J.A.B. Bulao & Associates

DO-ALL METALS INDUSTRIES, INC., SPS. DOMINGO LIM AND LELY KUNG LIM VS. SECURITY BANK CORP., TITOLAIDO E. PAYONGAYONG, EVYLENE C. SISON, PHIL. INDUSTRIAL SECURITY AGENCY CORP. AND GIL SILOS (G.R. NO. 176339, 10 JANUARY 2011, ABAD, J) SUBJECTS: FILING FEES; EX-PARTE HEARING; TERMINATION OF LEASE. (BRIEF TITLE: DO-ALL METALS ET AL. VS. SECURITY BANK ET AL.)

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DOCTRINES

PETITIONERS FILED SUPPLEMENTAL COMPLAINT BUT FAILED TO PAY THE FILING FEES. BANK SAID RTC DID NOT ACQUIRE JURISDICTION OVER THE CASE FOR NON-PAYMENT OF FILING FEES. IS THIS CORRECT? NO BECAUSE WHEN THE ORIGINAL COMPLAINT WAS FILED FILING FEES WERE PAID AND THE COURT ACQUIRED JURISDICTION OVER THE CASE.  SUCH JURISDICTION PERSISTS.

One.  On the issue of jurisdiction, respondent Bank argues that plaintiffs’ failure to pay the filing fees on their supplemental complaint is fatal to their action. 

But what the plaintiffs failed to pay was merely the filing fees for their Supplemental Complaint.  The RTC acquired jurisdiction over plaintiffs’ action from the moment they filed their original complaint accompanied by the payment of the filing fees due on the same.  The plaintiffs’ non-payment of the additional filing fees due on their additional claims did not divest the RTC of the jurisdiction it already had over the case.^[1][6] 

THE BANK FAILED TO APPEAR DURING TRIAL. EVIDENCE WAS PRESENTED EX-PARTE. LATER THE BANK ARGUED THAT THE TESTIMONIES OF PETITIONERS’ WITNESSES SHOULD NOT BE GIVEN CREDENCE BECAUSE THEY WERE GIVEN EX-PARTE. SC RULED THAT AN EX PARTE HEARING CANNOT BE ASSAILED AS LESS CREDIBLE.

The Bank belittles the testimonies of the petitioners’ witnesses for having been presented ex parte before the clerk of court.  But the ex parte hearing, having been properly authorized, cannot be assailed as less credible.  It was the Bank’s fault that it was unable to attend the hearing.  It cannot profit from its lack of diligence. 

THE BANK CONTENDED THAT THE LEASE HAVE ALREADY EXPIRED. THEREFORE THEY CAN TAKE OVER THE BUILDING FROM THE PETITIONERS. SC RULED THAT THE BANK HAD NO BUSINESS HARASSING PETITIONERS.

While the lease may have already lapsed, the Bank had no business harassing and intimidating the Lims and their employees.  The RTC was therefore correct in adjudging moral damages, exemplary damages, and attorney’s fees against the Bank for the acts of their representatives and building guards. 

PETITIONERS EXPLAINED THAT THEY HAVE NOT PAID THE FILING FEES FOR THEIR SUPPLEMENTAL COMPLAINT BECAUSE ANYWAY THESE FEES CONSTITUTED A LIEN ON THE JUDGMENT. SC RULED THAT AFTER-JUDGMENT LIEN APPLIES ONLY WHERE THE FEES WERE INCORRECTLY ASSESSED OR PAID OR WHERE THE COURT HAS DISCRETION TO FIX THE AMOUNT OF THE AWARD. NO SUCH CIRCUMSTANCE/S EXITS.

Three. As to the damages that plaintiffs claim under their supplemental complaint, their stand is that the RTC committed no error in admitting the complaint even if they had not paid the filing fees due on it since such fees constituted a lien anyway on the judgment award.  But this after-judgment lien, which implies that payment depends on a successful execution of the judgment, applies to cases where the filing fees were incorrectly assessed or paid or where the court has discretion to fix the amount of the award.^[2][8]  None of these circumstances obtain in this case. 

Here, the supplemental complaint specified from the beginning the actual damages that the plaintiffs sought against the Bank.  Still plaintiffs paid no filing fees on the same.  And, while petitioners claim that they were willing to pay the additional fees, they gave no reason for their omission nor offered to pay the same.  They merely said that they did not yet pay the fees because the RTC had not assessed them for it.  But a supplemental complaint is like any complaint and the rule is that the filing fees due on a complaint need to be paid upon its filing.^[3][9]  The rules do not require the court to make special assessments in cases of supplemental complaints.

WHAT IS THE EFFECT OF THE NON-PAYMENT OF FILING FEES PERTINENT TO A SUPPLEMENTAL COMPLAINT? SUCH SUPPLEMENTAL COMPLAINT SHALL BE TREATED AS NOT HAVING BEEN FILED.

To aggravate plaintiffs’ omission, although the Bank brought up the question of their failure to pay additional filing fees in its motion for reconsideration, plaintiffs made no effort to make at least a late payment before the case could be submitted for decision, assuming of course that the prescription of their action had not then set it in.  Clearly, plaintiffs have no excuse for their continuous failure to pay the fees they owed the court.  Consequently, the trial court should have treated their Supplemental Complaint as not filed. 

PETITIONERS ARGUED THAT THE BANK BE DEEMED TO HAVE WAIVED ITS OBJECTION TO THE NON-PAYMENT OF FILING FEES BECAUSE THEY RAISED THE ISSUE ONLY AFTER THE RTC HAD RENDERED ITS DECISION ON THE CASE. SC RULED THAT A PARTY OR EVEN THE TRIAL COURT CANNOT WAIVE THE PAYMENT OF THE FILING FEES. ONLY THE SUPREME COURT CAN GRANT EXEMPTIONS UNDER THE RULES.

Plaintiffs of course point out that the Bank itself raised the issue of non-payment of additional filing fees only after the RTC had rendered its decision in the case.  The implication is that the Bank should be deemed to have waived its objection to such omission.  But it is not for a party to the case or even for the trial court to waive the payment of the additional filing fees due on the supplemental complaint.  Only the Supreme Court can grant exemptions to the payment of the fees due the courts and these exemptions are embodied in its rules.

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DECISION

ABAD, J.:

This case is about the propriety of awarding damages based on claims embodied in the plaintiff’s supplemental complaint filed without prior payment of the corresponding filing fees.

The Facts and the Case

From 1996 to 1997, Dragon Lady Industries, Inc., owned by petitioner spouses Domingo Lim and Lely Kung Lim (the Lims) took out loans from respondent Security Bank Corporation (the Bank) that totaled P92,454,776.45.  Unable to pay the loans on time, the Lims assigned some of their real properties to the Bank to secure the same, including a building and the lot on which it stands (the property), located at M. de Leon St., Santolan, Pasig City.^[4][1] 

In 1998 the Bank offered to lease the property to the Lims through petitioner Do-All Metals Industries, Inc. (DMI) primarily for business although the Lims were to use part of the property as their residence.  DMI and the Bank executed a two-year lease contract from October 1, 1998 to September 30, 2000 but the Bank retained the right to pre-terminate the lease.  The contract also provided that, should the Bank decide to sell the property, DMI shall have the right of first refusal.

On December 3, 1999, before the lease was up, the Bank gave notice to DMI that it was pre-terminating the lease on December 31, 1999.  Wanting to exercise its right of first refusal, DMI tried to negotiate with the Bank the terms of its purchase.  DMI offered to pay the Bank P8 million for the property but the latter rejected the offer, suggesting P15 million instead.  DMI made a second offer of P10 million but the Bank declined the same. 

While the negotiations were on going, the Lims claimed that they continued to use the property in their business.  But the Bank posted at the place private security guards from Philippine Industrial Security Agency (PISA).  The Lims also claimed that on several occasions in 2000, the guards, on instructions of the Bank representatives Titolaido Payongayong and Evylene Sison, padlocked the entrances to the place and barred the Lims as well as DMI’s employees from entering the property.  One of the guards even pointed his gun at one employee and shots were fired.  Because of this, DMI was unable to close several projects and contracts with prospective clients.  Further, the Lims alleged that they were unable to retrieve assorted furniture, equipment, and personal items left at the property. 

The Lims eventually filed a complaint with the Regional Trial Court (RTC) of Pasig City for damages with prayer for the issuance of a temporary restraining order (TRO) or preliminary injunction against the Bank and its co-defendants Payongayong, Sison, PISA, and Gil Silos.^[5][2]  Answering the complaint, the Bank pointed out that the lease contract allowed it to sell the property at any time provided only that it gave DMI the right of first refusal.  DMI had seven days from notice to exercise its option.  On September 10, 1999 the Bank gave notice to DMI that it intended to sell the property to a third party.  DMI asked for an extension of its option to buy and the Bank granted it.  But the parties could not agree on a purchase price.  The Bank required DMI to vacate and turnover the property but it failed to do so.  As a result, the Bank’s buyer backed-out of the sale.  Despite what happened, the Bank and DMI continued negotiations for the purchase of the leased premises but they came to no agreement. 

The Bank denied, on the other hand, that its guards harassed DMI and the Lims.  To protect its property, the Bank began posting guards at the building even before it leased the same to DMI.  Indeed, this arrangement benefited both parties.  The Bank alleged that in October of 2000, when the parties could not come to an agreement regarding the purchase of the property, DMI vacated the same and peacefully turned over possession to the Bank.

The Bank offered no objection to the issuance of a TRO since it claimed that it never prevented DMI or its employees from entering or leaving the building.  For this reason, the RTC directed the Bank to allow DMI and the Lims to enter the building and get the things they left there.  The latter claimed, however, that on entering the building, they were unable to find the movable properties they left there.  In a supplemental complaint, DMI and the Lims alleged that the Bank surreptitiously took such properties, resulting in additional actual damages to them of over P27 million.

The RTC set the pre-trial in the case for December 4, 2001.  On that date, however, counsel for the Bank moved to reset the proceeding.  The court denied the motion and allowed DMI and the Lims to present their evidence ex parte.  The court eventually reconsidered its order but only after the plaintiffs had already presented their evidence and were about to rest their case.  The RTC declined to recall the plaintiffs’ witnesses for cross- examination but allowed the Bank to present its evidence.^[6][3]  This prompted the Bank to seek relief from the Court of Appeals (CA) and eventually from this Court but to no avail.^[7][4]

During its turn at the trial, the Bank got to present only defendant Payongayong, a bank officer.  For repeatedly canceling the hearings and incurring delays, the RTC declared the Bank to have forfeited its right to present additional evidence and deemed the case submitted for decision.

On September 30, 2004 the RTC rendered a decision in favor of DMI and the Lims.  It ordered the Bank to pay the plaintiffs P27,974,564.00 as actual damages, P500,000.00 as moral damages, P500,000 as exemplary damages, and P100,000.00 as attorney’s fees.  But the court absolved defendants Payongayong, Sison, Silos and PISA of any liability.

The Bank moved for reconsideration of the decision, questioning among other things the RTC’s authority to grant damages considering plaintiffs’ failure to pay the filing fees on their supplemental complaint.  The RTC denied the motion.  On appeal to the CA, the latter found for the Bank, reversed the RTC decision, and dismissed the complaint as well as the counterclaims.^[8][5]  DMI and the Lims filed a motion for reconsideration but the CA denied the same, hence this petition.

The Issues Presented

          The issues presented in this case are:

          1.       Whether or not the RTC acquired jurisdiction to hear and adjudicate plaintiff’s supplemental complaint against the Bank considering their failure to pay the filing fees on the amounts of damages they claim in it;

2.       Whether or not the Bank is liable for the intimidation and harassment committed against DMI and its representatives; and

3.       Whether or not the Bank is liable to DMI and the Lims for the machineries, equipment, and other properties they allegedly lost after they were barred from the property.

The Court’s Rulings

One.  On the issue of jurisdiction, respondent Bank argues that plaintiffs’ failure to pay the filing fees on their supplemental complaint is fatal to their action. 

But what the plaintiffs failed to pay was merely the filing fees for their Supplemental Complaint.  The RTC acquired jurisdiction over plaintiffs’ action from the moment they filed their original complaint accompanied by the payment of the filing fees due on the same.  The plaintiffs’ non-payment of the additional filing fees due on their additional claims did not divest the RTC of the jurisdiction it already had over the case.^[9][6] 

Two.  As to the claim that Bank’s representatives and retained guards harassed and intimidated DMI’s employees and the Lims, the RTC found ample proof of such wrongdoings and accordingly awarded damages to the plaintiffs.  But the CA disagreed, discounting the testimony of the police officers regarding their investigations of the incidents since such officers were not present when they happened.  The CA may be correct in a way but the plaintiffs presented eyewitnesses who testified out of personal knowledge.  The police officers testified merely to point out that there had been trouble at the place and their investigations yielded their findings.

The Bank belittles the testimonies of the petitioners’ witnesses for having been presented ex parte before the clerk of court.  But the ex parte hearing, having been properly authorized, cannot be assailed as less credible.  It was the Bank’s fault that it was unable to attend the hearing.  It cannot profit from its lack of diligence. 

Domingo Lim and some employees of DMI testified regarding the Bank guards’ unmitigated use of their superior strength and firepower.  Their testimonies were never refuted.  Police Inspector Priscillo dela Paz testified that he responded to several complaints regarding shooting incidents at the leased premises and on one occasion, he found Domingo Lim was locked in the building.  When he asked why Lim had been locked in, a Bank representative told him that they had instructions to prevent anyone from taking any property out of the premises.  It was only after Dela Paz talked to the Bank representative that they let Lim out.^[10][7]

Payongayong, the Bank’s sole witness, denied charges of harassment against the Bank’s representatives and the guards.  But his denial came merely from reports relayed to him.  They were not based on personal knowledge. 

While the lease may have already lapsed, the Bank had no business harassing and intimidating the Lims and their employees.  The RTC was therefore correct in adjudging moral damages, exemplary damages, and attorney’s fees against the Bank for the acts of their representatives and building guards. 

Three. As to the damages that plaintiffs claim under their supplemental complaint, their stand is that the RTC committed no error in admitting the complaint even if they had not paid the filing fees due on it since such fees constituted a lien anyway on the judgment award.  But this after-judgment lien, which implies that payment depends on a successful execution of the judgment, applies to cases where the filing fees were incorrectly assessed or paid or where the court has discretion to fix the amount of the award.^[11][8]  None of these circumstances obtain in this case. 

Here, the supplemental complaint specified from the beginning the actual damages that the plaintiffs sought against the Bank.  Still plaintiffs paid no filing fees on the same.  And, while petitioners claim that they were willing to pay the additional fees, they gave no reason for their omission nor offered to pay the same.  They merely said that they did not yet pay the fees because the RTC had not assessed them for it.  But a supplemental complaint is like any complaint and the rule is that the filing fees due on a complaint need to be paid upon its filing.^[12][9]  The rules do not require the court to make special assessments in cases of supplemental complaints.

To aggravate plaintiffs’ omission, although the Bank brought up the question of their failure to pay additional filing fees in its motion for reconsideration, plaintiffs made no effort to make at least a late payment before the case could be submitted for decision, assuming of course that the prescription of their action had not then set it in.  Clearly, plaintiffs have no excuse for their continuous failure to pay the fees they owed the court.  Consequently, the trial court should have treated their Supplemental Complaint as not filed. 

Plaintiffs of course point out that the Bank itself raised the issue of non-payment of additional filing fees only after the RTC had rendered its decision in the case.  The implication is that the Bank should be deemed to have waived its objection to such omission.  But it is not for a party to the case or even for the trial court to waive the payment of the additional filing fees due on the supplemental complaint.  Only the Supreme Court can grant exemptions to the payment of the fees due the courts and these exemptions are embodied in its rules.

Besides, as correctly pointed out by the CA, plaintiffs had the burden of proving that the movable properties in question had remained in the premises and that the bank was responsible for their loss.  The only evidence offered to prove the loss was Domingo Lim’s testimony and some undated and unsigned inventories.  These were self-serving and uncorroborated. 

WHEREFORE, the Court PARTIALLY GRANTS the petition and REINSTATES with modification the decision of the Regional Trial Court of Pasig City in Civil Case 68184.  The Court DIRECTS respondent Security Bank Corporation to pay petitioners DMI and spouses Domingo and Lely Kung Lim damages in the following amounts: P500,000.00 as moral damages, P500,000.00 as exemplary damages, and P100,000.00 for attorney’s fees.  The Court DELETES the award of actual damages of P27,974,564.00.

          SO ORDERED.

ROBERTO A. ABAD 

                                                              Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

ANTONIO EDUARDO B. NACHURA       DIOSDADO M. PERALTA

                  Associate Justice                                    Associate Justice

LUCAS P. BERSAMIN

Associate Justice

ATTESTATION

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

                                                      ANTONIO T. CARPIO

                                                   Associate Justice

                                Chairperson, Second Division                  

CERTIFICATION

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

                                                             RENATO C. CORONA

                                                            Chief Justice

  SPOUSES GEORGE R. TAN AND SUSAN L. TAN VS. BANCO DE ORO UNIBANK, INC.,(G.R. NOS. 190677-78); GEORGE R. TAN AND SUSAN L. TAN, VS. BANCO DE ORO UNIVERSAL BANK (G.R. NOS. 190699-700); BANCO DE ORO UNIBANK, INC., VS. GEORGE R. TAN AND SUSAN L. TAN (G.R. NO. 188792,  10 JANUARY 2011, NACHURA, J.: )

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RESOLUTION

NACHURA, J.:

These consolidated petitions assail the Court of Appeals (CA) September 18, 2009 Decision^[1][1] and December 16, 2009 Resolution^[2][2] in CA-G.R. SP No. 98307 and CA-G.R. SP No. 101421; and its March 12, 2009 Decision^[3][3] and July 15, 2009 Resolution^[4][4] in CA-G.R. SP No. 102799.

In CA-G.R. SP No. 98307 and CA-G.R. SP No. 101421, the appellate court dissolved the writ of preliminary injunction issued by the Regional Trial Court (RTC) of Quezon City, Branch 81, in Civil Case No. Q-07-59545, restraining the foreclosure of the real estate mortgage constituted by Spouses George R. Tan and Susan L. Tan (hereafter referred to as Spouses Tan) in favor of Banco De Oro Unibank, Inc. (BDO). The CA concluded that the issuance of the writ was unfounded and unsubstantiated.  In CA-G.R. SP No. 102799, the CA found that the bond set by the RTC was grossly insufficient to cover all the damages which BDO might sustain by reason of the injunction if the court should finally decide that Spouses Tan were not entitled to the writ. It thus remanded the case to the RTC for the determination of the proper injunction bond which should not be less than P32 Million.

After the filing of the Reply to BDO’s Comment in G.R. No. 188792 and while awaiting BDO’s Comment on the petition in G.R. Nos. 190677-78 and Spouses Tan’s Comment on the petition in G.R. Nos. 190699-700, BDO moved for extension of time to file the appropriate pleading in view of the settlement of the consolidated cases.^[5][5] 

On December 16, 2010, Spouses Tan and BDO filed a Joint Manifestation and Motion to Dismiss,^[6][6] alleging that they have come to an agreement for the amicable resolution of their respective claims to avoid the inconvenience of litigation. Attached to the motion are the Compromise Agreement executed by the parties and a copy of the RTC decision approving the agreement. The Compromise Agreement reads:

COMPROMISE AGREEMENT

This Agreement, which shall supplement Memorandum of Agreement dated 27 May 2010, is made and executed this _____ day of _______ 2010, by and between:

SPOUSES GEORGE R. TAN AND SUSAN L. TAN, Filipinos, of legal age, residing at 42 Ifugao St., La Vista Subd., Brgy. Pansol, Quezon City, hereinafter referred to as “Spouses Tan”;

– and –

BANCO DE ORO UNIBANK, INC., a banking corporation duly organized and existing under and by virtue of the laws of the Republic of the Philippines, with office address at 10/F BDO Corporate  Center South Tower, Makati Avenue corner H.V. Dela Costa St., Makati City, represented herein by its Senior Vice President, Melanie S. Belen, and Vice President, Emily D. Samoy, as evidenced by the Special Power of Attorney indicating their authority, a copy of which is attached hereto as Annex “A,” hereinafter referred to as the “Bank”;

(herein after referred to singly as a “Party,” and collectively as “Parties”).

WITNESSETH: That

Spouses Tan obtained various loans and other credit accommodations from the Bank in the total principal amount of Fifty Nine Million Nine Hundred Eighty Four Thousand Six Hundred Twenty Four and 19/100 Pesos (P59,984,624.19). As security for the loans and other credit accommodations, Spouses Tan executed a Real Estate Mortgage and Amended Real Estate Mortgage on 15 January 2004 and 02 February 2004, respectively, covering a parcel of land located at 42 Ifugao Street, La Vista Subdivision, Quezon City, covered by Transfer Certificate of Title (“TCT”) No. 13600, registered in the name of George Sin Gee Tan married to Susan  Lim Tan (the “Property”).

Sometime in 2006, Spouses Tan defaulted in the payment of their loan obligations. Hence, the Bank initiated  foreclosure proceedings on the foregoing Real Estate Mortgage. At the auction sale on 03 December 2009, the Bank emerged as highest bidder and was issued Certificate of Sale dated 04 December 2009.

Spouses Tan filed a complaint for annulment of mortgage with the Regional Trial Court of Quezon City, docketed as Civil Case No. Q-07-59545 (the “Case”), pending before Branch 81 (the “Court”).

In order to put an end to the protracted litigation, the Bank has accepted the proposal of Spouses Tan and entered into and executed Memorandum of Agreement dated 27 May 2010 (the “MOA”).

Further to the MOA, and as a supplement thereto, and pursuant to the Court’s Order given in open court on 07 July 2010, the parties have agreed to execute this Agreement.

NOW, THEREFORE, for and in consideration of the foregoing premises, the parties hereby agree to the following terms and conditions:

1.         The Bank shall allow Spouses Tan to redeem the Property for a total redemption price of SIXTY MILLION PESOS (P60,000,000.00), subject to the following terms:

a.                           THIRTY MILLION PESOS (P30,000,000.00), payable in five (5) years beginning June 2010, or until June 2015 (the “Term”). Spouses Tan shall pay Two Hundred Fifty Thousand Pesos (P250,000.00) a month, for sixty (60) months, with a balloon payment in the amount of Fifteen Million Pesos (P15,000,000.00) at the end of the Term.

b.                           For and in consideration of the amount of THIRTY MILLION PESOS (P30,000,000.00), Spouses Tan shall cede, transfer and convey to and in favor of the Bank, all its rights, possession, title and interests in a parcel of land in Roxas City covered by TCT No. T-16024, registered in the name of Spouses Tan (the “Roxas Property”).

2.         On December 2010, or upon expiration of the redemption period, Spouses Tan shall allow the Bank to consolidate title over the Property.

3.         Upon consolidation of title in the Bank’s name, the Bank and Spouses Tan shall execute a Contract to Sell covering the Property in accordance with the terms under Section 1.

4.         Upon full payment of the amount under Section 1 (a), and the cession, transfer and conveyance to the Bank of the Roxas Property pursuant to Section 1 (b), the parties agree that Spouses Tan’s personal loan obligations with the Bank, including Spouses Tan’s personal loan obligations with then Equitable PCI Bank, shall be deemed fully settled.

5.         After execution and signing, the parties shall file this Agreement with the Court for approval.

The parties hereby agree to move for the approval of this Agreement before the Court. However, the obligations under this Agreement shall be immediately enforceable even prior to the approval of this Agreement.

6.         Parties agree to move for the dismissal of the Case, within fifteen (15) days from execution of all documents necessary to implement this Agreement.

7.         All expenses, fees, and taxes in connection with: (a) the cession, transfer and conveyance to the Bank of the Roxas Property; and (b) the consolidation of title of the Property in the Bank’s name, shall be for the account of the Bank.

8.         Upon failure of Spouses Tan to comply with any of the terms and conditions under this Agreement, the Bank shall be entitled, without necessity of any demand or notice:

a.       To take immediate possession of the Property. Spouses Tan agree to peacefully surrender and immediately vacate the Property.

b.      To file the necessary motion or pleading with the Court to implement this Agreement, and/or enforce its rights under law and equity.

9.         Parties hereby mutually and irrevocably waive all claims, counterclaims, demands, and causes of action, which they raised, or could have raised, against each other, including future claims of whatever kind, in connection with the Case and the Property.

10.       The parties confirm that the terms and conditions contained in this Agreement have been mutually agreed upon, without any act of force, fraud or undue intimidation. The parties further confirm that they have consulted their respective legal counsel, and that they understand the legal consequences of this Agreement. Accordingly, the parties hereby agree to abide by the terms and conditions hereof, which have the force and effect of a lawful right and a demandable obligation.

11.       In the event that any one or more of the provisions of this Agreement be later declared invalid, illegal or unenforceable by any court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions shall in no way be impaired or affected thereby.

12.       The parties hereto intend for this Agreement to supplement the MOA. All terms and conditions of the MOA shall remain in full force and effect and remain unmodified except as specifically set forth in this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above-written.

BANCO DE ORO UNIBANK, INC.

By:

            Sgd.                                                                         Sgd.

MELANIE S. BELEN                                          GEORGE R. TAN

            Sgd.                                                                         Sgd.

EMILY D. SAMOY                                              SUSAN L. TAN^[7][7]

In a decision^[8][8] dated September 15, 2010, the RTC approved the compromise agreement. Having been sealed with court approval, the compromise agreement shall govern the respective rights and obligations of the parties. In view of the foregoing, the dismissal of the consolidated petitions is in order.

            WHEREFORE, premises considered, the Joint Manifestation and Motion to Dismiss is hereby GRANTED. Consequently, the consolidated petitions are DISMISSED. The cases are considered CLOSED and TERMINATED.

SO ORDERED.

                                      ANTONIO EDUARDO B. NACHURA

                                      Associate Justice

                                         Acting Chairperson

WE CONCUR:

ATTESTATION

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

                                                       ANTONIO EDUARDO B. NACHURA

                                                                      Associate Justice

                                                        Acting Chairperson, Second Division

CERTIFICATION

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

                                                                      RENATO C. CORONA

                                                                                              Chief Justice

^*               In lieu of Associate Justice Antonio T. Carpio per Raffle dated October 13, 2010.

^**             In lieu of Associate Justice Jose Catral Mendoza per Raffle dated October 13, 2010.

^***            In lieu of Associate Justice Roberto A. Abad per Raffle dated March 8, 2010.

^[9][1]           Penned by Associate Justice Jose Catral Mendoza (now a member of this Court), with Associate Justices Myrna Dimaranan-Vidal and Antonio L. Villamor, concurring; rollo (G.R. Nos. 190699-700), pp. 56-87. 

^[10][2]          Id. at 89-94.

^[11][3]          Penned by Associate Justice Monina Arevalo-Zenarosa, with Associate Justices Mariano C. del Castillo (now a member of this Court) and Ramon M. Bato, Jr., concurring; rollo (G.R. No. 188792), pp. 29-45.

^[12][4]          Id. at 83-85.

^[13][5]          Rollo (G.R. Nos. 190699-700), pp. 757-759.

^[14][6]          Id. at 771-773.

^[15][7]          Id. at 760-762.

^[16][8]          Rollo (G.R. Nos. 190677-78), pp. 150-153.

ELENITA C. FAJARDO VS. PEOPLE OF THE PHILIPPINES (G.R. NO. 190889, 10 JANUARY 2011, NACHURA, J.) 

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DECISION

NACHURA, J.: 

At bar is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking the reversal of the February 10, 2009 Decision^[1][1] of the Court of Appeals (CA), which affirmed with modification the August 29, 2006 decision^[2][2] of the Regional Trial Court (RTC), Branch 5, Kalibo, Aklan, finding petitioner guilty of violating Presidential Decree (P.D.) No. 1866, as amended.

The facts:

         Petitioner, Elenita Fajardo, and one Zaldy Valerio (Valerio) were charged with violation of P.D. No. 1866, as amended, before the RTC, Branch 5, Kalibo, Aklan, committed as follows:

                             That on or about the 28^th day of August, 2002, in the morning, in Barangay Andagao, Municipality of Kalibo, Province of Aklan, Republic of the Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, conspiring, confederating and mutually helping one another, without authority of law, permit or license, did then and there, knowingly, willfully, unlawfully and feloniously have in their possession, custody and control two (2) receivers of caliber .45 pistol, [M]odel [No.] M1911A1 US with SN 763025 and Model [No.] M1911A1 US with defaced serial number, two (2) pieces short magazine of M16 Armalite rifle, thirty-five (35) pieces live M16 ammunition 5.56 caliber and fourteen (14) pieces live caliber .45 ammunition, which items were confiscated and recovered from their possession during a search conducted by members of the Provincial Intelligence Special Operation Group, Aklan Police Provincial Office, Kalibo, Aklan, by virtue of Search Warrant No. 01 (9) 03 issued by OIC Executive Judge Dean Telan of the Regional Trial Court of Aklan.^[3][3]

          When arraigned on March 25, 2004, both pleaded not guilty to the offense charged.^[4][4] During pre-trial, they agreed to the following stipulation of facts:

1.     The search warrant subject of this case exists;

2.     Accused Elenita Fajardo is the same person subject of the search warrant in this case who is a resident of Sampaguita Road, Park Homes, Andagao, Kalibo, Aklan;

3.     Accused Zaldy Valerio was in the house of Elenita Fajardo in the evening of August 27, 2002 but does not live therein;

4.     Both accused were not duly licensed firearm holders;

5.     The search warrant was served in the house of accused Elenita Fajardo in the morning of August 28, 2002; and

6.     The accused Elenita Fajardo and Valerio were not arrested immediately upon the arrival of the military personnel despite the fact that the latter allegedly saw them in possession of a firearm in the evening of August 27, 2002.^[5][5]

As culled from the similar factual findings of the RTC and the CA,^[6][6] these are the chain of events that led to the filing of the information:

In the evening of August 27, 2002, members of the Provincial Intelligence Special Operations Group (PISOG) were instructed by Provincial Director Police Superintendent Edgardo Mendoza (P/Supt. Mendoza) to respond to the complaint of concerned citizens residing on Ilang-Ilang and Sampaguita Roads, Park Homes III Subdivision, Barangay Andagao, Kalibo, Aklan, that armed men drinking liquor at the residence of petitioner were indiscriminately firing guns.

Along with the members of the Aklan Police Provincial Office, the elements of the PISOG proceeded to the area. Upon arrival thereat, they noticed that several persons scampered and ran in different directions. The responding team saw Valerio holding two .45 caliber pistols. He fired shots at the policemen before entering the house of petitioner.

Petitioner was seen tucking a .45 caliber handgun between her waist and the waistband of her shorts, after which, she entered the house and locked the main door.

          To prevent any violent commotion, the policemen desisted from entering petitioner’s house but, in order to deter Valerio from evading apprehension, they cordoned the perimeter of the house as they waited for further instructions from P/Supt. Mendoza. A few minutes later, petitioner went out of the house and negotiated for the pull-out of the police troops. No agreement materialized.

At around 2:00 a.m. and 4:00 a.m. of August 28, 2002, Senior Police Officer 2 Clemencio Nava (SPO2 Nava), who was posted at the back portion of the house, saw Valerio emerge twice on top of the house and throw something. The discarded objects landed near the wall of petitioner’s house and inside the compound of a neighboring residence. SPO2 Nava, together with SPO1 Teodoro Neron and Jerome T. Vega (Vega), radio announcer/reporter of RMN DYKR, as witness, recovered the discarded objects, which turned out to be two (2) receivers of .45 caliber pistol, model no. M1911A1 US, with serial number (SN) 763025, and model no. M1911A1 US, with a defaced serial number. The recovered items were then surrendered to SPO1 Nathaniel A. Tan (SPO1 Tan), Group Investigator, who utilized them in applying for and obtaining a search warrant.

The warrant was served on petitioner at 9:30 a.m. Together with a barangay captain, barangay kagawad, and members of the media, as witnesses, the police team proceeded to search petitioner’s house.  The team found and was able to confiscate the following:

1.     Two (2) pieces of Short Magazine of M16 Armalite Rifle;

2.     Thirty five (35) pieces  of live M16 ammos 5.56 Caliber; and

3.     Fourteen (14) pieces of live ammos of Caliber 45 pistol.

Since petitioner and Valerio failed to present any documents showing their authority to possess the confiscated firearms and the two recovered receivers, a criminal information for violation of P.D. No. 1866, as amended by Republic Act (R.A.) No. 8294, was filed against them.

For their exoneration, petitioner and Valerio argued that the issuance of the search warrant was defective because the allegation contained in the application filed and signed by SPO1 Tan was not based on his personal knowledge. They quoted this pertinent portion of the application:

That this application was founded on confidential information received by the Provincial Director, Police Supt. Edgardo Mendoza.^[7][7]

They further asserted that the execution of the search warrant was infirm since petitioner, who was inside the house at the time of the search, was not asked to accompany the policemen as they explored the place, but was instead ordered to remain in the living room (sala).

Petitioner disowned the confiscated items. She refused to sign the inventory/receipt prepared by the raiding team, because the items allegedly belonged to her brother, Benito Fajardo, a staff sergeant of the Philippine Army.

Petitioner denied that she had a .45 caliber pistol tucked in her waistband when the raiding team arrived. She averred that such situation was implausible because she was wearing garterized shorts and a spaghetti-strapped hanging blouse.^[8][8]

Ruling of the RTC

The RTC rejected the defenses advanced by accused, holding that the same were already denied in the Orders dated December 31, 2002 and April 20, 2005, respectively denying the Motion to Quash Search Warrant and Demurrer to Evidence.  The said Orders were not appealed and have thus attained finality. The RTC also ruled that petitioner and Valerio were estopped from assailing the legality of their arrest since they participated in the trial by presenting evidence for their defense. Likewise, by applying for bail, they have effectively waived such irregularities and defects.

In finding the accused liable for illegal possession of firearms, the RTC explained: 

Zaldy Valerio, the bodyguard of Elenita Fajardo, is a former soldier, having served with the Philippine Army prior to his separation from his service for going on absence without leave (AWOL). With his military background, it is safe to conclude that Zaldy Valerio is familiar with and knowledgeable about different types of firearms and ammunitions. As a former soldier, undoubtedly, he can assemble and disassemble firearms.

It must not be de-emphasize[d] that the residence of Elenita Fajardo is definitely not an armory or arsenal which are the usual depositories for firearms, explosives and ammunition. Granting arguendo that those firearms and ammunition were left behind by Benito Fajardo, a member of the Philippine army, the fact remains that it is a government property. If it is so, the residence of Elenita Fajardo is not the proper place to store those items. The logical explanation is that those items are stolen property.

x x x x                         

The rule is that ownership is not an essential element of illegal possession of firearms and ammunition. What the law requires is merely possession which includes not only actual physical possession but also constructive possession or the subjection of the thing to one’s control and management. This has to be so if the manifest intent of the law is to be effective. The same evils, the same perils to public security, which the law penalizes exist whether the unlicensed holder of a prohibited weapon be its owner or a borrower. To accomplish the object of this law[,] the proprietary concept of the possession can have no bearing whatsoever.

                        x x x x

x x x.   [I]n order that one may be found guilty of a violation of the decree, it is sufficient that the accused had no authority or license to possess a firearm, and that he intended to possess the same, even if such possession was made in good faith and without criminal intent.

x x x x

To convict an accused for illegal possession of firearms and explosive under P.D. 1866, as amended, two (2) essential elements must be indubitably established, viz.: (a) the existence of the subject firearm ammunition or explosive which may be proved by the presentation of the subject firearm or explosive or by the testimony of witnesses who saw accused in possession of the same, and (b) the negative fact that the accused has no license or permit to own or possess the firearm, ammunition or explosive which fact may be established by the testimony or certification of a representative of the PNP Firearms and Explosives Unit that the accused has no license or permit to possess the subject firearm or explosive (Exhibit G).

The judicial admission of the accused that they do not have permit or license on the two (2) receivers of caliber .45 pistol, model M1911A1 US with SN 763025 and model M1911A1 of M16 Armalite rifle, thirty-five (35) pieces live M16 ammunition, 5.56 caliber and fourteen (14) pieces live caliber .45 ammunition confiscated and recovered from their possession during the search conducted by members of the PISOG, Aklan Police Provincial Office by virtue of Search Warrant No. 01 (9) 03 fall under Section 4 of Rule 129 of the Revised Rules of Court.^[9][9]  

 Consequently, petitioner and Valerio were convicted of illegal possession of firearms and explosives, punishable under paragraph 2, Section 1 of P.D. No. 1866, as amended by R.A. No. 8294, which provides:

The penalty of prision mayor in its minimum period and a fine of Thirty thousand pesos (P30,000.00) shall be imposed if the firearm is classified as high powered firearm which includes those with bores bigger in diameter than .38 caliber and 9 millimeter such as caliber .40, .41, .44, .45 and also lesser calibered firearms but considered powerful such as caliber .357 and caliber .22 center-fire magnum and other firearms with firing capability of full automatic and by burst of two or three: Provided, however, That no other crime was committed by the person arrested.

 Both were sentenced to suffer the penalty of imprisonment of six (6) years and one (1) day to twelve (12) years of prision mayor, and to pay a fine of P30,000.00.

On September 1, 2006, only petitioner filed a Motion for Reconsideration, which was denied in an Order dated October 25, 2006. Petitioner then filed a Notice of Appeal with the CA.

Ruling of the CA

The CA concurred with the factual findings of the RTC, but disagreed with its conclusions of law, and held that the search warrant was void based on the following observations:

[A]t the time of applying for a search warrant, SPO1 Nathaniel A. Tan did not have personal knowledge of the fact that appellants had no license to possess firearms as required by law. For one, he failed to make a categorical statement on that point during the application. Also, he failed to attach to the application a certification to that effect from the Firearms and Explosives Office of the Philippine National Police. x x x, this certification is the best evidence obtainable to prove that appellant indeed has no license or permit to possess a firearm. There was also no explanation given why said certification was not presented, or even deemed no longer necessary, during the application for the warrant. Such vital evidence was simply ignored.^[10][10]

Resultantly, all firearms and explosives seized inside petitioner’s residence were declared inadmissible in evidence. However, the 2 receivers recovered by the policemen outside the house of petitioner before the warrant was served were admitted as evidence, pursuant to the plain view doctrine.

Accordingly, petitioner and Valerio were convicted of illegal possession of a part of a firearm, punishable under paragraph 1, Section 1 of P.D. No. 1866, as amended. They were sentenced to an indeterminate penalty of three (3) years, six (6) months, and twenty-one (21) days to five (5) years, four (4) months, and twenty (20) days of prision correccional, and ordered to pay a P20,000.00 fine.

Petitioner moved for reconsideration,^[11][11] but the motion was denied in the CA Resolution dated December 3, 2009.^[12][12] Hence, the present recourse.

At the onset, it must be emphasized that the information filed against petitioner and Valerio charged duplicitous offenses contrary to Section 13 of Rule 110 of the Rules of Criminal Procedure, viz.:

Sec. 13.  Duplicity of offense. – A complaint or information must charge but one offense, except only in those cases in which existing laws prescribe a single punishment for various offenses.

            A reading of the information clearly shows that possession of the enumerated articles confiscated from Valerio and petitioner are punishable under separate provisions of Section 1, P.D. No. 1866, as amended by R.A. No. 8294.^[13][13] Illegal possession of two (2) pieces of short magazine of M16 Armalite rifle, thirty-five (35) pieces of live M16 ammunition 5.56 caliber, and fourteen (14) pieces of live caliber .45 ammunition is punishable under paragraph 2 of the said section, viz.:

The penalty of prision mayor in its minimum period and a fine of Thirty thousand pesos (P30,000.00) shall be imposed if the firearm is classified as high powered firearm which includes those with bores bigger in diameter than .38 caliber and 9 millimeter such as caliber .40, 41, .44, .45 and also lesser calibered firearms but considered powerful such as caliber .357 and caliber .22 center-fire magnum and other firearms with firing capability of full automatic and by burst of two or three: Provided, however, That no other crime was committed by the person arrested.^[14][14]

On the other hand, illegal possession of the two (2) receivers of a .45 caliber pistol, model no. M1911A1 US, with SN 763025, and Model M1911A1 US, with a defaced serial number, is penalized under paragraph 1, which states: 

Sec. 1. Unlawful manufacture, sale, acquisition, disposition or possession of firearms or ammunition or instruments used or intended to be used in the manufacture of firearms or ammunition. – The penalty of prision correccional in its maximum period and a fine of not less than Fifteen thousand pesos (P15,000.00) shall be imposed upon any person who shall unlawfully manufacture, deal in, acquire, dispose, or possess any low powered firearm, such as rimfire handgun, .380 or .32 and other firearm of similar firepower, part of firearm, ammunition, or machinery, tool or instrument used or intended to be used in the manufacture of any firearm or ammunition: Provided, That no other crime was committed.^[15][15]

This is the necessary consequence of the amendment introduced by R.A. No. 8294, which categorized the kinds of firearms proscribed from being possessed without a license, according to their firing power and caliber. R.A. No. 8294 likewise mandated different penalties for illegal possession of firearm according to the above classification, unlike in the old P.D. No. 1866 which set a standard penalty for the illegal possession of any kind of firearm. Section 1 of the old law reads:

Section 1.  Unlawful Manufacture, Sale, Acquisition, Disposition or Possession of Firearms or Ammunition or Instruments Used or Intended to be Used in the Manufacture of Firearms of Ammunition. – The penalty of reclusion temporal in its maximum period to reclusion perpetua shall be imposed upon any person who shall unlawfully manufacture, deal in, acquire dispose, or possess any firearms, part of firearm, ammunition, or machinery, tool or instrument used or intended to be used in the manufacture of any firearm or ammunition.  (Emphasis ours.)

By virtue of such changes, an information for illegal possession of firearm should now particularly refer to the paragraph of Section 1 under which the seized firearm is classified, and should there be numerous guns confiscated, each must be sorted and then grouped according to the categories stated in Section 1 of R.A. No. 8294, amending P.D. No. 1866. It will no longer suffice to lump all of the seized firearms in one information, and   state Section 1, P.D. No. 1866 as the violated provision, as in the instant case,^[16][16] because different penalties are imposed by the law, depending on the caliber of the weapon. To do so would result in duplicitous charges.

Ordinarily, an information that charges multiple offenses merits a quashal, but petitioner and Valerio failed to raise this issue during arraignment. Their failure constitutes a waiver, and they could be convicted of as many offenses as there were charged in the information.^[17][17] This accords propriety to the diverse convictions handed down by the courts a quo.

          Further, the charge of illegal possession of firearms and ammunition under paragraph 2, Section 1 of P.D. No. 1866, as amended by R.A. No. 8294, including the validity of the search warrant that led to their confiscation, is now beyond the province of our review since, by virtue of the CA’s Decision, petitioner and Valerio have been effectively acquitted from the said charges. The present review is consequently only with regard to the conviction for illegal possession of a part of a firearm.

The Issues

Petitioner insists on an acquittal and avers that the discovery of the two (2) receivers does not come within the purview of the plain view doctrine. She argues that no valid intrusion was attendant and that no evidence was adduced to prove that she was with Valerio when he threw the receivers. Likewise absent is a positive showing that any of the two receivers recovered by the policemen matched the .45 caliber pistol allegedly seen tucked in the waistband of her shorts when the police elements arrived. Neither is there any proof that petitioner had knowledge of or consented to the alleged throwing of the receivers.

Our Ruling

            We find merit in the petition.

          First, we rule on the admissibility of the receivers.  We hold that the receivers were seized in plain view, hence, admissible.

          No less than our Constitution recognizes the right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures. This right is encapsulated in Article III, Section 2, of the Constitution, which states:

Sec.  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.

Complementing this provision is the exclusionary rule embodied in Section 3(2) of the same article –

(2) Any evidence obtained in violation of this or the preceding section shall be inadmissible for any purpose in any proceeding.

          There are, however, several well-recognized exceptions to the foregoing rule.  Thus, evidence obtained through a warrantless search and seizure may be admissible under any of the following circumstances: (1) search incident to a lawful arrest; (2) search of a moving motor vehicle; (3) search in violation of custom laws; (4) seizure of evidence in plain view; and (5) when the accused himself waives his right against unreasonable searches and seizures.^[18][18]

Under the plain view doctrine, objects falling in the “plain view” of an officer, who has a right to be in the position to have that view, are subject to seizure and may be presented as evidence.^[19][19] It applies when the following requisites concur: (a) the law enforcement officer in search of the evidence has a prior justification for an intrusion or is in a position from which he can view a particular area; (b) the discovery of the evidence in plain view is inadvertent; and (c) it is immediately apparent to the officer that the item he observes may be evidence of a crime, contraband, or otherwise subject to seizure. The law enforcement officer must lawfully make an initial intrusion or properly be in a position from which he can particularly view the area. In the course of such lawful intrusion, he came inadvertently across a piece of evidence incriminating the accused. The object must be open to eye and hand, and its discovery inadvertent.^[20][20]

           Tested against these standards, we find that the seizure of the two receivers of the .45 caliber pistol outside petitioner’s house falls within the purview of the plain view doctrine.

First, the presence of SPO2 Nava at the back of the house and of the other law enforcers around the premises was justified by the fact that petitioner and Valerio were earlier seen respectively holding .45 caliber pistols before they ran inside the structure and sought refuge. The attendant circumstances and the evasive actions of petitioner and Valerio when the law enforcers arrived engendered a reasonable ground for the latter to believe that a crime was being committed. There was thus sufficient probable cause for the policemen to cordon off the house as they waited for daybreak to apply for a search warrant.

          Secondly, from where he was situated, SPO2 Nava clearly saw, on two different instances, Valerio emerge on top of the subject dwelling and throw suspicious objects. Lastly, considering the earlier sighting of Valerio holding a pistol, SPO2 Nava had reasonable ground to believe that the things thrown might be contraband items, or evidence of the offense they were then suspected of committing. Indeed, when subsequently recovered, they turned out to be two (2) receivers of .45 caliber pistol.

 The pertinent portions of SPO2 Nava’s testimony are elucidating:

            Q         When you arrived in that place, you saw policemen?

            A         Yes, sir.

            Q         What were they doing?

            A         They were cordoning the house.

Q         You said that you asked your assistant team leader Deluso about that incident. What did he tell you?

            A         Deluso told me that a person ran inside the house carrying with him a gun.

Q         And this house you are referring to is the house which you mentioned is the police officers were surrounding?

            A         Yes, sir.

            Q         Now, how  long did you stay in that place, Mr. Witness?

A         I stayed there when I arrived at past 10:00 o’clock up to 12:00 o’clock the following day.

Q         At about 2:00 o’clock in the early morning of August 28, 2002, can you recall where were you?

            A         Yes, sir.

            Q         Where were you?

            A         I was at the back of the house that is being cordoned by the police.

Q         While you were at the back of this house, do you recall any unusual incident?

            A         Yes, sir.

            Q         Can you tell the Honorable Court what was that incident?

            A         Yes, sir. A person went out at the top of the house and threw something.

            Q         And did you see the person who threw something out of this house?

            A         Yes, sir.

            x x x x

Q         Can you tell the Honorable Court who was that person who threw that something outside the house?

            A         It was Zaldy Valerio.

            COURT:          (to witness)

            Q         Before the incident, you know this person Zaldy Valerio?

            A         Yes, sir.

            Q         Why do you know him?

A         Because we were formerly members of the Armed Forces of the Philippines.

            x x x x

            PROS. PERALTA:

Q         When you saw something thrown out at the top of the house, did you do something if any?

            A         I shouted to seek cover.

            x x x x

Q         So, what else did you do if any after you shouted, “take cover?”

A         I took hold of a flashlight after five minutes and focused the beam of the flashlight on the place where something was thrown.

            Q         What did you see if any?

            A         I saw there the lower [part] of the receiver of cal. 45.

            x x x x

Q         Mr. Witness, at around 4:00 o’clock that early morning of August 28, 2002, do you recall another unusual incident?

            A         Yes, sir.

            Q         And can you tell us what was that incident?

A        I saw a person throwing something there and the one that was thrown fell on top of the roof of another house.

Q         And you saw that person who again threw something from the rooftop of the house?

            A         Yes, sir.

            Q         Did you recognize him?

            A         Yes, sir.

            Q         Who was that person?

            A         Zaldy Valerio again.

            x x x x

Q         Where were you when you saw this Zaldy Valerio thr[o]w something out of the house?

            A         I was on the road in front of the house.

Q         Where was Zaldy Valerio when you saw him thr[o]w something out of the house?

            A         He was on top of the house.

            x x x x

            Q         Later on, were you able to know what was that something thrown out?

            A         Yes, sir.

            Q         What was that?

            A         Another lower receiver of a cal. 45.

            x x x x

            Q         And what did he tell you?

            A         It [was] on the wall of another house and it [could] be seen right away.

            x x x x

Q         What did you do if any?

            A         We waited for the owner of the house to wake up.

            x x x x

            Q         Who opened the fence for you?

            A         It was a lady who is the owner of the house.

Q         When you entered the premises of the house of the lady, what did you find?

            A         We saw the lower receiver of this .45 cal. (sic)^[21][21]  

The ensuing recovery of the receivers may have been deliberate; nonetheless, their initial discovery was indubitably inadvertent. It is not crucial that at initial sighting the seized contraband be identified and known to be so. The law merely requires that the law enforcer observes that the seized item may be evidence of a crime, contraband, or otherwise subject to seizure.

            Hence, as correctly declared by the CA, the two receivers were admissible as evidence. The liability for their possession, however, should fall only on Valerio and not on petitioner.

          The foregoing disquisition notwithstanding, we find that petitioner is not liable for illegal possession of part of a firearm.

  In dissecting how and when liability for illegal possession of firearms attaches, the following disquisitions in People v. De Gracia^[22][22] are instructive:

                        The rule is that ownership is not an essential element of illegal possession of firearms and ammunition. What the law requires is merely possession which includes not only actual physical possession but also constructive possession or the subjection of the thing to one’s control and management. This has to be so if the manifest intent of the law is to be effective. The same evils, the same perils to public security, which the law penalizes exist whether the unlicensed holder of a prohibited weapon be its owner or a borrower. To accomplish the object of this law the proprietary concept of the possession can have no bearing whatsoever.

            But is the mere fact of physical or constructive possession sufficient to convict a person for unlawful possession of firearms or must there be an intent to possess to constitute a violation of the law? This query assumes significance since the offense of illegal possession of firearms is a malum prohibitum punished by a special law,  in which case good faith and absence of criminal intent are not valid defenses.

When the crime is punished by a special law, as a rule, intent to commit the crime is not necessary. It is sufficient that the offender has the intent to perpetrate the act prohibited by the special law. Intent to commit the crime and intent to perpetrate the act must be distinguished. A person may not have consciously intended to commit a crime; but he did intend to commit an act, and that act is, by the very nature of things, the crime itself. In the first (intent to commit the crime), there must be criminal intent; in the second (intent to perpetrate the act) it is enough that the prohibited act is done freely and consciously.

            In the present case, a distinction should be made between criminal intent and intent to possess. While mere possession, without criminal intent, is sufficient to convict a person for illegal possession of a firearm, it must still be shown that there was animus possidendi or an intent to possess on the part of the accused.  Such intent to possess is, however, without regard to any other criminal or felonious intent which the accused may have harbored in possessing the firearm. Criminal intent here refers to the intention of the accused to commit an offense with the use of an unlicensed firearm. This is not important in convicting a person under Presidential Decree No. 1866. Hence, in order that one may be found guilty of a violation of the decree, it is sufficient that the accused had no authority or license to possess a firearm, and that he intended to possess the same, even if such possession was made in good faith and without criminal intent.

Concomitantly, a temporary, incidental, casual, or harmless possession or control of a firearm cannot be considered a violation of a statute prohibiting the possession of this kind of weapon, such as Presidential Decree No. 1866. Thus, although there is physical or constructive possession, for as long as the animus possidendi is absent, there is no offense committed.^[23][23]

          Certainly, illegal possession of firearms, or, in this case, part of a firearm, is committed when the holder thereof:

(1)             possesses a firearm or a part thereof

(2)             lacks the authority or license to possess the firearm.^[24][24]

We find that petitioner was neither in physical nor constructive possession of the subject receivers. The testimony of SPO2 Nava clearly bared that he only saw Valerio on top of the house when the receivers were thrown. None of the witnesses saw petitioner holding the receivers, before or during their disposal.

          At the very least, petitioner’s possession of the receivers was merely incidental because Valerio, the one in actual physical possession, was seen at the rooftop of petitioner’s house. Absent any evidence pointing to petitioner’s participation, knowledge or consent in Valerio’s actions, she cannot be held liable for illegal possession of the receivers.

          Petitioner’s apparent liability for illegal possession of part of a firearm can only proceed from the assumption that one of the thrown receivers matches the gun seen tucked in the waistband of her shorts earlier that night. Unfortunately, the prosecution failed to convert such assumption into concrete evidence.

Mere speculations and probabilities cannot substitute for proof required to establish the guilt of an accused beyond reasonable doubt.  The rule is the same whether the offenses are punishable under the Revised Penal Code, which are mala in se, or in crimes, which are malum prohibitum by virtue of special law.^[25][25] The quantum of proof required by law was not adequately met in this case in so far as petitioner is concerned. 

The gun allegedly seen tucked in petitioner’s waistband was not identified with sufficient particularity; as such, it is impossible to match the same with any of the seized receivers.  Moreover, SPO1 Tan categorically stated that he saw Valerio holding two guns when he and the rest of the PISOG arrived in petitioner’s house. It is not unlikely then that the receivers later on discarded were components of the two (2) pistols seen with Valerio.

These findings also debunk the allegation in the information that petitioner conspired with Valerio in committing illegal possession of part of a firearm. There is no evidence indubitably proving that petitioner participated in the decision to commit the criminal act committed by Valerio.

Hence, this Court is constrained to acquit petitioner on the ground of reasonable doubt. The constitutional presumption of innocence in her favor was not adequately overcome by the evidence adduced by the prosecution.

The CA correctly convicted Valerio with illegal possession of part of a firearm.

    In illegal possession of a firearm, two (2) things must be shown to exist: (a) the existence of the subject firearm; and (b) the fact that the accused who possessed the same does not have the corresponding license for it.^[26][26] 

By analogy then, a successful conviction for illegal possession of part of a firearm must yield these requisites:

(a)              the existence of the part of the firearm; and

(b)             the accused who possessed the same does not have the license for the firearm to which the seized part/component corresponds.

 In the instant case, the prosecution proved beyond reasonable doubt the

elements of the crime. The subject receivers – one with the markings “United States Property” and the other bearing Serial No. 763025 – were duly presented to the court as Exhibits E and E-1, respectively.  They were also identified by SPO2 Nava as the firearm parts he retrieved af ter Valerio discarded them.^[27][27] His testimony was corroborated by DYKR radio announcer Vega, who witnessed the recovery of the receivers.^[28][28]

    Anent the lack of authority, SPO1 Tan testified that, upon verification, it was ascertained that Valerio is not a duly licensed/registered firearm holder of any type, kind, or caliber of firearms.^[29][29] To substantiate his statement, he submitted a certification^[30][30] to that effect and identified the same in court.^[31][31] The testimony of SPO1 Tan, or the certification, would suffice to prove beyond reasonable doubt the second element.^[32][32]

          WHEREFORE, premises considered, the February 10, 2009 Decision of the Court of Appeals is hereby REVERSED with respect to petitioner Elenita Fajardo y Castro, who is hereby ACQUITTED on the ground that her guilt was not proved beyond reasonable doubt.

SO ORDERED.

                                      ANTONIO EDUARDO B. NACHURA

                                      Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

Chairperson

JOSE CATRAL MENDOZA

Associate Justice

A T T E S T A T I O N

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

                                                             ANTONIO T. CARPIO

                                      Associate Justice

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

                                      RENATO C. CORONA

                                      Chief Justice