Republic vs. Sandiganbayan

Judicial admissions made in pleadings form part of the facts of the case and need not be formally offered in evidence; they may be considered in resolving a demurrer to evidence. A demurrer to evidence is resolved based on the facts and the law, which includes all means sanctioned by the Rules of Court in ascertaining matters in judicial proceedings—judicial admissions, matters of judicial notice, stipulations, and presumptions—the only exclusion being the defendant's evidence.

The Republic of the Philippines, through the Office of the Ombudsman, filed a petition for forfeiture under Section 2 of Republic Act No. 1379 against Romeo G. Panganiban, a former Regional Director at the Department of Public Works and Highways, and his family members. The forfeiture proceeding sought to recover properties allegedly unlawfully acquired by Romeo during his public incumbency, based on the disparity between his declared net worth in his Statements of Assets, Liabilities and Net Worth (SALNs) and his lawful government income. His wife Fe, daughter Geraldine, and sisters Elsa and Purita were impleaded as respondents on the premise that they were holding properties for and on behalf of Romeo.

Romeo G. Panganiban served as Regional Director at the Department of Public Works and Highways. On September 27, 2004, the Republic, through the Office of the Ombudsman, filed a petition for forfeiture before the Sandiganbayan against Romeo, his wife Fe, his daughter Geraldine, and his sisters Elsa and Purita, pursuant to Section 2 of Republic Act No. 1379. The Republic sought forfeiture of five real properties valued at not less than P40,766,300.00, plus additional properties worth P10,236,771.60: (a) a residential house and lot in Los Baños, Laguna covered by TCT No. 307495 in the name of Spouses Romeo and Fe; (b) a commercial four-storey building and lots in Sta. Cruz, Laguna covered by TCT Nos. 150693 and 150694 in Romeo's name; (c) a residential house and lot in Ayala Alabang Village, Muntinlupa City covered by TCT No. 1577 in Elsa's name; (d) a three-bedroom house and lot in Pasadena, Los Angeles, California registered in the name of "Fe Panganiban and Geraldine Panganiban"; and (e) a residential lot in Barangay Callos, Sta. Cruz, Laguna covered by TCT No. T-110804 in the name of Spouses Romeo and Fe.

The Republic anchored its forfeiture prayer on the disparity between Romeo's net worth of P455,000.00 in his 1986 SALN and P13,208,590.50 in his 2001 SALN, against his total government salary of only P2,516,818.90 from January 1, 1986 to December 31, 2001. The Republic also noted that Romeo made eight foreign travels between 1999 and 2004, while Fe made 28 travels abroad during the same period. The Republic concluded that the discrepancy of P10,236,771.60, plus the aggregate P40,766,300.00 value of the five real properties, constituted ill-gotten wealth.

In his Answer, Romeo denied the allegations, averring that his wife and sisters had the financial capacity to purchase the properties registered in their names, and that Fe contributed substantially to the family income as a business owner. He disavowed any personal participation in the purchase of the Ayala Alabang and Los Angeles properties, but admitted that the Los Angeles property was actually purchased by his daughter Geraldine and his wife. Fe, Elsa, and Purita filed a Joint Answer echoing the same denials. Geraldine did not file an Answer and was declared in default.

After the Republic presented its evidence-in-chief and filed its Formal Offer of Exhibits, the Sandiganbayan admitted all documentary exhibits except Exhibits "AA" (Property Profile) and "BB" (Sales Comparables) for the Los Angeles property, both for being mere photocopies. The respondents then filed a Demurrer to Evidence, arguing that the Republic failed to prove that Romeo unlawfully acquired the properties and failed to refute the legitimate ownership of Purita over the Los Baños Property and Elsa over the Ayala Alabang Property.

The Sandiganbayan partly granted the demurrer. It dismissed the forfeiture petition as to the Ayala Alabang property, holding that the travel documents and Sky Cable account in Fe's name could not defeat Elsa's Torrens Title and Deed of Absolute Sale. It dismissed the petition as to the Los Angeles property because the Republic's evidence consisted of inadmissible photocopies and the counter-affidavit was not formally offered. It also dismissed the petition as to the Callos-Sta. Cruz property, finding that its value was well within Romeo's financial capacity. However, it required the respondents to present countervailing evidence as to the Los Baños and Sta. Cruz properties and to explain their foreign travels.

The Republic moved for partial reconsideration, arguing that the Sandiganbayan failed to appreciate the PNP-CIDG investigator's testimony that Elsa admitted the Ayala Alabang property belonged to Romeo; that Fe's co-ownership of the Los Angeles property made Romeo a co-owner as her spouse; and that the finding on the Callos-Sta. Cruz property deserved closer examination. The Sandiganbayan denied the motion, prompting the Republic to file the instant petition for certiorari under Rule 65.

• Grave Abuse of Discretion — Ayala Alabang Property: The Republic argued that the Sandiganbayan acted with grave abuse of discretion when it considered in favor of Romeo, Fe, and Elsa a purported certificate of title and alleged deed of sale which were not formally offered in evidence, and disregarded the unrebutted evidence that Romeo and Fe are the beneficial owners of the Ayala Alabang property. It cited Section 34, Rule 132 of the Rules of Court, which provides that the court shall consider no evidence which has not been formally offered, and argued that the Sandiganbayan merely speculated when it ruled that "being siblings, it is natural and proper for the brother and sister to make things convenient for each other."

• Judicial Admission — Los Angeles Property: The Republic argued that the Sandiganbayan disregarded the judicial admission of Romeo in his Answer that the Pasadena, Los Angeles property was jointly acquired by his daughter Geraldine and wife Fe, making him a co-owner by virtue of his marriage to Fe. It cited Section 4, Rule 129 of the Rules of Court and Republic vs. Sandiganbayan, and reasoned that whether the property regime is absolute community or conjugal partnership of gains, Romeo stands as a co-owner of his wife's interest.

• Premature Ruling — Callos-Sta. Cruz Property: The Republic argued that the Sandiganbayan prematurely ruled that the Callos-Sta. Cruz property could be very well acquired by Romeo with his salaries and income, and that the assailed resolutions deserved closer examination.

• Ayala Alabang Property — Ownership Documents: The respondents countered that the petitioner's evidence as to the usage of the Ayala Alabang property by Romeo and Fe cannot defeat the ownership documents of Elsa, which documents—Revised Tax Declaration Form and Deed of Absolute Sale—were attached to the Petition for Forfeiture as Annexes "J" and "K" and made integral parts thereof.

• Ayala Alabang Property — Doubtful Testimony: The respondents argued that the testimonial evidence of witness Januario Mendoza—that Elsa admitted the Ayala Alabang property was actually owned by Romeo and Fe—is of doubtful veracity because Mendoza narrated that Elsa walked towards him when he was ushered inside the house, which is improbable because Elsa has been wheelchair-bound since before the petition was filed.

• Los Angeles Property — Insufficient Basis: The respondents insisted that any admission on the ownership of the Los Angeles property that may have been made in the answer/joint answer is not sufficient basis to find that the property belonged to Romeo, much less illegally acquired by him.

• Callos-Sta. Cruz Property — Financial Capacity: The respondents counter-argued that the Republic's very own evidence shows the value of the Callos-Sta. Cruz property to be well within Romeo and Fe's financial capacity to purchase; therefore, it has not been proved to have been unlawfully acquired.

• Procedural Matter — Mode of Review: Whether the Republic availed of the proper mode of review in filing a petition for certiorari under Rule 65 instead of a petition for review on certiorari under Rule 45.

• Ayala Alabang Property — Consideration of Unoffered Evidence: Whether the Sandiganbayan acted with grave abuse of discretion when it considered in favor of Romeo, Fe, and Elsa a purported certificate of title and an alleged deed of sale which were not formally offered in evidence, and disregarded the unrebutted evidence that Romeo and Fe are the beneficial owners of the Ayala Alabang property.

• Los Angeles Property — Judicial Admission: Whether the Sandiganbayan acted with grave abuse of discretion when it disregarded the judicial admission of Romeo in his Answer that the Pasadena, Los Angeles property was jointly acquired by his daughter Geraldine and wife Fe, making him a co-owner.

• Callos-Sta. Cruz Property — Premature Ruling: Whether the Sandiganbayan acted with grave abuse of discretion when it prematurely ruled that the Callos-Sta. Cruz property can be very well acquired by Romeo with his salaries and income.

• Procedural Matter — Mode of Review: No. Forfeiture proceedings under Republic Act No. 1379 are civil in nature, thus the proper mode of review is a petition for review on certiorari under Rule 45, not a special civil action of certiorari under Rule 65. However, the Court dispensed with the procedural lapse in the broader interest of justice to finally write finis to the prolonged litigation.

• Ayala Alabang Property — Consideration of Unoffered Evidence: No. The Sandiganbayan did not commit grave abuse of discretion. Although it incorrectly made mention of Exhibits "4" and "8" of the respondents, a certified true copy of the same Deed, including the Revised Tax Declaration Form, were earlier attached to the Petition for Forfeiture and made integral parts thereof, and a copy of the title was attached as Annex "3" of the Joint Answer. The Republic failed to refute the same and even marked it during pre-trial, thus admitting its genuineness and due execution.

• Los Angeles Property — Judicial Admission: Yes. The Sandiganbayan committed grave abuse of discretion. The admission of Romeo in his Answer that the Los Angeles property was bought by his wife Fe and daughter Geraldine is a judicial admission that formed part of the facts of the case. By law, the half share of Fe is deemed to pertain to both spouses Romeo and Fe.

• Callos-Sta. Cruz Property — Premature Ruling: No. The Sandiganbayan correctly dismissed the petition for forfeiture with respect to the Callos-Sta. Cruz property, as the Republic's documentary evidence failed to sufficiently prove that the subject property was unlawfully acquired or that Romeo could not have afforded it.

• Procedural Matter — Mode of Review: The Court noted that forfeiture proceedings under Republic Act No. 1379 are civil in nature, citing Garcia vs. Sandiganbayan, and thus the proper mode of review is a petition for review on certiorari under Rule 45, not a special civil action of certiorari under Rule 65. However, considering that rules of procedure are subservient to substantive rights, and in order to finally write finis to the prolonged litigation, the Court dispensed with the procedural lapse in the broader interest of justice, especially where the case is undeniably ingrained with immense public interest, public policy, and/or deep historical repercussions.

• Ayala Alabang Property — Consideration of Unoffered Evidence: The Court applied the standard for demurrer to evidence: it may be issued when, upon the facts and the law, the plaintiff has shown no right to relief. The "facts" contemplated by Section 1, Rule 33 of the Rules of Court should include all the means sanctioned by the Rules of Court in ascertaining matters in judicial proceedings—judicial admissions, matters of judicial notice, stipulations made during pre-trial and trial, admissions, and presumptions—the only exclusion being the defendant's evidence. The Court held that although the Sandiganbayan incorrectly made mention of Exhibits "4" and "8" of the respondents, a certified true copy of the same Deed, including the Revised Tax Declaration Form, were earlier attached to the Petition for Forfeiture and made integral parts thereof, and a copy of the title was attached as Annex "3" of the Joint Answer. The Republic failed to refute the same and even marked it during pre-trial, thus admitting its genuineness and due execution. When the due execution and genuineness of an instrument are deemed admitted because of the adverse party's failure to make a specific verified denial thereof, the instrument need not be presented formally in evidence. As to the cable television subscription and travel documents, these simply proved that Fe resides in the property, nothing more—not sufficient to prove that Romeo and Fe are the actual and beneficial owners, much less that they unlawfully acquired it.

• Los Angeles Property — Judicial Admission: The Court disagreed with the Sandiganbayan. The admission of Romeo in his Answer that the Los Angeles property was bought by his wife Fe and daughter Geraldine is a judicial admission that necessarily formed part of the facts of the case, which did not require proof to be sufficiently considered in the resolution of the demurrer to evidence. Moreover, the denial by Romeo of his ownership of the subject property is pregnant with an admission—that he has an interest in his wife's share in the property by virtue of their marital union. This is a negative pregnant, which is a form of negative expression which carries with it an affirmation or at least an implication of some kind favorable to the adverse party. The Court applied Articles 91, 106, 116, and 117 of the Family Code, holding that whether the property regime is absolute community or conjugal partnership of gains, the Los Angeles property is part of the spouses' property regime. Just as the Sandiganbayan gave weight to the admission of the respondents as to the registered owners on the certificate of title to the Ayala Alabang property, it should have accorded the same credence to their admission as to the owners of the Los Angeles property; otherwise, the application of the rules on evidence is arbitrary and tantamount to grave abuse of discretion. The Los Angeles property is co-owned in equal shares by Fe and Geraldine, and by law, the half share of Fe is deemed to pertain to both spouses Romeo and Fe. As a consequence of the reversal, the respondents are deemed to have waived the right to present countervailing evidence that such one-half was not unlawfully acquired.

• Callos-Sta. Cruz Property — Premature Ruling: The Court found that the Sandiganbayan correctly dismissed the petition for forfeiture with respect to the Callos-Sta. Cruz property. The Republic's pieces of documentary evidence failed to sufficiently prove that the subject property was unlawfully acquired, or that Romeo could not have afforded the said property. The Republic's claim that the assailed resolutions "deserve closer examination" did not actually state upon what ground the Sandiganbayan abused its discretion. Where a petition for certiorari under Rule 65 alleges grave abuse of discretion, the petitioner should establish that the respondent court or tribunal acted in a capricious, whimsical, arbitrary, or despotic manner in the exercise of its jurisdiction as to be equivalent to lack of jurisdiction.

• Demurrer to Evidence — A demurrer to evidence is a motion to dismiss on the ground of insufficiency of evidence, filed after the plaintiff rests his case. The question in a demurrer to evidence is whether the plaintiff, by his evidence in chief, has been able to establish a prima facie case. An order granting a demurrer to evidence is a judgment on the merits. The "facts" contemplated by Section 1, Rule 33 of the Rules of Court should include all the means sanctioned by the Rules of Court in ascertaining matters in judicial proceedings—judicial admissions, matters of judicial notice, stipulations made during the pre-trial and trial, admissions, and presumptions—the only exclusion being the defendant's evidence. The Court applied this doctrine in evaluating the Sandiganbayan's action on the demurrer, holding that the Sandiganbayan could properly consider the respondents' judicial admissions and documents attached to the pleadings.

• Judicial Admissions — Under Section 4, Rule 129 of the Rules of Court, an admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof. The admission may be contradicted only by showing that it was made through palpable mistake or that no such admission was made. Judicial admissions may be made: (a) in the pleadings filed by the parties; (b) in the course of the trial either by verbal or written manifestations or stipulations; or (c) in other stages of judicial proceedings, as in the pre-trial of the case. Facts pleaded in the petition and answer/joint answer are deemed admissions of the parties, who are not permitted to contradict them or subsequently take a position contrary to or inconsistent with such admissions. The Court applied this doctrine to hold that Romeo's admission in his Answer that the Los Angeles property was bought by his wife and daughter is a judicial admission that formed part of the facts of the case.

• Negative Pregnant — A negative pregnant is a form of negative expression which carries with it an affirmation or at least an implication of some kind favorable to the adverse party. The Court applied this doctrine to Romeo's denial of ownership of the Los Angeles property, holding that the denial was pregnant with an admission that he has an interest in his wife's share in the property by virtue of their marital union.

• Property Regime of Spouses — Under Article 91 of the Family Code, unless otherwise provided in the marriage settlements, the community property shall consist of all the property owned by the spouses at the time of the celebration of the marriage or acquired thereafter. Under Articles 106, 116, and 117 of the Family Code, under the regime of conjugal partnership of gains, all property acquired during the marriage, whether the acquisition appears to have been made, contracted, or registered in the name of one or both spouses, is presumed to be conjugal unless the contrary is proved. The Court applied these provisions to hold that the half share of Fe in the Los Angeles property is deemed to pertain to both spouses Romeo and Fe.

• "A demurrer to evidence is a motion to dismiss on the ground of insufficiency of evidence and is filed after the plaintiff rests his case. It is an objection by one of the parties in an action, to the effect that the evidence which his adversary produced, is insufficient in point of law, whether true or not, to make out a case or sustain the issue. The question in a demurrer to evidence is whether the plaintiff, by his evidence in chief, has been able to establish a prima facie case." — This passage, quoted from Condes vs. Court of Appeals, defines the nature and purpose of a demurrer to evidence, which is central to the procedural posture of the case.

• "The 'facts,' contemplated by the rule should include all the means sanctioned by the Rules of Court in ascertaining matters in judicial proceedings, i.e., judicial admissions, matters of judicial notice, stipulations made during the pre-trial and trial, admissions, and presumptions, the only exclusion being the defendant's evidence." — This passage articulates the scope of facts that a court may consider in resolving a demurrer to evidence, which was the basis for the Court's ruling on the Ayala Alabang and Los Angeles properties.

• "Just as public respondent Sandiganbayan gave weight to the admission of private respondents Romeo, et al., as to the registered owners on the certificate of title to the Ayala Alabang property, then it should have accorded the same credence to their admission as to the owners of the Los Angeles property, otherwise, the application of the rules on evidence is arbitrary and tantamount to grave abuse of discretion." — This passage states the Court's reasoning for finding grave abuse of discretion in the Sandiganbayan's inconsistent treatment of the respondents' judicial admissions.

• "Moreover, the denial by private respondent Romeo of his ownership of the subject property is pregnant with an admission, i.e., that he has an interest in his wife's share in the property by virtue of their marital union. This is a negative pregnant, which is a form of negative expression which carries with it an affirmation or at least an implication of some kind favorable to the adverse party." — This passage defines the doctrine of negative pregnant and explains its application to Romeo's denial of ownership of the Los Angeles property.

• Condes vs. Court of Appeals, 555 Phil. 311 (2007) — Cited for the definition and nature of a demurrer to evidence, which is central to the procedural framework of the case.

• Republic vs. Sandiganbayan, 453 Phil. 1059 (2003) — Cited for the doctrine that judicial admissions may be made in pleadings, in the course of trial, or in other stages of judicial proceedings, and for the principle that certiorari is allowed notwithstanding the existence of the remedy of appeal in cases ingrained with immense public interest.

• Tan vs. Bantegui, 510 Phil. 434 (2005) — Cited by the Republic for the proposition that the incontrovertible nature of a certificate of title applies only when the issue involved is the validity of the original and not of the transfer.

• Yuchengco vs. Sandiganbayan, 515 Phil. 1 (2005) — Cited by the Republic for the proposition that even if a respondent is not the registered owner of a property, if it could be shown by preponderance of evidence that the property is ill-gotten and that he/she is the beneficial owner, the subject property could still be forfeited in favor of the State.

• Heirs of Emilio Santioque vs. Heirs of Emilio Calma, 536 Phil. 524 (2006) — Cited for the guidelines in evaluating a demurrer to evidence, including the standard that it should be sustained where the plaintiff's evidence is prima facie insufficient for recovery.

• Casent Realty Development Corporation vs. Philbanking Corporation, 559 Phil. 793 (2007) — Cited for the proposition that the "facts" contemplated in a demurrer to evidence include all means sanctioned by the Rules of Court in ascertaining matters in judicial proceedings.

• Philippine American General Insurance Co., Inc. vs. Sweet Lines, Inc., 287 Phil. 213 (1992) — Cited for the rule that when the due execution and genuineness of an instrument are deemed admitted because of the adverse party's failure to make a specific verified denial thereof, the instrument need not be presented formally in evidence.

• Garcia vs. Sandiganbayan, 618 Phil. 346 (2009) — Cited for the proposition that forfeiture proceedings under Republic Act No. 1379 are civil in nature.

• Republic vs. Gimenez, G.R. No. 174673, January 11, 2016, 778 SCRA 261 — Cited for the proposition that the proper mode of review of Sandiganbayan resolutions in forfeiture cases is a petition for review on certiorari under Rule 45, not Rule 65.

• Section 2, Republic Act No. 1379 — The statute under which the forfeiture petition was filed, providing for the forfeiture in favor of the State of any property found to have been unlawfully acquired by any public officer or employee.

• Section 1, Rule 45, Rules of Court — Provides for the filing of a petition for review on certiorari with the Supreme Court from judgments, final orders, or resolutions of the Sandiganbayan, raising only questions of law. The Court noted that this was the proper mode of review, not Rule 65.

• Section 1, Rule 33, Rules of Court — Provides for the demurrer to evidence, stating that 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 the motion is granted but on appeal the order of dismissal is reversed, the defendant shall be deemed to have waived the right to present evidence.

• Section 34, Rule 132, Rules of Court — Provides that the court shall consider no evidence which has not been formally offered. The Republic cited this provision in arguing that the Sandiganbayan should not have considered the certificate of title and deed of sale in resolving the demurrer.

• Section 4, Rule 129, Rules of Court — Provides that an admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof, and may be contradicted only by showing that it was made through palpable mistake or that no such admission was made. The Court applied this provision to the respondents' admissions in their Answers.

• Articles 91, 106, 116, and 117, Family Code — These provisions define the property regime of spouses under the system of absolute community of property and conjugal partnership of gains. The Court applied these provisions to hold that the half share of Fe in the Los Angeles property is deemed to pertain to both spouses Romeo and Fe.

• Justice Del Castillo — Concurred.
• Justice Jardeleza — Concurred.
• Justice Tijam — Concurred.
• Chief Justice Sereno — On leave.