REPUBLIC
OF THE
Petitioner,
Present:
QUISUMBING,
J.,
Chairperson,
- versus
- CARPIO,
CARPIO
MORALES,
TINGA,
and
VELASCO, JR., JJ.
JUAN
C. TUVERA, VICTOR P.
TUVERA
and
DEVELOPMENT CORPORATION, Promulgated:
Respondents.
x-----------------------------------------------------------------------------------x
Tinga,
J.:
The long-term campaign for the recovery of ill-gotten wealth
of former President Ferdinand E. Marcos, his wife Imelda, and their associates,
has been met with many impediments, some of which are featured in this case,
that have led to doubts whether there is still promise in that enterprise. Yet
even as the prosecution of those cases have drudged on and on, the era of their
final reckoning is just beginning before this Court. The heavy hammer of the
law is just starting to fall.
The instant
action originated from a civil complaint for restitution and damages filed by the
Republic of the
I.
We
begin with the facts.
Twin Peaks
Development Corporation (
Acting on a letter
dated 31 May 1984 of Twin Peaks’ Vice-President and Treasurer Evelyn Fontanilla in behalf of the corporation, President Marcos
granted the award of a Timber License Agreement (TLA), more specifically TLA
No. 356, in favor of Twin Peaks to operate on 26,000 hectares of forest land
with an annual allowable cut of 60,000 cubic meters of timber and to export 10,000
cubic meters of mahogany of the narra species.[2]
As a result,
On
two days later by Mission Order No. MER-88
(Mission Order), also issued by the PCGG, implementing the aforementioned Writ of Sequestration.[5]
On
In particular, the Complaint
alleged that Juan Tuvera, as Presidential Executive Assistant of President
Marcos, took advantage of his relationship to influence upon and connection
with the President by engaging in a scheme to unjustly enrich himself at the
expense of the Republic and of the Filipino people. This was allegedly
accomplished on his part by securing TLA No. 356 on behalf of P45 million.
The Complaint prayed that (1)
TLA No. 356 be reverted to the State or cancelled; (2) respondents be jointly
and severally ordered to pay P48 million[11]
as actual damages; and (3) respondents pay moral, temperate and exemplary damages,
litigation expenses, and treble judicial costs.[12] It cited as grounds for relief, gross abuse of
official position and authority, breach of public trust and fiduciary
obligations, brazen abuse of right and power, unjust enrichment, and violation
of the Constitution.[13]
In their Answer,[14]
respondents Victor Tuvera and P45 million were merely
imagined,[16]
and that the PCGG has no statutory authority to institute the action.[17] By way of counterclaim, respondents asked
that the Republic be ordered to pay Victor Tuvera moral damages and to pay both
Victor Tuvera and
Anent the allegation that
Twin Peaks sold about P3 million worth of lumber despite the Writ of
Sequestration issued by the PCGG, respondents stressed that the Director of
Forest Development acted within the scope of his authority and the courts have
no supervising power over the actions of the Director of Forest Development and
the Secretary of the Department of Environment and Natural Resources (DENR) in
the performance of their official duties.[19]
As an affirmative and
special defense, respondents Victor Tuvera and
Secretary. When respondents
submitted their Answer, the denial by the DENR of the Ysmael motion was under
review before the Court.[20]
Juan Tuvera, who was abroad
when the case was filed on
Juan Tuvera filed a
compulsory counterclaim on the ground that the instant action had besmirched
his reputation and caused serious anxiety and mental anguish thus entitling him
to moral and exemplary damages and litigation expenses.[23]
On
From 1988 to 1993, the
proceedings before the Sandiganbayan were delayed owing to the difficulty of
acquiring jurisdiction over the person of President Marcos, who was by then
already in exile. Thus, upon motion by respondents, the Sandiganbayan granted
them a separate pre-trial/trial from President Marcos.[27]
Respondents submitted their
documentary evidence in the Pre-Trial Conference while the Republic reserved to
present the same during trial. After the
pre-trial conference, the Sandiganbayan issued a Pre-Trial Order[28]
dated
Whether or not defendant Juan C. Tuvera who was a
Presidential Executive Assistant at the time material to this case, by himself
and in concert with his co-defendants Ferdinand E. Marcos and Victor Tuvera,
took advantage of his relation and connection with the late Marcos, secure
(sic) a timber concession for Twin Peaks Development Corporation and, engage
(sic) in a scheme to unjustly enrich himself at the expense of the Republic and
the Filipino People.[29]
The Pre-Trial Order also
indicated that the Republic admitted the exhibits by respondents, subject to
the presentation of certified true copies thereof. Respondents’ exhibits were
as follows:[30]
|
Exhibit
Nos. |
Description
|
|
1 |
Amended Articles of Incorporation dated |
|
2 |
TLA No. 356 |
|
3 |
Order, Minister Ernesto M. Maceda, |
|
3-A |
Order, Minister Ernesto M. Maceda, |
|
3-B |
Order, Minister Ernesto M. Maceda, |
|
3-C |
Resolution, Office of the President, |
|
3-D |
Order, Office of the President, |
|
3-E |
Complaint, PCGG, dated |
|
3-E-1, 3-E-2, 3-E-3 |
I.S. No. 66 Affidavit, PCGG, Almario F. Mendoza,
Ltv. Ramon F. Mendoza and Affidavit, Isidro Santiago |
|
3-F |
Counter-Affidavit, Juan C. Tuvera, |
|
3-F-1 |
PCGG, Motion to Withdraw, Jose Restituto F. Mendoza,
|
|
3-F-2 |
Decision, Supreme Court, |
|
3-G |
Resolution, Supreme Court, |
|
4 |
Complaint, DENR, Almario F, Mendoza, 9 March
1990
|
|
4-A |
Answer/Comment, DENR, Almario F. Mendoza, dated |
|
4-B |
Decision, DENR, dated |
|
5 |
Complaint,
Ombudsman, etc., Case No. 0-90-0708, |
|
6, 6-A |
Answer/Counter-Affidavit, etc. |
|
6-B |
Decision, Ombudsman Case No. 0-90-0708, dated |
The Republic presented three
(3) witnesses during the trial. The first witness was Joveniana M. Galicia,
Chief of the National Forest Management Division of the Forest Management
Bureau. She identified TLA No. 356 of
The next witness was
Fortunato S. Arcangel, Regional Technical Director III of the DENR. He
testified that he is a Technical Director under the Forest Management Services
of the DENR.[34]
He identified Forestry Administration Order (FAO) No. 11 dated
he was aware of the process
by which TLA No. 356 was issued to
The Republic’s third and
last witness was Teresita M. Zuñiga, employee of the Bureau of Internal
Revenue. She identified the 1986 Income
Tax Returns of Victor P. Tuvera, Evelyn Fontanilla and Feliciano O. Salvana,
stockholders of
On
|
Exhibits |
Documents |
Purpose |
|
A |
Timber
License Agreement No. 356 of Twin Peaks Realty Development Corp. dated |
To prove that the Timber License Agreement was
executed prior to the amendment of the Articles of Incorporation of Twin
Peaks Realty Development Corp. |
|
B |
Memorandum dated |
To prove the participation of Juan C. Tuvera in the
grant of the timber concession of Twin Peaks Realty Development Corp. |
|
C |
Forestry Administrative Order No. 11 (Revised) |
To prove that Twin Peaks Realty Development Corp.
was granted a timber license agreement without following the procedure
outlined in the forestry rules and regulation and in violation of law. |
|
D |
Income Tax Return of Victor Tuvera |
To prove that Victor Tuvera was not a legitimate
stockholder of Twin Peaks Realty Development Corp. |
|
E |
Income Tax Return of Evelyn Fontanilla |
To prove that Evelyn Fontanilla was not a legitimate
stockholder of Twin Peaks Realty Development Corp. |
|
F |
Income Tax Return of Feliciano Salvana |
To prove that Feliciano Salvana was not a legitimate
stockholder of Twin Peaks Realty Development Corp. |
|
G |
Articles of Incorporation of Twin Peaks Realty Development Corp. (original) |
To prove that Twin Peaks Realty Development Corp.
was organized to engage in the real estate business and not in the logging
industry. |
|
H |
Timber Manifestation Report of [Twin Peaks Realty
Development Corp.] consigned to Scala Sawmill[46] |
To show that Twin Peaks Realty Development Corp.
lacks equipment to process logs. |
|
I |
Timber Manifestation Report of Twin Peaks consigned to La Peña Sawmill[47] |
To show that Twin Peaks Realty Development Corp.
lacks equipment to process logs. |
Respondents subsequently
submitted certified true copies of the exhibits they had presented during the
pre-trial conference.[48]
With leave of court, respondents
filed a Demurrer to Evidence. Respondents
argued that the Republic failed to present sufficient legal affirmative
evidence to prove its claim. In particular, respondents’ demurrer contends that the memorandum (Exh. B)
and TLA No. 356 are not “legal evidence” because “legal evidence” is not meant
to raise a mere suspicion or doubt. Respondents also claim that income tax
returns are not sufficient to show one’s holding in a corporation. Respondents
also cited the factual antecedents culminating with the Court’s decision in Felipe Ysmael, Jr. & Corp., Inc. v. Sec.
of Environment and Natural Resources.[49]
The Republic filed a Manifestation, contending that
the demurrer is not based on the
insufficiency of its evidence but on the strength of the evidence of respondents
as shown by their own exhibits. The Republic claimed that the Revised Forestry
Code of the
Respondents opposed the Manifestation, maintaining that since
the Republic admitted the exhibits of respondents during the pre-trial, it is
bound by its own admission. Further,
these same exhibits contain uncontroverted facts and laws that only magnify the
conclusion that the Republic has no right to relief.[51]
In its Resolution dated
In essence, the
Sandiganbayan held that the validity of TLA No. 356 was already fully
adjudicated in a Resolution/Order issued by the Office of the President on
The Republic now questions
the correctness of the Sandiganbayan’s decision to grant the demurrer to
evidence because it was not based solely on the insufficiency of its evidence
but also on the evidence of respondent mentioned during the pre-trial
conference. The Republic also challenges the applicability of res judicata.
II.
Preliminarily,
we observe that respondents had filed before the Sandiganbayan a pleading
captioned Motion to Dismiss or Demurrer to Evidence, thus evincing that they
were seeking the alternative reliefs of either a motion to dismiss or a
demurrer to evidence. However, the Sandiganbayan, in resolving this motion,
referred to it as Motion to Dismiss on Demurrer to Evidence, a pleading
of markedly different character from a Motion to Dismiss or Demurrer to
Evidence. Still, a close reading of the Sandiganbayan Resolution reveals
clearly that the Sandiganbayan was treating the motion as a demurrer, following
Rule 33, Section 1 of the Rules of Court, rather than a motion to dismiss under
Rule 16, Section 1.
This
notwithstanding, the Sandiganbayan justified the grant of demurrer with res judicata as rationale. Res judicata is an inappropriate ground
for sustaining a demurrer to evidence, even as it stands as a proper ground for
a motion to dismiss. A demurrer may be granted if, after the presentation of
plaintiff’s evidence, it appears upon the facts and the law that the plaintiff
has shown no right to relief. In contrast, the grounds for res judicata present themselves even before the presentation of
evidence, and it should be at that stage that the defense of res judicata should be invoked as a
ground for dismissal. Properly speaking, the movants for demurral who wish to
rely on a controlling value of a settled case as a ground for demurrer should
invoke the ground of stare decisis in
lieu of res judicata.
In Domondon v. Lopez,[53]
we distinguished a motion to dismiss for failure of the complainant to state a
cause of action from a motion to dismiss based on lack of cause of action. The
first is governed by Rule 16, Section 1(g),[54] while the second by Rule 33[55] of the Rules of Court, to wit:
x x x The first [situation where the complaint does
not alleged cause of action] is raised in a motion to dismiss under Rule 16
before a responsive pleading is filed and can be determined only from the
allegations in the initiatory pleading and not from evidentiary or other matter
aliunde. The
second [situation where the evidence does not sustain the cause of
action alleged] is raised in a demurrer to evidence under Rule 33
after the plaintiff has rested his case and can be resolved only on the basis
of the evidence he has presented in support of his claim. The
first does not concern itself with the truth and falsity of the allegations
while the second arises precisely
because the judge has determined the truth and falsity of the allegations and
has found the evidence wanting.
Hence,
a motion to dismiss based on lack of
cause of action is filed by the defendant after the plaintiff has presented
his evidence on the ground that the
latter has shown no right to the relief sought.
While a motion to dismiss under
Rule 16 is based on preliminary objections which can be ventilated before
the beginning of the trial, a motion to
dismiss under Rule 33 is in the nature of a demurrer to evidence on the
ground of insufficiency of evidence and is presented only after the plaintiff
has rested his case.[56]
[Emphasis supplied]
III.
We
shall first discuss the question of whether or not a demurrer to evidence may
be granted based on the evidence presented by the opposing parties.
An examination of the
Sandiganbayan’s Resolution shows that dismissal of the case on demurrer to
evidence was principally anchored on the Republic’s failure to show its right
to relief because of the existence of a prior judgment which consequently barred
the relitigation of the same
issue. In other words, the Sandiganbayan did
not dismiss the case on the
insufficiency of the Republic’s evidence nor on the strength of respondents’
evidence. Rather, it based
its dismissal on the existence of the Ysmael
case which, according to it, would render the case barred by res judicata.
Prescinding from this
procedural miscue, was the Sandiganbayan correct in applying res judicata to the case at bar? To
determine whether or not res judicata
indeed applies in the instant case, a review of Ysmael is proper.
In brief, Felipe Ysmael, Jr.
& Co., Inc. was a grantee of a timber license agreement, TLA No. 87.
Sometime in August 1983, the Bureau of Forest Development cancelled TLA No. 87
despite the company’s letter for the reconsideration of the revocation. Barely one year thereafter, one-half (or
26,000 hectares) of the area formerly covered by TLA No. 87 was re-awarded to
In 1986, Felipe Ysmael, Jr.
& Co., Inc. sent separate letters to
the Office of the President and the Ministry of Natural Resources primarily
seeking the reinstatement of TLA No. 87 and the revocation of TLA No. 356. Both
offices denied the relief prayed for. Consequently, Felipe Ysmael, Jr. &
Co., Inc. filed a petition for review before this Court.
The Court, through the late
Justice Irene Cortes, held that Ysmael’s letters to the Office of the President
and to the Ministry of Natural Resources in 1986 sought the reconsideration of
a memorandum order by the Bureau of Forest Development canceling their timber
license agreement in 1983 and the revocation of TLA No. 356 subsequently issued
by the Bureau in 1984. Ysmael did not attack the administrative actions until
after 1986. Since the decision of the Bureau has become final, it has the force
and effect of a final judgment within the purview of the doctrine of res judicata. These decisions and
orders, therefore, are conclusive upon the rights of the affected parties as
though the same had been rendered by a court of general jurisdiction. The Court
also denied the petition of Ysmael because it failed to file the special civil
action for certiorari under Rule 65 within a reasonable time, as well as in due
regard for public policy considerations and the principle of non-interference
by the courts in matters which are addressed to the sound discretion of
government agencies entrusted with the regulation of activities coming under
the special technical knowledge and training of such agencies.
In Sarabia and Leido v.
Secretary of Agriculture and Natural Resources, et al.,[57]
the Court discussed the underlying principle for res judicata, to
wit:
The fundamental principle upon which the doctrine of res
judicata rests is that parties ought not to be permitted to litigate the
same issue more than once; that, when a right or fact has been judicially tried
and determined by a court of competent jurisdiction, or an opportunity for such
trial has been given, the judgment of the court, so long as it remains
unreversed, should be conclusive upon the parties and those in privity with
them in law or estate.
For res judicata to serve as an absolute bar to a subsequent action,
the following requisites must concur: (1) the former judgment or order must be
final; (2) the judgment or order must be on the merits; (3) it must have been
rendered by a court having jurisdiction over the subject matter and parties;
and (4) there must be between the first and second actions, identity of
parties, of subject matter, and of causes of action.[58]
When there is only identity of issues with no identity of causes of action,
there exists res judicata in the concept of conclusiveness of judgment.[59]
In Ysmael, the case was between Felipe Ysmael Jr. & Co., Inc. and
the Deputy Executive Secretary, the Secretary of Environment and Natural
Resources, the Director of the Bureau of Forest Development and Twin Peaks Development
and Realty Corporation. The present case, on the other hand, was initiated by the
Republic of
the
The
Sandiganbayan held that despite the difference of parties, res judicata nevertheless applies on the basis of the supposed
sufficiency of the “substantial identity” between the Republic of the
The Court finds no basis to declare the Republic as
having substantial interest as that of Felipe Ysmael, Jr. & Co., Inc. In
the first place, the Republic’s cause of
action lies in
the alleged abuse of
power
on respondents’ part in violation of R.A. No. 3019[63] and breach
of public trust, which in turn warrants its claim for restitution and damages. Ysmael, on the other hand, sought the
revocation of TLA No. 356 and the reinstatement of its own timber license
agreement. Indeed, there is no identity of parties and no identity of causes of
action between the two cases.
IV.
What
now is the course of action to take since we cannot affirm the Sandiganbayan’s
grant of the demurrer to evidence? Rule 33, Sec. 1 reads:
Sec. 1. Effect of judgment on demurrer to evidence.
– After the plaintiff has completed the presentation of his evidence, the
defendant may move for dismissal on the ground that upon the facts and the law
the plaintiff has shown no right to relief. If his motion is denied, he shall
have the right to present evidence. If the motion is granted but on appeal the
order of dismissal is reversed he shall have be deemed to have waived the right
to present evidence.
The general rule
is that upon the dismissal of the demurrer in the appellate court, the
defendant loses the right to present his evidence and the appellate
court shall then proceed to render judgment on the
merits on the basis of
plaintiff’s evidence. As the Court explained in Generoso Villanueva Transit
Co., Inc. v. Javellana:[64]
The rationale
behind the rule and doctrine is simple and logical. The defendant is permitted, without waiving
his right to offer evidence in the event that his motion is not granted, to
move for a dismissal (i.e., demur to
the plaintiff’s evidence) on the ground that upon the facts as thus established
and the applicable law, the plaintiff has shown no right to relief. If the trial court denies the dismissal motion, i.e.,
finds that plaintiff’s evidence is sufficient for an award of judgment in the
absence of contrary evidence, the case still remains before the trial court
which should then proceed to hear and receive the defendant’s evidence so that
all the facts and evidence of the contending parties may be properly placed
before it for adjudication as well as before the appellate courts, in case of
appeal. Nothing is lost. The doctrine is but in line with the
established procedural precepts in the conduct of trials that the trial court
liberally receive all proffered evidence at the trial to enable it to render
its decision with all possibly relevant proofs in the record, thus assuring
that the appellate courts upon appeal have all the material before them
necessary to make a correct judgment, and avoiding the need of remanding the
case for retrial or reception of improperly excluded evidence, with the
possibility thereafter of still another appeal, with all the concomitant
delays. The rule, however, imposes the
condition by the same token that if his demurrer is granted by the trial court,
and the order of dismissal is reversed on appeal, the movant loses his right to
present evidence in his behalf and he shall have been deemed to have elected to
stand on the insufficiency of plaintiff’s case and evidence. In such event, the appellate court which
reverses the order of dismissal shall proceed to render judgment on the merits
on the basis of plaintiff’s evidence.[65]
It thus becomes the Court's
duty to rule on the merits of the complaint, duly taking into account the
evidence presented by the Republic, and without need to consider whatever evidence
the Tuveras have, they having waived their right to present evidence in their
behalf.
V.
Executive Order No. 14-A[66]
establishes that the degree of proof required in cases such as this instant
case is preponderance of evidence. Section 3 thereof reads:
SEC. 3. The
civil suits to recover unlawfully acquired property under Republic Act No. 1379
or for restitution, reparation of damages, or indemnification for consequential
and other damages or any other civil actions under the Civil Code or other
existing laws filed with the Sandiganbayan against Ferdinand E. Marcos, Imelda
R. Marcos, members of their immediate family, close relatives, subordinates,
close and/or business associates, dummies, agents and nominees, may proceed
independently of any criminal proceedings and may be proved by a
preponderance of evidence. [Emphasis supplied.]
Thus, the Court recently
held in Yuchengco v. Sandiganbayan,[67] that
in establishing the quantum of evidence required for civil cases involving the
Marcos wealth held by their immediate family, close relatives, subordinates, close and/or
business associates, dummies,
agents and nominees filed
before the Sandiganbayan, that “the Sandiganbayan, x x x
was not to look for proof beyond reasonable doubt, but to determine, based on
the evidence presented, in light of common human experience, which of the
theories proffered by the parties is more worthy of credence.”
In order that restitution
may be proper in this case, it must be first established that the grant of the
TLA to
Regarding the first line of
inquiry, the Complaint adverted to several provisions of law which ostensibly
were violated by the grant of the TLA in favor of
Still, the most organic laws
that determine the validity or invalidity of the TLA are those that governed
the issuance of timber license agreements in 1984. In that regard, the Republic
argues that the absence of a bidding process is patent proof of the
irregularity of the issuance of the TLA in favor of
A timber license agreement
authorizes a person to utilize forest resources within any forest land with the
right of possession and exclusion of others.[68] The Forestry Reform Code prohibits any person
from utilizing, exploiting, occupying, possessing or conducting any activity
within any forest land unless he had been authorized to do so under a license
agreement, lease, license or permit.[69]
The Code also mandates that no timber license agreement shall be issued unless
the applicant satisfactorily proves that he has the financial resources and
technical capability not only to minimize utilization, but also to practice
forest protection, conservation and development measures to insure the
perpetuation of said forest in productive condition.[70]
However, the Code is silent as to the procedure in the acquisition of such timber
license agreement. Such procedure is more particularly defined under FAO No.
11, dated
FAO No. 11 establishes that
it is the Director of Forestry who has the power “to grant timber licenses and
permits.”[71] It also provides as a general policy that
timber license agreements shall be
granted through no other
mode than public bidding.[72]
However, Section 24 of FAO No. 11 does admit that a timber license agreement may
be granted through “negotiation,” as well as through “public bidding.”
26.
When license may be issued.–A license under this Regulations may be
issued or granted only after an application and an award either through bidding
or by negotiation has been made and the Director of Forestry is satisfied
that the issuance of such license shall not be inconsistent with existing laws
and regulations or prejudicial to public interest, and that the necessary
license fee, bond deposit and other requirements of the Bureau of Forestry have
been paid and complied with.[73]
[Emphasis supplied.]
However, even a person who
is granted a TLA through “negotiation” is still required to submit the same
requirements and supporting papers as required for public bidding. The pertinent
provisions of FAO No. 11 state:
18.
Requirements
and supporting papers to be submitted.—The
following requirements with accompanying supporting papers or documents shall
be submitted in addition to the requirements of Section 12:
a.
With bid
application:
The applicant shall support his bid application with
the required application fee duly paid and proofs of the following:
(1)
Capitalization.—Cash deposits and established credit line by
applicant in domestic bank certified to by the bank President or any of its
authorized officials, duly attested by depositor as his own to be used
exclusively in logging and wood processing operations if awarded the area. The
bank certificate shall be accompanied by a written consent by the
applicant-depositor for the Director of Forestry or his authorized
representative to verify such cash deposit with bank authorities.
Capitalization and financial statements.— A minimum capitalization of P20.00 per cubit
meter in cash and an established credit line of P150.00 per cubic meter
based on the allowable annual cut are required. Financial statements certified
by the independent and reputable certified public accountants must accompany
the application as proof of the necessary
capitalization.
Additional capitalization, Real Estate.— In the event that the capitalization of the
applicant is less than the minimum or less than that set by the Director of
Forestry for the area, the applicant bidder may be asked to submit an affidavit
signifying his readiness, should the area be awarded to him, to convert within
a specified time any specified unencumbered and titled real estate into cash
for use in operating and developing the area.
Presentation of real estate should show location by municipality and
province, hectarage, title number, latest land tax declaration, assessed value
of land and improvements (stating kind of improvements), and encumbrances if
any.
(2)
Logging
machinery and equipment.—Evidence of
ownership or capacity to acquire the requisite machinery or equipment shall
accompany the bid application. The capacity or ability to acquire machineries
and equipments shall be determined by the committee on award. Leased equipment
or machineries may be considered in the determination by the Committee if
expressly authorized in writing by the Director of Forestry.
(3)
Technical know-how.—To assure efficient operation of the area or
concession, the applicant shall submit proof of technical competence and
know-how and/or his ability to provide hired services of competent personnel.
(4)
Operation or development
plan.— An appropriate plan of
operation and development of the forest area applied for shall be submitted,
including phasing plans and the fund requirements therefor, consistent with
selective logging methods and the sustained yield policy of the Bureau of
Forestry. This plan must be in general
agreement with the working unit plan for the area as contained in Chapter III,
Section 6(a) hereinabove.
(5)
Processing
plant.—The bidder or applicant shall
show evidence of ownership of, or negotiation to acquire, a wood processing
plant. The kind and type of plant, such as plywood, veneer, bandmill, etc.
shall be specified. The plant should be capable of processing at least 60% of
the allowable annual cut.
(6)
Forestry
Department.—The applicant shall
submit assurance under oath that he shall put a forestry department composed of
trained or experienced foresters to carry out forest management activities such
as selective logging, planting of denuded or logged-over areas within the
concessions as specified by the Director of Forestry and establish a forest
nursery for the purpose.
(7)
Statement on
sustained yield operations, reforestation, and protection under management
plans.— The bidder or applicant shall
submit a sworn statement of his agreement and willingness to operate the area
under sustained yield to reforest cleared areas and protect the concession or
licensed area and under the approved management plan, and to abide with all
existing forestry laws, rules and
regulations and those that may hereafter be promulgated; and of his agreement
that any violation of these conditions shall be sufficient cause for the
cancellation of the licenses.
(8)
Organization
plan.–Other important statement
connected with sound management and operation of the area, such as the
submission among others, of the organizational plan and employment of
concession guards, shall be submitted. In
this connection, the applicant shall submit a sworn statement to the effect no
alien shall be employed without prior approval of proper authorities.
(9)
Unauthorized
use of heave equipment.—The applicant shall give his assurance that he
shall not introduce into his area additional heave equipment and machinery
without approval of the Director of Forestry.
(10) Such other inducements or considerations to the award as will serve public interest may also be required from time to time.
x x x x
d) With applications for areas to be negotiated.—All the foregoing requirements and
supporting papers required for bidding under Section 18(a) hereinabove and of
Section 20(b) hereinbelow shall also apply to all areas that may be granted
through negotiation. In no case shall an area exceeding 100,000 hectares be
granted thru negotiation.[74]
The rationale underlying the
very elaborate procedure that entails prior to the grant of a timber license
agreement is to avert the haphazard exploitation of the State's forest
resources as it provides that only the most qualified applicants will be
allowed to engage in timber activities within the strict limitations of the
grant and that cleared forest areas will have to be renewed through
reforestation. Since timber is not a readily renewable natural resource, it is essential
and appropriate that the State serve and act as a jealous and zealous
guardian of our forest lands, with the layers of bureaucracy that encumber the
grant of timber license agreements effectively serving as a defensive wall
against the thoughtless ravage of our forest resources.
There is no doubt that no
public bidding occurred in this case. Certainly, respondents did not raise the
defense in their respective answers. The absence of such bidding was testified
on by prosecution witness Arcangel. Yet even if we consider that
It is evident that
an application directly to
the Office of the President as a proper mode for the issuance of a TLA. Without
discounting the breadth and scope of the President’s powers as Chief Executive,
the authority of the President with respect to timber licenses is, by the
express terms of the Revised Forestry Code, limited to the amendment,
modification, replacement or rescission of any contract, concession, permit,
license or any other form of privilege granted by said Code.[77]
There are several factors
that taint this backdoor application for a timber license agreement by
Sec. 18(a)(1) of FAO No. 11 requires that an applicant must
have a minimum capitalization of P20.00 per cubic meter in cash and an
established credit line of P150.00 per cubic meter based on the
allowable annual cut. TLA No. 356 allowed
Peaks, therefore, must have
at least P1,200,000.00 in cash as its minimum capitalization, following
FAO No. 11. An examination of P312,500.00.[78]
Clearly,
Moreover, Sec. 18(5)
provides that the bidder or applicant shall show evidence of ownership of, or
negotiation to acquire, a wood processing plant. However, although TLA No. 356
was issued to
What could have made
The causes of action against
respondents allegedly arose from Juan Tuvera’s abuse of his relationship,
influence and connection as Presidential Executive Assistant of then President
Marcos. Through Juan Tuvera’s position, the Republic claims that
Did Juan Tuvera do the
honorable thing and keep his distance from
Office of the President
of the
Malacanang
74-84
MEMORANDUM to
Director
Edmundo Cortes
Bureau
of
I
wish to inform you that the President
has granted the award to the Twin Peaks Realty Development Corporation, of the
concession to manage, operate and develop in accordance with existing policies
and regulations half of the timber area in the Province of Quirino covered by
TLA No. 87, formerly belonging to the Felipe Ysmael, Jr. & Company and
comprising 54,920 hectares, and to export half of the requested 20,000 cubic
meters of logs to be gathered from the area.
Herewith is a copy of the letter concering (sic) this
matter of Ms. Evelyn F. Fontanilla, Vice-President and Treasurer of the Twin
Peaks Realty Development Corporation, on which the President indicated such
approval in his own hand, which I am furnishing you for your information and
appropriate action.
(signed)
JUAN
C. TUVERA
Presidential
Executive Assistant[80]
The Memorandum establishes
at the very least that Tuvera knew about the
Delicadeza is not merely a stentorian
term evincing a bygone ethic. It is a legal principle as embodied by certain
provisions of the Anti-Graft and Corrupt Practices Act. Section 3 of R.A. No.
3019 states in part:
Sec. 3. Corrupt practices of public officers.—In
addition to acts or omissions of public officers already penalized by existing
law, the following shall constitute corrupt practices of any public officer and
are hereby declared to be unlawful:
(a) Persuading, inducing or influencing another public
officer to perform an act constituting a violation of rules and regulations
duly promulgated by competent authority or an offense in connection with the
official duties of the latter, or allowing himself to be persuaded, induced or
influenced to commit such violation or offense.
x x x x
(h) Directly or indirectly having
financial or pecuniary interest in any business, contract or transaction in
connection with which he intervenes or takes part in his official capacity, or
in which he is prohibited by the Constitution or by any law from having any
interest.
The Memorandum signed by Juan Tuvera can be taken as proof
that he “persuaded, induced or influenced” the Director of Forestry to
accommodate a timber license agreement in favor of Twin Peaks, despite the
failure to undergo public bidding, or to comply with the requisites for the
grant of such agreement by negotiation, and in favor of a corporation that did
not appear legally capacitated to be granted such agreement. The fact that the
principal stockholder of
In sum, the backdoor recourse for a hugely priced favor from
the government by itself, and more in tandem with other brazen relevant damning
circumstances, indicates the impudent abuse of power and the detestable misuse
of influence that homologously made the acquisition of ill-gotten wealth a
reality. Upon the facts borne out by the evidence for the Republic and
guideposts supplied by the governing laws, the Republic has a clear right to
the reliefs it seeks.
VI.
If only the Court's outrage
were quantifiable in sums of money, respondents are due for significant
pecuniary hurt. Instead, the Court is forced to explain in the next few
paragraphs why respondents could not be forced to recompensate the Filipino
people in appropriate financial terms. The fault lies with those engaged by the
government to litigate this case in behalf of the State.
It bears to the most
primitive of reasons that an action for recovery of sum of money must prove the
amount sought to be recovered. In the case at bar, the Republic rested its case
without presenting any evidence, documentary or testimonial, to establish the
amount that should be restituted to the State by reason of the illegal acts
committed by the respondents. There is the bare allegation in the complaint
that the State is entitled to P48 million by way of actual damages, but
no single proof presented as to why the State is entitled to such amount.
Actual damages must be
proven, not presumed.[81]
The Republic failed to prove damages. It is not enough for the Republic to have
established, as it did, the legal travesty that led to the wrongful obtention
by
We fail to comprehend why
the Republic failed to present any proof of actual damages. Was it the
inability to obtain the necessary financial documents that would establish the
income earned by
The
claim for moral damages deserves short shrift. The claimant in this case is the
Republic of the
A juridical
person is generally not entitled to moral damages because, unlike a natural
person, it cannot experience physical suffering or such sentiments as wounded
feelings, serious anxiety, mental anguish or moral shock. The Court of Appeals cites Mambulao Lumber Co. v. PNB, et al. to justify the award of moral damages.
However, the Court's statement in Mambulao that "a corporation may have a
good reputation which, if besmirched, may also be a ground for the award of
moral damages" is an obiter dictum.
Nevertheless,
AMEC's claim for moral damages falls under item 7 of Article 2219 of the Civil
Code. This provision expressly authorizes the recovery of moral damages in
cases of libel, slander or any other form of defamation. Article 2219(7) does
not qualify whether the plaintiff is a natural or juridical person. Therefore,
a juridical person such as a corporation can validly complain for libel or any
other form of defamation and claim for moral damages.[83]
As explained, a juridical
person is not entitled to moral damages under Article 2217 of the Civil Code.
It may avail of moral damages under the analogous cases listed in Article 2219,
such as for libel, slander or any other form of defamation. Suffice it to say
that the action at bar does not involve any of the analogous cases under
Article 2219, and indeed upon an intelligent reading of Article 2219, it is difficult
to see how the Republic could sustain any of the injuries contemplated therein.
Any lawyer for the Republic who poses a claim for moral damages in behalf of
the State stands in risk of serious ridicule.
However, there is sufficient
basis for an award of temperate damages, also sought by the Republic
notwithstanding the fact that a claim for both actual and temperate damages is
internally inconsistent. Temperate or moderate damages avail when “the court
finds that some pecuniary loss has been suffered but its amount can not from
the nature of the case, be proved with certainty.”[84]
The textual language might betray an intent that temperate damages do not avail
when the case, by its nature, is susceptible to proof of pecuniary loss; and
certainly the Republic could have proved pecuniary loss herein.[85] Still, jurisprudence applying Article 2224 is
clear that temperate damages may be awarded even in instances where pecuniary
loss could theoretically have been proved with certainty.
In a host of criminal cases,
the Court has awarded temperate damages to the heirs of the victim in cases
where the amount of actual damages was not proven due to the inadequacy of the
evidence presented by the prosecution. These cases include People v. Oliano,[86]
People v. Suplito,[87]
People v. De la Tongga,[88]
People v. Briones,[89]
and People v. Plazo.[90]
In Viron Transportation Co., Inc. v. Delos Santos,[91]
a civil action for damages involving a vehicular collision, temperate damages
were awarded for the resulting damage sustained by a cargo truck, after the
plaintiff had failed to submit competent proof of actual damages.
We cannot discount the heavy
influence of common law, and its reliance on judicial precedents, in our law on
tort and damages. Notwithstanding the language of Article 2224, a line of
jurisprudence has emerged authorizing the award of temperate damages even in
cases where the amount of pecuniary loss could have been proven with certainty,
if no such adequate proof was presented. The allowance of temperate damages
when actual damages were not adequately proven is ultimately a rule drawn from
equity, the principle affording relief to those definitely injured who are
unable to prove how definite the injury. There is no impediment to apply this
doctrine to the case at bar, which involves one of the most daunting and noble
undertakings of our young democracy–the recovery of ill-gotten wealth salted
away during the Marcos years. If the doctrine can be justified to answer for the unlawful damage to
a cargo truck, it is a
compounded wrath if it
cannot answer for the unlawful exploitation of our forests, to the injury of
the Filipino people. The amount of P1,000,000.00 as temperate damages is
proper.
The allowance of temperate
damages also paves the way for the award of exemplary damages. Under Article
2234 of the Civil Code, a showing that
the plaintiff is entitled to temperate damages allows for the award of
exemplary damages. Even as exemplary damages cannot be recovered as a matter of
right, the courts are empowered to decide whether or not they should be
adjudicated. Ill-gotten wealth cases are hornbook demonstrations where damages
by way of example or correction for the public good should be awarded. Fewer
causes of action deserve the stigma left by exemplary damages, which “serve as
a deterrent against or as a negative incentive to curb socially deleterious
actions.”[92]
The obtention of the timber license agreement by P1,000,000.00 as exemplary damages.
The imposition of exemplary
damages is a means by which the State, through its judicial arm, can send the
clear and unequivocal signal best expressed in the pithy but immutable phrase,
“never again.” It is severely unfortunate that the Republic did not exert its
best efforts in the full recovery of the actual damages caused by the illegal
grant of the Twin Peaks TLA. To the best of our ability, through the
appropriate vehicle of exemplary damages, the Court will try to fill in that deficiency.
For if there
is a lesson that should be
learned from the national
trauma of the rule of Marcos, it is that kleptocracy cannot pay. As those dark
years fade into the backburner of the collective memory, and a new generation
emerges without proximate knowledge of how bad it was then, it is useful that
the Court serves a reminder here and now.
WHEREFORE, the petition is GRANTED. The
Resolution of the Sandiganbayan dated P1,000,000.00) Pesos, as and for
temperate damages, and One Million (P1,000,000.00) Pesos, as and for exemplary damages, plus costs
of suit.
SO ORDERED.
DANTE O. TINGA Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
ANTONIO T. CARPIO CONCHITA CARPIO MORALES
Associate Justice Associate
Justice
PRESBITERO J. VELASCO,
JR.
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.
LEONARDO A. QUISUMBING
Associate Justice
Chairperson, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII of
the Constitution, and the Division Chairperson’s Attestation, it is hereby
certified 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.
REYNATO S. PUNO
Chief Justice
[3]Executive
Order No. 14 (1986).
[6]
[7]
[11]According
to the Complaint, respondent sold about P3 million worth of lumber
despite the service of Writ of Sequestration.
[17]
[18]
[20]The
case was later resolved by the Court with finality in Felipe Ysmael, Jr. v. Sec. of Environment and Natural Resources, G.R. No. 79538, 18 October 1990, 190 SCRA
673.
[32]
[33]
[40]
[42]Presidential
Decree No. 705, as amended, dated
[43]TSN,
[47]This
document was not presented by any of the witnesses.
[51]Sandiganbayan
rollo, Vol. 3, p. 1110; Opposition to
Manifestation and Motion,.
[52]
[54]SECTION
1. Grounds.—Within the time for but
before filing the answer to the complaint or pleading asserting a claim, a
motion to dismiss may be made on any of the following grounds:
x x x x
(g)
That the pleading asserting the claim states no cause of action;
x x x
x
[55]SECTION
1. Demurrer to evidence.—After the
plaintiff has completed the presentation of his evidence, the defendant may
move for dismissal on the ground that upon the facts and the law the plaintiff
has shown no right to relief. If his motion is denied, he shall have the right
to present evidence. If the motion is
granted but on appeal the order of dismissal is reversed he shall be deemed to
have waived the right to present evidence.
[57]111
Phil. 1081, 1087 (1961) citing Philippine National Bank v. Barretto, 52
Phil. 818, 824; Escudero v. Flores, 97 Phil. 240 (1955); 51 O.G. 3444.
[58]Sta. Lucia Realty and Development, Inc. v. Cabrigas, 411 Phil 369,
386 (2001), citing Cagayan de Oro Coliseum, Inc. v. Court of Appeals,
320 SCRA 731 (1999); Mirpuri v. Court of Appeals, 318 SCRA 516 (1999);
and Saura v. Saura, Jr.,
313 SCRA 465 (1999).
[59]Sta.
Lucia Realty and Development, Inc. v. Cabrigas, supra
note 55 citing Calalang v. Register of Deeds of Quezon City, 231 SCRA 88
(1994).
[61]Javier v. Veridiano II, G.R. No. 48050,
[62]Villa
Esperanza Development Corp. v. Honorable Court of Appeals, G.R. No. 97179,
3 February 1993, 218 SCRA 401.
[67]G.R. No.
149802,
[69]Forestry Reform Code, Sec. 20.
[71]Department
of Environment and Natural Resources (Forestry) Administrative Order No. 11
(1970), Sec. 4(c).
[72]Department
of Environment and Natural Resources (Forestry) Administrative Order No. 11
(1970), Sec. 3(a)(1).
[73]Department
of Environment and Natural Resources (Forestry) Administrative Order No. 11
(1970), Sec. 26.
[74]Department
of Environment and Natural Resources (Forestry) Administrative Order No. 11
(1970), Sec. 18.
[76]
[80]Rollo, p. 143; Formal Offer of Evidence.
The Memorandum has marginal notes but these marginal notes were not separately
marked nor specifically mentioned in the formal offer of evidence and in the
pleadings.
[85]See
e.g., Necesito v. Paras, 104 Phil.
75, 85 (1958).