was only a mortgage. The consideration appearing in the Deed of Sale is grossly inadequate considering the location of the property, the area and the fact that it was a two-storey building or house. If the intention was really to sell, why was there a need for [petitioner Virgilio Mallari] to seek the consent of [respondent Jose Mallari] if the property will be sold to third person?”
Consistent with their thesis that the aforesaid Deed of Absolute Sale executed by Virgilio’s parents is clearly a document of sale as its very language unmistakably states, petitioners fault the trial court for receiving parol evidence to establish that the instrument in question is actually one of equitable mortgage. Indirectly, petitioners also put the Court of Appeals to task for giving weight to those evidence instead of rejecting them, conformably with the Parol Evidence Rule under Section 9, Rule 130 of the Rules of Court.
We are not persuaded.
To begin with, we cannot view the Deed of Absolute Sale in question in isolation of the circumstances under which the same was executed by Virgilio’s parents, more so in the light of his father’s disavowal of what the document, on its face, purports to state.
Then, too, there is the ruling of this Court in Lustan vs. CA[6] to the effect that even if the document appears to be a sale, parol evidence may be resorted to if the same does not express the true intent of the parties. In the very words of Lustan:
“Even when a document appears on its face to be a sale, the owner of the property may prove that the contract is really a loan with mortgage by raising as an issue the fact that the document does not express the true intent of the parties. In this case, parol evidence then becomes competent and admissible to prove that the instrument was in truth and in fact given merely as a security for the repayment of a loan. And upon proof of the truth of such allegations, the court will enforce the agreement or understanding in consonance with the true intent of the parties at the time of the execution of the contract”.
In any event, at bottom of petitioners’ first submission is their inability to accept the factual findings of the two (2) courts below that the transaction between petitioner Virgilio Mallari and his parents, albeit denominated as one of absolute sale, is in reality an equitable mortgage. In short, petitioners would want us to revisit the factual findings of both courts, scrutinize and examine those findings anew and calibrate the validity of their conclusions on the basis of our own factual assessment.
The desired task cannot be done. Time and again, we have made it clear that this Court is not a trier of facts, and that in a petition for review under Rule 45, only questions of law may be raised in this Court. To reiterate what we have said in Bernardo vs. CA:[7]
“The Supreme Court’s jurisdiction is limited to reviewing errors of law that may have been committed by the lower court. The Supreme Court is not a trier of facts. It leaves these matters to the lower court, which have more opportunity and facilities to examine these matters. This same Court has declared that it is the policy of the Court to defer to the factual findings of the trial judge, who has the advantage of directly observing the witnesses on the stand and to determine their demeanor whether they are telling or distorting the truth.”
And again in Remalante vs. Tibe:[8]
“The rule in this jurisdiction is that only questions of law may be raised in a petition for certiorari under Rule 45 of the Revised Rules of Court. ‘The jurisdiction of the Supreme Court in cases brought to it from the Court of Appeals is limited to reviewing and revising the errors of law imputed to it, its findings of fact being conclusive.’ [Chan vs. Court of Appeals, G.R. No. L-27488, June 30, 1970, 33 SCRA 737, reiterating a long line of decisions]. This Court has emphatically declared that ‘it is not the function of the Supreme Court to analyze or weigh such evidence all over again, its jurisdiction being limited to reviewing errors of law that might have been committed by the lower court’ [Tiongco v. De la Merced, G.R. No. L-24426, July 25, 1974, 58 SCRA 89; Corona vs. Court of Appeals, G.R. No. L-62482, April 28, 1983, 121 SCRA 865; Banigued vs. Court of Appeals, G.R. No. L-47531, February 20, 1984, 127 SCRA 596].”
We do acknowledge that the rule thus stated is not casts in stone. For sure, it admits of exceptions. So it is that in Insular Life Assurance Company, Ltd. Vs. CA,[9] we wrote:
“[i]t is a settled rule that in the exercise of the Supreme Court’s power of review, the Court is not a trier of facts and does not normally undertake the re-examination of the evidence presented by the contending parties during the trial of the case considering that the findings of facts of the CA are conclusive and binding on the Court. However, the Court had recognized several exceptions to this rule, to wit: (1) when the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to 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; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.”
Unfortunately for the petitioners, however, we have made a close hard look into this case and found none of the foregoing exceptions as obtaining herein to warrant our departure from the established norm.
Nor are we inclined to disturb the findings of the two (2) courts below that petitioner Edenbert Madrigal is not buyer in good faith. Again, a reversal of such finding would impose upon us a reevaluation of the same set of facts appreciated by said courts in arriving at their common conclusion that Madrigal, contrary to what he proclaims himself to be, is not a buyer in good faith. At any rate, we nonetheless took the pains of reviewing the factors taken into account by both courts in rejecting Madrigal’s claim of being a buyer in good faith and found no reason to disagree with their rejection thereof.
With the view we take of this case, petitioners’ lament against the award of moral and exemplary damages and attorney’s fees in favor of respondent Jose Mallari, based as their lament is on their contention that respondent has no cause of action against them, must simply fall.
WHEREFORE, the instant petition is hereby DENIED and the assailed decision and resolution of the Court of Appeals AFFIRMED.
Costs against petitioners.
SO ORDERED.
Panganiban, (Chairman), Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.


________________________________________
[1] Penned by Associate Justice Remedios Salazar-Fernando and concurred in by Associate Justices Buenaventura J. Guerrero and Portia A. Hormachuelos.
[2] Rollo, p. 38.
[3] Rollo, pp. 65-69.
[4] Rollo, pp. 70-77.
[5] Rollo, p. 38.
[6] 334 Phil. 609 [1997].
[7] 216 SCRA 244 [1992].
[8] 158 SCRA 138 [1988].
[9] G.R. No. 126850, April 28, 2004.

Lap-lapu foundation vs. allied bank, G.R. No. 126006. January 29, 2004] In evidence subject

Below this digest is the full text of the case.

FACTS:

1. Petitioner through its president Tan obtain 4 loans from the allied bank covered by four promissory notes and when it become mature, the petitioner failed to pay despite the demand made by the allied bank.

2. Respondent bank filed a complaint before the RTC of Cebu city a complaint seeking payment by the petitioners, jointly and solidarily, of there loan.

3. Petitioner on there answer allege that the loan was obtained by Tan in its own personal capacity and that it never benefited directly or indirectly therefrom and interposes a cross claim against Tan.

4. The RTC rendered a decision ordering the Petitioner and Tan to pay jointly and solidarily The allied bank.

5. On there appeal to the CA, the CA affirmed the decision of the RTC and rule that the loan was entered into by the petitioner through its president Tan evidenced by the promissory notes and Applying the parol evidence rule, the CA likewise rejected petitioner Tan’s assertion that there was an unwritten agreement between him and the respondent Bank that he would pay the loans from the proceeds of his shares of stocks in the Lapulapu Industries Corp.

6. Petitioner filed a petition for review on certiorari before the SC.

Issue.

WHETHER OR NOT, THE CA ERRED IN APPLYING THE PAROLE EVIDENCE.

According to the SC, Section 9, Rule 130 of the of the Revised Rules of Court provides that “[when the terms of an agreement have been reduced to writing, it is to be 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.

the parol evidence rule likewise constrains this Court to reject petitioner Tan’s claim regarding the purported unwritten agreement between him and the respondent Bank on the payment of the obligation.

So the petition was denied.



SECOND DIVISION
[G.R. No. 126006. January 29, 2004]
LAPULAPU FOUNDATION, INC. and ELIAS Q. TAN, petitioners, vs. COURT OF APPEALS (Seventeenth Division) and ALLIED BANKING CORP., respondents
D E C I S I O N
CALLEJO, SR., J.:
Before the Court is the petition for review on certiorari filed by the Lapulapu Foundation, Inc. and Elias Q. Tan seeking to reverse and set aside the Decision [1] dated June 26, 1996 of the Court of Appeals (CA) in CA-G.R. CV No. 37162 ordering the petitioners, jointly and solidarily, to pay the respondent Allied Banking Corporation the amount of P493,566.61 plus interests and other charges. Likewise, sought to be reversed and set aside is the appellate court’s Resolution dated August 19, 1996 denying the petitioners’ motion for reconsideration.
The case stemmed from the following facts:
Sometime in 1977, petitioner Elias Q. Tan, then President of the co-petitioner Lapulapu Foundation, Inc., obtained four loans from the respondent Allied Banking Corporation covered by four promissory notes in the amounts of P100,000 each. The details of the promissory notes are as follows:
P/N No. Date of P/N Maturity Date Amount as of 1/23/79
BD No. 504 Nov. 7, 1977 Feb. 5, 1978 P123,377.76
BD No. 621 Nov. 28, 1977 Mar. 28, 1978 P123,411.10
BD No. 716 Dec. 12, 1977 Apr. 11, 1978 P122,322.21
BD No. 839 Jan. 5, 1978 May 5, 1978 P120,455.54 [2]
As of January 23, 1979, the entire obligation amounted to P493,566.61 and despite demands made on them by the respondent Bank, the petitioners failed to pay the same. The respondent Bank was constrained to file with the Regional Trial Court of Cebu City, Branch 15, a complaint seeking payment by the petitioners, jointly and solidarily, of the sum of P493,566.61 representing their loan obligation, exclusive of interests, penalty charges, attorney’s fees and costs.
In its answer to the complaint, the petitioner Foundation denied incurring indebtedness from the respondent Bank alleging that the loans were obtained by petitioner Tan in his personal capacity, for his own use and benefit and on the strength of the personal information he furnished the respondent Bank. The petitioner Foundation maintained that it never authorized petitioner Tan to co-sign in his capacity as its President any promissory note and that the respondent Bank fully knew that the loans contracted were made in petitioner Tan’s personal capacity and for his own use and that the petitioner Foundation never benefited, directly or indirectly, therefrom. The petitioner Foundation then interposed a cross-claim against petitioner Tan alleging that he, having exceeded his authority, should be solely liable for said loans, and a counterclaim against the respondent Bank for damages and attorney’s fees.
For his part, petitioner Tan admitted that he contracted the loans from the respondent Bank in his personal capacity. The parties, however, agreed that the loans were to be paid from the proceeds of petitioner Tan’s shares of common stocks in the Lapulapu Industries Corporation, a real estate firm. The loans were covered by promissory notes which were automatically renewable (“rolled-over”) every year at an amount including unpaid interests, until such time as petitioner Tan was able to pay the same from the proceeds of his aforesaid shares.
According to petitioner Tan, the respondent Bank’s employee required him to affix two signatures on every promissory note, assuring him that the loan documents would be filled out in accordance with their agreement. However, after he signed and delivered the loan documents to the respondent Bank, these were filled out in a manner not in accord with their agreement, such that the petitioner Foundation was included as party thereto. Further, prior to its filing of the complaint, the respondent Bank made no demand on him.
After due trial, the court a quo rendered judgment the dispositive portion of which reads:
WHEREFORE, in view of the foregoing evidences [sic], arguments and considerations, this court hereby finds the preponderance of evidence in favor of the plaintiff and hereby renders judgment as follows:
“1. Requiring the defendants Elias Q. Tan and Lapulapu Foundation, Inc. [the petitioners herein] to pay jointly and solidarily to the plaintiff Allied Banking Corporation [the respondent herein] the amount of P493,566.61 as principal obligation for the four promissory notes, including all other charges included in the same, with interest at 14% per annum, computed from January 24, 1979, until the same are fully paid, plus 2% service charges and 1% monthly penalty charges.
“2. Requiring the defendants Elias Q. Tan and Lapulapu Foundation, Inc., to pay jointly and solidarily, attorney’s fees in the equivalent amount of 25% of the total amount due from the defendants on the promissory notes, including all charges;
“3. Requiring the defendants Elias Q. Tan and Lapulapu Foundation, Inc., to pay jointly and solidarily litigation expenses of P1,000.00 plus costs of the suit.” [3]
On appeal, the CA affirmed with modification the judgment of the court a quo by deleting the award of attorney’s fees in favor of the respondent Bank for being without basis.
The appellate court disbelieved petitioner Tan’s claim that the loans were his personal loans as the promissory notes evidencing them showed upon their faces that these were obligations of the petitioner Foundation, as contracted by petitioner Tan himself in his “official and personal character.” Applying the parol evidence rule, the CA likewise rejected petitioner Tan’s assertion that there was an unwritten agreement between him and the respondent Bank that he would pay the loans from the proceeds of his shares of stocks in the Lapulapu Industries Corp.
Further, the CA found that demand had been made by the respondent Bank on the petitioners prior to the filing of the complaint a quo. It noted that the two letters of demand dated January 3, 1979 [4] and January 30, 1979 [5] asking settlement of the obligation were sent by the respondent Bank. These were received by the petitioners as shown by the registry return cards [6] presented during trial in the court a quo.
Finally, like the court a quo, the CA applied the doctrine of piercing the veil of corporate entity in holding the petitioners jointly and solidarily liable. The evidence showed that petitioner Tan had represented himself as the President of the petitioner Foundation, opened savings and current accounts in its behalf, and signed the loan documents for and in behalf of the latter. The CA, likewise, found that the petitioner Foundation had allowed petitioner Tan to act as though he had the authority to contract the loans in its behalf. On the other hand, petitioner Tan could not escape liability as he had used the petitioner Foundation for his benefit.
Aggrieved, the petitioners now come to the Court alleging that:
I. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE LOANS SUBJECT MATTER OF THE INSTANT PETITION ARE ALREADY DUE AND DEMANDABLE DESPITE ABSENCE OF PRIOR DEMAND.
II. THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THE PAROL EVIDENCE RULE AND THE DOCTRINE OF PIERCING THE VEIL OF CORPORATE ENTITY AS BASIS FOR ADJUDGING JOINT AND SOLIDARY LIABILITY ON THE PART OF PETITIONERS ELIAS Q. TAN AND LAPULAPU FOUNDATION, INC. [7]
The petitioners assail the appellate court’s finding that the loans had become due and demandable in view of the two demand letters sent to them by the respondent Bank. The petitioners insist that there was no prior demand as they vigorously deny receiving those letters. According to petitioner Tan, the signatures on the registry return cards were not his.
The petitioners’ denial of receipt of the demand letters was rightfully given scant consideration by the CA as it held:
Exhibits “R” and “S” are two letters of demand, respectively dated January 3, 1979 and January 30, 1979, asking settlement of the obligations covered by the promissory notes. The first letter was written by Ben Tio Peng Seng, Vice-President of the bank, and addressed to Lapulapu Foundation, Inc., attention of Mr. Elias Q. Tan, President, while the second was a final demand written by the appellee’s counsel, addressed to both defendants-appellants, and giving them five (5) days from receipt within which to settle or judicial action would be instituted against them. Both letters were duly received by the defendants, as shown by the registry return cards, marked as Exhibits “R-2” and “S-1,” respectively. The allegation of Tan that he does not know who signed the said registry return receipts merits scant consideration, for there is no showing that the addresses thereon were wrong. Hence, the disputable presumption “that a letter duly directed and mailed was received in the regular course of mail” (per par. V, Section 3, Rule 131 of the Revised Rules on Evidence) still holds. [8]
There is no dispute that the promissory notes had already matured. However, the petitioners insist that the loans had not become due and demandable as they deny receipt of the respondent Bank’s demand letters. When presented the registry return cards during the trial, petitioner Tan claimed that he did not recognize the signatures thereon. The petitioners’ allegation and denial are self-serving. They cannot prevail over the registry return cards which constitute documentary evidence and which enjoy the presumption that, absent clear and convincing evidence to the contrary, these were regularly issued by the postal officials in the performance of their official duty and that they acted in good faith. [9] Further, as the CA correctly opined, mails are presumed to have been properly delivered and received by the addressee “in the regular course of the mail.” [10] As the CA noted, there is no showing that the addresses on the registry return cards were wrong. It is the petitioners’ burden to overcome the presumptions by sufficient evidence, and other than their barefaced denial, the petitioners failed to support their claim that they did not receive the demand letters; therefore, no prior demand was made on them by the respondent Bank.
Having established that the loans had become due and demandable, the Court shall now resolve the issue of whether the CA correctly held the petitioners jointly and solidarily liable therefor.
In disclaiming any liability for the loans, the petitioner Foundation maintains that these were contracted by petitioner Tan in his personal capacity and that it did not benefit therefrom. On the other hand, while admitting that the loans were his personal obligation, petitioner Tan avers that he had an unwritten agreement with the respondent Bank that these loans would be renewed on a year-to-year basis and paid from the proceeds of his shares of stock in the Lapulapu Industries Corp.
These contentions are untenable.
The Court particularly finds as incredulous petitioner Tan’s allegation that he was made to sign blank loan documents and that the phrase “IN MY OFFICIAL/PERSONAL CAPACITY” was superimposed by the respondent Bank’s employee despite petitioner Tan’s protestation. The Court is hard pressed to believe that a businessman of petitioner Tan’s stature could have been so careless as to sign blank loan documents.
In contrast, as found by the CA, the promissory notes [11] clearly showed upon their faces that they are the obligation of the petitioner Foundation, as contracted by petitioner Tan “in his official and personal capacity.” [12] Moreover, the application for credit accommodation, [13] the signature cards of the two accounts in the name of petitioner Foundation, [14] as well as New Current Account Record, [15] all accompanying the promissory notes, were signed by petitioner Tan for and in the name of the petitioner Foundation. [16] These documentary evidence unequivocally and categorically establish that the loans were solidarily contracted by the petitioner Foundation and petitioner Tan.
As a corollary, the parol evidence rule likewise constrains this Court to reject petitioner Tan’s claim regarding the purported unwritten agreement between him and the respondent Bank on the payment of the obligation. Section 9, Rule 130 of the of the Revised Rules of Court provides that “[w]hen the terms of an agreement have been reduced to writing, it is to be 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.” [17]
In this case, the promissory notes are the law between the petitioners and the respondent Bank. These promissory notes contained maturity dates as follows: February 5, 1978, March 28, 1978, April 11, 1978 and May 5, 1978, respectively. That these notes were to be paid on these dates is clear and explicit. Nowhere was it stated therein that they would be renewed on a year-to-year basis or “rolled-over” annually until paid from the proceeds of petitioner Tan’s shares in the Lapulapu Industries Corp. Accordingly, this purported unwritten agreement could not be made to vary or contradict the terms and conditions in the promissory notes.
Evidence of a prior or contemporaneous verbal agreement is generally not admissible to vary, contradict or defeat the operation of a valid contract. [18] While parol evidence is admissible to explain the meaning of written contracts, it cannot serve the purpose of incorporating into the contract additional contemporaneous conditions which are not mentioned at all in writing, unless there has been fraud or mistake. [19] No such allegation had been made by the petitioners in this case.
Finally, the appellate court did not err in holding the petitioners jointly and solidarily liable as it applied the doctrine of piercing the veil of corporate entity. The petitioner Foundation asserts that it has a personality separate and distinct from that of its President, petitioner Tan, and that it cannot be held solidarily liable for the loans of the latter.
The Court agrees with the CA that the petitioners cannot hide behind the corporate veil under the following circumstances:
The evidence shows that Tan has been representing himself as the President of Lapulapu Foundation, Inc. He opened a savings account and a current account in the names of the corporation, and signed the application form as well as the necessary specimen signature cards (Exhibits “A,” “B” and “C”) twice, for himself and for the foundation. He submitted a notarized Secretary’s Certificate (Exhibit “G”) from the corporation, attesting that he has been authorized, inter alia, to sign for and in behalf of the Lapulapu Foundation any and all checks, drafts or other orders with respect to the bank; to transact business with the Bank, negotiate loans, agreements, obligations, promissory notes and other commercial documents; and to initially obtain a loan for P100,000.00 from any bank (Exhibits “G-1” and “G-2”). Under these circumstances, the defendant corporation is liable for the transactions entered into by Tan on its behalf. [20]
Per its Secretary’s Certificate, the petitioner Foundation had given its President, petitioner Tan, ostensible and apparent authority to inter alia deal with the respondent Bank. Accordingly, the petitioner Foundation is estopped from questioning petitioner Tan’s authority to obtain the subject loans from the respondent Bank. It is a familiar doctrine that if a corporation knowingly permits one of its officers, or any other agent, to act within the scope of an apparent authority, it holds him out to the public as possessing the power to do those acts; and thus, the corporation will, as against anyone who has in good faith dealt with it through such agent, be estopped from denying the agent’s authority. [21]
In fine, there is no cogent reason to deviate from the CA’s ruling that the petitioners are jointly and solidarily liable for the loans contracted with the respondent Bank.
WHEREFORE, premises considered, the petition is DENIED and the Decision dated June 26, 1996 and Resolution dated August 19, 1996 of the Court of Appeals in CA-G.R. CV No. 37162 are AFFIRMED in toto.
SO ORDERED.
Puno, (Chairman) Quisumbing, Austria-Martinez, and Tinga, JJ., concur.


________________________________________

Rep. vs. Masongsong, G.R. No. 162846. In evidence subject

Below this digest is the full text of the case.


FACTS:

1. Respondents filed a petition in the RTC of Lipa City, for the declaration of nullity of Decree No. 639024 purportedly issued in favor of Serapio[3] Lubis on June 21, 1937 in LRC Cadastral Record No. 1296, and that the Administrator of the Land Registration Authority (LRA) be ordered to issue a new decree in favor of them.

2. They averred that, to the best of their knowledge, the property had not been mortgaged nor encumbered, and that no other person had any interest thereon. They asserted that despite earnest efforts, Decree No. 639024 could no longer be located, and is as such presumed to have been lost or destroyed during World War II.

3. The Office of the Solicitor General (OSG) did not file any written opposition to the petition.

4. The RTC grant the petition and the OSG appealed to the CA alleging that the RTC erred in granting the petition despite the failure of the respondents to to adduce in evidence a copy of the decree purportedly issued in the name of Serapio Lubis, or at least a certified copy of the decision of the court granting the decree but the CA affirmed the decision of the RTC.

5. Petitioner filed a petition for review on certiorari before the SC.

ISSUE.

WHETHER OR NOT, THE CA ERRED IN AFFIRMING THE DECISION OF THE RTC.

According to the SC, respondents failed to prove that decree 639024 ever exist.
Section 3. Original document must be produced; exceptions. —When the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself, except in the following cases:

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

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

(c) When the original consists of numerous accounts or other documents which cannot be examined in court without great loss of time and the fact sought to be established from them is only the general result of the whole; and (d) When the original is a public record in the custody of a public officer or recorded in a public office.

Furthermore, Section 5, Rule 130 of the Rules of Court states that:
Section 5. When the original document is unavailable. – When the original document has been lost or destroyed, or cannot be produced in court, the offeror, upon proof of its execution or existence and the cause of its unavailability without bad faith on his part, may prove its contents by a copy, or by a recital of its contents in some authentic document, or by the testimony of witnesses in the order stated.

The offeror is not obliged to prove the loss or destruction of the original document beyond all possibility, as it is enough to prove a reasonable probability of such loss.[22] This may be done by a bona fide and diligent search, fruitlessly made in places where it is likely to be found.[23] Destruction signifies that the original no longer exists, while a loss signifies merely that it cannot be discovered.



REPUBLIC OF THE PHILIPPINES, G.R. No. 162846
Petitioner,
Present:

PUNO, J., Chairman,
AUSTRIA-MARTINEZ,
- versus - CALLEJO, SR.,
TINGA, and
CHICO-NAZARIO, JJ.


JOSE LUBIS MASONGSONG and Promulgated:
JUANITO LUBIS MASONGSONG,
Respondents. September 22, 2005

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

D E C I S I O N



CALLEJO, SR., J.:


This is a petition for review on certiorari of the Decision[1] of the Court of Appeals (CA) in CA-G.R. CV No. 75826 which affirmed the Decision[2] of the Regional Trial Court (RTC) of Lipa City, Branch 12, granting the petition in LRC Case No. 2001-0677.

The Antecedents


On December 28, 2001, Jose Lubis Masongsong and his brother, Juanito Lubis Masongsong, filed a petition in the RTC of Lipa City, for the declaration of nullity of Decree No. 639024 purportedly issued in favor of Serapio[3] Lubis on June 21, 1937 in LRC Cadastral Record No. 1296, and that the Administrator of the Land Registration Authority (LRA) be ordered to issue a new decree in favor of the petitioners.

The petitioners alleged that Serapio Lubis was the owner of a parcel of land located in Barangay Calingatan, Mataasnakahoy, Batangas. A cadastral survey was later conducted in Lipa and Mataasnakahoy, Batangas, Cad. 218 Lipa Cadastre, where the property of Serapio Lubis, with an area of 6,146.85 square meters, was identified as Lot No. 8500. The lot was the subject of Cadastral Case No. 24, LRC Cad. Record No. 1296, and after due proceedings, a decision directing the issuance of a decree over the lot was rendered in favor of Serapio Lubis. Conformably, Decree No. 639024 was issued on June 21, 1937. Serapio Lubis died intestate on December 12, 1940, and was survived by his two daughters, Angela Lubis Masongsong and Gregoria Lubis-Dimaculangan. The latter died on April 26, 1977, survived by her heirs Corazon Dimaculangan Vda. de Bariuan and Milagros Dimaculangan-Lescano; Angela Lubis Masongsong, likewise, died intestate on October 29, 1989, survived by her children, namely, Alberto, Nicanor, Jose and Juanito, all surnamed Masongsong, and Arsenia Masongsong-Reyes and Lourdes Masongsong-Aranda. Thereafter, the heirs of Angela Masongsong and Gregoria Dimaculangan agreed to adjudicate the aforesaid lot unto themselves, and caused the property to be re-surveyed. The plan[4] was prepared by Geodetic Engineer Gregorio T. Pesigan on August 15, 1998. The petitioners then discovered that the Bureau of Lands had no existing or salvaged records of Decree No. 639024. Thus, on December 31, 1999, the heirs of Angela Masongsong and Gregoria Dimaculangan executed a deed entitled “Pagbabahaging Labas sa Hukuman na May Bilihang Ganap O Lubusan”[5] over the property. The property had been declared for taxation purposes, the latest of which was in 1993, under Tax Declaration No. 008-00006 in the name of Serapio Lubis.[6]

The petitioners also indicated the names and addresses of the adjoining lot owners as “Placida and Baldomero Lubis, Marlene Nuestro and Salud Liac, c/o Gregorio Landicho, at Barangay Calingatan, Mataasnakahoy, Batangas.” They averred that, to the best of their knowledge, the property had not been mortgaged nor encumbered, and that no other person had any interest thereon. They asserted that despite earnest efforts, Decree No. 639024 could no longer be located, and is as such presumed to have been lost or destroyed during World War II.[7]

The following were appended to the petition: the Deed of Extrajudicial Settlement of the Estate of Serapio Lubis, Angela Masongsong and Gregoria Dimaculangan executed by the petitioners and the heirs of Angela Masongsong and Gregoria Lubis-Dimaculangan on December 31, 1999; and a Certification dated July 13, 2000 issued by the LRA stating that Decree No. 639024 issued on June 21, 1937 covering Lot No. 8500 of the Cadastral Survey of Lipa and Mataasnakahoy, Batangas under Cad. Case No. 24, LRC Cadastral Record No. 1296 is not among its salvaged records.

On January 4, 2002, the trial court issued an Order[8] giving due course to the petition and setting the hearing at 8:30 a.m. of February 4, 2002, where all persons interested could appear and show cause why the petition should not be granted. The court also directed that copies of the petition and its annexes and the aforesaid order be served on the Register of Deeds of Batangas, and the City Prosecutor of Lipa City, and that it be posted in at least three (3) conspicuous places, namely, at the Lipa City public market, Lipa City Hall and at Barangay Calingatan, Mataasnakahoy, Batangas.

The Office of the Solicitor General (OSG) did not file any written opposition to the petition.

During the hearing of the petition, petitioner Juanito Lubis Masongsong testified and declared that petitioner Jose Masongsong had taken possession and cultivated the property since 1970.[9] He also stated that the heirs of Serapio Lubis, Angela Masongsong and Gregoria Dimaculangan had settled and adjudicated the estate of the deceased unto themselves on December 31, 1999.[10]

The petitioners adduced in evidence a technical description of the property duly certified and found correct by the Regional Technical Director of the Bureau of Lands on August 13, 1998;[11] tax declarations covering the property in the name of Serapio Lubis, from 1968 to 1994;[12] a Certification from the LRA dated May 29, 1998, stating that after due verification of the record book of cadastral lots in its custody, it was found that Decree No. 639024 was issued on June 21, 1937 covering Lot No. 8500 of the Cadastral Survey of Lipa and Mataasnakahoy, Batangas, based on a decision in Cad. Case No. 24, LRC Cad. Record No. 1296;[13] a Certification by the Register of Deeds of Batangas stating that there was no existing or salvaged record of the certificate of title covering Lot No. 8500 of the Lipa City Cadastre covered by Decree No. 639024, Cad. Case No. 24, LRC Cad. Record No. 1296 in the name of Serapio Lubis;[14] and a certification from the Department of Environment and Natural Resources (DENR) Region IV, that per its records, Lot No. 8500 located in Barangay Calingatan, Mataasnakahoy, Batangas, is not covered by any kind of public land application or patent;[15] and a certified true copy of page 88, Cadastral Decree Book, Cadastral Decree Section, LRC, showing that Decree No. 639024 covering Lot No. 8500 based on the decision, Cadastral Case No. 79-1 was issued on June 21, 1937.[16]

The OSG did not adduce any evidence against the petition.

On May 29, 2002, the trial court rendered a Decision[17] granting the petition. The fallo of the decision reads:

WHEREFORE, the petition is GRANTED. The lost text of Decree No. 639024 issued on June 21, 1937 in the name of Serapio Lubis is cancelled and the Administrator of the Land Registration Authority, upon payment of the prescribed fees due thereon, is hereby ordered to issue a new decree in lieu thereof which shall bear a memorandum that it was issued in lieu of the lost or destroyed decree, but shall in all respect be entitled to like faith and credit as the original decree. Also, the Register of Deeds for the Province of Batangas, Batangas City is hereby ordered to cause the registration of the same in the name of Serapio Lubis.

SO ORDERED.[18]

The OSG appealed the decision to the CA, alleging that the trial court erred in granting the petition for the issuance of a new decree, since the petitioners failed to adduce in evidence a copy of the decree purportedly issued in the name of Serapio Lubis, or at least a certified copy of the decision of the court granting the decree. It further alleged that there was no showing in the RTC that the owners of the adjoining lots, namely, Placida Lubis, Baldomero Lubis, Marlene Nuesto and Salud Liac, all of Barangay Calingatan, Mataasnakahoy, Batangas, were served with copies of the petition, the order of the court setting the case for hearing and the notice of hearing issued by the court.

On March 15, 2004, the CA rendered judgment affirming the decision of the RTC and dismissing the appeal of the OSG.[19]

In due course, the Republic of the Philippines, through the OSG, filed a petition for review of the decision, alleging that:

I
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT THE FAILURE TO PRODUCE IN EVIDENCE THE ASSAILED DECREE OR AT LEAST THE DECISION RELEVANT THERETO, WAS ADEQUATELY EXPLAINED BY RESPONDENTS, AS WELL AS IN GIVING WEIGHT TO THE CERTIFICATIONS OF THE GOVERNMENT AGENCIES CONCERNED, NAMELY, THE LRA AND THE REGISTER OF DEEDS, TO THE EFFECT THAT THE SUBJECT DECREE WAS PRESUMABLY LOST OR DESTROYED.

II
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT THE ADJOINING LOT OWNERS AND RESPONDENTS’ CO-OWNERS NEED NOT BE NOTIFIED OF THE PROCEEDINGS IN THE COURT A QUO.[20]

On the first ground, the OSG avers that the respondents failed to prove that Decree No. 639024 in favor of Serapio Lubis ever existed; it behooved the respondents, as petitioners in the RTC, to adduce as evidence the decree of the court in Cadastral Case No. 24, LRC Cad. Record No. 1296, or in the absence thereof, any credible explanation why they failed to present such decree; and there is no competent and credible evidence that such decree had been lost or destroyed during the Second World War. Moreover, while the Republic of the Philippines, through the OSG, failed to adduce evidence in opposition to the petition, the respondents, as petitioners in the RTC, were burdened to prove the allegations of their petition and should have relied on the strength of their evidence.

The assailed ruling of the CA reads:

In [view] of the facts and circumstances in this case reveals that appellee could not have possibly produced Decree No. 639024 issued by the government in favor of Serapio pursuant to a decision rendered by the court relative thereto, for the simple reason that the same was lost or destroyed due to the devastation of the second World War. Contrary to appellant’s claim, the failure to produce the assailed decree or decision relevant thereto was well-explained by the appellee. As a matter of fact, they presented the certifications of the proper government agency to assert that the decree was lost or destroyed. As certified by Alberto Lingayo, Acting Chief of the Ordinary and Cadastral Decree Division of the LRA, a decree was issued for the subject lot pursuant to a court decision thereon. Although Salvador Oriel, the Chief of the Docket Division of the said office attested that there is no salvaged decree on file involving the disputed lot, he stated that the decree was presumed to have been lost or destroyed as a consequence of the World War. Also, the non-existence of a copy of the decree in the files of the LRA or the Register of Deeds does not imply that a decree had never been issued or recorded. Thus, the trial court did not err in giving weight to these certifications and in granting the petition on the basis thereof. In the issuance of these certifications, it is presumed, in the absence of contradictory evidence, that an official duty has been regularly performed. Since the decree in the name of appellee’s predecessor was issued on June 21, 1937, the court decision granting the same could have, likewise, been issued around the same time. As such, it can also be presumed that the decision was lost or destroyed due to the war. Besides, it is too late in the day to ask for such decision, when the appellant – oppositor in the instant petition, could have asked the same during the trial at the court below. With the loss or destruction of these documents, this Court is, likewise, bent on relying on the certifications issued by the LRA.[21]

The contention of the petitioner is correct.

The respondents, as the petitioners in the RTC, were burdened to prove the following: that the court had rendered the decision in LRC Case No. 24, LRC Cad. Record No. 1296 covering Lot 8500 in favor of Serapio Lubis, and that as such, Decree No. 639024 was issued on June 21, 1937 in favor of Serapio Lubis. The respondents were burdened to adduce in evidence the original, or even a certified copy directing the issuance of a decree to prove its contents. As provided for in Section 3, Rule 130 of the Rules of Court, secondary evidence may be adduced in such a case, viz.:

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

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

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

(c) When the original consists of numerous accounts or other documents which cannot be examined in court without great loss of time and the fact sought to be established from them is only the general result of the whole; and

(d) When the original is a public record in the custody of a public officer or recorded in a public office.

Furthermore, Section 5, Rule 130 of the Rules of Court states that:
Section 5. When the original document is unavailable. – When the original document has been lost or destroyed, or cannot be produced in court, the offeror, upon proof of its execution or existence and the cause of its unavailability without bad faith on his part, may prove its contents by a copy, or by a recital of its contents in some authentic document, or by the testimony of witnesses in the order stated.

The offeror is not obliged to prove the loss or destruction of the original document beyond all possibility, as it is enough to prove a reasonable probability of such loss.[22] This may be done by a bona fide and diligent search, fruitlessly made in places where it is likely to be found.[23] Destruction signifies that the original no longer exists, while a loss signifies merely that it cannot be discovered.[24] The term execution, on the other hand, means the accomplishment of a thing; the completion of an act or instrument; the fulfillment of an undertaking.[25]

The respondents adduced preponderant evidence to prove the existence of Decree No. 639024 covering Lot No. 8500 issued on June 21, 1937, and Lot No. 8434, Cad. 218 Lipa Cadastre with an area of 6,146.85 square meters located in Barangay Calingatan, Mataasnakahoy, Batangas, originally surveyed from February 1925 to September 1930.[26] A copy of the decree was filed with the Land Registration Commission (now the LRA), as evidenced by Record Book of Decrees,[27] but the same was not found in the LRA Vault Section, Docket Division. The respondents failed to adduce evidence that the decision of the court and the decree were in favor of Serapio Lubis, and failed to present a certified copy of the LRA decision in LRC Case No. 24.

The respondents even failed to adduce in evidence the original or certified true copy of the court’s decision in favor of Serapio Lubis. They could have secured a copy of the decision from the court or from the LRA, but failed to do so. There is even no showing that the court records in LRC Case No. 24 and the copy of the decision transmitted to the Land Registration Commission (now the LRA) were missing, lost or destroyed.

The Court notes that the respondents failed to adduce proof that from 1937 until 1968, Serapio Lubis, or after his death, his heirs, ever declared the property for taxation purposes under his/their names and paid the realty taxes therefor. There is even no evidence that Serapio, or his heirs after his death, ever took possession of the property from 1937. Inexplicably, it was only in 1968, long after Serapio’s death, that the property was declared for taxation purposes under his name. Moreover, Jose Masongsong took possession and cultivated the property only in 1970.

The Court agrees with the petitioner that Section 109 of Presidential Decree No. 1529 has no application in this case, as such provision applies only when the owner’s duplicate certificate of title is lost or stolen:
SEC. 109. Notice and replacement of lost duplicate certificate. – In case of loss or theft of an owner’s duplicate certificate of title, due notice under oath shall be sent by the owner or by someone in his behalf to the Register of Deeds of the province or city where the land lies as soon as the loss or theft is discovered. If a duplicate certificate is lost or destroyed, or cannot be produced by a person applying for the entry of a new certificate to him or for the registration of any instrument, a sworn statement of fact of such loss or destruction may be filed by the registered owner or other person in interest and registered.

Upon the petition of the registered owner or other person in interest, the court may, after notice and due hearing, direct the issuance of a new duplicate certificate, which shall contain a memorandum of the fact that it is issued in place of the lost duplicate certificate, but shall in all respects be entitled to like faith and credit as the original duplicate, and shall thereafter be regarded as such for all purposes of this decree.


Clearly, this provision does not apply to the loss or destruction of a decree based on a decision of the land registration court.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed decision of the Court of Appeals is REVERSED and SET ASIDE. The petition of the respondents in the court a quo is DISMISSED.

SO ORDERED.


ROMEO J. CALLEJO, SR.
Associate Justice

WE CONCUR:


REYNATO S. PUNO
Associate Justice
Chairman





MA. ALICIA AUSTRIA-MARTINEZ DANTE O. TINGA
Associate Justice Associate Justice



MINITA V. CHICO-NAZARIO
Associate Justice


A T T E S T A T I O N


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



REYNATO S. PUNO
Associate Justice
Chairman, Second Division




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 Chairman’s Attestation, it is hereby certified that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.




HILARIO G. DAVIDE, JR.
Chief Justice


________________________________________
[1] Penned by Associate Justice Mercedes Gozo-Dadole, with Associate Justices Eugenio S. Labitoria and Rosmari D. Carandang, concurring; Rollo, pp. 46-54.
[2] Penned by Judge Vicente F. Landicho; Id. at 55-58.
[3] Also spelled “Serafio.”
[4] Records, p. 10.
[5] Id. at 12-14.
[6] Id. at 16.
[7] Id. at 4-5.
[8] Records, p. 19.
[9] TSN, 7 March 2002, p. 21.
[10] Id. at 10.
[11] Exhibit “R.”
[12] Exhibits “S” to “S-6.”
[13] Exhibit “V.”
[14] Exhibit “X.”
[15] Exhibit “Y.”
[16] Exhibit “Z-1.”
[17] Records, pp. 120-123.
[18] Id. at 123.
[19] Rollo, pp. 46-54.
[20] Id. at 26.
[21] Rollo, pp. 51-52.
[22] Paylago v. Jarabe, G.R. No. L-20046, 27 March 1968, 22 SCRA 1247.
[23] Government of the Philippine Islands v. Martinez, 44 Phil. 817 (1918).
[24] Francisco, The Revised Rules of Court in the Philippines, Vol. VII, Part I, 1997 ed., p. 157.
[25] Id. at 155.
[26] Exhibit “P.”
[27] Exhibit “W.”

PHILIPPINE BANKING CORP. VS. CA, G.R. No. 127469 January 15, 2004

Below this digest is the full text of the case.

FACTS:

1. Marcos filed a complaint for a sum of money against Phil. Bank corp. alleging that he made a time deposit on two occasion through Pagsaligan one of the official of the bank in which in his first deposit, a receipt was given to him but in his second deposit, he was given only a letter of certification and when he tried to withdraw from the bank his time deposit to buy a material for his constraction, he was convince by the bank through Pagsaligan to keep his deposit intact and open a domestic letter of credit instead.

2. The BANK required Marcos to give a marginal deposit of 30% of the total amount of the letters of credit. The time deposits of Marcos would secure 70% of the letters of credit. Since Marcos trusted the BANK and Pagsaligan, he signed blank printed forms of the application for the domestic letters of credit, trust receipt agreements and promissory notes and executed three trust receipt agreement.

3. Marcos believe that he and the bank become debtor and creditor of each other and expect that the bank would offset his credit with his time deposit.

4. The bank on there answer denied the claim of marcos and alleged that it is a despirate attempt of marcos to avoid his liability under several trust receipt agreement which is the subject of a criminal complaint and claim that Marcos had a loan to them covered by a promissory notes.

5. The trial court rendered a decision in favor of Marcos and when the petitioner appealed to the court of appeals, it modify the decision of the RTC by redusing the actual damages and deleting the attorney’s fees.

ISSUE.

WHETHER OR NOT THE PETITIONER [sic] ABLE TO PROVE THE PRIVATE RESPONDENT’S OUTSTANDING OBLIGATIONS SECURED BY THE ASSIGNMENT OF TIME DEPOSITS.

According to the SUPREME COURT, the machine copy of the promissory notes presented by the bank had no evidentiary value, they could easily prove it had they presented the original copy because By the very nature of its business, the BANK should have had in its possession the original copies of the disputed promissory note and the records and ledgers evidencing the offsetting of the loan with the time deposits of Marcos. The BANK inexplicably failed to produce the original copies of these documents. Clearly, the BANK failed to treat the account of Marcos with meticulous care.



G.R. No. 127469 January 15, 2004
PHILIPPINE BANKING CORPORATION vs. COURT OF APPEALS, ET AL.
________________________________________
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 127469 January 15, 2004
PHILIPPINE BANKING CORPORATION, petitioner,
vs.
COURT OF APPEALS and LEONILO MARCOS, respondents.

D E C I S I O N

CARPIO, J.:
The Case
Before us is a petition for review of the Decision1 of the Court of Appeals in CA-G.R. CV No. 34382 dated 10 December 1996 modifying the Decision2 of the Regional Trial Court, Fourth Judicial Region, Assisting Court, Biñan, Laguna in Civil Case No. B-3148 entitled "Leonilo Marcos v. Philippine Banking Corporation."
The Antecedent Facts
On 30 August 1989, Leonilo Marcos ("Marcos") filed with the trial court a Complaint for Sum of Money with Damages3 against petitioner Philippine Banking Corporation ("BANK").4
Marcos alleged that sometime in 1982, the BANK through Florencio B. Pagsaligan ("Pagsaligan"), one of the officials of the BANK and a close friend of Marcos, persuaded him to deposit money with the BANK. Marcos yielded to Pagsaligan’s persuasion and claimed he made a time deposit with the BANK on two occasions. The first was on 11 March 1982 for P664,897.67. The BANK issued Receipt No. 635734 for this time deposit. On 12 March 1982, Marcos claimed he again made a time deposit with the BANK for P764,897.67. The BANK did not issue an official receipt for this time deposit but it acknowledged a deposit of this amount through a letter-certification Pagsaligan issued. The time deposits earned interest at 17% per annum and had a maturity period of 90 days.
Marcos alleged that Pagsaligan kept the various time deposit certificates on the assurance that the BANK would take care of the certificates, interests and renewals. Marcos claimed that from the time of the deposit, he had not received the principal amount or its interest.
Sometime in March 1983, Marcos wanted to withdraw from the BANK his time deposits and the accumulated interests to buy materials for his construction business. However, the BANK through Pagsaligan convinced Marcos to keep his time deposits intact and instead to open several domestic letters of credit. The BANK required Marcos to give a marginal deposit of 30% of the total amount of the letters of credit. The time deposits of Marcos would secure 70% of the letters of credit. Since Marcos trusted the BANK and Pagsaligan, he signed blank printed forms of the application for the domestic letters of credit, trust receipt agreements and promissory notes.
Marcos executed three Trust Receipt Agreements totalling P851,250, broken down as follows: (1) Trust Receipt No. CD 83.7 dated 8 March 1983 for P300,000; (2) Trust Receipt No. CD 83.9 dated 15 March 1983 for P300,000; and (3) Trust Receipt No. CD 83.10 dated 15 March 1983 for P251,250. Marcos deposited the required 30% marginal deposit for the trust receipt agreements. Marcos claimed that his obligation to the BANK was therefore only P595,875 representing 70% of the letters of credit.
Marcos believed that he and the BANK became creditors and debtors of each other. Marcos expected the BANK to offset automatically a portion of his time deposits and the accumulated interest with the amount covered by the three trust receipts totalling P851,250 less the 30% marginal deposit that he had paid. Marcos argued that if only the BANK applied his time deposits and the accumulated interest to his remaining obligation, which is 70% of the total amount of the letters of credit, he would have paid completely his debt. Marcos further pointed out that since he did not apply for a renewal of the trust receipt agreements, the BANK had no right to renew the same.
Marcos accused the BANK of unjustly demanding payment for the total amount of the trust receipt agreements without deducting the 30% marginal deposit that he had already made. He decried the BANK’s unlawful charging of accumulated interest because he claimed there was no agreement as to the payment of interest. The interest arose from numerous alleged extensions and penalties. Marcos reiterated that there was no agreement to this effect because his time deposits served as the collateral for his remaining obligation.
Marcos also denied that he obtained another loan from the BANK for P500,000 with interest at 25% per annum supposedly covered by Promissory Note No. 20-979-83 dated 24 October 1983. Marcos bewailed the BANK’s belated claim that his time deposits were applied to this void promissory note on 12 March 1985.
In sum, Marcos claimed that:
(1) his time deposit with the BANK "in the total sum of P1,428,795.345 has earned accumulated interest since March 1982 up to the present in the total amount of P1,727,305.45 at the rate of 17% per annum so his total money with defendant (the BANK) is P3,156,100.79 less the amount of P595,875 representing the 70% balance of the marginal deposit and/or balance of the trust agreements;" and
(2) his indebtedness was only P851,250 less the 30% paid as marginal deposit or a balance of P595,875, which the BANK should have automatically deducted from his time deposits and accumulated interest, leaving the BANK’s indebtedness to him at P2,560,025.79.
Marcos prayed the trial court to declare Promissory Note No. 20-979-83 void and to order the BANK to pay the amount of his time deposits with interest. He also sought the award of moral and exemplary damages as well as attorney’s fees for P200,000 plus 25% of the amount due.
On 18 September 1989, summons and a copy of the complaint were served on the BANK.6
On 9 October 1989, the BANK filed its Answer with Counterclaim. The BANK denied the allegations in the complaint. The BANK believed that the suit was Marcos’ desperate attempt to avoid liability under several trust receipt agreements that were the subject of a criminal complaint.
The BANK alleged that as of 12 March 1982, the total amount of the various time deposits of Marcos was only P764,897.67 and not P1,428,795.357 as alleged in the complaint. The P764,897.67 included the P664,897.67 that Marcos deposited on 11 March 1982.
The BANK pointed out that Marcos delivered to the BANK the time deposit certificates by virtue of the Deed of Assignment dated 2 June 1989. Marcos executed the Deed of Assignment to secure his various loan obligations. The BANK claimed that these loans are covered by Promissory Note No. 20-756-82 dated 2 June 1982 for P420,000 and Promissory Note No. 20-979-83 dated 24 October 1983 for P500,000. The BANK stressed that these obligations are separate and distinct from the trust receipt agreements.
When Marcos defaulted in the payment of Promissory Note No. 20-979-83, the BANK debited his time deposits and applied the same to the obligation that is now considered fully paid.8 The BANK insisted that the Deed of Assignment authorized it to apply the time deposits in payment of Promissory Note No. 20-979-83.
In March 1982, the wife of Marcos, Consolacion Marcos, sought the advice of Pagsaligan. Consolacion informed Pagsaligan that she and her husband needed to finance the purchase of construction materials for their business, L.A. Marcos Construction Company. Pagsaligan suggested the opening of the letters of credit and the execution of trust receipts, whereby the BANK would agree to purchase the goods needed by the client through the letters of credit. The BANK would then entrust the goods to the client, as entrustee, who would undertake to deliver the proceeds of the sale or the goods themselves to the entrustor within a specified time.
The BANK claimed that Marcos freely entered into the trust receipt agreements. When Marcos failed to account for the goods delivered or for the proceeds of the sale, the BANK filed a complaint for violation of Presidential Decree No. 115 or the Trust Receipts Law. Instead of initiating negotiations for the settlement of the account, Marcos filed this suit.
The BANK denied falsifying Promissory Note No. 20-979-83. The BANK claimed that the promissory note is supported by documentary evidence such as Marcos’ application for this loan and the microfilm of the cashier’s check issued for the loan. The BANK insisted that Marcos could not deny the agreement for the payment of interest and penalties under the trust receipt agreements. The BANK prayed for the dismissal of the complaint, payment of damages, attorney’s fees and cost of suit.
On 15 December 1989, the trial court on motion of Marcos’ counsel issued an order declaring the BANK in default for filing its answer five days after the 15-day period to file the answer had lapsed.9 The trial court also held that the answer is a mere scrap of paper because a copy was not furnished to Marcos. In the same order, the trial court allowed Marcos to present his evidence ex parte on 18 December 1989. On that date, Marcos testified and presented documentary evidence. The case was then submitted for decision.
On 19 December 1989, Marcos received a copy of the BANK’s Answer with Compulsory Counterclaim.
On 29 December 1989, the BANK filed an opposition to Marcos’ motion to declare the BANK in default. On 9 January 1990, the BANK filed a motion to lift the order of default claiming that it had only then learned of the order of default. The BANK explained that its delayed filing of the Answer with Counterclaim and failure to serve a copy of the answer on Marcos was due to excusable negligence. The BANK asked the trial court to set aside the order of default because it had a valid and meritorious defense.
On 7 February 1990, the trial court issued an order setting aside the default order and admitting the BANK’s Answer with Compulsory Counterclaim. The trial court ordered the BANK to present its evidence on 12 March 1990.
On 5 March 1990, the BANK filed a motion praying to cross-examine Marcos who had testified during the ex-parte hearing of 18 December 1989. On 12 March 1990, the trial court denied the BANK’s motion and directed the BANK to present its evidence. Trial then ensued.
The BANK presented two witnesses, Rodolfo Sales, the Branch Manager of the BANK’s Cubao Branch since 1987, and Pagsaligan, the Branch Manager of the same branch from 1982 to 1986.
On 24 April 1990, the counsel of Marcos cross-examined Pagsaligan. Due to lack of material time, the trial court reset the continuation of the cross-examination and presentation of other evidence. The succeeding hearings were postponed, specifically on 24, 27 and 28 of August 1990, because of the BANK’s failure to produce its witness, Pagsaligan. The BANK on these scheduled hearings also failed to present other evidence.
On 7 September 1990, the BANK moved to postpone the hearing on the ground that Pagsaligan could not attend the hearing because of illness. The trial court denied the motion to postpone and on motion of Marcos’ counsel ruled that the BANK had waived its right to present further evidence. The trial court considered the case submitted for decision. The BANK moved for reconsideration, which the trial court denied.
On 8 October 1990, the trial court rendered its decision in favor of Marcos. Aggrieved, the BANK appealed to the Court of Appeals.
On 10 December 1996, the Court of Appeals modified the decision of the trial court by reducing the amount of actual damages and deleting the attorney’s fees awarded to Marcos.
The Ruling of the Trial Court
The trial court ruled that the total amount of time deposits of Marcos was P1,429,795.34 and not only P764,897.67 as claimed by the BANK. The trial court found that Marcos made a time deposit on two occasions. The first time deposit was made on 11 March 1982 for P664,897.67 as shown by Receipt No. 635743. On 12 March 1982, Marcos again made a time deposit for P764,897.67 as acknowledged by Pagsaligan in a letter of certification. The two time deposits thus amounted to P1,429,795.34.
The trial court pointed out that no receipt was issued for the 12 March 1982 time deposit because the letter of certification was sufficient. The trial court made a finding that the certification letter did not include the time deposit made on 11 March 1982. The 12 March 1982 deposit was in cash while the 11 March 1982 deposit was in checks which still had to clear. The checks were not included in the certification letter since the BANK could not credit the amounts of the checks prior to clearing. The trial court declared that even the Deed of Assignment acknowledged that Marcos made several time deposits as the Deed stated that the assigment was charged against "various" time deposits.
The trial court recognized the existence of the Deed of Assignment and the two loans that Marcos supposedly obtained from the BANK on 28 May 1982 for P340,000 and on 2 June 1982 for P420,000. The two loans amounted to P760,000. On 2 June 1982, the same day that he secured the second loan, Marcos executed a Deed of Assignment assigning to the BANK P760,000 of his time deposits. The trial court concluded that obviously the two loans were immediately paid by virtue of the Deed of Assignment.
The trial court found it strange that Marcos borrowed money from the BANK at a higher rate of interest instead of just withdrawing his time deposits. The trial court saw no rhyme or reason why Marcos had to secure the loans from the BANK. The trial court was convinced that Marcos did not know that what he had signed were loan applications and a Deed of Assignment in payment for his loans. Nonetheless, the trial court recognized "the said loan of P760,000 and its corresponding payment by virtue of the Deed of Assignment for the equal sum."10
If the BANK’s claim is true that the time deposits of Marcos amounted only to P764,897.67 and he had already assigned P760,000 of this amount, the trial court pointed out that what would be left as of 3 June 1982 would only be P4,867.67.11 Yet, after the time deposits had matured, the BANK allowed Marcos to open letters of credit three times. The three letters of credit were all secured by the time deposits of Marcos after he had paid the 30% marginal deposit. The trial court opined that if Marcos’ time deposit was only P764,897.67, then the letters of credit totalling P595,875 (less 30% marginal deposit) was guaranteed by only P4,867.67,12 the remaining time deposits after Marcos had executed the Deed of Assignment for P760,000.
According to the trial court, a security of only P4,867.6713 for a loan worth P595,875 (less 30% marginal deposit) is not only preposterous, it is also comical. Worse, aside from allowing Marcos to have unsecured trust receipts, the BANK still claimed to have granted Marcos another loan for P500,000 on 25 October 1983 covered by Promissory Note No. 20-979-83. The BANK is a commercial bank engaged in the business of lending money. Allowing a loan of more than a million pesos without collateral is in the words of the trial court, "an impossibility and a gross violation of Central Bank Rules and Regulations, which no Bank Manager has such authority to grant."14 Thus, the trial court held that the BANK could not have granted Marcos the loan covered by Promissory Note No. 20-979-83 because it was unsecured by any collateral.
The trial court required the BANK to produce the original copies of the loan application and Promissory Note No. 20-979-83 so that it could determine who applied for this loan. However, the BANK presented to the trial court only the "machine copies of the duplicate" of these documents.
Based on the "machine copies of the duplicate" of the two documents, the trial court noticed the following discrepancies: (1) Marcos’ signature on the two documents are merely initials unlike in the other documents submitted by the BANK; (2) it is highly unnatural for the BANK to only have duplicate copies of the two documents in its custody; (3) the address of Marcos in the documents is different from the place of residence as stated by Marcos in the other documents annexed by the BANK in its Answer; (4) Pagsaligan made it appear that a check for the loan proceeds of P470,588 less bank charges was issued to Marcos but the check’s payee was one ATTY. LEONILO MARCOS and, as the trial court noted, Marcos is not a lawyer; and (5) Pagsaligan was not sure what branch of the BANK issued the check for the loan proceeds. The trial court was convinced that Marcos did not execute the questionable documents covering the P500,000 loan and Pagsaligan used these documents as a means to justify his inability to explain and account for the time deposits of Marcos.
The trial court noted the BANK’s "defective" documentation of its transaction with Marcos. First, the BANK was not in possession of the original copies of the documents like the loan applications. Second, the BANK did not have a ledger of the accounts of Marcos or of his various transactions with the BANK. Last, the BANK did not issue a certificate of time deposit to Marcos. Again, the trial court attributed the BANK’s lapses to Pagsaligan’s scheme to defraud Marcos of his time deposits.
The trial court also took note of Pagsaligan’s demeanor on the witness stand. Pagsaligan evaded the questions by giving unresponsive or inconsistent answers compelling the trial court to admonish him. When the trial court ordered Pagsaligan to produce the documents, he "conveniently became sick"15 and thus failed to attend the hearings without presenting proof of his physical condition.
The trial court disregarded the BANK’s assertion that the time deposits were converted into a savings account at 14% or 10% per annum upon maturity. The BANK never informed Marcos that his time deposits had already matured and these were converted into a savings account. As to the interest due on the trust receipts, the trial court ruled that there is no basis for such a charge because the documents do not stipulate any interest.
In computing the amount due to Marcos, the trial court took into account the marginal deposit that Marcos had already paid which is equivalent to 30% of the total amount of the three trust receipts. The three trust receipts totalling P851,250 would then have a balance of P595,875. The balance became due in March 1987 and on the same date, Marcos’ time deposits of P669,932.30 had already earned interest from 1983 to 1987 totalling P569,323.21 at 17% per annum. Thus, the trial court ruled that the time deposits in 1987 totalled P1,239,115. From this amount, the trial court deducted P595,875, the amount of the trust receipts, leaving a balance on the time deposits of P643,240 as of March 1987. However, since the BANK failed to return the time deposits of Marcos, which again matured in March 1990, the time deposits with interest, less the amount of trust receipts paid in 1987, amounted to P971,292.49 as of March 1990.
In the alternative, the trial court ruled that even if Marcos had only one time deposit of P764,897.67 as claimed by the BANK, the time deposit would have still earned interest at the rate of 17% per annum. The time deposit of P650,163 would have increased to P1,415,060 in 1987 after earning interest. Deducting the amount of the three trust receipts, Marcos’ time deposits still totalled P1,236,969.30 plus interest.
The dispositive portion of the decision of the trial court reads:
WHEREFORE, under the foregoing circumstances, judgment is hereby rendered in favor of Plaintiff, directing Defendant Bank as follows:
1) to return to Plaintiff his time deposit in the sum of P971,292.49 with interest thereon at the legal rate, until fully restituted;
2) to pay attorney’s fees of P200,000.00; [and]
3) [to pay the] cost of these proceedings.
IT IS SO ORDERED.16
The Ruling of the Court of Appeals
The Court of Appeals addressed the procedural and substantive issues that the BANK raised.
The appellate court ruled that the trial court committed a reversible error when it denied the BANK’s motion to cross-examine Marcos. The appellate court ruled that the right to cross-examine is a fundamental right that the BANK did not waive because the BANK vigorously asserted this right. The BANK’s failure to serve a notice of the motion to Marcos is not a valid ground to deny the motion to cross-examine. The appellate court held that the motion to cross-examine is one of those non-litigated motions that do not require the movant to provide a notice of hearing to the other party.
The Court of Appeals pointed out that when the trial court lifted the order of default, it had the duty to afford the BANK its right to cross-examine Marcos. This duty assumed greater importance because the only evidence supporting the complaint is Marcos’ ex-parte testimony. The trial court should have tested the veracity of Marcos’ testimony through the distilling process of cross-examination. The Court of Appeals, however, believed that the case should not be remanded to the trial court because Marcos’ testimony on the time deposits is supported by evidence on record from which the appellate court could make an intelligent judgment.
On the second procedural issue, the Court of Appeals held that the trial court did not err when it declared that the BANK had waived its right to present its evidence and had submitted the case for decision. The appellate court agreed with the grounds relied upon by the trial court in its Order dated 7 September 1990.
The Court of Appeals, however, differed with the finding of the trial court as to the total amount of the time deposits. The appellate court ruled that the total amount of the time deposits of Marcos is only P764,897.67 and not P1,429,795.34 as found by the trial court. The certification letter issued by Pagsaligan showed that Marcos made a time deposit on 12 March 1982 for P764,897.67. The certification letter shows that the amount mentioned in the letter was the aggregate or total amount of the time deposits of Marcos as of that date. Therefore, the P764,897.67 already included the P664,897.67 time deposit made by Marcos on 11 March 1982.
The Court of Appeals further explained:
Besides, the Official Receipt (Exh. "B", p. 32, Records) dated March 11, 1982 covering the sum of P664,987.67 time deposit did not provide for a maturity date implying clearly that the amount covered by said receipt forms part of the total sum shown in the letter-certification which contained a maturity date. Moreover, it taxes one’s credulity to believe that appellee would make a time deposit on March 12, 1982 in the sum of P764,897.67 which except for the additional sum of P100,000.00 is practically identical (see underlined figures) to the sum of P664,897.67 deposited the day before March 11, 1982.
Additionally, We agree with the contention of the appellant that the lower court wrongly appreciated the testimony of Mr. Pagsaligan. Our finding is strengthened when we consider the alleged application for loan by the appellee with the appellant in the sum of P500,000.00 dated October 24, 1983. (Exh. "J", p. 40, Records), wherein it was stated that the loan is for additional working capital versus the various time deposit amounting to P760,000.00.17 (Emphasis supplied)
The Court of Appeals sustained the factual findings of the trial court in ruling that Promissory Note No. 20-979-83 is void. There is no evidence of a bank ledger or computation of interest of the loan. The appellate court blamed the BANK for failing to comply with the orders of the trial court to produce the documents on the loan. The BANK also made inconsistent statements. In its Answer to the Complaint, the BANK alleged that the loan was fully paid when it debited the time deposits of Marcos with the loan. However, in its discussion of the assigned errors, the BANK claimed that Marcos had yet to pay the loan.
The appellate court deleted the award of attorney’s fees. It noted that the trial court failed to justify the award of attorney’s fees in the text of its decision. The dispositive portion of the decision of the Court of Appeals reads:
WHEREFORE, premises considered, the appealed decision is SET ASIDE. A new judgment is hereby rendered ordering the appellant bank to return to the appellee his time deposit in the sum of P764,897.67 with 17% interest within 90 days from March 11, 1982 in accordance with the letter-certification and with legal interest thereafter until fully paid. Costs against the appellant.
SO ORDERED.18 (Emphasis supplied)
The Issues
The BANK anchors this petition on the following issues:
1) WHETHER OR NOT THE PETITIONER [sic] ABLE TO PROVE THE PRIVATE RESPONDENT’S OUTSTANDING OBLIGATIONS SECURED BY THE ASSIGNMENT OF TIME DEPOSITS?
1.1) COROLLARILY, WHETHER OR NOT THE PROVISIONS OF SECTION 8 RULE 10 OF [sic] THEN REVISED RULES OF COURT BE APPLIED [sic] SO AS TO CREATE A JUDICIAL ADMISSION ON THE GENUINENESS AND DUE EXECUTION OF THE ACTIONABLE DOCUMENTS APPENDED TO THE PETITIONER’S ANSWER?
2) WHETHER OR NOT PETITIONER [sic] DEPRIVED OF DUE PROCESS WHEN THE LOWER COURT HAS [sic] DECLARED PETITIONER TO HAVE WAIVED PRESENTATION OF FURTHER EVIDENCE AND CONSIDERED THE CASE SUBMITTED FOR RESOLUTION?19
The Ruling of the Court
The petition is without merit.
Procedural Issues
There was no violation of the BANK’s right to procedural due process when the trial court denied the BANK’s motion to cross-examine Marcos. Prior to the denial of the motion, the trial court had properly declared the BANK in default. Since the BANK was in default, Marcos was able to present his evidence ex-parte including his own testimony. When the trial court lifted the order of default, the BANK was restored to its standing and rights in the action. However, as a rule, the proceedings already taken should not be disturbed.20 Nevertheless, it is within the trial court’s discretion to reopen the evidence submitted by the plaintiff and allow the defendant to challenge the same, by cross-examining the plaintiff’s witnesses or introducing countervailing evidence.21 The 1964 Rules of Court, the rules then in effect at the time of the hearing of this case, recognized the trial court’s exercise of this discretion. The 1997 Rules of Court retained this discretion.22 Section 3, Rule 18 of the 1964 Rules of Court reads:
Sec. 3. Relief from order of default. — A party declared in default may any time after discovery thereof and before judgment file a motion under oath to set aside the order of default upon proper showing that his failure to answer was due to fraud, accident, mistake or excusable neglect and that he has a meritorious defense. In such case the order of default may be set aside on such terms and conditions as the judge may impose in the interest of justice. (Emphasis supplied)
The records show that the BANK did not ask the trial court to restore its right to cross-examine Marcos when it sought the lifting of the default order on 9 January 1990. Thus, the order dated 7 February 1990 setting aside the order of default did not confer on the BANK the right to cross-examine Marcos. It was only on 2 March 1990 that the BANK filed the motion to cross-examine Marcos. During the 12 March 1990 hearing, the trial court denied the BANK’s oral manifestation to grant its motion to cross-examine Marcos because there was no proof of service on Marcos. The BANK’s counsel pleaded for reconsideration but the trial court denied the plea and ordered the BANK to present its evidence. Instead of presenting its evidence, the BANK moved for the resetting of the hearing and when the trial court denied the same, the BANK informed the trial court that it was elevating the denial to the "upper court."23
To repeat, the trial court had previously declared the BANK in default. The trial court therefore had the right to decide whether or not to disturb the testimony of Marcos that had already been terminated even before the trial court lifted the order of default.
We do not agree with the appellate court’s ruling that a motion to cross-examine is a non-litigated motion and that the trial court gravely abused its discretion when it denied the motion to cross-examine. A motion to cross-examine is adversarial. The adverse party in this case had the right to resist the motion to cross-examine because the movant had previously forfeited its right to cross-examine the witness. The purpose of a notice of a motion is to avoid surprises on the opposite party and to give him time to study and meet the arguments.24 In a motion to cross-examine, the adverse party has the right not only to prepare a meaningful opposition to the motion but also to be informed that his witness is being recalled for cross-examination. The proof of service was therefore indispensable and the trial court was correct in denying the oral manifestation to grant the motion for cross-examination.
We find no justifiable reason to relax the application of the rule on notice of motions25 to this case. The BANK could have easily re-filed the motion to cross-examine with the requisite notice to Marcos. It did not do so. The BANK did not make good its threat to elevate the denial to a higher court. The BANK waited until the trial court rendered a judgment on the merits before questioning the interlocutory order of denial.
While the right to cross-examine is a vital element of procedural due process, the right does not necessarily require an actual cross-examination, but merely an opportunity to exercise this right if desired by the party entitled to it.26 Clearly, the BANK’s failure to cross-examine is imputable to the BANK when it lost this right27 as it was in default and failed thereafter to exhaust the remedies to secure the exercise of this right at the earliest opportunity.
The two other procedural lapses that the BANK attributes to the appellate and trial courts deserve scant consideration.
The BANK raises for the very first time the issue of judicial admission on the part of Marcos. The BANK even has the audacity to fault the Court of Appeals for not ruling on this issue when it never raised this matter before the appellate court or before the trial court. Obviously, this issue is only an afterthought. An issue raised for the first time on appeal and not raised timely in the proceedings in the lower court is barred by estoppel.28
The BANK cannot claim that Marcos had admitted the due execution of the documents attached to its answer because the BANK filed its answer late and even failed to serve it on Marcos. The BANK’s answer, including the actionable documents it pleaded and attached to its answer, was a mere scrap of paper. There was nothing that Marcos could specifically deny under oath. Marcos had already completed the presentation of his evidence when the trial court lifted the order of default and admitted the BANK’s answer. The provision of the Rules of Court governing admission of actionable documents was not enacted to reward a party in default. We will not allow a party to gain an advantage from its disregard of the rules.
As to the issue of its right to present additional evidence, we agree with the Court of Appeals that the trial court correctly ruled that the BANK had waived this right. The BANK cannot now claim that it was deprived of its right to conduct a re-direct examination of Pagsaligan. The BANK postponed the hearings three times29 because of its inability to secure Pagsaligan’s presence during the hearings. The BANK could have presented another witness or its other evidence but it obstinately insisted on the resetting of the hearing because of Pagsaligan’s absence allegedly due to illness.
The BANK’s propensity for postponements had long delayed the case. Its motion for postponement based on Pagsaligan’s illness was not even supported by documentary evidence such as a medical certificate. Documentary evidence of the illness is necessary before the trial court could rule that there is a sufficient basis to grant the postponement.30
The BANK’s Fiduciary Duty to its Depositor
The BANK is liable to Marcos for offsetting his time deposits with a fictitious promissory note. The existence of Promissory Note No. 20-979-83 could have been easily proven had the BANK presented the original copies of the promissory note and its supporting evidence. In lieu of the original copies, the BANK presented the "machine copies of the duplicate" of the documents. These substitute documents have no evidentiary value. The BANK’s failure to explain the absence of the original documents and to maintain a record of the offsetting of this loan with the time deposits bring to fore the BANK’s dismal failure to fulfill its fiduciary duty to Marcos.
Section 2 of Republic Act No. 8791 (General Banking Law of 2000) expressly imposes this fiduciary duty on banks when it declares that the State recognizes the "fiduciary nature of banking that requires high standards of integrity and performance." This statutory declaration merely echoes the earlier pronouncement of the Supreme Court in Simex International (Manila) Inc. v. Court of Appeals31 requiring banks to "treat the accounts of its depositors with meticulous care, always having in mind the fiduciary nature of their relationship."32 The Court reiterated this fiduciary duty of banks in subsequent cases.33
Although RA No. 8791 took effect only in the year 2000,34 at the time that the BANK transacted with Marcos, jurisprudence had already imposed on banks the same high standard of diligence required under RA No. 8791.35 This fiduciary relationship means that the bank’s obligation to observe "high standards of integrity and performance" is deemed written into every deposit agreement between a bank and its depositor.
The fiduciary nature of banking requires banks to assume a degree of diligence higher than that of a good father of a family. Thus, the BANK’s fiduciary duty imposes upon it a higher level of accountability than that expected of Marcos, a businessman, who negligently signed blank forms and entrusted his certificates of time deposits to Pagsaligan without retaining copies of the certificates.
The business of banking is imbued with public interest. The stability of banks largely depends on the confidence of the people in the honesty and efficiency of banks. In Simex International (Manila) Inc. v. Court of Appeals36 we pointed out the depositor’s reasonable expectations from a bank and the bank’s corresponding duty to its depositor, as follows:
In every case, the depositor expects the bank to treat his account with the utmost fidelity, whether such account consists only of a few hundred pesos or of millions. The bank must record every single transaction accurately, down to the last centavo, and as promptly as possible. This has to be done if the account is to reflect at any given time the amount of money the depositor can dispose of as he sees fit, confident that the bank will deliver it as and to whomever he directs.
As the BANK’s depositor, Marcos had the right to expect that the BANK was accurately recording his transactions with it. Upon the maturity of his time deposits, Marcos also had the right to withdraw the amount due him after the BANK had correctly debited his outstanding obligations from his time deposits.
By the very nature of its business, the BANK should have had in its possession the original copies of the disputed promissory note and the records and ledgers evidencing the offsetting of the loan with the time deposits of Marcos. The BANK inexplicably failed to produce the original copies of these documents. Clearly, the BANK failed to treat the account of Marcos with meticulous care.
The BANK claims that it is a reputable banking institution and that it has no reason to forge Promissory Note No. 20-979-83. The trial court and appellate court did not rule that it was the bank that forged the promissory note. It was Pagsaligan, the BANK’s branch manager and a close friend of Marcos, whom the trial court categorically blamed for the fictitious loan agreements. The trial court held that Pagsaligan made up the loan agreement to cover up his inability to account for the time deposits of Marcos.
Whether it was the BANK’s negligence and inefficiency or Pagsaligan’s misdeed that deprived Marcos of the amount due him will not excuse the BANK from its obligation to return to Marcos the correct amount of his time deposits with interest. The duty to observe "high standards of integrity and performance" imposes on the BANK that obligation. The BANK cannot also unjustly enrich itself by keeping Marcos’ money.
Assuming Pagsaligan was behind the spurious promissory note, the BANK would still be accountable to Marcos. We have held that a bank is liable for the wrongful acts of its officers done in the interest of the bank or in their dealings as bank representatives but not for acts outside the scope of their authority.37 Thus, we held:
A bank holding out its officers and agents as worthy of confidence will not be permitted to profit by the frauds they may thus be enabled to perpetrate in the apparent scope of their employment; nor will it be permitted to shirk its responsibility for such frauds, even though no benefit may accrue to the bank therefrom (10 Am Jur 2d, p. 114). Accordingly, a banking corporation is liable to innocent third persons where the representation is made in the course of its business by an agent acting within the general scope of his authority even though, in the particular case, the agent is secretly abusing his authority and attempting to perpetrate a fraud upon his principal or some other person, for his own ultimate benefit.38
The Existence of Promissory Note No. 20-979-83 was not Proven
The BANK failed to produce the best evidence — the original copies of the loan application and promissory note. 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.39 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 piece of evidence.40
What the BANK presented were merely the "machine copies of the duplicate" of the loan application and promissory note. No explanation was ever offered by the BANK for its inability to produce the original copies of the documentary evidence. The BANK also did not comply with the orders of the trial court to submit the originals.
The purpose of the rule requiring the production of the best evidence is the prevention of fraud.41 If a party is in possession of 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.42
The absence of the original of the documentary evidence casts suspicion on the existence of Promissory Note No. 20-979-83 considering the BANK’s fiduciary duty to keep efficiently a record of its transactions with its depositors. Moreover, the circumstances enumerated by the trial court bolster the conclusion that Promissory Note No. 20-979-83 is bogus. The BANK has only itself to blame for the dearth of competent proof to establish the existence of Promissory Note No. 20-979-83.
Total Amount Due to Marcos
The BANK and Marcos do not now dispute the ruling of the Court of Appeals that the total amount of time deposits that Marcos placed with the BANK is only P764,897.67 and not P1,429,795.34 as found by the trial court. The BANK has always argued that Marcos’ time deposits only totalled P764,897.67.43 What the BANK insists on in this petition is the trial court’s violation of its right to procedural due process and the absence of any obligation to pay or return anything to Marcos. Marcos, on the other hand, merely prays for the affirmation of either the trial court or appellate court decision.44 We uphold the finding of the Court of Appeals as to the amount of the time deposits as such finding is in accord with the evidence on record.
Marcos claimed that the certificates of time deposit were with Pagsaligan for safekeeping. Marcos was only able to present the receipt dated 11 March 1982 and the letter-certification dated 12 March 1982 to prove the total amount of his time deposits with the BANK. The letter-certification issued by Pagsaligan reads:
March 12, 1982
Dear Mr. Marcos:
This is to certify that we are taking care in your behalf various Time Deposit Certificates with an aggregate value of PESOS: SEVEN HUNDRED SIXTY FOUR THOUSAND EIGHT HUNDRED NINETY SEVEN AND 67/100 (P764,897.67) ONLY, issued today for 90 days at 17% p.a. with the interest payable at maturity on June 10, 1982.
Thank you.
Sgd. FLORENCIO B. PAGSALIGAN
Branch Manager45

The foregoing certification is clear. The total amount of time deposits of Marcos as of 12 March 1982 is P764,897.67, inclusive of the sum of P664,987.67 that Marcos placed on time deposit on 11 March 1982. This is plainly seen from the use of the word "aggregate."
We are not swayed by Marcos’ testimony that the certification is actually for the first time deposit that he placed on 11 March 1982. The letter-certification speaks of "various Time Deposits Certificates with an ‘aggregate value’ of P764,897.67." If the amount stated in the letter-certification is for a single time deposit only, and did not include the 11 March 1982 time deposit, then Marcos should have demanded a new letter of certification from Pagsaligan. Marcos is a businessman. While he already made an error in judgment in entrusting to Pagsaligan the certificates of time deposits, Marcos should have known the importance of making the letter-certification reflect the true nature of the transaction. Marcos is bound by the letter-certification since he was the one who prodded Pagsaligan to issue it.
We modify the amount that the Court of Appeals ordered the BANK to return to Marcos. The appellate court did not offset Marcos’ outstanding debt with the BANK covered by the three trust receipt agreements even though Marcos admits his obligation under the three trust receipt agreements. The total amount of the trust receipts is P851,250 less the 30% marginal deposit of P255,375 that Marcos had already paid the BANK. This reduced Marcos’ total debt with the BANK to P595,875 under the trust receipts.
The trial and appellate courts found that the parties did not agree on the imposition of interest on the loan covered by the trust receipts and thus no interest is due on this loan. However, the records show that the three trust receipt agreements contained stipulations for the payment of interest but the parties failed to fill up the blank spaces on the rate of interest. Put differently, the BANK and Marcos expressly agreed in writing on the payment of interest46 without, however, specifying the rate of interest. We, therefore, impose the legal interest of 12% per annum, the legal interest for the forbearance of money,47 on each of the three trust receipts.
Based on Marcos’ testimony48 and the BANK’s letter of demand,49 the trust receipt agreements became due in March 1987. The records do not show exactly when in March 1987 the obligation became due. In accordance with Article 2212 of the Civil Code, in such a case the court shall fix the period of the duration of the obligation.50 The BANK’s letter of demand is dated 6 March 1989. We hold that the trust receipts became due on 6 March 1987.
Marcos’ payment of the marginal deposit of P255,375 for the trust receipts resulted in the proportionate reduction of the three trust receipts. The reduced value of the trust receipts and their respective interest as of 6 March 1987 are as follows:
1. Trust Receipt No. CD 83.7 issued on 8 March 1983 originally for P300,000 was reduced to P210,618.75 with interest of P101,027.76.51
2. Trust Receipt No. CD 83.9 issued on 15 March 1983 originally for P300,000 was reduced to P210,618.75 with interest of P100,543.04.52
3. Trust Receipt No. CD 83.10 issued on 15 March 1983 originally for P251,250 was reduced to P174,637.5 with interest of P83,366.68. 53
When the trust receipts became due on 6 March 1987, Marcos owed the BANK P880,812.48. This amount included P595,875, the principal value of the three trust receipts after payment of the marginal deposit, and P284,937.48, the interest then due on the three trust receipts.
Upon maturity of the three trust receipts, the BANK should have automatically deducted, by way of offsetting, Marcos’ outstanding debt to the BANK from his time deposits and its accumulated interest. Marcos’ time deposits of P764,897.67 had already earned interest54 of P616,318.92 as of 6 March 1987.55 Thus, Marcos’ total funds with the BANK amounted to P1,381,216.59 as of the maturity of the trust receipts. After deducting P880,812.48, the amount Marcos owed the BANK, from Marcos’ funds with the BANK of P1,381,216.59, Marcos’ remaining time deposits as of 6 March 1987 is only P500,404.11. The accumulated interest on this P500,404.11 as of 30 August 1989, the date of filing of Marcos’ complaint with the trial court, is P211,622.96.56 From 30 August 1989, the interest due on the accumulated interest of P211,622.96 should earn legal interest at 12% per annum pursuant to Article 221257 of the Civil Code.
The BANK’s dismal failure to account for Marcos’ money justifies the award of moral58 and exemplary damages.59 Certainly, the BANK, as employer, is liable for the negligence or the misdeed of its branch manager which caused Marcos mental anguish and serious anxiety.60 Moral damages of P100,000 is reasonable and is in accord with our rulings in similar cases involving banks’ negligence with regard to the accounts of their depositors.61
We also award P20,000 to Marcos as exemplary damages. The law allows the grant of exemplary damages by way of example for the public good.62 The public relies on the banks’ fiduciary duty to observe the highest degree of diligence. The banking sector is expected to maintain at all times this high level of meticulousness.63
WHEREFORE, the decision of the Court of Appeals is AFFIRMED with MODIFICATION. Petitioner Philippine Banking Corporation is ordered to return to private respondent Leonilo Marcos P500,404.11, the remaining principal amount of his time deposits, with interest at 17% per annum from 30 August 1989 until full payment. Petitioner Philippine Banking Corporation is also ordered to pay to private respondent Leonilo Marcos P211,622.96, the accumulated interest as of 30 August 1989, plus 12% legal interest per annum from 30 August 1989 until full payment. Petitioner Philippine Banking Corporation is further ordered to pay P100,000 by way of moral damages and P20,000 as exemplary damages to private respondent Leonilo Marcos.
Costs against petitioner.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Panganiban, Ynares-Santiago, and Azcuna, JJ., concur.

Footnotes
1 Penned by Associate Justice Arturo B. Buena with Associate Justices Ma. Alicia Austria-Martinez and Bernardo Ll. Salas, concurring, Third Division.
2 Penned by Judge N. C. Perello.
3 Rollo, p. 204.
4 The case was docketed as Civil Case No. B-3148.
5 The sum of P664,897.67 and P764,897.67 is P1,429,795.34, not P1,428,795.34.
6 Rollo, p. 211.
7 Should be P1,429,795.34. See note 5.
8 Records, p. 11.
9 Rollo, p. 231.
10 Rollo, p. 256.
11 The difference between P764,897.67 and P760,000 is P4,897.67, not P4,867.67.
12 Should be P4,897.67. See note 11.
13 Should be P4,897.67. See note 11.
14 Rollo, p. 257.
15 Rollo, p. 262.
16 Ibid., pp. 262-263.
17 Rollo, p. 35.
18 Ibid., p. 37.
19 Ibid., p. 321.
20 FLORENZ D. REGALADO, REMEDIAL LAW COMPENDIUM, Vol. 1, 173 (Sixth Revised Ed., 1997).
21 Ibid.
22 Now Section 3(b), Rule 9 of the 1997 Rules of Court.
23 TSN, 12 March 1990, p. 12.
24 OSCAR M. HERRERA, REMEDIAL LAW, Vol. I, 733 (2000).
25 Section 4, Rule 15 of the 1964 Rules of Court.
26 Fulgado v. Court of Appeals, G.R. No. 61570, 12 February 1990, 182 SCRA 81.
27 See OSCAR M. HERRERA, REMEDIAL LAW, Vol. 6, 176 (1999 ed.).
28 Caltex (Philippines), Inc. v. Court of Appeals, G.R. No. 97753, 10 August 1992, 212 SCRA 448.
29 Records, p.117.
30 Spouses Reaport v. Judge Mariano, 413 Phil. 299 (2001).
31 G.R. No. 88013, 19 March 1990, 183 SCRA 360.
32 Ibid.
33 See Bank of the Philippine Islands v. Intermediate Appellate Court, G.R. No. 69162, 21 February 1992, 206 SCRA 408; Citytrust Banking Corporation v. Intermediate Appellate Court, G.R. No. 84281, 27 May 1994, 232 SCRA 559; Tan v. Court of Appeals, G.R. No. 108555, 20 December 1994, 239 SCRA 310; Metropolitan Bank & Trust Co. v. Court of Appeals, G.R. No. 112576, 26 October 1994, 237 SCRA 761; Philippine Bank of Commerce v. Court of Appeals, 336 Phil. 667 (1997); Firestone v. Court of Appeals, G.R. No. 113236, 5 March 2001, 353 SCRA 601.
34 RA No. 8791 was approved on 3 May 2000.
35 The Consolidated Bank and Trust Corporation v. Court of Appeals, G.R. No. 138569, 11 September 2003.
36 Supra, note 31.
37 Prudential Bank v. Court of Appeals, G.R. No. 108957, 14 June 1993, 223 SCRA 350.
38 Ibid.
39 San Pedro v. Court of Appeals, 333 Phil. 597 (1996).
40 Ibid.
41 IBM Philippines, Inc. v. National Labor Relations Commission, 365 Phil. 137 (1999).
42 Ibid.
43 Rollo, p. 21.
44 Ibid., p. 373.
45 Ibid., pp. 34-35.
46 Article 1956, Civil Code of the Philippines.
47 EDGARDO L. PARAS, CIVIL CODE OF THE PHILIPPINES, Vol. 5, 832 (14th Ed., 2000); Biesterbos v. Court of Appeals, G.R. No. 152529, 22 September 2003.
48 TSN, 18 December 1989, p. 24.
49 Records, p. 36.
50 Article 2212 of the Civil Code provides:
"If the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a period was intended, the courts may fix the duration thereof.
The courts shall also fix the duration of the period when it depends on the will of the debtor.
In every case, the courts shall determine such period as may under the circumstances have been probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by them."
51 Rate of Legal Interest = 12% per annum
Period from 8 March 1983 (Date Trust Receipt No. CD 83.7 was issued) to 6 March 1987 (date when Trust Receipt No. CD 83.7 became due) = 1,459 days
Interest Due = (Value of Trust Receipt No. CD 83.7 after payment of the marginal deposit) (12%) (Number of Days)/ 365 days
Interest Due = (P210,618.75) (12%) (1,459)/365
Interest Due = P101,027.76
52 Rate of Legal Interest = 12% per annum
Period from 15 March 1983 (Date Trust Receipt No. CD 83.9 was issued) to 6 March 1987 (date when Trust Receipt No. CD 83.9 became due) = 1,452 days
Interest Due = (Value of Trust Receipt No. CD 83.9 after payment of the marginal deposit) (12%) (Number of Days)/365 days
Interest Due = (P210,618.75) (12%) (1,452)/365
Interest Due = P100,543.04
53 Rate of Legal Interest = 12% per annum
Period from 15 March 1983 (Date Trust Receipt No. CD 83.10 was issued) to 6 March 1987 (date when Trust Receipt No. CD 83.10 became due) = 1,452 days
Interest Due = (Value of Trust Receipt No. CD 83.10 after payment of the marginal deposit) (12%) (Number of Days)/ 365 days
Interest Due = (P174,637.5) (12%) (1,452)/365
Interest Due = P83,366.68
54 The time deposits matured every 90 days. The practice of banks is to compound the interest earned on every renewal of the time deposit. However, Marcos failed to allege and prove this practice. The documents presented in court to prove the time deposits do not contain any stipulation on compounding of interest. Thus, the interest on Marcos’ time deposits is computed on a straight, non-compounded basis. See Mambulao Lumber Co. v. Philippine National Bank, 130 Phil. 366 (1968); The Consolidated Bank and Trust Corporation v. Court of Appeals, G.R. No. 138569, 11 September 2003.
55 Stipulated Interest Rate = 17% per annum, with interest earned capitalized every 90 days upon every renewal of the time deposits.
Period from 10 June 1982 (Maturity date of the time deposits) to 6 March 1987 (Due date of the trust receipts) = 1,730 days
Interest Due = (Principal) (17%) (Number of Days)/ 365 days
Interest Due = (P 764,897.67) (17%) (1,730)/365 = P616,318.92
56 Stipulated Interest Rate = 17% per annum
Period from 6 March 1987 (Due date of the trust receipts) to 30 August 1989 (Date of filing of the complaint with the trial court) = 908 days
Interest Due = (Time deposits and interest –total value of the trust receipts) (17%) (Number of Days)/365 days
Interest Due = (P500,404.11) (17%) (908)/365 = P211,622.96
57 Article 2212 of the Civil Code provides:
"Interest due shall earn legal interest from the time it is judicially demanded, although the obligation may be silent upon this point."
58 Philippine National Bank v. Court of Appeals, G.R. No. 126152, 28 September 1999, 315 SCRA 309.
59 Prudential Bank v. Court of Appeals, G.R. No. 125536, 16 March 2000, 328 SCRA 264.
60 The Consolidated Bank and Trust Corporation v. Court of Appeals, G.R. No. 138569, 11 September 2003; Prudential Bank v. Court of Appeals, G.R. No. 125536, 16 March 2000, 328 SCRA 264.
61 Ibid. See also Tan v. Court of Appeals, G.R. No. 108555, 20 December 1994, 239 SCRA 310.
62 Prudential Bank v. Court of Appeals, supra, note 59.
63 Ibid.
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