CASE 2011-0100: WILFREDO Y. ANTIQUINA VS. MAGSAYSAY MARITIME CORPORATION and/or MASTERBULK, PTE., LTD., (G.R. NO. 168922, 13 APRIL 2011, LEONARDO – DE CASTRO, J.) SUBJECTS: LIBERAL CONSTRUCTION OF THE RULES; MEDICAL UNFITNESS BENEFITS; CBA; MARITIME LABOR CASE. (BRIEF TITLE: ANTIQUINA VS. MAGSAYSAY MARITIME).

Republic of the Philippines

Supreme Court

Baguio City

FIRST DIVISION

 x – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

D E C I S I O N

LEONARDO-DE CASTRO, J.:

          Before the Court is a Petition for Review on Certiorari, assailing the Court of Appeals’ Decision^[1][1] dated May 31, 2005 and Resolution^[2][2] dated July 14, 2005 in CA-G.R. SP No. 82638.  In the Decision dated May 31, 2005, the Court of Appeals modified the September 27, 2002^[3][3] Decision of the Labor Arbiter in OFW Case No. 01-06-1216-00 awarding sickness allowance, permanent medical unfitness benefits and attorney’s fees in favor of petitioner.  The Court of Appeals denied petitioner’s motion for reconsideration of the May 31, 2005 Decision in the assailed Resolution. 

          The material facts of the case, as culled from the records, follow:

          Sometime in February 2000, petitioner Wilfredo Y. Antiquina was hired, through respondent manning agency Magsaysay Maritime Corporation (MMC), to serve as Third Engineer on the vessel, M/T Star Langanger, which was owned and operated by respondent Masterbulk Pte., Ltd. (Masterbulk).  According to petitioner’s contract of employment,^[4][4] his engagement on the vessel was for a period of nine (9) months at a salary of US$936.00 per month.  It is undisputed that petitioner’s contract conformed to the standard Philippine Overseas Employment Agency (POEA) contract of employment.

          Petitioner commenced his employment on the M/T Star Langanger on March 1, 2000.  Almost seven months later, or on September 22, 2000, during a routine maintenance of the vessel’s H.F.O Purifier #1, petitioner suffered a fracture on his lower left arm after a part fell down on him. After first aid treatment was given to petitioner, he was brought to a hospital in Constanza, Romaniawhere the vessel happened to be at the time of the accident.  At the Romanian hospital, petitioner was diagnosed with “fractura 1/3 proximala cubitus stg.” as shown by the medical certificate^[5][5] issued by the attending physician and his arm was put in a cast.

           On October 1, 2000, petitioner was signed off the vessel at Port Said, Egyptand was repatriated to the Philippines, where he arrived on October 3, 2000.  He immediately reported to the office of MMC on October 4, 2000 and was referred to Dr. Robert Lim of the MetropolitanHospital.  On October 5, 2000, petitioner was examined at the MetropolitanHospitaland Dr. Lim subsequently issued a medical report confirming that petitioner has an undisplaced fracture of the left ulna. Petitioner was given medication and advised to return after two weeks for repeat x-ray and re-evaluation.^[6][6]

          After one month, petitioner’s cast was removed and he was advised to undergo physical therapy sessions.  Despite several months of physical therapy, petitioner noticed that his arm still had not healed and he had difficulty straightening his arm.  Another company designated doctor, Dr. Tiong Sam Lim, evaluated petitioner’s condition and advised that petitioner undergo a bone grafting procedure whereby a piece of metal would be attached to the fractured bone.  Upon learning from Dr. Tiong Sam Lim that the metal piece will only be removed from his arm after one and a half years, petitioner allegedly reacted with fear and decided not to have the operation.^[7][7] 

          After formally informing respondents of his decision to forego the medical procedure recommended by the company physician, petitioner filed a complaint for permanent disability benefits, sickness allowance, damages and attorney’s fees against herein respondents. 

          In his position paper^[8][8] filed with the Labor Arbiter, petitioner asserted that he is entitled to sickness allowance equivalent to his basic wage for 120 days as stipulated under Section 20 of the POEA Standard Employment Contract.  With respect to his claim for permanent disability benefits, he relied on the medical opinion of two doctors; namely, Dr. Rimando Saguin and Dr. Antonio A. Pobre who both issued medical certificates,^[9][9] finding to the effect that petitioner was no longer fit for sea service and recommending a partial permanent disability grade of 11 under the POEA Schedule of Disability Grading.  However, petitioner claimed that, notwithstanding his own medical evidence regarding his disability grade, he was entitled to the purportedly superior benefits provided for under Section 20.1.5 of respondents’ collective bargaining agreement (CBA) with the Associated Marine Officers’ and Seamen’s Union of the Philippines (AMOSUP).^[10][10] Section 20.1.5 allegedly provides:

Permanent Medical Unfitness – A seafarer whose disability is assessed at 50% or more under the POEA Employment Contract shall, for the purpose of this paragraph, be regarded as permanently unfit for further sea service in any capacity and entitled to 100% compensation, i.e. US$80,000.00 for officers and US$60,000.00 for ratings, AB and below. Furthermore, any seafarer assessed at less than 50% di[s]ability under the Contract but certified as permanently unfit for further sea service in any capacity by the company doctor, shall also be entitled to 100% compensation.^[11][11]

          Anent his prayer for damages and attorney’s fees, petitioner asserted that respondents should be made liable in view of their negligence and delay in the payment of his allegedly valid claims and the latter’s contravention of the terms and conditions of the contract of employment.^[12][12]

          In their defense, respondents contended that petitioner’s monetary claims were premature by reason of the latter’s refusal to undergo the operation recommended by the company designated physician.  Respondents presented Dr. Tiong Sam Lim’s typewritten opinion^[13][13] dated June 4, 2001, stating that:

            IF BONE GRAFTING WAS DONE AND THE BONE HEALED, THEN HE WILL BE ABLE TO GO BACK TO SEA DUTIES. IF THE LEFT FOREARM IS LEFT AS IS, THEN, THERE WILL BE PAIN AND INABILITY TO TURN THE FOREARM CAUSING DISABILITY. THE DISABILITY THEN WILL BE GRADE 10. 

          Further citing Section 20(B)(2) of the POEA Standard Employment Contract, respondents claimed that, although it was their obligation to repatriate an injured or sick seaman and pay for his treatment and sick leave benefits until he is declared fit to work or his degree of disability has been clearly established by the company designated physician, it was allegedly petitioner’s correlative obligation to submit himself for medical examination and treatment to determine if he is still fit to work or to establish the degree of his disability.^[14][14]  Respondents made known their willingness to shoulder the cost of the operation or procedure needed but it was allegedly petitioner who refused to undergo the operation in bad faith and in contravention of the terms of the employment contract.^[15][15]  Further, respondents argued that they were not liable for damages and attorney’s fees for there was no bad faith or ill motive on their part.^[16][16]  

In a Decision dated September 27, 2002, the Labor Arbiter ruled in favor of petitioner and awarded him the amount of US$3,614.00 as sickness allowance; US$80,000.00 “representing [his] permanent medical unfitness benefits under the pertinent provisions of the Collective Bargaining Agreement”;^[17][17] and attorney’s fees.

Respondents appealed the Labor Arbiter’s decision to the National Labor Relations Commission (NLRC), contending, in addition to their previously proffered arguments, that they have already paid petitioner’s sickness allowance^[18][18] and that the Labor Arbiter had no basis to award disability compensation for failure of petitioner to present the CBA and proof of membership to AMOSUP.

The NLRC dismissed respondents’ appeal in a Decision^[19][19] dated August 20, 2003 and subsequently denied their motion for reconsideration.^[20][20]

Undeterred, respondents filed a petition for certiorari^[21][21] with the Court of Appeals.  In a Decision dated May 31, 2005, the Court of Appeals noted that the NLRC appeared to have followed the rule that the conclusions of the Labor Arbiter when sufficiently corroborated by the evidence on record must be accorded respect by the appellate tribunals and thus, the NLRC no longer examined the evidence submitted by respondents to prove payment of petitioner’s sickness allowance.^[22][22]  However, relying on our decision in Philippine Telegraph and Telephone Corporation v. National Labor Relations Commission,^[23][23] the Court of Appeals held that:

Although said evidence were filed for the first time on appeal, it would have been prudent upon the NLRC to look into them since it was not bound by the rules of evidence prevailing in courts of law or equity. In fact, labor officials are mandated by Article 221 of the Labor Code to use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process. x x x.^[24][24] (Emphasis supplied.)

As for the probative value of the receipts submitted by respondents as annexes to the memorandum of appeal, the Court of Appeals found that:

As clearly shown by said annexes, [respondents] had already paid [petitioner] his sickness allowance. In fact, he received a PCIB Check, dated November 28, 2000, in the amount of P41,467.98 on December 1, 2000; another PCIB Check, dated December 14, 2000, in the amount of P45,255.60 on January 10, 2001; an FEBTC check, dated January 25, 2001, in the amount of P48,053.68 on January 31, 2001; and lastly an RCBC check, dated February 14, 2001, in the amount of P43,691.06 on February 28, 2001. All of these documents bear [petitioner’s] signature. Thus, he cannot deny that he received said sickness allowance in the total amount of P178,468.32.^[25][25] (Emphasis supplied.)

With respect to respondents’ claim that the Labor Arbiter’s award of US$80,000 in medical unfitness benefits had no basis, the Court of Appeals held that:

A careful perusal of the records shows that [petitioner’s] claim that he was a member of AMOSUP and, therefore, Article 20.1.5 of the CBA providing for an US$80,000.00 permanent medical unfitness benefits applies in this case, is not supported by the evidence. For one, the said CBA does not form part of the evidence presented by [petitioner] in this case. Instead, what he submitted as an attachment to his Memorandum of Authorities before this Court is a copy of a document entitled “Addendum to Memorandum of Agreement by and between Masterbulk PTE Ltd., Associated Marine Officers & Seamen’sUnion of the Phils. (AMOSUP), and Magsaysay Maritime Corporation.” Said Addendum merely provides:

“1.        That the Agreement shall be renewed/extended for another one (1) year effective January 1, 2000.

2.              All other terms and conditions of the Agreement not in anyway inconsistent with the foregoing shall remain unaltered and in full force and effect.”

Moreover, he did not even present any identification card that would show that he was really a member of the said labor organization. Neither did he present any document that would show that seafarers like him who ply the overseas route were compulsory or automatic members of said labor organization. Since [petitioner] claims such membership, it was incumbent upon him to prove it.

            We, thus, hold that the NLRC committed a grave abuse of discretion when it affirmed the Labor Arbiter’s decision awarding [petitioner] US$80,000.00 as medical unfitness benefit, despite the fact that such claim was unsubstantiated by any documentary evidence.^[26][26] (Emphases supplied.)

However, as it was undisputed that petitioner suffered a work-related injury, the Court of Appeals still saw fit to award medical unfitness benefits, based on the POEA Standard Contract of Employment and the finding of petitioner’s own physician that the proper disability grade for petitioner’s injury was Grade 11 or 14.93%.  Thus, the Court of Appeals computed petitioner’s medical unfitness benefits, as follows:

While it is true that [petitioner’s] claim for disability is premature, the fact remains that there is still a work-connected injury and the attendant loss or impairment of his earning capacity that need to be compensated. On this score, Sec. 30-A of POEA Standard Contract of Employment is applicable. The same provides for a schedule of disability allowances and per said schedule, an impediment of Grade 11 is equivalent to the maximum rate of US$50,000.00. Multiply this amount by the degree of impediment, which is 14.93%, the [petitioner] is entitled to US$7,465.00, to be paid in Philippine Currency equivalent to the exchange rate prevailing during the time of payment.^[27][27]

After finding that this case did not fall under the exceptional circumstances provided by law for an award of attorney’s fees, the Court of Appeals ruled that the award of 10% attorney’s fees in favor of petitioner was improper.  Thus, the dispositive portion of the Court of Appeals’ May 31, 2005 Decision read:

WHEREFORE, the September 27, 2002 Decision of the Labor Arbiter is hereby modified to read as follows:

“WHEREFORE, judgment is hereby rendered

1]  ordering the respondents to pay the complainant the amount of US$7,480.00 or its equivalent amount in Philippine Currency at the prevailing exchange rate at the time of payment, representing permanent medical unfitness benefits, plus legal interest reckoned from the time it was due;

2]  denying the claim for sickness allowance, the same having been paid;

3]  denying the claim for attorney’s fees; and

4]  denying the other claims of the complainant.”^[28][28]

In his motion for reconsideration of the above Decision of the Court of Appeals, petitioner claimed that it was only by inadvertence that he previously failed to attach a copy of the CBA.  Attached as annexes to his motion were: (a) a purported copy of the CBA (Masterbulk Vessels Maritime Officers Agreement 1999) which allegedly entitled him to US$110,000.00 in disability benefits (an amount even higher than the Labor Arbiter’s award of US$80,000.00); and (b) a copy of his monthly contributions as union member during the period that he was employed by respondents.  Thus, he prayed that the Court of Appeals reconsider its May 31, 2005 Decision and award him the higher amount of US$110,000.00 in disability benefits in accordance with the Masterbulk Vessels Maritime Officers Agreement 1999.

In their Comment, respondents objected to the annexes of petitioner’s motion for reconsideration on the grounds that his belated filing violated their right to due process and that the list of monthly contributions he presented did not prove he was a member of AMOSUP since the said list did not contain any validation/signature of an AMOSUP officer.

In his Reply, petitioner attached as additional evidence copies of: (a) his identification card as AMOSUP member; (b) his identification card as member of the Singapore Maritime Officers’ Union; and (c) a certification dated July 13, 2005 issued by the Legal Department of AMOSUP that petitioner was a member of said union at the time of employment with the M/T Star Langager from March 2 to October 1, 2000.^[29][29]

In a Resolution dated July 14, 2005, the Court of Appeals denied petitioner’s motion for reconsideration, ruling that:

As to the Masterbulk Vessels Maritime Agreement, it is too late in the day to consider it as it was just submitted with the Motion for Reconsideration. Liberality to get to the truth is most ideal but there is a point or stage of the process that it should no longer be allowed. To do so at this stage would be unfair to the other party.^[30][30]

Hence, petitioner now comes to this Court, raising the following issues:

I.

THE COURT OF APPEALS COMMITTED GRAVE ERROR IN NOT ADMITTING AND CONSIDERING THE EVIDENCE SUBMITTED BY PETITIONER SHOWING THAT HE IS A MEMBER OF THE AMOSUP AND THE SINGAPORE MARITIME OFFICERS UNION.

II.

THE COURT OF APPEALS WAS CLEARLY BIASED IN FAVOR OF THE RESPONDENTS SUCH THAT IT SHOWED LIBERALITY TO THE LATTER BUT STRICTLY APPLIED THE RULES AGAINST PETITIONER.

At the outset, it should be noted that the resolution of the foregoing issues entails a review of the facts of the case which ordinarily would not be allowed in a petition for review on certiorari under Rule 45 of the Rules of Court.  As a rule, only questions of law, not questions of fact, may be raised in a petition for review on certiorari under Rule 45.

However, this principle is subject to recognized exceptions. In the labor law setting, the Court will delve into factual issues when conflict of factual findings exists among the labor arbiter, the NLRC, and the Court of Appeals.^[31][31]  Considering that in the present case there were differing factual findings on the part of the Court of Appeals, on one hand, and the Labor Arbiter and the NLRC, on the other, there is a need to make our own assiduous evaluation of the evidence on record.

As the two issues raised by petitioner are intrinsically related, they will be discussed together.

The Court finds merit in petitioner’s contention that it would be more in keeping with the interest of fairness and substantial justice for the Court of Appeals to likewise admit and review petitioner’s evidence despite being submitted only on appeal.  There appears to be no justification for relaxing the rules of procedure in favor of the employer and not taking the same action in the case of the employee, particularly in light of the principle that technical rules of procedure shall be liberally construed in favor of the working class in accordance with the demands of substantial justice.^[32][32]  We have also previously held that “[r]ules of procedure and evidence should not be applied in a very rigid and technical sense in labor cases in order that technicalities would not stand in the way of equitably and completely resolving the rights and obligations of the parties.”^[33][33]   

In line with the objective of dispensing substantial justice, this Court has examined the evidence belatedly submitted by petitioner to the Court of Appeals.  Unfortunately, even with this procedural concession in favor of petitioner, we do not find any sufficient basis to overturn the Court of Appeals’ May 31, 2005 Decision on the merits.

To recall, it was petitioner’s assertion in his Position Paper that he is entitled to US$80,000.00 as medical unfitness benefits under Article 20.1.5 of the CBA with AMOSUP, which provision he merely quoted in his pleading.^[34][34]  The Labor Arbiter awarded the amount of US$80,000.00 as permanent medical unfitness benefits, citing the said AMOSUP CBA as his basis for the award.^[35][35]  The Court of Appeals found that such award was not supported by any evidence, in view of petitioner’s failure to present a copy of the AMOSUP CBA and proof of his membership in said union.

Although petitioner was able to submit to the Court of Appeals copies of his identification card as an AMOSUP member and a certification from AMOSUP’s Legal Department that he was a member of said union during the period of his employment on the M/T Star Langanger,^[36][36] he still failed to present any copy of respondents’ supposed CBA with AMOSUP.

What petitioner belatedly presented on appeal appears to be a CBA between respondent Masterbulk and the Singapore Maritime Officers’ Union, not AMOSUP. Article 20.1.5, or the stipulation regarding permanent medical fitness benefits quoted in petitioner’s Position Paper and relied upon by the Labor Arbiter in his decision, cannot be found in this CBA.  Instead, Clause 24 of the Masterbulk Vessels Maritime Officers’ Agreement 1999 provides in part:

24. COMPENSATION FOR INJURY OR DEATH

(1) The Company shall pay compensation to an officer for any injury or death arising from an accident while in the employment of the Company, and for this purpose shall effect a 24-hour insurance coverage in accordance with Appendix IV to this Agreement.

(2) Compensation shall be paid as stipulated in sub-clause (1) of this clause for all injuries howsoever caused, regardless of whether or not an officer comes within the scope of the Workmen’s Compensation Act and includes accidents arising or not arising out of the course of his employment and accidents arising outside the working hours of the injured or dead officer.

(3) An officer who is outside the scope of the Workmen’s Compensation Act shall be entitled to claim for compensation equivalent to that payable under the Workmen’s Compensation Act as if he is covered by the scope under the Workmen’s Compensation Act.

(4) An officer who receives compensation under the Workmen’s Compensation Act shall be entitled to receive only the difference between the amount paid to him under the Workmen’s Compensation Act and the amount payable under Appendix IV, if the latter amount is higher than the compensation assessed by the Workmen’s Compensation Department.

(5) An officer who suffers temporary incapacity shall be entitled to medical benefits including paid sick leave as stipulated in clause 23 of this Agreement.^[37][37]

The higher amount of benefits (US$110,000.00) being claimed by petitioner does not appear in clause 24 but in Appendix IV referred therein, to wit:

                                                                                            APPENDIX IV

                                                                                            (Clauses 19 & 24)

COMPENSATION FOR INJURY OR DEATH

Maximum Compensation Payable:

                                                             WORLD-WIDE       WAR RISK IN

                                                             EXCEPT                 WAR ZONE OR

                                                             WAR ZONE AREA WARLIKE AREA

1.1 Master, Chief Engineer and All ranks US$110,000              US$220,000

Compensation shall be paid to an officer who sustains injuries through an accident as follows:

                                                                                        PERCENTAGE OF

                                                                                    CAPITAL SUM PAYABLE

x x x x

2.2. PERMANENT DISABLEMENT resulting in:

x x x x

        2.2.8 Any other injury causing permanent disablement ……………….100%

x x x x

2.3 Permanent total loss of use of member shall be treated as loss of member.

2.4 Where the injury is not specified the Company shall adopt a percentage of disablement, which in its opinion is not inconsistent with the scales shown in sub-paragraph 2.2.

2.5 The aggregate of all percentages payable in respect of any one accident shall not exceed 100%.

x x x x

4.   Injuries which are covered under the 1^st and 2^nd Schedule to the Singapore Workmen’s Compensation Act (SWCA), but are not covered under this group personal accident policy (GPA) policy, shall be similarly covered by this GPA policy to the extent that computation of the percentage of compensation entailed in the SWCA shall be based on the maximum amount of compensation entailed in paragraph 1 of this Appendix. In the event of similar injury being entailed in the SWCA and this GPA policy, the more favourable compensation shall prevail.

5.   The Company shall effect a 24-hour insurance to cover officers in its employment for any injury or death arising from an accident or war risk as shown in this Appendix.

6.  The geographical limits of the insurance cover shall be worldwide.^[38][38] (Emphasis supplied.)

From the foregoing, respondent Masterbulk ostensibly committed in this CBA with a foreign union, Singapore Maritime Officers’ Union, that it shall pay compensation for injuries of employee-union members through the latter’s coverage in a group personal accident insurance policy under terms set out in Appendix IV of the CBA.  This contractual obligation is  completely different from the cause of action set out in petitioner’s Position Paper or the relief granted by the Labor Arbiter – which was the purported obligation of respondents under an alleged CBA with a local union to pay a specific amount of permanent medical unfitness benefits. 

We now come to the question whether the Court may award medical unfitness benefits in accordance with the Masterbulk Vessels Maritime Officers Agreement 1999 as prayed for in the present petition.  On this point, we rule that we cannot in view of the doubtful authenticity and enforceability of this CBA belatedly submitted by petitioner.

A perusal of the photocopies of the Masterbulk Vessels Maritime Officers Agreement 1999 submitted by petitioner to the Court and the Court of Appeals revealed that there were missing pages.  The first page of the agreement began with a portion of clause 3.  There was no signature page showing that the agreement was duly signed by the representatives of Masterbulk and the union.  On some pages, there were page numbers and signatures/initials in the margins but on other pages there were no page numbers and signatures/initials.  On the pages that did contain page numbers it was indicated that the document had 24 pages but the copies submitted by petitioner only had 17 pages. 

Although petitioner was able to submit a photocopy of his identification card as a member of the Singapore Maritime Officers’ Union, it appeared on the face of said identification card that his membership expired in September 2000 and it was unclear from the incomplete copy of the Masterbulk Vessels Maritime Officers Agreement 1999 if petitioner is entitled to make a claim under the said agreement beyond the term of his membership in the foreign union.

Even more importantly, clause 7 of the Masterbulk Vessels Maritime Officers Agreement 1999 provided that:

7.                  REFEREE

In the event of a dispute arising out of the operation of this Agreement, the matter shall be referred by either party to the President of the Industrial Arbitration Court of Singapore who may select a referee appointed under section 43 of the Industrial Relations Act to hear and determine such dispute.^[39][39]  (Emphases supplied.)

It likewise does not escape our notice that under the pertinent provisions of the above-mentioned agreement the computation and payment of compensation for injuries depend on the applicable provisions of the Singapore Workmen’s Compensation Act which petitioner did not prove in these proceedings.  Verily, the application and enforcement of foreign law is beyond this Court’s authority, especially in the absence of proof of such foreign law.  As we previously ruled in one case, “foreign laws do not prove themselves in our courts.  Foreign laws are not a matter of judicial notice. Like any other fact, they must be alleged and proven.  x x x.”^[40][40]

In National Union of Workers in Hotels, Restaurants and Allied Industries-Manila Pavilion Hotel Chapter v. National Labor Relations Commission,^[41][41] we held that “[t]he burden of proof rests upon the party who asserts the affirmative of an issue. And in labor cases, the quantum of proof necessary is substantial evidence, or such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.”^[42][42]

What is indubitable in this case is that petitioner alleged in his Position Paper that there was a CBA with AMOSUP (a local union of which he was purportedly a member) which entitled him to disability benefits in the amount of US$80,000.00.  It is elementary that petitioner had the duty to prove by substantial evidence his own positive assertions.  He did not discharge this burden of proof when he submitted photocopied portions of a different CBA with a different union.

          In all, we find that the Court of Appeals committed no error in ruling that the Labor Arbiter’s award of US$80,000.00 in disability benefits was unsupported by the evidence on record, even if we take into consideration petitioner’s late documentary submissions.  There is no cogent reason to disturb the appellate court’s finding that the only credible and competent bases for an award of disability benefits to petitioner are the POEA Standard Contract of Employment and petitioner’s own medical evidence that his disability grade is Grade 11 (14.93%).  Thus, the Court of Appeals’ computation of petitioner’s permanent medical unfitness benefits in the amount of US$7,465.00^[43][43] must stand.

           WHEREFORE, the instant petition for review is DENIED.  The Decision dated May 31, 2005 and the Resolution dated July 14, 2005 of the Court of Appeals in CA-G.R. SP No. 82638 are AFFIRMED.

No pronouncement as to costs.

          SO ORDERED.

                                                 TERESITA J. LEONARDO-DE CASTRO

                                       Associate Justice

WE CONCUR:

RENATO C. CORONA

Chief Justice

Chairperson

CERTIFICATION

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

CASE NO. 2011-0099: HEIRS OF MARILOU K. SANTIAGO, REPRESENTED BY DENNIS K. SANTIAGO, LOURDES K. SANTIAGO AND  EUFEMIA K. SANTIAGO VS. ALFONSO AGUILA (G.R. NO. 174034, 9 MARCH 2011, ABAD, J.) SUBJECT: FILING PETITION FOR REVIEW OUT OF TIME UNDER RULE 43. (BRIEF SUBJECT: HEIRS OF SANTIAGO VS. AGUILA).

SECOND DIVISION

HEIRS OF MARILOU K. SANTIAGO, G.R. No. 174034

represented by DENNIS K. SANTIAGO,

LOURDES K. SANTIAGO and

EUFEMIA K. SANTIAGO,

                             Petitioners,                     Present:

                                                                     CARPIO, J., Chairperson,

          – versus –                                             VELASCO, JR.,^*

  PERALTA,

  ABAD, and

  MENDOZA, JJ.

ALFONSO AGUILA,

                             Respondent.                            Promulgated:

                                                                      March 9, 2011

x ———————————————————————————– x

DECISION

ABAD, J.:

          This case is about the dismissal of a petition for review after it was filed within the 30-day extension that the petitioners originally asked since the appellate court later granted them only a 15-day extension.

The Facts and the Case

Petitioner heirs of Marilou K. Santiago owned a 25,309-square meter coconut land that respondent Alfonso Aguila (Aguila) tenanted.  For allegedly cutting down five coconut trees in violation of the Coconut Preservation Act of 1995 and depriving the heirs of their share in the harvest, the latter filed an ejectment suit against him before the Provincial Agrarian Reform Adjudicator (PARAD).  Aguila resisted the action. 

On May 31, 2000 the PARAD ruled that Aguila deliberately failed to pay his rents.  Thus, it terminated the tenancy relationship and ordered him to vacate the property and pay petitioners their past shares in the harvest.  Aguila appealed on June 16, 2005 to the Department of Agrarian Reform Adjudication Board (DARAB), which set aside the PARAD’s decision and ordered the execution of a new leasehold contract between the parties.  On March 3, 2006 the DARAB denied petitioner heirs’ motion for reconsideration. 

Since petitioner heirs received a copy of the DARAB resolution denying their motion for reconsideration on March 6, 2006, they had until March 21 within which to file a petition for review with the Court of Appeals (CA).  On March 15, 2006 they filed with the CA a motion for extension of 30 days or until April 20, 2006 within which to file their petition.  The heirs filed their petition for review on April 20, 2006, the last day of the extension they sought. 

Eight days later or on April 28, 2006 the CA granted petitioner heirs an extension of only 15 days or up to April 5, 2006 within which to file their petition.^[1]  The consequence of this was that the petition they earlier filed went beyond the allowed extension. Further, the CA also found the special power of attorney (SPA) attached to the petition defective in that it empowered petitioner Eufemia K. Santiago (Eufemia) as attorney-in-fact of a Dennis Matubis, who was not a petitioner, when Eufemia was supposed to stand as attorney-in-fact for petitioner Dennis K. Santiago.  For these reasons, the CA dismissed the petition.  Petitioner heirs moved for reconsideration but the CA denied their motion on August 7, 2006, prompting them to come to this Court on a petition for review. 

The Issue Presented

The issue in this case is whether or not the CA erred in dismissing petitioner heirs’ petition for review under Rule 43 for having been filed out of time.

The Court’s Rulings

1.       Regarding the defective SPA, petitioner heirs explained that it was an honest mistake because Dennis Matubis (who appeared not to be a party in the case) and petitioner Dennis K. Santiago are one and the same person.  Since Aguila has offered no proof to counter the truth of this assertion and since the CA did not require the heirs to substantiate it, the Court may presume such assertion to be true.  Besides, the CA cannot altogether throw out the entire petition for this reason since all the petitioners have a common interest in the success of the suit and since the petition was validly verified with respect to the rest of them.

          2.       Although it is within the CA’s discretion to grant or not to grant a motion for extension, such discretion should be exercised wisely and prudently.  The rules regulating the filing of motions for extension of time to file certain pleadings are intended to promote the speedy disposition of cases in the interest of justice, not throw out such pleadings on pure technicality.  

Here, on March 15, 2006 petitioner heirs filed their motion for extension of 30 days (counted from March 21 when the original period was to run out) within which to file their petition.  If the CA would want to deny that extension or shorten it to only 15 days up to April 5, 2006, it had technically at least 20 days (from March 15 to April 4) within which to so warn petitioners that they might have a chance to finish up and file their petition.  Yet, it did not.  While the parties have no right to expect the CA to grant their motion for extension, they have a right to expect reasonableness from it. 

Technically the CA waited 44 days up to April 28, 2006 before acting on the motion that petitioners filed on March 15, 2006. The CA knew, when it reduced to only 15 days the extension asked of it, that such reduced extension had already come to pass 23 days earlier on April 5, 2006.  Surely, the CA did not expect petitioners to still be able to cope with the reduced extension.  Since the rules allow the CA to grant an extra 15-day extension “for the most compelling reason,” the CA ought to have given petitioners reasonable notice that it did not regard its ground sufficiently compelling.  The CA gave petitioner heirs absolutely no chance to file a timely petition. 

What is more, when the CA acted on the motion for extension on April 28, 2006 the petition was already at hand, having been filed earlier on April 20.  The CA cannot pretend that it had been waiting with bated breath to have a look at the petition and that, consequently, it could only grant a shorter extension for its filing.  Indeed, the CA did not dismiss the petition outright when it did not get the same by April 5, its desired deadline.  The CA got the petition on April 20, 2006 but waited eight days more or until April 28, 2006 before looking at it.  So what was the point in its denying the longer extension when it was not ready to act promptly on the petition?

Procedural rules are intended to facilitate the administration of justice, not frustrate it.  It is always better that a case is decided on the merits rather than disposed of because of procedural infirmities.  Considering that the case involves tenancy relations and possession of agricultural landholding and that PARAD and DARAB have made conflicting findings, a review of the case by the CA was clearly in order. 

WHEREFORE, the Court GRANTS the petition, SETS ASIDE the Court of Appeals resolutions in CA-G.R. SP 93935 dated April 28, 2006 and August 7, 2006 and DIRECTS it to give due course to the petition of petitioner Heirs of Marilou K. Santiago and adjudicate it on its merits.

SO ORDERED. 

ROBERTO A. ABAD

                                                              Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

PRESBITERO J. VELASCO, JR.          DIOSDADO M. PERALTA

               Associate Justice                                  Associate Justice

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

^*  Designated as additional member in lieu of Associate Justice Antonio Eduardo B. Nachura, per Special Order 933 dated January 24, 2011.

^[1]  RULES OF COURT, Rule 43, Sec. 4.  Period of appeal.— x x x  Upon proper motion and the payment of the full amount of the docket fee before the expiration of the reglementary period, the Court of Appeals may grant an additional period of fifteen (15) days only within which to file the petition for review.  No further extension shall be granted except for the most compelling reason and in no case to exceed fifteen (15) days.

CASE NO. 2011-0098: CORNELIA M. HERNANDEZ VS. CECILIO F. HERNANDEZ (G.R. NO. 158576, 9 MARCH 2011, PEREZ, J.) SUBJECTS: QUITCLAIM; WHEN CONSENT IN CONTRACT IS VOIDABLE. (BRIEF TITLE: HERNANDEZ VS. HERNANDEZ).

FIRST DIVISION

x  – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

D E C I S I O N

PEREZ, J.:

Before Us is a Petition for Review^[1] of the Decision of the Court of Appeals in CA-G.R. CV No. 70184^[2] dated 29 May 2003.  The appellate court reversed the Decision of the Regional Trial Court of Makati, Branch 150 (RTC Branch 150), in Civil Case No. 00-1148^[3] dated 12 February 2001, declaring that the quitclaim signed by the petitioner is valid and incontrovertible.      

          The controversy between the parties began when the Republic of the Philippines, through the Department of Public Works and Highways (DPWH), offered to purchase a portion of a parcel of land with an area of 80,133 square meters, covered by TCT No. T-36751^[4] of the Registry of Deeds for Tanauan, Batangas, located at San Rafael, Sto. Tomas, Batangas,  for use in the expansion of the South Luzon Expressway.  The land is pro-indiviso owned by Cornelia M. Hernandez (Cornelia), petitioner herein, Atty. Jose M. Hernandez, deceased father of respondent Cecilio F. Hernandez (Cecilio),^[5] represented by Paciencia Hernandez (Paciencia) and Mena Hernandez (Mena), also deceased and represented by her heirs.^[6]

          The initial purchase price that was offered by the government was allegedly at Thirty-Five pesos (P35.00) per square meter for 14,643 square meters of the aforementioned land.^[7]  The Hernandez family rejected the offer.  After a series of negotiations with the DPWH, the last offer stood at Seventy Pesos (P70.00) per square meter.^[8]  They still did not accept the offer and the government was forced to file an expropriation case.

On 9 August 1993, an expropriation case was filed by the Republic of the Philippines, through the DPWH, before the Regional Trial Court, Branch 83 (RTC Branch 83), Tanauan, Batangas.^[9]  The case was first docketed as Civil Case No. T-859, then Civil Case No. C-023.  Branch Clerk of Court Francisco Q. Balderama, Jr., issued a Certification dated 10 January 2001 certifying that the docket numbers stated refers to one and the same case.^[10]

In Civil Case No. C-023, different parcels of land in Barangay Tripache, Tanauan Batangas, which belongs to thirty-four (34) families including the Hernandezes are affected by the expansion project of the DPWH.   A similar case, Civil Case No. C-022, was consolidated with the former as it affects the same DPWH endeavor.  Land in San Rafael, Sto. Tomas, Batangas, which belong to twenty-three (23) families, was also the subject of expropriation. 

On 11 November 1993, the owners of the Hernandez property executed a letter indicating: (1) Cecilio as the representative of the owners of the land; and (2) the compensation he gets in doing such job.  The letter reads:

November 11, 1993

Mr. Cecilio F. Hernandez

Tanauan, Batangas

Dear Cecilio:

This would confirm to give you twenty (20%) percent of any amount in excess of Seventy (P70.00) Pesos per square meter of our respective shares as success fee for your effort in representing us in Civil Case No. T-859 entitled, “Republic of the Philippines, represented by the Public Works and Highways v. Sto. Tomas Agri-Farms, Inc. and the Appellate Courts.”

Whatever excess beyond Three Hundred (P300.00) Pesos per square meter of the area shall likewise be given to you as additional incentive.

We will give you One Thousand Five Hundred (P8,500.00) (sic) Pesos each for the preparation of the pleading before the Regional Trial Court and such other reasonable expenses of litigation pro-indiviso.

                                                            Very Truly Yours,

                                             (Sgd.) PACENCIA F. HERNANDEZ

                                                        (Sgd.) CORNELIA M. HERNANDEZ

Conforme:

                                                         (Sgd.) PACITA M. HERNANDEZ

(Sgd.)CECILIO F. HERNANDEZ

                                                            HEIRS OF MENA M. HERNANDEZ

By: (Sgd.) MA. ANTONIA H. LLAMZON 

AND

                                                      (Sgd.) PERSEVERANDO M. HERNANDEZ^[11]

During the course of the expropriation proceedings, an Order dated 13 September 1996 was issued by the RTC Branch 83, informing the parties of the appointment of commissioners to help determine the just compensation. Cecilio was appointed as one of the commissioners to represent the defendants in Civil Case No. C-022. The Order reads:

In order to determine the fair market value of the lands subject of expropriation, the following are appointed as commissioners: Engr. Melchor Dimaano, as representative of the Department of Public Works and Highways (DPWH), Messrs. Magno Aguilar and Cecilio Hernandez, as representatives of the landowners, and Mr. Eric Faustino Esperanza as representative of the Court.^[12] (Emphasis ours)

On 18 October 1996, Cornelia, and her other co-owners who were also signatories of the 11 November 1993 letter, executed an irrevocable Special Power of Attorney (SPA) appointing Cecilio Hernandez as their “true and lawful attorney” with respect to the expropriation of the subject property.^[13] The SPA stated that the authority shall be irrevocable and continue to be binding all throughout the negotiation.  It further stated that the authority shall bind all successors and assigns in regard to any negotiation with the government until its consummation and binding transfer of a portion to be sold to that entity with Cecilio as the sole signatory in regard to the rights and interests of the signatories therein.  There was no mention of the compensation scheme for Cecilio, the attorney-in-fact.

The just compensation for the condemned properties was fixed in the Decision^[14] dated 7 January 1998, penned by Judge Voltaire Y. Rosales (Judge Rosales) of RTC Branch 83, Tanauan, Batangas.  The value of the land located at Barangay Tripache, Tanauan, Batangas, was pegged at One Thousand Five Hundred Pesos (P1,500.00) per square meter.  The total area that was condemned for the Hernandez family was Fourteen Thousand Six Hundred Forty-Three (14,643) square meters.  Thus, multiplying the values given, the Hernandez family will get a total of Twenty One Million, Nine Hundred Sixty-Four Thousand Five Hundred Pesos (P21,964,500.00) as just compensation.^[15]

Included in the decision is the directive of the court to pay the amount of P4,000.00 to Cecilio, as Commissioner’s fees.^[16]

On 6 October 1999, petitioner executed a Revocation of the SPA^[17] withdrawing the authority earlier granted to Cecilio in the SPA dated 18 October 1996.  After the revocation, on 28 December 1999, without the termination of counsel on record, Cornelia, with a new lawyer, moved for the withdrawal of her one-third (1/3) share of the just compensation, which is equivalent to Seven Million Three Hundred Twenty-One Thousand Five Hundred Pesos (P7,321,500.00) – the amount a pro-indiviso owner is to receive.

In the Order^[18] dated 24 January 2000, Judge Rosales, even with the irregularity that the motion to withdraw was not filed by the counsel of record, granted the motion of petitioner, with the condition that the money shall be released only to the attorney-in-fact, Mr. Cecilio F. Hernandez.  The trial court took cognizance of the irrevocable nature of the SPA dated 18 October 1996.^[19]Cecilio, therefore, was able to get not just one-third (1/3) of, but the entire sum of Twenty One Million, Nine Hundred Sixty-Four Thousand Five Hundred Pesos (P21,964,500.00).

On 7 February 2000, Cornelia received from Cecilio a Bank of the Philippine Islands Check amounting to One Million One Hundred Twenty-Three Thousand Pesos (P1,123,000.00).^[20] The check was however accompanied by a Receipt and Quitclaim^[21]document in favor of Cecilio.  In essence it states that: (1) the amount received will be the share of Cornelia in the just compensation paid by the government in the expropriated property; (2) in consideration of the payment, it will release and forever discharge Cecilio from any action, damages, claims or demands; and (3) Cornelia will not institute any action and will not pursue her complaint or opposition to the release to Cecilio or his heirs or assigns, of the entire amount deposited in the Land Bank of the Philippines, Tanauan, Batangas, or in any other account with any bank, deposited or will be deposited therein, in connection with Civil Case No C-023, representing the total just compensation of expropriated properties under the aforementioned case.

The check was received by Cornelia with a heavy heart.  She averred in her ex-parte testimony that she was forced to receive such amount because she needs the money immediately for medical expenses due to her frail condition.^[22]

Moreover, Cornelia averred that after a few days from her receipt of the check, she sought the help of her niece, Daisy Castillo, to get the decision in Civil Case No. C-022.^[23]  It was only then, when her niece got hold of the decision and explained its contents, that she learned that she was entitled to  receive Seven Million Three Hundred Twenty-One Thousand Five Hundred Pesos (P7,321,500.00).^[24]  In a Letter^[25] dated 22 June 2000, Cornelia demanded the accounting of the proceeds.  The letter was left unanswered.  She then decided to have the courts settle the issue.  A Complaint for the Annulment of Quitclaim and Recovery of Sum of Money and Damages^[26] was filed before the RTC Branch 150 of Makati on 18 September 2000.  The case was docketed as Civil Case No. 00-1184.

          Cecilio, despite the service of summons and copy of the complaint failed to file an answer.  The trial court explained further that Cecilio was present in the address supplied by the petitioner but refused to receive the copy.  The trial court even gave Cecilio ten (10) more days, from his refusal to accept the summons, to file his answer. Upon the motion of the petitioner, respondent Cecilio was declared in default.  The court allowed petitioner to adduce evidence ex parte.^[27]

          Cecilio tried to file a Motion for Reconsideration to lift the order of default. However, the trial court found that the leeway they have given Cecilio to file an answer was more than enough. 

In the Decision dated 12 February 2001, the RTC Branch 150 of Makati, through Judge Zeus C. Abrogar denied the motion and nullified the quitclaim in favor of Cecilio.  The fallo of the case reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant, declaring the receipt and quitclaim signed by the plaintiff dated February 7, 2000 as null and void and ordering the defendant to pay the plaintiff the amount of;

1. P6,198,417.60, including the accrued interest thereon with 12% per annum, computed from the date of the filing hereof until the said amount is fully paid;

1. payment of P200,000.00 to the plaintiff by the defendant by way of moral damages;

1. attorney’s fees in the sum of P100,000.00 and;

1. cost of suit.^[28]

Aggrieved, Cecilio appealed the Decision of the trial court. The Court of Appeals did not discuss whether the default order was proper.  However, the appellate court, in its Decision dated 29 May 2003 reversed and set aside the ruling of the trial court.  The dispositive portion reads:

WHEREFORE, premises considered, the Decision dated February 12, 2001, of the Regional Trial Court of Makati, National Capital Judicial Region, Branch 150, in Civil Case No. 00-1148, is hereby REVERSED and SET ASIDE and a new one is entered ordering the dismissal of the complaint filed on September 13, 2000 by the appellee against the appellant.  No pronouncement as to costs.^[29]

Petitioner Cornelia now submits that the Court of Appeals erred in holding the validity of the receipt and quitclaim document contrary to law and jurisprudence.^[30]  She holds that the distribution of award that transpired is unjust and prays that the decision of the RTC Branch 150 of Makati be reinstated.

          We agree.

          The trial court awarded the Hernandez family, among others, a total amount of P21,964,500.00 for the expropriation of 14,643 square meters of land to be used as extension of the South Luzon Expressway.  The three co-owners of the said land, Cornelia, Mena and Paciencia were listed as item number twenty (20) in the decision dated 7 January 1998, as one of the recipients of the just compensation to be given by the government.^[31]  As pro-indiviso landowners of the property taken, each one of them ought to receive an equal share or one third (1/3) of the total amount which is equivalent to  P7,321,500.00.

          The equal division of proceeds, however, was contested by Cecilio.  He avers that he is the agent of the owners of the property.^[32]  He bound himself to render service on behalf of her cousins, aunt and mother, by virtue of the request of the latter.^[33]  As an agent, Cecilio insists that he be given the compensation he deserves based on the agreement made in the letter dated 11 November 1993, also called as the service contract,^[34] which was signed by all the parties.  This is the contract to which Cecilio anchors his claim of validity of the receipt and quitclaim that was signed in his favor.

I.

          A contract where consent is given through mistake, violence, intimidation, undue influence, or fraud is voidable.^[35]  In determining whether consent is vitiated by any of the circumstances mentioned, courts are given a wide latitude in weighing the facts or circumstances in a given case and in deciding in their favor what they believe to have actually occurred, considering the age, physical infirmity, intelligence, relationship, and the conduct of the parties at the time of the making of the contract and subsequent thereto, irrespective of whether the contract is in public or private writing.^[36]  And, in order that mistake may invalidate consent, it should refer to the substance of the thing which is the object of the contract, or those conditions which have principally moved one or both parties to enter the contract.^[37] 

          The compensation scheme of 20% of any amount over P70.00 per square meter and everything above P300.00 per square meter was granted in favor of Cecilio by the Hernandezes on 11 November 1993.  At that time, the Hernandezes had just rejected the government’s offer of P35.00 per square meter, which offer last stood at P70.00 per square meter.  It was the rejection likewise of the last offer that led to the filing of the expropriation case on 9 August 1993.  It was in this case, and for Cecilio’s representation in it of the Hernandezes, that he was granted the compensation scheme.  Clear as day, the conditions that moved the parties to the contract were the base price at P70.00 per square meter, the increase of which would be compensated by 20% of whatever may be added to the base price; and the ceiling price of P300.00 per square meter, which was considerably high reckoned from the base atP70.00, which would therefore, allow Cecilio to get all that which would be in excess of the elevated ceiling.  The ceiling was, from the base, extraordinarily high, justifying the extraordinary grant to Cornelio of all that would exceed the ceiling.

          It was on these base and ceiling prices, conditions which principally moved both parties to enter into the agreement on the scheme of compensation, that an obvious mistake was made.  The trial court, deviating from the principle that just compensation is determined by the value of the land at the time either of the taking or filing,^[38] which was in 1993, determined the compensation as the 1998 value of P1,500.00 per square meter. The trial court ratiocinated that the 1998 value was considered for the reason, among others that:

3.  It is common knowledge that prices of real estate in Batangas, including and/or particularly in Sto.Tomas and Tanauan have skyrocketed in the past two years;^[39] (Emphasis ours).

          This 1998 “skyrocketed” price of P1,500.00 per square meter was pounced upon by Cecilio as the amount against which the 1993 ceiling of P300.00 per square meter should be compared, thereby giving him the amount computed^[40] as follows:

CECILIO’S FEES    = (20% of anything over P70.00) + (everything in        excess of P300)

*If the land value is at P1,500.00 per square meter, then,

                                    = (20% of  P230.00) + (P1,500.00 – P300.00)

                                    = P46.00 + P1,200.00

= P1,246.00 per square meter

CORNELIA’S SHARE        = (land value at 1,500 less Cecilio’s fees)

                                                = P254.00 per square meter

*The total expropriated property is at 14,643 m², thus, Cecilio will get a   total of

                                    = P1,246.00 * 14,643

                                    = P18,245,178.00 total compensatinon

*One Third of the above value shows that Cecilio will get, from Cornelia

                             = P6,081,726.00

It must be noted that:

*The Hernandez’ family gets P21,964,500 for 14,643 m², at P1,500.00 per m²

*One-third (1/3) of that is P7,321,500 representing the share of a co-owner like Cornelia

*What will be left of Cornelia’s share if she pays Cecilio will be:

P1,239,774  less: 124,953.60 (Nominal Cost of Litigation as averred by Cecilio)

1,500.00 (Nominal payment for preparation of pleadings)

OVERALL TOTAL AMOUNT CORNELIA WILL RECEIVE:

P 1,113,320.4

As opposed to:

OVERALL TOTAL AMOUNT CECILIO WILL RECEIVE:  P6,081,726.00

          Cecilio’s position would give him 83.07% of the just compensation due Cornelia as a co-owner of the land.  No evidence on record would show that Cornelia agreed, by way of the 11 November 1993 letter, to give Cecilio 83.07% of the proceeds of the sale of her land.

          What is on record is that Cornelia asked for an accounting of the just compensation from Cecilio several times, but the request remained unheeded. Right at that point, it can be already said that Cecilio violated the fiduciary relationship of an agent and a principal. The relation of an agent to his principal is fiduciary and it is elementary that in regard to property subject matter of the agency, an agent is estopped from acquiring or asserting a title adverse to that of the principal. His position is analogous to that of a trustee and he cannot, consistently with the principles of good faith, be allowed to create in himself an interest in opposition to that of his principal or cestui que trust.^[41]

          Instead of an accounting, what Cornelia received was a receipt and quitclaim document that was ready for signing.  As testified to by Cornelia, due to her frail condition and urgent need of money in order to buy medicines, she nevertheless signed the quitclaim in Cornelio’s favor.  Quitclaims are also contracts and can be voided if there was fraud or intimidation that leads to lack of consent.  The facts show that a simple accounting of the proceeds of the just compensation will be enough to satisfy the curiosity of Cornelia.  However, Cecilio did not disclose the truth and instead of coming up with the request of his aunt, he made a contract intended to bar Cornelia from recovering any further sum of money from the sale of her property.

          The preparation by Cecilio of the receipt and quitclaim document which he asked Cornelia to sign, indicate that even Cecilio doubted that he could validly claim 83.07% of the price of Cornelia’s land on the basis of the 11 November 1993 agreement.  Based on the attending circumstances, the receipt and quitclaim document is an act of fraud perpetuated by Cecilio.  Very clearly, both the service contract of 11 November 1993 letter- agreement, and the later receipt and quitclaim document, the first vitiated by mistake and the second being fraudulent, are void.

II.

          Cecilio’s last source of authority to collect payment from the proceeds of the expropriation is the SPA executed on 18 October 1996 by the Hernandezes in favor of Cecilio as their “true and lawful” attorney with respect to the expropriation of the Hernandez property.  At the outset, it must be underscored that the SPA did not specify the compensation of Cecilio as attorney-in-fact of the Hernandezes. 

          The SPA, however, must be appreciated in the light of the fact that Cecilio was appointed and acted as appraisal commissioner in the expropriation case under the provisions of Section 5, Rule 67 of the Rules of Court, which provides:

SEC. 5. Ascertainment of compensation. — Upon the rendition of the order of expropriation, the court shall appoint not more than three (3) competent and disinterested persons as commissioners to ascertain and report to the court the just compensation for the property sought to be taken.   The order of appointment shall designate the time and place of the first session of the hearing to be held by the commissioners and specify the time within which their report shall be submitted to the court. (Emphasis ours).

The commissioner to be appointed is specifically required to be disinterested.  As defined, such person must be free frombias, prejudice or partiality.^[42]  The record of performance by Cecilio of his duties as commissioner shows: (1) Order dated 13 September 1996 appointing Cecilio and three others as court commissioners; (2) Agreement on the course of action of the commissioners appointed 13 September 1996 whereby respondent Cecilio signed as a court commissioner; (3) Appraisal Commission Report dated 10 January 1997 signed by respondent and his fellow court commissioners; (4) Dissenting Opinion on the Lone Minority Report dated 14 February 1997 signed by respondent and two other court commissioners; and (5) Decision dated 7 February 1997 which sets the fees of the court commissioners.^[43]

When Cecilio accepted the position as commissioner and proceeded to perform the duties of such commissioner until the completion of his mandate as such, he created a barrier that prevented his performance of his duties under the SPA.  Due to the nature of his duties and functions as commissioner, Cecilio became an officer of the court. As stated in Section 5, Rule 67 of the Rules of Court, the commissioner’s duty is to “ascertain and report to the court the just compensation for the property to be taken.” The undertaking of a commissioner is further stated under the rules, to wit:

SEC. 6. Proceedings by commissioners.—Before entering upon the performance of their duties, the commissioners shall take and subscribe an oath that they will faithfully perform their duties as commissioners, which oath shall be filed in court with the other proceedings in the case. Evidence may be introduced by either party before the commissioners who are authorized to administer oaths on hearings before them, and the commissioners shall, unless the parties consent to the contrary, after due notice to the parties to attend, view and examine the property sought to be expropriated and its surroundings, and may measure the same, after which either party may, by himself or counsel, argue the case. The commissioners shall assess the consequential damages to the property not taken and deduct from such consequential damages the consequential benefits to be derived by the owner from the public use or purpose of the property taken, the operation of its franchise by the corporation or the carrying on of the business of the corporation or person taking the property.  But in no case shall the consequential benefits assessed exceed the consequential damages assessed, or the owner be deprived of the actual value of his property so taken.

Cecilio acted for the expropriation court.  He cannot be allowed to consider such action as an act for or in behalf of the defendant in the same case.  Cecilio could not have been a hearing officer and a defendant at the same time.  Indeed, Cecilio foisted fraud on both the Court and the Hernandezes when, after his appointment as commissioner, he accepted the appointment by the Hernandezes to “represent” and “sue for” them.

It should be noted, finally, that, as completion of his appointment as commissioner, compensation for the work he has done for the court was awarded, as stated in the decision rendered in the case, thus:

Finally, plaintiff is directed to pay the corresponding Commissioner’s fees of the following, to wit:

1. Eric Faustino J. Esperanza – Chairman                 P5,000.00
2. 2.      Cecilio F. Hernandez – Member                          4,000.00
3. Magno Aguilar – Member                           4,000.00
4. Melchor Dimaano – Member                                  4,000.00^[44]

III.

Cecilio breached an obligation that is neither a loan nor forbearance of money.  The decision of the lower court ordering Cecilio to pay the amount of P6,189,417.60 to Cornelia at 12% per annum until fully paid should be modified to 6% per annum from the time of the filing of the complaint up to the date of the decision, and at 12% per annum from  finality until fully paid, in order to conform to the doctrine enunciated by Eastern Shipping Lines, Inc. v. Court of Appeals,^[45] to wit:

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 of 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 on the amount of 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 a forbearance of credit.

WHEREFORE, premises considered, the Decision of the Court of Appeals is hereby REVERSED and SET ASIDE.  The Decision of the RTC of Makati, Branch 150 is REINSTATED with the following MODIFICATIONS that the interest on the monetary awards should be at 6% per annum from the time of the filing of the complaint up to the date of the decision, and at 12% per annum from finality until fully paid.

SO ORDERED.

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

^[1]               Under Rule 45 of the Rules of Court.

^[2]               Rollo, pp. 37-51.

^[3]               Decision of the RTC Branch 150, id. at 52-56.

^[4]               Transfer Certificate of Title, Annex “C,” id. at 57.

^[5]               TSN, 8 December 2000, pp. 4-6.

^[6]               Petition.  Rollo, p. 10.

^[7]               Brief for the Appellant.  CA rollo, p.72

^[8]               Id.

^[9]               Id.

^[10]             Id.

^[11]             Rollo, p. 58.

^[12]             Id. at 59.

^[13]             Id. at 60-62.

^[14]             Id. at 63-68.

^[15]             Just Compensation = (Area of land) * (Value per m²)

^[16]             Rollo, p. 67.

^[17]             Revocation of Special Power of Attorney, Annex “I.” Id. at 69-70.

^[18]             Order of Judge Voltaire Rosales, Branch 83.  Id. at 74.

^[19]             Petition.  Id. at 14.

^[20]             Id.

^[21]             Id. at 81-82.

^[22]             TSN, 8 December 2000, p. 10.

^[23]             Id. at 12-13.

^[24]             Id. at 13.

^[25]             Rollo, pp. 83-84.

^[26]             Complaint, Annex “O,” id. at 85-90.

^[27]             Id. at 15.

^[28]             Id. at 56.

^[29]             Decision of the Court of Appeals in CA G.R. CV. No. 70184, id. at 50.

^[30]             Id. at 18.

^[31]             Petition – Arguments and Discussion.  Id. at 66.

^[32]             Decision, RTC Branch 83.  Id. at 121.

^[33]             Art. 1868, Civil Code.

^[34]             Brief for the Appellant (Cecilio), CA rollo, p. 73.

^[35]             Art. 1330, Civil Code.

^[36]             TOLENTINO, Commentaries and Jurisprudence on the Civil Code of the Philippines, Vol. IV, 1991, Art. 1330, p. 475 citing Transporte v. Beltran, 51 Off. Gaz. 1434, March, 1955.

^[37]             Art. 1331, Civil Code.

^[38]             Sec. 4, Rule 67 of the Rules of Court.

^[39]             Decision, RTC Branch 83, Tanauan Batangas in Civil Case No. C-023.  Rollo, p. 65.

^[40]             The computation herein is the correct application of the formula in the service contract. There was an error in the computation made by Cecilio in its Appellant’s Brief (CArollo, p. 172).  

^[41]             Thomas v. Pineda, G.R. No. L-2411, 28 June 1951, citing Severino v. Severino, 44 Phil. 343.

^[42]             Roget’s Thesaurus, Fourth ed., 2001, adj.: impartial, unbiased, neutral, free from bias, unprejudiced, fair, impersonal, outside, uninvolved, dispassionate, free from self-interest.

^[43]             Petition.  Rollo, p. 22.

^[44]             Decision, RTC Branch 83 in Civil Case No. C-023.  Rollo, p. 67.

^[45]             G.R. No. 97412, 12 July 1994, 234 SCRA 78, 96-97.