Republic vs. De Borja

In a demurrer to evidence, the plaintiff must present evidence sufficient in point of law, taken as true, to make out a prima facie case entitling it to the relief sought; speculative, conjectural, and inconclusive evidence, as well as inadmissible hearsay, cannot support a finding of liability and justifies dismissal. A ruling on a demurrer to evidence is a final adjudication on the merits, and on appeal under Rule 45 the Court will not disturb the trial court’s factual findings and credibility assessments absent exceptional circumstances.

The Presidential Commission on Good Government, on behalf of the Republic, filed a complaint for accounting, reconveyance, forfeiture, restitution, and damages against Geronimo Velasco, Alfredo De Borja, several corporations, and other individuals for the recovery of assets allegedly amassed as ill-gotten wealth during the Marcos presidency. Velasco was the President and Chairman of the Board of PNOC. De Borja was his nephew. The Republic alleged that PNOC, in chartering vessels, was entitled to address commissions amounting to five percent of the freight, but during Velasco’s tenure these commissions were not remitted to PNOC. Instead, starting in 1979, the charter contracts were altered to conceal the commissions, which were then diverted to Decision Research Management Company (DRMC), a corporation purportedly controlled by Velasco. Velasco was also alleged to have received bribes and kickbacks in connection with PNOC’s purchase of crude oil tankers. The Republic claimed that De Borja acted as Velasco’s dummy, nominee, or agent, collecting those address commissions on Velasco’s behalf.

• Nature of the action: The Republic, through the PCGG, sought to recover ill-gotten assets from Velasco, De Borja, and various corporations. The complaint alleged that Velasco, as PNOC President and Chairman, facilitated the diversion of address commissions and received unlawful commissions in oil tanker transactions.
• De Borja’s alleged role: The complaint claimed that De Borja “collected these address commissions in behalf of Velasco” and acted as Velasco’s dummy, nominee, and/or agent for corporations Velasco owned or controlled, such as DRMC.
• Evidence for the Republic: The Republic presented two items of evidence relevant to De Borja’s liability:
  • Testimony of Epifanio Verano: Verano, a PNOC officer who was granted immunity, testified that on two occasions—once in the late 1970s and once in the early 1980s—ship brokers handed him sealed envelopes for delivery to Velasco. On both occasions, Velasco instructed Verano to bring the envelopes to the office of De Borja (Gerver). Verano left the envelopes at De Borja’s office because De Borja was not present.
    • On cross-examination, Verano admitted that the envelopes were sealed when he received them, remained sealed throughout, and he never opened them; he had no knowledge of their contents.
    • Verano further admitted that he never confirmed whether De Borja actually received the envelopes, did not receive any word that they failed to reach De Borja, and did not discuss the matter with De Borja on subsequent occasions when they met.
    • Verano also revealed that Velasco did not deal directly with brokers.
  • Affidavit of Jose M. Reyes: Reyes’ affidavit was offered, but the affiant died of a heart attack two days before his scheduled testimony and never testified in court. The affidavit was not subjected to cross-examination.
  • Demurrer to evidence: De Borja moved to dismiss on the ground that Verano’s testimony did not establish that he received any commissions; the envelopes were sealed, their contents unknown, and receipt was unconfirmed. The affidavit was inadmissible hearsay.

• Erroneous grant of demurrer: Petitioner Republic argued that the Sandiganbayan committed reversible error in granting De Borja’s demurrer to evidence because the testimony of Verano, viewed together with the circumstances, sufficiently demonstrated that De Borja acted as a conduit for the address commissions diverted from PNOC. Petitioner maintained that Verano’s repeated delivery of envelopes at Velasco’s behest, in the context of the alleged scheme, established a prima facie case of De Borja’s participation.
• Proper appreciation of evidence: Petitioner contended that the Sandiganbayan misappreciated the probative value of Verano’s testimony and should have considered it alongside the affidavit of Reyes and the documentary trail. The cumulative effect, petitioner insisted, met the preponderance of evidence standard necessary to withstand a demurrer.

• Insufficiency of evidence: Respondent De Borja maintained that the Republic’s evidence was purely speculative. Verano had no personal knowledge of the envelopes’ contents, never delivered them directly to De Borja, and never confirmed receipt. The testimony did not connect De Borja to any diversion of commissions. The affidavit of Reyes was inadmissible hearsay because the affiant died without testifying. Thus, no prima facie case existed.
• Procedural defect: Respondent argued that the Petition should be dismissed outright for failure to attach proof of service on the Sandiganbayan, as required by Section 5(d), Rule 56 of the Rules of Court.
• Mootness: Respondent contended that the subsequent final dismissal of Civil Case No. 0003 as to the other defendants in G.R. No. 199323 rendered the instant petition moot and academic, as the entire complaint had been resolved on the merits.

• Procedural Compliance: Whether the Petition should be dismissed for non-compliance with the proof-of-service requirement under Rule 56, Section 5(d).
• Mootness: Whether the final dismissal of Civil Case No. 0003 against the remaining defendants rendered the appeal from the grant of demurrer to evidence moot and academic.
• Propriety of Demurrer to Evidence: Whether the Sandiganbayan committed reversible error in granting De Borja’s demurrer to evidence on the ground that the Republic failed to present sufficient evidence to establish a prima facie case against him.

• Procedural Compliance: The procedural lapse was dispensed with in the broader interest of justice. Rules of procedure are subservient to substantive rights, and the Court preferred to resolve the controversy on the merits to finally write finis to the prolonged litigation.
• Mootness: The claim of mootness lacked merit. A dismissal based on a demurrer to evidence is a final order adjudicating the merits of the case against that particular defendant. The instant appeal was confined to De Borja’s alleged liability alone, distinct from the liability of the other defendants adjudicated in G.R. No. 199323. The subsequent dismissal of the complaint against other parties did not affect the prior, separate judgment on demurrer as to De Borja.
• Propriety of Demurrer to Evidence: The Sandiganbayan did not commit reversible error. The evidence adduced by the Republic was wholly insufficient to establish a prima facie case that De Borja acted as dummy or conduit. Verano’s testimony revealed that he had no knowledge of the contents of the sealed envelopes and never confirmed De Borja’s actual receipt; his account was speculative, conjectural, and inconclusive. The insinuations drawn by the Republic were unsupported by any competent evidence. The affidavit of Jose M. Reyes was inadmissible hearsay because the affiant died before his testimony could be taken in open court. Thus, no right to relief was shown. The Court deferred to the Sandiganbayan’s assessment of the evidence, reiterating that in a petition under Rule 45 only questions of law may be raised, and factual findings of the trial court on credibility and weight of evidence are generally binding on review.

• Demurrer to Evidence — A motion to dismiss filed after the plaintiff has rested its case, asserting that the evidence presented is insufficient in point of law to make out a case or sustain the issue. The test is whether the plaintiff’s evidence in chief, taken as true, establishes a prima facie case entitling it to the relief sought. It is premature at this stage to speak of a “preponderance of evidence” because the defendant has not yet presented countervailing proof; the court merely determines whether the plaintiff has crossed the threshold of legal sufficiency. A grant of demurrer results in a dismissal that is a final adjudication on the merits. Applied: The Sandiganbayan correctly found that Verano’s testimony, even accepted as true, did not supply the necessary nexus between De Borja and the alleged diversion of commissions; the Republic thus failed to establish a prima facie case.
• Rule on Review of Factual Findings in Petitions under Rule 45 — A petition for review on certiorari is limited to questions of law; the Supreme Court is not a trier of facts and will not re-examine or re-weigh evidence already considered by the lower courts. The Court accords great respect, if not finality, to the trial court’s findings on credibility of witnesses and assessment of evidence, absent any showing of arbitrariness or misapprehension of facts. Applied: The Court deferred to the Sandiganbayan’s calibration of Verano’s testimony and upheld the finding that it was insufficient to sustain the allegations.

• “A demurrer to evidence is a motion to dismiss on the ground of insufficiency of evidence. It is a remedy available to the defendant, to the effect that the evidence produced by the plaintiff is insufficient in point of law, whether true or not, to make out a case or sustain an issue.”
• “The question in a demurrer to evidence is whether the plaintiff, by his evidence in chief, had been able to establish a prima facie case.”
• “In a demurrer to evidence, however, it is premature to speak of ‘preponderance of evidence’ because it is filed prior to the defendant’s presentation of evidence; it is precisely the office of a demurrer to evidence to expeditiously terminate the case without the need of the defendant’s evidence.”
• “It is axiomatic that a dismissal on the basis of a demurrer to evidence is similar to a judgment; it is a final order ruling on the merits of a case.”
• “Nothing in the testimony of Verano reasonably points, or even alludes, to the conclusion that De Borja acted as a dummy or conduit of Velasco in receiving address commissions from vessel owners.”

• Felipe v. MGM Motor Trading Corp., G.R. No. 191849, September 23, 2015 — Clarified that a review of the dismissal on demurrer involves calibration of evidence and is a question of fact, not proper in a Rule 45 petition. Followed to uphold the Sandiganbayan’s factual determination.
• Spouses Condes v. Court of Appeals, 555 Phil. 311 (2007) — Defined the standard for a demurrer to evidence, emphasizing that it tests the sufficiency of the plaintiff’s evidence to establish a prima facie case, not preponderance. Applied in affirming that speculative testimony fails this threshold.
• Zoleta v. Sandiganbayan (Fourth Division), G.R. No. 185224, July 29, 2015 — Reiterated that factual questions are not cognizable in a petition for review on certiorari. Cited to support the Court’s deference to the Sandiganbayan.
• Republic v. Gimenez, G.R. No. 174673, January 11, 2016 — Recognized that a dismissal on demurrer to evidence is a judgment on the merits. Relied upon to reject respondent’s mootness claim.

• Section 1, Rule 133, Rules of Court — Defines preponderance of evidence as the quantum required in civil cases. The Court distinguished this standard from the prima facie sufficiency test applicable at the demurrer stage, holding that preponderance could not yet be assessed where defendant had not presented evidence.
• Section 1, Rule 45, Rules of Court — Restricts petitions for review to questions of law. Applied to limit the scope of review and to uphold the Sandiganbayan’s factual findings.
• Section 5(d), Rule 56, Rules of Court — Provides for dismissal of an appeal for failure to comply with proof-of-service requirements. The Court suspended its application in the interest of substantial justice.

Chief Justice Maria Lourdes P.A. Sereno (Chairperson), Associate Justices Teresita J. Leonardo-De Castro, Mariano C. Del Castillo, and Estela M. Perlas-Bernabe concurred.