J.A.B. Bulao & Associates

PEOPLE OF THE PHILIPPINES VS. NG YIK BUN, KWOK WAI CHENG, CHANG CHAUN SHI, CHUA SHILOU HWAN, KAN SHUN MIN, AND RAYMOND S. TAN (G.R. NO. 180452, 10 JANUARY 2011, VELASCO, JR., J.) SUBJECT: DANGEROUS DRUGS. (BRIEF TITLE: PEOPLE VS. NG YIK BUN ET AL.)

x————————————————————————————–x

D E C I S I O N

VELASCO, JR., J.:

The Case

          This is an appeal from the January 16, 2007 Decision of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 00485 entitled People of the Philippines v. Ng Yik Bun, Kwok Wai Cheng, Chang Chaun Shi, Chua Shilou Hwan, Kan Shun Min and Raymond S. Tan, which affirmed the April 1, 2004 Decision in Criminal Case No. Q-01-99437 of the Regional Trial Court (RTC), Branch 103 in Quezon City. The RTC found accused-appellants guilty beyond reasonable doubt of violating Section 16, Article III of Republic Act No. (RA) 6425 or the Dangerous Drugs Act of 1972.

The Facts

          An Information indicted accused-appellants of the following:

That on or about the 24^th day of August 2000, at Barangay Bignay II, Municipality of Sariaya, Province of Quezon, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, conspiring and confederating together and mutually helping one another, did then and there knowingly, willfully, unlawfully and feloniously transport, deliver and distribute, without authority of law, on board an L-300 Mitsubishi van, bearing Plate No. UBU 827, and have in their possession, custody, and control, without the corresponding license or prescription, twenty-five (25) heat-sealed transparent plastic bags containing Methamphetamine Hydrochloride (shabu), a regulated drug, each containing: 2.954 grams, 2.901 grams, 2.926 grams, 2.820 grams, 2.977 grams, 2.568 grams, 2.870 grams, 2.941 grams, 2.903 grams, 2.991 grams, 2.924 grams, 2.872 grams, 2.958 grams, 2.972 grams, 2.837 grams, 2.908 grams, 2.929 grams, 2.932 grams, 2.899 grams, 2.933 grams, 2.938 grams, 2.943 grams, 2.955 grams, 2.938 grams and 2.918 grams, respectively, with a total weight of 72.707 kilos, and one hundred forty seven (147) self-sealing transparent plastic bags likewise containing Methamphetamine Hydrochloride (shabu), also a regulated drug, with a total weight of 291.350 kilos, or with a grand total weight of 364.057 kilos.

            That the above acts were committed by a syndicate with the use of two (2) motor vehicles, namely: L-300 Mitsubishi Van bearing Plate No. UBU 827 and a Nissan Sentra Exalta car without Plate Number.

            Contrary to law.^[1][1]

          As summarized in the appealed CA decision, the facts are as follows:

          On August 24, 2000, at around 9:00 p.m., Capt. Danilo Ibon of Task Force Aduana received information from an operative that there was an ongoing shipment of contraband in Barangay Bignay II, Sariaya, Quezon Province.  Upon instructions from his superior, Major Carlo Magno Tabo, Capt. Ibon formed a team in coordination with a Philippine National Police detachment, and, along with the operative, the team then proceeded to Villa Vicenta Resort in Barangay Bignay II, Sariaya.

The members of the team were able to observe the goings-on at the resort from a distance of around 50 meters.   They spotted six Chinese-looking men loading bags containing a white substance into a white van.  Having been noticed, Capt. Ibon identified his team and asked accused-appellant Chua Shilou Hwan (Hwan) what they were loading on the van.  Hwan replied that it was shabu and pointed, when probed further, to accused-appellant Raymond Tan as the leader.  A total of 172 bags of suspected shabu were then confiscated. Bundles of noodles (bihon) were also found on the premises.

          A laboratory report prepared later by Police Inspector Mary Jean Geronimo on samples of the 172 confiscated bags showed the white substance to be shabu.  

          On January 10, 2001, an Amended Information for violation of Sec. 16, Article III of RA 6425 was filed against accused-appellants, who entered a plea of not guilty upon re-arraignment.

          Accused-appellants all maintained their innocence and presented the following defenses:

(1)     Accused-appellant Hwan testified that he was planning to buy cheap goods at Villa Vicenta Resort on August 24, 2000, when he saw a van full of bihon at the resort and inquired if it was for sale.  He went to relieve himself 15 meters away from the van.  A group of police officers arrested him upon his return.

(2)     Accused-appellant Tan testified that he was a businessman collecting a debt in Lucena City on August 24, 2000.  He was at a restaurant with his driver when three persons identified themselves as police officers and forcibly brought him inside a car.  He was handcuffed, blindfolded, and badly beaten.  He was later brought to a beach and was ordered to hold some bags while being photographed with five Chinese-looking men he saw for the first time.  A tricycle driver, Ricky Pineda, corroborated his story by testifying that he saw Tan being forced into a white Nissan car on August 24, 2000.

(3)     Accused-appellant Ng Yik Bun (Bun) testified that he arrived in the Philippines as a tourist on August 22, 2000.  On August 24, 2000, he was at a beach with some companions when four armed men arrested them.  He was made to pose next to some plastic bags along with other accused-appellants, whom he did not personally know.  He was then charged with illegal possession of drugs at the police station. A friend of his, accused-appellant Kwok Wai Cheng (Cheng), corroborated his story.

(4)     Accused-appellant Kan Shun Min (Min) testified that he arrived in the Philippines on July 1, 2000 for business and pleasure.  On August 24, 2000, he checked into a beach resort.  While walking there, he was suddenly accosted by four or five men who poked guns at him.  He was brought to a cottage where he saw some unfamiliar Chinese-looking individuals.  He likewise testified that he was made to take out white packages from a van while being photographed.  His friend, accused-appellant Chang Chaun Shi (Shi), corroborated his story.

The RTC convicted accused-appellants of the crime charged. The dispositive portion of the RTC Decision reads:

          ACCORDINGLY, the Court hereby renders judgment finding the six (6) accused namely Ng Yik Bun, Kwok Wai Cheng, Chang Chaun Shi, Chua Shilou Hwan, Kan Shun Min and Raymond S. Tan (some also known by other names), GUILTY beyond reasonable doubt of violating Section 16 of RA 6425, as amended and each is hereby sentenced to suffer the penalty of RECLUSION PERPETUA and to pay a fine of Five Million Pesos (P5,000,000.00) each.

            The shabu involved in this case and their accompanying paraphernalia are ordered disposed of in accordance with law, now RA 9165. The two (2) vehicles are forfeited in favor of the government.

            SO ORDERED.^[2][2] 

In questioning the RTC Decision before the CA, accused-appellants Bun, Cheng, Shi, Min, and Tan raised the lone issue of:  whether the trial court erred in ruling that there was a valid search and arrest despite the absence of a warrant. 

On the other hand, accused-appellant Hwan sought an acquittal on the basis of the following submissions:

I

The trial court erred when it held as valid the warrantless search, seizure and subsequent arrest of the accused-appellants despite the non-concurrence of the requisite circumstances that justify a warrantless arrest as held in the case of People vs. [Cuizon].

II

The trial court violated Article III, Section 14 of the 1987 Constitution as well as Rule 115 of the Revised Rules on Criminal Procedure when it heard the case at bench on June 26, 2001 at the chemistry division of the PNP Crime Laboratory in Camp Crame, Quezon City without the presence of both the herein accused-appellant and his counsel de parte.

III

The trial court erred when it issued and dictated in open hearing a verbal order denying accused’s formal “Motion to Suppress Illegally Procured Evidence” upon a [ratiocination] that is manifestly contrary to law [and] jurisprudence set in the Cuizon case, supra.

IV

The trial court erred when with lack of the desired circumspection, it sweepingly ruled the admission in evidence the 731 exhibits listed in the prosecution’s 43-page formal offer of evidence over the itemized written objections of the defense in a terse verbal order (bereft of reason for the denial of the raised objections) dictated in open hearing which reads: “All the exhibits of the prosecution are hereby admitted. The court believes that as far as the evidence submitted goes, these exhibits of the prosecution consisting of several plastic bags of shabu were not yet shown to be the fruit of a poisonous plant.” x x x

V

The trial court also erred in admitting the prosecution’s photographs (Exhibit “K” and “M,” inclusive of their sub-markings), the photographer who took the shots not having taken the witness stand to declare, as required by the rules, the circumstances under which the photographs were taken.

VI

The trial court erred when it tried and applied the provisions of R.A. 9165, the Dangerous Drugs Act of 2002, in the instant case even though [the] crime charged took place on 24 August 2000.

VII

The trial court erred in finding conspiracy among the accused.^[3][3]

The appellate court found accused-appellants’ contentions unmeritorious as it consequently affirmed in toto the RTC Decision.

The CA ruled that, contrary to accused-appellants’ assertion, they were first arrested before the seizure of the contraband was made.  The CA held that accused-appellants were caught in flagrante delicto loading transparent plastic bags containing white crystalline substance into an L-300 van which, thus, justified their arrests and the seizure of the contraband.  The CA agreed with the prosecution that the urgency of the situation meant that the buy-bust team had no time to secure a search warrant.  Moreover, the CA also found that the warrantless seizure of the transparent plastic bags can likewise be sustained under the plain view doctrine.

The CA debunked accused-appellant Hwan’s arguments in seriatim.  First, the CA ruled that People v. Cuizon^[4][4] was not applicable to the instant case, as, unlike in Cuizon, the apprehending officers immediately acted on the information they had received about an ongoing shipment of drugs. 

Second, the CA also noted that accused-appellant Hwan effectively waived his right to be present during the inspection of exhibits and hearing, for the manifestation made by the prosecution that accused-appellant Hwan waived his right to be present was never raised in issue before the trial court.

And third, the CA found accused-appellant Hwan’s other arguments untenable.  It held that the trial court correctly admitted Exhibits “K” and “M” even if the photographer was not presented as a witness.  The CA based its ruling on Sison v. People,^[5][5] which held that photographs can be identified either by the photographer or by any other competent witness who can testify to its exactness and accuracy.  It agreed with the Solicitor General that accused-appellants were correctly tried and convicted by the trial court under RA 6425 and not RA 9165, as can be gleaned from the fallo of the RTC Decision.  The CA likewise dismissed the argument that conspiracy was not proved by the prosecution, noting that the evidence presented established that accused-appellants were performing “their respective task[s] with the objective of loading the plastic bags of shabu into an L-300 van.”^[6][6]

          The CA disposed of the appeal as follows:

                        WHEREFORE, the Decision dated April 1, 2004 of the Regional Trial Court of Quezon City, Branch 103, in Criminal Case No. Q-01-99437, is hereby AFFIRMED in toto.

                        SO ORDERED.^[7][7]

            On February 18, 2008, the Court, acting on the appeal of accused-appellants, required the parties to submit supplemental briefs if they so desired.

          On March 27, 2008, accused-appellants Bun, Cheng, Shi, Min, and Tan filed their Supplemental Brief on the sole issue that:

THERE WAS NO VALID SEARCH AND ARREST DUE TO ABSENCE OF A WARRANT

 On June 4, 2008, accused-appellant Hwan filed his Supplemental Brief, raising the following errors, allegedly committed by the trial court:

I

THE TRIAL COURT VIOLATED ARTICLE III, SECTION 14 OF THE 1987 CONSTITUTION AS WELL AS RULE 115 OF THE REVISED RULES ON CRIMINAL PROCEDURE WHEN IT CONDUCTED A HEARING ON JUNE 26, 2001 AT THE CHEMISTRY DIVISION OF THE PNP CRIME LABORATORY IN CAMP CRAME, QUEZON CITY WITHOUT THE PRESENCE OF BOTH THE HEREIN ACCUSED-APPELLANT AND HIS COUNSEL IN SUCH VITAL [PROCEEDINGS].

II

THE TRIAL COURT ERRED WHEN IT HELD AS VALID THE WARRANTLESS SEARCH, SEIZURE AND SUBSEQUENT ARREST OF THE HEREIN APPELLANT DESPITE THE NON-CONCURRENCE OF THE REQUISITE CIRCUMSTANCES THAT JUSTIFY A WARRANTLESS ARREST.

          Essentially, accused-appellants claim that no valid in flagrante delicto arrest was made prior to the seizure and that the police officers placed accused-appellants under arrest even when there was no evidence that an offense was being committed.  Since there was no warrant of arrest, they argue that the search sans a search warrant subsequently made on them was illegal.  They contend that a seizure of any evidence as a result of an illegal search is inadmissible in any proceeding for any purpose. 

          Accused-appellant Hwan additionally claims that he was deliberately excluded when the trial court conducted a hearing on June 26, 2001 to identify 172 bags of shabu for trial purposes.  He asserts that no formal notice of the hearing was sent to him or his counsel, to his prejudice.

The Court’s Ruling

          On the issue of warrantless arrest, it is apropos to mention what the Bill of Rights under the present Constitution provides in part:

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.

A settled exception to the right guaranteed in the aforequoted provision is that of an arrest made during the commission of a crime, which does not require a warrant.  Such warrantless arrest is considered reasonable and valid under Rule 113, Sec. 5(a) of the Revised Rules on Criminal Procedure, which states:

Sec. 5.  Arrest without warrant; when lawful. — A peace officer or a private person may, without a warrant, arrest a person:
(a) When, in his presence, the person to be arrested has committed, is actually committing, or is attempting to commit an offense; (Emphasis supplied.)

The foregoing proviso refers to arrest in flagrante delicto.^[8][8]  In the instant case, contrary to accused-appellants’ contention, there was indeed a valid warrantless arrest in flagrante delicto.  Consider the circumstances immediately prior to and surrounding the arrest of accused-appellants:       (1) the police officers received information from an operative about an ongoing shipment of contraband; (2) the police officers, with the operative, proceeded to Villa Vicenta Resort in Barangay Bignay II, Sariaya, Quezon; (3) they observed the goings-on at the resort from a distance of around 50 meters; and (4) they spotted the six accused-appellants loading transparent bags containing a white substance into a white L-300 van.  The following exchange between Capt. Ibon and the prosecutor sheds light on the participation of all six accused-appellants:

Q:        Upon arriving at Villa Vicenta Resort in Brgy. Bignay II, [in] what specific area [did] you position yourselves?

A:         Initially we [were] about three hundred meters away from Villa Vicenta Resort, then we walked [stealthily] so as not to [be] [spotted] until we were about fifty meters sir.

Q:        So you [positioned] yourself about fifty meters away from the point of Villa Vicenta Resort?

A:         From the actual location we saw about six personnel walking together loading contraband.

Q:        You said you [were] about fifty meters away from these six persons who were loading contraband, is that what you mean?

A:         Yes sir.

Q:        In that place where you [positioned] yourself, could you tell us, what was the lighting condition in the place where you positioned yourselves?

A:         It was totally dark in our place sir.

Q:        How about the position of the six persons who were loading contraband?

A:         They were well-lighted sir.

Q:        Why do you say that they are well-lighted?

A:         There were several [fluorescent] lamps sir.

Q:        Where?

A:         One search light placed near where they were loading the shipment sir.

Q:        How about the other?

A:         About two fluorescent lamps at the house near the six persons your honor.

COURT:           Are these portable lamps:

A:         Fixed lamps your honor.

Q:        Where else?

A:         Another at the right corner[.] There was also somewhat a multi-purpose house and it [was] well-lighted your honor.

Q:        This is a resort and that multi-purpose house that you are referring to are the cottages of the resort?

A:         Yes your honor.

FISCAL:           You said you saw six persons who were loading goods[.] In what vehicle [were they] transferring those things?

A:         Into [an] L-300 van sir.

Q:        What is the color of the van?

A:         White sir.

Q:        What did you see that these six persons [were] loading?

A:         We saw [them] holding white plastic with white substance your honor.

Q:        What container [were they] loading?

A:         Actually there were several checkered bags and other plastic [bags] sir.

Q:        How [were] they loading these bags?

A:         [Manually] your honor.

Q:        Will you please describe how they [were] loading it, Mr. Witness?

A:         Actually the plastic bags [some were] repacked [into] checkered [bags] while others [were] loading inside the checkered bag sir.

Q:        Did they put that on their shoulder or what?

A:         Holding and holding [sic] sir.

Q:        Nobody carrying [it] on their back?

A:         Nobody sir.

x x x x 

Q:        You said you saw these six persons, will you please look around this courtroom and tell us if these six persons that you are referring to are present?

COURT:           Considering that there are many persons inside this courtroom, will you please stand up and please [tap] the shoulder of these six persons?

x x x x             

INTERPRETER:           Witness tapped the [shoulders] of six male persons inside the courtroom.

x x x x

FISCAL:          May we manifest your honor that when these  six persons stood up when their names [were] called on the basis [of] what [was] written [on] the information [were] once tapped on their shoulder by this witness.

The last question I have [is] how long you stayed in this position watching these six persons loading those [products] in the L-300 van?

A:         Ten to fifteen minutes sir.

Q:        Within that period could you tell us what transpired?

A:         I called Major Tabo to inform [him of] what I saw, I called Major Tabo through the hand-held radio sir.

Q:        What was the reply of major Tabo with respect to your information?

A:         He directed me to get closer to these six persons and find out if really the contraband is shabu that was first reported sir.

Q:        So did you in fact go closer?

A:         Yes sir.

Q:        How [close] were you [to] the six persons at the time?

A:         When we were closing [in] somebody noticed us and they were surprised, I immediately shouted “Freeze, don’t move, we are Filipino soldiers,” we further identified [ourselves] sir.

Q:        What was the reaction of the six persons when you shouted those words?

A:         They [froze] sir.

             x x x x 

Q:        When you went closer and they [froze], what happened?

A:         I asked them who among them are English-speaking?

Q:        What was the reply given to you?

A:         Somebody replied “tagalog lang.”

Q:        Who was that person who replied “tagalog lang?”

A:         Chua Shilou Hwan sir.

Q:        Will you please [identify] for us who answered that in [T]agalog?

COURT:          Please [tap] his shoulder.

A:         This man sir.

COURT:          Witness tapped the shoulder of a man who identified himself as Chua Shilou Hwan.

CHUA SHILOU HWAN:        Opo.

FISCAL:          After answering you [with] “tagalog lang,” what happened?

A:         I further asked them “Ano ang dala ninyo?”

Q:        What was the reply?

A:         Chua Shilou Hwan said shabu.

Q:        So [what] did you do next?

A:         I asked them who is their leader, sir.

Q:        What was the reply?

A:         He told me it was Raymond Tan, sir.

Q:        Is he inside this courtroom now?

A:         Yes sir.

COURT:          Please tap [his] shoulder.

 WITNESS:      This man sir.

COURT:          Ikaw ba Raymond Tan?

  INTERPRETER:  A man stood and [nodded] his head.

x x x x 

FISCAL:          Now after they [froze], what did you do?

A:         I inspected the contraband and I found these bags and I immediately called Major Tabo and informed [him of] the matter sir.

Q:        How many bags were you able to confiscate in the scene?

A:         All in all 172 your honor.

Q:        That 172, one of them is the bag in front of you [which] you identified earlier?

A:         Yes sir.

Q:        When you saw that bag could you tell us what particular [contents] attracted you upon seeing these bags?

A:         It was marked by the members (interrupted).

Q:        No what attracted you?

A:         Something crystalline white sir.

Q:        Are you referring to all the bags?
            

A:         All the bags sir.^[9][9] x x x

Evidently, the arresting police officers had probable cause to suspect that accused-appellants were loading and transporting contraband, more so when Hwan, upon being accosted, readily mentioned that they were loading shabu and pointed to Tan as their leader.  Thus, the arrest of accused-appellants––who were caught in flagrante delicto of possessing, and in the act of loading into a white L-300 van, shabu, a prohibited drug under RA 6425, as amended­­––is valid.

In People v. Alunday, we held that when a police officer sees the offense, although at a distance, or hears the disturbances created thereby, and proceeds at once to the scene, he may effect an arrest without a warrant on the basis of Sec. 5(a), Rule 113 of the Rules of Court, as the offense is deemed committed in his presence or within his view.^[10][10]  In the instant case, it can plausibly be argued that accused-appellants were committing the offense of possessing shabu and were in the act of loading them in a white van when the police officers arrested them.  As aptly noted by the appellate court, the crime was committed in the presence of the police officers with the contraband, inside transparent plastic containers, in plain view and duly observed by the arresting officers.  And to write finis to the issue of any irregularity in their warrantless arrest, the Court notes, as it has consistently held, that accused-appellants are deemed to have waived their objections to their arrest for not raising the issue before entering their plea.^[11][11]

Moreover, present in the instant case are all the elements of illegal possession of drugs:  (1) the accused is in possession of an item or object which is identified to be a prohibited drug; (2) such possession is not authorized by law; and (3) the accused freely and consciously possesses the said drug.^[12][12]  Accused-appellants were positively identified in court as the individuals caught loading and possessing illegal drugs.  They were found to be in possession of prohibited drugs without proof that they were duly authorized by law to possess them.  Having been caught in flagrante delicto, there is, therefore, a prima facie evidence of animus possidendi on the part of accused-appellants.^[13][13]  There is, thus, no merit to the argument of the defense that a warrant was needed to arrest accused-appellants.

 Accused-appellants were not able to show that there was any truth to their allegation of a frame-up in rebutting the testimonies of the prosecution witnesses.  They relied on mere denials, in contrast with the testimony of Capt. Ibon, who testified that he and his team saw accused-appellants loading plastic bags with a white crystalline substance into an L-300 van at the Villa Vicenta Resort.  Accused-appellants, except for Tan, claimed that they were ordered by the police officers to act like they were loading bags onto the van. Accused-appellant Tan told a different tale and claims he was arrested inside a restaurant.  But as the trial court found, the persons who could have corroborated their version of events were not presented in court.  The only witness presented by Tan, a tricycle driver whose testimony corroborated Tan’s alone, was not found by the trial court to be credible. 

As no ill motive can be imputed to the prosecution’s witnesses, we uphold the presumption of regularity in the performance of official duties and affirm the trial court’s finding that the police officers’ testimonies are deserving of full faith and credit.  Appellate courts generally will not disturb the trial court’s assessment of a witness’ credibility unless certain material facts and circumstances have been overlooked or arbitrarily disregarded.^[14][14]  We find no reason to deviate from this rule in the instant case.

          On the alleged lack of notice of hearing, it is now too late for accused-appellant Hwan to claim a violation of his right to examine the witnesses against him.  The records show the following exchange on June 26, 2001:

FISCAL LUGTO:

I would like to manifes[t] that Atty. Agoot, counsel of accused Chua Shilou Hwan, waived his right to be present for today’s trial for purposes of identification of the alleged shabu.

ATTY SAVELLANO:

[Are] we made to understand that this hearing is for identification of shabu only?

FISCAL LUGTO:

Yes despite the testimony of the Forensic Chemist, this is for continuation with the direct testimony for purposes of identification which was confiscated or seized by the joint operation of the Military and the PNP at Sariaya, Quezon.

For the record, this [is] for the continuation of the direct testimony of Forensic Chemist Mary Jean Geronimo.^[15][15]

          As the records confirm, accused-appellant Hwan and his counsel were not present when the forensic chemist testified.  The prosecution made a manifestation to the effect that accused-appellant Hwan waived his right to be present at that hearing.  Yet Hwan did not question this before the trial court.  No evidence of deliberate exclusion was shown.  If no notice of hearing were made upon him and his counsel, they should have brought this in issue at the trial, not at the late stage on appeal.

          All told, we hold that the findings of both the RTC and the CA must be affirmed.  The trial court’s determination as to the credibility of witnesses and its findings of fact should be accorded great weight and respect more so when affirmed by the appellate court.  To reiterate, a look at the records shows no facts of substance and value that have been overlooked, which, if considered, might affect the outcome of the instant appeal.  Deference to the trial court’s findings must be made as it was in the position to easily detect whether a witness is telling the truth or not.^[16][16]

Penalty Imposed

          Accused-appellants were each sentenced by the lower court to reclusion perpetua and to pay a fine of PhP 5,000,000.  This is within the range provided by RA 6425, as amended.^[17][17]  We, therefore, affirm the penalty imposed on accused-appellants.

WHEREFORE, the appeal is DENIED.  The CA Decision in CA-G.R. CR-H.C. No. 00485, finding accused-appellants Ng Yik Bun, Kwok Wai Cheng, Chang Chaun Shi, Chua Shilou Hwan, Kan Shun Min, and Raymond S. Tan guilty beyond reasonable doubt of violating Sec. 16, Art. III of RA 6425, as amended, is AFFIRMED IN TOTO.

SO ORDERED.

                                                          PRESBITERO J. VELASCO, JR.

                                                                        Associate Justice

WE CONCUR:

                                                RENATO C. CORONA

       Chief Justice

       Chairperson

TERESITA J. LEONARDO-DE CASTRO     MARIANO C. DEL CASTILLO

                  Associate Justice                                    Associate Justice

JOSE PORTUGAL PEREZ

Associate Justice

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

          Pursuant to Section 13, Article VIII of the Constitution, 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

JOSE MARQUES AND MAXILITE TECHNOLOGIES, INC. VS. FAR EAST BANK AND TRUST COMPANY, FAR EAST BANK INSURANCE BROKERS, INC., AND MAKATI INSURANCE COMPANY (G.R. NO. 171379); FAR EAST BANK AND TRUST COMPANY VS. JOSE MARQUES AND MAXILITE TECHNOLOGIES, INC., (G.R. NO. 171379, 10 JANUARY 2011, CARPIO, J.) SUBJECTS: ESTOPPEL, CONCLUSIVE PRESUMPTIONS. (BRIEF TITLE: MARQUES ET AL. VS. FEBTC ET AL.)

x—————————————————————-x

D E C I S I O N

CARPIO, J.:

The Case

These consolidated petitions for review¹ assail the 31 May 2005 Decision² and the 26 January 2006 Resolution³ of the Court of Appeals-Cebu City in CA-G.R. CV No. 62105. The Court of Appeals affirmed with modifications the 4 September 1998 Decision⁴ of the Regional Trial Court of Cebu City, Branch 58, in Civil Case No. CEB-18979.

The Facts

Maxilite Technologies, Inc. (Maxilite) is a domestic corporation engaged in the importation and trading of equipment for energy-efficiency systems. Jose N. Marques (Marques) is the President and controlling stockholder of Maxilite.

Far East Bank and Trust Co. (FEBTC)⁵ is a local bank which handled the financing and related requirements of Marques and Maxilite. Marques and Maxilite maintained accounts with FEBTC. Accordingly, FEBTC financed Maxilite’s capital and operational requirements through loans secured with properties of Marques under the latter’s name. Among Maxilite’s and Marques’ transactions with FEBTC were:

a. A straight loan in the name of Jose N. Marques for Maxilite at the original principal amount of P1 million. This is secured by real estate mortgage. From said original principal amount, the bank increased it by P300,000.00 about 26 October 1994 to enable the wiping out of Maxilite’s Trust Receipts Account and simplify the remaining accounts into straight loan accounts.

b. A straight loan in the name of Maxilite Technologies, Inc. for a principal amount of P2 million. This is secured with a Real Estate Mortgage of Marques’ residential property.

c. Master Card transactions covering two (2) Master Card Accounts of Marques, and

d. Local credit card transactions covering one credit card account of Marques.⁶

Far East Bank Insurance Brokers, Inc. (FEBIBI) is a local insurance brokerage corporation while Makati Insurance Company⁷ is a local insurance company. Both companies are subsidiaries of FEBTC.⁸

On 17 June 1993, Maxilite and Marques entered into a trust receipt transaction with FEBTC, in the sum of US$80,765.00, for the shipment of various high-technology equipment from the United States,⁹ with the merchandise serving as collateral. The foregoing importation was covered by a trust receipt document signed by Marques on behalf of Maxilite, which pertinently reads:

The undersigned (Marques) further agree(s) to keep said merchandise insured against fire to its full value, payable to the said bank, at the cost and expense of the undersigned, who hereby further agree(s) to pay all charges for storage on said merchandise or any or other expenses incurred thereon.

x x x x¹⁰

Sometime in August 1993, FEBIBI, upon the advice of FEBTC, facilitated the procurement and processing from Makati Insurance Company of four separate and independent fire insurance policies over the trust receipted merchandise: (1) Policy No. BR-F-1016333, issued on 15 September 1993, covering the period 12 August 1993 to 12 November 1993 in the amount of P1,000,000.00;¹¹ (2) Policy No. BR-F-1016888, issued on 15 September 1993 covering the period 8 September 1993 to 8 December 1993 in the amount of P605,494.28;¹² (3) Policy No. BR-F-1016930, issued on 18 October 1993, covering the period 14 October 1993 to 12 January 1994 in the amount of P527,723.66;¹³ and (4) Policy No. BR-F-1018392, issued on 14 December 1993, covering the period 1 December 1993 to 1 March 1994 in the amount of P725,000.00.¹⁴ Maxilite paid the premiums for these policies through debit arrangement. FEBTC would debit Maxilite’s account for the premium payments, as reflected in statements of accounts sent by FEBTC to Maxilite.

On 19 August 1994, Insurance Policy No. 1024439, covering the period 24 June 1994 to 24 June 1995, was released to cover the trust receipted merchandise. The policy relevantly provides:

2.      This policy including any renewal thereof and/or any endorsement thereon is not in force until the premium has been fully paid to and duly receipted by the Company in the manner provided herein.

Any supplementary agreement seeking to amend this condition prepared by agent, broker or Company official, shall be deemed invalid and of no effect.¹⁵

Finding that Maxilite failed to pay the insurance premium in the sum of P8,265.60 for Insurance Policy No. 1024439 covering the period 24 June 1994 to 24 June 1995, FEBIBI sent written reminders to FEBTC, dated 19 October 1994,¹⁶ 24 January 1995,¹⁷ and 6 March 1995, to debit Maxilite’s account.¹⁸

On 24 and 26 October 1994, Maxilite fully settled its trust receipt account.

On 9 March 1995, a fire gutted the Aboitiz Sea Transport Building along M.J. Cuenco Avenue, Cebu City, where Maxilite’s office and warehouse were located. As a result, Maxilite suffered losses amounting to at least P2.1 million, which Maxilite claimed against the fire insurance policy with Makati Insurance Company. Makati Insurance Company denied the fire loss claim on the ground of non-payment of premium. FEBTC and FEBIBI disclaimed any responsibility for the denial of the claim.

Maxilite and Marques sued FEBTC, FEBIBI, and Makati Insurance Company. Maxilite prayed for (1) actual damages totaling P2.3 million representing full insurance coverage and “business opportunity losses,” (2) moral damages, and (3) exemplary damages.¹⁹ On the other hand, Marques sought payment of actual, moral and exemplary damages, attorney’s fees, and litigation expenses. Maxilite and Marques also sought the issuance of a preliminary injunction or a temporary restraining to enjoin FEBTC from (1) imposing penalties on their obligations; (2) foreclosing the real estate mortage securing their straight loan accounts; and (3) initiating actions to collect their obligations.

FEBTC, FEBIBI, and Makati Insurance Company countered that Maxilite and Marques have no cause of action against them and essentially denied the allegations in the complaint.

The Ruling of the Trial Court

In ruling in favor of Maxilite and Marques, the Regional Trial Court of Cebu City, Branch 58, explained:

Considering the interest of the defendant FEBTC in the property insured, hence, its concern that the insurance policy therefor has to be effected and enforceable, and considering that the payment of the premium thereof was the procedure adopted by debiting the plaintiffs’ account, the Court is of the view that the non-payment of the premium of the insurance policy in question was due to the fault or negligence of the defendant FEBTC. What could have happened to the interest of the defendant FEBTC in the insurance policy in question had the fire occurred prior to the full settlement and payment of plaintiff’s Maxilite trust receipt account? Would defendant FEBTC have tossed the blame on the non-payment of premium to the plaintiffs?

Although there were reminders by defendant FEBIBI of the non-payment of the premium, the same were made by said defendant through the defendant FEBTC and not to the plaintiffs directly. Despite said reminders, the first of which was made on October 19, 1994 when plaintiff Maxilite has sufficient fund in its trust receipt account, defendant FEBTC did not heed the same and more so did it not care to pay the premium after the plaintiff Maxilite fully and finally settled its trust receipt account with defendant FEBTC as the latter has already lost its interest in the insurance policy in question by virtue of said full payment. But despite the non-payment of the insurance premium, the defendant Makati Insurance did not cancel the policy in question nor informed plaintiffs of its cancellation if the insurance premium should not be paid. Just as defendant FEBIBI failed to notify directly the plaintiffs of the said non-payment. Considering the relationship of the three (3) defendants herein, as undeniably sister companies, the non-payment of the premium of the insurance policy in question should be imputable to their fault or negligence. Under the factual milieu in the case at bar, the Court finds it just and equitable to hold said defendants liable to pay all the consequent damages suffered by the plaintiffs and their liability is solidary (Art. 2194, Civil Code).²⁰

The trial court disposed of the case as follows:

WHEREFORE, premises considered, judgment is hereby rendered ordering the defendants to pay jointly and severally to the plaintiff Maxilite the sum of Two Million One Hundred Thousand Pesos (P2,100,000.00), Philippine Currency, representing the full coverage of Insurance Policy No. 1024439 (Exh. ‘A’), as actual damages, plus interest of 12% per annum from filing of Complaint on July 11, 1996 until fully paid, to the plaintiff Marque[s] the sum of P400,000.00 as moral damages, to both plaintiffs the sum of P500,000.00 as exemplary damages, the sum of P50,000.00 as attorney’s fees, the sum of P23,082.50, representing the filing fees, as litigation expenses, and to pay the costs.

The counter-claims are hereby dismissed.

The writ of preliminary injunction is hereby made permanent.

SO ORDERED.²¹

The Ruling of the Court of Appeals

The Court of Appeals affirmed the trial court’s decision, with modifications, on the following grounds:

First, the relations among defendants with each other are closely related and so intertwined. The said three defendants, FEBTC, FEBIBI and MICI, are sister companies. This was never denied by the defendants themselves.

Second, the insurance coverage was the business of sister companies FEBIBI and Makati Insurance, not with FEBTC, which has been the bank of plaintiffs which handled the latter’s financing and related transactions. Stated a bit differently, defendant FEBTC handled the financing and related requirements of plaintiffs; defendant FEBIBI on the other hand is an insurance brokerage company of defendant FEBTC, while Makati Insurance is the insurance (arm) company of both defendants FEBIBI and FEBTC.

Third, defendant FEBTC caused FEBIBI to facilitate the insurance coverage of plaintiffs. FEBIBI then asked Makati Insurance to issue the subject policy. Makati Insurance delivered the policy to FEBIBI which it tasked with the collection of premium. FEBIBI in turn delivered the policy to FEBTC from where it sought the payment of the premiums.

Fourth, it must be noted that the cover note and policy was supposedly issued and made effective on June 24, 1994, when the trust receipt account was still outstanding and the insured merchandise was still theoretically owned by the bank. Thus, for all intents and purposes, it was to the best interest and protection of the bank to see to it that the goods were properly covered by insurance.

Fifth, the payment of premium has never been made an issue when the subject policy was still separated into three. Or even after the said consolidation into one policy (No. 1024439), still, payment of the premium has never become an issue.

x x x x

For another, if We were to believe defendants’ claim that the premium for the subject policy was not paid, then defendants should have cancelled the policy long before. But even up to the time the fire gutted plaintiffs’ warehouse in March 1995, defendants acknowledged that the subject policy remained effective. x x x

Furthermore, there was no notice of cancellation or any communication from defendants sent to plaintiffs that the policy shall be cancelled because of non-payment of premiums. Thus, the more reasonable and logical conclusion is that the subject policy was still fully in force because plaintiffs are still paying its premiums and defendants are collecting the same through debit account.²²

The Court of Appeals disposed of the case as follows:

UPON THE VIEW WE TAKE OF THIS CASE, judgment appealed from is hereby MODIFIED in such that:

a. the interest shall be at the rate of six percent (6%) per annum to run from the time of demand on April 11, 1995, in accordance with Article 1589 of the Civil Code, until the finality of this decision;

b. the moral damages of P400,000.00 is reduced to P50,000.00;

c. the exemplary damages of P500,000.00 is reduced to P50,000.00; and

d. the writ of preliminary injunction previously issued lifted and set aside.

In all other respects, judgment appealed from is AFFIRMED. Without pronouncement as to costs.

SO ORDERED.²³

Hence, these petitions.

The Issues

In G.R. No. 171379, petitioners assail the Court of Appeals’ reduction of (1) the interest rate from 12% to 6% per annum to be imposed on respondents’ liabilities; and (2) the award of moral and exemplary damages. Petitioners also question the portion of the Court of Appeals’ judgment allowing FEBTC to foreclose the real estate mortgage securing petitioners’ loans and disallowing legal compensation for the parties’ mutual obligations.

In G.R. No. 171419, petitioners challenge the Court of Appeals’ findings that (1) the premium for the subject insurance policy has in fact been paid; (2) FEBTC, FEBIBI and Makati Insurance Company are jointly and severally liable to pay respondents the full coverage of the subject insurance policy despite (a) their separate juridical personalities; (b) the absence of any fault or negligence on their part; and (c) respondents’ failure to prove the extent of the alleged loss. Petitioners further impugn the award of damages and attorney’s fees.

The Court’s Ruling

The petition in G.R. No. 171319 lacks merit, whereas the petition in G.R. No. 171419 is partially meritorious.

Essentially, Maxilite and Marques invoke estoppel in claiming against FEBTC, FEBIBI, and Makati Insurance Company the face value of the insurance policy. In their complaint, Maxilite and Marques alleged they were led to believe and they in fact believed that the settlement of Maxilite’s trust receipt account included the payment of the insurance premium.²⁴ Maxilite and Marques faulted FEBTC “if it failed to transmit the premium payments on subject insurance coverage contrary to its represented standard operating procedure of solely handling the insurance coverage and past practice of debiting [Maxilite’s] account.”²⁵

Article 1431 of the Civil Code defines estoppel as follows:
Art. 1431. Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon.

Meanwhile, Section 2(a), Rule 131 of the Rules of Court provides:

SEC. 2. Conclusive presumptions. – The following are instances of conclusive presumptions:

(a) Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing is true, and to act upon such belief, he cannot, in any litigation arising out of such declaration, act or omission, be permitted to falsify it.

In estoppel, a party creating an appearance of fact, which is false, is bound by that appearance as against another person who acted in good faith on it.²⁶ Estoppel is based on public policy, fair dealing, good faith and justice.²⁷ Its purpose is to forbid one to speak against his own act, representations, or commitments to the injury of one who reasonably relied thereon.²⁸ It springs from equity, and is designed to aid the law in the administration of justice where without its aid injustice might result.²⁹

In Santiago Syjuco, Inc. v. Castro,³⁰ the Court stated that “estoppel may arise from silence as well as from words.” ‘Estoppel by silence’ arises where a person, who by force of circumstances is obliged to another to speak, refrains from doing so and thereby induces the other to believe in the existence of a state of facts in reliance on which he acts to his prejudice.³¹ Silence may support an estoppel whether the failure to speak is intentional or negligent.³²

Both trial and appellate courts basically agree that FEBTC is estopped from claiming that the insurance premium has been unpaid. That FEBTC induced Maxilite and Marques to believe that the insurance premium has in fact been debited from Maxilite’s account is grounded on the the following facts: (1) FEBTC represented and committed to handle Maxilite’s financing and capital requirements, including the related transactions such as the insurance of the trust receipted merchandise; (2) prior to the subject Insurance Policy No. 1024439, the premiums for the three separate fire insurance policies had been paid through automatic debit arrangement; (3) FEBIBI sent FEBTC, not Maxilite nor Marques, written reminders dated 19 October 1994, 24 January 1995, and 6 March 1995 to debit Maxilite’s account, establishing FEBTC’s obligation to automatically debit Maxilite’s account for the premium amount; (4) there was no written demand from FEBTC or Makati Insurance Company for Maxilite or Marques to pay the insurance premium; (5) the subject insurance policy was released to Maxilite on 19 August 1994; and (6) the subject insurance policy remained uncancelled despite the alleged non-payment of the premium, making it appear that the insurance policy remained in force and binding.

Moreover, prior to the full settlement of the trust receipt account on 24 and 26 October 1994, FEBTC had insurable interest over the merchandise, and thus had greater reason to debit Maxilite’s account. Further, as found by the trial court, and apparently undisputed by FEBTC, FEBIBI and Makati Insurance Company, Maxilite had sufficient funds at the time the first reminder, dated 19 October 1994, was sent by FEBIBI to FEBTC to debit Maxilite’s account for the payment of the insurance premium. Since (1) FEBTC committed to debit Maxilite’s account corresponding to the insurance premium; (2) FEBTC had insurable interest over the property prior to the settlement of the trust receipt account; and (3) Maxilite’s bank account had sufficient funds to pay the insurance premium prior to the settlement of the trust receipt account, FEBTC should have debited Maxilite’s account as what it had repeatedly done, as an established practice, with respect to the previous insurance policies. However, FEBTC failed to debit and instead disregarded the written reminder from FEBIBI to debit Maxilite’s account. FEBTC’s conduct clearly constitutes negligence in handling Maxilite’s and Marques’ accounts. Negligence is defined as “the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent man and reasonable man could not do.”³³

As a consequence of its negligence, FEBTC must be held liable for damages pursuant to Article 2176 of the Civil Code which states “whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done.” Indisputably, had the insurance premium been paid, through the automatic debit arrangement with FEBTC, Maxilite’s fire loss claim would have been approved. Hence, Maxilite suffered damage to the extent of the face value of the insurance policy or the sum of P2.1 million.

Contrary to Maxilite’s and Marques’ view, FEBTC is solely liable for the payment of the face value of the insurance policy and the monetary awards stated in the Court of Appeals’ decision. Suffice it to state that FEBTC, FEBIBI, and Makati Insurance Company are independent and separate juridical entities, even if FEBIBI and Makati Insurance Company are subsidiaries of FEBTC. Absent any showing of its illegitimate or illegal functions, a subsidiary’s separate existence shall be respected, and the liability of the parent corporation as well as the subsidiary shall be confined to those arising in their respective business.³⁴ Besides, the records are bereft of any evidence warranting the piercing of corporate veil in order to treat FEBTC, FEBIBI, and Makati Insurance Company as a single entity. Likewise, there is no evidence showing FEBIBI’s and Makati Insurance Company’s negligence as regards the non-payment of the insurance premium.

The Court agrees with the Court of Appeals in reducing the interest rate from 12% to 6% as the obligation to pay does not arise from a loan or forbearance of money. In Eastern Shipping Lines, Inc. v. Court of Appeals,³⁵ the Court laid down the following guidelines for the application of the proper interest rates:

I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on “Damages” of the Civil Code govern in determining the measure of recoverable damages.

II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:

1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.

2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be . . . the amount finally adjudged.

3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to forbearance of credit. (Emphasis supplied)

With respect to Maxilite’s and Marques’ invocation of legal compensation, we find the same devoid of merit. Aside from their bare allegations, there is no clear and convincing evidence that legal compensation exists in this case. In other words, Maxilite and Marques failed to establish the essential elements of legal compensation. Therefore, Maxilite’s and Marques’ claim of legal compensation must fail.

WHEREFORE, we AFFIRM with MODIFICATION the 31 May 2005 Decision and the 26 January 2006 Resolution of the Court of Appeals-Cebu City in CA-G.R. CV No. 62105. Only Far East Bank and Trust Company, and not Far East Bank Insurance Brokers, Inc. or Makati Insurance Company, is ORDERED to PAY the face value of the subject insurance policy and the monetary awards stated in the Court of Appeals’ decision.

SO ORDERED.

ANTONIO T. CARPIO

Associate Justice

WE CONCUR:

ARTURO D. BRION

Associate Justice

DIOSDADO M. PERALTA ROBERTO A. ABAD

Associate Justice Associate Justice

JOSE C. MENDOZA

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

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

* Designated additional member per Raffle dated 9 June 2010.

1 Under Rule 45 of the Rules of Court.

2 Rollo (G.R. No. 171419), pp. 94-113. Penned by Associate Justice Vicente L. Yap, with Associate Justices Isaias P. Dicdican and Enrico A. Lanzanas concurring.

3 Id. at 114-118.

4 Id. at 631-664. Penned by Judge Jose P. Soberano, Jr.

5 FEBTC has been merged with Bank of the Philippine Islands (BPI), which is the surviving corporation.

6 Rollo (G.R. No. 171379), p. 157.

7 Now known as BPI/MS Insurance Corporation (BPI/MS-IC), id. at 198.

8 Rollo (G.R. No. 171419), p. 330; TSN, 9 February 1998, p. 20.

9 Id. at 251.

10 Id. at 225; TSN, 31 July 1997, p. 8 (Benjamin Torno).

11 Id. at 306.

12 Id. at 309.

13 Id. at 310.

14 Id. at 308.

15 Id. at 414.

16 Id. at 403.

17 Id. at 404.

18 Id. at 405.

19 Id. at 616-617.

20 Id. at 661-662.

21 Id. at 663-664.

22 Id. at 107-109.

23 Id. at 112-113.

24 Id. at 605.

25 Id. at 608.

26 Aquino, Ramon C., The Civil Code of the Philippines, Vol. 2, 1990 Edition, p. 508, citing Strong v. Gutierrez Repide, 6 Phil. 680, 685.

27 Id. at 509.

28 Id.

29 Id., citing 28 Am Jur 2^nd 28; PNB v. Perez, 183 Phil. 54 (1979); Lazo v. Republic Surety & Ins. Co., Inc., 142 Phil. 158 (1970).

30 G.R. No. 70403, 7 July 1989, 175 SCRA 171, 192, citing 31 C.J.S., pp. 490-494.

31 Id.

32 Id.

33 Bank of the Philippine Islands v. Suaez, G.R. No. 167750, 15 March 2010, 615 SCRA 291, 298.

34 Nisce v. Equitable PCI Bank, Inc., G.R. No. 167434, 19 February 2007, 516 SCRA 231, 258.

35 G.R. No. 97412, 12 July 1994, 234 SCRA 78, 95-97.

MILAGROS SALTING VS. JOHN VELEZ AND CLARISSA R. VELEZ (G.R. NO. 181930, 10 JANUARY 2011, NACHURA, J.)

SUBJECTS: NOTICE TO COUNSEL WHO DIED; EJECTMENT) BRIEF TITLE: SALTING VS. VELEZ ET AL.

x————————————————————x

DECISION

NACHURA, J.:

          This is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to annul and set aside the Court of Appeals (CA) Decision^[1][1] dated November 29, 2007 and Resolution^[2][2] dated February 27, 2008 in CA-G.R. SP No. 97618.

The factual and procedural antecedents leading to the instant petition are as follows:

          On October 7, 2003, respondents John Velez and Clarissa Velez filed a complaint^[3][3] for ejectment against petitioner Milagros Salting involving a property covered by Transfer Certificate of Title (TCT) No. 38079. The case was docketed as Civil Case No. 2524. On March 28, 2006, respondents obtained a favorable decision^[4][4] when the Metropolitan Trial Court (MeTC), Branch LXXIV, of Taguig City, Metro Manila, ordered petitioner to vacate the subject parcel of land and to pay attorney’s fees and costs of suit. The decision became final and executory, after which respondents filed a motion for execution which was opposed by petitioner.

 Thereafter, petitioner instituted an action before the Regional Trial Court (RTC), Branch 153, for Annulment of Sale of the Property covered by  TCT No. 38079, with prayer for the issuance of a Temporary Restraining Order (TRO) and/or Writ of Preliminary Injunction against respondents, Hon. Ma. Paz Yson, Deputy Sheriff Ernesto G. Raymundo, Jr., Teresita Diokno-Villamena, and Heirs of Daniel B. Villamena (Heirs of Villamena).^[5][5] The case was docketed as Civil Case No. 70859-TG. Petitioner claimed that she purchased the subject parcel of land from Villamena as evidenced by a notarized document known as Sale of Real Estate. She further explained that respondents were able to obtain title to the subject property through the fraudulent acts of the heirs of Villamena. Finally, she averred that the decision in Civil Case No. 2524 had not attained finality as she was not properly informed of the MeTC decision. Petitioner thus prayed that a TRO be issued, restraining respondents and all persons acting for and in their behalf from executing the MeTC decision dated March 28, 2006. She further sought the declaration of nullity of the sale by the heirs of Villamena to respondents involving the subject parcel of land, and, consequently, the cancellation of the title to the property in the name of respondents.

          Finding that petitioner would suffer grave and irreparable damage if respondents would not be enjoined from executing the March 28, 2006 MeTC decision while respondents would not suffer any prejudice, the RTC, in an Order dated October 26, 2006, granted the writ of preliminary injunction applied for.^[6][6] Aggrieved, respondents filed a special civil action for certiorari under Rule 65 of the Rules of Court before the CA, raising the sole issue of whether or not the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the writ of preliminary injunction against the execution of a judgment for ejectment.

          In a Decision^[7][7] dated November 29, 2007, the CA resolved the issue in the affirmative. The CA noted that the principal action in Civil Case No. 70859-TG is the annulment of the deed of sale executed between respondents and the heirs of Villamena, while the subject of the ancillary remedy of preliminary injunction is the execution of the final judgment in a separate proceeding for ejectment in Civil Case No. 2524. The appellate court concluded that petitioner had no clear and unmistakable right to possession over the subject parcel of land in view of the March 28, 2006 MeTC decision. Hence, contrary to the conclusion of the RTC, the CA opined that petitioner was not entitled to the writ of preliminary injunction. The CA thus set aside the October 26, 2006 Order of the RTC.

          Petitioner now comes before this Court in this petition for review on certiorari under Rule 45 of the Rules of Court, claiming that:         

          In rendering the assailed Decision and Resolution, the Court of Appeals has decided in a way probably not in accord with law or with the applicable decisions of the Supreme Court. (Section 6 (a), Rule 45, 1997 Rule[s] of Civil Procedure). The Court of Appeals disregarded the rule that service of decision to a deceased lawyer is invalid and that the party must be duly served by the final judgment in order that the final judgment will become final and executory. The Court of Appeals, likewise, disregarded the existence of a clear and existing right of the petitioner which should be protected by an injunctive relief and the rule that the pendency of an action assailing the right of a party to eject will justify the suspension of the proceedings of the ejectment case.^[8][8]  

Petitioner claims that she was denied her right to appeal when the March 28, 2006 MeTC decision was declared final and executory despite the fact that the copy of the decision was served on her deceased counsel. She further claims that the MeTC decision had not attained finality due to improper service of the decision. Moreover, petitioner avers that she has a clear and existing right and interest over the subject property which should be protected by injunction. Finally, petitioner argues that jurisprudence allows the suspension of proceedings in an ejectment case at whatever stage when warranted by the circumstances of the case.

In their Comment,^[9][9] respondents allege that the petition is already moot and academic in view of the execution of the MeTC decision. They claim that it is not proper to restrain the execution of the MeTC decision as the case instituted before the RTC was for the annulment of the sale executed between respondents and the heirs of Villamena, and not an action for annulment of judgment or mandamus to compel the MeTC to entertain her belated appeal. Respondents add that the finality of the ejectment case is not a bar to the case instituted for the annulment of the sale and the eventual recovery of ownership of the subject property. The actions for ejectment and for annulment of sale are two different cases that may proceed independently, especially when the judgment in the ejectment case had attained finality, as in the instant case. Finally, respondents fault the petitioner herself for not informing the MeTC of the death of her former counsel the moment she learned of such death.

We find no merit in the petition.

.

We first determine the validity of the service of the March 28, 2006 MeTC decision on petitioner’s counsel who, as of that date, was already deceased. If a party to a case has appeared by counsel, service of pleadings and judgments shall be made upon his counsel or one of them, unless service upon the party himself is ordered by the court.^[10][10]  Thus, when the MeTC decision was sent to petitioner’s counsel, such service of judgment was valid and binding upon petitioner, notwithstanding the death of her counsel.  It is not the duty of the courts to inquire, during the progress of a case, whether the law firm or partnership continues to exist lawfully, the partners are still alive, or its associates are still connected with the firm.^[11][11] Litigants, represented by counsel, cannot simply sit back, relax, and await the outcome of their case.^[12][12] It is the duty of the party-litigant to be in contact with her counsel from time to time in order to be informed of the progress of her case.^[13][13] It is likewise the duty of the party to inform the court of the fact of her counsel’s death. Her failure to do so means that she is negligent in the protection of her cause, and she cannot pass the blame to the court which is not tasked to monitor the changes in the circumstances of the parties and their counsels.

          It is noteworthy that when petitioner came to know of the death of her counsel and upon obtaining the services of a new counsel, petitioner instituted another action for the annulment of the deed of sale between her and the heirs of Villamena, instead of questioning the MeTC decision  through an action for annulment of judgment. Obviously, the annulment case instituted by petitioner is separate and distinct from the ejectment case filed by respondents. She cannot, therefore, obtain relief through the second case for alleged errors and injustices committed in the first case.

With the foregoing disquisition, we find that the March 28, 2006 MeTC decision had, indeed, become final and executory. A final and executory decision can only be annulled by a petition to annul the same on the ground of extrinsic fraud and lack of jurisdiction, or by a petition for relief from a final order or judgment under Rule 38 of the Rules of Court. However, no petition to that effect was filed.^[14][14] Well-settled is the rule that once a judgment becomes final and executory, it can no longer be disturbed, altered, or modified in any respect except to correct clerical errors or to make nunc pro tunc entries. Nothing further can be done to a final judgment except to execute it.^[15][15]

          In the present case, the finality of the March 28, 2006 decision with respect to possession de facto cannot be affected by the pendency of the annulment case where the ownership of the property is being contested.^[16][16] We are inclined to adhere to settled jurisprudence that suits involving ownership may not be successfully pleaded in abatement of the enforcement of the final decision in an ejectment suit. The rationale of the rule has been explained in this wise:

This rule is not without good reason. If the rule were otherwise, ejectment cases could easily be frustrated through the simple expedient of filing an action contesting the ownership over the property subject of the controversy. This would render nugatory the underlying philosophy of the summary remedy of ejectment which is to prevent criminal disorder and breaches of the peace and to discourage those who, believing themselves entitled to the possession of the property, resort to force rather than to some appropriate action in court to assert their claims.^[17][17]

Unlawful detainer and forcible entry suits under Rule 70 of the Rules of Court are designed to summarily restore physical possession of a piece of land or building to one who has been illegally or forcibly deprived thereof, without prejudice to the settlement of the parties’ opposing claims of juridical possession in appropriate proceedings.^[18][18] 

Finally, as aptly held by the CA, petitioner is not entitled to a writ of preliminary injunction to restrain the execution of the MeTC decision. Section 3, Rule 58 of the Rules of Court enumerates the grounds for the issuance of preliminary injunction, viz.:

SEC. 3. Grounds for issuance of preliminary injunction. – A preliminary injunction may be granted when it is established:

(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually;

(b) That the commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or

(c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual.

And as clearly explained in Ocampo v. Sison Vda. de Fernandez^[19][19] ¾

To be entitled to the injunctive writ, the applicant must show that there exists a right to be protected which is directly threatened by an act sought to be enjoined. Furthermore, there must be a showing that the invasion of the right is material and substantial and that there is an urgent and paramount necessity for the writ to prevent serious damage. The applicant’s right must be clear and unmistakable. In the absence of a clear legal right, the issuance of the writ constitutes grave abuse of discretion. Where the applicant’s right or title is doubtful or disputed, injunction is not proper. The possibility of irreparable damage without proof of an actual existing right is not a ground for injunction.

A clear and positive right especially calling for judicial protection must be shown. Injunction is not a remedy to protect or enforce contingent, abstract, or future rights; it will not issue to protect a right not in esse and which may never arise, or to restrain an act which does not give rise to a cause of action. There must exist an actual right. There must be a patent showing by the applicant that there exists a right to be protected and that the acts against which the writ is to be directed are violative of said right.^[20][20] 

In this case, the enforcement of the writ of execution which would evict petitioner from her residence is manifestly prejudicial to her interest. However, she possesses no legal right that merits the protection of the courts through the writ of preliminary injunction. Her right to possess the property in question has been declared inferior or inexistent in relation to respondents in the ejectment case in the MeTC decision which has become final and executory.^[21][21]

In any event, as manifested by respondents, the March 28, 2006 MeTC decision has already been executed. Hence, there is nothing more to restrain.

WHEREFORE, premises considered, the petition is DENIED for lack of merit. The Court of Appeals Decision dated November 29, 2007 and Resolution dated February 27, 2008 in CA-G.R. SP No. 97618 are AFFIRMED.

SO ORDERED.

                                      ANTONIO EDUARDO B. NACHURA

                                      Associate Justice

 WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

Chairperson

JOSE CATRAL MENDOZA

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