J.A.B. Bulao & Associates

PEOPLE OF THE PHILIPPINES VS. ALEX LINGASA, JORGE BI-AY AND JOHN DOE  (G.R. NO. 192187, 13 DECEMBER 20101, MENDOZA, J.)

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DOCTRINES

WHAT OBSERVATIONS ARE MADE KNOWN TO THE TRIAL COURT SUCH THAT ASSESSMENT OF CREDIBILITY OF WITNESSES IS BEST LEFT TO THE TRIAL COURT?

It is a well-entrenched doctrine that the assessment of the credibility of witnesses and their testimonies is a matter best undertaken by the trial court because of its unique opportunity to observe the witnesses first hand and note their demeanor, conduct and attitude under grilling examination.^[1][8] The trial court has the singular opportunity to observe the witnesses “through the different indicators of truthfulness or falsehood, such as the angry flush of an insisted assertion or the sudden pallor of a discovered lie or the tremulous mutter of a reluctant answer or the forthright tone of a ready reply; or the furtive glance, the blush of conscious shame, the hesitation, the sincere or the flippant or sneering tone, the heat, the calmness, the yawn, the sign, the candor or lack of it, the scant or full realization of the solemnity of an oath, the carriage and mien.”^[2][9]

THE RULE IS THAT FINDINGS OF FACTS OF TRIAL COURT ARE HELD CONCLUSIVE. WHAT ARE THE EXCEPTIONS?

This rule admits of exceptions, however, such as when the trial court’s findings of facts and conclusions are not supported by the evidence on record, or when certain facts of substance and value likely to change the outcome of the case have been overlooked by the lower court, or when the assailed decision is based on a misapprehension of facts.^[3][10]

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Thus, in the absence of any of these exceptions warranting the reversal of the decisions of the courts below, the general rule applies.  In addition, the Court notes that the trial court’s findings have been affirmed by the appellate court which, therefore, makes said findings generally conclusive and binding upon this Court.

ACCUSED SAID HE IS ONLY AN ACCOMPLICE BECAUSE HIS BLOW AGAINST THE VICTIM WAS NOT FATAL. SC SAID THERE WAS STILL CONSPIRACY. WHY? BECAUSE HIS BLOW WAS WHAT CAUSED THE ACCUSED TO FALL DOWN AND ALLOWED THE REST TO HACK HIM.

Indeed, the accused is guilty as principal by direct participation.  By his own admission, he delivered the first blow on the unwary victim. He initiated the deadly assault by hacking the hapless victim on the nape, causing the latter to immediately lose his balance and fall to the ground. Right after his initial attack, his co-accused rushed towards the poor and helpless victim and stabbed him several times in the back until he died. As confirmed by the autopsy report of Dr. Lorna V. Transmontero, the Municipal Health Officer of Cauayan, Negros Occidental, the victim died of multiple stab wounds inflicted on several parts of his body.

Considering the above circumstances, the Court cannot hold the accused liable as a mere accomplice because his active and direct involvement in the brutal killing of the victim was too obvious.

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 At any rate, the records clearly prove that there was conspiracy in the commission of the crime. Conspiracy exists when two or more persons come to an agreement concerning the commission of a felony and decide to commit it. Where all the accused acted in concert at the time of the commission of the offense, and it was shown by such acts that they had the same purpose or common design and were united in its execution, conspiracy is sufficiently established.^[4][11]

In the case at bench, the initial hacking by the accused followed by the multiple stabbing by his co-accused proves that they acted in concert at the time of the brutal killing. The fact that each one of them carried a deadly bladed weapon shows that they acted pursuant to the singular purpose of killing the victim.  It is not important who delivered the fatal blow.  In conspiracy, it matters not who among the accused actually killed the victim.  The act of one is the act of all. Each of the accused is equally guilty of the crime committed.^[5][12] 

TRUE WITNESSES ARE NOT FLAWLESS

Truth-telling witnesses are not expected to give flawless testimonies, considering the lapse of time and the treachery of human memory.  The Court has stated time and again that minor inconsistencies in the narration of witnesses do not detract from their essential credibility as long as their testimonies on the whole are coherent and intrinsically believable.  Inaccuracies may in fact suggest that the witnesses are telling the truth and have not been rehearsed.^[6][13]  Instead, they may even serve to strengthen their credibility as they negate any suspicion that their testimonies have been fabricated or rehearsed.

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D E C I S I O N

MENDOZA, J.:

Challenged in this appeal is the July 16, 2009 Decision^[7][1] of the Court of Appeals (CA) which affirmed the March 27, 2003 Decision^[8][2] of the Regional Trial Court, Branch 61, Kabankalan City, Negros Occidental (RTC), finding accused Eliseo Bi-ay, Jr. y Sarintas alias “Gideon” guilty beyond reasonable doubt of the crime of murder. 

On March 31, 1997, an information for Murder was filed against accused Eliseo Bi-ay, Jr. (Eliseo) and his co-accused, Jorge Bi-ay and Alex Lingasa, which reads as follows:

That on or about the 26^th day of December, 1996, in the Municipality of Cauayan, Province of Negros Occidental, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, in company of their other co-accused, whose true name is still unknown and herein designated only as “JOHN DOE,” armed with a bolo, conspiring, confederating and mutually helping one another, with evident premeditation and treachery, with intent to kill, did then and there, willfully, unlawfully and feloniously attack, assault, and hack one RODRIGO CLARO, thereby inflicting multiple fatal hack wounds upon the body of the latter which caused his death.

CONTRARY TO LAW.^[9][3]

When arraigned on April 3, 2000, Eliseo pleaded not guilty to the charge. Trial proceeded but only with respect to him as his co-accused were then at-large.

The respective positions of the parties were succinctly recited in the subject decision of the CA as follows:

On December 26, 1996, at around 7:00 in the evening, the victim Rodrigo Claro, together with his son Baby Boy Claro, were in the house of the victim’s father, Francisco Claro, in Sitio, Barangay Caliling, Cauayan, Negros Occidental. While Rodrigo and Francisco were talking with each other, accused Jorge Bi-ay, Alex Lingasa, and appellant Eliseo Bi-ay, Jr. alias “Gideon” arrived.  Accused Jorge Bi-ay, being the eldest in the group, then approached Francisco near the side of the house and asked for coffee. Francisco readily accommodated his visitors by getting coffee and sugar from the store of his younger sister nearby his house, and boiled some water. When the coffee was ready, accused Jorged [sic] requested the victim Rodrigo to serve coffee to his two companions, accused Alex and appellant Eliseo, who were waiting outside, which Rodrigo acceded.

Rodrigo then went out of the house and while carrying the two (2) cups of coffee, he noticed that his 10 year-old son, Baby Boy Claro, was following him. He turned his back and told his son to stay behind. When he was about to proceed, appellant Eliseo who was ahead of him, suddenly hacked him on the nape which caused him to lose his balance and fall to the ground. Accused Alex followed suit and stabbed Rodrigo at the back by thrusting a bladed instrument. Accused Jorge also went towards Rodrigo and stabbed him.

Witnessing the vicious assault on his father, Baby Boy Claro ran and shouted to his grandfather for help who then went out from his house with a bolo. Within ten (10) meters away, Francisco saw appellant delivering hacking blows on his son who was then lying on the ground face up, while accused Jorge and Alex immediately withdrew and fled as Francisco nearly approached them. Thereafter, appellant also ran away after all of them took turns in hacking the victim.

By the time Francisco finally reached his bloodied son, the victim already succumbed to the multiple stab wounds he sustained which caused his untimely death.

After the incident, Dr. Lorna V. Transmontero, Municipal Health Officer of Cauayan, Negros Occidental conducted an autopsy and yielded the following post mortem findings:

1.        Hacked wound at the forehead mid portion 3 cm. in diameter.

2.       Hacked wound at the L side of the mouth 4 inches in diameter.

3.       Hacked wound at the R side of the lower portion of the ear 4 inches in diameter.

4.       Hacked wound at the L nipple upper portion 1 inch in diameter.

5.        Hacked wound at the L side of the hypochondrium 1 inch in diameter.

6.       Hacked wound at the R side of the R nipple upper portion 1 inch in diameter.

7.        Hacked wound at the posterior portion of the neck 2 inches in diameter.

8.   Hacked wound at the posterior portion of the R upper arm 2 inches in diameter.

9.    Hacked wound at the posterior portion of the R lower arm 2 inches in diameter.

10.  Hacked wound at the lower portion of the R leg 2 inches  in diameter.

11.   Hacked wound at the L upper leg 2 inches in diameter.

On the other hand, appellant Eliseo denies the accusation against him and interposed the defense of alibi. He claims that on December 26, 1996, at around 5:00 in the afternoon, he and Jerry Siblag were in Sitio Kalapisan, Barangay Inayawan, Cauayan, Negros Occidental, to rent a sound system from Uldarico Alipan to be used in celebrating the birth anniversary of his deceased grandmother. Together with Uldarico, they left the latter’s house and brought the sound system to his father’s house at Sitio Kantyang, about seven (7) kilometers away, and arrived at around 7:00 in the evening. He stayed at the house of his father the entire evening and never left the place.^[10][4]

On March 27, 2003, the RTC rendered a decision finding the accused guilty beyond reasonable doubt of murder, the dispositive portion of which reads:

WHEREFORE, the Court finds accused Eliseo Bi-ay, Jr. alias “Gideon” guilty beyond reasonable doubt of the crime of murder as charged qualified by treachery and hereby sentences him to a penalty of imprisonment of reclusion perpetua and to indemnify the heirs of Rodrigo Claro the amount of P50, 000.00 by reason of his death and to pay the costs.

It is ordered that said accused be immediately remitted to the National Penitentiary.

Let this case be placed in the archives to be revived as soon as accused Alex Lingasa is apprehended.

The case against accused Jorge Bi-ay who is already deceased is DISMISSED.

SO ORDERED.^[11][5]

          Aggrieved, Eliseo appealed the RTC Decision to the CA assigning this lone error:

THE TRIAL COURT GRAVELY ERRED IN FINDING THE ACCUSED-APPELLANT GUILTY AS PRINCIPAL IN THE COMMISSION OF THE CRIME CHARGED WHEN HE IS ONLY LIABLE AS AN ACCOMPLICE. 

The CA noted that Eliseo raised the defense of denial and alibi during the trial of the case at the RTC but, on appeal, he argued that he could only be liable as an accomplice, and not as a principal.  In his Brief,^[12][6] Eliseo assailed  the RTC for finding him guilty as principal by direct participation in the commission of the crime of murder against the victim.  He claimed that the prosecution failed to show clear proof that he conspired with his co-accused in the killing of the victim. His alleged cooperation in the assault on the victim was not indispensable, thus, he could only be held liable as an accomplice. Moreover, the credibility of the prosecution witnesses was doubtful because of the glaring inconsistencies and lapses in their narration of their version of the incident.

On the other hand, the prosecution counters that the role of the accused as principal by direct participation in the execution of the crime was clearly established. Moreover, the questioned discrepancies and inconsistencies in the prosecution witnesses’ testimonies are minor and trivial.

            On July 16, 2009, the CA rendered a decision affirming with modification the RTC Decision, the dispositive portion of which reads:

WHEREFORE, premises considered the assailed Decision of the Regional Trial Court, 6^th Judicial Region, Branch 61, Kabankalan City, Negros Occidental, in Criminal Case No. 97-1893, finding accused-appellant Eliseo-Biay, Jr. y Sarintas alias “Gideon,” guilty beyond reasonable doubt of Murder, is hereby AFFIRMED with MODIFICATION. Appellant is hereby directed to pay the heirs of Rodrigo Claro the amounts of P50,000.00 as moral damages, P25,000.00 as exemplary damages, and P25,000.00 as temperate damages in addition to the P50,000.00 as civil indemnity awarded by the trial court.

No costs.

SO ORDERED.^[13][7]

          Hence, this petition raising this lone

ISSUE

WHETHER OR NOT THE ACCUSED-APPELLANT ELISEO-BI-AY, JR. y SARINTAS alias “GIDEON” IS GUILTY BEYOND REASONABLE DOUBT OF MURDER.

The accused argues that the facts established by the prosecution failed to show the existence of conspiracy in the killing of the victim. It was rather proven that he did not have any direct participation in the slaying because his initial hacking of the victim did not mortally wound him. The victim died after he was fatally stabbed in the back by his co-accused. Hence, he can only be liable as an accomplice because his participation was not indispensable compared with those of his co-accused.

Moreover, the accused claims that Francisco Claro (Francisco), testified on direct examination that he saw all the accused hacking his son. On cross-examination, however, his testimony was to the effect that he saw the other assailants fleeing away from the scene of the crime and the accused was the only one holding a weapon and stabbing the victim.

The Court finds no merit in the appeal.

It is a well-entrenched doctrine that the assessment of the credibility of witnesses and their testimonies is a matter best undertaken by the trial court because of its unique opportunity to observe the witnesses first hand and note their demeanor, conduct and attitude under grilling examination.^[14][8] The trial court has the singular opportunity to observe the witnesses “through the different indicators of truthfulness or falsehood, such as the angry flush of an insisted assertion or the sudden pallor of a discovered lie or the tremulous mutter of a reluctant answer or the forthright tone of a ready reply; or the furtive glance, the blush of conscious shame, the hesitation, the sincere or the flippant or sneering tone, the heat, the calmness, the yawn, the sign, the candor or lack of it, the scant or full realization of the solemnity of an oath, the carriage and mien.”^[15][9]

This rule admits of exceptions, however, such as when the trial court’s findings of facts and conclusions are not supported by the evidence on record, or when certain facts of substance and value likely to change the outcome of the case have been overlooked by the lower court, or when the assailed decision is based on a misapprehension of facts.^[16][10]

In the case at bench, the Court has not come across any misapprehension of facts. The prosecution witnesses, Francisco and Baby Boy Claro (Baby Boy), saw with their own eyes the brutal killing of the victim.  The Court finds no indication that either Francisco or Baby Boy was lying.

Thus, in the absence of any of these exceptions warranting the reversal of the decisions of the courts below, the general rule applies.  In addition, the Court notes that the trial court’s findings have been affirmed by the appellate court which, therefore, makes said findings generally conclusive and binding upon this Court.

Strangely, the accused interposed inconsistent defenses, as noted by the CA.  In the RTC, he claimed denial and alibi.  On appeal, he put up the defense that his participation in the murder was merely that of an accomplice instead of that of a principal by direct participation. Clearly, his change of defense strategy rendered his defense impotent.

Indeed, the accused is guilty as principal by direct participation.  By his own admission, he delivered the first blow on the unwary victim. He initiated the deadly assault by hacking the hapless victim on the nape, causing the latter to immediately lose his balance and fall to the ground. Right after his initial attack, his co-accused rushed towards the poor and helpless victim and stabbed him several times in the back until he died. As confirmed by the autopsy report of Dr. Lorna V. Transmontero, the Municipal Health Officer of Cauayan, Negros Occidental, the victim died of multiple stab wounds inflicted on several parts of his body.

Considering the above circumstances, the Court cannot hold the accused liable as a mere accomplice because his active and direct involvement in the brutal killing of the victim was too obvious.

For said reason, it is not even important to find out if conspiracy attended the commission of the crime. The conviction of the accused was not because of any conspiracy. He was convicted because he was positively identified by the eyewitnesses, Francisco and Baby Boy, as one of the assailants who actively and directly participated in the killing of Rodrigo Claro.

 At any rate, the records clearly prove that there was conspiracy in the commission of the crime. Conspiracy exists when two or more persons come to an agreement concerning the commission of a felony and decide to commit it. Where all the accused acted in concert at the time of the commission of the offense, and it was shown by such acts that they had the same purpose or common design and were united in its execution, conspiracy is sufficiently established.^[17][11]

In the case at bench, the initial hacking by the accused followed by the multiple stabbing by his co-accused proves that they acted in concert at the time of the brutal killing. The fact that each one of them carried a deadly bladed weapon shows that they acted pursuant to the singular purpose of killing the victim.  It is not important who delivered the fatal blow.  In conspiracy, it matters not who among the accused actually killed the victim.  The act of one is the act of all. Each of the accused is equally guilty of the crime committed.^[18][12] 

On the alleged inconsistency or discrepancy in the testimony of Francisco, the Court finds none.  The alleged inconsistency is more apparent than real.  As pointed out by the CA, what he meant was that while he was still approaching them, he witnessed the accused ganging up on his son.  When he was already there, he saw the accused continuously stabbing him while his companions were running away.  Thus the Court considers innocuous whatever discrepancies there were in the testimony of Francisco.

Truth-telling witnesses are not expected to give flawless testimonies, considering the lapse of time and the treachery of human memory.  The Court has stated time and again that minor inconsistencies in the narration of witnesses do not detract from their essential credibility as long as their testimonies on the whole are coherent and intrinsically believable.  Inaccuracies may in fact suggest that the witnesses are telling the truth and have not been rehearsed.^[19][13]  Instead, they may even serve to strengthen their credibility as they negate any suspicion that their testimonies have been fabricated or rehearsed.

WHEREFORE, the July 16, 2009 Decision of the Court of Appeals is AFFIRMED.

SO ORDERED. 

           JOSE CATRAL MENDOZA

                                                                                          Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

Chairperson

ANTONIO EDUARDO B. NACHURA     DIOSDADO M. PERALTA

               Associate Justice                                    Associate Justice

ROBERTO A. ABAD

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

EMMANUEL BABAS ET AL VS. LORENZO SHIPPING CORPORATION (G.R. NO. 86091, 15 DECEMBER 2010, NACHURA J.)

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DOCTRINES

IN A PETITION, THOSE WHO DO NOT SIGN THE VERIFICATION AND CERTIFICATION ON NON-FORUM SHOPPING HAVE NO LEGAL STANDING. THE PETITION AS REGARDS THEM WILL BE DISMISSED OUTRIGHT.

Before resolving the petition, we note that only seven (7) of the nine petitioners signed the Verification and Certification.^[1][14]  Petitioners Maximo Soriano, Jr. (Soriano) and Felixberto Anajao (Anajao) did not sign the Verification and Certification, because they could no longer be located by their co-petitioners.^[2][15]

In Toyota Motor Phils. Corp. Workers Association (TMPCWA), et al. v. National Labor Relations Commission,^[3][16] citing Loquias v. Office of the Ombudsman,^[4][17] we stated that the petition satisfies the formal requirements only with regard to the petitioner who signed the petition, but not his co-petitioner who did not sign nor authorize the other petitioner to sign it on his behalf.  Thus, the petition can be given due course only as to the parties who signed it. The other petitioners who did not sign the verification and certificate against forum shopping cannot be recognized as petitioners and have no legal standing before the Court. The petition should be dismissed outright with respect to the non-conforming petitioners.

Thus, we dismiss the petition insofar as petitioners Soriano and Anajao are concerned.

THE CHARACTER OF THE BUSINESS, I.E., WHETHER AS LABOR-ONLY CONTRACTOR OR AS JOB CONTRACTOR, SHOULD BE MEASURED IN TERMS OF, AND DETERMINED BY, THE CRITERIA SET BY STATUTE. THE PARTIES CANNOT DICTATE BY THE MERE EXPEDIENCE OF A UNILATERAL DECLARATION IN A CONTRACT THE CHARACTER OF THEIR BUSINESS.

Petitioners vigorously insist that they were employees of LSC; and that BMSI is not an independent contractor, but a labor-only contractor.  LSC, on the other hand, maintains that BMSI is an independent contractor, with adequate capital and investment.  LSC capitalizes on the ratiocination made by the CA. 

 In declaring BMSI as an independent contractor, the CA, in the challenged Decision, heavily relied on the provisions of the Agreement, wherein BMSI declared that it was an independent contractor, with substantial capital and investment. 

De Los Santos v. NLRC^[5][18] instructed us that the character of the business, i.e., whether as labor-only contractor or as job contractor, should be measured in terms of, and determined by, the criteria set by statute. The parties cannot dictate by the mere expedience of a unilateral declaration in a contract the character of their business. 

In San Miguel Corporation v. Vicente B. Semillano, Nelson Mondejas, Jovito Remada, Alilgilan Multi-Purpose Coop (AMPCO), and Merlyn N. Policarpio,^[6][19] this Court explained:

Despite the fact that the service contracts contain stipulations which are earmarks of independent contractorship, they do not make it legally so.  The language of a contract is neither determinative nor conclusive of the relationship between the parties. Petitioner SMC and AMPCO cannot dictate, by a declaration in a contract, the character of AMPCO’s business, that is, whether as labor-only contractor, or job contractor. AMPCO’s character should be measured in terms of, and determined by, the criteria set by statute. 

Thus, in distinguishing between prohibited labor-only contracting and permissible job contracting, the totality of the facts and the surrounding circumstances of the case are to be considered. 

WHAT IS  LABOR-ONLY CONTRACTING?

Labor-only contracting, a prohibited act, is an arrangement where the contractor or subcontractor merely recruits, supplies, or places workers to perform a job, work, or service for a principal.  In labor-only contracting, the following elements are present:  (a) the contractor or subcontractor does not have substantial capital or investment to actually perform the job, work, or service under its own account and responsibility;  and (b) the employees recruited, supplied, or placed by such contractor or subcontractor perform activities which are directly related to the main business of the principal.^[7][20]

WHAT IS PERMISSIBLE JOB CONTRACTING OR SUBCONTRACTING?

On the other hand, permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to put out or farm out with the contractor or subcontractor the performance or completion of a specific job, work, or service within a definite or predetermined period, regardless of whether such job, work, or service is to be performed or completed within or outside the premises of the principal. ^[8][21]

A person is considered engaged in legitimate job contracting or subcontracting if the following conditions concur:

(a) The contractor carries on a distinct and independent business and undertakes the contract work on his account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of his work except as to the results thereof;

(b) The contractor has substantial capital or investment; and

(c) The agreement between the principal and the contractor or subcontractor assures the contractual employees’ entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure, and social welfare benefits.^[9][22]

WHY BMSI IS ENGAGED IN LABOR-ONLY CONTRACTING? THIS IS AN EXAMPLE OF LABOR-ONLY CONTRACTING FIRM.

Given the above standards, we sustain the petitioners’ contention that BMSI is engaged in labor-only contracting.

First, petitioners worked at LSC’s premises, and nowhere else. Other than the provisions of the Agreement, there was no showing that it was BMSI which established petitioners’ working procedure and methods, which supervised petitioners in their work, or which evaluated the same. There was absolute lack of evidence that BMSI exercised control over them or their work, except for the fact that petitioners were hired by BMSI.

Second, LSC was unable to present proof that BMSI had substantial capital.  The record before us is bereft of any proof pertaining to the contractor’s capitalization, nor to its investment in tools, equipment, or implements actually used in the performance or completion of the job, work, or service that it was contracted to render.  What is clear was that the equipment used by BMSI were owned by, and merely rented from, LSC. 

In Mandaue Galleon Trade, Inc. v. Andales,^[10][23] we held:

The law casts the burden on the contractor to prove that it has substantial capital, investment, tools, etc. Employees, on the other hand, need not prove that the contractor does not have substantial capital, investment, and tools to engage in job-contracting.

          Third, petitioners performed activities which were directly related to the main business of LSC. The work of petitioners as checkers, welders, utility men, drivers, and mechanics could only be characterized as part of, or at least clearly related to, and in the pursuit of, LSC’s business. Logically, when petitioners were assigned by BMSI to LSC, BMSI acted merely as a labor-only contractor.

Lastly, as found by the NLRC, BMSI had no other client except for LSC, and neither BMSI nor LSC refuted this finding, thereby bolstering the NLRC finding that BMSI is a labor-only contractor.

BUT BMSI HAS A CERTIFICATE OF REGISTRATION WITH THE DOLE AS AN INDEPENDENT CONTRACTOR. SC RULED THIS IS NOT CONCLUSIVE.  IT ONLY PREVENTS THE LEGAL PRESUMPTION OF BEING A MERE LABOR-ONLY CONTRACTOR FROM ARISING.

The CA erred in considering BMSI’s Certificate of Registration as sufficient proof that it is an independent contractor.  In San Miguel Corporation v. Vicente B. Semillano, Nelson Mondejas, Jovito Remada, Alilgilan Multi-Purpose Coop (AMPCO), and Merlyn N. Policarpio,^[11][24] we held that a Certificate of Registration issued by the Department of Labor and Employment is not conclusive evidence of such status. The fact of registration simply prevents the legal presumption of being a mere labor-only contractor from arising.^[12][25] 

THE WORKERS OF A LABOR-ONLY CONTRACTOR BECOME REGULAR EMPLOYEES OF THE COMPANY WHERE THEY WORK.

Indubitably, BMSI can only be classified as a labor-only contractor.   The CA, therefore, erred when it ruled otherwise. Consequently, the workers that BMSI supplied to LSC became regular employees of the latter.^[13][26]  Having gained regular status, petitioners were entitled to security of tenure and could only be dismissed for just or authorized causes and after they had been accorded due process.

Petitioners lost their employment when LSC terminated its Agreement with BMSI.  However, the termination of LSC’s Agreement with BMSI cannot be considered a just or an  authorized cause for petitioners’ dismissal.  In Almeda v. Asahi Glass Philippines. Inc. v. Asahi Glass Philippines, Inc.,^[14][27] this Court declared:

The sole reason given for the dismissal of petitioners by SSASI was the termination of its service contract with respondent. But since SSASI was a labor-only contractor, and petitioners were to be deemed the employees of respondent, then the said reason would not constitute a just or authorized cause for petitioners’ dismissal. It would then appear that petitioners were summarily dismissed based on the aforecited reason, without compliance with the procedural due process for notice and hearing.

Herein petitioners, having been unjustly dismissed from work, are entitled to reinstatement without loss of seniority rights and other privileges and to full back wages, inclusive of allowances, and to other benefits or their monetary equivalents computed from the time compensation was withheld up to the time of actual reinstatement.  Their earnings elsewhere during the periods of their illegal dismissal shall not be deducted therefrom.

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DECISION

NACHURA, J.: 

          Petitioners Emmanuel Babas, Danilo T. Banag, Arturo V. Villarin, Sr., Edwin Javier, Sandi Bermeo, Rex Allesa, Maximo Soriano, Jr., Arsenio Estorque, and Felixberto Anajao appeal by certiorari under Rule 45 of the Rules of Court the October 10, 2008 Decision^[1][1] of the Court of Appeals (CA) in CA-G.R. SP. No. 103804, and the January 21, 2009 Resolution,^[2][2] denying its reconsideration.

          Respondent Lorenzo Shipping Corporation (LSC) is a duly organized domestic corporation engaged in the shipping industry; it owns several equipment necessary for its business. On September 29, 1997, LSC entered into a General Equipment Maintenance Repair and Management Services Agreement^[3][3] (Agreement) with Best Manpower Services, Inc. (BMSI).  Under the Agreement, BMSI undertook to provide maintenance and repair services to LSC’s container vans, heavy equipment, trailer chassis, and generator sets.  BMSI further undertook to provide checkers to inspect all containers received for loading to and/or unloading from its vessels.

          Simultaneous with the execution of the Agreement, LSC leased its equipment, tools, and tractors to BMSI.^[4][4]  The period of lease was coterminous with the Agreement. 

         BMSI then hired petitioners on various dates to work at LSC as checkers, welders, utility men, clerks, forklift operators, motor pool and machine shop workers, technicians, trailer drivers, and mechanics.    Six years later, or on May 1, 2003, LSC entered into another contract with BMSI, this time, a service contract.^[5][5] 

In September 2003, petitioners filed with the Labor Arbiter (LA) a complaint for regularization against LSC and BMSI.  On October 1, 2003, LSC terminated the Agreement, effective October 31, 2003.  Consequently, petitioners lost their employment.

BMSI asserted that it is an independent contractor.  It averred that it was willing to regularize petitioners; however, some of them lacked the requisite qualifications for the job.  BMSI was willing to reassign petitioners who were willing to accept reassignment.  BMSI denied petitioners’ claim for underpayment of wages and non-payment of 13^th month pay and other benefits.

          LSC, on the other hand, averred that petitioners were employees of BMSI and were assigned to LSC by virtue of the Agreement.  BMSI is an independent job contractor with substantial capital or investment in the form of tools, equipment, and machinery necessary in the conduct of its business. The Agreement between LSC and BMSI constituted legitimate job contracting.  Thus, petitioners were employees of BMSI and not of LSC.

          After due proceedings, the LA rendered a decision^[6][6] dismissing petitioners’ complaint.  The LA found that petitioners were employees of BMSI.  It was BMSI which hired petitioners, paid their wages, and exercised control over them. 

          Petitioners appealed to the National Labor Relations Commission (NLRC), arguing that BMSI was engaged in labor-only contracting.  They insisted that their employer was LSC.

          On January 16, 2008, the NLRC promulgated its decision.^[7][7]  Reversing the LA, the NLRC held:

We find from the records of this case that respondent BMSI is not engaged in legitimate job contracting.

            First, respondent BMSI has no equipment, no office premises, no capital and no investments as shown in the Agreement itself which states:

x x x x

VI.    RENTAL OF EQUIPMENT

         [6.01.] That the CLIENT has several forklifts and truck tractor, and has offered to the CONTRACTOR the use of the same by way of lease, the monthly rental of which shall be deducted from the total monthly billings of the CONTRACTOR for the services covered by this Agreement.

         6.02.    That the CONTRACTOR has agreed to rent the CLIENT’s forklifts and truck tractor.

  6.03.    The parties herein have agreed to execute a Contract of Lease for the forklifts and truck tractor that will be rented by the CONTRACTOR. (p. 389, Records) 

True enough, parties signed a Lease Contract (p. 392, Records) wherein respondent BMSI leased several excess equipment of LSC to enable it to discharge its obligation under the Agreement.  So without the equipment which respondent BMSI leased from respondent LSC, the former would not be able to perform its commitments in the Agreement.

            In Phil. Fuji Xerox Corp. v. NLRC (254 SCRA 294) the Supreme Court held:

            x x x.  The phrase “substantial capital and investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business,” in the Implementing Rules clearly contemplates tools, equipment, etc., which are directly related to the service it is being contracted to render.  One who does not have an independent business for undertaking the job contracted for is just an agent of the employer. (underscoring ours)

            Second, respondent BMSI has no independent business or activity or job to perform in respondent LSC free from the control of respondent LSC except as to the results thereof.  In view of the absence of such independent business or activity or job to be performed by respondent BMSI in respondent LSC [petitioners] performed work that was necessary and desirable to the main business of respondent LSC. Respondents were not able to refute the allegations of [petitioners] that they performed the same work that the regular workers of LSC performed and they stood side by side with regular employees of respondent LSC performing the same work.  Necessarily, the control on the manner and method of doing the work was exercised by respondent LSC and not by respondent BMSI since the latter had no business of its own to perform in respondent LSC.

            Lastly, respondent BMSI has no other client but respondent LSC.  If respondent BMSI were a going concern, it would have other clients to which to assign [petitioners] after its Agreement with LSC expired.  Since there is only one client, respondent LSC, it is easy to conclude that respondent BMSI is a mere supplier of labor.

            After concluding that respondent BMSI is engaged in prohibited labor-only contracting, respondent LSC became the employer of [petitioners] pursuant to DO 18-02.

            [Petitioners] therefore should be reinstated to their former positions or equivalent positions in respondent LSC as regular employees with full backwages and other benefits without loss of seniority rights from October 31, 2003, when they lost their jobs, until actual reinstatement (Vinoya v. NLRC, 324 SCRA 469). If reinstatement is not feasible, [petitioners] then should be paid separation pay of one month pay for every year of service or a fraction of six months to be considered as one year, in addition to full backwages.

            Concerning [petitioners’] prayer to be paid wage differentials and benefits under the CBA, We have no doubt that [petitioners] would be entitled to them if they are covered by the said CBA.  For this purpose, [petitioners] should first enlist themselves as union members if they so desire, or pay agency fee.  Furthermore, only [petitioners] who signed the appeal memorandum are covered by this Decision.  As regards the other complainants who did not sign the appeal, the Decision of the Labor Arbiter dismissing this case became final and executory.^[8][8]

The NLRC disposed thus:

          WHEREFORE, the appeal of [petitioners] is GRANTED.  The Decision of the Labor Arbiter is hereby REVERSED, and a NEW ONE rendered finding respondent Best Manpower Services, Inc. is engaged in prohibited labor-only-contracting and finding respondent Lorenzo Shipping Corp. as the employer of the following [petitioners]:

1.                  Emmanuel  B. Babas

2.                  Danilo Banag

3.                  Edwin L. Javier

4.                  Rex Allesa

5.                  Arturo Villarin, [Sr.]

6.                  Felixberto C. Anajao

7.                  Arsenio Estorque

8.                  Maximo N. Soriano, Jr.

9.                  Sandi G. Bermeo

            Consequently, respondent Lorenzo Shipping Corp. is ordered to reinstate [petitioners] to their former positions as regular employees and pay their wage differentials and benefits under the CBA.

            If reinstatement is not feasible, both respondents Lorenzo Shipping Corp. and Best Manpower Services are adjudged jointly and solidarily to pay [petitioners] separation pay of one month for every year of service, a fraction of six months to be considered as one year.

            In addition, respondent LSC and BMSI are solidarily liable to pay [petitioners’] full backwages from October 31, 2003 until actual reinstatement or, if reinstatement is not feasible, until finality of this Decision.

            Respondent LSC and respondent BMSI are likewise adjudged to be solidarily liable for attorney’s fees equivalent to ten (10%) of the total monetary award.

x x x x

SO ORDERED.^[9][9]

          LSC went to the CA via certiorari.  On October 10, 2008, the CA rendered the now challenged Decision,^[10][10] reversing the NLRC.  In holding that BMSI was an independent contractor, the CA relied on the provisions of the Agreement, wherein BMSI warranted that it is an independent contractor, with adequate capital, expertise, knowledge, equipment, and personnel necessary for the services rendered to LSC.   According to the CA, the fact that BMSI entered into a contract of lease with LSC did not ipso facto make BMSI a labor-only contractor; on the contrary, it proved that BMSI had substantial capital.  The CA was of the view that the law only required substantial capital or investment. Since BMSI had substantial capital, as shown by its ability to pay rents to LSC, then it qualified as an independent contractor. It added that even under the control test, BMSI would be the real employer of petitioners, since it had assumed the entire charge and control of petitioners’ services.  The CA further held that BMSI’s Certificate of Registration as an independent contractor was sufficient proof that it was an independent contractor.  Hence, the CA absolved LSC from liability and instead held BMSI as employer of petitioners.

          The fallo of the CA Decision reads:

          WHEREFORE, premises considered, the instant petition is GRANTED and the assailed decision and resolution of public respondent NLRC are REVERSED and SET ASIDE.  Consequently, the decision of the Labor Arbiter dated September 29, 2004 is REINSTATED.

            SO ORDERED.^[11][11]

Petitioners filed a motion for reconsideration, but the CA denied it on January 21, 2009.^[12][12] 

Hence, this appeal by petitioners, positing that:

THE HONORABLE COURT OF APPEALS ERRED IN IGNORING THE CLEAR EVIDENCE OF RECORD THAT RESPONDENT WAS ENGAGED IN LABOR-ONLY CONTRACTING TO DEFEAT PETITIONERS’ RIGHT TO SECURITY OF TENURE.^[13][13]

Before resolving the petition, we note that only seven (7) of the nine petitioners signed the Verification and Certification.^[14][14]  Petitioners Maximo Soriano, Jr. (Soriano) and Felixberto Anajao (Anajao) did not sign the Verification and Certification, because they could no longer be located by their co-petitioners.^[15][15]

In Toyota Motor Phils. Corp. Workers Association (TMPCWA), et al. v. National Labor Relations Commission,^[16][16] citing Loquias v. Office of the Ombudsman,^[17][17] we stated that the petition satisfies the formal requirements only with regard to the petitioner who signed the petition, but not his co-petitioner who did not sign nor authorize the other petitioner to sign it on his behalf.  Thus, the petition can be given due course only as to the parties who signed it. The other petitioners who did not sign the verification and certificate against forum shopping cannot be recognized as petitioners and have no legal standing before the Court. The petition should be dismissed outright with respect to the non-conforming petitioners.

Thus, we dismiss the petition insofar as petitioners Soriano and Anajao are concerned.

Petitioners vigorously insist that they were employees of LSC; and that BMSI is not an independent contractor, but a labor-only contractor.  LSC, on the other hand, maintains that BMSI is an independent contractor, with adequate capital and investment.  LSC capitalizes on the ratiocination made by the CA. 

 In declaring BMSI as an independent contractor, the CA, in the challenged Decision, heavily relied on the provisions of the Agreement, wherein BMSI declared that it was an independent contractor, with substantial capital and investment. 

De Los Santos v. NLRC^[18][18] instructed us that the character of the business, i.e., whether as labor-only contractor or as job contractor, should

be measured in terms of, and determined by, the criteria set by statute. The parties cannot dictate by the mere expedience of a unilateral declaration in a contract the character of their business. 

In San Miguel Corporation v. Vicente B. Semillano, Nelson Mondejas, Jovito Remada, Alilgilan Multi-Purpose Coop (AMPCO), and Merlyn N. Policarpio,^[19][19] this Court explained:

Despite the fact that the service contracts contain stipulations which are earmarks of independent contractorship, they do not make it legally so.  The language of a contract is neither determinative nor conclusive of the relationship between the parties. Petitioner SMC and AMPCO cannot dictate, by a declaration in a contract, the character of AMPCO’s business, that is, whether as labor-only contractor, or job contractor. AMPCO’s character should be measured in terms of, and determined by, the criteria set by statute. 

Thus, in distinguishing between prohibited labor-only contracting and permissible job contracting, the totality of the facts and the surrounding circumstances of the case are to be considered. 

Labor-only contracting, a prohibited act, is an arrangement where the contractor or subcontractor merely recruits, supplies, or places workers to perform a job, work, or service for a principal.  In labor-only contracting, the following elements are present:  (a) the contractor or subcontractor does not have substantial capital or investment to actually perform the job, work, or service under its own account and responsibility;  and (b) the employees recruited, supplied, or placed by such contractor or subcontractor perform activities which are directly related to the main business of the principal.^[20][20]

On the other hand, permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to put out or farm out with the contractor or subcontractor the performance or completion of a specific job, work, or service within a definite or predetermined period, regardless of whether such job, work, or service is to be performed or completed within or outside the premises of the principal. ^[21][21]

A person is considered engaged in legitimate job contracting or subcontracting if the following conditions concur:

(a) The contractor carries on a distinct and independent business and undertakes the contract work on his account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of his work except as to the results thereof;

(b) The contractor has substantial capital or investment; and

(c) The agreement between the principal and the contractor or subcontractor assures the contractual employees’ entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure, and social welfare benefits.^[22][22]

Given the above standards, we sustain the petitioners’ contention that BMSI is engaged in labor-only contracting.

First, petitioners worked at LSC’s premises, and nowhere else. Other than the provisions of the Agreement, there was no showing that it was BMSI which established petitioners’ working procedure and methods, which supervised petitioners in their work, or which evaluated the same. There was absolute lack of evidence that BMSI exercised control over them or their work, except for the fact that petitioners were hired by BMSI.

Second, LSC was unable to present proof that BMSI had substantial capital.  The record before us is bereft of any proof pertaining to the contractor’s capitalization, nor to its investment in tools, equipment, or implements actually used in the performance or completion of the job, work, or service that it was contracted to render.  What is clear was that the equipment used by BMSI were owned by, and merely rented from, LSC. 

In Mandaue Galleon Trade, Inc. v. Andales,^[23][23] we held:

The law casts the burden on the contractor to prove that it has substantial capital, investment, tools, etc. Employees, on the other hand, need not prove that the contractor does not have substantial capital, investment, and tools to engage in job-contracting.

          Third, petitioners performed activities which were directly related to the main business of LSC. The work of petitioners as checkers, welders, utility men, drivers, and mechanics could only be characterized as part of, or at least clearly related to, and in the pursuit of, LSC’s business. Logically, when petitioners were assigned by BMSI to LSC, BMSI acted merely as a labor-only contractor.

Lastly, as found by the NLRC, BMSI had no other client except for LSC, and neither BMSI nor LSC refuted this finding, thereby bolstering the NLRC finding that BMSI is a labor-only contractor.

The CA erred in considering BMSI’s Certificate of Registration as sufficient proof that it is an independent contractor.  In San Miguel Corporation v. Vicente B. Semillano, Nelson Mondejas, Jovito Remada, Alilgilan Multi-Purpose Coop (AMPCO), and Merlyn N. Policarpio,^[24][24] we held that a Certificate of Registration issued by the Department of Labor and Employment is not conclusive evidence of such status. The fact of registration simply prevents the legal presumption of being a mere labor-only contractor from arising.^[25][25] 

Indubitably, BMSI can only be classified as a labor-only contractor.   The CA, therefore, erred when it ruled otherwise. Consequently, the workers that BMSI supplied to LSC became regular employees of the latter.^[26][26]  Having gained regular status, petitioners were entitled to security of tenure and could only be dismissed for just or authorized causes and after they had been accorded due process.

Petitioners lost their employment when LSC terminated its Agreement with BMSI.  However, the termination of LSC’s Agreement with BMSI cannot be considered a just or an  authorized cause for petitioners’ dismissal.  In Almeda v. Asahi Glass Philippines. Inc. v. Asahi Glass Philippines, Inc.,^[27][27] this Court declared:

The sole reason given for the dismissal of petitioners by SSASI was the termination of its service contract with respondent. But since SSASI was a labor-only contractor, and petitioners were to be deemed the employees of respondent, then the said reason would not constitute a just or authorized cause for petitioners’ dismissal. It would then appear that petitioners were summarily dismissed based on the aforecited reason, without compliance with the procedural due process for notice and hearing.

Herein petitioners, having been unjustly dismissed from work, are entitled to reinstatement without loss of seniority rights and other privileges and to full back wages, inclusive of allowances, and to other benefits or their monetary equivalents computed from the time compensation was withheld up to the time of actual reinstatement.  Their earnings elsewhere during the periods of their illegal dismissal shall not be deducted therefrom.

Accordingly, we hold that the NLRC committed no grave abuse of discretion in its decision.  Conversely, the CA committed a reversible error when it set aside the NLRC ruling.

WHEREFORE, the petition is GRANTED.  The Decision and the Resolution of the Court of Appeals in CA-G.R. SP. No. 103804 are REVERSED and SET ASIDE.  Petitioners Emmanuel Babas, Danilo T. Banag, Arturo V. Villarin, Sr., Edwin Javier, Sandi Bermeo, Rex Allesa, and Arsenio Estorque are declared regular employees of Lorenzo Shipping Corporation.   Further, LSC is ordered to reinstate the seven petitioners to their former position without loss of seniority rights and other privileges, and to pay full backwages, inclusive of allowances, and other benefits or their monetary equivalent, computed from the time compensation was withheld up to the time of actual reinstatement.

No pronouncement as to costs.

SO ORDERED.

                                      ANTONIO EDUARDO B. NACHURA

                                      Associate Justice

WE CONCUR:

                                         ANTONIO T. CARPIO

Associate Justice

Chairperson

JOSE CATRAL MENDOZA

Associate Justice

A T T E S T A T I O N

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

                                                             ANTONIO T. CARPIO

                                      Associate Justice

                                      Chairperson, Second Division

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

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

                                      RENATO C. CORONA

                                                                     Chief Justice

MAXWELL HEAVY EQUIPMENT CORPORATION VS. ERIC UYCHIAOCO YU (G.R. NO. 179395, 15 DECEMBER 2010, CARPIO, J.) SUBJECTS: SC NO TRIER OF FACTS; RTC DECISION AFFIRMED BY CA DEEMED FINAL. (BRIEF TITLE: MAXWELL HEAVY EQUIPMENT VS. YU)

x———————————————————————x

SUPREME COURT IS NOT A TRIER OF FACTS

This Court is not a trier of facts.⁸ It is not the Court’s function to analyze or weigh the evidence all over again, its jurisdiction being limited to reviewing errors of law that might have been committed by the lower court.⁹

In this case, the question of whether Maxwell’s transactions with BPI were accommodation loans for Yu’s benefit is clearly factual, and thus, beyond the Court’s review.

WHEN RTC DECISION IS AFFIRMED BY CA, SAID DECISION IS DEEMED FINAL AND CONCLUSIVE.

Appeals, will not be disturbed by this Court.¹⁰ As a rule, such findings by the lower courts are entitled to great weight and respect, and are deemed final and conclusive on this Court when supported by the evidence on record.¹¹ The foregoing principle applies to the present controversy.

In this case, the Court of Appeals affirmed the trial court’s finding that “it was Yu who accommodated Maxwell by allowing the use of his real properties as collateral [for Maxwell’s loans].” The appellate court concurred with the trial court that Maxwell is the principal borrower since it was Maxwell which paid interest on the loans. Additionally, various documents designated Maxwell as borrower and communications demanding payment of the loans sent by BPI were addressed to Maxwell as the borrower, with Yu indicated only as the owner of the real properties as loan collateral.

x———————————————————————x

D E C I S I O N

CARPIO, J.:

The Case

This petition for review¹ assails the 21 June 2007 Decision² of the Court of Appeals in CA-G.R. CV No. 84522. The Court of Appeals affirmed with modification the 11 January 2005 Decision³ of the Regional Trial Court, National Capital Judicial Region, Branch 167, Pasig City. The trial court ordered, among others, the reimbursement by petitioner Maxwell Heavy Equipment Corporation (Maxwell) of the amount of P8,888,932.33 to respondent Eric Uychiaoco Yu (Yu) for the latter’s payment of Maxwell’s loan obligation with the Bank of Philippine Islands (BPI).

The Facts

On 3 April 2001 and 2 May 2001, Maxwell obtained loans from BPI, G. Araneta Avenue Branch, in the total sum of P8,800,000.00 covered by two Promissory Notes and secured by a real estate mortgage over two lots registered in Yu’s name. Promissory Note No. 1-6743742-001 for P800,000.00 was due on 26 March 2002⁴ while Promissory Note No. 1-6743742-002 for P8,000,000.00 was due on 24 April 2002.⁵ Yu signed as Maxwell’s co-maker in the Promissory Note covering the P8,000,000 loan. It appears that Yu did not sign as co-maker in the Promissory Note for P800,000.

Maxwell defaulted in the payment of the loans, forcing Yu to pay BPI P8,888,932.33 representing the principal loan amounts with interest, through funds borrowed from his mother, Mina Yu, to prevent the foreclosure of his real properties.

Thereafter, Yu demanded reimbursement from Maxwell of the entire amount paid to BPI. However, Maxwell failed to reimburse Yu. Consequently, Yu filed with the trial court a complaint for sum of money and damages.

Maxwell denied liability for Yu’s claimed amount. Maxwell countered that the transactions with BPI were merely accommodation loans purely for Yu’s benefit. Maxwell likewise pointed out that Yu, having signed as co-maker, is solidarily liable for the loans. Maxwell also insisted that Yu’s mother is the real payor of the loans and thus, is the real party-in-interest to institute the complaint.

The trial court ruled in favor of Yu, disposing of the case as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant Maxwell Heavy Equipment Corporation ordering the latter to pay the former the following sums of money:

a) The sum of Php 8,888,932.33/00, representing the principal obligation, with legal interest thereon computed at the legal rate from the time of default on 2 April 2002 until full payment thereof;

b) The sum of Php 200,000.00, for and as reasonable attorney’s fees and;

       c.            Costs of suit.

Bereft of evidence, the claim for moral as well as exemplary damages is hereby DENIED.

Also, for lack of sufficient factual and legal basis, the counterclaim is similarly DISMISSED.

SO ORDERED.⁶

On appeal, the Court of Appeals affirmed with modification the ruling of the trial court, by deleting the award of attorney’s fees and specifying the rate of interest on the allegedly reimbursable amount from Maxwell.

Hence, this petition.

The Ruling of the Court of Appeals

In affirming the trial court’s ruling, the Court of Appeals rejected Maxwell’s contention that the transactions with BPI were accommodation loans solely for Yu’s benefit since (1) Maxwell was paying for the loans’ interest and (2) various demand letters from BPI were addressed to Maxwell as the borrower.

The Court of Appeals gave credence to the testimonies of Yu and his mother on the liability of Maxwell for the claimed amount. On the other hand, it disbelieved the testimony of Caroline Yu, then president of Maxwell, denying Yu’s entitlement to reimbursement for the payment he made to BPI since it was uncorroborated by any documentary evidence.

The dispositive portion of the decision of the Court of Appeals reads:

WHEREFORE, the appealed Decision dated January 11, 2005 is affirmed, subject to the modification that:

1.      the award of attorney’s fees is deleted; and

2.      the legal rate of interest on the principal amount of P8,800,000.00 is twelve per cent (12%) per annum from the filing of the complaint on August 19, 2003 until the finality of this Decision. After this Decision becomes final and executory, the applicable rate shall also be twelve per cent (12%) per annum until its full satisfaction.

SO ORDERED.⁷

The Issue

The main issue in this case is whether Yu is entitled to reimbursement from Maxwell for the loan payment made to BPI. This issue in turn depends on whether the transactions with BPI were accommodation loans solely for Yu’s benefit.

The Ruling of the Court

The petition lacks merit.

This Court is not a trier of facts.⁸ It is not the Court’s function to analyze or weigh the evidence all over again, its jurisdiction being limited to reviewing errors of law that might have been committed by the lower court.⁹

In this case, the question of whether Maxwell’s transactions with BPI were accommodation loans for Yu’s benefit is clearly factual, and thus, beyond the Court’s review.

Moreover, factual findings of the trial court, when affirmed by the Court of Appeals, will not be disturbed by this Court.¹⁰ As a rule, such findings by the lower courts are entitled to great weight and respect, and are deemed final and conclusive on this Court when supported by the evidence on record.¹¹ The foregoing principle applies to the present controversy.

In this case, the Court of Appeals affirmed the trial court’s finding that “it was Yu who accommodated Maxwell by allowing the use of his real properties as collateral [for Maxwell’s loans].” The appellate court concurred with the trial court that Maxwell is the principal borrower since it was Maxwell which paid interest on the loans. Additionally, various documents designated Maxwell as borrower and communications demanding payment of the loans sent by BPI were addressed to Maxwell as the borrower, with Yu indicated only as the owner of the real properties as loan collateral.

Furthermore, we affirm the finding that Maxwell gravely failed to substantiate its claim that the loans were purely for Yu’s benefit. Maxwell’s evidence consisting of the testimony of Caroline Yu, Yu’s spouse and then president of Maxwell, was uncorroborated.

On the other hand, Yu’s and his mother’s testimonies were supported by various documents establishing the real nature of the loan, and belying Maxwell’s allegations. Yu presented the following: (1) Corporate Resolution to Borrow, dated 21 August 2000, where Maxwell authorized Caroline Yu to loan from BPI on its behalf; (2) the two Promissory Notes, dated 3 April 2001 and 2 May 2001, signed by Caroline Yu as Maxwell’s representative; and (3) two disclosure statements, dated 3 April 2001 and 2 May 2001, on “loan/credit transaction” signed by Caroline Yu, designating Maxwell as the borrower. Based on the foregoing, it is clear that Maxwell is the principal borrower solely liable for the payment of the loans.

While Maxwell is the real debtor, it was Yu who paid BPI the entire amount of Maxwell’s loans. Hence, contrary to Maxwell’s view, Article 1236 of the Civil Code applies. This provision reads:

The creditor is not bound to accept payment or performance by a third person who has no interest in the fulfillment of the obligation, unless there is a stipulation to the contrary.

Whoever pays for another may demand from the debtor what he has paid, except that if he paid without the knowledge or against the will of the debtor, he can recover only insofar as the payment has been beneficial to the debtor.

The above provision grants the plaintiff (Yu) the right to recovery and creates an obligation on the part of the defendant (Maxwell) to reimburse the plaintiff. In this case, Yu paid BPI P8,888,932.33, representing the amount of the principal loans with interest, thereby extinguishing Maxwell’s loan obligation with BPI. Pursuant to Article 1236 of the Civil Code, Maxwell, which was indisputably benefited by Yu’s payment, must reimburse Yu the same amount of P8,888,932.33.¹²

WHEREFORE, the Court DENIES the petition and AFFIRMS the 21 June 2007 Decision of the Court of Appeals in CA-G.R. CV No. 84522.

SO ORDERED.

ANTONIO T. CARPIO

Associate Justice

WE CONCUR:

PRESBITERO J. VELASCO, JR.

Associate Justice

ANTONIO EDUARDO B. NACHURA ROBERTO A. ABAD

Associate Justice Associate Justice

JOSE C. MENDOZA

Associate Justice

ATTESTATION

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

ANTONIO T. CARPIO

Associate Justice

Chairperson

CERTIFICATION

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

RENATO C. CORONA

Chief Justice

* Designated additional member per Raffle dated 2 June 2010.

1 Under Rule 45 of the Rules of Court.

2 Rollo, pp. 156-167. Penned by Associate Justice Fernanda Lampas Peralta, with Associate Justices Edgardo P. Cruz and Normandie B. Pizarro, concurring.

3 Id. at 104-110. Penned by Judge Alfredo C. Flores.

4 Id. at 74.

5 Id. at 76.

6 Id. at 110. Penned by Judge Alfredo C. Flores

7 Id. at 166.

8 De Guia v. Presiding Judge, RTC Br. 12, Malolos, Bulacan, G.R. No. 161074, 22 March 2010, 616 SCRA 284, 292; Madrigal v. Court of Appeals, 496 Phil. 149, 156 (2005), citing Bernardo v. CA, G.R. No. 101680, 7 December 1992, 216 SCRA 224 and Remalante v. Tibe, No. L-59514, 25 February 1988, 158 SCRA 138.

9 Madrigal v. Court of Appeals, supra.

10 Pacific Airways Corporation v. Tonda, 441 Phil. 156, 162 (2002); Austria v. Court of Appeals, 384 Phil. 408, 415 (2000).

11 Dimaranan v. Heirs of Spouses Hermogenes Arayata and Flaviana Arayata, G.R. No. 184193, 29 March 2010, 617 SCRA 101, 112-113; Espinosa v. People, G.R. No. 181071, 15 March 2010, 615 SCRA 446, 454, citing Republic v. Casimiro, G.R. No. 166139, 20 June 2006, 491 SCRA 499, 523.

12 See R.F.C. v. Court of Appeals, 94 Phil. 984 (1954), cited in Aquino, The Civil Code of the Philippines, Vol. 2, p. 301. See also Philippine Commercial International Bank v. Court of Appeals, G.R. No. 121989, 31 January 2006, 481 SCRA 127, 138.