G.R. No. 74225 . April 17, 1989.
REPUBLIC OF THE PHILIPPINES, petitioner, vs. INTERMEDIATE APPELLATE COURT, SIMPLICIO BERDON, GAUDIOSA BERDON and LUIS BERDON, respondents.

FACTS

The Republic filed a petition for forfeiture under Republic Act No. 1379 against Simplicio Berdon, an Assistant Staff Civil Engineer, his wife Gaudiosa, and his father Luis. The petition alleged that from 1963 to 1969, the spouses acquired various parcels of land and constructed a house with a total value disproportionate to their lawful incomes, savings, and declared assets, constituting unexplained wealth valued at P124,495.82. The Republic sought forfeiture of these properties, and the trial court issued a writ of attachment. The Republic’s evidence, primarily from investigators, centered on deeds of sale for multiple properties and sworn statements of assets and liabilities filed by Simplicio, which showed a significant disparity between his acquisitions and his government salary.
The respondents presented evidence to explain the source of funds for the acquisitions. Simplicio and Gaudiosa testified that the properties were financed through external sources: a P3,000 donation and a P5,000 loan from Gaudiosa’s parents, who owned land and a moviehouse; a P14,000 loan from the GSIS; a P6,000 loan from the DBP; and a substantial loan (with about P60,000 actually released) from Congressman Ramon Durano, a wedding sponsor, for agricultural investment. The trial court dismissed the petition, finding the wealth sufficiently explained, and the Intermediate Appellate Court affirmed.

ISSUE

Did the Intermediate Appellate Court err in affirming the dismissal of the forfeiture petition, thereby ruling that the respondents successfully rebutted the statutory presumption that the subject properties were unlawfully acquired?

RULING

No, the appellate court did not err. The Supreme Court affirmed the dismissal, upholding the legal logic that the presumption under Section 2 of R.A. No. 1379 —that property acquired by a public officer manifestly out of proportion to his salary is prima facie unlawful—is rebuttable. The statute affords the respondent every opportunity to explain, to the satisfaction of the court, how the property was acquired. In this case, private respondents presented competent and credible evidence demonstrating legitimate external sources of funding for the properties, including loans and a donation from family.
The Court clarified that in a forfeiture proceeding under R.A. No. 1379 , the courts are not strictly bound by the entries in the respondent’s sworn statements of assets and liabilities. The inaccuracies or omissions in Simplicio’s statements, while potentially material for other proceedings like anti-graft cases, do not automatically preclude a valid explanation for the wealth in the context of forfeiture. The focus is on the totality of evidence presented to explain the acquisitions. Here, the respondents’ evidence directly addressed and overcame the prima facie case established by the disparity. Consequently, the presumption of unlawful acquisition was successfully rebutted, leaving no legal basis for forfeiture. The petition was denied.