J.A.B. Bulao & Associates

CASE 2012-0039: F.F. CRUZ & CO., INC. VS.       HR CONSTRUCTION CORP. (G.R. NO. 187521, MARCH 14, 2012, REYES, J.) SUBJECT/S: GENERALLY, THE ARBITRAL AWARD OF CIAC IS FINAL AND MAY NOT BE APPEALED; ISSUES ON THE PROPER INTERPRETATION OF THE TERMS OF THE SUBCONTRACT AGREEMENT INVOLVE QUESTIONS OF LAW; WHAT ARE QUESTIONS OF LAW, QUESTIONS OF FACTS.  (BRIEF TITLE: F.F. CRUZ VS. HR CONSTRUCTION).

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DISPOSITIVE:

WHEREFORE, in consideration of the foregoing disquisitions, the Decision dated February 6, 2009 and Resolution dated April 13, 2009 of the Court of Appeals in CA-G.R. SP No. 91860 are hereby AFFIRMED with MODIFICATION that the arbitration costs shall be shared equally by the parties herein.

          SO ORDERED.

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Republic of thePhilippines

Supreme Court

Manila

SECOND DIVISION

 x—————————————————————————————-x

DECISION

REYES, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by petitioner F.F. Cruz & Co., Inc. (FFCCI) assailing the Decision^[1][1] dated February 6, 2009 and Resolution^[2][2] dated April 13, 2009 issued by the Court of Appeals (CA) in CA-G.R. SP No. 91860.

The Antecedent Facts

Sometime in 2004, FFCCI entered into a contract with the Department of Public Works and Highways (DPWH) for the construction of the Magsaysay Viaduct, known as the Lower Agusan Development Project. On August 9, 2004, FFCCI, in turn, entered into a Subcontract Agreement^[3][3] with HR Construction Corporation (HRCC) for the supply of materials, labor, equipment, tools and supervision for the construction of a portion of the said project called the East Bank Levee and Cut-Off Channel in accordance with the specifications of the main contract.

The subcontract price agreed upon by the parties amounted to P31,293,532.72. Pursuant to the Subcontract Agreement, HRCC would submit to FFCCI a monthly progress billing which the latter would then pay, subject to stipulated deductions, within 30 days from receipt thereof.

The parties agreed that the requests of HRCC for payment should include progress accomplishment of its completed works as approved by FFCCI. Additionally, they agreed to conduct a joint measurement of the completed works of HRCC together with the representative of DPWH and consultants to arrive at a common quantity.

Thereafter, HRCC commenced the construction of the works pursuant to the Subcontract Agreement.

On September 17, 2004, HRCC submitted to FFCCI its first progress billing in the amount of P2,029,081.59 covering the construction works it completed from August 16 to September 15, 2004.^[4][4] However, FFCCI asserted that the DPWH was then able to evaluate the completed works of HRCC only until July 25, 2004. Thus, FFCCI only approved the gross amount of P423,502.88 for payment. Pursuant to the Subcontract Agreement, FFCCI deducted from the said gross amount P42,350.29 for retention and P7,700.05 for expanded withholding tax leaving a net payment in the amount of P373,452.54. This amount was paid by FFCCI to HRCC on December 3, 2004.^[5][5]

FFCCI and the DPWH then jointly evaluated the completed works of HRCC for the period of July 26 to September 25, 2004. FFCCI claimed that the gross amount due for the completed works during the said period was P2,008,837.52. From the said gross amount due, FFCCI deducted therefrom P200,883.75 for retention and P36,524.07 for expanded withholding tax leaving amount of P1,771,429.45 as the approved net payment for the said period.  FFCCI paid this amount on December 21, 2004.^[6][6]

On October 29, 2004, HRCC submitted to FFCCI its second progress billing in the amount of P1,587,760.23 covering its completed works from September 18 to 25, 2004.^[7][7] FFCCI did not pay the amount stated in the second progress billing, claiming that it had already paid HRCC for the completed works for the period stated therein.

On even date, HRCC submitted its third progress billing in the amount of P2,569,543.57 for its completed works from September 26 to October 25, 2004.^[8][8] FFCCI did not immediately pay the amount stated in the third progress billing, claiming that it still had to evaluate the works accomplished by HRCC.

On November 25, 2004, HRCC submitted to FFCCI its fourth progress billing in the amount of P1,527,112.95 for the works it had completed from October 26 to November 25, 2004.

Subsequently, FFCCI, after it had evaluated the completed works of HRCC from September 26 to November 25, 2004, approved the payment of the gross amount of P1,505,570.99 to HRCC. FFCCI deducted therefrom P150,557.10 for retention and P27,374.02 for expanded withholding tax leaving a net payment of P1,327,639.87, which amount was paid to HRCC on March 11, 2005.^[9][9]

Meanwhile, HRCC sent FFCCI a letter^[10][10] dated December 13, 2004 demanding the payment of its progress billings in the total amount of P7,340,046.09, plus interests, within three days from receipt thereof. Subsequently, HRCC completely halted the construction of the subcontracted project after taking its Christmas break on December 18, 2004.

On March 7, 2005, HRCC, pursuant to the arbitration clause in the Subcontract Agreement, filed with the Construction Industry Arbitration Commission (CIAC) a Complaint^[11][11] against FFCCI praying for the payment of the following: (1) overdue obligation in the reduced amount of P4,096,656.53 as of December 15, 2004 plus legal interest; (2) P1,500,000.00 as attorney’s fees; (3) P80,000.00 as acceptance fee and representation expenses; and (4) costs of litigation.

In its Answer,^[12][12] FFCCI claimed that it no longer has any liability on the Subcontract Agreement as the three payments it made to HRCC, which amounted to P3,472,521.86, already represented the amount due to the latter in view of the works actually completed by HRCC as shown by the survey it conducted jointly with the DPWH. FFCCI further asserted that the delay in the payment processing was primarily attributable to HRCC inasmuch as it presented unverified work accomplishments contrary to the stipulation in the Subcontract Agreement regarding requests for payment.

Likewise, FFCCI maintained that HRCC failed to comply with the condition stated under the Subcontract Agreement for the payment of the latter’s progress billings, i.e. joint measurement of the completed works, and, hence, it was justified in not paying the amount stated in HRCC’s progress billings.

On June 16, 2005, an Arbitral Tribunal was created composed of Engineer Ricardo B. San Juan, Joven B. Joaquin and Attorney Alfredo F. Tadiar, with the latter being appointed as the Chairman.

In a Preliminary Conference held on July 5, 2005, the parties defined the issues to be resolved in the proceedings before the CIAC as follows:

1. What is the correct amount of [HRCC’s] unpaid progress billing?

1. Did [HRCC] comply with the conditions set forth in subparagraph 4.3 of the Subcontract Agreement for the submission, evaluation/processing and release of payment of its progress billings?

1. Did [HRCC] stop work on the project?

3.1     If so, is the work stoppage justified?

3.2     If so, what was the percentage and value of [HRCC’s] work accomplishment at the time it stopped work on the project?

1. Who between the parties should bear the cost of arbitration or in what proportion should it be shared by the parties?^[13][13]

Likewise, during the said Preliminary Conference, HRCC further reduced the amount of overdue obligation it claimed from FFCCI to P2,768,916.66. During the course of the proceedings before the CIAC, HRCC further reduced the said amount to P2,635,397.77 – the exact difference between the total amount of HRCC’s progress billings (P6,107,919.63) and FFCCI’s total payments in favor of the latter (P3,472,521.86).

The CIAC Decision

On September 6, 2005, after due proceedings, the CIAC rendered a Decision^[14][14] in favor of HRCC, the decretal portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the Claimant HR CONSTRUCTION CORPORATION and AWARD made on its monetary claim against Respondent F.F. CRUZ & CO., INC., as follows:

[P]2,239,452.63          as the balance of its unpaid billings and

        101,161.57          as reimbursement of the arbitration costs.

[P]2,340,614.20          Total due the Claimant

Interest on the foregoing amount [P]2,239,452.63 shall be paid at the rate of 6% per annum from the date of this Decision. After finality of this Decision, interest at the rate of 12% per annum shall be paid thereon until full payment of the awarded amount shall have been made x x x.

SO ORDERED.^[15][15]

The CIAC held that the payment method adopted by FFCCI is actually what is known as the “back-to-back payment scheme” which was not agreed upon under the Subcontract Agreement. As such, the CIAC ruled that FFCCI could not impose upon HRCC its valuation of the works completed by the latter. The CIAC gave credence to HRCC’s valuation of its completed works as stated in its progress billings. Thus:

During the trial, [FFCCI’s] Aganon admitted that [HRCC’s] accomplishments are included in its own billings to the DPWH together with a substantial mark-up to cover overhead costs and profit. He further admitted that it is only when DPWH approves its (Respondent’s) billings covering [HRCC’s] scope of work and pays for them, that [FFCCI] will in turn pay [HRCC] for its billings on the sub-contracted works.

On clarificatory questioning by the Tribunal, [FFCCI] admitted that there is no “back-to-back” provision in the sub-contract as basis for this sequential payment arrangement and, therefore, [FFCCI’s] imposition thereof by withholding payment to [HRCC] until it is first paid by the project owner on the Main Contract, clearly violates said sub-contract. It [is] this unauthorized implementation of a back-to-back payment scheme that is seen to be the reason for [FFCCI’s] non-payment of the third progress billings.

It is accordingly the holding of this Arbitral Tribunal that [FFCCI] is not justified in withholding payment of [HRCC’s] third progress billing for this scheme that [HRCC] has not agreed to in the sub-contract agreement x x x.

x x x

The total retention money deducted by [FFCCI] from [HRCC’s] three progress billings, amounts to [P]395,945.14 x x x. The retention money is part of [HRCC’s] progress billings and must, therefore, be credited to this account. The two amounts (deductions and net payments) total [P]3,868,467.00 x x x. This represents the total gross payments that should be credited and deducted from the total gross billings to arrive at what has not been paid to the [HRCC]. This results in the amount of [P]2,239,452.63 ([P]6,107,919.63 – [P]3,868,467.00) as the correct balance of [HRCC’s] unpaid billings.^[16][16]

Further, the CIAC ruled that FFCCI had already waived its right under the Subcontract Agreement to require a joint measurement of HRCC’s completed works as a condition precedent to the payment of the latter’s progress billings. Hence:

[FFCCI] admits that in all three instances where it paid [HRCC] for its progress billings, it never required compliance with the aforequoted contractual provision of a prior joint quantification. Such repeated omission may reasonably be construed as a waiver by [FFCCI] of its contractual right to require compliance of said condition and it is now too late in the day to so impose it. Article 6 of the Civil Code expressly provides that “rights may be waived unless the waiver is contrary to law, public order, public policy, morals or good customs”. The tribunal cannot see any such violation in this case.

x x x

[FFCCI’s] omission to enforce the contractually required condition of payment, has led [HRCC] to believe it to be true that indeed [FFCCI] has waived the condition of joint quantification and, therefore, [FFCCI] may not be permitted to falsify such resulting position.^[17][17]

Likewise, the CIAC held that FFCCI’s non-payment of the progress billings submitted by HRCC gave the latter the right to rescind the Subcontract Agreement and, accordingly, HRCC’s work stoppage was justified. It further opined that, in effect, FFCCI had ratified the right of HRCC to stop the construction works as it did not file any counterclaim against HRCC for liquidated damages arising therefrom.

FFCCI then filed a petition for review with CA assailing the foregoing disposition by the CIAC.

The CA Decision

On February 6, 2009, the CA rendered the herein assailed Decision^[18][18] denying the petition for review filed by FFCCI. The CA agreed with the CIAC that FFCCI had waived its right under the Subcontract Agreement to require a joint quantification of HRCC’s completed works.

The CA further held that the amount due to HRCC as claimed by FFCCI could not be given credence since the same was based on a survey of the completed works conducted without the participation of HRCC. Likewise, being the main contractor, it ruled that it was the responsibility of FFCCI to include HRCC in the joint measurement of the completed works. Furthermore, the CA held that HRCC was justified in stopping its construction works on the project as the failure of FFCCI to pay its progress billings gave the former the right to rescind the Subcontract Agreement.

FFCCI sought a reconsideration^[19][19] of the said February 6, 2009 Decision but it was denied by the CA in its Resolution^[20][20] dated April 13, 2009. 

Issues

In the instant petition, FFCCI submits the following issues for this Court’s resolution:

[I.]

x x x First, [d]oes the act of [FFCCI] in conducting a verification survey of [HRCC’s] billings in the latter’s presence amount to a waiver of the right of [FFCCI] to verify and approve said billings? What, if any, is the legal significance of said act?

[II.]

x x x Second, [d]oes the payment of [FFCCI] to [HRCC] based on the results of the above mentioned verification survey result in the former being obliged to accept whatever accomplishment was reported by the latter?

[III.]

x x x Third, [d]oes the mere comparison of the payments made by [FFCCI] with the contested progress billings of [HRCC] amount to an adjudication of the controversy between the parties?

[IV.]

x x x Fourth, [d]oes the failure of [FFCCI] to interpose a counterclaim against [HRCC] for liquidated damages due to the latter’s work stoppage, amount to a ratification of such work stoppage?

[V.]

x x x Fifth, [d]id the [CA] disregard or overlook significant and material facts which would affect the result of the litigation?^[21][21]

In sum, the crucial issues for this Court’s resolution are: first, what is the effect of FFCCI’s non-compliance with the stipulation in the Subcontract Agreement requiring a joint quantification of the works completed by HRCC on the payment of the progress billings submitted by the latter; and second, whether there was a valid rescission of the Subcontract Agreement by HRCC.

The Court’s Ruling

          The petition is not meritorious.

Procedural Issue:

Finality and Conclusiveness of the CIAC’s Factual Findings

          Before we delve into the substantial issues raised by FFCCI, we shall first address the procedural issue raised by HRCC. According to HRCC, the instant petition merely assails the factual findings of the CIAC as affirmed by the CA and, accordingly, not proper subjects of an appeal under Rule 45 of the Rules of Court. It likewise pointed out that factual findings of the CIAC, when affirmed by the CA, are final and conclusive upon this Court.

Generally, the arbitral award of CIAC is final and may not be appealed except on questions of law.

          Executive Order (E.O.) No. 1008^[22][22] vests upon the CIAC original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines. Under Section 19 of E.O. No. 1008, the arbitral award of CIAC “shall be final and inappealable except on questions of law which shall be appealable to the Supreme Court.”^[23][23]

          In Hi-Precision Steel Center, Inc. v. Lim Kim Steel Builders, Inc.,^[24][24] we explained raison d’ etre for the rule on finality of the CIAC’s arbitral award in this wise:

Voluntary arbitration involves the reference of a dispute to an impartial body, the members of which are chosen by the parties themselves, which parties freely consent in advance to abide by the arbitral award issued after proceedings where both parties had the opportunity to be heard. The basic objective is to provide a speedy and inexpensive method of settling disputes by allowing the parties to avoid the formalities, delay, expense and aggravation which commonly accompany ordinary litigation, especially litigation which goes through the entire hierarchy of courts. Executive Order No. 1008 created an arbitration facility to which the construction industry in thePhilippinescan have recourse. The Executive Order was enacted to encourage the early and expeditious settlement of disputes in the construction industry, a public policy the implementation of which is necessary and important for the realization of national development goals.

Aware of the objective of voluntary arbitration in the labor field, in the construction industry, and in any other area for that matter, the Court will not assist one or the other or even both parties in any effort to subvert or defeat that objective for their private purposes. The Court will not review the factual findings of an arbitral tribunal upon the artful allegation that such body had “misapprehended the facts” and will not pass upon issues which are, at bottom, issues of fact, no matter how cleverly disguised they might be as “legal questions.” The parties here had recourse to arbitration and chose the arbitrators themselves; they must have had confidence in such arbitrators. x x x^[25][25] (Citation omitted)

Thus, in cases assailing the arbitral award rendered by the CIAC, this Court may only pass upon questions of law. Factual findings of construction arbitrators are final and conclusive and not reviewable by this Court on appeal. This rule, however, admits of certain exceptions.

          In Spouses David v. Construction Industry and Arbitration Commission,^[26][26] we laid down the instances when this Court may pass upon the factual findings of the CIAC, thus:

We reiterate the rule that factual findings of construction arbitrators are final and conclusive and not reviewable by this Court on appeal, except when the petitioner proves affirmatively that: (1) the award was procured by corruption, fraud or other undue means; (2) there was evident partiality or corruption of the arbitrators or of any of them; (3) the arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; (4) one or more of the arbitrators were disqualified to act as such under section nine of Republic Act No. 876 and willfully refrained from disclosing such disqualifications or of any other misbehavior by which the rights of any party have been materially prejudiced; or (5) the arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final and definite award upon the subject matter submitted to them was not made. x x x^[27][27]  (Citation omitted)

Issues on the proper interpretation of the terms of the Subcontract Agreement involve questions of law.

            A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact.^[28][28]

On the surface, the instant petition appears to merely raise factual questions as it mainly puts in issue the appropriate amount that is due to HRCC. However, a more thorough analysis of the issues raised by FFCCI would show that it actually asserts questions of law.

FFCCI primarily seeks from this Court a determination of whether amount claimed by HRCC in its progress billing may be enforced against it in the absence of a joint measurement of the former’s completed works. Otherwise stated, the main question advanced by FFCCI is this: in the absence of the joint measurement agreed upon in the Subcontract Agreement, how will the completed works of HRCC be verified and the amount due thereon be computed?

The determination of the foregoing question entails an interpretation of the terms of the Subcontract Agreement vis-à-vis the respective rights of the parties herein. On this point, it should be stressed that where an interpretation of the true agreement between the parties is involved in an appeal, the appeal is in effect an inquiry of the law between the parties, its interpretation necessarily involves a question of law.^[29][29]

Moreover, we are not called upon to examine the probative value of the evidence presented before the CIAC. Rather, what is actually sought from this Court is an interpretation of the terms of the Subcontract Agreement as it relates to the dispute between the parties.

First Substantive Issue: Effect of Non-compliance with the Joint Quantification Requirement on the Progress Billings of HRCC

          Basically, the instant issue calls for a determination as to which of the parties’ respective valuation of accomplished works should be given credence. FFCCI claims that its valuation should be upheld since the same was the result of a measurement of the completed works conducted by it and the DPWH. On the other hand, HRCC maintains that its valuation should be upheld on account of FFCCI’s failure to observe the joint measurement requirement in ascertaining the extent of its completed works.

The terms of the Subcontract Agreement should prevail.

          In resolving the dispute as to the proper valuation of the works accomplished by HRCC, the primordial consideration should be the terms of the Subcontract Agreement. It is basic that if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control.^[30][30]

In Abad v. Goldloop Properties, Inc.,^[31][31] we stressed that:

A court’s purpose in examining a contract is to interpret the intent of the contracting parties, as objectively manifested by them. The process of interpreting a contract requires the court to make a preliminary inquiry as to whether the contract before it is ambiguous. A contract provision is ambiguous if it is susceptible of two reasonable alternative interpretations. Where the written terms of the contract are not ambiguous and can only be read one way, the court will interpret the contract as a matter of law. If the contract is determined to be ambiguous, then the interpretation of the contract is left to the court, to resolve the ambiguity in the light of the intrinsic evidence.^[32][32] (Emphasis supplied and citation omitted)

            Article 4 of the Subcontract Agreement, in part, contained the following stipulations:

ARTICLE 4

SUBCONTRACT PRICE

4.1     The total SUBCONTRACT Price shall be THIRTY ONE MILLION

TWO HUNDRED NINETY THREE THOUSAND FIVE HUNDRED THIRTY TWO PESOS & 72/100 ONLY ([P]31,293,532.72) inclusive of Value Added Tax  x x x.

x x x 

4.3       Terms of Payment

FFCCI shall pay [HRCC] within thirty (30) days upon receipt of the [HRCC’s] Monthly Progress Billings subject to deductions due to ten percent (10%) retention, and any other sums that may be due and recoverable by FFCCI from [HRCC] under this SUBCONTRACT. In all cases, however, two percent (2%) expanded withholding tax on the [HRCC’s] income will be deducted from the monthly payments.

Requests for the payment by the [HRCC] shall include progress accomplishment of completed works (unit of work accomplished x unit cost) as approved by [FFCCI]. Cut-off date of monthly billings shall be every 25^th of the month and joint measurement shall be conducted with the DPWH’s representative, Consultants, FFCCI and [HRCC] to arrive at a common/agreed quantity.^[33][33] (Emphasis supplied)

Pursuant to the terms of payment agreed upon by the parties, FFCCI obliged itself to pay the monthly progress billings of HRCC within 30 days from receipt of the same. Additionally, the monthly progress billings of HRCC should indicate the extent of the works completed by it, the same being essential to the valuation of the amount that FFCCI would pay to HRCC.

The parties further agreed that the extent of HRCC’s completed works that would be indicated in the monthly progress billings should be determined through a joint measurement conducted by FFCCI and HRCC together with the representative of DPWH and the consultants.

It is the responsibility of FFCCI to call for the joint measurement of HRCC’s completed works.

          It bears stressing that the joint measurement contemplated under the Subcontract Agreement should be conducted by the parties herein together with the representative of the DPWH and the consultants. Indubitably, FFCCI, being the main contractor of DPWH, has the responsibility to request the representative of DPWH to conduct the said joint measurement.

On this score, the testimony of Engineer Antonio M. Aganon, Jr., project manager of FFCCI, during the reception of evidence before the CIAC is telling, thus:

MR. J. B. JOAQUIN:

            Engr. Aganon, earlier there was a stipulation that in all the four billings, there never was a joint quantification.

PROF. A. F. TADIAR:

            He admitted that earlier. Pinabasa ko sa kanya.

ENGR. R. B. SAN JUAN:

            The joint quantification was done only between them and DPWH.

x x x x

ENGR. AGANON:

            Puwede ko po bang i-explain sandali lang po regarding lang po doon sa quantification na iyon? Basically po as main contractor of DPWH, we are the ones who [are] requesting for joint survey quantification with the owner, DPWH. Ngayon po, although wala sa papel na nag-witness and [HRCC] still the same po, nandoon din po sila during that time, kaya lang ho . . .

MR. J. B. JOAQUIN:

            Hindi pumirma?

ENGR. AGANON:

            Hindi sila puwede pumirma kasi ho kami po ang contractor ng DPWH hindi sila.^[34][34] (Emphasis supplied)

FFCCI had waived its right to demand for a joint measurement of HRCC’s completed works under the Subcontract Agreement.

            The CIAC held that FFCCI, on account of its failure to demand the joint measurement of HRCC’s completed works, had effectively waived its right to ask for the conduct of the same as a condition sine qua non to HRCC’s submission of its monthly progress billings.

          We agree.

          In People of the Philippines v. Donato,^[35][35] this Court explained the doctrine of waiver in this wise:

Waiver is defined as “a voluntary and intentional relinquishment or abandonment of a known existing legal right, advantage, benefit, claim or privilege, which except for such waiver the party would have enjoyed; the voluntary abandonment or surrender, by a capable person, of a right known by him to exist, with the intent that such right shall be surrendered and such person forever deprived of its benefit; or such conduct as warrants an inference of the relinquishment of such right; or the intentional doing of an act inconsistent with claiming it.”

As to what rights and privileges may be waived, the authority is settled:

x x x the doctrine of waiver extends to rights and privileges of any character, and, since the word ‘waiver’ covers every conceivable right, it is the general rule that a person may waive any matter which affects his property, and any alienable right or privilege of which he is the owner or which belongs to him or to which he is legally entitled, whether secured by contract, conferred with statute, or guaranteed by constitution, provided such rights and privileges rest in the individual, are intended for his sole benefit, do not infringe on the rights of others, and further provided the waiver of the right or privilege is not forbidden by law, and does not contravene public policy; and the principle is recognized that everyone has a right to waive, and agree to waive, the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity, if it can be dispensed with and relinquished without infringing on any public right, and without detriment to the community at large. x x x^[36][36] (Emphasis supplied and citations omitted)

          Here, it is undisputed that the joint measurement of HRCC’s completed works contemplated by the parties in the Subcontract Agreement never materialized. Indeed, HRCC, on separate occasions, submitted its monthly progress billings indicating the extent of the works it had completed sans prior joint measurement. Thus:

          FFCCI did not contest the said progress billings submitted by HRCC despite the lack of a joint measurement of the latter’s completed works as required under the Subcontract Agreement. Instead, FFCCI proceeded to conduct its own verification of the works actually completed by HRCC and, on separate dates, made the following payments to HRCC:

          FFCCI’s voluntary payment in favor of HRCC, albeit in amounts substantially different from those claimed by the latter, is a glaring indication that it had effectively waived its right to demand for the joint measurement of the completed works. FFCCI’s failure to demand a joint measurement of HRCC’s completed works reasonably justified the inference that it had already relinquished its right to do so. Indeed, not once did FFCCI insist on the conduct of a joint measurement to verify the extent of HRCC’s completed works despite its receipt of the four monthly progress billings submitted by the latter.

FFCCI is already barred from contesting HRCC’s valuation of the completed works having waived its right to demand the joint measurement requirement.

In view of FFCCI’s waiver of the joint measurement requirement, the CA, essentially echoing the CIAC’s disposition, found that FFCCI is obliged to pay the amount claimed by HRCC in its monthly progress billings. The CA reasoned thus:

Verily, the joint measurement that [FFCCI] claims it conducted without the participation of [HRCC], to which [FFCCI] anchors its claim of full payment of its obligations to [HRCC], cannot be applied, nor imposed, on [HRCC]. In other words, [HRCC] cannot be made to accept a quantification of its works when the said quantification was made without its participation. As a consequence, [FFCCI’s] claim of full payment cannot be upheld as this is a result of a quantification that was made contrary to the express provisions of the Subcontract Agreement.

The Court is aware that by ruling so, [FFCCI] would seem to be placed at a disadvantage because it would result in [FFCCI] having to pay exactly what [HRCC] was billing the former. If, on the other hand, the Court were to rule otherwise[,] then [HRCC] would be the one at a disadvantage because it would be made to accept payment that is less than what it was billing.

Circumstances considered, however, the Court deems it proper to rule in favor of [HRCC] because of the explicit provision of the Subcontract Agreement that requires the participation of the latter in the joint measurement. If the Court were to rule otherwise, then the Court would, in effect, be disregarding the explicit agreement of the parties in their contract.^[43][43]

          Essentially, the question that should be resolved is this: In view of FFCCI’s waiver of its right to demand a joint measurement of HRCC’s completed works, is FFCCI now barred from disputing the claim of HRCC in its monthly progress billings?

          We rule in the affirmative.

          As intimated earlier, the joint measurement requirement is a mechanism essentially granting FFCCI the opportunity to verify and, if necessary, contest HRCC’s valuation of its completed works prior to the submission of the latter’s monthly progress billings.

In the final analysis, the joint measurement requirement seeks to limit the dispute between the parties with regard to the valuation of HRCC’s completed works. Accordingly, any issue which FFCCI may have with regard to HRCC’s valuation of the works it had completed should be raised and resolved during the said joint measurement instead of raising the same after HRCC had submitted its monthly progress billings. Thus, having relinquished its right to ask for a joint measurement of HRCC’s completed works, FFCCI had necessarily waived its right to dispute HRCC’s valuation of the works it had accomplished.

Second Substantive Issue:

Validity of HRCC’s Rescission of the Subcontract Agreement

          Both the CA and the CIAC held that the work stoppage of HRCC was justified as the same is but an exercise of its right to rescind the Subcontract Agreement in view of FFCCI’s failure to pay the former’s monthly progress billings. Further, the CIAC stated that FFCCI could no longer assail the work stoppage of HRCC as it failed to file any counterclaim against HRCC pursuant to the terms of the Subcontract Agreement.

For its part, FFCCI asserted that the work stoppage of HRCC was not justified and, in any case, its failure to raise a counterclaim against HRCC for liquidated damages before the CIAC does not amount to a ratification of the latter’s work stoppage.

          The determination of the validity of HRCC’s work stoppage depends on a determination of the following: first, whether HRCC has the right to extrajudicially rescind the Subcontract Agreement; and second, whether FFCCI is already barred from disputing the work stoppage of HRCC.

HRCC had waived its right to rescind the Subcontract Agreement.

The right of rescission is statutorily recognized in reciprocal obligations. Article 1191 of the Civil Code pertinently reads:

Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.

The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible.

The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.

This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with Articles 1385 and 1388 and the Mortgage Law.

          The rescission referred to in this article, more appropriately referred to as resolution is on the breach of faith by the defendant which is violative of the reciprocity between the parties.^[44][44] The right to rescind, however, may be waived, expressly or impliedly.^[45][45]

          While the right to rescind reciprocal obligations is implied, that is, that such right need not be expressly provided in the contract, nevertheless the contracting parties may waive the same.^[46][46]

          Contrary to the respective dispositions of the CIAC and the CA, we find that HRCC had no right to rescind the Subcontract Agreement in the guise of a work stoppage, the latter having waived such right. Apropos is Article 11.2 of the Subcontract Agreement, which reads:

11.2          Effects of Disputes and Continuing Obligations

Notwithstanding any dispute, controversy, differences or arbitration proceedings relating directly or indirectly to this SUBCONTRACT Agreement and without prejudice to the eventual outcome thereof, [HRCC] shall at all times proceed with the prompt performance of the Works in accordance with the directives of FFCCI and this SUBCONTRACT Agreement.^[47][47] (Emphasis supplied)

Hence, in spite of the existence of dispute or controversy between the parties during the course of the Subcontract Agreement, HRCC had agreed to continue the performance of its obligations pursuant to the Subcontract Agreement. In view of the provision of the Subcontract Agreement quoted above, HRCC is deemed to have effectively waived its right to effect extrajudicial rescission of its contract with FFCCI. Accordingly, HRCC, in the guise of rescinding the Subcontract Agreement, was not justified in implementing a work stoppage.

The costs of arbitration should be shared by the parties equally.

Section 1, Rule 142 of the Rules of Court provides:

Section 1. Costs ordinarily follow results of suit. – Unless  otherwise provided in these rules, costs shall be allowed to the prevailing party as a matter of course, but the court shall have power, for special reasons, to adjudge that either party shall pay the costs of an action, or that the same be divided, as may be equitable. No costs shall be allowed against the Republic of thePhilippines unless otherwise provided by law. (Emphasis supplied)

Although, generally, costs are adjudged against the losing party, courts nevertheless have discretion, for special reasons, to decree otherwise.

Here, considering that the work stoppage of HRCC is not justified, it is only fitting that both parties should share in the burden of the cost of arbitration equally. HRCC had a valid reason to institute the complaint against FFCCI in view of the latter’s failure to pay the full amount of its monthly progress billings. However, we disagree with the CIAC and the CA that only FFCCI should shoulder the arbitration costs. The arbitration costs should be shared equally by FFCCI and HRCC in view of the latter’s unjustified work stoppage.

WHEREFORE, in consideration of the foregoing disquisitions, the Decision dated February 6, 2009 and Resolution dated April 13, 2009 of the Court of Appeals in CA-G.R. SP No. 91860 are hereby AFFIRMED with MODIFICATION that the arbitration costs shall be shared equally by the parties herein.

          SO ORDERED.

                                       BIENVENIDO L. REYES

                                      Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

MARIA LOURDES P. A. SERENO

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

CASE 2012-0036: SPO2 LOLITO T. NACNAC VS. PEOPLE OF THE PHILIPPINES (G.R. NO. 191913, MARCH 21, 2012, VELASCO, JR., J.) SUBJECT/S: MOTION FOR RECON GRANTED BY SC; ELEMENTS OF SELF DEFENSE; (BRIEF TITLE: NACNAC VS. PEOPLE)

========================

DISPOSITIVE:

        WHEREFORE, petitioner’s Motion for Reconsideration is GRANTED. The CA Decision dated July 20, 2009 in CA-G.R. CR-H.C. No. 30907 is REVERSED and SET ASIDE.  Petitioner SPO2 Lolito T. Nacnac is ACQUITTED of homicide on reasonable doubt.

The Director of the Bureau of Prisons is ordered to immediately RELEASE petitioner from custody, unless he is being held for some other lawful cause, and to INFORM this Court within five (5) days from receipt of this Decision of the date petitioner was actually released from confinement.

         SO ORDERED.

=========================

SUBJECT/DOCTRINE/DIGEST:

WHAT ARE THE ELEMENTS OF SELF DEFENSE?

A)   UNLAWFUL AGGRESSION;

B)   REASONABLE NECESSITY OF THE MEANS EMPLOYED TO PREVENT OR REPEL IT;

C)   LACK OF SUFFICIENT PROVOCATION ON THE PART OF THE PERSON DEFENDING HIMSELF.

        The Revised Penal Code provides the requisites for a valid self-defense claim:

ART. 11. Justifying circumstances.––The following do not incur any criminal liability:

1. Anyone who acts in defense of his person or rights, provided that the following circumstances concur:

First. Unlawful aggression;

Second. Reasonable necessity of the means employed to prevent or repel it;

Third. Lack of sufficient provocation on the part of the person defending himself.

XXXXXXXXXXXXXXXXXX

WHEN IS THERE UNLAWFUL AGGRESSION?

IT WOULD “PRESUPPOSE AN ACTUAL, SUDDEN AND UNEXPECTED ATTACK OR IMMINENT DANGER ON THE LIFE AND LIMB OF A PERSON––NOT A MERE THREATENING OR INTIMIDATING ATTITUDE––BUT MOST IMPORTANTLY, AT THE TIME THE DEFENSIVE ACTION WAS TAKEN AGAINST THE AGGRESSOR. X X X THERE IS AGGRESSION IN CONTEMPLATION OF THE LAW ONLY WHEN THE ONE ATTACKED FACES REAL AND IMMEDIATE THREAT TO ONE’S LIFE. THE PERIL SOUGHT TO BE AVOIDED MUST BE IMMINENT AND ACTUAL, NOT JUST SPECULATIVE.”^[1][11]

        Unlawful aggression is an indispensable element of self-defense. We explained, “Without unlawful aggression, self-defense will not have a leg to stand on and this justifying circumstance cannot and will not be appreciated, even if the other elements are present.”^[2][10] It would “presuppose an actual, sudden and unexpected attack or imminent danger on the life and limb of a person––not a mere threatening or intimidating attitude––but most importantly, at the time the defensive action was taken against the aggressor. x x x There is aggression in contemplation of the law only when the one attacked faces real and immediate threat to one’s life. The peril sought to be avoided must be imminent and actual, not just speculative.”^[3][11]

        As We held:

Even the cocking of a rifle without aiming the firearm at any particular target is not sufficient to conclude that one’s life was in imminent danger. Hence, a threat, even if made with a weapon, or the belief that a person was about to be attacked, is not sufficient. It is necessary that the intent be ostensibly revealed by an act of aggression or by some external acts showing the commencement of actual and material unlawful aggression.^[4][12]

XXXXXXXXXXXXXXXXXXXX

ACCORDING TO THE TRIAL COURT THE VICTIM ONLY DREW HIS GUN. THERE IS NO EVIDENCE THAT HE POINTED IT TO PETITIONER. THUS THERE WAS NO UNLAWFUL AGGRESSION. CA POINTED OUT THAT THE LIKELIHOOD THAT THE VICTIM WILL COMMIT UNLAWFUL AGGRESSION WAS VERY SLIM BECAUSE HE WAS VERY DRUNK. ARE THE TRIAL COURT AND CA CORRECT?

NO. THE FOLLOWING CIRCUMSTANCES NEGATE CONVICTION:

(1)            THE DRUNKEN STATE OF THE VICTIM;

(2)            THE VICTIM WAS ALSO A POLICE OFFICER WHO WAS PROFESSIONALLY TRAINED AT SHOOTING;

(3)            THE WARNING SHOT FIRED BY PETITIONER WAS IGNORED BY THE VICTIM;

(4)            A LAWFUL ORDER BY PETITIONER WAS IGNORED BY THE VICTIM; AND

(5)            THE VICTIM WAS KNOWN FOR HIS COMBATIVE AND DRUNKEN BEHAVIOR.

        According to the trial court, petitioner’s claim that the victim pointed his gun at petitioner was a mere afterthought. It ruled that petitioner’s sworn statement and direct testimony as well as the testimonies of SPO1 Eduardo Basilio and SPO2 Roosevelt Ballesteros only established that the victim drew his gun. The trial court went on to differentiate the act of drawing a gun and pointing it at a target. It held that the mere act of drawing a gun cannot be considered unlawful aggression. In denying petitioner’s motion for reconsideration, the CA affirmed the trial court’s findings and further held that petitioner had fuller control of his physical and mental faculties in view of the victim’s drunken state. It concluded that the likelihood of the victim committing unlawful aggression in “his inebriated state” was “very slim.”^[5][14] 

        We disagree. The characterization as a mere afterthought of petitioner’s testimony on the presence of unlawful aggression is not supported by the records.

         The following circumstances negate a conviction for the killing of the victim:

(6)            The drunken state of the victim;

(7)            The victim was also a police officer who was professionally trained at shooting;

(8)            The warning shot fired by petitioner was ignored by the victim;

(9)            A lawful order by petitioner was ignored by the victim; and

(10)      The victim was known for his combative and drunken behavior.

        As testified by the victim’s companion, SPO1 Basilio, petitioner ordered him and the victim not to leave because they were on duty. SPO1 Basilio also confirmed that the victim was inebriated and had uttered invectives in response to petitioner’s lawful order.^[6][15]

        Ordinarily, as pointed out by the lower court, there is a difference between the act of drawing one’s gun and the act of pointing one’s gun at a target. The former cannot be said to be unlawful aggression on the part of the victim. In People v. Borreros,^[7][16] We ruled that “for unlawful aggression to be attendant, there must be a real danger to life or personal safety. Unlawful aggression requires an actual, sudden and unexpected attack, or imminent danger thereof, and not merely a threatening or intimidating attitude x x x. Here, the act of the [deceased] of allegedly drawing a gun from his waist cannot be categorized as unlawful aggression. Such act did not put in real peril the life or personal safety of appellant.”

        The facts surrounding the instant case must, however, be differentiated from current jurisprudence on unlawful aggression. The victim here was a trained police officer. He was inebriated and had disobeyed a lawful order in order to settle a score with someone using a police vehicle. A warning shot fired by a fellow police officer, his superior, was left unheeded as he reached for his own firearm and pointed it at petitioner. Petitioner was, therefore, justified in defending himself from an inebriated and disobedient colleague.  Even if We were to disbelieve the claim that the victim pointed his firearm at petitioner, there would still be a finding of unlawful aggression on the part of the victim. We quote with approval the OSG’s argument^[8][17] on this point:

        A police officer is trained to shoot quickly and accurately. A police officer cannot earn his badge unless he can prove to his trainors that he can shoot out of the holster quickly and accurately x x x. Given this factual backdrop, there is reasonable basis to presume that the appellant indeed felt his life was actually threatened. Facing an armed police officer like himself, who at that time, was standing a mere five meters from the appellant, the [latter] knew that he has to be quick on the draw. It is worth emphasizing that the victim, being a policeman himself, is presumed to be quick in firing.

          Hence, it now becomes reasonably certain that in this specific case, it would have been fatal for the appellant to have waited for SPO1 Espejo to point his gun before the appellant fires back.

XXXXXXXXXXXXXXXXXXX

WAS THERE REASONABLE MEANS EMPLOYED?

YES. THERE WAS A LONE GUNSHOT WOUND.

        To successfully invoke self-defense, another requisite is that the means employed by the accused must be reasonably commensurate to the nature and the extent of the attack sought to be averted.^[9][18]

        Supporting petitioner’s claim of self-defense is the lone gunshot wound suffered by the victim. The nature and number of wounds inflicted by the accused are constantly and unremittingly considered as important indicia.^[10][19]  In People v. Catbagan,^[11][20] We aptly held:

The means employed by the person invoking self-defense is reasonable if equivalent to the means of attack used by the original aggressor.Whether or not the means of self-defense is reasonable depends upon the nature or quality of the weapon, the physical condition, the character, the size and other circumstances of the aggressor; as well as those of the person who invokes self-defense; and also the place and the occasion of the assault.

        In the instant case, the lone wound inflicted on the victim supports the argument that petitioner feared for his life and only shot the victim to defend himself. The lone gunshot was a reasonable means chosen by petitioner in defending himself in view of the proximity of the armed victim, his drunken state, disobedience of an unlawful order, and failure to stand down despite a warning shot.

XXXXXXXXXXXXXXX

WAS THERE SUFFICIENT PROVOCATION ON THE PART OF PETITIONER?

NONE. PETITIONER MAY HAVE BARKED AT VICTIM BUT HE WAS GIVING A LAWFUL ORDER. PETITIONER FIRED HIS GUN BUT IT WAS A WARNING SHOT.

The last requisite for self-defense to be appreciated is lack of sufficient provocation on the part of the person defending himself or herself. As gleaned from the findings of the trial court, petitioner gave the victim a lawful order and fired a warning shot before shooting the armed and drunk victim. Absent from the shooting incident was any evidence on petitioner sufficiently provoking the victim prior to the shooting.

        All told, We are convinced that petitioner was only defending himself on the night he shot his fellow police officer.  The rule is that factual findings of the trial court and its evaluation of the credibility of witnesses and their testimonies are entitled to great respect and will not be disturbed on appeal.^[12][21] This rule is binding except where the trial court has overlooked, misapprehended, or misapplied any fact or circumstance of weight and substance.^[13][22] As earlier pointed out, the trial court did not consider certain facts and circumstances that materially affect the outcome of the instant case.  We must, therefore, acquit petitioner.

        Given the peculiar circumstances of this case, We find that the prosecution was unable to establish beyond reasonable doubt the guilt of petitioner. Even the OSG shares this view in its Comment appealing for his acquittal.

===========================

Republic of thePhilippines

SUPREME COURT

Manila

THIRD DIVISION

x—————————————————————————————–x

DECISION

VELASCO, JR., J.:

Every circumstance favoring the accused’s innocence must be duly taken into account. The proof against the accused must survive the test of reason. Strongest suspicion must not be permitted to sway judgment. The conscience must be satisfied that on the accused could be laid the responsibility for the offense charged. If the prosecution fails to discharge the burden, then it is not only the accused’s right to be freed; it is, even more, the court’s constitutional duty to acquit him.^[14][1]

        This treats of the Motion for Reconsideration of Our Resolution dated August 25, 2010, affirming the July 20, 2009 Decision^[15][2] of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 30907 entitled People of the Philippines v. SPO2 Lolito T. Nacnac. The CA affirmed the May 23, 2007 Judgment^[16][3] in Criminal Case No. 10750-14 of the Regional Trial Court (RTC), Branch 14 in Laoag City, which convicted petitioner of homicide.

The Facts

An Information charged the accused as follows:

        That on or about February 20, 2003, in Dingras, Ilocos Norte, and within the jurisdiction of this Honorable Court, accused SPO2 Lolito I. Nacnac, a public officer, being then a member of the Philippine National Police, assigned with the Dingras Police Station, Dingras, Ilocos Norte, did then and there willfully, unlawfully and feloniously, with intent to kill, shoot one SPO1 Doddie Espejo with a gun resulting into the latter’s death.^[17][4]

A reverse trial ensued upon the claim of self-defense by the accused. As summarized by CA,^[18][5] the shooting incident happened as follows:

        The victim, SPO1 Doddie Espejo[,] had a history of violent aggression and drunkenness. He once attacked a former superior, P/Insp. Laurel Gayya, for no apparent reason. On the day of his death, he visited a cock house for merriment. He was shot by accused-appellant [petitioner] on February 20, 2003 at around 10:00 p.m. at the Dingras Police Station, Dingras, Ilocos Norte.

          On that fateful night of February 20, 2003, accused-appellant, the victim and a number of other police officers were on duty. Their shift started at 8:00 in the morning of the same day, to end at 8:00 the next morning. Accused-appellant, being the highest ranking officer during the shift, was designated the officer-of-the-day. Shortly before 10:00 in the evening, the victim, together with then SPO1 Eduardo Basilio, took the patrol tricycle from the station grounds. When accused-appellant saw this, he stopped the victim and his colleague from using the tricycle. The victim told accused-appellant that he (the victim) needed it to go toLaoagCityto settle a previous disagreement with a security of a local bar.

          Accused-appellant still refused. He told the victim that he is needed at the station and, at any rate, he should stay at the station because he was drunk. This was not received well by the victim. He told accused-appellant in Ilocano: “Iyot ni inam kapi” (Coitus of your mother, cousin!). The victim alighted from the tricycle. SPO1 Eduardo Basilio did the same, went inside the office, and left the accused-appellant and the victim alone. The victim took a few steps and drew his .45 caliber gun which was tucked in a holster on the right side of his chest. Accused-appellant then fired his M-16 armalite upward as a warning shot. Undaunted, the victim still drew his gun. Accused-appellant then shot the victim on the head, which caused the latter’s instantaneous death. Accused-appellant later surrendered to the station’s Chief of Police.

The RTC Ruling

        The RTC found the accused guilty of the crime charged. The RTC held that the claim of self-defense by the accused was unavailing due to the absence of unlawful aggression on the part of the victim. The dispositive portion of the RTC Judgment reads:

WHEREFORE, the accused SPO2 Lolito Nacnac is found GUILTY beyond reasonable doubt of the crime of homicide. Taking into account the mitigating circumstance of voluntary surrender, the Court hereby sentences him to an indeterminate penalty ranging from EIGHT YEARS of prision mayor as minimum to FOURTEEN YEARS of reclusion temporal as maximum. He is also ordered to pay the heirs of the deceased (1) P50,000.00 as indemnity for his death, (2) P100,000.00 as actual damages, (3) P50,000.00 as moral damages, and (4) P20,000.00 as attorney’s fees. Costs against the accused.^[19][6]

The CA Ruling

        On appeal, the CA affirmed the findings of the RTC.  It held that the essential and primary element of unlawful aggression was lacking. It gave credence to the finding of the trial court that no one else saw the victim drawing his weapon and pointing it at accused Senior Police Officer 2 (SPO2) Lolito T. Nacnac.  The fallo of the CA Decision reads:

          WHEREFORE, the instant appeal is DISMISSED for lack of merit and the challenged Judgment dated May 23, 2007 in Criminal Case No. 10750-14 is AFFIRMED IN TOTO.^[20][7]

        On August 25, 2010, this Court issued a Resolution, denying Nacnac’s petition for review for failure to sufficiently show that the CA committed any reversible error in the challenged decision and resolution as to warrant the exercise of this Court’s appellate jurisdiction.

        On October 11, 2010, petitioner filed a Motion for Reconsideration of this Court’s Resolution dated August 25, 2010.  On March 21, 2012, this Court granted the Motion and reinstated the petition. Petitioner raises the following issues:

1. [Whether the CA erroneously held that] the victim’s drawing of his handgun or pointing it at the petitioner is not sufficient to constitute unlawful aggression based on existing jurisprudence.

2. [Whether the CA incorrectly appreciated the photo] showing the victim holding his handgun in a peculiar manner despite the fact that no expert witness was presented to testify thereto x x x.

3. [Whether petitioner] has met the second and third requisites of self-defense x x x.^[21][8]

        Petitioner argues that he did not receive a just and fair judgment based on the following: (1) the trial court did not resort to expert testimony and wrongly interpreted a photograph; (2) the trial court ignored the evidence proving unlawful aggression by the victim; (3) the trial court ignored the two gun reports and two empty shells found at the crime scene which support the claim that petitioner fired a warning shot; and (4) the trial court failed to appreciate petitioner’s act of self-defense.  Petitioner also claims that the CA gravely erred in not giving proper weight and due consideration to the Comment of the Office of the Solicitor General (OSG).

        In its Comment^[22][9] dated April 27, 2011, the OSG avers that petitioner is entitled to an acquittal, or at the very least, not one but two mitigating circumstances.

Our Ruling

        We revisit Our ruling in the instant case.

        The Revised Penal Code provides the requisites for a valid self-defense claim:

ART. 11. Justifying circumstances.––The following do not incur any criminal liability:

1. Anyone who acts in defense of his person or rights, provided that the following circumstances concur:

First. Unlawful aggression;

Second. Reasonable necessity of the means employed to prevent or repel it;

Third. Lack of sufficient provocation on the part of the person defending himself.

Unlawful Aggression

        Unlawful aggression is an indispensable element of self-defense. We explained, “Without unlawful aggression, self-defense will not have a leg to stand on and this justifying circumstance cannot and will not be appreciated, even if the other elements are present.”^[23][10] It would “presuppose an actual, sudden and unexpected attack or imminent danger on the life and limb of a person––not a mere threatening or intimidating attitude––but most importantly, at the time the defensive action was taken against the aggressor. x x x There is aggression in contemplation of the law only when the one attacked faces real and immediate threat to one’s life. The peril sought to be avoided must be imminent and actual, not just speculative.”^[24][11]

        As We held:

Even the cocking of a rifle without aiming the firearm at any particular target is not sufficient to conclude that one’s life was in imminent danger. Hence, a threat, even if made with a weapon, or the belief that a person was about to be attacked, is not sufficient. It is necessary that the intent be ostensibly revealed by an act of aggression or by some external acts showing the commencement of actual and material unlawful aggression.^[25][12]

        The following exchange showing actual and material unlawful aggression transpired during the examination of petitioner:^[26][13]

Atty. Lazo:  At any rate, when you again prevented them from getting the tricycle telling them again that they should not get the tricycle, what happened next?

Accused: When police officer Basilio alighted from the tricycle SPO1 Espejo also alighted sir.

Q       What did Doddie Espejo do when he alighted from the tricycle?

A       I saw him hold his firearm tucked on his right waist. (witness demonstrating by placing his right hand at his right sideways). And he was left handed, sir.

Q       And what happened next?

A       When I saw him holding his firearm that was the time I fired a warning shot, sir.

Q       And when you fired [a] warning shot, what happened next?

A       He drew his firearm, sir.

Q       When he drew his firearm, what did you do?

A       When he drew his firearm I shot him [on] his head once, sir.

x x x x

Atty. Cajigal:

Q       By the way, what kind of firearm did the victim draw from his waist?

A       Cal. 45, sir.

Q       What firearm did you use in defending yourself?

A       M-16 armalite, sir.

x x x x

Q       Alright, you mean to tell the Honorable Court then that at the time that you pointed or squeezed the trigger of your gun the cal. 45 was already pointed at you?

A       Yes, sir.

Q       Did you ever observe if he squeezed the trigger but the gun [was] already pointed at you?

A       He just pointed his firearm at me, sir.

Q       Who first pointed his firearm, the victim pointed his firearm at you before you pointed your firearm at him?

A       The victim, sir.

Q       In short, it was the victim whose gun was first pointed at you?

A       Yes, sir.

Q       And that was the time when you raised your armalite and also pointed the same at him is that right?

A       Yes, that was the time that I shot him, sir. (Emphasis supplied.)

        According to the trial court, petitioner’s claim that the victim pointed his gun at petitioner was a mere afterthought. It ruled that petitioner’s sworn statement and direct testimony as well as the testimonies of SPO1 Eduardo Basilio and SPO2 Roosevelt Ballesteros only established that the victim drew his gun. The trial court went on to differentiate the act of drawing a gun and pointing it at a target. It held that the mere act of drawing a gun cannot be considered unlawful aggression. In denying petitioner’s motion for reconsideration, the CA affirmed the trial court’s findings and further held that petitioner had fuller control of his physical and mental faculties in view of the victim’s drunken state. It concluded that the likelihood of the victim committing unlawful aggression in “his inebriated state” was “very slim.”^[27][14] 

        We disagree. The characterization as a mere afterthought of petitioner’s testimony on the presence of unlawful aggression is not supported by the records.

         The following circumstances negate a conviction for the killing of the victim:

(11)      The drunken state of the victim;

(12)      The victim was also a police officer who was professionally trained at shooting;

(13)      The warning shot fired by petitioner was ignored by the victim;

(14)      A lawful order by petitioner was ignored by the victim; and

(15)      The victim was known for his combative and drunken behavior.

        As testified by the victim’s companion, SPO1 Basilio, petitioner ordered him and the victim not to leave because they were on duty. SPO1 Basilio also confirmed that the victim was inebriated and had uttered invectives in response to petitioner’s lawful order.^[28][15]

        Ordinarily, as pointed out by the lower court, there is a difference between the act of drawing one’s gun and the act of pointing one’s gun at a target. The former cannot be said to be unlawful aggression on the part of the victim. In People v. Borreros,^[29][16] We ruled that “for unlawful aggression to be attendant, there must be a real danger to life or personal safety. Unlawful aggression requires an actual, sudden and unexpected attack, or imminent danger thereof, and not merely a threatening or intimidating attitude x x x. Here, the act of the [deceased] of allegedly drawing a gun from his waist cannot be categorized as unlawful aggression. Such act did not put in real peril the life or personal safety of appellant.”

        The facts surrounding the instant case must, however, be differentiated from current jurisprudence on unlawful aggression. The victim here was a trained police officer. He was inebriated and had disobeyed a lawful order in order to settle a score with someone using a police vehicle. A warning shot fired by a fellow police officer, his superior, was left unheeded as he reached for his own firearm and pointed it at petitioner. Petitioner was, therefore, justified in defending himself from an inebriated and disobedient colleague.  Even if We were to disbelieve the claim that the victim pointed his firearm at petitioner, there would still be a finding of unlawful aggression on the part of the victim. We quote with approval the OSG’s argument^[30][17] on this point:

        A police officer is trained to shoot quickly and accurately. A police officer cannot earn his badge unless he can prove to his trainors that he can shoot out of the holster quickly and accurately x x x. Given this factual backdrop, there is reasonable basis to presume that the appellant indeed felt his life was actually threatened. Facing an armed police officer like himself, who at that time, was standing a mere five meters from the appellant, the [latter] knew that he has to be quick on the draw. It is worth emphasizing that the victim, being a policeman himself, is presumed to be quick in firing.

          Hence, it now becomes reasonably certain that in this specific case, it would have been fatal for the appellant to have waited for SPO1 Espejo to point his gun before the appellant fires back.

Reasonable Means Employed

        To successfully invoke self-defense, another requisite is that the means employed by the accused must be reasonably commensurate to the nature and the extent of the attack sought to be averted.^[31][18]

        Supporting petitioner’s claim of self-defense is the lone gunshot wound suffered by the victim. The nature and number of wounds inflicted by the accused are constantly and unremittingly considered as important indicia.^[32][19]  In People v. Catbagan,^[33][20] We aptly held:

The means employed by the person invoking self-defense is reasonable if equivalent to the means of attack used by the original aggressor.Whether or not the means of self-defense is reasonable depends upon the nature or quality of the weapon, the physical condition, the character, the size and other circumstances of the aggressor; as well as those of the person who invokes self-defense; and also the place and the occasion of the assault.

        In the instant case, the lone wound inflicted on the victim supports the argument that petitioner feared for his life and only shot the victim to defend himself. The lone gunshot was a reasonable means chosen by petitioner in defending himself in view of the proximity of the armed victim, his drunken state, disobedience of an unlawful order, and failure to stand down despite a warning shot.

Lack of Sufficient Provocation

The last requisite for self-defense to be appreciated is lack of sufficient provocation on the part of the person defending himself or herself. As gleaned from the findings of the trial court, petitioner gave the victim a lawful order and fired a warning shot before shooting the armed and drunk victim. Absent from the shooting incident was any evidence on petitioner sufficiently provoking the victim prior to the shooting.

        All told, We are convinced that petitioner was only defending himself on the night he shot his fellow police officer.  The rule is that factual findings of the trial court and its evaluation of the credibility of witnesses and their testimonies are entitled to great respect and will not be disturbed on appeal.^[34][21] This rule is binding except where the trial court has overlooked, misapprehended, or misapplied any fact or circumstance of weight and substance.^[35][22] As earlier pointed out, the trial court did not consider certain facts and circumstances that materially affect the outcome of the instant case.  We must, therefore, acquit petitioner.

        Given the peculiar circumstances of this case, We find that the prosecution was unable to establish beyond reasonable doubt the guilt of petitioner. Even the OSG shares this view in its Comment appealing for his acquittal.

        WHEREFORE, petitioner’s Motion for Reconsideration is GRANTED. The CA Decision dated July 20, 2009 in CA-G.R. CR-H.C. No. 30907 is REVERSED and SET ASIDE.  Petitioner SPO2 Lolito T. Nacnac is ACQUITTED of homicide on reasonable doubt.

The Director of the Bureau of Prisons is ordered to immediately RELEASE petitioner from custody, unless he is being held for some other lawful cause, and to INFORM this Court within five (5) days from receipt of this Decision of the date petitioner was actually released from confinement.

         SO ORDERED.

PRESBITERO J. VELASCO, JR.

                                                             Associate Justice

WE CONCUR:

DIOSDADO M. PERALTA

Associate Justice

ROBERTO A. ABAD                                JOSE CATRAL MENDOZA

     Associate Justice                                                  Associate Justice

ESTELA M. PERLAS-BERNABE

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.

PRESBITERO J. VELASCO, JR.

       Associate Justice

          Chairperson

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

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

                                                                   RENATO C. CORONA

                                                                            Chief Justice