Republic of the Philippines Administration (OWWA) ID, OFW ID, seamans book, alien

SUPREME COURT certificate of registration/immigrant certificate of registration,

Manila government office ID, certification from the National Council
for the Welfare of Disable Persons (NCWDP), Department of
Social Welfare and Development (DSWD) certification; or
A.M. No. 02-8-13-SC February 19, 2008

(b) xxxx."
RE: 2004 RULES ON NOTARIAL PRACTICE -
The Court Resolved, upon the recommendation of the Sub Committee on the
Revision of the Rules Governing Notaries Public, to AMEND Sec. 12 (a). Rule II of Quisumbing, J., on official leave. Ynares-Santiago, J., on leave.
the 2004 Rules on Notarial Practice, to wit:
(adv127a)
Sirs/Mesdames:

Quoted hereunder, for your information, is a resolution of the Court En Banc

dated February 19, 2008. Very truly yours.

"A.M. No. 02-8-13-SC-Re: 2004 Rules on Notarial Practice. The Court MA. LUISA D. VILLARAMA (sgd)
Resolved, upon the recommendation of the Sub Committee on the
Revision of the Rules Governing Notaries Public, to AMEND Sec. 12 (a). Clerk of Court
Rule II of the 2004 Rules on Notarial Practice, to wit:

Rule II

DEFINITIONS

xxx

"Sec. 12. Component Evidence of Identity. The phrase "competent

evidence of identity" refers to the identification of an individual based
on:

(a) at least one current identification document issued by an

official agency bearing the photograph and signature of the
individual, such as but not limited to, passport, drivers license,
Professional Regulations Commission ID, National Bureau of
Investigation clearance, police clearance, postal ID, voters ID,
Barangay certification, Government Service and Insurance
System (GSIS) e-card, Social Security System (SSS) card,
Philhealth card, senior citizen card, Overseas Workers Welfare
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
A.C. No. 8637 September 15, 2014
IMELDA CATO GADDI, Complainant,
vs.
ATTY. LOPE M. VELASCO, JR. Respondent.
RESOLUTION
CARPIO, Acting C.J.:
The Case
Before us is an administrative complaint filed by Imelda Cato Gaddi (Gaddi) against
Atty. Lope M. Velasco (Velasco) for violation of the 2004 Rules on Notarial Practice.
The Facts
According to Gaddi, she was the Operations and Accounting Manager of the Bert
Lozada Swimming School (BLSS) when she broached the idea of opening a branch
of BLSS in Solano, Nueva Vizcaya (BLSS in Solano) to Angelo Lozada (Angelo), the
Chief Operations Officer of BLSS. Believing that Angelo agreed, Gaddi opened a
BLSS in Solano. However, in April 2010, Angelo informed the management that he
did not authorize a BLSS in Solano. Upon Angelo's complaint, the police officers
apprehended the swimming instructors of BLSS in Solano, namely: Jonathan
Lagamzon Lozare, Katherine Agatha Gaddi Ancheta, who is Gaddi' s niece, and
Lorenz Ocampo Gaddi, who is Gaddi' s grandson.
At past 10:00 a.m. of 22 April 2010, while inside the BLSS main office in Sta. Ana,
Manila, Gaddi was informed of the apprehension of the swimming instructors.
Worried, Gaddi pleaded with Angelos wife, Kristina Marie, and the BLSS Programs
Manager Aleza Garcia for permission to leave the office and proceed to Nueva
Vizcaya. Instead ofacceding to her plea, they commanded Gaddi tomake a
handwritten admission1 that the BLSS in Solano was unauthorized. They warned
Gaddi that she cannot leave the office without the handwritten admission. Thus,
Gaddi conceded in doing the handwritten admission and left the office before 1:00
p.m. of the same day. Subsequently, Gaddi found out that Angelo filed a complaint
against her regarding the BLSS in Solano using her handwritten admission, which
was already notarized by Velasco.
Thus, Gaddi filed the present complaint against Velasco for violation of the 2004
Rules on Notarial Practice, specifically Rule IV, Section 2 (b) and Rule VI, Section 3.
Gaddi denied that she personally appeared before Velasco to have her handwritten
admission notarized. She alleged that she did not consent to its notarization nor did
she personally know him, give any competent evidence of identity or sign the
notarial register.
In his comment dated 17 September 2010,2 Velasco alleged that he was
commissioned notary public for Makati City from 4 January 2010 to 31 December
2011. He alleged that Gaddi appeared before him in his notarial office in Makati
City on 22 April 2010 and requested for the notarization of a four-page handwritten
document. He ascertained Gaddis identity, through two identification cards her
BLSSID and Tax Identification Number (TIN) ID, and that the document was her
own. Thereafter, he notarized the document and recorded it in his notarial register
as Doc. No. 130, Page No. 27, Book No. 192, Series of 2010. Velasco insisted that he
duly complied with the 2004 Rules on Notarial Practice and it was Gaddis
complaint, which was notarized by a fake notary public. Velasco claimed that Gaddi
only denied having the document notarized when she found out that Angelo used
the document against her.
In a Resolution dated 18 October 2010,3 the Court referred the case to the
Integrated Bar of the Philippines (IBP) for investigation, report and
recommendation.
The IBPs Report and Recommendation
In a Report and Recommendation dated 23 June 2011,4 Investigating Commissioner
Pablo S. Castillo (Investigating Commissioner) found the complaint impressed with
merit, and recommended a penalty of fine of P5,000.00 on Velasco for violation of
Rule IV, Section 2(b) and Rule VI, Section 3 of the 2004 Rules on Notarial Practice.
The Investigating Commissioner gave more credence to Gaddis statement that she
did not personally appear before Velasco to have her handwritten admission
notarized. The Investigating Commissioner found it contradictory to logic and
human experience that Gaddi went first to Makati City to have her self-
incriminating handwritten admission notarized before proceeding to Nueva
Vizcaya. The Investigating Commissioner also believed Gaddis statement that the
identification cards presented by Velasco were computer-generated from the BLSS
office, since the portion of the notarial certificate listing the evidenceof identity
was left blank. As to Velascos claim that Gaddis complaint had a fake notary
public, the Investigating Commissionerfound it unsubstantiated.
In Resolution No. XX-2013-1275 passed on 13 February 2013, the IBP Board of
Governors adopted and approved the Investigating Commissioners report and
recommendation, to wit: RESOLVED to ADOPT and APPROVE, as it is hereby
unanimously ADOPTED and APPROVED, with modification, the Report and
Recommendation of the Investigating Commissioner in the above-entitled case,
herein made part of this Resolution as Annex "A", and finding the recommendation
fully supported by the evidence on record and the applicable laws and rules, and
for violation of Rule IV, Sec. [2(b) and Rule VI, Sec.] 3 of the 2004 Rules on Notarial
Practice, Atty. Lope M. Velascos Notarial Commission is hereby REVOKED and
DISQUALIFIED for being Commissioned as Notary Public for two (2) years with stern
[w]arning to be more circumspect in his dealing and that repetition of the same act
shall be dealt with more severely.
There was no motion for reconsideration filed.
The Ruling of the Court
We sustain the findings of the IBP and adopt its recommendations with
modification.
Time and again, we have reminded lawyers commissioned as notaries public that
notarization is not an empty, meaningless, and routinary act.6 Notarization
converts a private document to a public document, making it admissible in
evidence without further proof of its authenticity.7 A notarial document is, by law,
entitled to full faith and credit upon its face; for this reason, notaries public must
observe with utmost care the basic requirements in the performance of their
duties.8
The 2004 Rules on Notarial Practice provides that a notary public should not
notarize a document unlessthe signatory to the document is in the notarys
presence personally atthe time of the notarization, and personally known to the
notary public or otherwise identified through competent evidence of identity.9 At
the time of notarization, the signatory shall sign or affix with a thumb or mark the
notary publics notarial register.10 The purpose of these requirements is to enable
the notary public to verify the genuineness of the signature and to ascertain that
the document is the signatorys free act and deed.11 If the signatory is not acting of
his or her own free will, a notary public is mandated to refuse to perform a notarial
act.12 A notary public is also prohibited from affixing an official signature or seal on
a notarial certificate that is incomplete.13
In the present case, contrary to Velascos claim that Gaddi appeared before him
and presented two identification cards as proof of her identity, the notarial
certificate, in rubber stamp, itself indicates: "SUBSCRIBE AND SWORN TO BEFORE
ME THIS APR 22, 2010 x x x AT MAKATI CITY. AFFIANT EXHIBITING TO ME HIS/HER
C.T.C. NO. __________ ISSUED AT/ON ___________." 14 The unfilled spaces clearly
establish that Velasco had been remiss in his duty of ascertaining the identity of the
signatory to the document. Velasco did not comply with the most basic function
that a notary public must do, that is, to require the presence of Gaddi; otherwise,
he could have ascertained that the handwritten admission was executed
involuntarily and refused to notarize the document. Furthermore, Velasco affixed
his signature in an incomplete notarial certificate. Velasco did not even present his
notarial register to rebut Gaddis allegations. It is presumed that evidence willfully
suppressed would be adverse if produced.15 In Isenhardt v. Real,16 a notary public
who failed to discharge his duties was meted out the penalty of revocation of his
notarial commission, disqualification from being commissioned as a notary public
for a period of two years, and suspension fromthe practice of law for one year. For
notarizing a document without ascertaining the identity and voluntariness of the
signatory to the document, for affixing his signature in an incomplete otarial
certificate, and for dishonesty in his pleadings, Velasco failed to discharge his duties
as notary public and breached Canon 117 and Rule 1.0118 of the Code of
Professional Responsibility. Considering these findings and our previous
rulings,19Velasco should not only be disqualified for two years as a notary public, he
must also be suspended from the practice of law for one year.1wphi1
WHEREFORE, the Court finds respondent Atty. Lope M. Velasco GUILTY of violating
the 2004 Rules on Notarial Practice and the Code of Professional Responsibility.
Accordingly, the Court SUSPENDS him from the practice of law for one year,
REVOKES his incumbent notarial commission, if any, and PROHIBITS him from being
commissioned as a notary public for two years, effective immediately, with a stem
warning that a repetition of the same or similar offense shall be dealt with more
severely.
Let copies of this Resolution be furnished the Office of the Bar Confidant, to be
appended to respondent's personal record as attorney. Likewise, copies shall be
furnished to the Integrated Bar of the Philippines and all courts in the country for
their information and guidance.

SO ORDERED.
 Republic of the Philippines that even if respondent had obtained authority from the DOJ, respondent would
SUPREME COURT still be guilty of violating Section 7(b)(2) of RA 6713 because her practice as a
Manila notary public conflicts with her official functions.7

FIRST DIVISION In her Comment, respondent admitted that she was a notary public from 29
February 1988 to 31 December 1989.8Respondent stated that she was authorized
A.C. No. 5688 June 4, 2009 by her superior, the Register of Deeds, to act as a notary public. Respondent
pointed out that the Register of Deeds, Atty. Pelagio T. Tolosa, also subscribed
petitions and documents that were required to be registered.9 Respondent
FELIPE E. ABELLA, Complainant,
explained that the Register of Deeds imposed the following conditions for her
vs.
application as a notary public:
ATTY. ASTERIA E. CRUZABRA, Respondent.

xxx
RESOLUTION

4. That the application for commission was on the condition that respondent
CARPIO, J.:
cannot charge fees for documents required by the Office to be presented and
under oath.10
Felipe E. Abella (complainant) filed a complaint for violation of Canon 1 of the Code
of Professional Responsibility and Section 7(b)(2) of Republic Act No. 67131 (RA
Respondent contended that when she filed her petition for commission as a notary
6713) or the Code of Conduct and Ethical Standards for Public Officials and
public, the requirement of approval from the DOJ Secretary was still the subject of
Employees against Atty. Asteria E. Cruzabra (respondent). In his affidavit-
a pending query by one of the Registrars and this fact was not known to
complaint2 dated 8 May 2002, complainant charged respondent with engaging in
respondent.11 Respondent maintained that she had no intention to violate any rule
private practice while employed in the government service.
of law. Respondent, as a new lawyer relying on the competence of her superior,
admitted that an honest mistake may have been committed but such mistake was
Complainant alleged that respondent was admitted to the Philippine Bar on 30 May committed without willfulness, malice or corruption.12
1986 and was appointed as Deputy Register of Deeds of General Santos City on 11
August 1987.3 Complainant asserted that as Deputy Register of Deeds, respondent
Respondent argued that she was not engaged in illegal practice as a notary public
filed a petition for commission as a notary public and was commissioned on 29
because she was duly commissioned by the court.13 Respondent denied that she
February 1988 without obtaining prior authority from the Secretary of the
violated Section 7(b)(2) of RA 6713 because she was authorized by her superior to
Department of Justice (DOJ).4Complainant claimed that respondent has notarized
act as a notary public. Respondent reasoned that her being a notary public
some 3,000 documents.5 Complainant pointed out that respondent only stopped
complemented her functions as Deputy Register of Deeds because respondent
notarizing documents when she was reprimanded by the Chief of the Investigation
could immediately have documents notarized instead of the registrants going out
Division of the Land Registration Authority.6
of the office to look for a notary public. Respondent added that she did not charge
fees for the documents required by the office to be presented under
Complainant contended that respondent could not justify her act by pretending to oath.14lawphi1
be in good faith because even non-lawyers are not excused from ignorance of the
law. Complainant branded as incredible respondents claim that she was merely
Respondent insisted that contrary to complainants claims, she only notarized 135
motivated by public service in notarizing 3,000 documents. Complainant pointed
documents as certified by the Clerk of Court of the 11th Judicial Region, General
out that respondent spent money to buy the Notarial Register Books and spent
Santos City.15
hours going over the documents subscribed before her, thereby prejudicing her
efficiency and performance as Deputy Register of Deeds. Complainant believed
In her Report and Recommendation (Report) dated 25 January 2005, Investigating
Commissioner Lydia A. Navarro recommended to the IBP Board of Governors the
dismissal of the complaint against respondent for lack of merit. The Report reads in
part:
However, the fact that she applied for commission as Notary Public without
securing the approval of the proper authority although she was allowed to do so by
her superior officer, was not her own undoing for having relied on the ample
authority of her superior officer, respondent being a neophyte in the law
profession for having newly passed the bar a year after at that time.
Records further showed that after having been reprimanded by Atty. Flestado for
said mistake which was done in good faith respondent ceased and desisted to
perform notarial work since then up to the present as could be gleaned from the
Certification issued by Clerk of Court VI Atty. Elmer D. Lastimosa of the 11th Judicial
Region General Santos City; dated December 23, 2004 that 135 documents have
been notarized by the respondent from February 29, 1988 to December 31 1989
and there was no record of any notarized documents from January 19, 1990 to
December 21, 1991.16
In a Resolution dated 12 March 2005, the IBP Board of Governors, in adopting and
approving the Report, dismissed the case for lack of merit.
Complainant claims that in dismissing the complaint for "lack of merit" despite
respondents admission that she acted as a notary public for two years, the IBP
Board of Governors committed a serious error amounting to lack of jurisdiction or
authority.17
Section 7(b)(2) of RA 6713 provides:
Section 7. Prohibited Acts and Transactions. - In addition to acts and omissions of
public officials and employees now prescribed in the Constitution and existing laws,
the following shall constitute prohibited acts and transactions of any public official
and employee and are hereby declared to be unlawful:
xxx
(b) Outside employment and other activities related thereto. - Public officials and
employees during their incumbency shall not:
xxx
(2) Engage in the private practice of their profession unless authorized by the
Constitution or law, provided, that such practice will not conflict or tend to conflict
with their official functions; or
xxx
Memorandum Circular No. 1718 of the Executive Department allows government
employees to engage directly in the private practice of their profession provided
there is a written permission from the Department head. It provides:
The authority to grant permission to any official or employee shall be granted by
the head of the ministry or agency in accordance with Section 12, Rule XVIII of the
Revised Civil Service Rules, which provides:
"Sec. 12. No officer or employee shall engage directly in any private business,
vocation, or profession or be connected with any commercial, credit, agricultural,
or industrial undertaking without a written permission from the head of
Department; Provided, That this prohibition will be absolute in the case of those
officers and employees whose duties and responsibilities require that their entire
time be at the disposal of the Government: Provided, further, That if an employee
is granted permission to engage in outside activities, the time so devoted outside
of office hours should be fixed by the chief of the agency to the end that it will not
impair in any way the efficiency of the other officer or employee: And provided,
finally, That no permission is necessary in the case of investments, made by an
officer or employee, which do not involve any real or apparent conflict between his
private interests and public duties, or in any way influence him in the discharge of
his duties, and he shall not take part in the management of the enterprise or
become an officer or member of the board of directors",
Subject to any additional conditions which the head of the office deems necessary
in each particular case in the interest of the service, as expressed in the various
issuances of the Civil Service Commission. (Boldfacing supplied)
It is clear that when respondent filed her petition for commission as a notary
public, she did not obtain a written permission from the Secretary of the DOJ.
Respondents superior, the Register of Deeds, cannot issue any authorization
because he is not the head of the Department. And even assuming that the
Register of Deeds authorized her, respondent failed to present any proof of that
written permission. Respondent cannot feign ignorance or good faith because Wherefore, we find Atty. Asteria E. Cruzabra guilty of engaging in notarial practice
respondent filed her petition for commission as a notary public after Memorandum without the written authority from the Secretary of the Department of Justice, and
Circular No. 17 was issued in 1986.1avvphi1 accordingly we REPRIMAND her. She is warned that a repetition of the same or
similar act in the future shall merit a more severe sanction.
In Yumol, Jr. v. Ferrer Sr.,19 we suspended a lawyer employed in the Commission on
Human Rights (CHR) for failing to obtain a written authority and approval with a SO ORDERED.
duly approved leave of absence from the CHR. We explained:
ANTONIO T. CARPIO
Crystal clear from the foregoing is the fact that private practice of law by CHR Associate Justice
lawyers is not a matter of right. Although the Commission allows CHR lawyers to
engage in private practice, a written request and approval thereof, with a duly WE CONCUR:
approved leave of absence for that matter are indispensable. In the case at bar, the
record is bereft of any such written request or duly approved leave of absence. No
written authority nor approval of the practice and approved leave of absence by
the CHR was ever presented by respondent. Thus, he cannot engage in private
practice.

As to respondents act of notarizing documents, records show that he applied for

commission as notary public on 14 November 2000, before the Regional Trial Court
(RTC) of San Fernando, Pampanga, Branch 42. This was granted by RTC Executive
Judge Pedro M. Sunga, Jr., on 01 December 2000. However, the CHR authorized
respondent to act as notary public only on 29 October 2001. Considering the acts of
notarization are within the ambit of the term "practice of law," for which a prior
written request and approval by the CHR to engage into it are required, the crucial
period to be considered is the approval of the CHR on 29 October 2001 and not the
approval of the RTC on 04 December 2000.20

In Muring, Jr. v. Gatcho,21 we suspended a lawyer for having filed petitions for
commission as a notary public while employed as a court attorney. We held:

Atty. Gatcho should have known that as a government lawyer, he was prohibited
from engaging in notarial practice, or in any form of private legal practice for that
matter. Atty. Gatcho cannot now feign ignorance or good faith, as he did not seek
to exculpate himself by providing an explanation for his error. Atty. Gatchos filing
of the petition for commission, while not an actual engagement in the practice of
law, appears as a furtive attempt to evade the prohibition.22

Under the Uniform Rules on Administrative Cases in the Civil Service, engaging in
the private practice of profession, when unauthorized, is classified as a light
offense punishable by reprimand.23
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 162864 March 28, 2007
SPS. PEBLIA ALFARO and PROSPEROUS ALFARO, Petitioners,
vs.
HON. COURT OF APPEALS, SPS. OLEGARIO P. BAGANO and CECILIA C.
BAGANO Respondents.
DECISION
TINGA, J.:
There lies an inherent oxymoron to the term "duplicate originals" as applied to
documents. Yet, even as two "duplicate originals" of the same document are not
exactly identical, they may be considered as identical for all legal intents and
purposes. Indeed, each "duplicate original" may be considered as the best evidence
of the transaction embodied therein.
Assailed in this Petition for Review on Certiorari is the Decision1 of the Court of
Appeals dated 17 November 2003 in CA-G.R. CV No. 72335, as well as the
Resolution dated 3 March 2004, denying the motion for reconsideration.
First, the facts on record.
On 15 April 1996, Spouses Olegario and Cecilia Bagano (respondents) filed a
complaint against Spouses Peblia and Prosperous Alfaro (petitioners) for
Declaration of Nullity of Sale with Damages and Preliminary Injunction before the
Regional Trial Court (RTC) of Cebu City. In the complaint, respondents as plaintiffs
alleged the following: that they were the previous registered owners of a parcel of
land known as Lot No. 1710, located at San Roque, Talisay, Cebu and covered by
Transfer Certificate of Title (TCT) No. 78445; that on 22 June 1994, respondents
executed a Real Estate Mortgage over the lot in favor of petitioners to secure
payment of an obligation in the amount of P180,000.00; that upon payment of the
mortgage debt, a Cancellation and Discharge of Mortgage2 dated 20 June 1995 was
executed; that when respondents demanded the return of their title, petitioners
refused, prompting the former to check with the Register of Deeds; that upon
verification, respondents learned that their title had already been cancelled and in
lieu thereof TCT No. 927833 was
issued in the name of petitioners by virtue of a spurious Deed of Absolute Sale
dated 14 June 1995 (Deed of Absolute Sale) purportedly executed by respondents.
Thus, respondents sought the nullification of the deed of sale on the ground that
their signatures thereon were forged.
In their answer, petitioners as defendants denied the alleged forgery. They insisted
that respondents sold Lot No. 1710 to them in consideration of the amount
of P534,000.00 sometime in June 1995.
Respondents evidence tend to establish that they sent a letter-request to Romeo
Varona (Varona), a handwriting expert from the Cebu City PNP Crime Laboratory,
for the examination of the questioned signatures in the Deed of Absolute Sale. The
request was accompanied by a set of documents consisting of the Deed of
Conditional Sale dated 23 October 1989 (Exh. "H")4 together with documents
containing the specimen signatures of respondents, namely: five (5) receipts with
corresponding dates (Exhs. "I," "I-1," "I-2," "I-3," "I-4"),5 Community Tax Certificate
dated 13 January 1995 (Exh. "J"),6 Individual Taxpayers ID (Exh. "K"),7 Partido ng
Masang Pilipino ID (Exh. "L"),8and a copy of the Deed of Sale
(Exh. "B").9 After examining Exh. "B" and comparing the signatures thereon
purporting to be those of respondents with the specimen signatures on the
documents provided by respondents, Varona issued Report No. 006-9610dated 11
January 1996 containing his findings.
On 25 November 1998, respondents presented Varona as an expert witness on
their behalf. Varona affirmed the conclusion embodied in his Report that the
questioned signatures appearing on Exhibit "B" were forged.
On the same trial date, petitioners manifested their intention to have Varona
examine another set of documents which according to them contain the genuine
signatures of respondents. Hence, on 12 March 1999, petitioners sent a letter to
Varona, requesting him to examine the signatures on the other set of documents,
namely: Real Estate Mortgage dated 22 June 1994 (Ex. "2"),11 Acknowledgement
Receipt for the sum of P216,000.00 dated 14 June 1995 (Ex. "3"),12 six (6) deeds of
conditional sale (Exhs. "4" to "9"),13 China Bank Check No. A-190308 dated 5 August
1994 for P52,000.00 (Exh. "10"),14 and Community Tax Certificate (CTC) No.
19886842 dated
8 February 1995 (Exh. "11").15 At the continuation of the cross-examination, Varona
stated that the signatures on the documents provided him, which purport to be
those of respondents, as well as the signatures on another copy of the Deed of
Absolute Sale (Exh. "13"), which similarly purport to be those of respondents, were
affixed by the same persons.16
According to petitioners evidence, respondents had initially mortgaged Lot No.
1710 in their favor for P180,000.00 on 22 June 2004, as evidenced by a Real Estate
Mortgage.17 Two months later, respondents sold a different set of lots, i.e., Lot
Nos. 809-C, 809-D, 809-J, 809-K, 809-T and 809-U, by virtue of six (6) deeds of
conditional sale in favor of petitioners who paid the sum of P138,000.00 as
downpayment. Thereafter, petitioners discovered that the lots subject of the
conditional sale were also sold on installment basis to other parties. To placate
petitioners, respondents sold to them the lot in question, Lot No. 1710, in
consideration of P534,000.00, as evidenced by the Deed of Absolute Sale.
Petitioners paid an additional P216,000.00 after being credited the amounts
of P180,000.00 representing the debt secured by the Real Estate Mortgage
and P138,000.00 representing the aggregate downpayments for the six (6)
conditional deeds of sale.18
On 23 April 2001, the RTC rendered a Decision19 dismissing the complaint and
ordering respondents to pay P50,000.00 as moral damages, P20,000.00 as
attorneys fees and P10,000.00 as litigation expenses, plus costs of suit.
On appeal, the Court of Appeals promulgated the assailed Decision,20 reversing and
setting aside the Decision of the RTC. It declared the Deed of Absolute Sale null and
void ab initio, reinstated TCT No. 78445 in the name of respondents, and ordered
petitioners to pay the amount of P20,000.00 as moral damages and attorneys fee
to respondents.
In the present petition, petitioners maintain that the Court of Appeals committed
an error in reversing the judgment of the trial court. Issues were raised, concerning
the following points, to wit: first, the selective reversal by the appellate court of the
RTCs factual findings; second, the selective discussion of the elements of a
contract of sale as basis for the invalidation of the Deed of Absolute Sale; third, the
ruling that failure to offer in evidence the second questioned report proved fatal to
petitioners cause; fourth, the blanket denial of petitioners motion for
reconsideration; and fifth, the citing of
respondent Olegario Baganos testimony in the Decision despite its having been
stricken off the records for his failure to be cross-examined.21
The first three (3) points raised obviously relate to the determinative issue
whether or not the questioned signatures of respondents on the Deed of Absolute
Sale were forged, thereby rendering the document spurious. Such determination is
evidently factual in nature, and the well-entrenched rule is that in the exercise of
this Courts power of review, the findings of facts of the Court of Appeals are
conclusive and binding on this Court.22 However, there are recognized
exceptions,23 among which is when the factual findings of the trial court and the
appellate court are conflicting.24 This case falls under the exception. The
disagreement between the trial court and the Court of Appeals in the factual
conclusion, especially with regard to the alleged forgery of respondents signatures
on the Deed of Absolute Sale, has constrained us to minutely examine the evidence
submitted by the parties.
On its face, the Deed of Absolute Sale was notarized; as such, it enjoys the
presumption of regularity and carries the evidentiary weight conferred upon it with
respect to its due execution.25 Absent evidence that is clear, convincing, and more
than merely preponderant, the presumption must be upheld. 26
In their bid to establish "clear, convincing and more than merely preponderant
evidence," respondents presented an expert witness, Varona, who attested that
the Deed of Absolute Sale was indeed forged. Was the witness successful in that
regard?
Respondents rely on Varonas testimony on direct examination, as well as his
findings in the examination of the copy of the Deed of Absolute Sale as Exh. "B." On
that basis, they claim forgery. In their effort to refute respondents allegation,
petitioners hinge on the testimony on cross-examination of the same expert and
his findings in the examination of another original of the Deed of Absolute Sale,
marked as Exh. "13." The two varying findings led the trial court to conclude that
Varona had retracted his earlier finding of forgery, thus:
When Mr. Romeo Varona was presented by the defendants to identify and give his
expert opinion about the signatures appearing in the documents marked as
annexes 1 to 13, he categorically told the Honorable Court that the signatures of
Olegario Bagano and Cecilia Bagano appearing in the said documents are genuine,
thus belying the claim of the plaintiff that said signatures are forged.
It should be noted[,] however, that in an earlier testimony, Mr. Romeo Varona
testified that the deed of sale in question is a forgery, but he later on retracted his
earlier testimony after he conducted an examination of the documents sent to him
by the defendants.27
The trial court further sustained the validity of the Deed of Absolute Sale by citing
the rule that instruments are evidence, even against third persons, of the fact
which gave rise to their execution and of the date of the latter.28The trial court also
emphasized the character of the questioned deed as a notarial document, which
cannot be disproved by mere denial of the alleged signatory, and bears the
presumption of regularity.29 Moreover, the RTC noted that respondents filed the
case in bad faith to appease their buyers and cover up their wrongdoings in
subdividing the lot and selling the resulting lots to different parties.30
The Court of Appeals rejected the trial courts conclusion and proceeded from a
different premise, i.e., that in the second examination which involves the standard
and specimen signatures submitted by petitioners, Varona did not actually receive
and examine the original of the Deed of Sale, Exh. "13." It explained, thus:
Records show that the signatures of Spouses Bagano appearing in the Deed of Sale
dated June 14, 1995 were forged. Witness Romeo O. Varona, a document examiner
of the PNP Crime Laboratory came out with his Questioned Document Report No.
006-96 dated January 11, 1995 which states that after a careful examination of the
questioned document submitted by Spouses Bagano, he found out that the
signatures of Spouses Bagano appearing in the questioned Deed of Sale dated June
14, 1995 were forged. x x x
xxxx
Likewise, he confirmed on the witness stand on November 25, 1998 that indeed
the signatures of Spouses Bagano appearing in the questioned Deed of Absolute
Sale are forgeries. However, on cross-examination conducted on February 10,
1999, counsel for Spouses Alfaro manifested that they would submit for
examination the subject documents and that she would cross-examine Mr. Varona
after the latters examination of the submitted documents. On February 28, 1999[,]
counsel for the Spouses Alfaro, Atty. Montesclaros, submitted other documents for
examination, except the Deed of Absolute Sale dated June 14, 1995. On May 19,
1999, during Mr. Varonas cross-examination, he testified that his findings and
conclusions, as stated in the Questioned Document Report No. 039-39 dated
March 12, 1999, were that the signatures appearing thereon were written by one
and same person. On May 28, 1999, Atty. Montesclaros again requested Mr.
Varona to examine the Deed of Absolute Sale dated June 14, 1995. On June 16,
1999, Mr. Varona categorically testified that he had examined the said deed of sale
and when asked if he prepared a report on the said examination he answered in
the affirmative. But when again asked where that report was, Mr. Varona referred
to Questioned Document Report No. 039-39 dated March 12. 1999, which was the
same report that he prepared previously on the basis of the first request of Atty.
Montesclaros dated February 28, 1999, where it did not include for examination
the questioned Deed of Absolute Sale dated June 14, 1995.
Such a testimony cannot be taken as a retraction of his previous testimony. What
the lower court failed to realize was that Romeo Varona did not actually receive
and examine the original copy of the questioned Deed of Absolute Sale, as testified
to by him. x x x
xxxx
Such a statement categorically means that Romeo Varona did not actually receive
any copy of the questioned deed of absolute sale during his first examination upon
the request of Atty. Montesclaros. This Court observed that during Mr. Varonas
cross-examination on June 16, 1999, defendants-appellees counsel, Atty. Juanita
Montesclaros, tried to make it appear that Mr. Varona examined the Deed of
Absolute Sale, when in truth and in fact, he did not. x x x
xxxx
It is very clear that Atty. Montesclaros tried to make it appear that the questioned
document which was the Deed of Absolute Sale dated June 14, 1995 was indeed
examined. However, this was not the case because Mr. Varonas alleged report on
the second request for examination still refers to the previous report, Questioned
Document Report No. 039-39 dated March 12, 1999, which was the same report
that he prepared previously on the basis of the first request of Atty. Montesclaros
dated February 28, 1999, wherein it did not include for examination the questioned
Deed of Absolute Sale dated June 14, 1995, and which he had already identified on
May 19, 1999. This only means that the Deed of Absolute Sale was not received
and examined by Mr. Varona and yet his testimony on cross, dated June 16, 1999[,]
still referred to the same report. There was[,] therefore no report made on the
second request for examination dated May 28, 1999 on the Deed of Absolute Sale
dated June 14, 1995 as Mr. Varona merely referred to his previous report as his
alleged second report on the Deed of Absolute Sale. Moreover, the date of the
second Written Request for examination is May 28, 1999 and the date of the
Questioned Document Report No. 039-39 is March 12, 1999, and Mr. Varonas
testimony of June 16, 1999 referred to the said report of March 12, 1999 which
report was made on the basis of the first written request for examination.31
The disparate conclusions reached by the courts below are such because they
originated from different but similarly erroneous basic premises.
When a document in two or more copies is executed at or about the same time,
with identical contents, all such copies are equally regarded as originals. 32 Original
does not mean the first paper written, in contrast to a copy or transcript made
later. The original depends upon the issue to be proved.33 It is immaterial whether
that document was written before or after another, was copied from another, or
was itself used to copy from,34 as long as its contents are the subject of
inquiry.35 Hence, one or some of these copies are still considered as originals, and
they have equal claims to authenticity.
As a matter of practice, deeds of conveyance are prepared in several copies for
notarization and record purposes. After notarization, the notary public retains
copies pursuant to the Rules on Notarial Practice, one for his record and the other
for transmittal to the court, through Clerk of Court concerned, where he secured
his notarial commission.36When he gives all the other copies to the parties, the
latter agree between themselves how many copies should be kept by each. The
parties also agree which copies shall be presented to the Register of Deeds for
registration, the city or municipal assessor in connection with the payment of
transfer tax and other fees, and the Bureau of Internal Revenue in connection with
the payment of the capital gains tax. All the notarized copies are originals. They are
sometimes loosely referred to as "original copies" or "duplicate originals."
In the case at bar, presented in evidence were two copies of one and the same
Deed of Absolute Sale dated 14 June 1995. These are respondents Exh. "B"37 and
petitioners Exh. "13"38 which was also marked by respondents as their Exh.
"O."39 Exh. "B" appears to be a certified true copy of the original of the Deed of
Absolute Sale presented to and kept as part of the records of the Register of
Deeds.40 Exhibit "13" is a copy of the original retained by petitioners.
Respondents had engaged Varona to determine the genuineness of the signatures
purporting to be theirs on Exh. "B" by comparing them with the specimen
signatures on the documents41 which they also provided Varona. On the witness
stand, Varona affirmed his finding in his Report42 that the questioned signatures on
Exh. "B" were not affixed by the same persons who affixed the specimen signatures
and thus the questioned signatures were forged.43
However, after Varona testified on direct examination, petitioners manifested that
they would engage him to examine a different set of documents which contain the
signatures of respondents.44 On cross-examination, Varona stated that he
examined the signatures on Exh. "13" and the specimen signatures on the other
documents furnished him and that after making the examination he arrived at the
conclusion that the signatures on the documents, including Exh. "13," were affixed
by the same persons.45
On the basis of the two findings of Varona, the first involving Exh. "B" and the
second relating to Exh. "13," the trial court concluded that the questioned deed is
genuine as the signatures thereon which purport to be those of respondents are
really theirs. It ratiocinated that Varona had retracted his first opinion when he
came out with his second opinion.
The trial court erred in using the supposed retraction as basis for its ruling. It
cannot properly speak of retraction of one finding by the other because the
examinations conducted by Varona covered two different standard signatures and
two different sets of specimen signatures. It would have been a retraction or
repudiation of the first conclusion if the standard signatures analyzed and
compared with the specimen signatures were one and the same in the two
examinations, even if the specimen signatures were contained in two different sets
of documents which is not even the case here.
Yet clearly, Varona came out with inconsistent findings. On one hand, he concluded
that Exh. "B" is spurious because the questioned signatures thereon were forged.
On the other, he issued a different determination as regards Exh. "13," finding that
the signatures thereon which purport to be those of respondents and the
counterpart specimen signatures were affixed by the same persons. Since Exhs. "B"
and "13" are copies of two originals of one and the same deed, his conclusions with
respect to the two exhibits should be common, i.e., either the questioned
signatures thereon were both affixed by the same persons or they were affixed by
different persons.
The disharmonious findings render Varonas testimony unconvincing. Thus, the
presumption of validity of the Deed of Absolute Sale as a notarized document is left
unscathed.
Respondents seek to downplay the determinations made by Varona concerning
Exh. "13" by impugning the authenticity of the specimen signatures, specifically the
signature of Olegario Bagano on the CTC, Exh. "11." They claim in particular that
the issuance date of the CTC was altered. Respondents, however, did not present
any tangible proof to support their allegation. On the other hand, petitioners
procured a certification from Cebu City Treasurer Eustaquio B. Cesa to the effect
that the subject CTC belonged to Olegario Bagano.46 As regards the other
documents which contain the specimen signatures, namely: the Real Estate
Mortgage (Exh. "2"), the Acknowledgment Receipt (Exh. "3"), the six deeds of
conditional sale (Exhs. "4" to "9") and the China Bank check (Exh. "10"), respondent
failed to adduce countervailing evidence of spuriousness. It is noteworthy that the
parties to the deeds of sale were also petitioners and respondents themselves.
Also, the amount covered by the Acknowledgment Receipt was the additional cash
payment of petitioners to respondents.
On the part of the Court of Appeals, it chose to disregard Varonas conclusions on
Exh. "13" on the premise that the written report which contained the conclusions
was not presented in evidence.
However, as borne out by the record, Varona repeated his findings in open court in
the course of his testimony on cross-examination and even was asked on re-direct
examination by respondents counsel thereon.47
Generally, it has been held that handwriting experts, while probably useful, are not
indispensable in examining or comparing handwriting.48 Yet without Varonas
testimony, the Court is hard-pressed to find any other basis on the record to
establish the forgery. One who alleges forgery has the burden to establish his case
by a preponderance of evidence, or evidence which is of greater weight or more
convincing than that which is offered in opposition to it.49Aside from the opinion of
the handwriting expert which this Court finds inconsequential, the bare assertions
on the part of respondent Cecilia Bagano that the signature appearing on the Deed
of Absolute Sale is not that of her husband is not enough. No additional witnesses
were presented.
We reassert that forgery is not presumed; it must be proven by clear, positive and
convincing evidence. Those who make the allegation of forgery have the burden of
proving it.50 Respondents failed to substantiate with sufficient evidence their claim
that their signatures appearing on the deed of sale were forged.
We are moreover influenced in our ultimate finding by the fact that there is also
sufficient evidence on record to bolster the presumption that the notarized Deed
of Absolute Sale was genuine. Ultimately worthy of consideration is petitioner
Plebia Alfaros positive testimony that she actually saw respondent Olegario
Bagano affix his signature on the questioned document. 51 However self-serving
that allegation may seem, it corroborates the other evidence that respondents did
affix their signatures on the deed. Equally relevant in this supposition is the
comparison of the standard signatures on Exh. "13" with the signatures of
respondents found in the Real Estate Mortgage, Exh. "2," a document which was
duly notarized and thus bears prima facie proof as to its due execution and the
validity of the contents therein. Even respondent Cecilia Bagano admitted the
genuineness of said document in her testimony.52No specific objection was raised
by respondents as to the validity of the Deed of Real Estate Mortgage, their blanket
objection thereto being confined to an overarching allegation against its materiality
and relevancy, which is not sufficient to rebut the presumption of authenticity of
the notarized deed.
And it must be said that our own comparison of the signatures on the Deed of
Absolute Sale to the specimen signatures submitted by the parties reveals no
substantial variance to warrant the conclusion
that there was forgery. Mere variance of the signatures cannot be considered as
conclusive proof that the same were forged.53
What could respondents have done in order to fortify their claim of forgery
following the manifest indecisiveness of the expert witness they had relied on?
Considering that the burden was upon respondents to establish the alleged
forgery, they should have presented evidence on rebuttal, which they did not do,
or even another expert witness to attest to their claim of forgery, which again they
failed to do. Disingenuous as petitioners tactic may have seemed, in using their
opponents expert witness to advocate the contrary cause, respondents were not
without remedy to mitigate the damage wrought by said witness. That they failed
to introduce rebuttal evidence finally led to the collapse of their cause of action.
With the foregoing disquisition, discussion of the other issues raised by petitioners
is unnecessary.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals is SET
ASIDE. The Decision of the Regional Trial Court of Cebu, Branch 12, is REINSTATED.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 179127 December 24, 2008
IN-N-OUT BURGER, INC., petitioner,
vs.
SEHWANI, INCORPORATED AND/OR BENITAS FRITES, INC., respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
seeking to reverse the Decision1dated 18 July 2006 rendered by the Court of
Appeals in CA-G.R. SP No. 92785, which reversed the Decision2 dated 23 December
2005 of the Director General of the Intellectual Property Office (IPO) in Appeal No.
10-05-01. The Court of Appeals, in its assailed Decision, decreed that the IPO
Director of Legal Affairs and the IPO Director General do not have jurisdiction over
cases involving unfair competition.
Petitioner IN-N-OUT BURGER, INC., a business entity incorporated under the laws
of California, United States (US) of America, which is a signatory to the Convention
of Paris on Protection of Industrial Property and the Agreement on Trade Related
Aspects of Intellectual Property Rights (TRIPS). Petitioner is engaged mainly in the
restaurant business, but it has never engaged in business in the Philippines. 3
Respondents Sehwani, Incorporated and Benita Frites, Inc. are corporations
organized in the Philippines.4
On 2 June 1997, petitioner filed trademark and service mark applications with the
Bureau of Trademarks (BOT) of the IPO for "IN-N-OUT" and "IN-N-OUT Burger &
Arrow Design." Petitioner later found out, through the Official Action Papers issued
by the IPO on 31 May 2000, that respondent Sehwani, Incorporated had already
obtained Trademark Registration for the mark "IN N OUT (the inside of the letter
"O" formed like a star)."5 By virtue of a licensing agreement, Benita Frites, Inc. was
able to use the registered mark of respondent Sehwani, Incorporated.
Petitioner eventually filed on 4 June 2001 before the Bureau of Legal Affairs (BLA)
of the IPO an administrative complaint against respondents for unfair competition
and cancellation of trademark registration. Petitioner averred in its complaint that
it is the owner of the trade name IN-N-OUT and the following trademarks: (1) "IN-
N-OUT"; (2) "IN-N-OUT Burger & Arrow Design"; and (3) "IN-N-OUT Burger Logo."
These trademarks are registered with the Trademark Office of the US and in various
parts of the world, are internationally well-known, and have become distinctive of
its business and goods through its long and exclusive commercial use.6 Petitioner
pointed out that its internationally well-known trademarks and the mark of the
respondents are all registered for the restaurant business and are clearly identical
and confusingly similar. Petitioner claimed that respondents are making it appear
that their goods and services are those of the petitioner, thus, misleading ordinary
and unsuspecting consumers that they are purchasing petitioners products.7
Following the filing of its complaint, petitioner sent on 18 October 2000 a demand
letter directing respondent Sehwani, Incorporated to cease and desist from
claiming ownership of the mark "IN-N-OUT" and to voluntarily cancel its trademark
registration. In a letter-reply dated 23 October 2000, respondents refused to
accede to petitioner demand, but expressed willingness to surrender the
registration of respondent Sehwani, Incorporated of the "IN N OUT" trademark for
a fair and reasonable consideration. 8
Petitioner was able to register the mark "Double Double" on 4 July 2002, based on
their application filed on 2 June 1997.9 It alleged that respondents also used this
mark, as well as the menu color scheme. Petitioners also averred that respondent
Benitas receipts bore the phrase, "representing IN-N-OUT Burger."10 It should be
noted that that although respondent Sehwahi, Incorporated registered a mark
which appeared as "IN N OUT (the inside of the letter "O" formed like a star),"
respondents used the mark "IN-N-OUT."11
To counter petitioners complaint, respondents filed before the BLA-IPO an Answer
with Counterclaim. Respondents asserted therein that they had been using the
mark "IN N OUT" in the Philippines since 15 October 1982. On 15 November 1991,
respondent Sehwani, Incorporated filed with the then Bureau of Patents,
Trademarks and Technology Transfer (BPTTT) an application for the registration of
the mark "IN N OUT (the inside of the letter "O" formed like a star)." Upon approval
of its application, a certificate of registration of the said mark was issued in the
name of respondent Sehwani, Incorporated on 17 December 1993. On 30 August
2000, respondents Sehwani, Incorporated and Benita Frites, Inc. entered into a
Licensing Agreement, wherein the former entitled the latter to use its registered
mark, "IN N OUT." Respondents asserted that respondent Sehwani, Incorporated,
being the registered owner of the mark "IN N OUT," should be accorded the
presumption of a valid registration of its mark with the exclusive right to use the
same. Respondents argued that none of the grounds provided under the
Intellectual Property Code for the cancellation of a certificate of registration are
present in this case. Additionally, respondents maintained that petitioner had no
legal capacity to sue as it had never operated in the Philippines.12
Subsequently, the IPO Director of Legal Affairs, Estrellita Beltran-Abelardo,
rendered a Decision dated 22 December 2003,13 in favor of petitioner. According to
said Decision, petitioner had the legal capacity to sue in the Philippines, since its
country of origin or domicile was a member of and a signatory to the Convention of
Paris on Protection of Industrial Property. And although petitioner had never done
business in the Philippines, it was widely known in this country through the use
herein of products bearing its corporate and trade name. Petitioners marks are
internationally well-known, given the world-wide registration of the mark "IN-N-
OUT," and its numerous advertisements in various publications and in the Internet.
Moreover, the IPO had already declared in a previous inter partes case that "In-N-
Out Burger and Arrow Design" was an internationally well-known mark. Given
these circumstances, the IPO Director for Legal Affairs pronounced in her Decision
that petitioner had the right to use its tradename and mark "IN-N-OUT" in the
Philippines to the exclusion of others, including the respondents. However,
respondents used the mark "IN N OUT" in good faith and were not guilty of unfair
competition, since respondent Sehwani, Incorporated did not evince any intent to
ride upon petitioners goodwill by copying the mark "IN-N-OUT Burger" exactly.
The inside of the letter "O" in the mark used by respondents formed a star. In
addition, the simple act of respondent Sehwani, Incorporated of inquiring into the
existence of a pending application for registration of the "IN-N-OUT" mark was not
deemed fraudulent. The dispositive part of the Decision of the IPO Director for
Legal Affairs reads:
With the foregoing disquisition, Certificate of Registration No. 56666
dated 17 December 1993 for the mark "IN-N-OUT" (the inside of the
letter "O" formed like a star) issued in favor of Sehwani, Incorporated is
hereby CANCELLED. Consequently, respondents Sehwani, Inc. and
Benitas Frites are hereby ordered to permanently cease and desist from
using the mark "IN-N-OUT" and "IN-N-OUT BURGER LOGO" on its goods
and in its business. With regards the mark "Double-Double," considering
that as earlier discussed, the mark has been approved by this Office for
publication and that as shown by evidence, Complainant is the owner of
the said mark, Respondents are so hereby ordered to permanently cease
and desist from using the mark Double-Double. NO COSTS. 14
Both parties filed their respective Motions for Reconsideration of the
aforementioned Decision. Respondents Motion for Reconsideration15 and
petitioners Motion for Partial Reconsideration16 were denied by the IPO Director
for Legal Affairs in Resolution No. 2004-1817 dated 28 October 2004 and Resolution
No. 2005-05 dated 25 April 2005,18 respectively.
Subsequent events would give rise to two cases before this Court, G.R. No. 171053
and G.R. No. 179127, the case at bar.
G.R. No. 171053
On 29 October 2004, respondents received a copy of Resolution No. 2004-18 dated
28 October 2004 denying their Motion for Reconsideration. Thus, on 18 November
2004, respondents filed an Appeal Memorandum with IPO Director General Emma
Francisco (Director General Francisco). However, in an Order dated 7 December
2004, the appeal was dismissed by the IPO Director General for being filed beyond
the 15-day reglementary period to appeal.
Respondents appealed to the Court of Appeals via a Petition for Review under Rule
43 of the Rules of Court, filed on 20 December 2004 and docketed as CA-G.R. SP
No. 88004, challenging the dismissal of their appeal by the IPO Director General,
which effectively affirmed the Decision dated 22 December 2003 of the IPO
Director for Legal Affairs ordering the cancellation of the registration of the
disputed trademark in the name of respondent Sehwani, Incorporated and
enjoining respondents from using the same. In particular, respondents based their
Petition on the following grounds:
THE IPO DIRECTOR GENERAL COMMITTED GRAVE ERROR IN DISMISSING
APPEAL NO. 14-2004-00004 ON A MERE TECHNICALITY
THE BUREAU OF LEGAL AFFAIRS (SIC) DECISION AND RESOLUTION (1)
CANCELLING RESPONDENTS CERTIFICATE OF REGISTRATION FOR THE
MARK "IN-N-OUT," AND (2) ORDERING PETITIONERS TO PERMANENTLY
CEASE AND DESIST FROM USING THE SUBJECT MARK ON ITS GOODS AND
BUSINESS ARE CONTRARY TO LAW AND/OR IS NOT SUPPORTED BY
EVIDENCE.
Respondents thus prayed:
 WHEREFORE, petitioners respectfully pray that this Honorable Court give
due course to this petition, and thereafter order the Office of the
Director General of the Intellectual Property Office to reinstate and give
due course to [respondent]s Appeal No. 14-2004-00004.
Other reliefs, just and equitable under the premises, are likewise prayed
for.
On 21 October 2005, the Court of Appeals rendered a Decision denying
respondents Petition in CA-G.R SP No. 88004 and affirming the Order dated 7
December 2004 of the IPO Director General. The appellate court confirmed that
respondents appeal before the IPO Director General was filed out of time and that
it was only proper to cancel the registration of the disputed trademark in the name
of respondent Sehwani, Incorporated and to permanently enjoin respondents from
using the same. Effectively, the 22 December 2003 Decision of IPO Director of Legal
Affairs was likewise affirmed. On 10 November 2005, respondents moved for the
reconsideration of the said Decision. On 16 January 2006, the Court of Appeals
denied their motion for reconsideration.
Dismayed with the outcome of their petition before the Court of Appeals,
respondents raised the matter to the Supreme Court in a Petition for Review under
Rule 45 of the Rules of Court, filed on 30 January 2006, bearing the title Sehwani,
Incorporated v. In-N-Out Burger and docketed as G.R. No. 171053.19
This Court promulgated a Decision in G.R. No. 171053 on 15 October
2007,20 finding that herein respondents failed to file their Appeal Memorandum
before the IPO Director General within the period prescribed by law and,
consequently, they lost their right to appeal. The Court further affirmed the
Decision dated 22 December 2003 of the IPO Director of Legal Affairs holding that
herein petitioner had the legal capacity to sue for the protection of its trademarks,
even though it was not doing business in the Philippines, and ordering the
cancellation of the registration obtained by herein respondent Sehwani,
Incorporated of the internationally well-known marks of petitioner, and directing
respondents to stop using the said marks. Respondents filed a Motion for
Reconsideration of the Decision of this Court in G.R. No. 171053, but it was denied
with finality in a Resolution dated 21 January 2008.
G.R. No. 179127
Upon the denial of its Partial Motion for Reconsideration of the Decision dated 22
December 2003 of the IPO Director for Legal Affairs, petitioner was able to file a
timely appeal before the IPO Director General on 27 May 2005.
During the pendency of petitioners appeal before the IPO Director General, the
Court of Appeals already rendered on 21 October 2005 its Decision dismissing
respondents Petition in CA-G.R. SP No. 88004.
In a Decision dated 23 December 2005, IPO Director General Adrian Cristobal, Jr.
found petitioners appeal meritorious and modified the Decision dated 22
December 2003 of the IPO Director of Legal Affairs. The IPO Director General
declared that respondents were guilty of unfair competition. Despite respondents
claims that they had been using the mark since 1982, they only started constructing
their restaurant sometime in 2000, after petitioner had already demanded that
they desist from claiming ownership of the mark "IN-N-OUT." Moreover, the sole
distinction of the mark registered in the name of respondent Sehwani,
Incorporated, from those of the petitioner was the star inside the letter "O," a
minor difference which still deceived purchasers. Respondents were not even
actually using the star in their mark because it was allegedly difficult to print. The
IPO Director General expressed his disbelief over the respondents reasoning for
the non-use of the star symbol. The IPO Director General also considered
respondents use of petitioners registered mark "Double-Double" as a sign of bad
faith and an intent to mislead the public. Thus, the IPO Director General ruled that
petitioner was entitled to an award for the actual damages it suffered by reason of
respondents acts of unfair competition, exemplary damages, and attorneys
fees.21 The fallo of the Decision reads:
WHEREFORE, premises considered, the [herein respondents] are held
guilty of unfair competition. Accordingly, Decision No. 2003-02 dated 22
December 2003 is hereby MODIFIED as follows:
[Herein Respondents] are hereby ordered to jointly and severally pay
[herein petitioner]:
1. Damages in the amount of TWO HUNDRED TWELVE THOUSAND FIVE
HUNDRED SEVENTY FOUR AND 28/100(P212,574.28);
2. Exemplary damages in the amount of FIVE HUNDRED THOUSAND
PESOS (P500,000.00);
 3. Attorneys fees and expenses of litigation in the amount of FIVE
HUNDRED THOUSAND PESOS (P500,000.00).
All products of [herein respondents] including the labels, signs, prints,
packages, wrappers, receptacles and materials used by them in
committing unfair competition should be without compensation of any
sort be seized and disposed of outside the channels of commerce.
Let a copy of this Decision be furnished the Director of Bureau of Legal
Affairs for appropriate action, and the records be returned to her for
proper disposition. Further, let a copy of this Decision be furnished the
Documentation, Information and Technology Transfer Bureau for their
information and records purposes.22
Aggrieved, respondents were thus constrained to file on 11 January 2006 before
the Court of Appeals another Petition for Review under Rule 43 of the Rules of
Court, docketed as CA-G.R. SP No. 92785. Respondents based their second Petition
before the appellate court on the following grounds:
THE IPO DIRECTOR GENERAL COMMITTED GRAVE ERROR IN HOLDING
PETITIONERS LIABLE FOR UNFAIR COMPETITION AND IN ORDERING THEM
TO PAY DAMAGES AND ATTORNEYS FEES TO RESPONDENTS
THE IPO DIRECTOR GENERAL COMMITTED GRAVE ERROR IN AFFIRMING
THE BUREAU OF LEGAL AFFAIRS DECISION (1) CANCELLING PETITIONERS
CERTIFICATE OF REGISTRATION FOR THE MARK "IN-N-OUT," AND (2)
ORDERING PETITIONERS TO PERMANENTLY CEASE AND DESIST FROM
USING THE SUBJECT MARK ON ITS GOODS AND BUSINESS
Respondents assailed before the appellate court the foregoing 23 December 2005
Decision of the IPO Director General, alleging that their use of the disputed mark
was not tainted with fraudulent intent; hence, they should not be held liable for
damages. They argued that petitioner had never entered into any transaction
involving its goods and services in the Philippines and, therefore, could not claim
that its goods and services had already been identified in the mind of the public.
Respondents added that the disputed mark was not well-known. Finally, they
maintained that petitioners complaint was already barred by laches.23
At the end of their Petition in CA-G.R. SP No. 92785, respondents presented the
following prayer:
WHEREFORE, [respondents herein] respectfully pray that this Honorable
Court:
(a) upon the filing of this petition, issue a temporary restraining order
enjoining the IPO and [petitioner], their agents, successors and assigns,
from executing, enforcing and implementing the IPO Director Generals
Decision dated 23 December 2005, which modified the Decision No.
2003-02 dated 22 December 2003 of the BLA, until further orders from
this Honorable Court.
(b) after notice and hearing, enjoin the IPO and [petitioner], their agents,
successors and assigns, from executing, enforcing and implementing the
Decision dated 23 December 2005 of the Director General of the IPO in
IPV No. 10-2001-00004 and to maintain the status quo ante pending the
resolution of the merits of this petition; and
(c) after giving due course to this petition:
(i) reverse and set aside the Decision dated 23 December 2005
of the Director General of the IPO in IPV No. 10-2001-00004
finding the [respondents] guilty of unfair competition and
awarding damages and attorneys fees to the respondent
(ii) in lieu thereof, affirm Decision No. 2003-02 of the BLA dated
22 December 2003 and Resolution No. 2005-05 of the BLA
dated 25 April 2005, insofar as it finds [respondents] not guilty
of unfair competition and hence not liable to the [petitioner]
for damages and attorneys fees;
(iii) reverse Decision No. 2003-02 of the BLA dated 22
December 2003, and Resolution No. 2005-05 of the BLA dated
25 April 2005, insofar as it upheld [petitioner]s legal capacity to
sue; that [petitioner]s trademarks are well-known; and that
respondent has the exclusive right to use the same; and
(iv) make the injunction permanent.
[Respondents] also pray for other reliefs, as may deemed just or
equitable.24
On 18 July 2006, the Court of Appeals promulgated a Decision25 in CA-G.R. SP No.
92785 reversing the Decision dated 23 December 2005 of the IPO Director General.
The Court of Appeals, in its Decision, initially addressed petitioners assertion that
respondents had committed forum shopping by the institution of CA-G.R. SP No.
88004 and CA-G.R. SP No. 92785. It ruled that respondents were not guilty of
forum shopping, distinguishing between the respondents two Petitions. The
subject of Respondents Petition in CA-G.R SP No. 88004 was the 7 December 2004
Decision of the IPO Director General dismissing respondents appeal of the 22
December 2003 Decision of the IPO Director of Legal Affairs. Respondents
questioned therein the cancellation of the trademark registration of respondent
Sehwani, Incorporated and the order permanently enjoining respondents from
using the disputed trademark. Respondents Petition in CA-G.R. SP No. 92785
sought the review of the 23 December 2005 Decision of the IPO Director General
partially modifying the 22 December 2003 Decision of the IPO Director of Legal
Affairs. Respondents raised different issues in their second petition before the
appellate court, mainly concerning the finding of the IPO Director General that
respondents were guilty of unfair competition and the awarding of actual and
exemplary damages, as well as attorneys fees, to petitioner.
The Court of Appeals then proceeded to resolve CA-G.R. SP No. 92785 on
jurisdictional grounds not raised by the parties. The appellate court declared that
Section 163 of the Intellectual Property Code specifically confers upon the regular
courts, and not the BLA-IPO, sole jurisdiction to hear and decide cases involving
provisions of the Intellectual Property Code, particularly trademarks. Consequently,
the IPO Director General had no jurisdiction to rule in its Decision dated 23
December 2005 on supposed violations of these provisions of the Intellectual
Property Code.
In the end, the Court of Appeals decreed:
WHEREFORE, the Petition is GRANTED. The Decision dated 23 December
2005 rendered by the Director General of the Intellectual Property Office
of the Philippines in Appeal No. 10-05-01 is REVERSED and SET ASIDE.
Insofar as they pertain to acts governed by Article 168 of R.A. 8293 and
other sections enumerated in Section 163 of the same Code,
respondents claims in its Complaint docketed as IPV No. 10-2001-00004
are hereby DISMISSED.26
The Court of Appeals, in a Resolution dated 31 July 2007,27 denied petitioners
Motion for Reconsideration of its aforementioned Decision.
Hence, the present Petition, where petitioner raises the following issues:
I
WHETHER OR NOT THE COURT OF APPEALS ERRED IN ISSUING THE
QUESTIONED DECISIONDATED 18 JULY 2006 AND RESOLUTION DATED 31
JULY 2007 DECLARING THAT THE IPO HAS NO JURISDICTION OVER
ADMINISTRATIVE COMPLAINTS FOR INTELLECTUAL PROPERTY RIGHTS
VIOLATIONS;
II
WHETHER OR NOT THE INSTANT PETITION IS FORMALLY DEFECTIVE; AND
III
WHETHER OR NOT THE COURT OF APPEALS ERRED IN ISSUING THE
QUESTIONED DECISIONDATED 18 JULY 2006 AND RESOLUTION DATED 31
JULY 2007 DECLARING THAT SEHWANI AND BENITA ARE NOT GUILTY OF:
(A) SUBMITTING A PATENTLY FALSE CERTIFICATION OF NON-FORUM
SHOPPING; AND (B) FORUM SHOPPING PROPER.28
As previously narrated herein, on 15 October 2007, during the pendency of the
present Petition, this Court already promulgated its Decision29 in G.R. No. 171053
on 15 October 2007, which affirmed the IPO Director Generals dismissal of
respondents appeal for being filed beyond the reglementary period, and left the
22 December 2003 Decision of the IPO Director for Legal Affairs, canceling the
trademark registration of respondent Sehwani, Incorporated and enjoining
respondents from using the disputed marks.
Before discussing the merits of this case, this Court must first rule on the
procedural flaws that each party has attributed to the other.
Formal Defects of the Petition
Respondents contend that the Verification/Certification executed by Atty. Edmund
Jason Barranda of Villaraza and Angangco, which petitioner attached to the present
Petition, is defective and should result in the dismissal of the said Petition.
Respondents point out that the Secretarys Certificate executed by Arnold M.
Wensinger on 20 August 2007, stating that petitioner had authorized the lawyers of
Villaraza and Angangco to represent it in the present Petition and to sign the
Verification and Certification against Forum Shopping, among other acts, was not
properly notarized. The jurat of the aforementioned Secretarys Certificate reads:
Subscribed and sworn to me this 20th day of August 2007 in Irving
California.
Rachel A. Blake (Sgd.)
Notary Public30
Respondents aver that the said Secretarys Certificate cannot properly authorize
Atty. Barranda to sign the Verification/Certification on behalf of petitioner because
the notary public Rachel A. Blake failed to state that: (1) petitioners Corporate
Secretary, Mr. Wensinger, was known to her; (2) he was the same person who
acknowledged the instrument; and (3) he acknowledged the same to be his free act
and deed, as required under Section 2 of Act No. 2103 and Landingin v. Republic of
the Philippines.31
Respondents likewise impugn the validity of the notarial certificate of Atty. Aldrich
Fitz B. Uy, on Atty. Barandas Verification/Certification attached to the instant
Petition, noting the absence of (1) the serial number of the commission of the
notary public; (2) the office address of the notary public; (3) the roll of attorneys
number and the IBP membership number; and (4) a statement that the
Verification/Certification was notarized within the notary publics territorial
jurisdiction, as required under the 2004 Rules on Notarial Practice. 32
Section 2 of Act No. 2103 and Landingin v. Republic of the Philippines are not
applicable to the present case. The requirements enumerated therein refer to
documents which require an acknowledgement, and not a mere jurat.
A jurat is that part of an affidavit in which the notary certifies that before him/her,
the document was subscribed and sworn to by the executor. Ordinarily, the
language of the jurat should avow that the document was subscribed and sworn to
before the notary public. In contrast, an acknowledgment is the act of one who has
executed a deed in going before some competent officer or court and declaring it
to be his act or deed. It involves an extra step undertaken whereby the signor
actually declares to the notary that the executor of a document has attested to the
notary that the same is his/her own free act and deed.33 A Secretarys Certificate,
as that executed by petitioner in favor of the lawyers of the Angangco and Villaraza
law office, only requires a jurat.34
Even assuming that the Secretarys Certificate was flawed, Atty. Barranda may still
sign the Verification attached to the Petition at bar. A pleading is verified by an
affidavit that the affiant has read the pleading and that the allegations therein are
true and correct of his personal knowledge or based on authentic records. 35 The
party itself need not sign the verification. A partys representative, lawyer or any
other person who personally knows the truth of the facts alleged in the pleading
may sign the verification.36 Atty. Barranda, as petitioners counsel, was in the
position to verify the truth and correctness of the allegations of the present
Petition. Hence, the Verification signed by Atty. Barranda substantially complies
with the formal requirements for such.
Moreover, the Court deems it proper not to focus on the supposed technical
infirmities of Atty. Barandas Verification. It must be borne in mind that the
purpose of requiring a verification is to secure an assurance that the allegations of
the petition has been made in good faith; or are true and correct, not merely
speculative. This requirement is simply a condition affecting the form of pleadings,
and non-compliance therewith does not necessarily render it fatally defective.
Indeed, verification is only a formal, not a jurisdictional requirement. In the interest
of substantial justice, strict observance of procedural rules may be dispensed with
for compelling reasons.37The vital issues raised in the instant Petition on the
jurisdiction of the IPO Director for Legal Affairs and the IPO Director General over
trademark cases justify the liberal application of the rules, so that the Court may
give the said Petition due course and resolve the same on the merits.
This Court agrees, nevertheless, that the notaries public, Rachel A. Blake and
Aldrich Fitz B. Uy, were less than careful with their jurats or notarial certificates.
Parties and their counsel should take care not to abuse the Courts zeal to resolve
cases on their merits. Notaries public in the Philippines are reminded to exert
utmost care and effort in complying with the 2004 Rules on Notarial Practice.
Parties and their counsel are further charged with the responsibility of ensuring
that documents notarized abroad be in their proper form before presenting said
documents before Philippine courts.
Forum Shopping
Petitioner next avers that respondents are guilty of forum shopping in filing the
Petition in CA-G.R. SP No. 92785, following their earlier filing of the Petition in CA-
G.R SP No. 88004. Petitioner also asserts that respondents were guilty of
submitting to the Court of Appeals a patently false Certification of Non-forum
Shopping in CA-G.R. SP No. 92785, when they failed to mention therein the
pendency of CA-G.R SP No. 88004.
Forum shopping is the institution of two or more actions or proceedings grounded
on the same cause on the supposition that one or the other court would make a
favorable disposition. It is an act of malpractice and is prohibited and condemned
as trifling with courts and abusing their processes. In determining whether or not
there is forum shopping, what is important is the vexation caused the courts and
parties-litigants by a party who asks different courts and/or administrative bodies
to rule on the same or related causes and/or grant the same or substantially the
same reliefs and in the process creates the possibility of conflicting decisions being
rendered by the different bodies upon the same issues.38
Forum shopping is present when, in two or more cases pending, there is identity of
(1) parties (2) rights or causes of action and reliefs prayed for, and (3) the identity
of the two preceding particulars is such that any judgment rendered in the other
action, will, regardless of which party is successful, amount to res judicata in the
action under consideration.39
After a cursory look into the two Petitions in CA-G.R. SP No. 88004 and CA-G.R. SP
No. 92785, it would at first seem that respondents are guilty of forum shopping.
There is no question that both Petitions involved identical parties, and raised at
least one similar ground for which they sought the same relief. Among the grounds
stated by the respondents for their Petition in CA-G.R SP No. 88004 was that "[T]he
Bureau of Legal Affairs (sic) Decision and Resolution (1) canceling [herein
respondent Sehwani, Incorporated]s certificate of registration for the mark IN-N-
OUT and (2) ordering [herein respondents] to permanently cease and desist from
using the subject mark on its goods and business are contrary to law and/or is (sic)
not supported by evidence."40 The same ground was again invoked by respondents
in their Petition in CA-G.R. SP No. 92785, rephrased as follows: "The IPO Director
General committed grave error in affirming the Bureau of Legal Affairs (sic)
Decision (1) canceling [herein respondent Sehwani, Incorporated]s certificate of
registration for the mark "IN-N-OUT," and (2) ordering [herein respondents] to
permanently cease and desist from using the subject mark on its goods and
business."41 Both Petitions, in effect, seek the reversal of the 22 December 2003
Decision of the IPO Director of Legal Affairs. Undoubtedly, a judgment in either one
of these Petitions affirming or reversing the said Decision of the IPO Director of
Legal Affairs based on the merits thereof would bar the Court of Appeals from
making a contrary ruling in the other Petition, under the principle of res judicata.
Upon a closer scrutiny of the two Petitions, however, the Court takes notice of one
issue which respondents did not raise in CA-G.R. SP No. 88004, but can be found in
CA-G.R. SP No. 92785, i.e., whether respondents are liable for unfair competition.
Hence, respondents seek additional reliefs in CA-G.R. SP No. 92785, seeking the
reversal of the finding of the IPO Director General that they are guilty of unfair
competition, and the nullification of the award of damages in favor of petitioner
resulting from said finding. Undoubtedly, respondents could not have raised the
issue of unfair competition in CA-G.R. SP No. 88004 because at the time they filed
their Petition therein on 28 December 2004, the IPO Director General had not yet
rendered its Decision dated 23 December 2005 wherein it ruled that respondents
were guilty thereof and awarded damages to petitioner.
In arguing in their Petition in CA-G.R. SP No. 92785 that they are not liable for
unfair competition, it is only predictable, although not necessarily legally tenable,
for respondents to reassert their right to register, own, and use the disputed mark.
Respondents again raise the issue of who has the better right to the disputed mark,
because their defense from the award of damages for unfair competition depends
on the resolution of said issue in their favor. While this reasoning may be legally
unsound, this Court cannot readily presume bad faith on the part of respondents in
filing their Petition in CA-G.R. SP No. 92785; or hold that respondents breached the
rule on forum shopping by the mere filing of the second petition before the Court
of Appeals.
True, respondents should have referred to CA-G.R. SP No. 88004 in the Certification
of Non-Forum Shopping, which they attached to their Petition in CA-G.R. SP No.
92785. Nonetheless, the factual background of this case and the importance of
resolving the jurisdictional and substantive issues raised herein, justify the
relaxation of another procedural rule. Although the submission of a certificate
against forum shopping is deemed obligatory, it is not jurisdictional.42 Hence, in this
case in which such a certification was in fact submitted, only it was defective, the
Court may still refuse to dismiss and, instead, give due course to the Petition in
light of attendant exceptional circumstances.
The parties and their counsel, however, are once again warned against taking
procedural rules lightly. It will do them well to remember that the Courts have
taken a stricter stance against the disregard of procedural rules, especially in
connection with the submission of the certificate against forum shopping, and it
will not hesitate to dismiss a Petition for non-compliance therewith in the absence
of justifiable circumstances.
The Jurisdiction of the IPO
The Court now proceeds to resolve an important issue which arose from the Court
of Appeals Decision dated 18 July 2006 in CA-G.R. SP No. 92785. In the afore-stated
Decision, the Court of Appeals adjudged that the IPO Director for Legal Affairs and
the IPO Director General had no jurisdiction over the administrative proceedings
below to rule on issue of unfair competition, because Section 163 of the
Intellectual Property Code confers jurisdiction over particular provisions in the law
on trademarks on regular courts exclusively. According to the said provision:
Section 163. Jurisdiction of Court.All actions under Sections 150, 155,
164, and 166 to 169 shall be brought before the proper courts with
appropriate jurisdiction under existing laws.
The provisions referred to in Section 163 are: Section 150 on License Contracts;
Section 155 on Remedies on Infringement; Section 164 on Notice of Filing Suit
Given to the Director; Section 166 on Goods Bearing Infringing Marks or Trade
Names; Section 167 on Collective Marks; Section 168 on Unfair Competition,
Rights, Regulation and Remedies; and Section 169 on False Designations of Origin,
False Description or Representation.
The Court disagrees with the Court of Appeals.
Section 10 of the Intellectual Property Code specifically identifies the functions of
the Bureau of Legal Affairs, thus:
Section 10. The Bureau of Legal Affairs.The Bureau of Legal Affairs shall
have the following functions:
10.1 Hear and decide opposition to the application for registration of
marks; cancellation of trademarks; subject to the provisions of Section
64, cancellation of patents and utility models, and industrial designs; and
petitions for compulsory licensing of patents;
10.2 (a) Exercise original jurisdiction in administrative complaints for
violations of laws involving intellectual property rights; Provided, That
its jurisdiction is limited to complaints where the total damages claimed
are not less than Two hundred thousand pesos
(P200,000): Provided, futher, That availment of the provisional
remedies may be granted in accordance with the Rules of Court. The
Director of Legal Affairs shall have the power to hold and punish for
contempt all those who disregard orders or writs issued in the course of
the proceedings.
(b) After formal investigation, the Director for Legal Affairs may impose
one (1) or more of the following administrative penalties:
(i) The issuance of a cease and desist order which shall specify
the acts that the respondent shall cease and desist from and
shall require him to submit a compliance report within a
reasonable time which shall be fixed in the order;
(ii) The acceptance of a voluntary assurance of compliance or
discontinuance as may be imposed. Such voluntary assurance
may include one or more of the following:
(1) An assurance to comply with the provisions of the
intellectual property law violated;
(2) An assurance to refrain from engaging in unlawful
and unfair acts and practices subject of the formal
investigation
(3) An assurance to recall, replace, repair, or refund
the money value of defective goods distributed in
commerce; and
(4) An assurance to reimburse the complainant the
expenses and costs incurred in prosecuting the case
in the Bureau of Legal Affairs.
The Director of Legal Affairs may also require the
respondent to submit periodic compliance reports
and file a bond to guarantee compliance of his
undertaking.
 (iii) The condemnation or seizure of products which are subject
of the offense. The goods seized hereunder shall be disposed of
in such manner as may be deemed appropriate by the Director
of Legal Affairs, such as by sale, donation to distressed local
governments or to charitable or relief institutions, exportation,
recycling into other goods, or any combination thereof, under
such guidelines as he may provide;
(iv) The forfeiture of paraphernalia and all real and personal
properties which have been used in the commission of the
offense;
(v) The imposition of administrative fines in such amount as
deemed reasonable by the Director of Legal Affairs, which shall
in no case be less than Five thousand pesos (P5,000) nor more
than One hundred fifty thousand pesos (P150,000). In addition,
an additional fine of not more than One thousand pesos
(P1,000) shall be imposed for each day of continuing violation;
(vi) The cancellation of any permit, license, authority, or
registration which may have been granted by the Office, or
the suspension of the validity thereof for such period of time as
the Director of Legal Affairs may deem reasonable which shall
not exceed one (1) year;
(vii) The withholding of any permit, license, authority, or
registration which is being secured by the respondent from the
Office;
(viii) The assessment of damages;
(ix) Censure; and
(x) Other analogous penalties or sanctions.
10.3 The Director General may by Regulations establish the procedure to
govern the implementation of this Section.43 (Emphasis provided.)
Unquestionably, petitioners complaint, which seeks the cancellation of the
disputed mark in the name of respondent Sehwani, Incorporated, and damages for
violation of petitioners intellectual property rights, falls within the jurisdiction of
the IPO Director of Legal Affairs.
The Intellectual Property Code also expressly recognizes the appellate jurisdiction
of the IPO Director General over the decisions of the IPO Director of Legal Affairs,
to wit:
Section 7. The Director General and Deputies Director General.
7.1 Fuctions.The Director General shall exercise the following powers
and functions:
xxxx
b) Exercise exclusive appellate jurisdiction over all decisions rendered by
the Director of Legal Affairs, the Director of Patents, the Director of
Trademarks, and the Director of Documentation, Information and
Technology Transfer Bureau. The decisions of the Director General in the
exercise of his appellate jurisdiction in respect of the decisions of the
Director of Patents, and the Director of Trademarks shall be appealable
to the Court of Appeals in accordance with the Rules of Court; and those
in respect of the decisions of the Director of Documentation, Information
and Technology Transfer Bureau shall be appealable to the Secretary of
Trade and Industry;
The Court of Appeals erroneously reasoned that Section 10(a) of the Intellectual
Property Code, conferring upon the BLA-IPO jurisdiction over administrative
complaints for violations of intellectual property rights, is a general provision, over
which the specific provision of Section 163 of the same Code, found under Part III
thereof particularly governing trademarks, service marks, and tradenames, must
prevail. Proceeding therefrom, the Court of Appeals incorrectly concluded that all
actions involving trademarks, including charges of unfair competition, are under
the exclusive jurisdiction of civil courts.
Such interpretation is not supported by the provisions of the Intellectual Property
Code. While Section 163 thereof vests in civil courts jurisdiction over cases of unfair
competition, nothing in the said section states that the regular courts have sole
jurisdiction over unfair competition cases, to the exclusion of administrative
bodies. On the contrary, Sections 160 and 170, which are also found under Part III
of the Intellectual Property Code, recognize the concurrent jurisdiction of civil
courts and the IPO over unfair competition cases. These two provisions read:
 Section 160. Right of Foreign Corporation to Sue in Trademark or Service
Mark Enforcement Action.Any foreign national or juridical person who
meets the requirements of Section 3 of this Act and does not engage in
business in the Philippines may bring a civil or administrative
action hereunder for opposition, cancellation, infringement, unfair
competition, or false designation of origin and false description, whether
or not it is licensed to do business in the Philippines under existing laws.
xxxx
Section 170. Penalties.Independent of the civil and administrative
sanctions imposed by law, a criminal penalty of imprisonment from two
(2) years to five (5) years and a fine ranging from Fifty thousand pesos
(P50,000) to Two hundred thousand pesos (P200,000), shall be imposed
on any person who is found guilty of committing any of the acts
mentioned in Section 155, Section168, and Subsection169.1.
Based on the foregoing discussion, the IPO Director of Legal Affairs had jurisdiction
to decide the petitioners administrative case against respondents and the IPO
Director General had exclusive jurisdiction over the appeal of the judgment of the
IPO Director of Legal Affairs.
Unfair Competition
The Court will no longer touch on the issue of the validity or propriety of the 22
December 2003 Decision of the IPO Director of Legal Affairs which: (1) directed the
cancellation of the certificate of registration of respondent Sehwani, Incorporated
for the mark "IN-N-OUT" and (2) ordered respondents to permanently cease and
desist from using the disputed mark on its goods and business. Such an issue has
already been settled by this Court in its final and executory Decision dated 15
October 2007 in G.R. No. 171053, Sehwani, Incorporated v. In-N-Out
Burger,44ultimately affirming the foregoing judgment of the IPO Director of Legal
Affairs. That petitioner has the superior right to own and use the "IN-N-OUT"
trademarks vis--vis respondents is a finding which this Court may no longer
disturb under the doctrine of conclusiveness of judgment. In conclusiveness of
judgment, any right, fact, or matter in issue directly adjudicated or necessarily
involved in the determination of an action before a competent court in which
judgment is rendered on the merits is conclusively settled by the judgment therein
and cannot again be litigated between the parties and their privies whether or not
the claims, demands, purposes, or subject matters of the two actions are the
same.45
Thus, the only remaining issue for this Court to resolve is whether the IPO Director
General correctly found respondents guilty of unfair competition for which he
awarded damages to petitioner.
The essential elements of an action for unfair competition are (1) confusing
similarity in the general appearance of the goods and (2) intent to deceive the
public and defraud a competitor. The confusing similarity may or may not result
from similarity in the marks, but may result from other external factors in the
packaging or presentation of the goods. The intent to deceive and defraud may be
inferred from the similarity of the appearance of the goods as offered for sale to
the public. Actual fraudulent intent need not be shown.46
In his Decision dated 23 December 2005, the IPO Director General ably explains the
basis for his finding of the existence of unfair competition in this case, viz:
The evidence on record shows that the [herein respondents] were not
using their registered trademark but that of the [petitioner].
[Respondent] SEHWANI, INC. was issued a Certificate of Registration for
IN N OUT (with the Inside of the Letter "O" Formed like a Star) for
restaurant business in 1993. The restaurant opened only in 2000 but
under the name IN-N-OUT BURGER. Apparently, the [respondents]
started constructing the restaurant only after the [petitioner] demanded
that the latter desist from claiming ownership of the mark IN-N-OUT and
voluntarily cancel their trademark registration. Moreover, [respondents]
are also using [petitioners] registered mark Double-Double for use on
hamburger products. In fact, the burger wrappers and the French fries
receptacles the [respondents] are using do not bear the mark registered
by the [respondent], but the [petitioners] IN-N-OUT Burgers name and
trademark IN-N-OUT with Arrow design.
There is no evidence that the [respondents] were authorized by the
[petitioner] to use the latters marks in the business. [Respondents]
explanation that they are not using their own registered trademark due
to the difficulty in printing the "star" does not justify the unauthorized
use of the [petitioners] trademark instead.
Further, [respondents] are giving their products the general appearance
that would likely influence purchasers to believe that these products are
those of the [petitioner]. The intention to deceive may be inferred from
the similarity of the goods as packed and offered for sale, and, thus,
action will lie to restrain such unfair competition. x x x.
xxxx
[Respondents] use of IN-N-OUT BURGER in busineses signages reveals
fraudulent intent to deceive purchasers. Exhibit "GG," which shows the
business establishment of [respondents] illustrates the imitation of
[petitioners] corporate name IN-N-OUT and signage IN-N-OUT BURGER.
Even the Director noticed it and held:
"We also note that In-N-Out Burger is likewise, [petitioners]
corporate name. It has used the "IN-N-OUT" Burger name in its
restaurant business in Baldwin Park, California in the United
States of America since 1948. Thus it has the exclusive right to
use the tradenems "In-N-Out" Burger in the Philippines and the
respondents are unlawfully using and appropriating the same."
The Office cannot give credence to the [respondents] claim of good faith
and that they have openly and continuously used the subject mark since
1982 and is (sic) in the process of expanding its business. They contend
that assuming that there is value in the foreign registrations presented as
evidence by the [petitioner], the purported exclusive right to the use of
the subject mark based on such foreign registrations is not essential to a
right of action for unfair competition. [Respondents] also claim that
actual or probable deception and confusion on the part of customers by
reason of respondents practices must always appear, and in the present
case, the BLA has found none. This Office finds the arguments untenable.
In contrast, the [respondents] have the burden of evidence to prove that
they do not have fraudulent intent in using the mark IN-N-OUT. To prove
their good faith, [respondents] could have easily offered evidence of use
of their registered trademark, which they claimed to be using as early as
1982, but did not.
[Respondents] also failed to explain why they are using the marks of
[petitioner] particularly DOUBLE DOUBLE, and the mark IN-N-OUT Burger
and Arrow Design. Even in their listing of menus, [respondents] used
[Appellants] marks of DOUBLE DOUBLE and IN-N-OUT Burger and Arrow
Design. In addition, in the wrappers and receptacles being used by the
[respondents] which also contained the marks of the [petitioner], there is
no notice in such wrappers and receptacles that the hamburger and
French fries are products of the [respondents]. Furthermore, the receipts
issued by the [respondents] even indicate "representing IN-N-OUT."
These acts cannot be considered acts in good faith. 47
Administrative proceedings are governed by the "substantial evidence rule." A
finding of guilt in an administrative case would have to be sustained for as long as it
is supported by substantial evidence that the respondent has committed acts
stated in the complaint or formal charge. As defined, substantial evidence is such
relevant evidence as a reasonable mind may accept as adequate to support a
conclusion.48 As recounted by the IPO Director General in his decision, there is
more than enough substantial evidence to support his finding that respondents are
guilty of unfair competition.
With such finding, the award of damages in favor of petitioner is but proper. This is
in accordance with Section 168.4 of the Intellectual Property Code, which provides
that the remedies under Sections 156, 157 and 161 for infringement shall
apply mutatis mutandis to unfair competition. The remedies provided under
Section 156 include the right to damages, to be computed in the following manner:
Section 156. Actions, and Damages and Injunction for Infringement.
156.1 The owner of a registered mark may recover damages from any
person who infringes his rights, and the measure of the damages suffered
shall be either the reasonable profit which the complaining party would
have made, had the defendant not infringed his rights, or the profit which
the defendant actually made out of the infringement, or in the event
such measure of damages cannot be readily ascertained with reasonable
certainty, then the court may award as damages a reasonable percentage
based upon the amount of gross sales of the defendant or the value of
the services in connection with which the mark or trade name was used
in the infringement of the rights of the complaining party.
In the present case, the Court deems it just and fair that the IPO Director General
computed the damages due to petitioner by applying the reasonable percentage of
30% to the respondents gross sales, and then doubling the amount thereof on
account of respondents actual intent to mislead the public or defraud the
petitioner,49 thus, arriving at the amount of actual damages of P212,574.28.
Taking into account the deliberate intent of respondents to engage in unfair
competition, it is only proper that petitioner be awarded exemplary damages.
Article 2229 of the Civil Code provides that such damages may be imposed by way
of example or correction for the public good, such as the enhancement of the
protection accorded to intellectual property and the prevention of similar acts of
unfair competition. However, exemplary damages are not meant to enrich one
party or to impoverish another, but to serve as a deterrent against or as a negative
incentive to curb socially deleterious action.50 While there is no hard and fast rule
in determining the fair amount of exemplary damages, the award of exemplary
damages should be commensurate with the actual loss or injury suffered. 51 Thus,
exemplary damages of P500,000.00 should be reduced to P250,000.00 which more
closely approximates the actual damages awarded.

In accordance with Article 2208(1) of the Civil Code, attorneys fees may likewise be
awarded to petitioner since exemplary damages are awarded to it. Petitioner was
compelled to protect its rights over the disputed mark. The amount of P500,000.00
is more than reasonable, given the fact that the case has dragged on for more than
seven years, despite the respondents failure to present countervailing evidence.
Considering moreover the reputation of petitioners counsel, the actual attorneys
fees paid by petitioner would far exceed the amount that was awarded to it.52

IN VIEW OF THE FOREGOING, the instant Petition is GRANTED. The assailed

Decision of the Court of Appeals in CA-G.R. SP No. 92785, promulgated on 18 July
2006, is REVERSED. The Decision of the IPO Director General, dated 23 December
2005, is hereby REINSTATED IN PART, with the modification that the amount of
exemplary damages awarded be reduced to P250,000.00.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
A.C. No. 7036 June 29, 2009
JUDGE LILY LYDIA A. LAQUINDANUM, Complainant,
vs.
ATTY. NESTOR Q. QUINTANA, Respondent.
DECISION
PUNO, CJ.:
This administrative case against Atty. Nestor Q. Quintana (Atty. Quintana)
stemmed from a letter1 addressed to the Court filed by Executive Judge Lily Lydia A.
Laquindanum (Judge Laquindanum) of the Regional Trial Court of Midsayap,
Cotabato requesting that proper disciplinary action be imposed on him for
performing notarial functions in Midsayap, Cotabato, which is beyond the
territorial jurisdiction of the commissioning court that issued his notarial
commission, and for allowing his wife to do notarial acts in his absence.
In her letter, Judge Laquindanum alleged that pursuant to A.M. No. 03-8-02-SC,
executive judges are required to closely monitor the activities of notaries public
within the territorial bounds of their jurisdiction and to see to it that notaries public
shall not extend notarial functions beyond the limits of their authority. Hence, she
wrote a letter2 to Atty. Quintana directing him to stop notarizing documents within
the territorial jurisdiction of the Regional Trial Court of Midsayap, Cotabato (which
is outside the territorial jurisdiction of the commissioning court that issued his
notarial commission for Cotabato City and the Province of Maguindanao) since
certain documents3 notarized by him had been reaching her office.
However, despite such directive, respondent continuously performed notarial
functions in Midsayap, Cotabato as evidenced by: (1) the Affidavit of Loss of ATM
Card4 executed by Kristine C. Guro; and (2) the Affidavit of Loss of Drivers
License5 executed by Elenita D. Ballentes.
Under Sec. 11, Rule III6 of the 2004 Rules on Notarial Practice, Atty. Quintana could
not extend his notarial acts beyond Cotabato City and the Province of
Maguindanao because Midsayap, Cotabato is not part of Cotabato City or the
Province of Maguindanao. Midsayap is part of the Province of Cotabato. The City
within the province of Cotabato is Kidapawan City, and not Cotabato City.
Judge Laquindanum also alleged that, upon further investigation of the matter, it
was discovered that it was Atty. Quintanas wife who performed notarial acts
whenever he was out of the office as attested to by the Joint Affidavit7executed by
Kristine C. Guro and Elenita D. Ballentes.
In a Resolution dated February 14, 2006,8 we required Atty. Quintana to comment
on the letter of Judge Laquindanum.
In his Response,9 Atty. Quintana alleged that he filed a petition for notarial
commission before Branch 18, Regional Trial Court, Midsayap, Cotabato. However,
the same was not acted upon by Judge Laquindanum for three weeks. He alleged
that the reason for Judge Laquindanums inaction was that she questioned his
affiliation with the Integrated Bar of the Philippines (IBP) Cotabato City Chapter,
and required him to be a member of IBP Kidapawan City Chapter and to obtain a
Certification of Payments from the latter chapter. Because of this, he opted to
withdraw his petition. After he withdrew his petition, he claimed that Judge
Laquindanum sent a clerk from her office to ask him to return his petition, but he
did not oblige because at that time he already had a Commission for Notary
Public10 issued by Executive Judge Reno E. Concha of the Regional Trial Court,
Branch 14, Cotabato City.
Atty. Quintana lamented that he was singled out by Judge Laquindanum, because
the latter immediately issued notarial commissions to other lawyers without asking
for so many requirements. However, when it came to him, Judge Laquindanum
even tracked down all his pleadings; communicated with his clients; and
disseminated information through letters, pronouncements, and directives to court
clerks and other lawyers to humiliate him and be ostracized by fellow lawyers.
Atty. Quintana argued that he subscribed documents in his office at Midsayap,
Cotabato; and Midsayap is part of the Province of Cotabato. He contended that he
did not violate any provision of the 2004 Rules on Notarial Practice, because he was
equipped with a notarial commission. He maintained that he did not act outside
the province of Cotabato since Midsayap, Cotabato, where he practices his legal
profession and subscribes documents, is part of the province of Cotabato. He
claimed that as a lawyer of good moral standing, he could practice his legal
profession in the entire Philippines.
Atty. Quintana further argued that Judge Laquindanum had no authority to issue
such directive, because only Executive Judge Reno E. Concha, who issued his
notarial commission, and the Supreme Court could prohibit him from notarizing in
the Province of Cotabato.
In a Resolution dated March 21, 2006,11 we referred this case to the Office of the
Bar Confidant (OBC) for investigation, report and recommendation.
In the February 28, 2007 Hearing12 before the OBC presided by Atty. Ma. Crisitina
B. Layusa (Hearing Officer), Judge Laquindanum presented a Deed of
Donation,13 which was notarized by Atty. Quintana in 2004.14 Honorata Rosil
appears as one of the signatories of the document as the donors wife. However,
Honorata Rosil died on March 12, 2003, as shown by the Certificate of
Death15 issued by the Civil Registrar of Ibohon, Cotabato.
Judge Laquindanum testified that Atty. Quintana continued to notarize documents
in the years 2006 to 2007 despite the fact that his commission as notary public for
and in the Province of Maguindanao and Cotabato City had already expired on
December 31, 2005, and he had not renewed the same.16 To support her claim,
Judge Laquindanum presented the following: (1) Affidavit of Loss [of]
Title17 executed by Betty G. Granada with subscription dated April 8, 2006 at
Cotabato City; (2) Certificate of Candidacy18 of Mr. Elias Diosanta Arabis with
subscription dated July 18, 2006; (3) Affidavit of Loss [of] Drivers
License19 executed by Anecito C. Bernabe with subscription dated February 20,
2007 at Midsayap, Cotabato; and (4) Affidavit of Loss20 executed by Santos V.
Magbanua with subscription dated February 22, 2007 at Midsayap, Cotabato.
For his part, Atty. Quintana admitted that all the signatures appearing in the
documents marked as exhibits of Judge Laquindanum were his except for the
following: (1) Affidavit of Loss of ATM Card21 executed by Kristine C. Guro; and (2)
Affidavit of Loss of Drivers License22 executed by Elenita D. Ballentes; and (3)
Affidavit of Loss23 executed by Santos V. Magbanua. He explained that those
documents were signed by his wife and were the result of an entrapment
operation of Judge Laquindanum: to let somebody bring and have them notarized
by his wife, when they knew that his wife is not a lawyer. He also denied the he
authorized his wife to notarize documents. According to him, he slapped his wife
and told her to stop doing it as it would ruin his profession.
Atty. Quintana also claimed that Judge Laquindanum did not act on his petition,
because he did not comply with her requirements for him to transfer his
membership to the Kidapawan Chapter, wherein her sister, Atty. Aglepa, is the IBP
President.
On the one hand, Judge Laquindanum explained that she was only performing her
responsibility and had nothing against Atty. Quintana. The reason why she did not
act on his petition was that he had not paid his IBP dues,24which is a requirement
before a notarial commission may be granted. She told his wife to secure a
certification of payment from the IBP, but she did not return.
This was denied by Atty. Quintana, who claimed that he enclosed in his Response
the certification of good standing and payments of his IBP dues. However, when
the same was examined, there were no documents attached thereto. Due to
oversight, Atty. Quintana prayed that he be given time to send them later which
was granted by the Hearing Officer.
Finally, Atty. Quintana asked for forgiveness for what he had done and promised
not to repeat the same. He also asked that he be given another chance and not be
divested of his privilege to notarize, as it was the only bread and butter of his
family.
On March 5, 2007, Atty. Quintana submitted to the OBC the documents25 issued by
the IBP Cotabato City Chapter to prove that he had paid his IBP dues.
In a Manifestation26 dated March 9, 2007, Judge Laquindanum submitted a
Certification27 and its entries show that Atty. Quintana paid his IBP dues for the
year 2005 only on January 9, 2006 per Official Receipt (O.R.) No. 610381. Likewise,
the arrears of his IBP dues for the years 1993, 1995, 1996, and 1998 to 2003 were
also paid only on January 9, 2006 per O.R. No. 610387. Hence, when he filed his
petition for notarial commission in 2004, he had not yet completely paid his IBP
dues.
In its Report and Recommendation,28 the OBC recommended that Atty. Quintana
be disqualified from being appointed as a notary public for two (2) years; and that
if his notarial commission still exists, the same should be revoked for two (2) years.
The OBC found the defenses and arguments raised by Atty. Quintana to be without
merit, viz:
Apparently, respondent has extended his notarial acts in Midsayap and Kabacan,
Cotabato, which is already outside his territorial jurisdiction to perform as Notary
Public.
Section 11 of the 2004 Rules on Notarial Practice provides, thus:
"Jurisdiction and Term A person commissioned as notary public may perform
notarial acts in any place within the territorial jurisdiction of the commissioning
court for a period of two (2) years commencing the first day of January of the year
in which the commissioning court is made, unless earlier revoked [or] the notary
public has resigned under these Rules and the Rules of Court.
Under the rule[,] respondent may perform his notarial acts within the territorial
jurisdiction of the commissioning Executive Judge Concha, which is in Cotabato City
and the [P]rovince of Maguindanao only. But definitely he cannot extend his
commission as notary public in Midsayap or Kabacan and in any place of the
province of Cotabato as he is not commissioned thereat to do such act. Midsayap
and Kabacan are not part of either Cotabato City or [P]rovince of Maguindanao but
part of the province of North Cotabato. Thus, the claim of respondent that he can
exercise his notarial commission in Midsayap, Cotabato because Cotabato City is
part of the province of Cotabato is absolutely devoid of merit.
xxxx
Further, evidence on record also shows that there are several documents which the
respondents wife has herself notarized. Respondent justifies that he cannot be
blamed for the act of his wife as he did not authorize the latter to notarize
documents in his absence. According to him[,] he even scolded and told his wife
not to do it anymore as it would affect his profession.
In the case of Lingan v. Calubaquib et al., Adm. Case No. 5377, June 15, 2006 the
Court held, thus:
"A notary public is personally accountable for all entries in his notarial register; He
cannot relieve himself of this responsibility by passing the buck to their (sic)
secretaries"
A person who is commissioned as a notary public takes full responsibility for all the
entries in his notarial register. Respondent cannot take refuge claiming that it was
his wifes act and that he did not authorize his wife to notarize documents. He is
personally accountable for the activities in his office as well as the acts of his
personnel including his wife, who acts as his secretary.
Likewise, evidence reveals that respondent notarized in 2004 a Deed of Donation
(Rollo, p. 79) wherein, (sic) Honorata Rosel (Honorata Rosil) one of the affiants
therein, was already dead at the time of notarization as shown in a Certificate of
Death (Rollo, p.80) issued by the Civil Registrar General of Libungan, Cotabato.
Sec. 2, (b), Rule IV of the 2004 Rules on Notarial Practice provides, thus[:]
"A person shall not perform a notarial act if the person involved as signatory to the
instrument or document (1) is not in the notarys presence personally at the time
of the notarization; and (2) is not personally known to the notary public through
competent evidence of identity as defined by these Rules."
Clearly, in notarizing a Deed of Donation without even determining the presence or
qualifications of affiants therein, respondent only shows his gross negligence and
ignorance of the provisions of the 2004 Rules on Notarial Practice.
xxxx
Furthermore, respondent claims that he, being a lawyer in good standing, has the
right to practice his profession including notarial acts in the entire Philippines. This
statement is barren of merit.
While it is true that lawyers in good standing are allowed to engage in the practice
of law in the Philippines.(sic) However, not every lawyer even in good standing can
perform notarial functions without having been commissioned as notary public as
specifically provided for under the 2004 Rules on Notarial Practice. He must have
submitted himself to the commissioning court by filing his petition for issuance of
his notarial (sic) Notarial Practice. The commissioning court may or may not grant
the said petition if in his sound discretion the petitioner does not meet the
required qualifications for [a] Notary Public. Since respondent herein did not
submit himself to the procedural rules for the issuance of the notarial commission,
he has no reason at all to claim that he can perform notarial act[s] in the entire
country for lack of authority to do so.
Likewise, contrary to the belief of respondent, complainant being the
commissioning court in Midsayap, Cotabato has the authority under Rule XI of the
2004 Rules on Notarial Practice to monitor the duties and responsibilities including
liabilities, if any, of a notary public commissioned or those performing notarial acts On the contrary, we feel that he should be reminded that a notarial commission
without authority in her territorial jurisdiction.29 should not be treated as a money-making venture. It is a privilege granted only to
those who are qualified to perform duties imbued with public interest. As we have
xxxx declared on several occasions, notarization is not an empty, meaningless, routinary
act. It is invested with substantive public interest, such that only those who are
qualified or authorized may act as notaries public. The protection of that interest
We adopt the findings of the OBC. However, we find the penalty of suspension
necessarily requires that those not qualified or authorized to act must be
from the practice of law for six (6) months and revocation and suspension of Atty.
prevented from imposing upon the public, the courts, and the administrative
Quintana's notarial commission for two (2) years more appropriate considering the
offices in general. It must be underscored that notarization by a notary public
gravity and number of his offenses.
converts a private document into a public document, making that document
admissible in evidence without further proof of the authenticity thereof.33
After a careful review of the records and evidence, there is no doubt that Atty.
Quintana violated the 2004 Rules on Notarial Practice and the Code of Professional
IN VIEW WHEREOF, the notarial commission of Atty. Nestor Q. Quintana, if still
Responsibility when he committed the following acts: (1) he notarized documents
existing, is hereby REVOKED, and he is DISQUALIFIED from being commissioned as
outside the area of his commission as a notary public; (2) he performed notarial
notary public for a period of two (2) years. He is also SUSPENDED from the practice
acts with an expired commission; (3) he let his wife notarize documents in his
of law for six (6) months effective immediately, with a WARNING that the
absence; and (4) he notarized a document where one of the signatories therein
repetition of a similar violation will be dealt with even more severely. He is
was already dead at that time.
DIRECTED to report the date of his receipt of this Decision to enable this Court to
determine when his suspension shall take effect.1avvphi1
The act of notarizing documents outside ones area of commission is not to be
taken lightly. Aside from being a violation of Sec. 11 of the 2004 Rules on Notarial
Let a copy of this decision be entered in the personal records of respondent as a
Practice, it also partakes of malpractice of law and falsification.30Notarizing
member of the Bar, and copies furnished the Bar Confidant, the Integrated Bar of
documents with an expired commission is a violation of the lawyers oath to obey
the Philippines, and the Court Administrator for circulation to all courts in the
the laws, more specifically, the 2004 Rules on Notarial Practice. Since the public is
country.
deceived into believing that he has been duly commissioned, it also amounts to
indulging in deliberate falsehood, which the lawyer's oath proscribes.31 Notarizing
documents without the presence of the signatory to the document is a violation of SO ORDERED.
Sec. 2(b)(1), Rule IV of the 2004 Rules on Notarial Practice,32 Rule 1.01 of the Code
of Professional Responsibility, and the lawyers oath which unconditionally requires REYNATO S. PUNO
lawyers not to do or declare any falsehood. Finally, Atty. Quintana is personally Chief Justice
accountable for the documents that he admitted were signed by his wife. He
cannot relieve himself of liability by passing the blame to his wife. He is, thus, guilty WE CONCUR:
of violating Canon 9 of the Code of Professional Responsibility, which requires
lawyers not to directly or indirectly assist in the unauthorized practice of law.

All told, Atty. Quintana fell miserably short of his obligation under Canon 7 of the
Code of Professional Responsibility, which directs every lawyer to uphold at all
times the integrity and dignity of the legal profession.

That Atty. Quintana relies on his notarial commission as the sole source of income
for his family will not serve to lessen the penalty that should be imposed on him.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 192280 January 25, 2011
SERGIO G. AMORA, JR., Petitioner,
vs.
COMMISSION ON ELECTIONS and ARNIELO S. OLANDRIA, Respondents.
DECISION
NACHURA, J.:
Before us is a petition for certiorari under Rule 64, in relation to Rule 65, of the
Rules of Court, seeking to annul and set aside the Resolutions dated April 29,
20101 and May 17, 2010,2 respectively, of the Commission on Elections (COMELEC)
in SPA No. 10-046 (DC).
First, the undisputed facts.
On December 1, 2009, petitioner Sergio G. Amora, Jr. (Amora) filed his Certificate
of Candidacy (COC) for Mayor of Candijay, Bohol. At that time, Amora was the
incumbent Mayor of Candijay and had been twice elected to the post, in the years
2004 and 2007.
To oppose Amora, the Nationalist Peoples Coalition (NPC) fielded Trygve L. Olaivar
(Olaivar) for the mayoralty post. Respondent Arnielo S. Olandria (Olandria) was one
of the candidates for councilor of the NPC in the same municipality.
On March 5, 2010, Olandria filed before the COMELEC a Petition for
Disqualification against Amora. Olandria alleged that Amoras COC was not
properly sworn contrary to the requirements of the Omnibus Election Code (OEC)
and the 2004 Rules on Notarial Practice. Olandria pointed out that, in executing his
COC, Amora merely presented his Community Tax Certificate (CTC) to the notary
public, Atty. Oriculo Granada (Atty. Granada), instead of presenting competent
evidence of his identity. Consequently, Amoras COC had no force and effect and
should be considered as not filed.
Amora traversed Olandrias allegations in his Answer cum Position Paper.3 He
countered that:
1. The Petition for Disqualification is actually a Petition to Deny Due
Course or cancel a certificate of candidacy. Effectively, the petition of
Olandria is filed out of time;
2. Olandrias claim does not constitute a proper ground for the
cancellation of the COC;
3. The COC is valid and effective because he (Amora) is personally known
to the notary public, Atty. Granada, before whom he took his oath in
filing the document;
4. Atty. Granada is, in fact, a close acquaintance since they have been
members of the League of Muncipal Mayors, Bohol Chapter, for several
years; and
5. Ultimately, he (Amora) sufficiently complied with the requirement that
the COC be under oath.
As previously adverted to, the Second Division of the COMELEC granted the
petition and disqualified Amora from running for Mayor of Candijay, Bohol.
Posthaste, Amora filed a Motion for Reconsideration4 before the COMELEC en
banc. Amora reiterated his previous arguments and emphasized the asseverations
of the notary public, Atty. Granada, in the latters affidavit,5 to wit:
1. The COMELECs (Second Divisions) ruling is contrary to the objectives
and basic principles of election laws which uphold the primacy of the
popular will;
2. Atty. Granada states that while he normally requires the affiant to
show competent evidence of identity, in Amoras case, however, he
accepted Amoras CTC since he personally knows him;
 3. Apart from the fact that Amora and Atty. Granada were both members
of the League of Municipal Mayors, Bohol Chapter, the two consider each
other as distant relatives because Amoras mother is a Granada;
4. It is a matter of judicial notice that practically everybody knows the
Mayor, most especially lawyers and notaries public, who keep themselves
abreast of developments in local politics and have frequent dealings with
the local government; and
5. In all, the COC filed by Amora does not lack the required formality of
an oath, and thus, there is no reason to nullify his COC.
Meanwhile, on May 10, 2010, national and local elections were held. Amora
obtained 8,688 votes, equivalent to 58.94% of the total votes cast, compared to
Olaivars 6,053 votes, equivalent to only 41.06% thereof. Subsequently, the
Muncipal Board of Canvassers of Candijay, Bohol, proclaimed Amora as the winner
for the position of Municipal Mayor of Candijay, Bohol.6
A week thereafter, or on May 17, 2010, in another turn of events, the COMELEC en
banc denied Amoras motion for reconsideration and affirmed the resolution of the
COMELEC (Second Division). Notably, three (3) of the seven (7) commissioners
dissented from the majority ruling. Commissioner Gregorio Larrazabal
(Commissioner Larrazabal) wrote a dissenting opinion, which was concurred in by
then Chairman Jose A.R. Melo and Commissioner Rene V. Sarmiento.
In denying Amoras motion for reconsideration and upholding Olandrias petition
for disqualification of Amora, the COMELEC ratiocinated, thus:
[Amora] himself admitted in his Motion that the Second Division was correct in
pointing out that the CTC is no longer a competent evidence of identity for
purposes of notarization.
The COC therefore is rendered invalid when [petitioner] only presented his CTC to
the notary public. His defense that he is personally known to the notary cannot be
given recognition because the best proof [of] his contention could have been the
COC itself. However, careful examination of the jurat portion of the COC reveals no
assertion by the notary public that he personally knew the affiant, [petitioner]
herein. Belated production of an Affidavit by the Notary Public cannot be given
weight because such evidence could and should have been produced at the earliest
possible opportunity.
The rules are absolute. Section 73 of the Election Code states:
"Section 73. Certificate of Candidacy. No person shall be eligible for any elective
public office unless he files a sworn certificate of candidacy within the period fixed
herein."
Under the 2004 Rules on Notarial Practice of 2004 (Rules), the requirements of
notarization of an oath are:
"Section 2. Affirmation or Oath. The term Affirmation or Oath refers to an act
in which an individual on a single occasion:
(a) appears in person before the notary public;
(b) is personally known to the notary public or identified by the notary
public through competent evidence of identity as defined by these Rules;
and
(c) avows under penalty of law to the whole truth of the contents of the
instrument or document."
The required form of identification is prescribed in [S]ection 12 of the same Rules,
to wit:
"Section 12. Competent Evidence of Identity. The phrase competent evidence of
identity refers to the identification of an individual based on:
(a) at least one current identification document issued by an official agency bearing
the photograph and signature of the individual. x x x."
It is apparent that a CTC, which bears no photograph, is no longer a valid form of
identification for purposes of Notarization of Legal Documents. No less than the
Supreme Court itself, when it revoked the Notarial Commission of a member of the
Bar in Baylon v. Almo, reiterated this when it said:
"As a matter of fact, recognizing the established unreliability of a community tax
certificate in proving the identity of a person who wishes to have his document
notarized, we did not include it in the list of competent evidence of identity that
notaries public should use in ascertaining the identity of persons appearing before
them to have their documents notarized."
Seeking other remedies, [Amora] maintained that Section 78 of the Election Code
governs the Petition. Said section provides that:
"Sec. 78. Petition to deny due course to or cancel a certificate of candidacy. A
verified petition seeking to deny due course or to cancel a certificate of candidacy
may be filed by the person exclusively on the ground that any material
representation contained therein as required under Section 74 hereof is false. The
petition may be filed at any time not later than twenty-five days from the time of
the filing of the certificate of candidacy and shall be decided, after due notice and
hearing, not later than fifteen days before the election."
[Amora] however failed to note that the Petition relies upon an entirely different
ground. The Petition has clearly stated that it was invoking Section 73 of the
Election Code, which prescribes the mandatory requirement of filing a sworn
certificate of candidacy. As properly pointed out by [Olandria], he filed a Petition to
Disqualify for Possessing Some Grounds for Disqualification, which, is governed by
COMELEC Resolution No. 8696, to wit:
"B. PETITION TO DISQUALIFY A CANDIDATE PURSUANT TO SECTION 68 OF THE
OMNIBUS ELECTION CODE AND PETITION TO DISQUALIFY FOR LACK OF
QUALIFICATIONS OR POSSESSING SOME GROUNDS FOR DISQUALIFICATION
1. A verified petition to disqualify a candidate pursuant to Section 68 of the OEC
and the verified petition to disqualify a candidate for lack of qualifications
or possessing some grounds for disqualification may be filed on any day after the
last day for filing of certificates of candidacy but not later than the date of
proclamation;
xxxx
3. The petition to disqualify a candidate for lack of qualification or possessing some
grounds for disqualification, shall be filed in ten (10) legible copies, personally or
through a duly authorized representative, by any person of voting age, or duly
registered political party, organization or coalition of political parties on the ground
that the candidate does not possess all the qualifications as provided for by the
Constitution or by existing law or who possesses some grounds for disqualification
as provided for by the Constitution or by existing law."
xxxx
Finally, we do not agree with [Amora] when he stated that the Second Divisions
Resolution "practically supplanted congress by adding another ground for
disqualification, not provided in the omnibus election code or the local government
code. The constitution is very clear that it is congress that shall prescribe the
qualifications (and disqualifications) of candidates for local government positions."
These grounds for disqualification were laid down in both laws mentioned by
[Amora] and COMELEC Resolution 8696.7
Hence, this petition for certiorari imputing grave abuse of discretion to the
COMELEC. On June 15, 2010, we issued a Status Quo Ante Order and directed
respondents to comment on the petition. As directed, Olandria and the COMELEC
filed their respective Comments8 which uniformly opposed the petition. Thereafter,
Amora filed his Reply.9
Amora insists that the Petition for Disqualification filed by Olandria is actually a
Petition to Deny Due Course since the purported ground for disqualification simply
refers to the defective notarization of the COC. Amora is adamant that Section 73
of the OEC pertains to the substantive qualifications of a candidate or the lack
thereof as grounds for disqualification, specifically, the qualifications and
disqualifications of elective local officials under the Local Government Code (LGC)
and the OEC. Thus, Olandrias petition was filed way beyond the reglementary
period of twenty-five (25) days from the date of the filing of the disputed COC.
Moreover, Amora maintains that his COC is properly notarized and not defective,
and the presentation of his CTC to the notary public to whom he was personally
known sufficiently complied with the requirement that the COC be under oath.
Amora further alleges that: (1) Olaivar, his opponent in the mayoralty post, and
likewise a member of the NPC, is purportedly a fraternity brother and close
associate of Nicodemo T. Ferrer (Commissioner Ferrer), one of the commissioners
of the COMELEC who disqualified him; and (2) Olaivar served as Consultant for the
COMELEC, assigned to the Office of Commissioner Ferrer.
Olandria and the COMELEC reiterated the arguments contained in the COMELEC en
banc resolution of May 17, 2010.
Amoras petition is meritorious.
We find that the COMELEC ruling smacks of grave abuse of discretion, a capricious
and whimsical exercise of judgment equivalent to lack of jurisdiction. Certiorari lies
where a court or any tribunal, board, or officer exercising judicial or quasi-judicial
functions has acted without or in excess of jurisdiction or with grave abuse of
discretion.10
In this case, it was grave abuse of discretion to uphold Olandrias claim that an
improperly sworn COC is equivalent to possession of a ground for disqualification.
Not by any stretch of the imagination can we infer this as an additional ground for
disqualification from the specific wording of the OEC in Section 68, which reads:
SEC. 68. Disqualifications. Any candidate who, in an action or protest in which he
is party is declared by final decision of a competent court guilty of, or found by the
Commission of having: (a) given money or other material consideration to
influence, induce or corrupt the voters or public officials performing electoral
functions; (b) committed acts of terrorism to enhance his candidacy; (c) spent in his
election campaign an amount in excess of that allowed by this Code; (d) solicited,
received or made any contribution prohibited under Sections 89, 95, 96, 97 and
104; or (e) violated any of Sections 80, 83, 85, 86, and 261, paragraphs d, e, k, v,
and cc, sub-paragraph 6, shall be disqualified from continuing as a candidate, or if
he has been elected, from holding the office. Any person who is a permanent
resident of or an immigrant to a foreign country shall not be qualified to run for any
elective office under this Code, unless said person has waived his status as a
permanent resident or immigrant of a foreign country in accordance with the
residence requirement provided for in the elections laws.
and of Section 40 of the LGC, which provides:
SEC. 40. Disqualifications. The following persons are disqualified from running for
any elective local position:
(a) Those sentenced by final judgment for an offense involving moral
turpitude or for an offense punishable by one (1) year or more of
imprisonment, within two (2) years after serving sentence;
(b) Those removed from office as a result of an administrative case;
(c) Those convicted by final judgment for violating the oath of allegiance
to the Republic;
(d) Those with dual citizenship;
(e) Fugitives from justice in criminal or nonpolitical cases here or abroad;
(f) Permanent residents in a foreign country or those who have acquired
the right to reside abroad and continue to avail of the same right after
the effectivity of this Code; and
(g) The insane or feeble-minded.
It is quite obvious that the Olandria petition is not based on any of the grounds for
disqualification as enumerated in the foregoing statutory provisions. Nowhere
therein does it specify that a defective notarization is a ground for the
disqualification of a candidate. Yet, the COMELEC would uphold that petition upon
the outlandish claim that it is a petition to disqualify a candidate "for lack of
qualifications or possessing some grounds for disqualification."
The proper characterization of a petition as one for disqualification under the
pertinent provisions of laws cannot be made dependent on the designation,
correctly or incorrectly, of a petitioner. The absurd interpretation of Olandria,
respondent herein, is not controlling; the COMELEC should have dismissed his
petition outright.
A petition for disqualification relates to the declaration of a candidate as ineligible
or lacking in quality or accomplishment fit for the position of mayor. The distinction
between a petition for disqualification and the formal requirement in Section 73 of
the OEC that a COC be under oath is not simply a question of semantics as the
statutes list the grounds for the disqualification of a candidate.
Recently, we have had occasion to distinguish the various petitions for
disqualification and clarify the grounds therefor as provided in the OEC and the
LGC. We declared, thus:
To emphasize, a petition for disqualification on the one hand, can be premised on
Section 12 or 68 of the OEC, or Section 40 of the LGC. On the other hand, a petition
to deny due course to or cancel a CoC can only be grounded on a statement of a
material representation in the said certificate that is false. The petitions also have
different effects. While a person who is disqualified under Section 68 is merely
prohibited to continue as a candidate, the person whose certificate is cancelled or
denied due course under Section 78 is not treated as a candidate at all, as if he/she
never filed a CoC. Thus, in Miranda v. Abaya, this Court made the distinction that a
candidate who is disqualified under Section 68 can validly be substituted under
Section 77 of the OEC because he/she remains a candidate until disqualified; but a
person whose CoC has been denied due course or cancelled under Section 78
cannot be substituted because he/she is never considered a candidate.11
Apart from the qualifications provided for in the Constitution, the power to
prescribe additional qualifications for elective office and grounds for
disqualification therefrom, consistent with the constitutional provisions, is vested
in Congress.12 However, laws prescribing qualifications for and disqualifications
from office are liberally construed in favor of eligibility since the privilege of holding
an office is a valuable one.13 We cannot overemphasize the principle that where a
candidate has received popular mandate, all possible doubts should be resolved in
favor of the candidates eligibility, for to rule otherwise is to defeat the will of the
people.14
In stark contrast to the foregoing, the COMELEC allowed and confirmed the
disqualification of Amora although the latter won, and was forthwith proclaimed,
as Mayor of Candijay, Bohol.
Another red flag for the COMELEC to dismiss Olandrias petition is the fact that
Amora claims to personally know the notary public, Atty. Granada, before whom
his COC was sworn. In this regard, the dissenting opinion of Commissioner
Larrazabal aptly disposes of the core issue:
With all due respect to the well-written Ponencia, I respectfully voice my dissent.
The primary issue herein is whether it is proper to disqualify a candidate who, in
executing his Certificate of Candidacy (COC), merely presented to the Notary Public
his Community Tax Certificate.
The majority opinion strictly construed the 2004 Rules on Notarial Practice (the
"2004 Notarial Rules") when it provided that valid and competent evidence of
identification must be presented to render Sergio G. Amora, Jr.s [petitioners] COC
valid. The very wording of the 2004 Notarial Rules supports my view that the
instant motion for reconsideration ought to be granted, to wit:
Section 2. Affirmation or Oath . The term "Affirmation" or "Oath" refers to an act
in which an individual on a single occasion:
(a) appears in person before the notary public;
(b) is personally known to the notary public or identified by the notary
public through competent evidence of identity as defined by these Rules;
and
(c) avows under penalty of law to the whole truth of the contents of the
instrument or document.
As quoted supra, competent evidence of identity is not required in cases where the
affiant is personally known to the Notary Public, which is the case herein. The
records reveal that [petitioner] submitted to this Commission a sworn affidavit
executed by Notary Public Oriculo A. Granada (Granada), who notarized
[petitioners] COC, affirming in his affidavit that he personally knows [petitioner].
[Respondent], on the other hand, presented no evidence to counter Granadas
declarations. Hence, Granada[s] affidavit, which narrates in detail his personal
relation with [petitioner], should be deemed sufficient.
The purpose of election laws is to give effect to, rather than frustrate, the will of
the voters.1wphi1 The people of Candijay, Bohol has already exercised their right
to suffrage on May 10, 2010 where [petitioner] was one of the candidates for
municipal mayor. To disqualify [petitioner] at this late stage simply due to an overly
strict reading of the 2004 Notarial Rules will effectively deprive the people who
voted for him their rights to vote.
The Supreme Courts declaration in Petronila S. Rulloda v. COMELEC et al. must not
be taken lightly:
Technicalities and procedural niceties in election cases should not be made to
stand in the way of the true will of the electorate. Laws governing election contests
must be liberally construed to the end that the will of the people in the choice of
public officials may not be defeated by mere technical objections.
Election contests involve public interest, and technicalities and procedural barriers
must yield if they constitute an obstacle to the determination of the true will of the
electorate in the choice of their elective officials. The Court frowns upon any
interpretation of the law that would hinder in any way not only the free and
intelligent casting of the votes in an election but also the correct ascertainment of
the results.15
Our ruling herein does not do away with the formal requirement that a COC be
sworn. In fact, we emphasize that the filing of a COC is mandatory and must comply
with the requirements set forth by law.16

Section 2 of the 2004 Rules on Notarial Practice lists the act to which an affirmation
or oath refers:

Sec. 2. Affirmation or Oath. The term "Affirmation" or "Oath" refers to an act in

which an individual on a single occasion:

(a) appears in person before the notary public;

(b) is personally known to the notary public or identified by the notary

public through competent evidence of identity as defined by these Rules;
and

(c) avows under penalty of law to the whole truth of the contents of the
instrument or document.

In this case, however, contrary to the declarations of the COMELEC, Amora

complied with the requirement of a sworn COC. He readily explained that he and
Atty. Granada personally knew each other; they were not just colleagues at the
League of Municipal Mayors, Bohol Chapter, but they consider each other as
distant relatives. Thus, the alleged defect in the oath was not proven by Olandria
since the presentation of a CTC turned out to be sufficient in this instance. On the
whole, the COMELEC should not have brushed aside the affidavit of Atty. Granada
and remained inflexible in the face of Amoras victory and proclamation as Mayor
of Candijay, Bohol.

WHEREFORE, the petition is GRANTED. The Resolutions of the Commission on

Elections in SPA No. 10-046 (DC) dated April 29, 2010 and May 17, 2010,
respectively, are ANULLED and SET ASIDE.

SO ORDERED.