G.R. No.

193426 September 29, 2014

SUBIC BAY LEGEND RESORTS AND CASINOS, INC., Petitioner,

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari assails the April 27, 2010 Decision and August 24, 2010
Resolution of the Court of Appeals (CA) in CA-G.R. CV No. 91758, entitled "Bernard C.
Fernandez, Plaintiff-Appellee, versus Subic Bay Legend Resorts and Casinos, Inc.,
Defendant-Appellant," which affirmed in toto the May 17, 2006 Decision of the Regional Trial
Court (RTC) of Olongapo City, Branch 74, in Civil Case No. 237-0-97.

Factual Antecedents

Petitioner Subic Bay Legend Resorts d Casinos, Inc., a duly organized and e)(isting
corporation operating under Philippine laws, operates the Legenda Hotel and Casino
(Legenda) located in the Subic Bay Freeport Zone in Zambales. On the other hand,
respondent Bernard C. Fernandez is the plaintiff in Civil Case No. 237-0-97 prosecuted
against petitioner in Olongapo RTC.

As determined by the CA, the facts of the case are as follows:

At around eleven o'clock in the evening of 6 June 1997, the appellee's brother[,] Ludwin
Fernandez[,] visited the Legenda Hotel and Casino x x x owned and operated by the
appellant and located along the Waterfront Road, Subic Bay Freep011 Zone. Legenda had
strategically installed several closed circuit television (CCTV) cameras as part of security
measures required by its business. The monitors revealed that Ludwin changed x x x
$5,000.00 w011h of chips into smaller denominations. Legenda admitted in its brief that its
surveillance staff paid close attention to Ludwin simply because it was "wmsual" for a
Filipino to play using dollar-denominated chips. After Ludwin won $200.00 in a game of
baccarat, he redeemed the value of chips worth $7,200.00. A review of the CCTV recordings
showed that the incident was not the first time Ludwin visited the Casino, as he had also
been there on 5 June 1997.

An operation was launched by Legenda to zero-in on Ludwin whose picture was furnished its
security section. Thus, unbeknownst to him, he was already closely watched on 13 June 1997
when he went with another brother, Deoven[,] to the casino at around the same time or at 11:
17 p.m. After playing (and losing $100.00) only one round of baccarat, the siblings had their
chips encashed at two separate windows. Since the cashiers were apprised of a supposed
irregularity, they "froze" the transaction.

Shortly thereafter, Legenda's internal security officers accosted Ludwin and Deoven and
ordered them to return the cash and they complied without ado because they were being
pulled away. The two were eventually escorted to private rooms where they were
separately interrogated about the source of the chips they brought. They were held for
about seven hours w1til the wee hours of the morning, without food or sleep. The ultimaturn
was simple: they confess that the chips were given by a certain employee, Michael Cabrera,
or they would not be released from questioning. The same line of questioning confronted
them when they were later twned-over for blotter preparation to the Intelligence and
Investigation Office of the Subic Bay Metropolitan Authority (IIO SBMA). Finally, the brothers
succwnbed to Legenda's instruction to execute a joint statement implicating Cabrera as the
illegal source of the chips. Due to hunger pangs and fatigue, they did not disown the
statement even when they subscribed the same before the prosecutor in whose office they
were [later] brought. On the other hand, they signed for basically the san1e reason a
document purporting to show that they were "released to [their] brother's custody in good
condition." At the time, Deoven was about 21 years old, in his second year of engineering
studies and was not familiar with the so-called "estafa" with which the security personnel
threatened to sue him for; although he was quite aware of the consequences of a crime such
as direct assault because he had previously been convicted thereof. About two weeks later,
Deoven exec ted a retraction in Baguio City where he took up his engineering course.7

On July 1, 1997, respondent filed Civil Case No. 237-0-97 for recovery of sum of money with
damages against petitioner, on the premise that on June 13, 1997, he went to Legenda with
his brothers Ludwin and Deoven; that he handed over Legenda casino chips worth
US$6,000.00, which belonged to him, to his brothers for the latter to use at the casino; that
petitioner accosted his brothers and unduly and illegally confiscated his casino chips
equivalent to US$5,900.00; and that petitioner refused and continues to refuse to return the
same to him despite demand. His Complaint prayed for the return of the casino chips and an
award of P50,000.00 moral damages, P50,000.00 exemplary damages, P30,000.00 attorney's
fees, P20,000.00 litigation expenses, and costs.

Petitioner's Answer with Compulsory Counterclaim essentially alleged that right after
Ludwin and Deoven's transactions with the Legenda cashier were frozen on June 13, 1997,
they voluntarily agreed to proceed to the Legenda security office upon invitation, where
Ludwin voluntarily informed security officers that it was a certain Michael Cabrera
(Cabrera) - a Legenda table inspector at the time - who gave him the casino chips for
encashment, taught him how to play baccarat and thereafter encash the chips, and rewarded
him with Pl,000.00 for every $1,000.00 he encashed; that Ludwin pointed to a picture of
Cabrera in a photo album of casino employees shown to him; that Ludwin and Deoven were
then brought to the IIO SBMA, where they reiterated their statements made at the Legenda
security office; that they volunteered to testify against Cabrera; that respondent himself
admitted that it was Cabrera who gave him the casino chips; that Ludwin and Deoven
voluntarily executed a joint affidavit before the Olongapo City Prosecutor's Office, which
they subsequently recanted; that respondent had no cause of action since the confiscated
casino chips worth US$5,900.00 were stolen from it, and thus it has the right to retain them.
By way of counterclaim, petitioner sought an award of P 1 million moral damages, P1 million
exemplary damages, and P.5 million attorney's fees and litigation expenses.

Respondent filed his Answer to petitioner's counterclaim.

Ruling of the Regional Trial Court

After pre-trial and trial, the trial court rendered its May 17, 2006 Decision, which decreed as
follows:

WHEREFORE, finding that the evidence preponderates in favor of the plaintiff, judgment is
rendered against the defendant ordering it to:

1) Return to plaintiff casino chips worth USD $5,900.00 or its equivalent in Philippine
Peso at the rate of P38.00 to USD $1 in 1997.
 2) Pay plaintiff attorney's fees in the amount of P30,000.00 3) [Pay] [c]ost of this suit.

SO DECIDED.

In arriving at the above conclusion, the trial court held:

The primordial issue is whether or not plaintiff can be considered the lawful owner of the
USD $5,900 worth of casino chips that were confiscated.

There is no dispute that the subject chips were in the possession of the plaintiff. He claims he
got hold of them as payment for car services he rendered to a Chinese individual. Defendant
however, contends that said chips were stolen from the casino and it is the lawful owner of
the same.

The onus fell on defendant to prove that the casino chips were stolen. The proof adduced
however, is wanting. The statements of Deoven and Ludwin C. Fernandez, confessing to the
source of the chips were recanted hence, have little probative value. The testimony of
defendant's witnesses narrated defendant's action responding to the suspicious movements
of the Fernandez brothers based on surveillance tapes. The tapes, however, do not show
how these persons got hold of the chips. The alleged source in the person of Mike Cabrera,
a table inspector of the casino[,] was based on the recanted declarations of the brothers. No
criminal charge was shown to have been filed against him nor the plaintiff and his brothers.
Neither was there an explanation given as to how those chips came into the possession of
Mike Cabrera much less that he passed them on to the brothers for the purpose of encashing
and dividing the proceeds amongst themselves. All told therefore, there is no direct
evidence to prove the theory of the defendant and the circumstantial evidence present is, to
the mind of the court, not sufficient to rebut the legal presw11ption that a person in
possession of personal property is the lawful owner of the same (Art. 559, Civil Code of the
Philippines).

Ruling of the Court of Appeals

Petitioner appealed the May 1 7, 2006 Decision of the trial court, arguing that Ludwin and
Deoven's admission in their joint affidavit before the Olongapo City Prosecutor's Office that
it was Cabrera who gave them the casino chips strongly indicates that the chips were stolen
from Legenda; that the subsequent recantation by Ludwin and Deoven of their joint affidavit
should be looked upon with disfavor, given that recanted testimony is unreliable and
recantations can be easily secured from poor and ignorant witnesses and for monetary
consideration or through intimidation; that respondent's explanation that he gave the chips
to his brothers Ludwin and Deoven for them to play in the casino is highly doubtful; that the
true purpose of Ludwin and Deoven was to encash the stolen chips; that no force or
intimidation attended the treatment accorded Ludwin and Deoven when they were accosted
and asked to explain their possession of the chips; and that the trial court erred in awarding
attorney's fees and costs for the filing of a baseless suit solely aimed at unjustly enriching
respondent at petitioner's expense.

On April 27, 2010, the CA issued the assailed Decision which affirmed the trial court's May
17, 2006 Decision. Petitioner's Motion for Reconsideration was rebuffed as well.

In deciding against petitioner, the CA held that, applying Article 559 of the Civil Code,
respondent had the legal presumption of title to or ownership of the casino chips. This
conclusion springs from respondent's admission during trial that the chips represented
payment by a Chinese customer for services he rendered to the latter in his car shop. The
CA added that since respondent became the owner of the chips, he could very well have
given them to Ludwin and Deoven, who likewise held them as "possessors in good faith and
for value" and with "presumptive title" derived from the respondent. On the other hand,
petitioner failed to convincingly show that the chips were stolen; for one, it did not even file
a criminal case against the supposed mastermind, Cabrera - nor did it charge Ludwin or
Deoven - for the alleged theft or taking of its chips.

The CA likewise held that Ludwin' s and Deoven' s statements and admissions at the Legenda
security office are inadmissible because they were obtained in violation of their
constitutional rights: they were held in duress, denied the right to counsel and the
opportunity to contact respondent, and deprived of sleep, which is one of the "more subtler
[sic] techniques of physical and psychological torture to coerce a confession." It found that
the actions and methods of the Legenda security personnel in detaining and extracting
confessions from Ludwin and Deoven were illegal and in gross violation of Ludwin's and
Deoven's constitutional rights.
Finally, the CA held that petitioner was guilty of bad faith in advancing its theory and claim
against respondent by unduly accusing him of dealing in stolen casino chips, which thus
entitles respondent to the reduced award of attorney's fees in the amount of P30,000.00

Issues

Petitioner raises the following issues:

a) The Honorable Court seriously erred in ruling that the recanted statements of
Deoven Fernandez and Ludwin C. Fernandez have [no] probative value;

b) The Honorable Court seriously erred in ruling that the circumstantial evidence
present is not sufficient to rebut the legal presumption that a person in possession of
personal property is the lawful owner of the same;

c) The Honorable Court seriously erred in finding that the evidence preponderates in
favor of the herein respondent; [and]

d) The Honorable Court seriously erred in awarding attorney's fees and costs of suit I
favor of the respondent.

Petitioner's Arguments

In its Petition and Reply, petitioner mainly argues that the assailed dispositions are
grounded entirely on speculation, and the inferences made are manifestly mistaken and
based on a misappreciation of the facts and law; that the CA failed to consider the
testimonial and documentary evidence it presented to prove the fact that the casino chips
were missing and were stolen by Cabrera, who thereafter gave them to respondent's
brothers, Ludwin and Deoven. Petitioner maintains that the presumption of title under
Article 559 cannot extend to respondent's brothers, who admitted during the investigation at
the Legenda security office and in their Joint Affidavit that the chips came from Cabrera, and
not responcient; that the subsequent Sworn Statement recanting the Joint Affidavit should not
be given credence, as affidavits of recantation can easily be secured - which thus makes
them unreliable; and that no duress attended the taking of the brothers' Joint Affidavit, which
was prepared by Henry Marzo of the Intelligence and Investigation Office (IIO) of the Subic
Bay Metropolitan Authority (SBMA).

Petitioner asserts that it is unbelievable that respondent would give US$6,000.00 worth of
casino chips to his brothers with which to play at the casino; that with the attending
circumstances, the true intention of respondent's brothers was to encash the stolen chips
which Cabrera handed to them, and not to play at the casino. Petitioner thus concludes that
no coercion could have attended the investigation of Ludwin and Deoven; that their
subsequent recantation should not be given weight; and that for suing on a baseless claim,
respondent is not entitled to attorney's fees and costs of litigation.

Petitioner thus prays for the reversal of the assailed dispositions and the corresponding
dismissal of Civil Case No. 237-0-97.

Respondent's Arguments

In his Comment, respondent generally echoes the pronouncement of the CA. He likewise
notes that petitioner has raised only questions of fact; that the Petition is being prosecuted to
delay the proceedings; that the trial and appellate courts are correct in finding that
petitioner failed to prove its case and show that the casino chips were stolen; that petitioner
failed to rebut the presumption that a person in possession of personal property is the lawful
owner of the same, pursuant to Article 559 of the Civil Code; and that the P30,000.00 award
of attorney's fees should be increased to P100,000.00.

Our Ruling

The Petition is denied.

Petitioner's underlying theory is that the subject casino chips were in fact stolen by its
employee Cabrera, then handed over to respondent's brothers, Ludwin and Deoven, for
encashment at the casino; that Ludwin and Deoven played at the casino only for show and to
conceal their true intention, which is to encash the chips; that respondent's claim that he
owned the chips, as they were given to him in payment of services he rendered to a Chinese
client, is false. These arguments require the Court to examine in greater detail the facts
involved. However, this may not be done because the Court is not a trier of facts and does
not normally undertake the re-examination of the evidence presented during trial; the
resolution of factual issues is the function of lower courts, whose findings thereon are
received with respect and are binding on the Court subject only to specific exceptions. In
tum, the factual findings of the Court of Appeals carry even more weight when they are
identical to those of the trial court's.

Besides, a question of fact cannot properly be raised in a petition for review on certiorari.
Moreover, if petitioner should stick to its theory that Cabrera stole the subject casino chips,
then its failure to file a criminal case against the latter -including Ludwin and Deoven for that
matter - up to this point certainly does not help to convince the Court of its position,
especially considering that the supposed stolen chips represent a fairly large amount of
money. Indeed, for purposes of this proceeding, there appears to be no evidence on record
- other than mere allegations and suppositions - that Cabrera stole the casino chips in
question; such conclusion came unilaterally from petitioner, and for it to use the same as
foundation to the claim that Ludwin, Deoven and respondent are dealing in stolen chips is
clearly irregular and unfair.

Thus, there should be no basis to suppose that the casino chips found in Ludwin's and
Deoven's possession were stolen; petitioner acted arbitrarily in confiscating the same
without basis. Their Joint Affidavit - which was later recanted - does not even bear such fact;
it merely states that the chips came from Cabrera. If it cannot be proved, in the first place,
that Cabrera stole these chips, then there is no more reason to suppose that Ludwin and
Deoven were dealing in or possessed stolen goods; unless the independent fact that
Cabrera stole the chips can be proved, it cannot be said that they must be confiscated when
found to be in Ludwin's and Deoven's possession.

It is not even necessary to resolve whether Ludwin's and Deoven's Joint Affidavit was
obtained by duress or otherwise; the document is irrelevant to petitioner's cause, as it does
not suggest at all that Cabrera stole the subject casino chips. At most, it only shows that
Cabrera gave Ludwin and Deoven casino chips, if this fact is true at all - since such statement
has since been recanted.

The fact that Ludwin and Deoven appear to be indecisive as to who gave them the casino
chips does not help petitioner at all.1wphi1 It cannot lead to the conclusion that Cabrera
stole the chips and then gave them to the two; as earlier stated, petitioner had to prove this
fact apart from Ludwin's and Deoven's claims, no matter how incredible they may seem.

Though casino chips do not constitute legal tender, there is no law which prohibits their use
or trade outside of the casino which issues them. In any case, it is not unusual nor is it
unlikely that respondent could be paid by his Chinese client at the former' s car shop with
the casino chips in question; said transaction, if not common, is nonetheless not unlawful.
These chips are paid for anyway; petitioner would not have parted with the same if their
corresponding representative equivalent - in legal tender, goodwill, or otherwise was not
received by it in return or exchange. Given this premise - that casino chips are considered
to have been exchanged with their corresponding representative value - it is with more
reason that this Court should require petitioner to prove convincingly and persuasively that
the chips it confiscated from Ludwin and Deoven were indeed stolen from it; if so, any Tom,
Dick or Harry in possession of genuine casino chips is presumed to have paid for their
representative value in exchange therefor. If petitioner cannot prove its loss, then Article
559 cannot apply; the presumption that the chips were exchanged for value remains.

Finally, the Court sustains the award of attorney's fees. Under Article 2208 of the Civil Code,
attorney's fees may be recovered when the defendant acted in gross and evident bad faith in
refusing to satisfy the plaintiff's plainly valid, just and demandable claim, or in any other
case where the court deems it just and equitable that attorney's fees and expenses of
litigation should be recovered. Petitioner's act of arbitrarily confiscating the casino chips
and treating Ludwin and Deoven the way it did, and in refusing to satisfy respondent's claim
despite the fact that it had no basis to withhold the chips, confirm its bad faith, and should
entitle respondent to an award.

With the foregoing view of the case, a discussion of the other issues raised is deemed
irrelevant and unnecessary.

WHEREFORE, the Petition is DENIED. The assailed April 27, 2010 Decision and August 24,
2010 Resolution of the Court of Appeals in CA-G.R. CV No. 91758 are AFFIRMED.

SO ORDERED.