HERMINIO T. DISINI, PETITIONER, VS. REPUBLIC OF THE PHILIPPINES, RESPONDENT.

This Petition for Review on Certiorari^[1] assails the April 11, 2012 Decision^[2] and the October 24, 2012 Resolution^[3] of the Sandiganbayan
in Civil Case No. 0013 which declared as ill-gotten the commissions
received by Herminio T. Disini (Disini) relative to the Bataan Nuclear
Power Plant (BNPP) project, and ordered him to account for and reconvey
the total amount of $50,562,500.00, with interest until fully paid.^[4]
In its assailed Resolution, the anti-graft court denied the Republic’s
Motion for Partial Reconsideration and Disini’s Partial Motion for
Reconsideration and Motion to Strike Out for lack of merit.^[5]

The Antecedents:

This case involves the recovery of ill-gotten wealth against Disini,
a close associate of former President Ferdinand Marcos (President
Marcos), in relation to the BNPP project.^[6]
The BNPP project is a nuclear power plant project awarded to
Westinghouse Electric Corporation (Westinghouse) and Burns & Roe,
Inc. (B&R), as main contract6r and architect-engineer, respectively,
in 1976.^[7] The BNPP remains inoperable to this day.^[8]

On July 23, 1987, the Republic, through the Presidential Commission
on Good Government (PCGG), filed a complaint for reconveyance,
reversion, accounting, restitution and damages against Disini, President
Marcos and Imelda Marcos (Imelda), for amassing ill-gotten wealth
during President Marcos’ term.^[9]
Among others, the Republic alleged that Disini received special
concessions from President Marcos in relation to the award of the BNPP
contract to Westinghouse and B&R, for a scandalously exorbitant
amount.^[10] Allegedly, Disini
received substantial commissions from Westinghouse and B&R for the
award of the contract and its execution.^[11]

During trial, only the Republic presented evidence since Disini was a party in default:^[12] after summons to him remained unserved and after summons by publication against him was completed.^[13]
The default order was sustained by this Court in a Decision rendered on
July 5, 2010 which became final and executory on November 18, 2010.^[14]

The Republic presented the following witnesses ex parte,
namely: (a) Lourdes Magno, Information Technology Officer III of the
PCGG; (b) Rodolfo B. Jacob (Jacob), former President of Herdis Group,
Inc. (Herdis); (c) Danilo Richard V. Daniel, Director IV of the PCGG
Research Department; (d) Angelo Manahan (Manahan), former Executive
Vice-President and Chief Operating Officer of Herdis; (e) Rafael Sison,
former member of the Board of Governors of the Development Bank of the
Philippines (DBP); (f) Cristina A. Beranilla, PCGG Legal Assistant; (g)
Ricardo Paras III, Chief State Counsel; (h) Atty. Jesus P. Disini
(Jesus), second cousin of Disini and former Senior Vice-President of
Herdis; and (i) Jesus Vergara (Vergara), former President of Asia
Industries, Inc. (AII).^[15]
The Republic also presented the deposition of Rolando C. Gapud (Gapud),
former officer of Bancom Development Corporation, former President of
the Security Bank and Trust Company, and President Marcos and Imelda’s
financial advisor.^[16]

However, Jesus’ testimony was not given any probative value in view
of his immunity agreement with the Republic that his affidavits were to
be used solely for the New Jersey· District Court (NJDC) case and the
International Court of Arbitration (ICA) proceedings involving
Westinghouse and B&R’s claims against the Republic. This Court
upheld the said immunity agreement in Disini v. Sandiganbayan^[17]
which clearly prohibited the Republic from using him as a witness in
any· claim brought by the Republic against Herminio Disini.”

The Republic also offered documentary evidence, such as Exhibits A
to Z and series; AA to ZZ and series; AAA to ZZZ and series; and AAAA to
DDDD and series.^[18]

Version of the Republic:

The Republic claimed that Westinghouse solicited the influence of
Disini, a known close associate of President Marcos, to become its
Special Sales Representative (SSR) to ensure its appointment as the main
contractor for the BNPP project, for a fee of 3% of the contract price
as commission.^[19] The
Republic also alleged that Disini unduly took advantage of his close
association with President Marcos to obtain favorable terms for
Westinghouse by requesting President Marcos to issue orders or
directives to the National Power Corporation (NPC) to accept
Westinghouse’s proposals in relation with the BNPP project.

Meanwhile, AII and Westinghouse entered into an agreement wherein the
former would act as the latter’s SSR in the Philippines for a fee of
$3,000,000.^[20] Thereafter,
Power Contractors, Inc. (PCI); a consortium entered into by Onofre B.
Banson, Antonio P. Chanco, Vergara, Jose P. Dans, Jr., Rufino M. Asi,
Ventura 0. Ducut, Claudio B. Altura, Lucio C. Torres, and Jacob, as
stockholders, Monark International Inc., Vinnell-Belvoir Corporation,
and Engineering Equipment, Inc., was formed to undertake the civil and
other related works of the BNPP project.^[21] PCI was 40% owned by AII.^[22]

Thereafter, Disini, through his company Herdis, acquired Ail’s 40%
interest in PCI to gain and benefit from PCI’s contract with
Westinghouse.^[23] Also, he acquired AII to benefit from the latter’s SSR agreement with Westinghouse.^[24]
The Republic claimed that all commissions due to AII was directly paid
by Westinghouse to Disini, through Herdis, and not to All which resulted
in the latter’s financial distress.

On the other hand, B&R had a written agreement with Technosphere
Consultant Group, Inc. (TCI), a company owned by Herdis. Pursuant to
their agreement, TCI would receive a commission of 10% of the contract
price of B&R as the architect-engineer in the BNPP project. This
commission was for the services rendered by Disini in influencing
President Marcos to award the BNPP project to B&R as
architect-engineer.

Both Westinghouse and B&R made their payments to Disini beginning
1976. However, these commissions were not recorded in the books of
Herdis, Ail or TCL Instead, they were remitted by Westinghouse and
B&R to a certain Rene Pasche in Switzerland who deposited the money
in Disini’s Switzerland bank accounts. However, in· 1978, Westinghouse
started to remit the commissions through the International Corporate
Bank (Interbank) in the Philippines in which Disini and Jacob were the
authorized signatories. A substantial portion of the Interbank account
was then deposited in the overseas bank accounts in Switzerland under
the account names “965 Summa” and “735 Phil” with Disini’s wife,
Pacencia, and Jacob as the authorized signatories.^[25]

Sandigan Decision

On April 11, 2012, the Sandiganbayan rendered its assailed
Decision declaring the commissions in the amount of $50,562,500.00
received by Disini to be ill-gotten wealth^[26] and ordering him to account for and reconvey the said amount to the Republic.^[27] The dispositive portion of the assailed Decision reads:

WHEREFORE, premises considered, judgment is hereby
rendered DECLARING ILL-GOTTEN the commissions received by defendant
HERMINIO T. DISINI in connection with the Bataan Nuclear Power Plant
transaction. Defendant Disini is ordered to ACCOUNT for these
commissions and to RECONVEY the total amount of $50,562,500.00 he
received by virtue of this transaction to the Plaintiff, with interest
until fully paid. Plaintiff’s claims for actual, moral, temperate,
nominal, exemplary damages, attorney’s fees, litigation expenses, and
treble judicial costs are DISMISSED for not being established by a
preponderance of evidence.^[28]

Notably, only Disini was found liable by the Sandiganbayan of
having amassed ill-gotten wealth by way of substantial commissions
totaling $50,562,500.00 which he received from Westinghouse and B&R
in connection with the BNPP project. The Sandiganbayan found
Disini to be a close personal and business associate of President Marcos
based on the following: his appearances in Malacañang to play golf
together with a select group of people, several phone calls from
President Marcos himself, submission of aide memoires to
President Marcos which contained information relating to the business
development of Herdis, and various requests to President Marcos for the
approval of his loans from government banks and other requests for the
benefit of his companies.^[29]

In ruling for the Republic, the Sandiganbayan relied on the testimonies of witnesses Manahan, Vergara, and Jacob, all of whom were privy to the BNPP project.^[30] It held that the evidence presented by the Republic established the following:

Disini, as the owner of Herdis and a known close associate and
family friend of President Marcos, served as an SSR of Westinghouse^[31] and B&R^[32] in exchange for substantial commissions totaling $50,562,500.00.^[33]
As Westinghouse and B&R’s SSR, Disini used his personal and close
association with President Marcos to ensure that the BNPP project would
be awarded to Westinghouse and B&R.^[34]
In addition, Disini sought private concessions from President Marcos in
the form of orders which favored and allowed Westinghouse and B&R to continue with the BNPP project despite unfavorable terms against the
Philippines.^[35]

In arriving at the total amount of commissions received by Disini from Westinghouse and B&R, the Sandiganbayan primarily relied on Exhibit E-9,^[36]
Disini’s purported summary of the total commissions from Westinghouse
and B&R in relation to the BNPP project. The Anti-Graft Court found
no probative value on the documentary evidence relating to the existence
of Disini’s Switzerland bank accounts to prove receipt of commissions
as they were mere photocopies, unauthenticated and not properly
translated.

Nonetheless, the Sandiganbayan ruled that even if most of the
documentary evidence were photocopies with no probative value, the
testimonies of Manahan, Vergara, Jacob and Sison constituted
preponderant evidence that: (a) Disini and President Marcos were close
associates, or relatives by affinity; (b) President Marcos acquiesced
to Disini’s representation as the exclusive agent for Westinghouse and
B&R with respect to the BNPP project; (c) Westinghouse and B&R
agreed to pay commission to Disini for the latter to influence President
Marcos to award the contracts to them; and (d) Disini, did in fact,
receive these commissions.

However, while the Sandiganbayan found, Disini liable, it held that there was no evidence of President Marcos’ and Imelda’s receipt of the commissions.^[37] Thus, they were not held liable.^[38]

Both parties filed their respective motions for reconsideration. The
Republic argued that it sufficiently proved that anop1alous grants of
loans and guarantees were given to the companies owned by President
Marcos and Disini through Presidential Decree (P.D.) Nos. 550 and 750;
and Letter of Instruction (LOI) Nos. 658 and 1132. It insisted that
President Marcos and Disini misappropriated, embezzled and converted
funds of government financial institutions by granting unwarranted
favors to Herdis. It likewise alleged that President Marcos accumulated
ill-gotten wealth in conspiracy with Disini, thus, he should also be
held liable for the receipt of commissions from Westinghouse and B&R
in relation to the BNPP project. Lastly, it claimed that it is entitled
to actual, temperate, nominal and exemplary damages, attorney’s fees
and other judicial costs.

On the other hand, Disini opined that the Republic had no cause of
action against him as there was no contract or quasi-contract violated.
Also, he alleged that witnesses Manahan, Vergara and Jacob had no
personal knowledge of the allegations in their affidavits. Specifically,
he cited Manahan’s Transcripts of Stenographic Notes (TSN) in Criminal
Case No. 28001-02^[39] filed before the Sandiganbayan
which showed his lack of personal knowledge on matters alleged in his
affidavit. Also, he insisted that he did not take undue advantage of his
alleged close relationship with President Marcos for personal gain or
benefit. Lastly, no evidence was adduced to prove the amount of
commissions he allegedly received from Westinghouse and B&R.

On October 24, 2012, the Sandiganbayan denied both the Republic’s
Motion for Partial Reconsideration and Disini’s Partial Motion for
Reconsideration and Motion to Strike Out for lack of merit.^[40]
It ruled that Disini, having been declared in default, cannot present
as evidence Manahan’s TSN in Criminal Case Nos. 28001-02 in a motion for
reconsideration.

As a party in default, Disini lost his right to present evidence and
to participate in the trial by filing a Motion to Strike Out. Thus, the
Sandiganbayan ruled that it is not bound to recognize the said Motion to Strike Out filed by Disini or to act on it.

As to the Republic’s motion for partial reconsideration, the Sandiganbayan
held that i:t failed to present credible evidence to prove the
accumulation of ill-gotten wealth by President Marcos, Imelda and Disini
based on P.D.s and LOI issued by President Marcos. The anti-graft court
noted that the Republic did not offer any evidence to prove the
specific amounts of loans or other accommodations granted by President
Marcos to Disini.

It opined that the Republic; should not expect the Sandiganbayan
to make its own investigation to determine the particular loan amounts
or accommodations and favorable treatment granted to Disini by President
Marcos based on P.D. Nos. 550 and 750 as well as LOI Nos. 658 and 1132.
As to the damages claimed by the Republic, the Sandiganbayan ruled that there was no factual basis for the award of moral, temperate, nominal and exemplary damages.^[41]

As to Disini’s motion for partial reconsideration, the Sandiganbayan
ruled that Jacob’s testimony proved that Disini indeed received
commissions from Westinghouse and B&R for his services rendered
regarding the award of the BNPP project to them. Absent any
countervailing evidence, Jacob’s testimony deserved probative weight
despite the lack of documentary proof. However, the Sandiganbayan
maintained its ruling that there was no sufficient evidence to show that
President Marcos and Imelda received any commissions from Westinghouse
and B&R.^[42]

Hence, Disini filed the instant Petition for Review on Certiorari
under Rule 45. Meanwhile, on June 3, 2014, Disini died and was
substituted in the suit by his heir Herminio Angel E. Disini, Jr.^[43]

Issues

Disini raised the following issues^[44] in his Petition:

1. Whether the Sandiganbayan violated the rule on
authentication of documents under Section 120 of Ru1e 132 of the Rules
of Court when it admitted and relied on Republic’s Exhibit E-9. x x x

2. Whether there [was] a civil law cause of action that justifie[d] the Sandiganbayan‘s [order] to account for and reconvey,to the Republic the sum of $50,562,500.00. x x x

3. Whether the Sandiganbayan violated Section 14 of Article VIII of the 1987 Constitution when it concluded that the Westinghouse contract exist[ed]. x x x

4. Whether the Sandiganbayan violated Section 14 of Article
VIII of the [1987 Constitution] when it concluded that [Disini] received
the sum of $50,562,500.00. x x x

First, Disini claims that the Sandiganbayan disregarded
the rule on authentication of documents when it admitted and relied on
Exhibit E-9, a private document attached to Manahan’s affidavit, to
arrive at the amount of $50,562,500.00.^[45] According to Disini, no one authenticated, signed, nor identified Exhibit E-9.^[46] Further, Exhibit E-9 was allegedly disowned by Manahan during the taking of his deposition in separate criminal cases.^[47]

However, the Sandiganbayan refused to consider Manahan’s deposition
on the ground that Disini was a party in default. Disini contends that
the anti­-graft court should not have ignored evidence which was
presented in a related case lest it violate the fundamental rule of
fairness and deny the defaulting party due process of law.

Moreover, Disini argues that the Sandiganbayan simply cannot
infer from or use the amounts indicated in Exhibit E-9 as there was
nothing in the said document which would suggest that the amounts
represented the commissions paid to Disini. No other evidence was
presented to prove that actual payments were made.

Besides, the Republic did not offer as evidence the Westinghouse and
B&R contracts which would be the best evidence to prove the amount
of commissions. The Sandiganbayan cannot take judicial notice of
the: (1) contracts of the BNPP project; (2) consideration therefor; (3)
commission agreements related thereto; and (4) payments to Westinghouse
by the Republic or the commissions actually received by Disini.

Also, the witnesses presented had no personal knowledge of the
Westinghouse and B&R contracts. In fact, Vergara testified that he
was not present during the negotiation of the final draft of the
contract and the signing thereof. Even Jacob did not categorically
testify that the amounts he remitted pertained to commissions from
certain contract as he had no personal knowledge that the said
commissions were related to particular transactions.

Second, Disini alleges that there was no civil law cause of action that justified the Sandiganbayan‘s directive to account for and reconvey to the Republic the sum of $50,562,500.00.^[48]
Disini claims that he was never a public official, hence, he ould not
be held liable for breach of public trust. There was also no evidence to
prove that the alleged commissions he received were part of the
purchase price paid by the Republic to Westinghouse and B&R relating
to the BNPP project.

Disini cites the rulings’ of the two (2) foreign tribunals, namely,
the NJDC and the ICA, which found that no bribery attended the execution
of the Westinghouse and B&R contracts, respectively. Both the NJDC
and the ICA found no evidence that Disini acted as agent to secure the
award of the BNPP project to Westinghouse and B&R; neither was there
any evidence to prove that President Marcos received commissions from
the said contracts.

Furthermore, Disini asserts that he could not be held liable for
breach of trust without a public officer being also held liable as a
conspirator. The reliance of the Sandiganbayan on Executive Order
(EO) Nos. 1, 2 and 14-A was misplaced as these EOs did not create a
civil cause of action but merely authorized the PCGG to undertake the
recovery of ill-gotten wealth and vest the Sandiganbayan with jurisdiction thereon. No law was mentioned upon which to base the cause of action for the reconveyance of $50,562,500.00.

Third, Disini maintains that the Sandiganbayan violated
Section 14 of Article VIII of the 1987 Constitution when it concluded
that the Westinghouse contract existed even though it was never
produced, presented nor seen by any witnesses.^[49] The Sandiganbayan
accepted as a fact the existence of the Westinghouse and B&R
contracts without any documentary proof presented by the Republic.

Disini also insists that the Republic can no longer assail the
validity of the Westinghouse and B&R contracts as the ICA and NJDC
decisions found no illegalities in their procurement, award, negotiation
and execution. The Republic cannot relitigate the same issue as it is
bound by the foreign decisions.

Finally, Disini avers that the Sandiganbayan violated
Section 14 of Article VIII of the 1987 Constitution when it concluded
that he received the sum of $50,562,500.00, despite lack of proof
thereof.^[50] He contends that
Jacob did not specifically quantify the total commissions he allegedly
received. The absence of the specific amount precludes a conclusion that
he actually received commissions from Westinghouse and B&R.

Also, Jacob did not identify all the documents attached to his
affidavit. He merely mentioned Exhibit 3 as an example, but the said
document pertained to Herdis and TCI and did not indicate Disini as the
recipient or payee of the alleged remittance. No bank documents were
presented by the Republic to show the remittances to his accounts
Interbank, as well as the subsequent transfers to his accounts in
Switzerland and other places. Disini argues that the Sandiganbayan
failed to explicitly state the facts upon which its conclusion that he
received $50,562,500.00 were based in violation of due process and
Section 14, Article VIII of the Constitution.

In its July 29, 2013 Comment,^[51] the Republic argued that it has valid civil causes of action against Disini^[52] Since the complaint was for recovery of ill­-gotten wealth, it was founded on EO Nos. 1, 2 and -14-A (1986).^[53]
The PCGG was tasked to recover ill-gotten wealth amassed by President
Marcos, his close relatives, subordinates, business associates, dummies,
agents, or nominees. Under EO No. 14-A, the PCGG, with the assistance
of the Office of the Solicitor General (OSG) and other government
agencies, is empowered to file and prosecute all ill-gotten wealth cases
investigated by it under EO Nos. 1 and 2.

The Republic further argued that despite the fact that Disini was not
a public official or fiduciary agent of the government, his receipt of
substantial commissions by reason of his influence and close relationship
with President Marcos constitutes grave abuse of right and power
resulting in unjust enrichment and causing grave damage and prejudice to
the Republic and the Filipinos.

The Republic also maintains that the Sandiganbayan correctly relied on Exhibit E-9 in arriving at the amount of $50,562,500.00 since Manahan attested to its veracity.^[54]
Exhibit E-9, a one-page tabulation of commissions received by Disini
typed on his stationery, forms part of Manahan’s affidavit. While the
amount of $50,562,500.00 is not expressly stated in Exhibit E-9, a
simple addition of the amounts listed in Items I to IV would sum up to
$50,562,500.00. Exhibit E-9 was identified by Manahan in his direct
examination where he declared that he fully understood the contents of
his affidavit and attested to the veracity of all its annexes attached
thereto.

Further, considering that Disini was in default, heis barred from
presenting evidence such as witness Manahan’s alleged disavowal of
Exhibit E-9 in Criminal Case Nos. 28001-02.^[55]
As a consequence of the default order, Disini can no longer present his
own evidence and therefore cannot invoke Manahan’s deposition in
Criminal Case Nos. 28001 and 28002 pending before the Sandiganbayan.

As to the existence of the Westinghouse contract and Disini’s receipt
of the commissions, the Republic argues that both were satisfactorily
established by the testimonies of witnesses Jacob, Manahan and Vergara.^[56]
In particular, the testimonies of Manahan and Vergara as to the
existence of the Westinghouse and B&R contracts are entitled to
great weight because of their credibility and close business
relationship with Disini. Also, Disini is estopped from questioning the
existence of the Westinghouse and B&R contracts as he himself
invoked the decisions of the NJDC and ICA. In effect, he admitted the
existence of the said contracts.

Lastly, the Republic alleges that Disini’s petition should be dismissed as it was filed out of time.^[57] Disini received a copy of the Sandiganbayan‘s
Resolution dated October 24, 2012 on November 7, 2012. Under Section 2,
Rule 45 of the Rules of Court, Disini had only 15 days from November 7,
2012, or until November 22, 2013 within which to file a petition for
review on certiorari. However, Disini filed his petition more
than two (2) months from November 22, 2012. Hence, this petition was
clearly filed out of time or as a mere afterthought.

In his January 21, 014 Reply,^[58]
Disini reiterates the following: (a) Exhibit E-9 is unreliable,
incompetent and unauthenticated which should not have been relied upon
by the Sandiganbayan in computing his alleged commissions; (b)
the Republic has no legal basis to account for the amount of
$50,562,500.00 as he did not violate any of its rights under EO Nos. 1, 2
and 14-A; (c) the Sandiganbayan should not have ignored witness Manahan’s disavowal of Exhibit E-9 in Criminal Case Nos. 28001-02;^[59] and (d) the Sandiganbayan
should have required the Republic to present the Westinghouse and
B&R contracts and Disini’s alleged SSR agreements. Lastly, he opined
that procedural rules should be liberally applied and that the instant
petition should be given due course as it is of transcendental
importance.

After the parties’ submission of their respective memoranda, the case was submitted for resolution.^[60]

Our Ruling

We grant the Petition in part.

The issues raised by Disini will be discussed into two (2) parts, viz.:
(I) whether the Republic, through the PCGG and the assistance of the
OSG, has a cause of action against Disini in relation to the recovery of
substantial commissions he received from Westinghouse and B&R; and
(II) whether there is preponderance of evidence to prove that Disini is
liable to account for and reconvey the ill-gotten wealth he acquired
from Westinghouse and B&R in relation with the BNPP project.

I          

The case is founded on EO Nos. 1, 2, 14 and 14-A (1986).

Section 1(d) of the Freedom Constitution^[61]
mandates the President to continue the exercise of legislative power
until a legislature is elected and convened under a New Constitution. It
vests in the President the power and duty to enact measures to achieve
the mandate of the people, among others, “the [recovery] of ill-gotten
properties amassed by the leaders and supporters of the previous regime
and protect the interest of the people through orders of sequestration
or freezing of assets of accounts.”^[62]
Hence, then President Corazon C. Aquino (Pres. Aquino) issued EO No. 1
creating the PCGG with the task of assisting the President in regard to:

(a) The recovery of all ill-gotten wealth accumulated
by former President Ferdinand E. Marcos, his immediate family,
relatives, subordinates and close associates, whether located in the
Philippines or abroad, including the takeover or sequestration of all
business enterprises and entities owned or controlled by them, during
his administration, directly or through nominees, by taking undue
advantage of their public office and/or using their powers, authority,
influence, connections or relationship.

(b) The investigation of such cases of graft and corruption as the President may assign to the Commission from time to time.

(c) The adoption of safeguards to ensure that the above practices
shall not be repeated in any manner under the new government, and the
institution of adequate measures to prevent the occurrence of
corruption.^[63]

Further, EO No. 2^[64] was issued enjoining the following:

(1) Freeze all assets and properties in the Philippines
in which former President Marcos and/or his wife, Mrs. Imelda Romualdez
Marcos, their close relatives, subordinates, business associates,
dummies,’ agents, or nominees have any interest or participation.

(2) Prohibit any person from transferring, conveying, encumbering or
otherwise depleting or concealing such assets and properties or from
assisting or taking part in their transfer, encumbrance, concealment, or
dissipation under pain of such penalties as are Prescribed by law.

(3) Require all persons in the Philippines holding such assets or
properties, whether located in the Philippines or abroad, in their names
as nominees, agents or trustees, to make full disclosure of the same to
the Presidential Commission on Good Government within (30) days from
publication of this Executive Order, or the substance thereof, in at
least two (2) newspapers of general circulation in the Philippines.

(4) Prohibit former President Ferdinand Marcos and/or his wife,
Imelda Romualdez Marcos, their close relatives, subordinates, business
associates, dummies, agents, or nominees from transferring, conveying,
encumbering, concealing or dissipating said assets or properties in the
Philippines and abroad, pending the outcome of appropriate proceedings
in the Philippines to determine whether any such assets or properties
were acquired by them through or as a result of improper or illegal use
of or the conversion of funds belonging to the Government of the
Philippines or any of its branches, instrumentalities, enterprises,
banks or financial institutions, or by taking undue advantage of their
official position, authority, relationship, connection or influence to
unjustly enrich themselves at the expense and to the grave damage and
prejudice of the Filipino people and the Republic of the Philippines.^[65]

Thereafter, EO No. 14 was issued directing the PCGG to file all such cases, whether civil or criminal, with the Sandiganbayan
to recover all assets and properties illegally acquired or
misappropriated by President Marcos, Imelda, their close relatives,
subordinates, business associates, dummies, agents or nominees. Further,
EO No. 14-A decreed that civil suits to recover unlawfully acquired
property under Republic Act No. 1379 or for the 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 President Marcos, Imelda, their
close relatives and associates, may proceed independently of any
criminal proceedings and may be proved by preponderance of evidence.^[66]

Verily, the Freedom Constitution and EO Nos. 1, 2, 14 and 14-A
confirm the authority and duty given to the PCGG to file the instant
action against Disini for recovery of his alleged ill-gotten wealth
relative to the BNPP project. Thus, contrary to Disini’s contention the
Republic, through the PCGG, has a valid cause of action against him. EO
No. 1, founded on the Freedom Constitution, explicitly tasked the PCGG
to assist in the recovery of ill-gotten wealth. EO Nos. 2, 14 and 14-A
further defined and bolstered the duties of the PCGG in the exercise of
its mandate. There is no doubt, therefore, that the Republic, through
the PCGG, has a clear-cut cause to file the present suit against Disini
in view of his alleged involvement in the BNPP project through receipt
of substantial commissions from Westinghouse and B&R for influencing
President Marcos in their favor.

Furthermore, it is clear from the Amended Complaint^[67] that the action is one for recovery of ill-gotten wealth:

I. NATURE OF THE ACTION

1. This is a civil action against Defendants Herminia T. Disini,
Rodolfo Jacob, Rafael A. Sison, Ferdinand E. Marcos and Imelda R. Marcos
to recover from them ill-gotten wealth consisting of funds and other property
which they, in unlawful concert with one another, had acquired and
accumulated in flagrant breach of trust and of their fiduciary as public
officers, with grave abuse of right and power and in brazen violation
of the Constitution and laws of the Republic of the Philippines, thus
resulting in their unjust enrichment during Defendant Ferdinand E.
Marcos’ 20 years of rule from December 30, 1965 to February 25, 1986,
first as President of the Philippines under the 1935 Constitution and,
thereafter, as one-man ruler under martial law and Dictator under the
1973 Marcos-promulgated Constitution.

x x x x

IV

GENERAL AVERMENTS OF
DEFENDANTS’ ILLEGAL ACTS

x x x x

10. Among others, in furtherance of the plan and acting in the manner
referred to above, in unlawful concert with one another and with gross
abuse of power and authority, Defendants Ferdinand Marcos and Imelda R.
Marcos:

x x x x

(b) awarded contracts with the Government to their relatives,
business associates, dummies, nominees, agents or persons who were
beholden to said Defendants, under terms and conditions grossly and
manifestly disadvantageous to the government;

x x x x

V

SPECIFIC AVERMENTS OF

DEFENDANTS’ ILLEGAL ACTS

13. Defendants Herminio T. Disini and Rodolfo Jacob, by
themselves and/or in unlawful concert, active collaboration and willing
participation of Defendants Ferdinand E. Marcos and Imelda R. Marcos,
and taking undue advantage of their association and influence with the
latter Defendant spouses in order to prevent disclosure and recovery of
ill-gotten assets,
engaged in devices, schemes and stratagems such as:

(a) [A]cted as the above Defendant spouses’ dummy, nominee and/or agent in acquiring and exercising control of several corporations, such as: (1) Herdis Group of companies, (2) Energy Corporation, (3) Vulcan Industrial Mining, (4) United Oriental Bank, (5) Three-M;

x x x x

(c) [U]nlawfully utilizing the Herdis Group of Companies and
Asia Industries, Inc. as conduits through which Defendants received,
kept, and/or invested improper payments such as unconscionably large
commissions from foreign corporations, like the Westinghouse
Corporations;

(d) [S]ecured special concessions, privileges and/or benefits from
Defendants Ferdinand E. Marcos and Imelda R. Marcos, such as a contract
awarded to Westinghouse Corporation which built an inoperable nuclear
facility in the country for a scandalously exorbitant amount that
included Defendant’s staggering commissions-Defendant Rodolfo Jacob
executed for HGI the contract for the aforesaid nuclear plant;

x x x x

14. The acts of Defendants, singly or collectively, and/or in unlawful concert with one another, constitute gross
abuse of official position and authority, flagrant breach of public
trust and fiduciary obligations, acquisition of unexplained wealth,
brazen abuse of right and power, unjust enrichment, violation of the
Constitution and laws of the Republic of the Philippines, to the grave and irreparable damage of Plaintiff and the Filipino people.^[68] (Emphases supplied)

The allegations in the Amended Complaint clearly show that Disini is
being sued for amassing ill-gotten wealth. Indeed, as will be further
discussed hereafter, the commissions received by Disini from
Westinghouse and B&R are ill-gotten wealth which necessitate the
filing of this action.

The PCGG Rules and Regulations define ill-gotten wealth as follows:

SECTION 1. Definition. – (A) “Ill-gotten wealth” is hereby defined as any
asset, property, business enterprise or material possession of persons
within the purview of Executive Orders Nos. 1 and 2, acquired by them
directly, or indirectly thru dummies, nominees, agents, subordinates
and/or business associates by any of the following means or similar
schemes:

(1) Through misappropriation, conversion, misuse or malversation of public funds or raids on the public treasury;

(2) Through the receipt, directly or indirectly, of any
commission, gift, share, percentage, kickbacks or any other form of
pecuniary benefit from any person and/or entity in connection with any
government contract or project or by reason of the office or position of
the official concerned.

(3) By the illegal or fraudulent conveyance or disposition of assets
belonging to the government or any of its subdivisions, agencies or
instrumentalities or government-owned or controlled corporations;

(4) By obtaining, receiving or accepting directly or indirectly any
shares of stock, equity, or any other form of interest or participation
in any business enterprise or undertaking;

(5) Through the establishment of agricultural, industrial or
commercial monopolies or other combination and/or by the issuance,
promulgation and/or implementation of decrees and orders intended to
benefit particular persons or special interests; and

(6) By taking undue advantage of official position, authority, relationship or influence for personal gain or benefit.^[69] (Emphasis supplied)

In Republic v. Sandiganbayan,^[70]
ill-gotten wealth is defined as the “vast resources of the government”
amassed by President Marcos, his immediate family, relatives and close
associates, to wit:

Although E.O. No. 1 and the other issuances dealing with ill-­gotten wealth (i.e.,
E.O. No. 2, E.O. No. 14, and E.O. No. 14-A) only identified the subject
matter of ill-gotten wealth and the persons who could amass ill­-gotten
wealth and did not include an explicit definition of ill-gotten wealth, we can still discern the meaning and concept of ill-gotten wealth from the WHEREAS Clauses themselves of E.O. No. 1, in that ill­-gotten wealth consisted of the “vast resources of the government”
amassed by “former President Ferdinand E. Marcos, his immediate family,
relatives and close associates both here and abroad.” It is clear,
therefore, that ill-gotten wealth would not include all the
properties of President Marcos, his immediate family, relatives, and
close associates but only the part that originated from the “vast
resources ·of the government.”^[71] (Emphasis supplied)

In Bataan Shipyard & Engineering Co., Inc. v. Presidential Commission on Good Government^[72] and Presidential Commission on Good Government v. Tan,^[73]
We defined ill-gotten wealth as those “acquired through or as a result
of improper or illegal use of or the conversion of funds belonging to
the Government or any of its branches, instrumentalities, enterprises,
banks or financial institutions, or by taking undue advantage of
official position, authority, relationship, connection or influence,
resulting in unjust enrichment of the ostensible owner and grave damage
and prejudice to the State.”^[74]

Furthermore, in Chavez v. Presidential Commission on Good Government,^[75]
ill-gotten wealth is defined as those “assets and properties
purportedly acquired, directly or indirectly, by former President
Marcos, his immediate family, relatives and close associates through or
as a result of their improper or illegal use of government funds or
properties; or their having taken undue advantage of their public
office; or their use of powers, influence or relationships, resulting in
their unjust enrichment and causing grave damage and prejudice to the
Filipino people and the Republic of the Philippines.”^[76]

In sum, in order to be considered as ill-gotten wealth, they must
have: (a) originated from the government; and (b) been taken by former
President Marcos, his immediate family, relatives, and close associates
by illegal means.^[77]

Evidently, the BNPP is a government project the construction of
which was awarded to Westinghouse as the main contractor and B&R as
the architect-engineer, allegedly through undue advantage of Disini’s
influence and close association with President Marcos. In exchange,
Disini allegedly received substantial commissions based on 3% and 10% of
the total contract price from Westinghouse and B&R, respectively.
Obviously, the payment of the alleged commissions would be coming from
Westinghouse and B&R, which are private corporations, and not
directly from the government.

However, contrary to the contention of Disini, ill-gotten wealth also
encompasses those that are derived indirectly from government funds or
properties through the use of power, influence, or relationship
resulting in unjust enrichment and causing grave damage and prejudice to
the Filipino people and the Republic. The alleged subject commissions
may not have been sourced directly from the public funds but it is
beyond cavil that Disini would not have amassed these commissions had he
not exerted undue influence on President Marcos.

Disini indirectly and unjustly enriched himself through his
influence and close association with President Marcos by ensuring that
the BNPP project would be awarded to Westinghouse and B&R. Besides,
his alleged receipt of commissions from Westinghouse and B&R is
clearly within the definition of ill-gotten wealth under the PCGG Rules
and Regulations, that is, the receipt, directly or indirectly, of any
commission from an entity in connection with any government contract or
project.

Disini’s argument that he may not be held liable since he was not a
public officer, or that there was no finding of conspiracy between him
and President Marcos, deserves scant consideration. Suffice it to say
that EO Nos. 1, 2, 14 and 14-A (1986) clearly provide that ill-gotten
wealth may be recovered from President Marcos’ immediate family,
relatives, subordinates and close associates, notwithstanding their
private status. Undoubtedly, the Republic may recover ill-gotten wealth
not only from President Marcos, Imelda and his immediate family but also
from his dummies, nominees, agents, subordinates and/or business
associates whether or not President Marcos is also found liable together
with them.

In light of the above issuances authorizing the recovery of
ill-gotten wealth, there is no doubt that the Republic has a valid cause
of action founded in EO Nos. 1, 2, 14 and 14-A (1986).

II

We now come to the issue of whether the Republic has proved by
preponderance of evidence its allegations that Disini should be held
liable and made to account for and reconvey his ill-gotten wealth
consisting of the substantial commissions he received from Westinghouse
and B&R relative to the BNPP project. To resolve this matter, the
Court needs to review and evaluate the evidence presented by the
Republic which is generally not allowed in a petition for review on certiorari under Rule 45.

Procedural matters:

As a general rule, the Court’s jurisdiction in a, Rule 45 petition is limited to the review of pure questions of law.^[78] Rule 45 does not allow the review of questions of fact because the Court is not a trier of facts.^[79]

A question of law arises when there is doubt as to what the law is on
a certain state of facts, while a question of fact exists when there is
doubt as to the truth or falsity of the alleged facts.^[80]
The test in determining whether a question is one of law or of fact is
whether the appellate court can resolve the issue raised without
reviewing or evaluating the evidence, in which case, it is a question of
law.^[81] Any question that
invites evaluation of the whole evidence, as well as their relation to
each other and to the whole, is a question of fact and thus proscribed
in a Rule 45 petition.^[82]

The rule however admits of exceptions:

(1) [W]hen the findings are grounded entirely on
speculations, surmises, or conjectures; (2) when the inference made is
manifestly mistaken, absurd, or impossible; (3) when there is a grave
abuse of discretion; (4) when the judgment is based on misappreciation of facts;
(5) when the findings of fact are conflicting; (6) when in making its
findings, the same are contrary to the admissions of both appellant and
appellee; (7) when the findings are contrary to those of the trial
court; (8) when the findings are conclusions without citation of specific evidence on which they are based;
(9) when the facts set forth in the petition as well as in the
petitioner’s main and reply briefs are not disputed by the respondent;
and (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record.^[83] (Emphases supplied)

Here, Disini raised the issues on the authenticity of Exhibit E-9,
the existence or absence of Westinghouse and B&R contracts, and the
actual receipt and amount of commissions from Westinghouse and B&R.
Clearly, these issues involve questions of facts. They relate to the
probative weight of Exhibit E-9, the existence of the Westinghouse and
B&R contracts, and the commission agreements, and Disini’s receipt
of the sum of $50,562,500.00.^[84]
Precisely, these issues require a judicious review of all the evidence
presented in this case. Thus, these issues are not proper in a Rule 45
petition.

Nevertheless, We find that the circumstances in the instant case
warrant the application of the exception rather than the general rule,
as will be discussed below.          

Existence of Westinghouse and B&R contracts and commission agreements.

The alleged commissions received by Disini, i.e., 3% and 10%,
were supposedly based on the total contract price of the Westinghouse
and B&R contracts, respectively. However, Disini avers that the
records are bereft of any evidence as to the existence of these
contracts and their corresponding commission agreements. In fact, the Sandiganbayan
anchored its decision as to existence of these contracts and commission
agreements on the testimonies of Vergara and Jacob who narrated how the
BNPP contract was awarded to Westinghouse and B&R and how Disini
used his close personal relationship with President Marcos to obtain
substantial concessions.

Under the Best Evidence Rule under Section 3, Rule 130 of the Rules
of Court, no evidence shall be admissible other than the original
document when the subject of inquiry is the contents of a document, to
wit:

Section 3. Original document must be produced, exceptions.
– When the subject of inquiry is the contents of a document, no
evidence shall be admissible other than the original document itself,
except in the following cases:

(a) When the original has been lost or destroyed, or cannot be produced in court, without bad faith on the part of the offeror;

(b) When the original is in the custody or under control of the party
against whom the evidence is offered, and the latter fails to produce
it after reasonable notice;

(c) When the original consists of numerous accounts or other
documents which cannot be examined in court without great loss of time
and the fact sought to be established from them is only the general
result of the whole; and

(d) When the original is a public record in the custody of a public officer or is recorded in a public office.

The rule’s purpose is to ensure that the exact contents of a writing are brought before the court,^[85] to act as an insurance against fraud^[86]
and to protect against misleading inferences resulting from the
intentional or unintentional introduction of selected portions of a
larger set of writings.^[87]
However, when the evidence sought to be introduced concerns external
facts, such as the existence, execution or delivery of the writing,
without reference to its terms, the Best Evidence Rule cannot be
invoked.^[88] In such case, secondary evidence may be admitted even without presenting the original.

In the present case, the Republic claims to have proved the
existence of the Westinghouse and B&R contracts in relation to the
BNPP project as well as the existence of their corresponding commission
agreements with Disini.

We agree with the Republic. As to the proof of the existence of the
Westinghouse and B&R contracts in relation to the BNPP project as
well as the existence of their corresponding commission agreements with
Disini, We hold that it was-sufficiently established by the testimonies
of Vergara and Jacob. Despite the non-presentation of the original
contracts themselves, the Republic has duly proved their execution, to
wit:

Affidavit of Vergara dated November 15, 1988:^[89]

2. Approximately in 1973, at about the time of the oil embargo,
Westinghouse saw the opportunity to promote nuclear power in the
Philippines. I discussed the subject on many occasions with Mr. L.P.
Sabol, the Westinghouse Power Systems District Manager stationed in
Manila, and later with Mr. L.C. Saunders, the Westinghouse
Vice-President, Power Systems-Far East, stationed in Hongkong.
Westinghouse was very anxious to obtain a contract for the first nuclear
plant project in the Philippines. However, Westinghouse had recently
lost in the bidding for the Malaya II power plant project in the
Philippines, and they suspected that they lost because Westinghouse
lacked influence with President Marcos. We decided not to make the
same mistake in connection with the nuclear project, and we therefore
set about recruiting someone close to President Marcos to serve as our
“Special Sales Representative” (SSR).

3. Mr. Sabol and I spent some time considering who should be
approached to act as the westinghouse SSR. I first contacted Dr.
Pacifico Marcos, the brother of President Marcos. Dr. Marcos declined to
act as SSR because he knew nothing about electric power plants or the
nuclear project and believed that the President might question his
involvement. Sometime later I was having breakfast at Wack-Wack
golf club when I saw Herminio T. Disini. I knew that Disini was a close
family friend of President Marcos and that his wife was the personal
physician and cousin of Imelda Marcos. I therefore decided to approach
Disini to see if he would serve as SSR.

4. Herminio Disini was initially unenthusiastic about my proposal
because he, like Pacifico Marcos, knew nothing about nuclear power.
Disini’s attitude seemed to change, however, when I reminded him that
the project could cost as much as $600 million, yielding a commission in
the range of $30 million. Disini suggested a meeting, and I brought Mr.
Sabol to Disini’s office that same day. Mr. Sabol gave Disini some
Westinghouse brochures and explained the nuclear project. The
meeting ended with Disini promising to give us an answer within one
week. Less than a week later Disini called to say that he would be
interested in acting as the Westinghouse SSR for the nuclear project.
When he accepted appointment as SSR, I knew that the project would be
awarded to Westinghouse. Mr. Disini would not have accepted appointment
unless it had been cleared with Mr. Marcos. I told this to Mr. Sabol. It
then became necessary to secure Westinghouse management approval of
Disini’s appointment as SSR and to set the financial arrangement with
him. Mr. Saunders came to Manila for that purpose and met with
Disini, Sabol and myself at the Hyatt Hotel. Later I went to San
Francisco with Disini and Sabol to meet with other Westinghouse
officials at the Airport Hilton. There were approximately five people
present from Westinghouse. The agenda was to answer the question –
why would Westinghouse appoint Mr. Disini. At first, Westinghouse
seemed skeptical about Disini’s abilities but I assured them that once
Disini accepted appointment as SSR it meant that Westinghouse had
already received the nuclear project. I explained Mr. Disini’s close
relationship with the President. I also mentioned the fact that Burns
& Roe had been appointed consultant to NPC. This was very important
to Westinghouse because it demonstrated Mr. Disini’s influence with the
President. This information satisfied Westinghouse and they agreed to
retain Disini as SSR.

5. Prior to mv trip to San Francisco, Mr. Saunders introduced
me to representatives of Burns & Roe, Inc., an Am:erican engineering
firm interested in a consulting arrangement with NPC. I arranged a
meeting between Mr. Disini and Mr. Ketterer of Burns & Roe. The
meeting was for Mr. Ketterer to understand how Mr. Disini might help
Burns & Roe secure the consultancv contract. Later I arranged a
meeting between Mr. Hull of Burns & Roe and Mr. Disini. During this
meetitig Mr. Disini agreed to assist Burns & Roe and Burns & Roe
agreed to pay commissions to Disini in exchange for his influence with
President Marcos.

6. Westinghouse agreed to the basic terms of the SSR arrangement in San Francisco. Later,
Westinghouse entered into a written SSR agreement with Disini and
agreed to pay him substantial “commissions” if he succeeded in obtaining
the nuclear plant contract for Westinghouse. It was my
perception that Westinghouse did not want to spend the money and time
necessary to prepare a detailed proposal without some tangible evidence
they would get the job. Mr. Sabol prepared and submitted draft letter of
intent to be issued by NPC, a copy of which is attached hereto as
Exhibit A.

7. The SSR agreement with Westinghouse listed as many services
as possible to attempt to justify the size of the fee involved, even
though a number of the services were not to be performed. When
Westinghouse encountered any difficulties with NPC during the contact
negotiations, we could call upon Disini to visit the President and
arrange to have the President intervene on behalf of Westinghouse.
One such Westinghouse request to Disini is attached hereto as Exhibit
B. Another such request is in the form of a Westinghouse “Aide Memoire”
(attached as Exhibit C), which is the format we often used to
communicate through Disini with the President. The Aide Memoire bears
the President’s directives to NPC in accordance with the views expressed
by Westinghouse.^[90] (Emphases supplied.)

Supplemental Affidavit of Vergara dated December 9, 1988:^[91]

8. Although we reached a general agreement on the
SSR terms, the implementing details remained to be worked out and were
not finalized until later. The agreement contained certain general
terms. It would be effective on March 15, 1974. Disini would receive
three percent (3%) of the total contract price (firm plus
reimbursables). Payments would not be due until the prime contract for
the plant had been signed and Westinghouse had started to draw funds
against it.

9. It was clearly understood and agreed by Disini and Westinghouse that the
main service to be provided by Disini was to influence President Marcos
to award the contract to Westinghouse. In fact, during the entire term
of the SSR contract (which extended for over ten years), Disini rendered
no substantial services of any kind to Westinghouse, beyond securing
the prime contract itself.

10. Another aspect of the deal that Disini and I discussed with
Westinghouse in Manila was the necessity for a commitment to engage
Burns & Roe to become the architect-engineer for the project. Disini
had a parallel SSR agreement with Burns & Roe under which he would
receive commissions from Burns & Roe if that company was selected to
perform design work during the project’s execution. Therefore,
he needed to ensure that Burns & Roe received the
architect/engineering subcontract on the project from Westinghouse.
Saunders and Sabol had agreed to this aspect of the deal in order to
preserve the role of Westinghouse as prime contractor. Westinghouse PSPD
personnel who had to make the decision were opposed to Burns & Roe.
This issue was only resolved two months later, as further discussed
below.

x x x x

15. As discussed above, the deal with Burns & Roe would
result in commission payments to Disini. Therefore, it was in
everybody’s interest that Westinghouse honor Sabol’s and Saunders’
recommendation and engage Burns & Roe. In late April 1974, Mr.
Kenneth Roe came to the Philippines to sign Burns & Roe’s Phase I
consulting contract with NPC and, while in Manila, met with
Disini and confirmed the SSR agreement that Mr. Hull had negotiated ith
Disini. We now needed to have a deal between Westinghouse and Burns
& Roe finalized so that all parties would be bound to each other.

x x x x

20. The following day, President Marcos met with the Westinghouse
delegation (Wallace, Keogh, Sabol, myself and others (for a formal
presentation). Wallace led the presentation. The President
jokingly commented that “you people know how to choose your
representative” – referring to H. Disini. There is no doubt in my mind
that Westinghouse executives understood that their SSR payments were
providing the. inducement to President Marcos to award the contract to
Westinghouse.^[92] (Emphases supplied)

Affidavit of Jacob dated October 31, 1990:^[93]

11. I was aware that Herdis was acting as the
Special Sales Representative (“SSR”) for Westinghouse and Burns &
Roe in [not readable]. Westinghouse had a written agreement with Herdis
providing that Herdis would receive commissions in the amount of 3% of
the Westhighouse contract price. Burns & Roe had a written agreement
with Technosphere Consultants Group, Inc. (“Technosphere”), a Herdis
company, pursuant to which Technosphere would receive about 10% of the
Burns & Roe contract price as commissions. During the course of the
BNPP project, I was responsible for invoicing and arranging payments
from Westinghouse and Burns & Roe under these agreements. See Exhibit

2. Aside from Mr. Disini’s efforts in obtaining the award of the
project to Westinghouse and Burns & Roe, I am not aware of any other
material services rendered by Herdis or Technosphere under their
respective agreements.^[94] (Emphases supplied)

Vergara’s and Jacob’s affidavits satisfactorily’ proved the due
execution of the Westinghouse and B&R contracts and their
corresponding commission agreements with Disini. Vergara narrated in
detail how Disini was appointed as Westinghouse’s SSR and how he exerted
influence on President Marcos to appoint it as the BNPP project main
contractor. Also, Vergara clearly testified on how he arranged a meeting
between Disini and B&R for the former to also become the latter’s
SSR to President Marcos with respect to the BNPP project.

These transactions with Westinghouse and B&R were corroborated by
Jacob in his affidavit. As deduced from Vergara’s and Jacob’s
affidavits, the BNPP project was successfully awarded to Westinghouse as
the main contractor and to B&R as the architect-engineer because of
Disini’s influence and close association with President Marcos.
Certainly, the existence of the Westinghouse and B&Rs contracts had
been duly proved.

As to Disini’s commission agreements with Westinghouse and B&R,
Vergara and Jacob positively affirmed the existence thereof as they had
the opportunity to personally witness and participate in these
transactions. Vergara was the President of AII, which acted as the SSR
of Westinghouse in the Philippines. He was present at the start of the
negotiation between Westinghouse and Disini until the award of the BNPP
project to Westinghouse.

Certainly, his testimony as to the existence of Disini’s commission
agreement with Westinghouse is credible and highly probable under the
circumstances. In addition, Vergara was also present during the
negotiation between Disini and B&R as he, himself, brokered and
arranged the meeting between Westinghouse and B&R for the former to
engage the services of the latter as architect-engineer, pursuant to
Disini’s agreement with B&R.

Jacob corroborated Vergara’s declarations when he, as the President
of Herdis, confirmed the existence of these commission agreements. He
specifically testified that: (a) Herdis and Westinghouse had a written
agreement wherein the former would receive 3% of the latter’s total
contract price in the BNPP project; and (b) TCP, a subsidiary of Herdis,
and B&R also had a written agreement wherein the former would
receive 10% of the total contract price of the latter in the BNPP
project.

These testimonies sufficiently prove the existence of the
Westinghouse and B&R contracts and their corresponding commission
agreements. Contrary to Disini’s contention, the Best Evidence Rule is
not applicable in the present case. The Republic presented the
affidavits of both Vergara and Jacob to prove the existence and
execution of these contracts and the corresponding commission agreements
without inference as to the contents or terms thereof. Hence, We rule
in favor of the Republic.

However, for Disini to be held liable to return and account for the
commissions he allegedly received, the Republic must prove by
preponderance of evidence not only the existence of these contracts and
commission agreements but the receipt of these substantial commissions
by Disini from Westinghouse and B&R as well.          

Disini received commissions from Westinghouse and B&R:

The evidence on record shows that Disini received commissions from
Westinghouse and B&R despite the non-presentation by the Republic of
the Westinghouse and B&R contracts and their respective commission
agreements. The sworn testimonies and affidavits of Vergara and Jacob
are categorical, credible and corroborative, sufficiently proving that
Disini, through Herdis and its subsidiaries, acquired ill-gotten wealth
in relation to the BNPP project.

Vergara’s Affidavits:

Vergara testified as to his participation in the negotiation and
execution of the Westinghouse and B&R contracts and Disini’s
commission agreements. He declared that Disini received millions of
dollars in commissions from Westinghouse and B&R relative to the
BNPP project as well as additional compensation through contracts
entered into by Herdis and its subsidiaries, to wit:

8. Disini received “commission” payments
from Westinghouse and Burns & Roe amounting to many millions of
dollars. He received additional compensation through contracts and
subcontracts awarded to companies he owned to provide goods or services
for the nuclear project. I formed Power Contractors, Inc., for example,
to perform the civil/structural construction work for the project. Asia
Industries owned 40% of PCI at the outset. This 40% was acquired almost
immediately by Mr. Disini. Mr. Jacob acquired [FOR HERDIS] an existing
insurance company, and renamed it Summa Insurance, Inc., to provide the
insurance coverage for the project. By virtue of his
relationship with President Marcos and his agreements with Westinghouse
and Burns & Roe, Disini could obtain virtually any lucrative
contract or subcontract for the nuclear project that he wished.^[95] (Emphases supplied)

Vergara testified as to Disini’s participation in the BNPP project by
facilitating the award of the BNPP project to Westinghouse and B&R
and through acquisition of companies involved in the BNPP project.
Vergara participated in the incorporation of PCI, a consortium which
performed civil or constructional work for te BNPP project. Thereafter,
PCI, which was 40% owned by AII, was subsequently acquired by Disini.
He also declared that Herdis acquired an insurance company and renamed
it as Summa Insurance, Inc. (SII) which provided insurance coverage for
the BNPP project. Vergara claimed that these companies, PCI and SII,
gave lucrative compensation to Disini in view of his involvement in the
BNPP project.

He also confirmed that Disini received these substantial commissions through Herdis and AII, thus:

28. Pursuant to the respective SSR agreements
Westinghouse entered into with Asia Industries and Herdis, commissions
were paid to Asia Industries and Herdis. Exhibit 4 is a July 14,
1975 revision of the SSR Agreement between Asia Industries and
Westinghouse, which I signed for Asia Industries.

29. Many of the commission payments ostensibly made to Asia Industries were actually credited but never received by Asia Industries.
Rodolfo Jacob and Jerry Orlina, who were Disini’s righthand financial
advisors, would know the disposition, transfer and distribution of the
commission payments and the actual amount involved.^[96] (Emphases supplied)

In his Supplemental Affidavit dated January 5, 1989,^[97]
Vergara further elucidated on what happened to AII’s commissions due
from Westinghouse which were not received by or transferred to the
company, viz.:

7. The Westinghouse-NPC contract was signed in February 1976 and
Westinghouse was released to start work a few months later, whereupon
the SSR commissions began to accrue. Even though commissions were
paid Herdis by Westinghouse as they became due, Asia Industries did not
receive any commission payments and was not even notified that the first
two payments had been made until much later, when I asked Westinghouse
for an accounting.

x x x x

11. I was head of Asia Industries from 1975 until its acquisition by
the National Development Company in April 1982. During this period, I
served as Asia Industries’ President and also as a member of its Board
of Directors. I managed the company in all respects except the financial
one, for HGI controlled our treasury and finances.

12. Westinghouse’s SSR agreement with Asia Industries (Exhibit 4
to the Supplemental Affidavit) committed Westinghouse to paying Asia
Industries over $6 million in commissions. We used that
commitment in July 1977, when Asia Industries sought to acquire Usiphil, Inc. (“Usiphil”), a former sister company. We applied for a $25
million standby letter of credit from the Philippine National Bank
(“PNB”), a Philippine Government-owned bank, to finance the acquisition.
Our application was supported by Usiphil’s business prospects, and was
backed in part by our anticipated; receipt of nuclear power plant
commissions from Westinghouse. We did succeed in acquiring Usiphil, but
it apparently took President Marcos’ personal involvement to overcome
the opposition of PNB to the transactions.

x x x x

14. It was my understanding and expectation that Asia Industries
would receive and avail itself of the Westinghouse commissions. Starting
in 1978, as a result of the U.S. Department of Justice’s investigation
of illegal payments in connection with the nuclear power plant project,
Westinghouse stopped sending commission payments to Switzerland and
began to remit the payments directly to the Philippines. After this
switch, Asia Industries commissions still ended up in the hands of HGI.
In most cases, the transfers of funds were reflected in the company’s
books as “short­-term investments” or “other current assets.” Exhibit 4
is a copy of Asia Industries’ financial statements for the years 1979
and 1980. As Exhibit 4 shows, by the end of 1980 Asia Industries had
booked 47.3 million pesos in “short term investments” and 1.5 million
pesos as “other assets.” The transfer of Westinghouse commissions to HGI
accounts for the vast majority of the amounts covered by those entries.

15. In some cases, the commission pavments were transferred
directly to HGI without even entering them in Asia Industries’ books.
For example, in January 1979 Westinghouse forwarded to Asia Industries a
commission payment of $579,619.27, and gave notice of this transfer by a
January 30, 1979 telex from its Export Treasury Department to our
General Manager V.B. Mimbras (Exhibit 5 hereto is a copy of that telex).
Upon receipt of the funds, Mr. Jacob requested that we turn the
$579,000 commission over to him immediately, and this was done.
Exhibit 6 memorializes the transaction; it is a May 8, 1980 memorandum
to me from Asia Industries’ treasurer, Mr. Gutierrez, indicating the
disposition given to the check. Mr. Jacob never reimbursed Asia
Industries for this check.^[98](Emphases supplied)

In addition to the existence of Westinghouse’s commission agreement
with Herdis, Vergara also confirmed the existence of Westinghouse’s
agreement with AII Vergara declared that AII and Westinghouse had an SSR
agreement wherein the former would receive commissions from the latter
in exchange for its service as SSR. However, Vergara deposed that no
commissions were ever received by the company from Westinghouse as these
commissions were directly paid or transferred to Herdis, AII’s owner.^[99]
This clearly demonstrated how Disini utilized companies such as AII and
Herdis in his scheme of amassing ill-gotten wealth. He merely procured
AII to facilitate his receipt of the commissions thereby unjustly
enriching himself to the detriment of the Republic. This fact was
confirmed by Vergara when Disini purchased AII because of its SSR
agreement with. Westinghouse and the certainty that the BNPP project
would be awarded to Westinghouse, to wit:

5. Aware of the large amounts in commissions
that Westinghouse would pay Asia Industries once the nuclear power plant
project was initiated, Mr. Disini offered to buy Asia Industries from
its corporate parent, and was able to purchase it for approximately $2.5
million. This deal was indicative of Mr. Disini’s complete confidence
that he would be able to secure a contract for the nuclear power plant.
This confidence was further evidenced by the fact that Mr. Disini had
to borrow from a Swiss bank the purchase price of Asia Industries, and
offered the upcoming commissions on the nuclear power plant as proof of
his ability to pay back the loan. Mr. Disini, his chief assistant
Rodolfo Jacob, and I travelled to Basel, Switzerland to arrange for the
bank loan and close on the sale with U.S. Industries, Inc.^[100] (Emphasis supplied.)

The existence and due execution of these contracts and commission
agreements, the successful award of the BNPP project to Westinghouse and
B&R and the construction of the still inoperable BNPP strengthened
the fact that commissions due to Disini already accrued, and were
credited and received by the latter. Disini would not have bought AII if
he was not confident that Westinghouse would be awarded the BNPP
project. Thus, when the Westinghouse contract was signed and thereafter
implemented, the commissions due Disini also accrued. Vergara’s
affidavits affirmed Disini’s receipt of commissions, thus:

Supplemental Affidavit of Vergara dated December 9, 1988:

8. Although we reached a general agreement on the SSR
terms, the implementing details remained to be worked out and were not
finalized until later. The agreement contained certain general terms. It
would be effective on March 15, 1974. Disini would receive three
percent (3%) of the total contract price (firm plus reimbursables). Payments
would not be due until the prime contract for the plant had been signed
and Westinghouse had started to draw funds against it.

9. It was clearly understood and agreed by Disini and Westinghouse
that the main service to be provided by Disini was to influence
President Marcos to award the contract to Westinghouse. In fact,
during the entire term of the SSR contract (which extended for over ten
years), Disini rendered no substantial services of any kind to
Westinghouse, beyond securing the prime contract itself.^[101] (Emphasis supplied)

Affidavit of Vergara dated January 25, 1989:

7. The Westinghouse-NPC contract was signed in
February 1976 and Westinghouse was released to start work for a few
months later, whereupon the SSR commissions began to accrue.
Even though commissions were paid Herdis by Westinghouse as they become
due, Asia Industries did not receive any commission payments and was
not even notified that the first two payments had been made until much
later, when I asked Westinghouse for an accounting.^[102] (Emphasis supplied)

Although Vergara testified that he had no personal knowledge as to
the transfer of these commissions to Disini, his testimonies and sworn
affidavits are relevant in laying the foundation of Disini’s receipt
thereof by categorically declaring the existence of these Westinghouse
and B&R contracts and their respective commission agreements and the
time of accrual of these commissions. Also, Vergara demonstrated the
extent of Disini’s participation in the BNPP project through his company
Herdis and its subsidiaries, and his further acquisition of other
companies involved in the project. This reveals Disini’s considerable
interest in a government project which he obviously attained due to his
influence and close association with President Marcos.

Jacob’s Affidavits:

For his part, Jacob was equally candid in his testimony and sworn
affidavits which firmly established Disini’s receipt of these
commissions. Based on his personal knowledge as President of Herdis, he
declared that he participated in the transfer of these commissions from
Westinghouse and B&R to Disini’s accounts, to wit:

Affidavit dated October 31, 1990:

11. I was aware that Herdis was acting as the Special
Sales Representative (“SSR”) for Westinghouse and Burns & Roe in
[not readable]. Westinghouse had a written agreement with Herdis
providing that Herdis would receive commissions in the amount of 3% of
the Westinghouse contract price. Burns & Roe had a written agreement
with Technosphere Consultants Group, Inc. (“Technosphere”), Herdis
company, pursuant to which Technosphere would receive about 10% of the
Burns & Roe contract price as commissions. During the course
of the PNPP project, I was responsible for invoicing and arranging
payments from Westinghouse and Burns & Roe under these agreements.
See Exhibit 2. Aside from Mr. Disini’s efforts in obtaining the award
of the project to Westinghouse and Burns & Roe, I am not aware of
any other material services rendered by Herdis or Technosphere under
their respective agreements.

x x x x

13. I was aware that Westinghouse and Burns & Roe made
commission payments beginning 1976. Upon Mr. Disini’s instructions, the
commission payments were not recorded on the books of Herdis and
Technosphere. Upon Mr. Disini’s further instructions, I directed
Westinghouse and Burns & Roe to remit the commissions directly to
Mr. Rene Pasche in Switzerland who deposited them in Swiss banks. This
was the arrangement until the U.S. Department of Justice Investigation
in 1978, when Westinghouse advised us that henceforth payments would be
remitted straight to Manila. On the basis of my dealings with
Westinghouse officials and my examination of their internal memos and
other documentary evidence, I believe that Westinghouse knew that
President Marcos was getting financial benefits from the contract.

14. To receive the Westinghouse commission payments in the
Philippines, Foreign currency Deposit Unit accounts were opened at
International Corporate Bank (“Interbank”). Mr. Disini and I were
the signatories for the accounts. A substantial portion of the funds in
this Interbank account were remitted to overseas accounts in Switzerland
and elsewhere. Exhibit 3 is an example of a remittance that I
ordered transferring commission payments from Interbank to the Swiss
Volks Bank for the account 20529 Santa Clara.^[103] (Emphases supplied)

Supplemental Affidavit dated June 16, 1994

1. Moreover, Mr. Disini had opened bank accounts in Switzerland
under the account names “965 Summa” and “735 Phil”, where Pacencia
Disini and I were authorized signatories. I surmise that I
was made a signatory to these accounts because Mr. Disini trusted me to
give Mrs. Disini the necessary assistance in any transactions regarding
the funds deposited in such accounts although I do not recall having
personally made withdrawals from such accounts. I confirm the
authenticity from such accounts. I confirm the authenticity of my
signatures in the aforementioned accounts as evidenced by the Swiss bank
documents attached hereto as Annexes “A”, “B”, “C”, “D”, “E” and “F”.

x x x x

8. Anent the commission payments made by Westinghouse in
connection with the contract for the construction of the Bataan Nuclear
Power Plant, since Mr. Disini owns HERDIS, he personally received the
commissions due HERDIS and such payments were kept off the books of
HERDIS. However, while as I stated in my previous affidavit, I had a
role in transmitting some of these commissions, upon Mr. Disini’s
instructions, to his bank accounts in Switzerland and Singapore.
I was not involved in the international operations of Mr. Disini’s
personal businesses abroad. Mr. Disini hired foreign officers and
personnel to manage his businesses abroad. One of this trusted men, a
finance man by the name of Rene Pasche, was in charge of his Swiss bank
accounts and in fact, the name of one of Mr. Disini’s company, PADIS SA,
stands for Pasche and Disini. ^[104] (Emphases supplied)

A review of Jacob’s affidavits, identified and duly authenticated by
him, reveals that as President of Herdis, he had personal knowledge of
Herdis’ transactions, especially with respect to the BNPP project as
well as other circumstances surrounding it. For a testimonial evidence
to be believed, it must not only proceed from the mouth of a credible
witness but must also be credible in itself such that common experience
and observation of mankind lead to the inference of its probability
under the circumstances.^[105]

Jacob’s credibility to testify on the matter of Disini’s receipt of
commissions stemmed from Disini’s trust and confidence in him as he
was personally invited by Disini to work for his company Herdis, to wit:

Affidavit dated October 31, 1990:

4. Sometime in mid-1974, Mr. Disini visited
me at my office and first broached the idea of my joining Herdis as
President. In subsequent talks, he persistently tried to convince me to
do so. He explained the expansion plans of Herdis and that he’
needed me to set up and run a professional organization to implement
these plans. He assured me that as Herdis President I would have a free
hand in major decisions and policies. He also offered to guarantee me a
compensation package at least equivalent to what I was receiving at SGV.
These discussions went on for several months.

5. After some serious thought, I accepted Mr. Disini’s
offer sometime in late 1974. About March, 1975, Mr. Disini began
introducing me to the officers and staff of Herdis and its subsidiaries. Occasionally, I was given informal briefings on Herdis’ business corporations. I
likewise was invited by Mr. Disini to be present in two or three
meetings with Westinghouse officers, wherein I was introduced. I recall
that in one meeting with Westinghouse officers in April, 1975, the
matter of commissions and contract price were discussed (as reflected in Mr. Sabol’s April 15, 1975 letter to me. See Exhibit 1.)^[106] (Emphases supplied)

Undoubtedly, Disini trusted Jacob as he hired him as President of
Herdis and even allowed him to join in his meetings with Westinghouse.
Disini also entrusted to Jacob the task of transferring his commissions
from Westinghouse and B&R to his overseas personal bank accounts. In
fact, Jacob declared that he was even made a signatory to some of these
overseas bank accounts, as well as in a Philippine foreign currency
deposit unit account.

Despite the fact that the Republic offered mere photocopies of the
bank documents, this does not affect the admissibility and probative
value of Jacob’s sworn statement as to the existence of the bank accounts
and Disini’s receipt of commissions, ‘especially since these statements
came from a credible witness such as Jacob. To stress, when the evidence
presented concerns the existence, execution or delivery of the writing,
without inference to its terms, the Best Evidence Rule cannot be
invoked. Clearly, Jacob is credible to testify on matters regarding
Disini’s receipt of commissions from Westinghouse and B&R and the
manner of his participation as well as that of Herdis and its
subsidiaries. Hence, his testimony and sworn affidavits must be accorded
probative value.

Moreover, Jacob corroborated Vergara’s testimony that Herdis and its
subsidiary TCI received. commissions from Westinghouse and B&R,
respectively, even when these companies did not render any service in
relation to the BNPP project. As part of his affidavit, the Republic
attached certain transmittal letters, invoice and bank documents the
contents of which may not be admissible in evidence as they are mere
photocopies and not properly authenticated. However, these may be
considered part of Jacob’s testimony as he, himself, was the recipient
and/or author no less of these transmittal letters and invoice, and the
signatory to the bank documents.

Also, Jacob explained that Herdis received the commissions from
Westinghouse but they were not recorded in its books and were instead
remitted directly to Disini’s overseas bank accounts and later to a
Philippine fiduciary deposit unit account which were then transferred by
Jacob himself to Disini’s overseas bank accounts. As part of Jacob’s
testimony, the Republic offered a sample remittance made by Jacob to
Disipi’s overseas bank account. Again, the document and the contents
thereof are not per se considered as admissible under the Rules,
but is only part of the narration of the witness that he effected the
transfer of these commissions to Disini.

We are cognizant of the fact that the Republic presented “certified
xerox copies” of most, if not all, of its documentary evidence. In the
assailed Decision, the Sandiganbayan gave no probative value to
these documents tending to prove Disini’s overseas bank accounts as they
were not properly authenticated or translated, to wit:

We, however, cannot give probative weight to the
documents relating to the existence of the so-called Disini Swiss
accounts considering that these documents are foreign private documents
in the German and French language. x x x

x x x x

The evidence consisting of Exhibits “HHH,” “HHH-TR,” “III,” “III-TR,”
“JJJ” and sub-markings, “JJJ-TR,” “KKK” and sub-markings, “KKK-TR,” “LLL”
and sub-markings, “LLL-TR,” “MMM,” “MMM-TR,” “NNN,” “NNN-TR,” “NNN-1,”
“NNN-1 (TR),” “OOO,” “OOO-TR,” “PPP,” “PPP(TR),” “QQQ” and sub-markings
and their respective translations, “RRR” and sub­ markings and their
respective translations, “SSS” and sub-markings and their respective
translations, “TTT,” “TTT(TR),” “UUU,” “UUU(TR),” “VVV,” and “VVV(TR)”
presented by the plaintiff were unauthenticated and not properly
translated. All the documents relating to these accounts were
photocopies. As stated in the Rules of Court, for a private document to
be proven, due execution and authenticity must be proven. This was not
fulfilled by the plaintiff as what was presented were mere photocopies
of supposed bank statements/records received by the Philippine Embassy
in Switzerland and those which a PCGG employee had received here in the
Philippines. No evidence established why the originals of the
documents could not be produced. At the very least, the plaintiff should
have presented the records as received by the Philippine Embassy. Furthermore, the documentary evidence given were also photocopies of the translations, which ere done here in the Philippines.
There was no explanation as to why this was done. Thus, the translation
of French and German texts into English is unacceptable. There was no
opportunity for the Court to scrutinize the translations as the supposed
translator was not even presented.

Additionally, majority of the other documentary evidence offered by
the plaintiff are mere photocopies. Some were even photocopies of
photocopies, and bad copies at that. x x x^[107] (Emphasis supplied)

Nonetheless, the absence of these documents is not fatal to the
Republic’s cause especially since the testimonial evidence offered
contained positive declarations of witnesses based on their personal
knowledge. We thus hold that the Republic has duly proved by
preponderance of evidence through the affidavits of Vergara and Jacob,
the fact of receipt by Disini of these commissions from Westinghouse and
B&R.

Preponderance of Evidence:

In cases involving ill-gotten wealth, EO No. 14-A clearly requires preponderance of evidence.^[108]
Section 1, Rule 133 of the Rules of Court provides for the quantum of
evidence for civil actions, and delineates how preponderance of evidence
is determined, viz.:

Section 1. Preponderance of evidence, how determined. –
In civil cases, the party having the burden of proof must establish his
case by a preponderance of evidence. In determining where the
preponderance or superior weight of evidence on the issues involved
lies, the court may consider all the facts and circumstances
of the case, the witnesses’ manner of testifying. their intelligence,
their means and opportunity of knowing the facts to which they are
testifying, the nature of the facts to which they testify, the
probability or improbability of their testimony, their interest or want
of interest, and also their personal credibility so far as the same may
legitimately appear upon the trial. The court may also consider the number of witnesses, though the preponderance is not necessarily with the greater number.^[109] (Emphasis supplied)

Preponderance of evidence means that the evidence adduced by one side is, as a whole, superior to that of the other side.^[110] Essentially, preponderance of evidence refers to the comparative weight of the evidence presented by the opposing parties.^[111]
As such, it has been defined as “the weight, credit, and value of the
aggregate evidence on either side,” and is usually considered to be
synonymous with the term greater weight of the evidence or greater
weight of the credible evidence.^[112] It is proof that is more convincing to the court as worthy of belief than that which is offered in opposition thereto.^[113]

In this case, Disini was declared in default and failed to adduce
evidence in his behalf. However, the Republic must still abide by the
principles of due process which require that there be preponderant
evidence of Disini’s acquisition of ill-gotten wealth. Hence, the
Republic carries the heavy burden of proof and must discharge such
burden satisfactorily; otherwise, the action would fail.

Applying said principle, the factual circumstances established by the
Republic through testimonial evidence are sufficient and convincing
enough to prove that Disini received substantial commissions from
Westinghouse and B&R in relation to the BNPP project despite lack of
documentary proof of his receipt thereof. It bears noting that these
commissions were ill-gotten wealth acquired by Disini through illegal or
clever means to disguise and hide the illicit nature of its
acquisition.

Hence, original copies of documentary evidence showing actual receipt
by Disini of these commissions would surely be arduous, if not
impossible, to retrieve. In fact, Jacob affirmed that these commissions
were not even recorded in Herdis’ company books which means that Disini
intended to conceal receipt of these commissions to avoid any trace of
his illegal involvement with the BNPP project by leaving no proof of
receipt thereof by Herdis.

The narrations of Vergara and Jacob which duly established the
existence of the Westinghouse and B&R contracts and their
corresponding commission agreements, and the transfer of these
commissions to Disini’s overseas bank accounts, convince this Court that
Disini indeed received substantial commissions constituting ill-gotten
wealth. In addition, the testimonies and sworn affidavits of Vergara and
Jacob, as President of All and Herdis, respectively, deserve greater
consideration since they had the opportunity to personally witness these
factual circumstances because of their respective positions in the
companies owned by Disini.

Also, the corroborative testimonies of Vergara and Jacob are worthy
of belief as they are neither improbable nor impossible. Both Vergara
and Jacob have no reason to lie and would gain no benefit from doing so.
As witnesses who have sworn under oath, they may be held liable for
perjury for giving false statements or failing to comply with the order
to testify or provide information.^[114]

Further, their act of testifying for the Republic is specifically
enjoined by Executive Order No. 2 which requires all persons holding
assets or properties in their names as nominees, agents or trustees, to
make full disclosure of the same to the Republic. Indeed, Jacob’s own
admission that he was made a signatory to Disini’s overseas bank
accounts and Philippine fiduciary deposit unit account is a duty
required under the law. Consequently, Vergara and Jacob were obliged to
fully disclose these illegal contracts and their participation thereto.
Hence, there is no reason to doubt their testimonies and sworn
affidavits. They are straightforward, candid, and in some respect,
supported by their own admissions against interest.

Contrary to Disini’s contention, the lack of a definite amount in
Vergara’s and Jacob’s testimonies, except the statement that Disini
received 3% and 10% of Westinghouse’s and B&R’s total contract
price, respectively, does not refute or negate the operative fact of
Disini’s acquisition of ill-gotten wealth through concealment of his
commissions behind the facade of Herdis and its subsidiaries. In fine,
We find that the Republic has duly proved by preponderance of evidence
that Disini acquired ill-gotten wealth in the form of commissions from
Westinghouse and B&R by acting as their SSR for the BNPP project.

In ruling for the Republic, the Sandiganbayan relied on Yuchengco v. Sandiganbayan (Yuchengco)^[115]
when it held that the affidavits of Manahan, Vergara and Jacob are
sufficient to hold Disini liable to reconvey ill-gotten wealth, i.e. U$50,562,500.00, even without documentary proof. In the assailed Decision, the Sandiganbayan stated:

As in Yuchengco, this Court chooses to place its
belief on the testimonies of Jacob, Vergara and Manahan because of
their credibility and the inherent corroborative nature of their
testimonies. There is not a
shred of evidence to controvert their statements, not only because
defendants were declared in default, but also because there is no reason
to doubt their credibility. These witnesses occupied very special loci
of trust and confidence within the Disini circle, and also observed from
a privileged point of view the dealings with Marcos, and vice versa.
Their affidavits were sworn to and also affirmed through their
testimonies before the Court. There is no doubt in Our mind that their
statements should be given utmost weight. The testimonial
evidence presented by the plaintiff remained unrebutted and
uncontradicted and therefore, amounts to preponderant evidence. ^[116] (Emphasis supplied)

In Yuchengco, this Court gave credence to the testimonial
evidence offered by the Republic even if almost all documents it offered
were mere photocopies. The issue in Yuchengco centered on the recovery
of the Marcoses’ shares of stock in the Philippine Telecommunications
Investment Corporation (PTIC): 76,779 shares in the name of Ramon U.
Cojuangco, 21,525 shares in the name of Imelda O. Cojuangco, and 111,415
shares in the name of Prime Holdings Incorporated (PHI).^[117]

Consequently, as to the true owner of PHI, Witness Jose Yao Campos’
(Campos) testimony was categorical when he declared that in all of the
corporations he organized, the certificates indorsed in blank or deed of
trust or assignment in favor of an unnamed beneficiary were delivered
to President Marcos. Even without presenting these deeds of trust or
assignment, his testimony proved the existence and the delivery thereof
to President Marcos. His testimony, therefore, supported the Republic’s
contention that PHI was a dummy corporation for President Marcos.^[118]

Here, the Republic offered the affidavits of Vergara and Jacob to
prove that Disini received substantial commissions from Westinghouse and
B&R. Similarly, their testimonies proved the existence of the
Westinghouse and B&R contracts and their respective commission agreements and Disini ‘s receipt of these substantial commissions.

Moreover, in Yuchengco, Campos’ testimony was corroborated by
witness Rolando Gapud who testified that he did not own the 400 shares
of stock in Pill but only held it in trust for President Marcos. He also
affirmed, based on his personal knowledge, that the certificates
indorsed in blank deed of trust or assignment were delivered to
President Marcos. Another witness, Francisco de Guzman, confirmed that
Campos organized PHI with his associates and that they held their shares
as mere nominees. Thus, the issue of who owned PHI was well-supported
by the testimonies of Campos, Gapud and de Guzman even without the
purported deeds of assignment.^[119]

In the present case, Vergara’s sworn affidavits corroborated that of
Jacob. Vergara testified as to the negotiation of, contracts by Disini
with Westinghouse and B&R as well as the existence of these
contracts and commission agreements. These facts were confirmed by Jacob
when he categorically admitted his participation in the transfer of
these commissions to Disini’s overseas bank accounts as per the existing
commission agreements of Herdis and TCI with Westinghouse and B&R,
respectively. Both witnesses also declared that Herdis and TCI did not
render any service for the BNPP project that would justify the payment
of these commissions. Clearly, the commissions were paid for the service
of Disini as Westinghouse and B&R’s SSR to President Marcos.

However, unlike in Yuchengco where the specific shares of
Marcos’ dummy corporations were identified and undisputed, here the
amount of commissions received by Disini is being contested. The
Republic’s witnesses did not specifically quantify the amount of
commissions but referred to certain documents which were not only mere
photocopies but were also not properly authenticated. Hence, these
documents are inadmissible and have no probative value.

Also, Vergara and Jacob’s testimony that Disini was paid 3% and 10%
of the Westinghouse and B&R contracts as commissions clearly
warrants the review of the terms of the contract which is covered by the
Best Evidence Rule. Hence, We cannot give credit to these declarations
without violating a basic evidentiary rule.

While it is true that Yuchengco was not intended as a
precedent with respect to giving weight and credence to testimonial
evidence despite lack of documentary proof in future cases involving
actions for recovery of ill-gotten wealth, Yuchengco did not state nor
in any way imply, that testimonial evidence is superior over documentary
evidence and sufficient to establish proof of ill-gotten wealth.

What the ruling in Yuchengco teaches is that testimonial
evidence when credible, categorical and corroborated is given credence
and weight to prove acquisition of ill-gotten wealth. This is not a
justification, however, for any party to merely submit photocopies of
documents without properly authenticating the same in violation of
evidentiary rules and confidently expect its claims to be granted based
on testimonial evidence, especially when the contents of a documentary
evidence are put in issue and necessary for adjudication on the merits.

Nonetheless, We ruled in Republic v. Spouses Gimenez^[120]
that the court may consider testimonial evidence and exhibits offered
as part of the witnesses’ testimonies in an action for acquisition of
ill-gotten wealth, thus:

Notably, the Sandiganbayan’s evaluation of the evidence presented by

petitioner was cursory. main reason for granting the Motion to Dismiss
on Demurrer to Evidence was that there was no evidence to consider due
to petitioner’s failure to file its Formal Offer of Evidence. It brushed
off the totality of evidence on which petitioner built its case.

Even assuming that no documentary evidence was properly
offered, this court finds it clear from the second assailed Resolution
that the Sandiganbayan did not even consider other evidence presented by petitioner during the 19 years of trial. The Sandiganbavan
erred in ignoring petitioner’s testimonial evidence without any basis
or justification. Numerous exhibits were offered as part of the
testimonies of petitioner’s witnesses.

Petitioner presented both testimonial and documentary evidence that
tended to establish a presumption that respondents acquired ill-­gotten
wealth during respondent Fe Roa Gimenez’s incumbency as public officer
and which total amount or value was manifestly out of proportion to her
and her husband’s salaries and to their other lawful income or
properties.^[121] (Emphasis supplied)

While We recognize that the defendant’s right to due process of law
must always be protected and upheld, We also acknowledge the Republic’s
tedious job, through the PCGG, in gathering evidence of ill-gotten
wealth which is mostly cleverly concealed and not easily apparent and
accessible given the nature of its illegality. We cannot just ignore the
credible, candid and corroborated testimonial evidence on the pretext
of lack of documentary evidence. Neither should We place superiority on
the documentary evidence over the sworn testimonies of witnesses and vice versa.
All admissible evidence should be weighed, considered and scrutinized
by the court for and/or against parties to arrive at a judgment taking
into consideration the quantum of evidence required.

Hence, We affirm the Sandiganbayan‘ s ruling that Disini
acquired ill-­gotten wealth by receiving substantial commissions from
Westinghouse and B&R in connection with the BNPP project by giving
credence to Jacob and Vergara’s testimonial evidence and the exhibits
offered as part of their testimonies which are credible, categorical and
corroborative. However, We cannot subscribe to the Sandiganbayan‘s conclusion that Disini is liable to reconvey the amount of $50,562,500.00.          

No sufficient proof of the amount of $50,562,500.00:

To prove the amount of the total commissions received by Disini, the
best evidence would be the Westinghouse and B&R contracts and their
corresponding commission agreements, especially considering the
Republic’s claim that the commissions received by Disini were based on
3% and 10% of the total contract price of the Westinghouse and B&R
contracts, respectively, which clearly requires an inquiry into the
specific terms and contents of the contracts. However, the Republic
offered no justification as to their non-­presentation thereof. As to the
secondary evidence, i.e. Exhibit E-9 and the affidavits of
Manahan, Vergara and Jacob, the Republic offered no explanation why they
should fall under any of the exceptions to the Best Evidence Rule.

The Sandiganbayan nevertheless accorded great weight to
Exhibit E-9 or a tabulation of commissions allegedly typewritten on
Disini’s stationery, which was attached to Manahan’s affidavit, to
arrive at the amount of 50,562,500.00. We reproduce Exhibit E-9 below.^[122]

(see image p. 39)

Patently, Exhibit E-9 is a certified xerox copy. The Republic intends
to prove the total amount of Commissions received by Disini by
presenting his typewritten tabulation of commissions on his stationery.
However, under the Best Evidence Rule, when the subject of inquiry is
the content of a document, no evidence shall be admissible other than
the original document itself subject to certain exceptions. Here; the
Republic failed to offer any plausible reason or justification why it
presented a mere photocopy instead of the original.

Mere attestation by the affiant that he saw the original copies of
the documents and that the photocopies are faithful reproductions of the
original will not suffice without the Republic offering proof that the
presentation of the secondary evidence is within the exceptions
contemplated under Section 5, Rule 130 of the Rules of Court. Absent such
justification, the certified xerox copy of Exhibit E-9 attached to
Manahan’s affidavits cannot be given any evidentiary value for the
purpose for which it was offered, i.e., to establish the amount of commissions received by Disini.

Further, in offering documents as evidence before the court, such are
classified as either public or private. Rule 132, Section 19 of the
Rules of Court provides:

SEC. 19. Classes of Documents. — For the purpose of their presentation in evidence, documents are either public or private.

Public documents are:

(a) The written official acts, or records of the official acts of the
sovereign authority, official bodies and tribunals, and public
officers, whether of the Philippines, or of a foreign country;

(b) Documents acknowledge before a notary public except last wills and testaments; and

(c) Public records, kept in the Philippines, of private documents required by law to be entered therein.

All other writings are private.

The importance of classifying documents into public or private is explained in Patula v. People,^[123] to wit:

The nature of documents as either public or private
determines how the documents may be presented as evidence in court. A
public document, by virtue of its official or sovereign character, or
because it has been acknowledged before a notary public (except a
notarial will) or a competent public official with the formalities
required by law, or because it is a public record of a private writing
authorized by law, is self-authenticating and requires no further authentication in order to be presented as evidence in court.
In contrast, a private document is any other writing, deed, or instrument executed by a private person without the intervention of a
notary or other person legally authorized by which some disposition or
agreement is proved or set forth. Lacking the official or sovereign
character of a public document, or the solemnities prescribed by law, a
private document requires authentication in the manner allowed by law or
the Rules of Court before its acceptance as evidence in court.^[124]

Whether a document is public or private is relevant in determining
its admissibility as evidence. Public documents are admissible in
evidence even without further proof of their due execution and
genuineness. On the other hand, private documents are inadmissible in
evidence unless they are properly authenticated.^[125] Clearly, Exhibit E-9 is a private document, thus it must be properly authenticated to be admissible and given probative value.

Admissibility is different from probative value:

Disini assails both the admissibility and probative value of Exhibit E-9. He claims that the Sandiganbayan violated the rule on authentication of documents under Section 20 of Rule 132^[126] when it admitted and relied on Exhibit E-9.^[127]

“[A]dmissibility of evidence should not be confused with its
probative value. Admissibility refers to the question of whether certain
pieces of evidence are to be considered at all, while probative value
refers to the question of whether the admitted evidence proves an
issue.”^[128] “Thus, a
particular evidence may be admissible, but its evidentiary weight
depends on judicial evaluation within the guidelines provided by the
rules of evidence.”^[129]

Evidence is admissible when it is relevant to the issue and is not excluded by the law or the rules on evidence.^[130] Before any private
document offered as authentic, such as Exhibit E-9, is received in
evidence, its due execution and authenticity must be proved by anyone
who saw the document executed or written, or by evidence of the
genuineness of the signature or handwriting of the maker.^[131]
“During authentication in court, a witness positively testifies that a
document presented as evidence is genuine and has been duly executed or
that the document is neither spurious nor counterfeit nor executed by
mistake or under duress.”^[132]

Disini argues that sine Exhibit E-9 was not authenticated, it should not have been admitted by the Sandiganbayan.^[133]          

Exhibit E-9 was not authenticated:

A review of the records shows that Exhibit E-9 was indeed not
authenticated. Its due execution and genuineness were not proved by the
Republic in accordance with Section 20 of Rule 131.

Notably, during the presentation of Manahan, he only authenticated
his affidavit, and not Exhibit E-9. The transcript of stenographic notes
taken during his presentation reflect as much:

Q	Do you recall having executed on January 26, 1989 an Affidavit which we have previously marked as Exhibit “E”, consisting of twelve pages, and which was subscribed and sworn to before Notary Public Estella’ Regina Q. Bernad, which annexes were marked as Exhibits “E-1” to “E-11”?
A	Yes, Ma’am.
Q	I am showing you this Exhibit “E” entitled Affidavit dated January 26, 1989 together with all its annexes. What is the relation of this document to the one that you mentioned?
A	It is the same, Ma’am.
Q	Do you confirm that you affixed your signature on the bottom portion on each and every page of this Affidavit and above the typewritten name Angelo V. Manahan found on page eleven of the said Affidavit?
A	Yes, Ma’am.
	x x x x
Q	Mr. Manahan, do you affirm the truthfulness of your statement in the said affidavit, and do you understand fully its contents and the annexes described as Exhibits “E-1” to “E-11”?
A	Yes, Ma’am.[134] (Emphasis supplied)

The only testimony on Exhibit E-9 was the one provided by Manahan in his affidavit:

16. Exhibit 9 (Document 00727) is a one-page tabulation of nuclear power plant commissions, typed in Mr. Disini’s stationery.
Although I was HGI’s chief financial officer, I was not informed of the
details of the arrangement under which HGI [received] commissions from
Westinghouse Electric Corporation (“Westinghouse”) in connection with
the Philippine Nuclear Power Plant (“PNPP”). Anything that related to
BNPP was treated as secret by Mr. Disini and his close advisors. The
Westinghouse commission payments were handled by Mr. Jerry Orlina, who
was Mr. Disini’s personal finance officer. The Westinghouse commission
payments were never received by HGI in the Philippines, and my
understanding is that they were paid directly into foreign bank
accounts. The funds from the commissions never entered HGI’s treasury.^[135] (Emphasis supplied)

Such one-sentence description does not suffice to authenticate the
document. There was no statement that Exhibit E-9 was genuine and had
been duly executed or that it was neither spurious nor counterfeit, or
executed by mistake or under duress.

Notably, the Sandiganbayan stated in the assailed Decision that Exhibit E-9 was only admitted as part of Manahan’s testimony:^[136]

This Court resolved plaintiffs Formal Offer of Evidence in the following manner:

To ADMIT the affidavits marked as Exhibits A, B, C, D, E, XX,
YY, ZZ and their sub-markings in so far as they were testified on by
witnesses Rodolfo Jacob, Jesus Vergara, Angelo Manahan and Rafael Sison, the affiants in the said affidavits.

x x x x

The documentary evidence presented by the plaintiff were only admitted as part of the testimony of the witnesses.
Therefore, these pieces of evidence do not have independent status. Its
probative force depends entirely on the credibility of the testimony of
the witness who identified the documents. Nevertheless, the contents of
the document will be considered part of the narration of the witness.^[137] (Emphases supplied)

A document admitted as part of the testimony of a witness does not constitute proof of the facts stated therein.^[138]
It merely forms part of the testimony of the witness and does not have
an independent status. Its probative force depends entirely on the
credibility of the testimony of which it is a part of.^[139]

Thus, when the Sandiganbayan admitted Exhibit E-9 as part of
Manahan’s testimony, it ws not supposed to consider Exhibit E-9 as proof
of the fact stated therein, i.e., the amount of commissions. The
Anti-Graft Tribunal was supposed to treat Exhibit E-9 only as part of
Manahan’s testimony. Contrary to its express statement, the Sandiganbayan actually relied on Exhibit E-9 to determine the amount of commissions.

In the assailed Decision, the Sandiganbayan found that the
total amount of commissions received by Disini in connection with the
BNPP project supposedly amounted to $50,562,500.00:

According to the testimonies of Manahan and Vergara, Westinghouse
agreed to pay a commission of 5% of the total contract amount. Asia
Industries was entitled to get a commission of ½% of the value of the
Westinghouse components sold on the nuclear project. Herdis Management
and Investment Corporation were entitled to a 3% transaction, as
commission. Technosphere Consultants, Inc. (sic) a Herdis company,
supposedly obtained a 10% commission from Burns & Roe because of
Disini’s involvement. According to Vergara, the project cost was as much
as $600 million, and basing on Jacob’s testimony, these commissions
were deposited in the Swiss bank accounts in the name of Disini and his
immediate family. It appears, however, that the amounts deposited in the
Swiss bank accounts in the names of Liliana and Herminia Angel Disini
were already withdrawn as a consequence of the Swiss Federal Court’s
Partial Decision dated August 18, 2006 unblocking the same. This makes
the issue of the Swiss accounts being held in custodia legis moot and academic. Disini’s own summary of the total commissions generated by this transaction amounting to $50,562,500.00 is as follows: ^[140] (Emphasis supplied)

I. W Commission ($715 m) Project# 1 $10,725,000 8,837,500 ————— $19,562,500 II. B & R Commission Technosphere 5% of $40 million $2M HD 1M ———— $3M III. PCI Gross Fee $20M Cost of Expense 12M ———— $8M IV. W Margin Project 1 and 2 $20M[141]

Significantly, the amount of $50,562,500.00 does not appear in any of
the pleadings filed by the parties or in the witnesses’ testimonies. It
appeared for the first time in the assailed Decision. The Sandiganbayan explained that such amount was arrived at after adding items I to IV bf Exhibit E-9. By adding items I to IV, the Sandiganbayan clearly relied on Exhibit E-9 to determine the amount of commissions received by Disini.          

The Sandiganbayan etred in relying on Exhibit E-9:

Since Exhibit E-9 was unauthenticated, and thus inadmissible in evidence as proof of the fact stated therein, the Sandiganbayan
should not have relied thereon in determining the exact amount of
commissions received by Disini. By doing so, it relied on a documentary
evidence whose due execution and genuineness were not established.

In addition, We also doubt the use of Exhibit E-9 in the
determination of the amount of the commissions received by Disini for
the following reasons:

First, Exhibit E-9 is patently vague. It lacks significant
details such as the date of writing and the author. It uses acronyms
which meanings were not explained by Manahan nor the Republic. Again,
the only statement provided by Manahan, i.e., “16. Exhibit 9
(Document 00727) is a one-page tabulation of nuclear power plant
commissions, typed in Mr. Disini’s stationery,” reveals no details as to
its source nor ownership.

Second, when the Sandiganbayan reproduced Exhibit E-9
in the assailed Decision, it omitted the phrase “1/3 Share” amounting to
“$2.67”. It did not explain why the omission was made.

Third there is evident disparity between the amount indicated
in Exhibit E-9 as the Westinghouse commission, compared to the amount
cited by the Sandiganbayan in its assailed Decision:

According to the testimonies of Manahan and Vergara, Westinghouse agreed to pay a commission of 5% of the total contract amount.
Asia Industries was entitled to get a commission of 1/2% of the value
of the Westinghouse components sold on the nuclear project. Herdis
Management and Investment Corporation, were entitled to a 3%
transaction, as commission. Technosphere Consultants, Inc. (sic) a
Herdis company, supposedly obtained a 10% commission from Burns &
Roe because of Disini’s involvement. According to Vergara, the project cost was as much as $600 million,
and basing on Jacob’s testimony, these commissions were deposited in
the Swiss bank accounts in the name of Disini and his immediate family. x
x x ^[142] (Emphases supplied)

Certainly, 5% of the $600,000,000.00, i.e. US$30,000.00, is
substantially far from the amount of $19,562,500.00 indicated in Exhibit
E-9 as the “W Commission”, assuming “W” refers to Westinghouse. Indeed,
the Sandiganbayan erred when it relied on Exhibit E-9 in arriving at the amount of $50,562,500.00.          

Criminal Cases Nos. 28001-02:

To further assail Exhibit E-9, Disini points to the existence of
Manahan’s deposition in Criminal Case Nos. 28001-02, where he allegedly
disowned knowledge of Exhibit E-9.^[143] Disini cites the following stenographic notes taken during Manahan’s deposition:

Q:	Thank you. Is it your intention Mr. Manahan to specify that Exhibit “9” is an authentic and accurate tabulation?
A:	I cannot say so because I did not see the originals, Sir.
Q:	And neither did you have any participation in its preparation.
A:	No, Sir, I did not have any participation in its preparation.
	x x x
Q:	May I refer you to Exhibit “9” Mr. Manahan, of your Affidavit, which according to your affidavit, is one-page tabulation of nuclear power plant commissions, typed in Mr. Disini’s stationery. My question to you Mr. Manahan is, did you have any participation in preparing this tabulation?
A:	No, Sir.
Q:	When for the first time did you see Exhibit”9″
A:	When it was shown to me by the PCGG, Sir.[144] (Emphases supplied)

In response, the Republic argues that Disini is barred from invoking
the deposition considering that he was already declared in default.^[145] As a consequence of the default order, Disini had lost his standing in court and can no longer present his own evidence.^[146]

We agree with the Republic.          

A party in default may not present its own evidence:

“A party in default loses [its] right to present evidence, control the proceedings, and examine or cross-examine witnesses.”^[147]
Such party has “no right to expect that [its] pleadings would be acted
upon by the court nor may be object to or refute evidence or motions
filed against [it].”^[148]

However, while a party in default loses the right to present
evidence, it retains the right to appeal as part of the remedies
available to a party in default.^[149] The grounds that may be raised in such an appeal are restricted to any of the following:

Indeed, a defending party declared in default retains the
right to appeal from the judgment by default. However, the grounds that
may be raised in such an appeal are restricted to any of the following: first,
the failure of the plaintiff to prove the material allegations of the
complaint; second, the decision is contrary to law; and third, the
amount of judgment is excessive or different in kind from that prayed
for. x x x^[150] (Emphasis supplied)

A party in default is precluded from raising any other ground in its
appeal from the judgment by default since, otherwise, it would then be
allowed to adduce evidence in its defense, which right it had lost after
it was declared in default.^[151]

Here, when Disini was declared in default, he lost his right to
present evidence. While he retained his right to appeal, which he
exercised when he filed the Petition, he was proscribed from pleading
the existence of the deposition in Criminal Case Nos. 28001-02. Thus, we
do not find any error with the Sandiganbayan‘s refusal to consider Manahan’s deposition in Criminal Case Nos. 28001-02.

In the same vein, We reject Disini’s invocation of the ICA award
dated December 19, 1991 and the NJDC decision dated July 15, 1993, which
supposedly cleared him of bribery charges in relation to the
Westinghouse and B&R contracts. By introducing these new matters,
Disini is effectively adducing evidence in his defense, which right he
had lost after he was declared in default.

Nevertheless, it should be noted that while a party in default loses
its right to present evidence, the court is still supposed to protect
its right by rendering judgment in accordance with the evidence required
by law.^[152] It may not admit nor rely on incompetent evidence:^[153]

While it may be said that by defaulting, the defendant leaves himself at the mercy of the court, the
rules nevertheless see to it that any judgment against him must be in
accordance with the evidence required by law. The evidence of the
plaintiff, presented in the defendant’s absence, cannot be admitted if
it is basically incompetent. Although the defendant would not be
in a position to object, elementary justice requires that only legal
evidence should be considered against him. If the same should prove
insufficient to justify a judgment for the plaintiff, the complaint must
be dismissed. And if a favorable judgment is justifiable, it cannot
exceed in amount or be different in kind from what is prayed for in the
complaint.^[154] (Emphasis supplied)

This is why We overturn the Sandiganbayan‘s reliance on Exhibit
E-9, which is inadmissible in evidence to determine the amount of
commissions received by Disini for being unauthenticated and in
violation of the Best Evidence Rule. Nonetheless, We recognize that the
Republic preponderantly proved that Disini indeed received substantial
commissions and thus, it is entitled to recover even without a definite
proof of its total amount. In lieu thereof, We grant Republic’s claim
for temperate and exemplary damages.
           

Republic is entitled to temperate and exemplary damages:

The Republic, in its Amended Complaint,^[155] claimed actual, moral, nominal and exemplary damages, to wit:

19. Fifth Cause of Action LIABILITY FOR DAMAGES – (a) By
reason of the unlawful acts set forth above, Plaintiff and the Filipino
people have suffered actual damages in an amount representing the
pecuniary loss sustained by the latter as a result of Defendants’
Unlawful acts, the approximate value and interest on which, from the
time of their wrongful acquisition, plus expenses which Plaintiff has been
compelled to in4ur and shall continue to incur in its effort to recover
Defendants’ ill-gotten wealth all over the world. Defendants are,
therefore, jointly and severally liable to Plaintiff for actual damages
and for expenses incurred in the recovery of Defendants’ ill-gotten
wealth.

(b) As a result of Defendants’ unlawful, malicious, immoral and
wanton acts described above, Plaintiff and the Filipino people had
painfully endured and suffered for more than twenty long years, and
still continue to endure and suffer anguish, fright, sleepless nights,
serious anxiety, wounded feelings and moral shock, as well as besmirched
reputation and social humiliation before the international community,
for which Defendants are jointly and severally liable to Plaintiff and
the Filipino people for moral damages.

(c) In addition, Plaintiff and the Filipino people are entitled to
temperate damages for their sufferings which, by their very nature, are
incapable of pecuniary estimation, but which this Honorable Court may
determine in the exercise of its sound discretion;

(d) Defendants, by reason of the above described unlawful acts, have
violated and invaded the inalienable right of Plaintiff and the
Filipino people to a fair and decent way of life befitting a Nation with
rich natural and human resources. This basic and fundamental right of
Plaintiff and the Filipino people should be recognized and vindicated by
awarding nominal damages in an amount to be determined by the Honorable
Court in the exercise of its sound discretion.

(e) By way of example and correction for the public good and in order
to ensure that Defendants’ unlawful, malicious, immoral and wanton acts
are not repeated, said Defendants are jointly and severally liable to
Plaintiff for exemplary damages.^[156]

Despite the failure of the Republic to prove the total amount of
commissions received by Disini, the Court fully recognizes its right to
recover the ill-gotten wealth. Disini is not at all entitled to these
commissions as he illegally acquired them through the use of his
influence and close relationship with President Marcos without rendering
any service for the benefit of the Republic’s BNPP project.

Evidently, Disini unjustly enriched himself by receiving substantial
commissions from Westinghouse and B&R and acting as the SSR in order
to ensure the award of the BP project to the said companies by taking
undue advantage of his close relationship with President Marcos. Article
22 of the Civil Code provides that “[e]very person who through an
act or performance by another, or any other means, acquires or comes
into possession of something at the expense of the latter without just
or legal ground, shall return the same to him.”

There is unjust enrichment when a person unjustly retains a benefit
to the loss of another, or when a person retains money or property of
another against the fundamental principals of justice, equity and good
conscience. The principle of unjust enrichment essentially contemplates
payment when there is no duty to pay, and the person who receives the
payment has no right to receive it.^[157]

We further elucidated on the concept of enrichment in University of the Philippines v. PHILAB Industries, Inc.:^[158]

Unjust enrichment is a term used to depict result or
effect of failure to make remuneration of or for property or benefits
received under circumstances that give rise to legal or equitable
obligation to account for them; to be entitled to remuneration, one must
confer benefit by mistake, fraud, coercion, or request. Unjust
enrichment is not itself a theory of reconvey. Rather, it is a
prerequisite for the enforcement of the doctrine of restitution.^[159]

Also, in Reyes v. Lim,^[160]
the court may, in the exercise of equity jurisdiction, make a ruling
despite the “silence, obscurity or insufficiency of the laws,” thus:

The instant case, however, is precisely one where there is a hiatus in the law and in the Rules of Court. If left alone, the hiatus
will result in unjust enrichment to Reyes at the expense of Lim. The
hiatus may also imperil restitution, which is a precondition to the
rescission of the Contract to Sell that Reyes himself seeks. This is not
a case of equity overruling a positive provision of law or judicial
rule for there is none that governs this particular case. This is a case
of silence or insufficiency of the law and the Rules of Court. In
this case, Article 9 of the Civil Code expressly mandates the courts to
make a ruling despite the “silence, obscurity or insufficiency of the
laws.” This calls for the application of equity, which “fills the open
spaces in the law.”

Thus, the trial court in the exercise of its equity jurisdiction may
validly order the deposit of the P10 million down payment in court. The
purpose of the exercise of equity jurisdiction in this case is to
prevent unjust enrichment and to ensure restitution. Equity jurisdiction
aims to do complete justice in cases where a court of law is unable to
adapt its judgments to the special circumstances of a case because of
the inflexibility of its statutory or legal jurisdiction. Equity is the
principle by which substantial justice may be attained in cases where
the prescribed or customary forms of ordinary law are inadequate.^[161] (Emphasis supplied.)

In fine, the Republic’s failure to particularly prove the actual
amount of commissions received by Disini should not override its right
to recover the illegally-acquired commissions considering the fact that
it has satisfactorily established, by preponderance of evidence,
Disini’s receipt thereof. Necessarily, public funds were released for
the construction of the BNPP project. Disini indirectly amassed a
portion of these public funds through commissions paid by Westinghouse
and B&R. These commissions or “kickbacks” are not only illegal or
fraudulent but detrimental to the Republic and highly unfair and
prejudicial to ordinary Filipino taxpayers.

However, actual damages to be recoverable must be supported by
evidence on record and cannot be left merely to the discretion of the
court. While We affirm the Republic’s entitlement to recover Disini’s
ill-gotten wealth, no other evidence was presented to show the definite
amount thereof. The Republic failed to substantiate its claim for actual
pecuniary loss or damages sustained by reason of Disini’s acquisition of
ill-gotten wealth.

While it is true that the Republic failed to prove the amount of
commissions received, this does not mean, however, that Disini is free
from any liability under this civil action for reconveyance, reversion,
accounting, restitution and damages. Thus, under the principle of unjust
enrichment, We uphold the Republic’s right to recover these commissions
in favor of the Filipino people. No one should unjustly enrich himself
by receiving commissions in connection with a government project when
clearly he has no right for it nor entitled to retain the same.

Nonetheless, since recovery thereof cannot be effected due to the
absence of a definite amount, We deem it proper to award the Republic
temperate damages for the pecuniary loss and the Filipino people
suffered on account of Disini’s illegal acquisitions of substantial
commissions from Westinghouse and B&R, albeit the amount thereof not
being proven with certainty. Under Article 2224 of the Civil Code,
temperate or moderate damages, which are more than nominal but less than
compensatory damages, may be recovered when the court finds that some
pecuniary loss has been suffered but its amount cannot, from the nature
of: the case, be determined with certainty. In Araneta v. Bank of America,^[162] the concept of temperate damages is explained thus:

The Code commission, in explaining the concept of temperate damages under Article 2224, makes the following comment:

“In some States of the American Union, temperate d ages are allowed. There
are cases where from the nature of the case, definite proof of
pecuniary loss cannot be offered although the court is convinced that
there has been such loss. For instance, injury to one’s
commercial credit or to the goodwill of a business firm is often hard to
show with certainty in terms of money. Should damages be denied for
that reason? The judge should be empowered to calculate moderate damages
in such cases, rather than that the plaintiff should suffer, without
redress from the defendant’s wrongful act.”^[163] (Emphasis supplied)

In Seven Brothers Shipping Corp. v. DMC-Construction Resources, Inc.,^[164]
the Court enumerated the cases where temperate damages were rightly
granted and awarded when proof of the actual amount was not duly proved,
to wit:

In contrast, under Article 2224, temperate or moderate
damages may be recovered when the court finds that some pecuniary loss
has been suffered but its amount cannot, from the nature of the case, be
provided with certainty. This principle was thoroughly explained in Araneta v. Bank of America, which cited the Code Commission, to wit:

The Code Commission, in explaining the concept of temperate damages under Article 2224, makes the following comment:

In some States of the American Union, temperate damages are
allowed. There are cases where from the nature of the case, definite
proof of pecuniary loss cannot be offered, although the court is
convinced that there has been such loss. For instance, injury to one’s
commercial credit or to the goodwill of a business firm is often hard to
show with certainty in terms of money. Should damages be denied for
that reason? The judge should be empowered to calculate moderate damages
in such cases, rather than that the plaintiff should suffer, without
redress from the defendant’s wrongful act.

Thus, in Tan v. OMC Carriers, Inc., temperate damages were
rightly awarded because plaintiff suffered a loss, although definitive
proof of its amount cannot be presented as the photographs produced as
evidence were deemed insufficient. Established in that case, however,
was the fact that respondent’s truck was responsible for the damage to
petitioner’s property and that petitioner suffered some form of
pecuniary loss. In Canada v. All Commodities Marketing Corporation,
temperate damages were also awarded wherein respondent’s goods did not
reach the Pepsi Cola Plant at Muntinlupa City as a result of the
negligence of petitioner in conducting its trucking and hauling
services, even if the amount of the pecuniary loss had not been proven.
In Philtranco Services Enterprises, Inc. v. Paras, the respondent
was likewise awarded temperate damages in an action for breach of
contract of carriage, even if his medical expenses had not been
established with certainty. In People v. Briones, in which the
accused was found guilty of murder, temperate damages were given even if
the funeral expenses for the victim had not been sufficiently proven.^[165] (Citations omitted)

Here, the Republic is entitled to recover temperate damages as there
is no doubt that Disini trampled on the rights of the Filipino people to
benefit from, and make good use of, these ill-gotten wealth, i.e.,
substantial commissions or kickbacks he acquired; and that the whole
nation significantly suffered pecuniary loss due to Disini’s illegal
acquisition of these public funds.

In assessing the amount of such damages, Article 2216 of the Civil Code provides:

Art. 2216. No proof of pecuniary loss is necessary in order
that moral, nominal, temperate, liquidated or exemplary damages, may be
adjudicated. The assessment of such damages, except liquidated ones, is
left to the discretion of the court, according to the circumstances
of each case.

Considering the relevant circumstances of this case, the amount of
One Billion Pesos (P1,000,000,000.00) as temperate damages is reasonable
and justified. It bears stressing that this is not just an ordinary
civil action for recovery of property and damages. This is an action
for recovery of ill-gotten wealth which is imbued ·with public interest
and concerns not only the government but every Filipino citizen, then
and now. As part of the healing process of this nation, the Freedom
Constitution specifically mandates the President to prioritize the
recovery of these ill-gotten wealth. Hence, the loss or injury suffered
by every Filipino due to Disini’s acquisition of ill-gotten wealth must
be duly recognized and compensated.

Further, We note that the Filipino people have not at all benefitted
from the BNPP as it has remained inoperable as of this writing, a
proverbial White Elephant. Obviously, a considerable amount of public
funds had been invested and allocated for the construction of the BNPP,
which funds came from the blood, sweat and tears of the Filipino
taxpayers. The ill-gotten wealth should have been used and spent or and
by the rightful owner thereof and not just by one person or a select
group of people in power.

Also, the Republic was unduly deprived of its rights over these
substantial commissions as part of public funds, and was compelled to
litigate for their recovery for more than three decades. We cannot
overemphasize that Disini received these ill-gotten wealth starting in
1976 when the construction of the BNPP began. Consequently, he had
profited immensely from these commissions for a significant portion of
his lifetime at the expense of the Filipinos.

Taking into consideration the inflation rate and the Philippine
Peso’s purchasing power at that time, these substantial commissions, if
recovered, would have been greatly valued now and could have been used
for the betterment of the Philippines. In addition, the Republic would
have been entitled to recover legal interest on the total amount of
commissions received had it proved such.

Undeniably, the recovery of these illegally acquired public funds,
properties and assets has great impact on every Filipino’s life. Hence,
the award of One Billion Pesos (P1,000,000,000.00) temperate damages is
reasonable under the circumstances taking into consideration the rights
of all Filipino citizens encroached upon by Disini’s acquisition of
ill-gotten wealth and the damage caused to the Republic for its failure
to make good use of the same.

With the grant of temperate damages, this allows the imposition of
exemplary damages by way of example or correction for the public good.^[166] Exemplary damages cannot be recovered as a matter of right^[167] and are only considered when moral, temperate, liquidated or compensatory damages are granted.^[168]
“Exemplary damages are designed by our civil law to permit the courts
to reshape behavior that is socially deleterious in its consequence by
creating negative incentives or deterrents against such behavior.”^[169]
Its purpose is to serve as a deterrent to serious wrong doings and as a
vindication of undue sufferings and wanton invasion of the rights of an
injured or a punishment for those guilty of outrageous conduct.^[170]

There is no doubt that Disini’s receipt of thee substantial
commissions from Westinghouse and B&R is illegal and despicable
which is no less than abhorred by our Freedom Constitution as its
mandate includes eradication of graft and corruption, punishment of
those guilty thereof and recovery of ill­-gotten wealth. Verily, Disini’s
conduct should be corrected and deterred as his use of influence or
power for his own personal benefit to the detriment of the Republic
caused substantial injury not only to public funds but to the morale,
trust and confidence of Filipinos in the government and its projects.
Hence, this Court finds it reasonable under the circumstances to award
One Million Pesos (P1,000,000.00) as exemplary damages.

Nevertheless, the Republic is not entitled to nominal damages as it
is incompatible with the award of temperate damages. Nominal damages are
recoverable where a legal right is technically violated and must be
vindicated against an invasion that has produced no actual present loss
of any kind or where there has been a breach of contract but no
substantial injury or actual damages whatsoever have been or can be
shown.^[171] Clearly, Disini’s
illegal acquisition of substantial commissions from Westinghouse and
B&R produces injury or damage to the Republic which has been
deprived the use of these public funds in the interest of the Filipinos.

In the same manner, moral damages cannot be awarded in favor of the
Republic as it failed to convince this Court that it suffered any form
of physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock,
social-humiliation, or any other similar circumstance because of
Disini’s acquisition of ill-gotten wealth.^[172]

Finally, the monetary awards shall earn the legal interest at the rate of 6% per annum from the finality of this Decision until their satisfaction.^[173]

III

In summary, We find that the Sandiganbayan did not err in
finding Disini liable for the commissions he received from Westinghouse
and B&R in relation to the BNPP project. The Republic had
preponderantly proved the: (a) existence of the Westinghouse and B&R
commissions and their respective commission agreements; and (b)
Disini’s receipt thereof based on the testimonies of Jacob and Vergara.
However, the Sandiganbayan erred in relying on Exhibit E-9 to
determine the exact amount of commissions the Republic is entitled to
recover. Nonetheless, We deem it proper to grant the Republic: (a)
temperate damages in the amount of One Billion Pesos (P1,000,000,000.00)
to compensate for the Republic’s pecuniary loss by reason of Disini’s
acquisition of ill-gotten wealth; and (b) exemplary damages in the
amount of One Million Pesos (P1,000,000.00) to set an example and to
serve as a deterrent to socially deleterious actions, such as
acquisition of ill­-gotten wealth. The Court further validates the
express findings of the Sandiganbayan that former President
Ferdinand E. Marcos and former First Lady Imelda Romualdez-Marcos had no
participation whatsoever with regard to Disini’s illicit dealings in
the BNPP Project.

Lastly, We sternly remind Disini’s counsel of record, Bernas Law
Offices, to strictly observe court deadlines. The Petition was filed
almost two (2) months late.^[174]
On this ground alone, We could have already dismissed it, if not only
for the importance of the issues involved. But this case has
unfortunately gone on for too long; its definitive resolution is long
overdue. We therefore remind all the parties that any further perceived
attempt to delay its resolution shall not merit this Court’s liberality.

WHEREFORE, the Petition is GRANTED in PART. The assailed April 11, 2012 Decision and October 24, 2012 Resolution of the Sandiganbayan in Civil Case No. 0013 are hereby AFFIRMED with MODIFICATION. The order to account and reconvey $50,562,500.00 is DELETED for lack of basis. Instead, petitioner is DIRECTED to PAY
the Republic of the Philippines temperate damages in the amount of One
Billion Pesos (P1,000,000,000.00), and exemplary damages in the amount
of One Million Pesos (P1,000,000.00). These monetary awards shall earn
legal interest at the rate of 6% per annum from the finality of this Decision until their full satisfaction.

SO ORDERED.

Gesmundo, C.J., no part.
Perlas-Bernabe, Leonen, Caguioa, Carandang, Inting, Zalameda, Lopez, M. V., Delos Santos, Gaerlan, Rosario, and Lopez, J.Y., JJ., concur.
Lazaro-Javier, J., no part.

---

^[1] Rollo, Vol. I, pp. 32-73.

^[2] Id. at 75-126; penned
by Associate Justice Rafael R. Lagos and concurred in by Associate
Justices Efren N. De La Cruz and Rodolfo A. Ponferrada.

^[3] Id. at 128-136.

^[4] Id. at 125-126.

^[5] Id. at 136.

^[6] See id. at 75.

^[7] Id. at 35, 112-113.

^[8] Id. at 36.

^[9] Id. at 76. The
complaint was later on amended to implead Rafael Sison as co-defendant,
in his capacity as a director of the Development Bank of the
Philippines. He was, however, later on dropped from the case for being a
state witness, along with Rodolfo Jacob.

^[10] Id. at 358.

^[11] Id.

^[12] Id. at 90.

^[13] Id. at 77.

^[14] Id. at 79.

^[15] Id.

^[16] Records, Vol. IX, p. 492.

^[17] 635 Phil. 402 (2010).

^[18] Records, Vol. IX, pp. 192-233.

^[19] Id. at 240.

^[20] Id. at 916, 928.

^[21] Id. at 944.

^[22] Id. at 897.

^[23] Id.

^[24] Id. at 935.

^[25] Id. at 275.

^[26] Rollo, Vol. I, p. 125.

^[27] Id.

^[28] Id.

^[29] Records, Vol. IX, pp. 238-242, 283-288.

^[30] Rollo, Vol. I, p. 115.

^[31] Id. at 107.

^[32] Records, Vol. IX, pp. 896, 911.

^[33] Rollo, Vol. I, p. 117.

^[34] Id. at 122-123.

^[35] Id. at 109-110.

^[36] Id. at 405.

^[37] Id. at 118.

^[38] Id. at 124.

^[39] Id. at 267-315.

^[40] Id. at 136.

^[41] Id. at 124.

^[42] Id.

^[43] Rollo, Vol. II, pp. 668-670, 671-674.

^[44] Rollo, Vol. I, pp. 46-47.

^[45] Id. at 47-55.

^[46] Id.

^[47] Id.

^[48] Id. at 55-60.

^[49] Id. at 60-63.

^[50] Id. at 63-70.

^[51] Rollo, Vol. II, pp. 581-619.

^[52] Id. at 588-596.

^[53] Id.

^[54] Id. at 597.

^[55] Id. at 597-601.

^[56] Id. at 601-614.

^[57] Id. at 614-615.

^[58] Id. at 627-665.

^[59] Id. at 630-641.

^[60] Id. at 699-742, 750-827.

^[61] 1986 Provisional (Freedom) Constitution of the Philippines; Proclamation No. 3, February 28, 1986.

^[62] Section 1(d) of the Freedom Constitution.

^[63] Executive Order No. 1 (1986).

^[64] Executive Order No. 2 (1986).

^[65] Id.

^[66] Executive Order No. 14-A (1986).

^[67] Rollo, Vol. I, pp. 347-367.

^[68] Id.

^[69] PCGG Rules and Regulations Implementing Executive Orders Nos. 1 and 2 (1986).

^[70] 663 Phil. 212 (2011).

^[71] Id. at 298.

^[72] 234 Phil. 180 (1987).

^[73] 564 Phil. 426 (2007).

^[74] Id. at 443.

^[75] 360 Phil. 133 (1998).

^[76] Id. at 165.

^[77] Id.

^[78] RULES OF COURT, Rule 45, Sec. 1 provides:

Section 1. Filing of petition with Supreme Court. — A party desiring to appeal by certiorari
from a judgment or final order or resolution of the Court of Appeals,
the Sandiganbayan, the Regional Trial Court or other courts whenever
authorized by law, may file with the Supreme Court a verified petition
for review on certiorari. The petition shall raise only questions of law which must be distinctly set forth. (Emphasis supplied)

^[79] General Mariano Alvarez Services Cooperative, Inc. v. National Housing Authority, 753 Phil. 353, 359 (2015).

^[80] Id., citing Land Bank of the Philippines v. Yatco Agricultural Enterprises, 724 Phil. 276, 284-285 (2014).

^[81] Id.

^[82] Id.

^[83] Verdadero v. People, 782 Phil. 168, 176-177 (2016), citing Laborte v. Pagsanjan Tourism Consumers’ Cooperative, 724 Phil. 434, 447-448 (2014).

^[84] Rollo, Vol. I, pp. 46-47.

^[85] Heirs of Margarita Prodon v. Heirs of Maximo Alvarez and Valentina Clave, 717 Phil. 54, 66 (2013) citing Lempert and Saltzburg, A Modern Approach to Evidence, (American Casebook Series), Second Edition, 1982, p. 1007.

^[86] Id.

^[87] Id. at 66-67.

^[88] Id. at 67 citing McCormick on Evidence (Hornbook Series), Third Edition 1984, A§ 233, p. 707.

^[89] Records, Vol. IX, pp. 893-397.

^[90] Id.

^[91] Id. at 906-916.

^[92] Id. at 908-913.

^[93] Id. at 237-243.

^[94] Id. at 240.

^[95] Id. at 897.

^[96] Id. at 916.

^[97] Id. at 933-943.

^[98] Id. at 935-939.

^[99] Id. at 935.

^[100] Id.

^[101] Id. at 908-909.

^[102] Id. at 935-936.

^[103] Id. at 240-241.

^[104] Id. at 275-276.

^[105] Dizon v. Matti, Jr., G.R. No. 215614 (Resolution), March 27, 2019, 889 SCRA 1, 25.

^[106] Records, Vol. IX, pp. 237 238.

^[107] Rollo, Vol. I, pp. 119-120.

^[108] Section 3 of Executive Order No. 14-A (1986) provides:

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.

^[109] RULES OF COURT, Rule 133, Sec. 1.

^[110] Republic v. Reyes-Bakunawa, 716 Phil. 629, 642 (2013), citing Encinas v. National Bookstore, Inc., 485 Phil. 683, 695 (2004).

^[111] Id.

^[112] Id.

^[113] Id.

^[114] Section 4 of Executive Order No. 14-A (1986).

^[115] 515 Phil. 1 (2006).

^[116] Rollo, Vol. I, p. 115.

^[117] Yuchengco v. Sandiganbayan, supra note 115, p. 50.

^[118] Id. at 26-29.

^[119] Id. at 34-37.

^[120] 776 Phil. 233 (2016).

^[121] Id. at 275-276.

^[122] Records, Vol. 1, p. 405.

^[123] 685 Phil. 376 (2012).

^[124] Id. at 397.

^[125] Salas v. Sta. Mesa Market Corporation, 554 Phil. 343, 348 (2007).

^[126] RULES OF COURT, Rule 132, Sec. 20 states:

Section 20. Proof of private document. Before any private
document offered as authentic is received in evidence, its due execution
and authenticity must be proved either:

(a) By anyone who saw the document executed or written; or

(b) By evidence of the genuineness of the signature or handwriting of the maker.

Any other private document need only be identified as that which it is claimed to be. (21a)

^[127] Rollo, Vol. I, pp. 47-55.

^[128] Heirs of Lourdes Sabanpan v. Comorposa, 456 Phil. 161, 172 (2003), citing PNOC Shipping & Transport Corporation v. Court of Appeals, 358 Phil. 38, 59 (1998).

^[129] Id.

^[130] RULES OF COURT, Rule 128, Sec. 3 states:

Section 3. Admissibility of evidence. — Evidence is admissible when it is relevant to the issue and is not excluded by the law or these rules. (3a)

^[131] RULES OF COURT, Rule 132, Sec. 20.

^[132] Salas v. Sta. Mesa Market Corp.,
supra note 119 at 349, citing Ricardo J. Francisco, Evidence: Rules of
Court in the Philippines (Rules 128-138), 3rd ed., pp. 504-505, and Bough v. Cantiveros, 40 Phil. 209, 213 (1919).

^[133] Rollo, Vol. I, pp. 47-55.

^[134] TSN, February 14, 2007, pp. 6-8.

^[135] Rollo, Vol. I, p. 508.

^[136] Id. at 90.

^[137] Id.

^[138] Republic v. T.A.N. Properties, Inc. 578 Phil. 441, 455 (2008), citing Haverton Shipping Ltd v. National Labor Relations Commission, 220, Phil. 356, 362-365 (1985).

^[139] Manliclic v. Calaunan, 541 Phil. 911, 630 (2007), citing People v. Martinez, 340 Phil. 374, 388 (1997).

^[140] Rollo, pp. 116-117.

^[141] Id. at 117.

^[142] Id. at 116-117.

^[143] Id. at 47-55.

^[144] Id. at 53.

^[145] Id. Vol. II, pp. 597-601.

^[146] Id.

^[147] Otero v. Tan, 692 Phil. 714,724 (2012), citing Cavili v. Judge Florendo, 238 Phil. 597, 603 (1987).

^[148] Id.

^[149] See Tiburcio v. Castro,
244 Phil. 599,602 (1988), where the following remedies were enumerated:

Under the Rules of Court, there are several remedies available to a
defaulted party, namely:

a) The defendant in default may, at any time after discovery thereof and
before judgment, file a motion, under oath, to set aside the order of
default on the ground that his failure to answer was due to fraud,
accident, mistake or excusable neglect, and that he has meritorious
defenses; (Sec. 3, Rule 18)

b) If the judgment has already been rendered when the defendant
discovered the default, but before the same has become final and
executory, he may file a motion for new trial under Section 1(a) of Rule
37;

c) If the defendant discovered the default after the judgment has become
final and executory, he may file a petition for relief under Section 2
of Rule 38; and

d) He may also appeal from the judgment rendered against him as contrary
to the evidence or to the law, even if no petition to set aside the
order of default has been presented by him. (Sec. 2, Rule 41) (Lina v. Court of Appeals, 135 SCRA 637, 642).

^[150] Otero v. Tan, supra at 725, citing, Martinez v. Republic of the Philippines, 536 Phil. 868, 875-880 (2006).

^[151] Id., citing Arquero v. Court of Appeals, 673 Phil. 545, 557 (2011).

^[152] Id. at 276-277, citing Tanhu v. Judge Ramolete, 160 Phil. 1101, 1126 (1975).

^[153] Id.

^[154] Id.

^[155] Rollo, Vol. I, pp. 347-367.

^[156] Id. at 363-364.

^[157] Manila International Airport Authority v. Avia Filipinas International, Inc., 683 Phil. 34, 44 (2012).

^[158] 489 Phil. 693 (2004).

^[159] Id. at 710.

^[160] 456 Phil. 1 (2003).

^[161] Id. at 9-10.

^[162] 148-B Phil. 124 (1971).

^[163] Id. at 131.

^[164] 748 Phil. 692 (2014).

^[165] Id. at 701-702.

^[166] CIVIL CODE, Article 2229.

^[167] CIVIL CODE, Article 2233.

^[168] CIVIL CODE, Article 2229.

^[169] Sulpicio Lines, Inc. v. Karaan, G.R. No. 208590, October 3, 2018, 881 SCRA 588, 606 citing New World Developers and Management, Inc. v. AMA Computer Learning Center, Inc.,754 Phil. 463, 475 (2015).

^[170] Lim v. Tan, 801 Phil. 13, 25 (2016) citing People v. Combate, 653 Phil. 487, 507-508 (2010) citing People v. Dalisay, 620 Phil. 831 (2009).

^[171] Seven Brothers Shipping Corp. v. DMC-Construction Resources, Inc., supra note 158, p. 700.

^[172] Locsin v. Hizon, 743 Phil. 420, 438-439 (2014).

^[173] Nacar v. Gallery Frames, 716 Phil. 267 (2013).

^[174] In its Motion to
Admit the Attached Petition for Review on Certiorari, it stated that a
copy of the assailed Resolution was received by tliBernas Law Offices’
receptionist on November 7, 2012, but the receptionist only informed
Attys. Jose A. Bernas and Joanne Mae A. Bibal of the receipt on January
9, 2013. Thus, the Petition was only filed on January 16, 2013.