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| Remedial Law Digest |
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Posted by: admin - 05-31-2019, 10:28 PM - Forum: Remedial Laws
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2018 GOLDEN BEACON REMEDIAL LAW
By: Dean MANUEL R. BUSTAMANTE
1. J U R I S D I C T I O N
Jurisdiction is the power and authority of a court to hear, try and decide a case. It is conferred by substantive law or by other statutes.
Features of jurisdiction over the subject matter:
1. conferred by law
2. can be raised at anytime
3. to be determined by the allegations of the case
4. determined by the allegations in the pleadings, not the evidence
5. sometimes territorial
COURTS OF LAW vs. COURTS OF EQUITY
A court of law decides a case according to what promulgated law is while a court of equity adjudicates a controversy according to the common precept of what is and just without inquiring into the terms of the statutes.
CONSTITUTIONAL and STATUTORY COURTS
Constitutional Courts are those created by the Constitution while Statutory Courts are those created by law. The Supreme Court owes its creation to the Constitution. It is therefore a Constitutional Court.
The Sandiganbayan is NOT a constitutionally created court because it was not directly created by the Constitution but was created by law pursuant to a constitutional mandate. All courts in the Philippines other than the Supreme Court are statutory court.
The distinction is significant because Constitutional Courts cannot be abolished by Congress without amending the Constitution whereas Statutory Courts may be abolished by Congress by just simply repealing the law which created those courts.
DOCTRINE OF PRIMARY JURISDICTION
Under this doctrine, courts will not resolve a controversy involving a question which is within the jurisdiction of an administrative tribunal, especially where the question demands the exercise of sound administrative discretion requiring the special knowledge and experience of said tribunal in determining technical and intricate matters of fact. (Villaflor vs. Court of Appeals, 280 SCRA 297).
WHEN JURISDICTION OVER THE RES BECOMES SIGNIFICANT
Jurisdiction over the res becomes relevant only in actions in rem and quasi in rem but also in situations where jurisdiction over the person of the defendant cannot be acquired in personam.
ACTIONS INCAPABLE OF PECUNIARY ESTIMATION
In actions incapable of pecuniary estimation, the basic issue is one other than the recovery of a sum of money. The money claim is this type of action is merely incidental.
In determining whether an action is one the subject matter of which is not capable of pecuniary estimation, the SC has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the MTC or RTC would depend on the amount of the
claim. However, where the basic issue is something OTHER THAN the right to recover a sum of money, then the action is considered as one incapable of pecuniary estimation.
Some Examples of Action Incapable of Pecuniary Estimations:
1. Specific Performance;
2. Rescission;
3. Support;
4. Foreclosure of Mortgage;
5. Injunction;
6. Annulment;
7. etc.
ZENAIDA LANTING vs. HON. OMBUDSMAN
458 SCRA 93, G.R. No. 141426, May 6, 2005
FACTS: Petitioner filed a criminal complaint before the office of the Ombudsman against city officials of Manila for violation of RA 3019.
The Office of the Ombudsman dismissed the complaint for lack of merit.
She appealed the decision of the Ombudsman to the Court of Appeals (CA), however, the CA dismissed the petition on the ground that it has no jurisdiction over the subject matter of the complaint.
ISSUE: Whether the CA have jurisdiction to review cases decided by the Ombudsman?
HELD: NO. Petitioner’s complaint before the Ombudsman is for violation of the RA 3019 (Anti-Graft and Corrupt Practices Acts) and it is not an administrative complaint. Considering the complaint is criminal in nature, the Supreme Court (SC) has the sole authority to review the Ombudsman resolution on pure question of law.
ESTOPPEL
SPRINGSUN MANAGEMENT SYSTEM vs. OSCAR CAMERINO
449 SCRA, G.R. No. 161029, January 19, 2005
FACTS: Respondents have been the farmers-tenants of Victoria Homes, cultivating and planting rice and corn on the lots.
Victoria Homes without notifying the respondents, sold the lots to petitioner Springsun.
Petitioner filed several complaints for forcible entry with the MTC against the respondent farm tenants.
In their common answer to the complaint, the respondents averred that they and their families have been in their possession of the lots as tenants and they have been tilling and planting rice and other agricultural crops thereon many years ago up to the present. MTC dismissed the case.
On appeal, the RTC affirmed the dismissal. When appeal was brought to the CA, the petitioner asserts that the lower court did not have jurisdiction in the said case and it should have been filed with the Department of Agrarian Reforms instead.
ISSUE: Whether the question of jurisdiction be raised for the first time on appeal?
HELD: NO. It did not do so before the trial court and the Appellate Court. The SC has consistently ruled that an issue proffered for the first time on appeal and not timely presented in the proceedings before the lower court is barred by the principle of estoppel.
**** The Court has constantly upheld the doctrine that while jurisdiction may be assailed at any stage, a litigant’s participation in all stages of the case before the trial court, including the invocation of its authority in asking affirmative relief, bars such party from challenging the court’s jurisdiction. A party cannot invoke the jurisdiction of a court to
secure affirmative relief against his opponent and after obtaining or failing to obtain such relief, repudiate or question that same jurisdiction. The Court frowns upon the undesirable practice of a party participating in the
proceedings and submitting his case for decision and then accepting judgment only if favorable and attacking it for lack of jurisdiction when adverse.
JURISDICTION OVER THE PERSON OF THE ACCUSED
RENATO M. DAVID vs. EDITHA AGBAY & PEOPLE
G.R. No. 199113, March 18, 2015
FACTS: An information for Falsification of Public Document was filed against David before the MTC and a warrant of arrest was issued against David.
On February 11, 2011, after the filing of the information and before his arrest, David filed an Urgent Motion for Re-determination of Probable Cause.
The MTC denied David’s motion for re-determination of probable cause and further cited lack of jurisdiction over the person of the accused David as the motion was filed prior to his arrest.
ISSUE: Whether the jurisdiction over the person of the accused was already acquired by the filing of the Urgent Motion for Re-determination of Probable Cause.
HELD: YES. The voluntary appearance of the accused, whereby the court acquires the jurisdiction over his person, is accomplished either by his pleading to the merits such as requiring the exercise of the court’s jurisdiction thereafter, appearing for arraignment or by filing of bail.
Distinction should be made between custody of the law and jurisdiction over the person.
Custody of the law required before the court can act upon application for bail, but is not required for the adjudication of other reliefs sought by the defendant when the mere application therefore constitutes a waiver of the defense of lack of jurisdiction over the person of the accused.
Custody of the law is accomplished either by arrest or voluntary surrender while jurisdiction over the person of the accused is acquired upon his arrest or voluntary surrender.
One can be under the custody of the law but not subject to the jurisdiction of the court over his person, such as, when a person arrested by virtue of a warrant files a motion before arraignment to quash the warrant.
On the other hand, one can be subject to the jurisdiction of the court over his person, and yet not be in the custody of the law, such as when an accused escapes custody after his trial has commenced.
Being in the custody of the law signifies restraint on the person, who is thereby deprived of his will and liberty, binding him to become obedient to the will of the law.
Custody of the law is literally custody over the body of the accused. It includes, but is not limited to, detention.
In criminal cases, jurisdiction over the person of the accused is deemed waived by the accused when he files any pleading seeking an affirmative relief, except in cases when he invokes the special jurisdiction of the court by impugning such jurisdiction over his person.
Considering that David sought affirmative relief in filing his motion for re-determination of probable cause, the MTC acquires over his person.
VOID JUDGMENT DOES NOT ATTAIN FINALITY
HON. CESAR D. BUENAFLOR vs. JOSE M. RAMIREZ
G.R. No. 201607, February 15, 2017, 817 SCRA 623
FACTS: Chairman Domingo of the PAGC appointed Ramirez as Executive Assistant III. A month later, Chairman Domingo resigned and was replaced by Buenaflor.
Buenaflor terminated Ramirez as of the same date as Chairman Domingo’s resignation on the ground that his position was co-terminus with that of the appointing authority.
Believing that his appointment had been contractual in nature, Ramirez sued Buenaflor in the RTC. On the other hand, Buenaflor filed his answer and contended that Ramirez should have instead filed an administrative complaint in the Civil Service Commission (CSC).
After trial, the RTC rendered judgment declaring Buenaflor guilty of unlawful termination because he had not discharged his burden of proving that Ramirez’ employment was co-terminus with that of Chairman Domingo.
Buenaflor seasonably filed his motion for reconsideration which the RTC denied the same on September 30, 2008.
On September 22, 2011, Buenaflor filed a notice of appeal.
The RTC denied due course to the notice of appeal of Buenaflor, and altogether dismissed the appeal for having been filed out of time.
Buenaflor assailed the order of the RTC by petition for certiorari in the CA, alleging that the RTC thereby gravely abused its discretion amounting to lack or excess of jurisdiction.
The CA dismissed the petition on technical grounds. Buenaflor moved for reconsideration, but the CA denied his motion for reconsideration as Buenaflor’s Notice of Appeal was filed 1,125 days thereafter is clearly out of time.
ISSUES
1) Whether RTC has jurisdiction over the termination of the services of Ramirez.
2) Whether the decision of the RTC has not attained finality despite the belated appeal.
RULINGS
1) NO. The RTC has no jurisdiction over a case involving termination of employment of an employee of the Civil Service.
Ramirez’ complaint challenging the validity of his termination from the service was outside of the RTC’s sphere of authority. His appointment or separation from the service are within the exclusive jurisdiction of the CSC.
It is clarified that the CSC has jurisdiction over a case involving a civil servant if it can be regarded as equivalent to a labor dispute under the Labor Code.
Conversely, the regular court has jurisdiction if the case can be decided under the general laws, such as when the case is for the recovery of private debts, or for the recovery of damages due to slanderous remarks of the employee, or prosecution of the employees.
The mere fact that the parties are members of the Civil Service should not remove the controversy from the general jurisdiction of the courts of justice and place them under the special of the CSC.
Jurisdiction over the subject the subject matter is conferred only by the Constitution or the law, it cannot be acquired through a waiver, it cannot be acquired, it cannot be enlarged by the omission of the parties; it cannot be conferred by the acquiescence of the court.
BP 129 did not vest jurisdiction in the RTC over matters relating to the Civil Service. Consequently, the RTC could not arrogate unto itself the hearing and decision of a subject matter outside of its jurisdiction.
2) YES, the void and ineffectual decision of the RTC did not attain finality despite the supposedly belated appeal by Buenaflor.
When a court has no jurisdiction over the subject matter, the only power it has is to dismiss the action. Upon the filing of the complaint, the RTC could only have dismissed it for lack of jurisdiction. Any further actions the RTC took, were void and ineffectual.
A void judgment - being non-existent in legal contemplation -- does not become final and executory even with the belated filing of an appeal.
KATARUNGANG PAMBARANGAY
AVELINA ZAMORA vs. HEIRS OF CARMEN IZQUIERDO
443 SCRA 24, G.R. No. 146195, November 18, 2004
FACTS: Respondents filed with the MTC a complaint for unlawful detainer against the petitioner.
Petitioner filed a motion to dismiss the complaint on the ground that the controversy was not referred to the barangay for conciliation. First, petitioner alleged that the barangay Certificate to file action is fatally defective because it pertains to another dispute i.e. the refusal by respondents to give consent to petitioner’s request for installation of water facilities in the premises. And second, when the parties failed to reach an amicable settlement before the Lupong Tagapamayapa, the Punong Barangay as Lupon Chairman did not constitute the Pangkat ng Tagapagkasundo before whom mediation or arbitration proceedings should have been conducted.
ISSUE: Whether the case be dismissed for the alleged failure to comply with the required barangay conciliation?
HELD: NO. While it is true that the “Sertifikasyon” is entitled “Ukol sa Hindi Pagbibigay Ng Pahintulot Sa Pagpapakabit Ng Tubig,” this title must not prevail over the actual issues discussed in the proceedings. Hence, to require another confrontation at the barangay level as sine qua non for the filing of the instant case would not serve any useful purpose anymore since no issues would be raised therein and the parties have proven so many times in the past that they cannot get to settle their differences amicably.
Furthermore, the SC cannot sustain petitioner’s contention that the Lupon conciliation alone, without the proceeding before the Pangkat ng Tagapagkasundo, contravenes the law on Katarungang Pambarangay. Section 412 (a) of RA 7160 clearly provides that, as a precondition to filing a complaint in court, the parties shall go through the conciliation process either before the Lupon Chairman as what happened in the present case, or the Pangkat. Here, while the Pangkat was not constituted, however, the parties met nine times at the Office of the Barangay Chairman for conciliation wherein not only the issue of water installation was discussed but also petitioner’s violation of the lease contract. It is thus manifest that there was substantial compliance with the law which does not require strict adherence thereto.
**** The court, agency or quasi-judicial agency which has possession or physical custody over the res or subject property of the case has jurisdiction over it and has the authority and jurisdiction to rule and issue a decisions over the same. (Commissioner of Customs vs. Court of Appeals, G.R. Nos. 111202-05, January 31, 2006, 481 SCRA 109).
**** The “Construction Industry Arbitration Law” provides that the CIAC shall have original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved. These disputes may involve government and private contracts. For the Board to acquire jurisdiction, the parties to the dispute must agree to submit the same to voluntary arbitration. When a contract contains a clause to the submission of a future controversy to arbitration, it is not necessary for the parties to enter into a submission agreement before the claimant may invoke the jurisdiction of CIAC. (Department of Health vs. HTMC Engineers Company, G.R. No. 146120, January 27, 2006, 480 SCRA 299).
**** Non-compliance with the condition precedent under PD 1508 does not prevent a court of competent jurisdiction from exercising its power of jurisdiction over a case where the defendants fail to object to such exercise of jurisdiction. But such objection should be seasonably made before the court first taking cognizance of the complaint, and must be raised in the Answer, or in such other pleading allowed under the Rules of Court. (Espino vs. Legarda, G.R. No. 149266, March 17, 2006, 485 SCRA 74)
BARANGAY CONCILIATION
CRISANTA ALCARAZ MIGUEL vs. JERRY D. MONTAÑEZ
G.R. No. 191336, January 25, 2012, 664 SCRA 345
FACTS: There was a Contract of Loan between Crisanta and Jerry but when the obligation became due and demandable, debtor Jerry failed to pay despite demand. A complaint was filed before the Lupong Tagapamayapa and a compromise was entered into where the debtor agreed to pay P2,000 per month. However, the debtor failed to pay, hence, a certificate to file an action was issued by the Lupon. The creditor filed a complaint for sum of money before the MeTC of Makati City.
ISSUE: Whether the complaint for sum of money is the proper remedy.
HELD: YES. Because the debtor failed to comply with the terms of the Kasunduang Pag-aayos, said agreement is deemed rescinded pursuant to Article 2041 of the New Civil Code and the creditor can insist on her original demand. Perforce, the complaint for collection of sum of money is the proper remedy.
Q: What is a doctrine of hierarchy of courts?
A: Pursuant to this doctrine, direct resort from the lower courts to the Supreme Court will not be entertained unless the appropriate remedy cannot be obtained in the lower tribunals. The Supreme Court is a court of last resort, and must so remain if it is to satisfactorily perform the functions assigned to it by the Constitution and immemorial tradition. Thus, a petition for review on certiorari assailing the decision involving both questions of fact and law must first be brought before the Court of Appeals. (Lacson Hermanas vs. Heirs of Cenon Ignacio, G.R. No. 165973, June 29, 2005, 462 SCRA 290).
Q: What is judicial courtesy?
A: It applies where “there is a strong probability that the issues before the higher court would be rendered moot and moribund as a result of continuation of the proceedings in the lower court or court of origin.” Thus, the lower court or court of origin should suspend its proceedings. (Republic vs. Sandiganbayan, 492 SCRA 748, June 26, 2006)
ACQUISITION OF JURISDICTION OVER THE PERSON
MA. IMELDA MANOTOC vs. COURT OF APPEALS
G.R. No. 130974, August 18, 2006, 499 SCRA 21
The court’s jurisdiction over a defendant is founded on a valid service of summons. Without a valid service, the court cannot acquire jurisdiction over the defendant, unless the defendant voluntarily submits to it. The defendant must be properly apprised of a pending action against him and assured of the opportunity to present his defenses to the suit. Proper service of summons is used to protect one’s right to due process.
JURISDICTION OVER THE SUBJECT MATTER
FELICISIMO OPRIASA vs. CITY GOVERNMENT OF QUEZON CITY
G.R. No. 149190, December 19, 2006, 511 SCRA 234
For the trial court to acquire jurisdiction over the petition for reconstitution, the occupants of the property should be notified of the petition. However, there was no need to notify petitioners as they were not occupants or persons in possession of the property entitled
to a notice of hearing. As petitioners were not entitled to notice, they could not claim intrinsic fraud.
ACTION INCAPABLE OF PECUNIARY ESTIMATION
FAR EAST BANK vs. SHEMBERG MARKETING CORPORATION
G.R. No. 163878, December 12, 2006, 510 SCRA 685
Where the basic issue is something other than the right to recover a sum of money, where the money claim is only incidental or a consequence of the principal relief sought, the action is incapable of pecuniary estimation. An action questioning the validity of a mortgage is one incapable of pecuniary estimation.
JURISDICTION NOT AFFECTED BY MERE DEFECT IN FORM
MR. & MRS. GEORGE TAN vs. G.V.T. ENGINEERING SERVICES
G.R. No. 153057, August 7, 2006, 498 SCRA 93
It would be an unjustifiable abandonment of the principles laid down in the jurisprudence if the Court would nullify the proceedings had in the present case by the lower and appellate courts on the simple ground that the complaint filed with the trial court was not properly captioned for these are matters of form and the Court finds the defect merely technical which does not, in any way, affect its jurisdiction.
PRINCIPLE OF HIERARCHY OF COURTS
MOLDEX REALTY, INC. vs. H L U R B
G.R. No. 149719, June 21, 2007, 525 SCRA 198
Petitions seeking the nullification of an administrative resolution which do not involve circumstances and issues of transcendental importance to the public must be filed with the Regional Trial Court and not with the Supreme Court or the Court of Appeals directly.
ARBITRATION
UNIWIDE SALES REALTY vs. TITAN – IKEDA CONSTRUCTION CORP.
G.R. No. 126619, December 20, 2006, 511 SCRA 335
As an arbitration body, the CIAC can only resolve issues brought before it by the parties through the Term of Reference (TOR), which functions similarly as a pre-trial brief. The Rules of Court may not be used to contravene the spirit of the CIAC rules.
RULE 3 - PARTIES TO CIVIL ACTIONS
SECTION 6 – PERMISSIVE JOINDER OF PARTIES
PANTRANCO NORTH EXPRESS, INC. vs. STANDARD INSURANCE COMPANY
453 SCRA 482, G.R. No. 140746, March 16, 2005
FACTS: Crispin Gicale was driving the passenger jeepney owned by Martina. While driving, a Pantranco passenger bus was trailing behind. The Pantranco bus overtook the jeepney, in so doing, the Pantranco bus hit the left rear side of the jeepney and sped away.
Crispin reported the incident to the police station and respondent Standard Insurance Company, insurer of the jeepney. The total cost of the repair was not paid in full by Standard, so Martina shouldered the balance.
Thereafter, Standard and Martina demanded reimbursement from petitioner Pantranco and its driver but they refused. This prompted respondents to file with the RTC a complaint for sum of money.
In their answer, both petitioners specifically denied the allegations in the complaint and averred that there was a misjoinder of parties. Petitioners insist that the trial court has no jurisdiction over the case since the cause of action of each respondent did not arise from the same transaction and that there are no common questions of law and fact common to both parties.
For their part, respondents contend that their individual claims arose out of the same vehicular accident and involve a common question of fact and law.
ISSUE: Whether there was misjoinder of parties.
HELD: NO. There was no misjoinder of parties in the case at bar. Pursuant to Rule 3, Section 6 of the Rules of Court, permissive joinder of parties requires that: (1) the right to relief arises out of the same transaction or series of transactions; (2) there is a question of law or fact common to all the plaintiffs or defendants; and (3) such joinder is not otherwise proscribed by the provisions of the Rules on jurisdiction and venue.
In this case, there is a single transaction common to all, that is, Pantranco’s bus hitting the rear side of the jeepney. There is also a common question of fact, that is, whether petitioners are negligent. There being a single transaction common to both respondents, consequently, they have the same cause of action against petitioners. To
determine identity of cause of action, it must be ascertained whether the same evidence which is necessary to sustain the second cause of action would have been sufficient to authorize a recovery in the first. Such joinder of parties avoids multiplicity of suit and ensures the convenient, speedy and orderly administration of justice.
SECTION 6 - MISJOINDER OF CAUSES OF ACTION
LILIA B. ADA vs. FLORANTE BAYLON
G.R. No. 182435, August 13, 2012, 678 SCRA 293
FACTS: During the pendency of an action for partition, there was a donation made by Rita to Florante without the consent of the other parties or the Court. When the other parties learned of the donation, they filed a Supplemental Pleading seeking the rescission of the donation.
ISSUE: Can there be a joinder of these two (2) causes of action?
HELD: NO. There was a misjoinder of causes of action. The action for partition could not be joined with action for the rescission of the said donation inter vivos in favor of Florante. Lest it be overlooked, an action for partition is a special civil action governed by Rule 69 of the Rules of Court while an action for rescission is an ordinary civil action governed by the ordinary rules of civil procedure. The variance in the procedure in the special civil action of partition and in the ordinary civil action precludes their joinder in one complaint or their being tried in a single proceeding to avoid confusion in determining what rules shall govern the conduct of the proceedings as well as in the determination of the presence of requisite elements of each particular cause of action.
Nevertheless, misjoinder of causes of action is not a ground for dismissal.
A misjoined cause of action, if not severed upon motion of a party or by the Court sua sponte, may be adjudicated by the court together with the other cause of action.
RULE 3 - PARTIES TO CIVIL ACTIONS
SECTION 16 - DEATH OF A PARTY, DUTY OF COUNSEL
CAPITOLINA NAPERE vs. AMANDO BARBARONA
543 SCRA 376, G.R. No. 160426, January 31, 2008
FACTS: Amando filed a complaint for recovery possession, quieting of title and damages against Spouses Juan and Capitolina.
During the pendency of the case, Juan died, and their counsel informed the Court of Juan’s death and submitted the names and addresses of Juan’s heirs.
The trial court failed to order the substitution of the heirs. Despite this oversight, the proceedings were conducted and the judgment was rendered by the trial court.
ISSUE: Whether the trial court did not acquire jurisdiction over the persons of the heirs for its failure to order their substitution.
HELD: NO. Formal substitution by heirs is not necessary when they themselves voluntarily appear. It is a fact that Capitolina is a co-defendant of the deceased and actively participated in the case. The records show that the counsel of Juan and Capitolina continued to represent them even after Juan’s death.
The rule on substitution by heirs is not a matter of jurisdiction, but a requirement of due process. It was designed to ensure that the deceased party would continue to be properly represented in the suit through his heirs or the duly appointed legal representative of his estate. Moreover, non-compliance with the Rules results in the denial of the right to due process for the heirs who, though not duly notified of the proceedings, would be substantially affected by the decision rendered therein.
It is only when there is a denial of due process, as when the deceased is not represented by any legal representatives, or heirs, that the court nullifies the trial proceedings and the resulting judgment therein.
SPOUSES JULITA & FELIPE DELA CRUZ vs. PEDRO JOAQUIN
464 SCRA 576, G.R. No. 162788, July 28, 2005
FACTS: Pedro filed a complaint for recovery of possession and ownership, cancellation of title and damages against Spouses Julita and Felipe dela Cruz.
During the pendency of the case, Pedro died. The RTC rendered judgment in favor of Pedro.
On appeal, the Motion for Substitution of Party Plaintiff was filed before the Court of Appeals and the same was granted.
ISSUE: Whether the trial court had lost its jurisdiction over the case upon the death of Pedro.
HELD: NO. Strictly speaking, the rule on the substitution by heirs is not a matter of jurisdiction but a requirement of due process. Thus, when due process is not violated, as when the right of the representative or heir is recognized and protected, non-compliance or belated formal compliance with the Rules cannot affect the validity of a promulgated decision.
Mere failure to substitute for a deceased plaintiff is not a sufficient ground to nullify a trial court’s decision. The alleging party must prove that there was an undeniable violation of due process.
Evidently, the heirs of Pedro voluntary appeared and participated in the case. When the appellate court had ordered the legal representatives to appear and substitute for him, the substitution even on appeal had been ordered correctly.
CHITTICK vs. COURT OF APPEALS
166 SCRA 219, G.R. No. L-25350, October 4, 1988
The failure of the heirs to substitute for the original plaintiff upon her death led to the nullification of the trial court’s decision. The latter had sought to recover support in arrears and her share in the conjugal partnership.
The children who allegedly substituted for her to continue the case against their father had vehemently objected to their inclusion as parties.
Moreover, because he died during the pendency of the case, they were bound to substitute for the defendant also. The substitution effectively merged the persons of the plaintiff and the defendant and thus extinguishes the obligations being sued upon.
SECTION 17 – DEATH OR SEPARATION OF A PARTY WHO IS
A PUBLIC OFFICER
MAYOR RHUSTOM DAGADAG vs. MICHAEL TONGNAWA
450 SCRA 437, G.R. Nos. 161166-67, February 3, 2005
FACTS: Petitioner, while then the mayor of Tanudan, sent respondents a memorandum ordering them to explain within 72 hours why they should not be administratively sanctioned for acts unbecoming of public servants and failure to perform their duties. After investigation, the Committee found respondents liable for insubordination, non performance of duties, and absences without official leaves. Petitioner issued an order suspending respondents from their respective positions for two months.
Respondents appealed to the Civil Service Commission (CSC) but the latter affirmed petitioner’s orders. Upon appeal to CA, the appellate court reversed CSC’s decision and reinstated the respondents.
Subsequently, petitioner filed a petition for certiorari in the SC. However, at the time of filing of said petition, the petitioner was no longer the mayor.
ISSUE: Whether the petitioner may appeal the decision of the Court of Appeals.
HELD: NO. Section 17 of Rule 3 provides, “When a public officer is a party in an action in his official capacity and during its pendency dies, resigns or otherwise ceases to hold office, the action may be continued and maintained by or against his successor if, within thirty (30) days after the successor takes office or such time as may be granted by the court, it is satisfactorily shown to the court by any party that there is a substantial need for continuing or maintaining it and that the successor adopts or continues or threatens to adopt or continue the action of his predecessor. Before the substitution is made, the party or officer to be affected, unless expressing thereto, shall be given reasonable notice of the application therefore and accorded an opportunity to be heard.
Where the petitioner ceases to be mayor, the appeal and/or action be initiated may be discontinued and maintained by his successor if there is substantial need to do so. If the successor failed to pursue the appeal and/or action, the same should be dismissed.
**** A party who was not properly impleaded as a party defendant cannot be liable for the judgment against a defendant without a trial. (2005 BQ # X)
PARTIES TO THE ACTION
ANTONIO BALTAZAR vs. HON. OMBUDSMAN
G.R. No. 136433, December 6, 2006, 510 SCRA 74
In private suits, standing is governed by the “real parties – in – interest” rule found in Section 2, Rule 3 of the 1997 Rules of Civil Procedure which provides that “every action must be prosecuted or defended in the name of the real party in interest.”
PERSON NOT PRIVY TO A CONTRACT MAY NOT BRING AN ACTION; EXCEPTION
CALTEX PHILIPPINES, INC. vs. PNOC SHIPPING AND TRANSPORT CORP.
G.R. No. 150711, August 10, 2006, 498 SCRA 400
Ordinarily, one who is not a privy to a contract may not bring an action to enforce it. However, this case falls under the exception. As an exception, parties who have not taken part in a contract may show that they have a real interest affected by its performance or annulment. In other words, those who are not principally or subsidiarily obligated in a contract, in which they had no intervention, may show their detriment that could result from it.
RULE 7
PARTS OF A PLEADING
SEC. 5 - CERTIFICATION AGAINST FORUM SHOPPING
Q: What is forum shopping?
A: It is an act of a party which consists of filing multiple suits, simultaneously or successively for the purpose of obtaining a favorable judgment.
**** Failure to comply with the requirement of forum shopping is not curable by mere amendment of the complaint or other initiatory pleading, but shall cause for the dismissal of the case without prejudice. However, the trial court in the exercise of its sound discretion, may choose to be liberal and consider the amendment as substantial compliance. (Great Southern Maritime Services Corp. vs. Acuna, G.R. No. 140189, February 28, 2005, 452 SCRA 422).
**** Counsel cannot sign the anti-forum shopping certification because it must be executed by the plaintiff or principal party. (2000 BQ # II)
FERNANDO MARTIN O. PEÑA vs. ATTY. LOLITO APARICIO
A.C. No. 7298, June 25, 2007, 525 SCRA 444
The filing of multiple suits and the possibility of conflicting decisions rarely happen in disbarment complaints considering that said proceedings are either taken by the Supreme Court motu propio, or by the Integrated Bar of the Philippines (IBP) upon the verified complaint of any person. Thus, if the complaint in a disbarment case fails to attach a certification against forum shopping, the pendency of another disciplinary action against the same respondent may still be ascertained with ease.
PAUL LEE TAN vs. PAUL SYCIP
G.R. No. 153468, August 17, 2006, 499 SCRA 216
In the interest of substantial justice, a procedural lapse may be excused especially when there appears to be no intention to circumvent the need for proper verification and certification. The substantial merits of petitioners’ case and the purely legal question involved in the Petition should be considered special circumstances or compelling reasons that justify an exception to the strict requirements of the verification and the certification of non-forum shopping.
RULE 8
MANNER OF MAKING ALLEGATION IN PLEADINGS
EQUITABLE CARDNETWORK, INC. vs. JOSEFA B. CAPISTRANO
G.R. No. 180157, February 8, 2012, 665 SCRA 454
FACTS: In a complaint for sum of money, Equitable Cardnetwork alleged that the defendant, a woman at the age of 81 and bedridden at that, applied for and used a credit card, but failed to pay for her obligations. In her answer, she alleged that she denied the allegations for lack of knowledge as to their truth and denied having applied for membership with the card company and that she never authorized anyone to get her alleged card thus not being a member, she has no obligation, monetary or otherwise, to the plaintiff. After trial, the RTC ruled that having failed to deny under oath the genuineness and due execution of ECI’s actionable document that were attached to the complaint, she impliedly admitted the genuineness and due execution of the same.
ISSUE: Whether the defendant made an effective specific denial of the genuineness and due execution of the actionable documents.
HELD: YES. Because the defendant effectively denied the genuineness and due execution of the actionable documents. It is true that she denied the documents merely for “lack of knowledge” which denial, is inadequate since by their nature she ought to know the truth of the allegations regarding those documents. But her inadequacy was cured by her assertion that she was denying the allegations regarding those actionable documents, stating that she never applied for membership with the card company. These reasons cannot be ignored and they form part of the answer. Hence, when she denied the transactions for “lack of knowledge,”
it was her way of saying that such transactions took place without her knowing. Since the answer was verified, she in effect denied under
oath the genuineness and due execution of the documents supporting them. For this reason, she is not barred from introducing evidence that those documents were forged.
SEC. 8 - HOW TO CONTEST SUCH DOCUMENTS
**** Respondents failed to deny specifically the execution of the promissory note. This being the case, there was no need for petitioner to present the original of the promissory note in question. Their judicial admission with respect to the genuineness and execution of the promissory note sufficiently established their liability to petitioner regardless of the fact that petitioner failed to present the original of said note. (Consolidated Bank and Trust Corp. vs. Del Monte Motor Works, Inc. G.R. No. 154684, July 29, 2005, 465 SCRA 117).
SEC. 10 - SPECIFIC DENIAL
AGRIFINA AQUINTEY vs. SPS. FELICIDAD & RICO TIBONG
G.R. No. 166704, December 20, 2006, 511 SCRA 414
A denial is not made specific simply because it is so qualified by the defendant. A general denial not become specific by the use of the word “specifically.” The answer should be so definite and certain in its allegations that the pleader’s adversary should not be left in doubt as to what is admitted, what is denied, and what is covered by denials of knowledge as sufficient to form a belief.
FAILURE OF DEFENDANT TO DISCLOSE THE MATTERS ALLEGED IN THE COMPLAINT
FRILOU CONSTRUCTION, INC. vs.
AEGIS INTEGRATED STRUCTURE CORPORATION
G.R. No. 191088, August 17, 2016, 800 SCRA 611
FACTS: Respondent Aegis filed a complaint for a sum of money against petitioner Frilou. Aegis averred that the sum of P6,024,306.00 has long been overdue in that respondent Aegis had long supplied, fabricated, delivered and erected the structural steel requirements of petitioner Frilou but the latter has paid respondent the sum of P4,490,014.12 only thereby leaving an unpaid balance of P1,534,291.68.
Petitioner denied this by stating “petitioner also DENIES paragraphs 4 and 5 for being contrary to the facts and circumstances surrounding the case,” but did not state specifically the matters which it relies on to support denial of liability of unpaid balance.
The RTC dismissed the complaint for insufficiency of evidence sustaining petitioner’s contention that respondent failed to show evidence of Frilou’s supposed remaining liability for the balance amount of P1,534,291.68.
On appeal, CA reversed and set aside the RTC ruling on the sole issue of whether respondent Aegis established its claim of the balance amount of P1,534,219.68 even in the absent of presentation of delivery receipts. The CA ruled that petitioner’s judicial admission of the existence of the Purchase Orders worked to establish the remaining balance amounting to P1.534 Million by preponderance of evidence.
Moreover, in failing to specifically deny the allegation that respondent Aegis supplied, delivered and erected the structural requirements of Frilou in the amount of P6,014 Million, the latter is deemed to have admitted the same.
ISSUES
1) What are the three (3) modes of specific denial?
2) What is the purpose of requiring defendant to make a specific denial?
3) Whether petitioner Frilou failed to make a specific denial.
RULINGS
1) Section 10, Rule 8 of the Rules of Court on manner of making allegations in pleading contemplates three (3) modes of specific denial:
a) by specifying such material allegation of the fact in the complaint, the truth of which the defendant does not admit, and whatever practicable, setting forth the substance of the matters which he will rely upon to support his denial;
b) by specifying so much of an averment in the complaint as is true and material and denies only the remainder;
c) by stating that the defendant is without knowledge or information sufficient to form a belief as to truth of a material averment in the complaint which has the effect of a denial.
2) The purpose of requiring the defendant to make a specific denial is to make him disclose the matters alleged in the complaint with the matter which he intends to disprove at the trial, together with the matter which he relied upon to support the denial. The parties are compelled to lay their cards on the table.
3) YES. Petitioner admitted and failed to specifically deny the material averments in respondent’s complaint that Aegis complied with the obligation under the Purchase Orders or the complete amount of P6,024,305.00.
First, petitioner did not make a specific denial, but a general one to the effect that it is no longer has any remaining liabilities to the respondent.
Secondly, petitioner did not state “ the facts and circumstances surrounding the case,” the matters which it relies on to support its denial of its liability in the amount of P1,534,291.68.
Petitioner only asserted that respondent failed to show evidence of its supposed remaining liability. This is not an assertion of the truth and substance of the matter. It is merely a statement that as far as petitioner is concerned, respondent does not have evidence to prove its claim.
Petitioner is plainly splitting hairs. As a result of its failure to make a specific denial, it was deemed to have admitted all the material averment in the complaint.
Petitioner should have, and could have easily, specifically denied each and every averment under the foregoing paragraph as required by Section 10 of Rule 8 and the asserted the substance of the matter which it relies on to support its denial.
Consequently, the judicial admission of petitioner’s remaining liability need not be proved.
RULE 9
EFFECT OF FAILURE TO PLEAD
Section 1 - Defenses and objections not pleaded.
Lack of jurisdiction over the subject matter may be raised at any stage of the proceeding, even on appeal. The reason is that jurisdiction is conferred by law and lack of it affects the very authority of the court to take cognizance of and to render judgment on the action. Moreover, jurisdiction is determined by the averments of the complaint, not by the defenses contained in the answer. (Francel Realty Corporation vs. Sycip, G.R. No. 154684, September 8, 2005, 469 SCRA 424).
Section 3 - Default: Declaration of
The mere fact that a defendant is declared in default does not automatically result in the grant of prayers of the plaintiff. To win, the latter must still present the same quantum of evidence that would be required if the defendant were still present. A party that defaults is not deprived of its right, except the right to be heard and to present evidence to the trial court. If the evidence presented does not
support a judgment for the plaintiff, the complaint should be dismissed, even if the defendant may not have been heard or allowed to present any countervailing evidence. (Gajudo vs. Traders Royal Bank, G.R. 151098, March 21, 2006, 485 SCRA 108).
RULE 10
AMENDED AND SUPPLEMENTAL PLEADINGS
ALPINE LENDING INVESTORS vs. CORPUZ
G.R. No. 157107, November 24, 2006, 508 SCRA 45
Amendment is a matter of right when a motion to dismiss was filed.
Settled is the rule that a motion to dismiss is not a responsive pleading for the purpose of Section 2, Rule 10. As no responsive pleading had been filed, respondent could amend her complaint as a matter of right. Following the ruling in Breslin vs. Luzon Stevedoring Co. that respondent has the right to amend her complaint, it is the correlative duty of the trial court to accept the amended complaint, otherwise, mandamus would lie against it. In other words, the trial court’s duty to admit the amended complaint was purely ministerial. In fact, respondent should have not have filed a motion to admit her amended complaint.
RULE 13
FILING AND SERVICE OF PLEADINGS, JUDGMENTS
AND OTHER PAPERS
LUCIANO ELLO vs. COURT OF APPEALS
460 SCRA 406, G.R. No. 141255, June 21, 2005
FACTS: Respondents filed with the MTCC a complaint against the petitioners for forcible entry. The MTCC dismissed the complaint for failure of the respondents to establish that they have brought the instant case within one year from entry of petitioners.
On appeal, the RTC reversed the MTCC decision and ordered the petitioners to vacate the lots and deliver the same to the respondents.
Petitioners filed with the CA a petition for review. The petition was dismissed outright on the ground that it does not contain the affidavit of service required by Section 11 of Rule 13.
Petitioners promptly filed a motion for reconsideration attaching therewith the affidavit of service executed by Gabriel M. Manasan. In their motion for reconsideration, petitioners averred that they failed to append to their petition the affidavit of service due to an excusable oversight considering the time constraint in filing the petition with voluminous annexes and that there would be a denial of substantial justice if their petition would be dismissed merely by reason of technicality. Still unconvinced, the CA denied petitioners motion for reconsideration.
ISSUE: Whether the petition be dismissed for failure to attach the affidavit of service?
HELD: NO. Under Section 11 Rule 13, personal service and filing is the general rule, and resort to other modes of service and filing, the exception. Henceforth, whenever personal service or filing is practicable, in light of the circumstances of time, place and person, personal service or filing is mandatory. Only when personal service or filing is not practicable may resort to other modes be had, which must then be accompanied by written explanation as to why personal service or filing was not practicable to begin with. In adjudging the plausibility of an explanation, a court shall likewise consider the importance of the subject matter of the case or the issues involved therein, and the prima facie merit of the pleading sought to be expunged for violation of Section 11.
In the present case, there is no question that petitioners violated Section 11 of Rule 13 by failing to append the affidavit of service to their petition for review filed with the CA. The SC note, though that petitioners, upon receipt of the CA’s challenged Resolution dismissing outright their petition due to such omission, promptly filed a motion for reconsideration, readily acknowledging their procedural lapse and attaching therewith the required affidavit of service. Significantly, the affidavit of service shows that the petition for review was filed with the CA thru
Registered mail. This mode of filing is permitted under Section 11 Rule 13 since it is obviously impractical for petitioners and their counsel, who are all residents of Cagayan de Oro City, to personally file their petition in Manila. Clearly, the affidavit of service is a substantive compliance with the requirement under Section 11.
SECTION 9
FILING AND SERVICE OF PLEADINGS, JUDGMENTS
& OTHER PAPERS
HEIRS OF WILFREDO DELOS SANTOS vs. DEL ROSARIO
G.R. No. 139167, June 29, 2005, 462 SCRA 98
FACTS: On April 2, 1998, the postman attempted to deliver a copy of an adverse decision of the lower court to the office of Atty. Olaybal, counsel for petitioner. At that time, the office of Atty. Olaybal was closed since he was then suffering from influenza. The postman instead delivered the copy of the decision to Bernadeth Faye Alamares, who was a clerk in an office adjacent to Atty. Olaybal. Alamares received the Decision and signed the corresponding registry return card.
ISSUE: Whether there is a valid service of decision.
HELD: NO. In this case, the postman served a copy of the trial court’s decision on Alamares who was neither an associate nor employee of Atty. Olaybal. The records show that Alamares was then an employee of Asaphil Corporation whose office is adjacent to Atty. Olaybal. There is nothing in the records showing Atty. Olaybal authorized either Alamares or Ashapil Corporation to receive mails addressed to him or his law office.
SEC. 8 - SUBSTITUTED SERVICE
REMELITA ROBINSON vs. CELITA MIRALLES
G.R. No. 163584, December 12, 2006, 510 SCRA 678
ISSUE: Whether a substituted service of summons upon petitioner has been validly effected.
HELD: YES. We have ruled that the statutory requirements of substituted service must be followed strictly, faithfully, and fully and any substituted service other than that authorized by the Rules is considered ineffective. However, we frown upon an overly strict application of the Rules. It is the spirit, rather than the letter of the procedural rules that governs.
In his return, Sheriff Potente declared that he was refused entry by the security guard in Alabang Hills twice. The latter informed him that petitioner prohibits him from allowing anybody to proceed to her residence whenever she is out. Obviously, it was impossible for the sheriff to effect personal or substituted service of summons upon petitioner. We note that she failed to controvert the sheriff’s declaration. Nor did she deny having received the summons through the security guard. Considering her strict instruction to the security guard, she must bear its consequences. Thus, we agree with the trial court that summons has been properly served upon petitioner and that it has acquired jurisdiction over her.
INVALID SUBSTITUTED SERVICE OF SUMMONS
YUK LING ONG vs. BENJAMIN T. CO
G.R. No. 206653, February 25, 2015, 752 SCRA 42
FACTS: Ong, a British - Hong Kong national, and Co, a Filipino citizen, were married on October 3, 1982 at Ellinwood Malate Church.
Sometime in November 2008, Ong was subpoenaed by the BID to appear before the said agency because her permanent residence visa was subjected to cancellation proceedings reportedly her marriage with Co was nullified by the court.
When Ong appeared before the BID, she was furnished copies of petition for declaration of marriage and RTC decision declaring the marriage between Ong and Co as void ab initio dated December 11, 2002.
Ong was perflexed that her marriage with Co had been declared void ab initio.
Consequently, Ong filed a petition for annulment of judgment under Rule 47 of the Rules of Court before the CA on November 24, 2008 claiming that she was never notified of the annulment case filed against her. She prayed that the RTC decision dated December 11, 2002 be nullified on the ground of extrinsic fraud and lack of jurisdiction.
Ong alleged that Co committed extrinsic fraud because he deliberately indicated a wrong address to prevent her from participating in the trial. Jurisdiction over her person was not acquired because of an invalid substituted service of summons as no sufficient explanation showing impossibility of personal service was stated before resorting to substituted service was made on a security guard of their townhouse and not a member of her household.
ISSUES
(1) Whether the annulment of judgment is the proper remedy to invalidate the decision dated December 11, 2002 that has long lapsed into finality.
(2) Whether the substituted service of summons is valid.
RULINGS
(1) YES. Annulment of judgment is a recourse equitable in character allowed only in exceptional cases as where there is no available or other adequate remedy.
Rule 47 of the 1997 Rules of Civil Procedure governs actions for annulment of judgments or final orders and resolutions and Section 2 thereof explicitly provides only two grounds for annulment of judgment, that is, extrinsic fraud and lack of jurisdiction.
Annulment of judgment is an equitable principle not because it allows a party – litigant another opportunity to reopen a judgment that has long lapsed into finality but because it enables him to be discharged from the burden of being bound to a judgment that is an absolute nullity to begin with.
Lack of jurisdiction on the part of the trial court in rendering the judgment or final order is either lack of jurisdiction over the subject matter or nature of the action, or lack of jurisdiction over the person of the defendant. The former is a matter of substantive law because statutory law defines the jurisdiction of the courts over the subject matter or nature of the action. The latter is a matter of procedural law for it involves the service of summons or other processes on the defendant.
(2) NO. There was lack of jurisdiction over her persons because there was an invalid service of summons.
Jurisdiction over the defendant is acquired either upon a valid service of summons or the defendant voluntary appearance in court. If the defendant does not voluntarily appears in court, jurisdiction can be acquired by personal or substituted service of summons as laid down under Sections 6 and 7 of Rule 14 of the Rules of Court.
In the case at bench, the summons was issued on July 29, 2002 and the process server resorted to substituted service of summons on August 1, 2002 after only two (2) days from the issuance of the summons. The server’s return utterly lacks sufficient detail of the attempts undertaken by the process server to personally serve the summons on defendant. The server simply made a general statement that summons was effected after several futile attempts to serve the same personally. The server did not state the specific number of attempts made to perform the personal service of summons; the dates and the corresponding time the attempts were made; and the underlying reasons for each unsuccessful service. He did not explain either if there were inquiries made to locate the defendant. These important acts to serve the summons on defendant, though futile, must be specified in the return to justify substituted service.
SEC. 10 - PRIORITIES IN MODES OF SERVICE AND FILING
REY GARCESA vs. MARIETTA LAGUARDIA
G.R. No. 161234, April 27, 2007, 522 SCRA 559
On the issue of lack of explanation for non-personal service, Section 11, Rule 13 requires that resort to registered mail as a mode of service must come with an explanation why personal service was not practicable in the first place. However, while it is true that procedural rules are necessary to secure an orderly and speedy administration of justice, rigid application of Section 11, Rule 13 may be relaxed in the interest of substantial justice.
RULE 16
MOTION TO DISMISS
DEVELOPMENT BANK OF THE PHILIPPINES vs. SPS. WILFREDO GATAL
452 SCRA 697, G.R. No. 138567, March 4, 2005
FACTS: Respondent spouses obtained a loan from petitioner which was secured by a real estate mortgage over a commercial lot.
For failure of respondents to pay their loan, petitioner foreclosed the mortgage and thereafter, the title of the lot was consolidated in the name of petitioner DBP. The property was then offered for sale at public auction, but none of the bidders was able to meet the bid price ceiling.
Afterwards, petitioner offered the property for negotiated sale. Respondents submitted their bid but petitioner rejected it because another buyer, Jimmy Torrefranca, was already declared the preferred bidder.
Aggrieved, respondents filed with the RTC a complaint for injunction with prayer for TRO and preliminary injunction, seeking to declare the sale of the property to Torrefranca void, to uphold respondents’ right of pre-emption and to maintain the status quo.
Meantime, petitioner filed with the same RTC a petition for issuance of a writ of possession, which the court issued.
Respondents filed a motion to dismiss the petition for issuance of a writ of possession and to quash the writ of possession on the ground that there is another case pending before the same court involving the same parties, the same subject matter and the same legal issues. The RTC issued an Order dismissing the action and recalling its earlier Order granting the writ of possession on the ground of litis pendentia.
Petitioner filed a petition for certiorari with the CA which was denied.
ISSUE: Whether the action be dismissed on the ground of litis pendentia.
HELD: NO. Litis pendentia does not apply to the circumstances obtaining in the case at bar. For litis pendentia to lie as a ground for a motion to dismiss, the following requisites must be present: (1) that the parties to the action are the same; (2) that there is substantial identity in the causes of action and reliefs sought; and (3) that the result of the first action is determinative of the second in any event and regardless of which party is successful. It is undisputed that both cases involve the same parties and the same property. The first case filed is an action for injunction by respondents against petitioner DBP, while upon the other hand, the latter
action is a petition for the issuance of a writ of possession filed by petitioner DBP, being the purchaser of the lot at the public auction. Clearly, the rights asserted and the reliefs sought by the parties in both cases are not identical. Thus, respondents’ claim of litis pendentia is unavailing.
Section 1 - Grounds time for filing
Section 1, Rule 16 of the said Rules specifically provides that the Motion to Dismiss must be made “within the time for but before the filing the answer to the complaint or pleading asserting a claim. Thus, a Motion to Dismiss may not, therefore, be made after an answer had already filed. (Bonifactio Construction & Management vs. Perlas-Bernabe, G.R. No. 161379, June 30, 2005, 462 SCRA 392)
Section 6 - Pleading grounds as affirmative defenses.
Section 6, Rule 16 of the Rules of Court is explicit in stating that the defendant may reiterate any of the grounds for dismissal provided under Rule 16 of the Rules of Court as affirmative defenses but that a preliminary hearing no longer be had thereon if a motion to dismiss had already been filed. The Section, however, does not contemplate a situation, such as the one obtaining in this case where there are several defendants but only one filed a motion to dismiss.
The Motion to Dismiss filed by the Laperal does not affect the right of the other defendants, including petitioners herein, to plead their own affirmative defenses and be preliminary heard thereon. The trial court is likewise not proscribed from granting, in its discretion, such a motion for preliminary hearing. The only caveat is that the ground of non-compliance with the condition precedent of resorting to arbitration, which was raised in Laperal’s Motion to Dismiss, may no longer be included in the preliminary hearing because it has already been heard and finally resolved. (Abrajano vs. Heirs of Augusto Salas, G.R. No. 158895, February 16, 2006, 482 SCRA 476).
MOTION TO DISMISS UNDER RULE 16 vs. DEMURRER TO EVIDENCE UNDER RULE 33
ROSA PAMARAN vs. BANK OF COMMERCE
G.R. No. 205753, July 4, 2016, 795 SCRA 430
FACTS: In her complaint, Rosa alleged that she was the owner of a residential house she had constructed in 1987 on the lots owned by her children with their consent in Muntinlupa City.
Sometime in 1998, her children obtained loans from the Bank of Commerce (Bankcom) and as a security, her children constituted Real Estate Mortgage (REM) on their lots.
Rosa claimed that Bankcom neither included her house in determining the loan amount nor obtained consent to the REM. She added that Bankcom was aware of the existence of her house on these lots.
Eventually, these lots were foreclosed and their ownership was consolidated in favor of Bankcom. Later, Bankcom filed a petition for issuance of writs of possession, which was granted.
Rosa averred that because of these writs, she was dispossessed of her house. Thus, she prayed that Bankcom be ordered to pay her damages for the value of her house for its violation of her right to due process before the RTC Olongapo City where she resides.
Bankcom raised in its answers, the following affirmative defenses: 1) Rosa has no cause of action because she is not the owner of the subject lots and she was never a party to the REM; 2) the complaint is a collateral attack on the title because the REM and the certificate of sale also indicated the improvement thereon; 3) an interference with the jurisdiction of RTC Muntinlupa where the present complaint is a real action which should be filed also in RTC Muntinlupa and not in RTC Olongapo.
Rosa contended that this is a personal action because she cited real properties in Muntinlupa City, she is not asking to be the owner or possessor thereof but is merely praying that Bankcom be ordered to pay her damages corresponding to the value of her house. She likewise affirmed that the venue is proper since she resides in Olongapo City.
On December 10, 2012, the RTC Olongapo issued an order granting Bankcom’s motion to dismiss and accordingly, dismissing the complaint.
ISSUES
1) Whether the RTC Olongapo correctly dismissed the complaint based on the motion to dismiss raised by Bankcom.
2) Whether Rosa’s complaint has a valid cause of action.
3) Whether Rosa’s complaint is personal action.
4) Whether Rosa’s action interferes with the jurisdiction of RTC Muntinlupa.
5) Whether Rosa’s right to due process was violated.
RULINGS
1) NO. A Motion to dismiss under Section 1 (a) of Rule 16 is based on preliminary objections made before the trial, while the motion to dismiss under Rule 33 is a demurrer to evidence on the ground of insufficiency of evidence and is made only after the plaintiff rested his case.
In the first situation, the motion must be made before a responsive pleading is filed, and it can be resolved only on the basis of the allegations in the initiatory pleading.
On the other hand, in the instance, the motion to dismiss must be filed after the plaintiff rested his case, and it can be determined only on the basis of the evidence adduced by the plaintiff.
In the first case, it is immaterial if the allegations in the complaint are true or false, however, in the second situation, the judge must determine the truth or falsity of the allegations based on the evidence presented.
Hence, Bankcom submitted its motion to dismiss by way of affirmative defenses. Clearly, there had been no presentation of evidence made and Rosa had not yet rested her case.
2) YES. In determining whether a complaint states or does not state a cause of action, the court must hypothetically admit the truth of the allegations and determine if it may grant the relief prayed for based on them. The court cannot consider external factors in determining the presence or the absence of a cause of action other than the allegations in the complaint.
In fine, the allegations in the complaint that: Rosa is the owner of a residential house built on the lots owned by her children; by reason of the foreclosure of these lots, Bankcom acquired the lots and also appropriated Rosa’s house; thus, Rosa seeks recovery of damages against Bankcom.
Hypothetically, admitting these allegations to be true, Rosa’s cause of action against Bankcom involves a) her right over her house; b) Bankcom’s obligation to respect Rosa’s right to enjoy her house; and c) Bankcom’s violation of such right, which gave rise to this action for damages.
Notably, the RTC Olongapo disregarded the allegations in the Complaint but also, it failed to consider that the Bankcom’s arguments necessitate the examination of the evidence that can be done through a full-blown trial.
The determination of whether Rosa has a right over the subject house and of whether Bankcom violated this right cannot be addressed in a mere motion to dismiss. Such determination requires the contravention of the allegations in the Complaint and the full adjudication of the merits of the case based on all the evidence adduced by the parties.
3) YES. The complaint is one for recovery of damages relating to the injury committed by Bankcom for violating Rosa’s right to due process and right to enjoy her house.
Rosa repeatedly averred that she does not seek recovery of the possession or title. Her interest to the house is merely incidental to the primary purpose which the action is filed, that is, her claim for damages.
Clearly, this action involves Rosa’s interest in the value of the house but only in so far as to determine her entitlement to damages. She is not interested in the house itself. Indeed, the primary objective of the Complaint is to recover damages and not to regain ownership or possession of the subject property. Hence, this case is a personal action properly filed in the RTC Olongapo, where Rosa resides.
4) NO. The present action does not interfere with the jurisdiction of the RTC Muntinlupa.
One, the nature of this action, which is damages, is different from the petition before the RTC Muntinlupa, which is for issuance of writs of possession.
Two, the laws relied upon in these actions vary, this damage suit is based on Rosa’s reliance on her right emanating from Article 32 of the Civil Code, while Bankcom’s petition is pursuant to Act No. 3135, as amended.
5) YES. Bankcom’s motion to dismiss must be resolved with reference to the allegations in the Complaint assuming them to be true.
The RTC Olongapo did not inquire on the truthfulness of the allegations of the Complaint and declared them to be false and dismissed the complaint.
On this regard, Rosa’s right to due process of law is gravely violated.
EFFECT OF DISMISSAL WITHOUT PREJUDICE
SPS. ISIDRO & LEA CRUZ vs. SPS. FLORENCIO & AMPARO CARAOS
G.R. No. 138208, April 23, 2007, 521 SCRA 510
The dismissal of the case without prejudice indicates the absence of a decision on the merits and leaves the parties free to litigate the matter in a subsequent action as though the dismissed action had not been commenced.
PHILIPPINE DAILY INQUIRER (PDI) vs. HON. ELMO M. ALAMEDA
550 SCRA 199, G.R. No. 160604, March 28, 2008
FACTS: PDI published an article narrating the death of Bong Caldez due to the alleged erroneous diagnosis of Dr. Babaran.
Based on this article, Dr. Babaran filed a complaint for damages against PDI.
The Answer with Counterclaims was filed by PDI, raising, among others, that the complaint states no cause of action.
Pre-trial was held and terminated.
Thereafter, PDI filed a Motion for a Preliminary Hearing on Affirmative Defense raised in the answer (which is also a ground for a motion to dismiss) based on failure to state cause of action due to the failure of Dr. Babaran to specifically allege the participation of PDI in the complaint.
ISSUE: Whether the complaint should be dismissed upon the motion for a preliminary hearing on affirmative defense raised in the answer on failure to state cause of action.
HELD: YES. This procedure is designed to prevent a tedious, if not traumatic, trial in case the complaint falls short of sufficiently alleging a cause of action.
When a defendant seeks the dismissal of the complaint through a motion to dismiss, the sufficiency of the motion should be tested on the strength of the allegations of facts contained in the complaint and no other basis.
RELAXATION OF THE RULE ON RES JUDICATA
PABLO DE LEON vs. JOSEFINA BALINAG
G.R. No. 169996, August 11, 2006, 498 SCRA 569
The public policy underlying the principle of res judicata must be considered together with the policy that a party shall not be deprived of a fair adversary proceeding in which to present his case. After all, rules of procedure are intended to promote rather than defeat substantial justice, and should thus not be applied in a very rigid and technical sense.
RULE 17
DISMISSAL OF ACTIONS
Section 3 - Dismissal due to fault of plaintiff - nolle prosequi
Under Section 3, Rule 17 of the 1997 Rules of Court of Civil Procedure, there are three instances where the complaint may be dismissed due to the plaintiff’s fault: (1) if he fails to appear during a scheduled trial, especially on the date for the presentation of his evidence in chief; (2) if he fails to prosecute his action for an unreasonable length of time; and (3) if he fails to comply with the rules or any order of the court.
There is failure to prosecute when the plaintiff, being present, is not ready or is unwilling to proceed with the scheduled trial or when postponements in the past are due to the plaintiff’s own making, intended to be dilatory or to cause substantial prejudice on the part of the defendant. (Belonio vs. Rodriguez, G.R. No. 161379, August 11, 2005, 466 SCRA 557).
RULE 18
PRE – TRIAL
SECTION 3 - NOTICE OF PRE-TRIAL
Old rules concerning notice of resetting of pre-trial conferences
The Supreme Court noted the proceedings before the lower court happened in the years 1994 to 1995, and thus governed by the old Rules of Civil Procedure. Under the old rules, particularly Rule 20, Section 1, a notice of pre-trial must be served on the party affected, separately from his counsel. Otherwise, the proceedings will be null and void. The general rule that notice to counsel is notice to parties has
been insufficient and inadequate for purposes of pre-trial, such that the trial courts uniformly serve such notice to party through or care of his counsel at counsel’s address with the express imposition upon counsel of the obligation of notifying the party of the date, time and place of the pre-trial conference and assuring that the party either appear thereat or deliver to counsel a written authority to represent the party with power to compromise the case, with the warning that a party who fails to do so may be non-suited or declared in default. (Advance Textile Mills vs. Tan, G.R. No. 154040, July 28, 2005, 464 SCRA 431).
EFFECT OF FAILURE TO APPEAR AT THE PRE-TRIAL CONFERENCE
PANGASINAN FIVE STAR BUS CO. vs. SPS. LEON & LUISA BARREDO
G.R. No. 152714, August 10, 2006, 498 SCRA 418
A party who fails to appear at a pre-trial conference may be non-suited or considered as in default. If the defendant is declared as in default, the court may allow the plaintiff to present his evidence ex parte before the Branch Clerk of Court and thereafter, render judgment on the basis of the evidence of the plaintiffs. On the other hand, if the defendant is absent during the initial trial without any justifiable reason therefore, the defendant cannot be declared as in default for such absence. However, the court may allow the plaintiff to present his evidence before the Branch Clerk of Court ex parte.
Effect of failure to file Pre-trial Brief
BANK OF THE PHILIPPINE ISLANDS (BPI) vs. DOMINGO R. DANDO
G.R. No. 177456, September 4, 2009, 598 SCRA 378
FACTS: BPI filed a complaint for Sum of Money and Damages against Dando before the RTC. After Dando filed his Answer with Counterclaim, BPI filed its Motion to Set Case for Pre-Trial.
The trial court issued a Notice of Pre-trial Conference which directed the parties to submit their respective pre-trial briefs at least three days before the scheduled date of pre-trial on August 18, 2003. Dando submitted his Pre-trial Brief on August 11, 2003. BPI, on the other hand, filed its Pre-trial Brief with the RTC, and furnished Dando with a copy thereof, only on August 18, 2003, the very day of the scheduled Pre-trial Conference.
When the parties appeared before the RTC on August 18, 2003 for the schedule Pre-trial Conference, Dando orally moved for the dismissal of the complaint citing Sections 5 and 6, Rule 18 of the Rules of Court. The RTC granted the motion and thereby dismissed the case with prejudice.
ISSUE: Should the case be dismissed on the ground of BPI’s failure to file a pre-trial brief within the period prescribed.
HELD: YES. It is basic legal construction that where the words of command such as “shall,” “must,” or “ought” are employed, they are generally and ordinarily regarded as mandatory. Thus, where, as in Rule 18, Sections 5 and 6 of the Rules of Court, the word “shall” is used a mandatory duty is imposed, which the Court ought to enforce.
The Court is fully aware that procedural rules are not to be belittled or simply disregarded for these prescribed procedures insure an orderly and speedy administration of justice. However, it is equally true that litigation is not merely a game of technicalities. For, indeed, the general objective of procedure is to facilitate the application of justice to the rival claims of contending parties, bearing always in mind that procedure is not to hinder but to promote the administration of justice.
Pre-trial Brief of Amended Complaint
EUFEMIA BALATICO AGATEP vs. ROBERTA RODRIGUEZ
G.R. No. 170540, October 28, 2009, 604 SCRA 634
FACTS: Natalia mortgaged a parcel of land to PNB to secure a loan. For failure to pay the loan, PNB foreclosed the property.
After the expiration of the redemption period, PNB consolidated its ownership over the parcel of land.
However, while the mortgage was still in existence, Natalia sold the land to Agatep. Neither was the sale registered nor the title was delivered to Agatep, nonetheless, Agatep took possession of the land and fenced it with barbed wire.
PNB later sold the said property to Roberta, who is the daughter of Natalia. A new title was issued in the name of Roberta.
Agatep filed a complaint for reconveyance against Roberta and Natalia. After both parties had already filed their respective Pre-trial Brief, Agatep filed an amended complaint impleading PNB. During the pre-trial conference, the RTC dismissed the amended complaint because Agatep failed to file its Pre-trial Brief.
ISSUE: Whether the Rules of Court requires that another pre-trial brief when a complaint is amended to implead another defendant.
HELD: YES. The pre-trial brief serves as a guide during the pre-trial conference so as to simplify, abbreviate and expedite the trial if not to dispense with it. It is a devise essential to the speedy disposition of disputes, and parties cannot brush it aside as a mere technicality.
ADR MEDIATION PROCEEDINGS - Non - Appearance of Party
LINDA CHAN KENT vs. DIONISIO MICAREZ
G.R. No. 185758, March 9, 2011, 645 SCRA 176
FACTS: Linda Kent filed a complaint for recovery of real property and annulment of title against her parents and brother. RTC explored the possibility of an amicable settlement by ordering the referral of the case to the Philippine Mediation Center (PMC). Kent and her counsel twice attended the mediation conference and were made to sign the attendance sheet while waiting for the late arrival of the defendants and their counsel. On the last scheduled conference, Kent and her counsel failed to appear because they had to attend some urgent matters caused by the sudden increase in prices of commodities and on account of this absence, the RTC dismissed the case.
ISSUE: Whether or not dismissal is proper on account of non-appearance during the mediation proceedings.
HELD: NO. A.M. No. 01-10-5-SC PHILJA regards mediation as part of pre-trial where parties are encouraged to personally attend the proceedings. To
ensure the attendance of the parties, it specifically enumerates the sanctions that the court can impose upon a party who fails to appear in the proceedings which includes censure, reprimand, contempt and even dismissal of the action. However, the Court finds dismissal too severe to be imposed where the record is devoid of evidence of willful or flagrant disregard of the rules on mediation proceedings. There is no clear demonstration that the absence was intended to perpetuate delay in the litigation of the case as lack of interest on the part of Kent to enter into a possible amicable settlement of the case.
RULE 19
INTERVENTION
HEIRS OF GERONIMO RESTRIVERA vs. SALVADOR DE GUZMAN
434 SCRA 456, G.R. No. 146540, July 14, 2004
FACTS: Petitioners filed with the PARAB a complaint for maintenance of peaceful possession against herein respondents.
The provincial adjudicator rendered a decision finding and declaring all the petitioners are not bona fide tenants on the property in question.
Meantime during the pendency of petitioner’s appeal to the DARAB, TRICOM filed a motion for intervention. TRICOM alleged that it has legal interest in the subject landholding, having purchased the same from respondents, as shown by a Deed of Assignment and a Deed of Sale on Installments.
ISSUE: Whether TRICOM’s Motion for intervention is proper?
HELD: YES. TRICOM’s motion for intervention is proper. Fundamentally, the allowance or disallowance of a motion to intervene is addressed to the sound discretion of the court. The permissive tenor of the rules shows the intention to give to the court the full measure of discretion in permitting or disallowing the intervention. The discretion of the court, once exercised, cannot be reviewed by certiorari nor controlled by mandamus save in instances where such discretion has been so exercised in an arbitrary or capricious manner.
Section 1 of Rule 19 provides: “A person who has a legal interest in the matter in litigation or in the success of either of the parties, or in interest against both, or is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof may, with leave of court, be allowed to intervene in the action. The court shall consider whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the intervenor’s right may be fully protected in a separate proceeding.
Here, TRICOM’s legal interest in the subject property cannot be disputed. As shown by the Deed of Assignment and the Deed of Sale on Installments, respondents transferred and sold to TRICOM the subject landholding. As a purchaser, respondent TRICOM acquired an interest in the property, and thus, has standing to intervene to protect such interest.
RULE 26
ADMISSION BY ADVERSE PARTY
DEVELOPMENT BANK OF THE PHILIPPINES vs. COURT OF APPEALS
G.R. No. 153034, September 20, 2005, 470 SCRA 317
FACTS: Irene Canadala obtained 2 loans from DBP secured by mortgages on 3 parcels of land.
Later, DBP foreclosed the mortgages and sold it at public auction. Canadala redeemed one of the lands and offered to redeem the other 2 properties but the bank denied it for being below the amount of its claim.
Consequently, when respondent’s daughter, as the assignee, failed to redeem, the bank consolidated its titles over the properties. Respondent then filed a complaint for the exercise of her right to redemption with damages. Before trial, respondent request for admission by adverse party.
The bank filed its Comment which respondent objected because it was not under oath as required under Rule 26 and it failed to state the reasons for the admission or denial of matters. Both the trial court and the CA ruled that the admission should be under oath in order to be admitted.
ISSUE: Whether the admission of DBP should be admitted even it is not under oath.
HELD: YES. The admissions of DBP were already alleged in the supplemental complaint which were already denied or admitted. To require it to be under oath would be pointless and superfluous. DBP did not have to comment on respondent’s request for admission which merely reproduced the allegations in her complaint. That the Comment was not under oath is not a substantive, but merely a formal defect which can be excused in the interest of justice conformably to the well-entrenched doctrine that all pleadings should be liberally construed in order to do substantial justice. Thus, DBP substantially complied with Rule 26.
If the factual allegations in the complaint are the very same allegations set forth in the request for admission and have already been specifically denied or otherwise dealt with in the answer, a response to the request is no longer required.
RULE 29
REFUSAL TO COMPLY WITH MODES OF DISCOVERY
SECTION 1 - REFUSAL TO ANSWER
FELISA JARAVATA vs. MA. DIANA KAROLUS
G.R. No. 154988, June 21, 2007, 525 SCRA 239
No judgment by default maybe had, without first requiring an application by the proponent to compel an answer. This is the requisite procedure under Section 1 of Rule 29 of the 1997 Rules of Civil Procedure.
On appeal, the Court of Appeals cannot decide a case on the merits, when the appealed judgment is a judgment by default since there was as yet no trial or presentation of evidence in the court a quo. Parties must at least have been a chance to substantiate by evidence their respective claims at the trial court.
RULE 35
SUMMARY JUDGMENT
ASIAN CONSTRUCTION & DEV. CORP. vs. PCI BANK
G.R. No. 153827, April 25, 2006, 488 SCRA 192
It must be borne in mind that the petitioner admitted in its “Answer” the due execution and authenticity of the documents appended to the complaint. Petitioner did not deny its liability for the principal amount claimed by the respondent in its complaint. Petitioner merely alleged, by way of defenses, that if failed to pay its account because of the region-wide economic crisis that engulfed Asia in July 1997, and the “Deeds of Assignment” executed by it in favor of the respondents were contracts of adhesion. Petitioner elaborated on and catalogued its defenses in its “Appellant’s Brief” what it believed, as “genuine issues.” However, petitioner failed to append to its “Opposition” to the “Motion for Summary Judgment,”
“Affidavits showing the factual basis for its defenses of “extraordinary deflation,” including facts, figures and data showing its financial conditions before and after the economic crisis and that the crisis was the proximate cause of its financial distress.
The failure of the petitioner to append to its “Opposition” any “Affidavits” showing that its defenses were not contrived or cosmetic to delay judgment created a presumption that the defenses of the petitioner were not offered in good faith and that the same could not be sustained.
ESTATE OF LIM CHING vs. FLORENCIA BACALA
G.R. No. 149603, March 14, 2007, 518 SCRA 315
Summary judgment is sanctioned in this jurisdiction by Section 1, Rule 35 of the 1997 Rules on Civil Procedure, as amended, when there is no genuine factual issue to be resolved.
RULE 36
JUDGMENTS, FINAL ORDERS AND ENTRY THEREOF
HEIRS OF THE LATE FLOR TUNGPALAN vs. COURT OF APPEALS
460 SCRA 392, G.R. No. 136207, June 21, 2005
FACTS: Petitioners filed with the RTC a complaint for Reformation, Reconveyance and Nullification of titles against the respondents.
After the respondents filed their answer, the trial court set the case for pre-trial conference on various dates but was postponed for five times upon motion of the petitioners and the respondents. Thus, they were twice warned that the postponement would be for the last time.
During the pre-trial conference, the petitioners were declared non-suited for their failure to appear despite notice. Their complaint was dismissed.
One year and seven months later, petitioner filed a motion for reconsideration. The trial court granted the motion “in the interest of justice.” However, respondents filed a motion for reconsideration of the order on the ground that the trial court has no more jurisdiction to issue the same. The trial court granted this motion and reinstated the order declaring the petitioners non-suited.
ISSUE: Whether the decision of the trial court, dismissing the complaint for failure to prosecute, become final and executory.
HELD: YES. Failure to interpose an appeal within the reglementary period renders an order or decision final and executory unless a party files a motion for reconsideration within the 15-day reglementary period. The law grants an aggrieved party a period of 15 days from his receipt of the court’s decision or order disposing of the action or proceeding to appeal or move to reconsider the same.
After the lapse of the 15-day period, an order becomes final and executory and is beyond the power or jurisdiction of the court which rendered it to further amend or revoke. The court loses jurisdiction over the case and not even an appellate court would have the power to review a judgment that has acquired finality. Otherwise, there would be no end to litigation and would set to naught the main role of courts of justice which is to assist in the enforcement of the law and the maintenance of peace and order by setting justiciable controversies with finality.
A motion for Clarification is not a Motion for Reconsideration
A Motion for Clarificatory Judgment not being in the character of a motion for reconsideration does not toll the reglementary period for filing a petition for review with the Court of Appeals. Its filing will not bar the judgment from attaining finality, nor will its resolution amend the decision to be reviewed. (Commissioner on Higher Education vs. Mercado, G.R. No. 157877, March 10, 2006, 484 SCRA 424)
RULE 37
NEW TRIAL OR RECONSIDERATION
Motion for Extension of Time does not toll/suspend the 15-day reglementary period of filing a Motion for Reconsideration
The rule is and has been that the period for filing a motion for reconsideration is non-extendible. Since then, the Court has consistently and strictly adhered thereto.
Given the above, we rule without hesitation that the appellate court’s denial of petitioner’s motion for reconsideration is justified. Precisely, it is because petitioner’s earlier motion for extension of time did not suspend/toll the running of the 15-day reglementary period for filing a motion for reconsideration. Under the circumstances, the CA decision has already attained finality when
petitioner filed its motion for reconsideration. (Apex Mining Co., Inc. vs. Commissioner of Internal Revenue, G.R. No. 122472, October 20, 2005, 473 SCRA 490).
LAND BANK OF THE PHILIPPINES vs. HEIRS OF FERNANDO ALSUA
G.R. No. 167361, April 2, 2007, 520 SCRA 132
The period for filing a motion for reconsideration should be counted from the date of receipt of the order or a person having sufficient discretion to receive the same.
RULE 38
RELIEF FROM JUDGMENTS, ORDERS, OR OTHER PROCEEDINGS
Section 3 - Time for filing petition
A petition for relief from judgment is the proper remedy of a party seeking to set aside a judgment rendered against him by a court of whenever he was unjustly deprived of a hearing or was prevented from taking an appeal, in either case, because of fraud,
accident, mistake or excusable neglect. The petition for relief should be filed within 60 days after the petitioner learns of the judgment or order, or other proceeding to be set aside and not more than six months after such judgment. Both periods must concur and are not extendible and never interrupted. Strict compliance with these periods stems from the equitable character and nature of the petition for adequate remedy. A petition for relief is actually the “last chance” given by law to litigants to question a final judgment or order. Failure to avail of such “last chance” within the grace period fixed by the Rules of Court is fatal. (Datu Eduardo Ampo vs. Court of Appeals, G.R. No. 169091, February 16, 2006, 482 SCRA 562).
EFFECT OF VOID JUDGMENT ON PERIOD SET UNDER RULE 38
NARCISO GUIANG vs. COURT OF APPEALS
G.R. No. 169372, December 6, 2006, 510 SCRA 568
When the judgment on its face is void ab initio, the limited periods for relief from judgment under Rule 38 are inapplicable. This is so because a void judgment is vulnerable to attack, in any way and at anytime, even when no appeal has been taken.
RULE 39
EXECUTION, SATISFACTION AND EFFECT OF JUDGMENTS
AIDA LUGAYAN vs. SPOUSES ANTONIO TIZON
454 SCRA 488, G.R. No. 147958, March 31, 2005
FACTS: Travel 2000 International filed a civil case for a sum of money against Aida Lugayan with the MeTC and the judgment was rendered in favor of Travel.
The Sheriff then levied upon Aida’s house and lot. During the auction sale, Spouses Tizon were declared the highest bidders and were awarded the certificate of sale.
Thereupon, Aida Lugayan filed with the RTC a complaint for annulment of the MeTC Decision in the civil case for sum of money.
Meanwhile, Aida failed to redeem her house and lot within one year. This prompted Spouses Tizon to file a complaint for illegal detainer against Rona and Arturo Lugayan with the MeTC.
During the course of the proceedings, the Lugayans alleged among others, that they were the real parties in interest and spouses Tizon have no cause of action against them due to the pendency of the civil case for annulment of judgment pending in the RTC and that litis pendentia and forum shopping barred the institution of the illegal detainer case.
ISSUE: Whether the case for unlawful detainer be dismissed on the ground of res judicata
HELD: NO. The elements of res judicata, also known as “bar by prior judgment,” are: (1) the former judgment must be final; (2) the court which rendered it had jurisdiction over the subject matter and the parties; (3) it must be a judgment on the merits; and (4) there must be, between the first and second actions, identity of parties, subject matter, and causes of action. Here, the fourth element is not present.
First, there is no identity of parties. In civil case for sum of money, the parties are Travel 2000 International as plaintiff and Aida Lugayan as defendant. In civil case for illegal detainer, the parties are spouses Tizon as plaintiffs and Rona Lugayan and Arturo Lugayan as defendants.
Second, the subject matter in the sum of money is non-payment of debt, while in civil case for illegal detainer, it is unlawful possession of the property.
Third, there is no identity in the cause of action. The first case is for sum of money, while the second case is for illegal detainer.
Section 1 - Execution upon judgments or final orders
Once a judgment becomes final, the prevailing party is entitled as a matter of right to a writ of execution wherein the issuance of which is the trial court’s ministerial duty.
There are instances, however, when an error may be committed in the course of execution proceedings prejudicial to the rights of a party. These instances call for correction by a superior court, as where the writ of execution varies the judgment. (Greater Metropolitan Manila Solid Waster Mgt. Commission vs. Jancom Environmental Corp., G.R. No. 163663, June 30, 2006, 494 SCRA 281).
Section 48 - Effect of Foreign Judgments or final orders
This foreign judgment is not yet binding on Philippine courts. It is entrenched in Section 48, Rule 39 of the Rules of Court that a foreign judgment on the mere strength of its promulgation is not yet conclusive, as it can be annulled on the grounds of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. It is likewise recognized in Philippine jurisprudence and internal law that a foreign judgment may be barred from recognition if it runs counter to public policy. (Republic vs. Gingoyon, G.R. No. 166429, February 1, 2006, 481 SCRA 457).
EXECUTION PENDING APPEAL IN ELECTION CASES
DIEGO LIM vs. COMELEC
G.R. No. 171952, March 8, 2007, 518 SCRA 1
Before granting an execution pending appeal in election cases, the following requisites must concur: (1) there must be a motion by the prevailing party with notice to the adverse party; (2) there must be “good reasons” for the execution pending appeal; and (3) the order granting execution pending appeal must state the good reasons.
SECTION 2 (a) - EXECUTION PENDING APPEAL
LAND BANK vs. SPS. PLACIDO & CLARY ORILLA
556 SCRA 102, G.R. No. 157206, June 27, 2008
FACTS: DARAB informed Spouses Orilla of the compulsory acquisition of their landholding pursuant to CARP. The RTC acting as Special Agrarian Court (SAC) fixed the just compensation of the land at P1.47M.
Land Bank filed a Notice of Appeal, subsequently, Spouses Orilla filed a Motion for Execution pending Appeal.
ISSUE: Whether the Spouses Orilla were entitled to execution pending appeal of the compensation fixed by SAC based on the principle of prompt payment of just compensation.
HELD: YES. Execution of the judgment or final order is discretionary. The existence of good reasons is what confers discretionary power on a court to issue a writ of execution pending appeal. “Good reasons” consist of compelling or superior circumstances demanding urgency which will
outweigh the injury or damages suffered should the losing party secure a reversal of the judgment or final order.
In the case at bar, the prompt payment of just compensation is consistent with principle of justice, fairness and equity, and that suspending payment will prolong the agony of Spouses Orilla due to the deprivation of their land. It must be noted that Spouses Orilla are 71 years old and if payment would be delayed, it would not be long that death would overtake them.
SECTION 6 - EXECUTION BY MOTION OR BY INDEPENDENT ACTION
CENTRAL SURETY & INSURANCE CO. vs. PLANTERS PRODUCTS, INC.
G.R. No. 149053, March 7, 2007, 517 SCRA 651
Under Rule 39, Section 6, the rule is that a final judgment may be executed by mere motion within five years from the date of entry of judgment. However, the rule is not absolute and admits one notable exception and, that is, when the delay in enforcing the judgment is caused by the party assailing the filing of the motion.
ESTEBAN YAU vs. RICARDO SILVERIO, SR.
543 SCRA 520, G.R. No. 158848, February 4, 2008
FACTS: On March 28, 1984, Esteban Yau filed a complaint with RTC for recovery of the value of the promissory note and for damages against Philfinance and the members of its board of directors.
On May 27, 1991, the trial court rendered its decision in favor of Esteban Yau.
Philfinance interposed an appeal to the Court of Appeals. The order of dismissal became final and executory on December 26, 1991.
The trial court issued the writ of execution. The defendants’ bank deposits were garnished by the sheriff. Also, the shares of Silverio in the Manila Golf and Country Club were sold at public auction.
As the judgment was only partially satisfied, the writ of execution was enforced against the other defendants, including Macapagal.
In 1999, the sheriff sent notices of garnishment to several banks in Manila against any existing account of Macapagal. Thereupon, Macapagal filed with the trial court a motion to quash the writ of execution on the ground that its lifetime has expired.
ISSUE: Whether the decision rendered by the RTC may still be enforced against Silverio and Macapagal even if more than five (5) years have already lapsed from its finality.
HELD: YES. A judgment may be executed on motion within five (5) years from the date of its entry or from the date it becomes final and executory. However, there are instances where the Court allowed execution by motion even after the lapse period upon meritorious grounds. These grounds have one common denominator, and that is, the delay is caused or occasioned by actions of the judgment debtor and/or is incurred for his benefit or advantage.
Here, the judgment of the trial court sought to be executed became final and executory on December 26, 1991. The writ of execution was issued and it could not be enforced for the full satisfaction of the judgment within the five-year period because Macapagal and Silverio filed petitions with the Court of Appeals and Supreme Court challenging the trial court’s judgment and the writ of execution. Such petitions suspended or interrupted the further enforcement of the writ.
MODIFICATION OF JUDGMENTS
REPUBLIC vs. UNIMEX MICRO-ELECTRONICS GMBH
G.R. Nos. 166309-10, March 9, 2007, 518 SCRA 19
Where facts or events transpire after a decision has become executory, which facts constitute a supervening cause rendering the final
judgment unenforceable, said judgment may be modified. Also, a final judgment may be altered when its execution becomes impossible or unjust. Final and executory judgment or order may be executed on motion within five years from the date of its entry. After the lapse of such time, and before it is barred by the statute of limitation, a judgment may be enforced by action. The revived judgment may also be enforced by motion within five years from the date of its entry and thereafter by action before it is barred by the statute of limitation.
TERCERIA is a remedy available to a third-party claimant under Sec. 17, Rule 39 and is filed by a third party claimant with the officer making the levy by executing an affidavit of the claimant’s title with a copy thereof served upon the officer making the levy and the judgment creditor. With the filing of this affidavit, the officer is not bound to keep the property unless the judgment creditor indemnifies the officer against such claim by an adequate bond. An action for damages may be brought against the officer within 120 days from the date of the filing of the bond.
SECTION 33, RULE 39 - DEED AND WRIT OF POSSESSION
DOCTRINE: As a general rule, the issuance of a writ of possession after the foreclosure sale and during the period of redemption is ministerial.
As an exception, it ceases to be ministerial if there is a third party holding the property adversely to the judgment debtor.
EMMANUEL VILLANUEVA vs. CHERDAN LENDING
INVESTORS CORPORATION
G.R. No. 177881, October 13, 2010, 633 SCRA 173
FACTS: Peñaredondo obtained from Cherdan Lending a loan amounting to P2.2 million secured by a real estate mortgage over a parcel of land covered by TCT # T-129690.
Despite demand, Peñaredondo failed to pay the obligation. Hence, Cherdan extrajudicially foreclosed the mortgage. At the auction sale, Cherdan was declared as the highest bidder. Upon the expiration of the redemption period, the title to the property was consolidated and a new title was issued to Cherdan.
On September 28, 2001, Cherdan filed before the RTC an Ex Parte Petition for Issuance of a Writ of Possession.
Accordingly, a writ of possession was issued and served to Villanueva who moved for the reconsideration of the order and setting aside of the writ of possession on the ground that he is the owner and is in actual possession of the property. He notified the court that he had filed criminal and civil case relative to fraudulent transfer of ownership of the subject property from him to Peñaredondo.
ISSUE: Whether the issuance of a writ of possession over the subject property of the foreclosure of the real estate mortgage be enforced against Villanueva.
HELD: NO. Section 33, Rule 39 of the Rules of Court provides that the possession of the mortgaged property may be awarded to the purchaser in the extrajudicial foreclosure unless a third party is actually holding the property adversely to the judgment debtor.
In this case, Villanueva opposed the issuance of a writ of possession on the ground that he is in actual possession of the mortgaged property under a claim of ownership. His title to the property was cancelled by virtue of a falsified deed of donation in favor of Peñaredondo. Because of this falsification, he filed civil and criminal cases against Peñaredondo to nullify the deed of donation and to punish the party responsible for the falsified document.
To enforce the writ against Villanueva, an unwitting third party possessor who took no part in the foreclosure proceedings, would amount to the taking of real property without the benefit of proper judicial intervention.
TEODORO DARCEN vs. V.R. GONZALES CREDIT ENTREPRISES, INC.
G.R. No. 199747, April 3, 2013, 695 SCRA 207
FACTS: Sometime in January 2007, Gonzales appeared and claimed that Teodoro’s late mother Flora had mortgaged their properties to V.R. Gonzales Credit in 1995 and demanded payment of several loans taken out by Flora.
Upon investigation, Teodoro found out that their properties had indeed been mortgaged to Gonzales in 1995 and the purported signatures of her mother to the mortgage contracts were allegedly forged by his brothers Manuel and Arturo.
When Gonzales extrajudicially foreclosed the subject properties, Teodoro filed an action for the annulment of mortgage against Gonzales and his brothers Manuel and Arturo.
On December 8, 2009, Gonzales filed an ex parte petition for issuance of a writ of possession. The order of court dated February 26, 2010 was served to Teodoro.
Teodoro opposed the order of a writ of possession on the ground that he is the adverse claimant who is a third party and stranger to the real estate mortgage executed by his late mother Flora.
ISSUE: Whether Teodoro be considered a third party and stranger who is actually holding the properties adversely to the judgment obligor.
HELD: NO. Teodoro had consented to the extrajudicial settlement of the estate of his father as well as waiver by them of their shares in favor of their mother. For this very reason, he cannot be permitted to interpose an adverse claim in the subject mortgaged properties and defeat the writ of possession issued to Gonzales.
RURAL BANK OF STA BARBARA vs. GERRY CENTENO
G.R. No. 200667, March 11, 2013, 693 SCRA 110
FACTS: Gregorio mortgaged his property as a security for a loan in favor of Sta. Barbara Rural Bank.
Gregorio defaulted on the mortgage prompting Sta . Barbara to cause the extrajudicial foreclosure of the said mortgage. Consequently, the subject lots were sold to Sta. Barbara being the highest bidder at the auction sale.
Gregorio failed to redeem the subject lots within one (1) year redemption period. Nonetheless, Gregorio still continued with the possession and cultivation of the aforesaid properties.
Sometime in 1983, Gerry, the son of Gregorio, took over the cultivation of the subject properties.
On March 14, 1988, Gerry purchased the said lots from Gregorio and able to obtain the corresponding tax declaration in his name.
On March 19, 1998, Sta. Barbara filed a petition for the issuance of a writ of possession.
Gerry opposed the petition asserting that he purchased the said property and has in fact in actual, open and exclusively possession of the same properties for at least 15 years. He further averred that the foreclosure sale was null and void owing to the forged signatures in the real estate mortgage and Sta. Barbara’s right over the subject lots had already prescribed.
ISSUE: Whether Gerry be considered a third party who is holding the properties adversely to the judgment obligor.
HELD: NO. Considering that Gerry acquired the subject lots from his father Gregorio on March 14, 1988 after they were purchased by Sta. Barbara in the foreclosure sale in 1971, it cannot be therefore be disputed that Gerry is a mere successor-in-interest of Gregorio.
Consequently, he cannot be deemed as a “third party who is actually holding the property adversely to the judgment obligor” under the legal contemplation.
A P P E A L
Q: When may late appeals be entertained by the Court?
A: There have been exceptions, however, in which the Court dispensed with technical infirmities and gave due course to tardy appeals. In some of those instances, the presence of justifying circumstances recognized by law -- such as fraud, accident, mistake or excusable negligence -- properly vested the judge with discretion to approve or admit an appeal filed out time. In other instances, lapsed appeals were allowed in order to serve substantial justice, upon consideration of a) matters of life, liberty, honor or property; b) the existence of special or compelling circumstances; c) the merits of the case d) causes not entirely attributable to the fault or negligence of the party that would be favored by the suspension of the rules; e) the failure to show that the review being sought was merely frivolous and dilatory; and (f) the fact that the other party would not be unjustly prejudiced. (Go vs. Yamane, G.R. No. 160762, May 3, 2006, 489 SCRA 107).
APPEAL IN NATURALIZATION CASES
IN RE: PETITION FOR ADMISSION AS CITIZENS,
SHEWAK KESWANI vs. REPUBLIC OF THE PHILIPPINES
G.R. No. 153986, June 8, 2007, 524 SCRA 145
The applicable procedure with regard to appeals governing naturalization cases is that provided under BP 129 and supplemented by the 1997 Rules of Civil Procedure which is through an ordinary appeal to the Court of Appeals.
FINAL AND EXECUTORY JUDGMENT MADE SUBJECT OF APPEAL
DANILO L. PAREL vs. HEIRS OF SIMEON PRUDENCIO
G.R. No. 192217, March 2, 2011, 644 SCRA 496
FACTS: Simeon was the owner of a two-storey house, where he allowed Danilo and his parents to live on the ground floor. Later, Simeon needed the whole house back and informed Danilo and his parents that they had to vacate the place. Danilo, however, remained in the house with his family despite repeated demands which drove Simeon to institute an action for recovery of possession and damages. Danilo maintained that the land on which Simeon’s house was constructed was in his father’s name, making Simeon and his father co-owners of the house of which Simeon claims sole ownership.
RTC ruled in favor of Danilo. The CA, on Simeon’s appeal, rendered a Decision reversing the RTC Decision. SC on certiorari affirmed the CA decision.
Thereafter, Simeon sought to enforce the final and executory decision and thus filed a Motion for Issuance of Writ of Execution. Danilo prayed that the P2,000 monthly rental he was ordered to pay be computed from April 1988 to March 1994 only since he had vacated the premises by April 1994.
ISSUE: Whether a decision which became final and executory can be subject of appeal.
HELD: YES. Unjustified delay in the enforcement of a judgment sets at naught the role of courts in disposing justiciable controversies with finality. Once a judgment becomes final and executory, all the issues between the parties are deemed resolved and laid to rest, all that remains is the execution of the decision which is the matter of right. However, there are exceptional circumstances which considerations of justice and equity dictate that there be some mode available to the
party aggrieved of elevating the question to a higher court. The instant case falls under one of the exceptions, that is the fact that Danilo has left the property under dispute is a change in the situation of the parties that would make execution inequitable or unjust.
RULE 41
APPEAL FROM THE RTC
M. A. SANTANDER CONSTRUCTION, INC. vs. ZENAIDA VILLANUEVA
441 SCRA 525, G.R. No. 136477, November 10, 2004
ISSUE: Whether non-payment of the docket fees and other legal fees within the prescribed period a valid ground to dismiss an appeal.
HELD: YES. The right to appeal is not a natural right or a part of due process. It is merely a statutory privilege and may be exercised only in the manner and in accordance with the provisions of law. Thus, one who seeks to avail of the right to appeal must strictly comply with the requirements of the rules, and failure to do so leads to the loss of the right to appeal. Failure to pay the appellate court docket and other lawful fees on time is a ground to dismiss the appeal.
The mere filing of the notice of appeal is not enough, for it must be accompanied by the payment of the correct appellate docket fees. Payment in full of docket fees within the prescribed period is mandatory. It is an essential requirement without which the decision appealed from would become final and executory as if no appeal had been filed.
ANTONIO BORBON vs. COURT OF APPEALS
445 SCRA 617, G.R. No. 138495, December 9, 2004
ISSUE: Whether the appeal be dismissed for failure to file the appellant’s brief within the period provided for by law.
HELD: YES. Section 3 of Rule 41 provides: “The appeal shall be taken within 15 days from notice of judgment or final order appealed from. Where a record on appeal is required, the appellant shall file a notice of appeal and a record on appeal within 30 days from notice of the judgment or final order. The period of appeal shall be interrupted by a timely motion for new trial or reconsideration. No motion for new trial or reconsideration shall be allowed.” This provision should be read in consonance with Section 7 Rule 44 . Courts have the power and jurisdiction to grant an extension of time to perfect the appeal with the filing of the appellant’s brief but the motion seeking an extension of time to file an appellant’s brief must be filed within the period to perfect an appeal. Here, the Appellate court, upon petitioner’s timely motion, allowed him to file the appellant’s brief up to September 7, 1998, but he filed the same only February 2, 1999 or after a lapse of 159 days.
Section 1 - Subject of appeal
The rule that no appeal lies from an order or writ directing the execution of a final judgment, for otherwise a case will not attain finality, is not absolute since a party aggrieved by an improper or irregular execution of a judgment is not without a remedy. Thus, the Court enumerated the exceptional circumstances where a party may elevate the matter of an improper execution for appeal, to wit: “when the writ of execution varies the judgment.” (Banaga vs. Majaducon, G.R. No. 149051, June 30, 2006, 494 SCRA 153)
RULE 42
PETITION FOR REVIEW FROM RTC TO COURT OF APPEALS
GERTRUDES TEH vs. PEOPLE OF THE PHILIPPINES
448 SCRA 25, G.R. No. 141180, January 11, 2005
FACTS: Petitioner was found guilty for estafa by the MTCC beyond reasonable doubt. On appeal, the RTC affirmed the MTCC’s decision.
Petitioner then elevated the matter to the CA by way of petition for review. The latter, however, dismissed the petition for being insufficient in form, not being accompanied by duplicate original or certified true copies of the documents and material parts of the record that would support the allegations. Moreover, there was
no written explanation why service of the petition was not done personally.
ISSUE: Whether the appeal be dismissed based on the aforementioned grounds.
HELD: YES. Petitioner violated the provisions of Section 2 of Rule 42 and Section 11 of Rule 13 which warrants the dismissal of her petition by the Court of Appeals.
The petitioner herself admitted that the only documents attached to the petition were certified true copies of the Decisions of the RTC and the MTCC. There were no copies of the pleadings filed below or other materials portions of the record which would support the allegations in the petition.
Section 11 of Rule 13 reads: “Whenever practicable, the service and filing of pleadings and other papers shall be done personally. Except with respect to papers emanating from the court, a resort to other
modes must be accompanied by a written explanation why the service or filing was not done personally. A violation of this Rule may be cause to consider the paper as not filed.”
Failure to pay the correct docket fees
The appellate court may extend the time for the payment of the docket fees should there be a justifiable reason for the failure to pay the correct amount of docket fees within the prescribed period, such as fraud, accident, mistake, excusable negligence or a similar supervening casualty, without fault on the part of the appellant.
The payment of docket fees within the prescribed period is jurisdictional and is necessary for the perfection of an appeal. The failure to pay the appellate court docket fee within the reglementary period confers a discretionary, and not a mandatory power to dismiss the proposed appeal, and that such power should be used in the exercise of the court’s sound judgment in accordance with the tenets of justice and fair play and with a great deal of circumspection considering all attendant circumstances. Said “discretion must be exercised wisely and prudently, never capriciously, with a view to substantial justice. (De Dios Carlos vs. Court of Appeals, G.R. No. 134473, March 30, 2006, 485 SCRA 578).
MOTION FOR EXTENSION OF TIME
BERNARDO vs. PEOPLE
G.R. No. 166980, April 3, 2007, 520 SCRA 332
The extension should be tacked to the original period, to commence immediately after the expiration of such period. The court has no discretion to reckon the commencement of the extension from a date later than the expiration of such original period, not even if the expiry date is Saturday, Sunday, or a legal holiday.
RULE 45
APPEAL BY CERTIORARI TO THE SUPREME COURT
JOY TAN vs. JUDGE SALIC DUMARPA
438 SCRA 659, G.R. No. 138777, September 22, 2004
FACTS: Respondent filed a civil case for damages with prayer for issuance of writ of attachment against petitioner.
Tan filed her answer with motion to dismiss the complaint on the ground of failure to state cause of action. The trial court denied the motion to dismiss and set the pre-trial conference.
But during the pre-trial, petitioner and counsel did not appear. Thus, petitioner was declared in default and respondent was allowed to present evidence ex parte. The trial court rendered judgment by default.
Petitioner filed a motion for reconsideration of the judgment by default on the ground that her counsel did not receive the copy of the order denying her motion to dismiss and setting the pre-trial conference. The trial court denied petitioner’s motion for reconsideration and ruled that
the motion is pro forma and does not toll the running of the period to appeal. Thus judgment by default has become final and executory.
Petitioner filed this petition for review on certiorari before the Supreme Court under Rule 45.
ISSUE: Whether the SC may consider the petition for review as a petition for certiorari under Rule 65.
HELD: YES. The petitioner should have, pursuant to the Rules, filed with the trial court a motion for new trial or an ordinary appeal with the CA. Instead, she came directly to the SC via the instant petition for review on certiorari. However, in the interest of justice, the SC considered the instant petition, pro hac vice, a petition for certiorari under Rule 65. It appears prima facie from petitioner’s allegations that the trial court committed grave abuse of discretion in rendering the Judgment by Default. If such allegations are true and the trial court’s fatal error remains uncorrected, then petitioner will suffer great injustice.
Indeed, where as here, there is a strong showing that grave miscarriage of justice would result from the strict application of the Rules, the SC will not hesitate to relax the same in the interest of substantial justice. Verily, by denying petitioner’s motion for reconsideration on the wrong ground that it is pro forma and by declaring her as in default and allowing respondent to present his evidence ex parte, the trial court deprived petitioner of her right to due process. Clearly, the trial judge committed grave abuse of discretion.
LOSING PARTY TO SEEK RELIEF FROM THE COURT OF ORIGIN
MARY JANE G. DY CHIAO vs. SEBASTIAN BOLIVAR
G.R. No. 192491, August 17, 2016, 800 SCRA 611
FACTS: In a civil case, the CA declared petitioner Mary Dy Chiao subsidiarily liable to pay the exact amount of P5,711,164, which was ultimately affirmed by the Supreme Court.
The decision was forwarded to RTC Branch 19 of Naga City for execution. Following the execution proceedings, a writ of execution was issued and directed the respondent sheriff to levy properties of petitioner to satisfy the amount of P5,711,164.00.
To fend off the public auction of her properties, petitioner filed a so-called Petition for Prohibition with application for TRO and preliminary injunction and the case was raffled to RTC Branch 23.
The RTC Branch 23 dismissed the case for lack of jurisdiction, opining that the processes being undertaken by the respondent sheriff were deemed proceeding in same civil case assigned to and still pending before RTC Branch 19, and that the RTC Branch 19 continued to exercise general supervision and control over such proceedings.
Petitioner then filed in the CA her Motion for Extension of Time to file Verified Petition for Review on Certiorari indicating therein that she would be raising a question of law.
As stated, the CA denied said petition on the ground that where only questions of law are raised, the petition for review on certiorari shall be filed with the Supreme Court and not with CA.
ISSUES
1) Whether CA has jurisdiction to resolve the Motion for Extension of Time to File Petition for Review on Certiorari pursuant to the principle of hierarchy of courts.
2) Whether the dismissal of the action by RTC Branch 23 is proper.
RULINGS
1) NO. CA has no jurisdiction to resolve the Motion for Extension of Time to File verified petition for review on certiorari.
The CA properly denied the petitioner’s Motion for Extension of Time to File Verified Petition for Review on Certiorari and justifiably considered the case close and terminated.
The petitioner was patently guilty of taking an erroneous appeal in view of her manifest intention to limit her appeal to question of law. Such an appeal would only be filed to the Supreme Court pursuant Section 1, Rule 45 of the Rules of Court.
Pursuant to Section 2, Rule 50 of the Rules of Court, an appeal raising only questions of law brought to the CA instead to the Supreme Court, shall be dismissed.
2) YES. The dismissal of the case by RTC Branch 23 is proper considering that the assailed action and processes undertaken by the respondent sheriff to levy the properties of the petitioner were deemed proceedings in the same civil action assigned to RTC Branch 19 as the court that had issued the writ of execution.
Such proceedings, being incidents of the execution of the final and executory decision of the RTC Branch 19 remained within its control.
To allow the petitioner’s action in the RTC Branch 23 would disregard the doctrine of judicial stability or non-interference, under which no court has the power to interfere by injunction with the judgments or decrees of a court of concurrent or coordinate jurisdiction.
Courts and tribunals with the same or equal authority -- even those exercising concurrent and coordinate jurisdiction - - are not permitted to interfere with each other’s respective cases, much less their orders or judgments therein.
That the respondent sheriff was the sole party sought to be prevented from further acting in the execution proceedings or that the RTC Branch 23 was not impleaded by the petitioner, did not matter.
The respondent sheriff was under the direct control and supervision of the RTC Branch 19 as the court that had issued the writ of execution enforcing the final decision of the CA against the petitioner.
The determination of whether or not the notice of levy was valid and proper, rightfully fell within the exclusive prerogative of the RTC Branch 19 to ascertain and pronounce.
If she doubted the authority of the respondent sheriff to issue the notice of levy, she would have sought clarification of the matter from RTC Branch 19, and should an outcome be adverse to her, she could then have sought fitting redress from a superior court vested with the authority to review and reverse the action of the respondent sheriff instead of resorting to her action before the RTC Branch 23.
RULE 47
ANNULMENT OF JUDGMENT OR FINAL ORDERS AND RESOLUTIONS
ALABAN vs. COURT OF APPEALS
G.R. No. 156021, September 23, 2005, 470 SCRA 697
A motion for new trial or reconsideration and a petition for relief of judgment are remedies available only to parties in the proceedings where the assailed judgment is rendered. As parties to the probate proceedings, petitioners could have validly availed of the remedies of motion for new trial or reconsideration and petition for relief from judgment. In fact, petitioners filed a motion to reopen, which is essentially a motion for new trial, with petitioners praying for the reopening of the case and the setting of further proceedings. However, the motion was denied for having been filed out of time, long after the Decision became final and executory.
For failure to make use without sufficient justification of the said remedies available to petitioners, they could no longer resort to a petition for annulment of judgment. Otherwise, they would benefit from their own inaction or negligence.
SECTION 2 - GROUNDS FOR ANNULMENT
FELIX CAMITAN vs. COURT OF APPEALS
G.R. No. 128099, December 20, 2006, 511 SCRA 364
Annulment of judgment is allowed only in exceptional cases as where there is no available or other adequate remedy. An action for annulment of judgment is grounded only on two justifications: (1) extrinsic fraud; and (2) lack of jurisdiction or denial of due process.
RULE 50
DISMISSAL OF APPEAL
ESTATE OF TARCILA VDA. DE VILLEGAS vs. GABOYA
G.R. No. 143006, July 14, 2006, 495 SCRA 30
The right to appeal is a statutory right and a party who seeks to avail of the right must faithfully comply with the rules. Petitioner’s plea for liberal application of the rules would mean deviation from the aforementioned rules, which cannot be tolerated. These rules are designed to facilitate the orderly disposition of appealed cases.
Q: What is the “Law of the Case”?
A: It is an opinion on a former appeal. More specifically, it means that whatever is once irrevocably established as the controlling legal rule of decision between the same parties in the same case continues to be the law of the case whether correct on general principles or not, so long as the facts on which such decision was predicated continue to be the facts of the case before the court. (Arriola vs. Philex Mining, G.R. No. 147756, August 9, 2005, 466 SCRA 152).
RULE 52
“FRESH PERIOD RULE”
Fresh 15 day period after denial of motion for reconsideration
FIL-ESTATE PROPERTIES, INC. vs. HON. MARRIETA HOMEÑA – VALENCIA
555 SCRA 345, G.R. No. 173942, June 25, 2008
FACTS: In 1998, Naval filed a complaint against Fil-Estate seeking the recovery of a parcel of land which the latter had allegedly taken possession of by constructing a golf course within the vicinity of her property.
The RTC rendered a decision in favor of Naval of which Fil-Estate moved for reconsideration. On July 26, 2000, the RTC denied the motion.
On August 11, 2000, Fil-Estate filed a Notice of Appeal alleging that the order of denial of the motion for reconsideration was received on August 9, 2000, but the filing fee was paid only on August 25, 2000, or beyond the reglementary period to perfect the appeal. Consequently, the RTC denied the appeal and such denial was sustained by the Court of Appeals.
ISSUE: Whether the “fresh period rule” pronounced in Neypes could retroactively apply in cases where the period for appeal had lapsed prior to September 14, 2005 when Neypes was promulgated.
HELD: YES. Amendments to procedural rules are procedural or remedial in character as they do not create new or remove vested rights, but only operate in furtherance of the remedy or confirmation of rights already existing. They may be given retroactive effect on actions pending and undetermined at the time of their passage and this will not violate any right of a person who may feel that he is adversely affected, insomuch as there are no vested rights in rules of procedure.
To deny herein petitioners the benefit of the “fresh period rule” will amount to injustice, if not absurdity, since the subject notice of judgment and final order were issued two years later or in the year 2000 as compared to the notice of judgment and final order in Neypes which were issued in 1998.
RULE 57
PRELIMINARY ATTACHMENT
Section 20 - Claim for damages on account of improper,
irregular or excessive attachment
The language used in the 1997 revision of the Rules of Civil Procedure leaves no doubt that there is no longer need for a favorable judgment in favor of the party against whom attachment was issued in order that damages may be awarded. It is indubitable that even a party who loses the action in main but is able to establish a right to damages by reason of improper, irregular, or excessive attachment may be entitled to damages. This bolster the notion that the claim for damages arising from such wrongful attachment may arise and be decided separately from the merits of the main action. (De Dios Carlos vs. Sandoval, G.R. No. 135830, September 30, 2005, 471 SCRA 266)
RULE 58
PRELIMINARY INJUNCTION
Computation of the 20-day period for TRO
Non-working days (Saturdays, Sundays and legal holidays) are excluded from the counting of the period only when the last day of the period falls on such days. The Rule does not provide for any other circumstance in which non-working days would affect the counting of a prescribed period. (BPI vs. Court of Appeals, G.R. No. 142731, June 8, 2006, 490 SCRA 168)
PRELIMINARY INJUNCTION AS ACTION IN PERSONAM
CONRADO PINEDA vs. HON. PEDRO T. SANTIAGO
G.R. No. 143482, April 13, 2007, 521 SCRA 47
A suit for injunction is an action in personam and, as such, the respondent judge’s jurisdiction is, therefore, limited to the parties in the injunction suit.
SECTION 5 - PRELIMINARY INJUNCTION NOT GRANTED WITHOUT NOTICE; EXCEPTIONS
SPS. MANUEL & LUISA TAN LEE vs. COURT OF APPEALS
G.R. No. 147191, March 20, 2007, 518 SCRA 546
No preliminary injunction shall be granted without hearing and prior notice to the party or person sought to be enjoined.
RULE 63
DECLARATORY RELIEF
Propriety of declaratory relief
The Court may entertain a suit for declaratory relief to finally settle the doubt as to the proper interpretation of the conflicting laws involved, notwithstanding a violation of the rights of the party affected. (Executive Secretary vs. Southwing Heavy Industries, G.R. No. 164171, February 20, 2006, 482 SCRA 673).
EXECUTORY PROCESS AVAILABLE IN DECLARATORY RELIEF
DBM vs. MANILA’S FINEST RETIREES ASSOCIATION, INC.
G.R. No. 169466, May 9, 2007, 523 SCRA 90
The execution of judgments in a Petition in a Declaratory Relief is not necessarily indefensible. A special civil action is after all not essentially different from an ordinary civil action, which is generally governed by Rules 1 to 56 of the Rules of Court, except that the former deals with a special subject matter which makes some necessary special regulation.
RTC HAS JURISDICTION OVER DECLARATORY RELIEF BUT HAS NO JURISDICTION OVER TRO & INJUNCTION UNDER EPIRA
ENERGY REGULATION COMMISSION vs.
HON. GREGORIO L. VEGA, JR. & MERALCO
G.R. No. 225141, September 26, 2016, 804 SCRA 181
FACTS: Meralco filed petition for declaratory relief with prayer for issuance of a TRO and/or a writ of preliminary injunction seeking to declare as null and void selected issuances by the DOE and ERC related to Retail Competition and Open Assess (RCOA) provision of the EPIRA.
The RTC issued an order granting Meralco’s prayer and ordering the issuance of a 20-day TRO in its favor.
The ERC then filed a petition assailing the RTC’s order as well and praying for an injunction relief to enjoin the RTC from continuing its proceeding in the present case.
ISSUES
1) Whether RTC has jurisdiction over petition for declaratory relief.
2) Whether RTC has jurisdiction over the ancillary prayer for the issuance of a Writ of Preliminary Injunction enjoining EPIRA’s implementation.
RULINGS
1) YES. The RTC’s exercise of jurisdiction over the petition for declaratory relief is proper as this is a matter that expressly falls under its jurisdiction.
Section 1, Rule 63 of the Rules of Court furthermore is clear that the RTC has jurisdiction over petitions for declaratory relief.
2) NO. RTC does not have jurisdiction to issue any order or enjoining the DOE/ERB issuances relating to EPIRA.
Under the clear terms of Section 78 of the EPIRA, only the Supreme Court may issue an order enjoining the EPIRA’s implementation.
This provision is similar to Section 3 of RA 8975 enacted in relation with government infrastructure projects, where it was established that if the RTC issues a writ of preliminary injunction that will impede the process of national government projects, the lower court commits grave abuse of discretion.
RULE 65
CERTIORARI, PROHIBITION AND MANDAMUS
MAYOR EDGARDO FLORES vs. SANGGUNIANG PANLALAWIGAN OF PAMPANGA
452 SCRA 278, G.R. No. 159022, February 23, 2005
ISSUE: Whether the petition prematurely filed as petitioner failed to first exhaust all administrative remedies.
HELD: YES. The administrative complaint against petitioner was filed with respondent Sanggunian in accordance with Section 61 of RA 7160 (Local Government Code of 1991). After receiving the order of the respondent Sanggunian preventively suspending him from office, petitioner should have filed a motion for reconsideration in order to give the latter the opportunity to correct itself if there was any error on its part. Such motion is a condition sine qua non before filing a petition for certiorari under Rule 65 Section 1 of the same Rule requires that petitioner must not only show that respondent Sanggunian, in issuing the questioned order, “acted without or in excess of its jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction,” but that “there is no appeal, nor plain, speedy and adequate remedy
in the ordinary course of law.” The “plain” and “adequate remedy” referred to in Section 1 of Rule 65 is a motion for reconsideration of the assailed order or resolution. To dispense with the requirement of filing a motion for reconsideration, petitioner must show a concrete, compelling and valid reason for doing so. This, petitioner failed to do.
PO3 WILLIAM MENDOZA vs. NATIONAL POLICE COMMISSION
460 SCRA 399, G.R. No. 139658, June 21, 2005
FACTS: Petitioner police officer was administratively charged with illegal arrest, illegal detention, physical injuries and robbery.
The PNP Regional Director rendered a decision dismissing petitioner from service. Petitioner interposed an appeal to the Regional Appellate Board (RAB) of the Napolcom. The RAB rendered a resolution affirming the decision of the PNP Regional Director. Consequently, petitioner filed a motion for reconsideration, which was denied by the RAB.
Thereafter, petitioner filed with the RTC a petition for certiorari on the ground that he was not accorded due process. The RAB, through the Solicitor General, filed a motion to dismiss contending that petitioner failed to exhaust all administrative e remedies.
ISSUE: Whether petitioner’s failure to exhaust all administrative remedies fatal.
HELD: YES. Petitioner’s failure to exhaust all administrative remedies is fatal to his cause. It is elementary that where, as here, a remedy is available within the administrative machinery, this should be resorted to. Under the provisions of the DILG Act of 1990, the Decision of the PNP Regional Director imposing upon a PNP member the administrative penalty of dismissal from the service is appealable to the RAB. From the RAB Decision, the aggrieved party may then appeal to the Secretary of the DILG. Here, petitioner did not interpose an appeal to the DILG Secretary. It bears emphasis that in the event the Secretary renders an unfavorable decision, petitioner may still elevate his case to the Civil Service Commission.
REPUBLIC OF THE PHILIPPINES vs. SANDIGANBAYAN & ILUSORIO
460 SCRA 146, G.R. No. 141796, June 15, 2005
ISSUE: Whether a petition for certiorari be filed with the SC without first filing a motion for reconsideration of the assailed decision.
HELD: NO. As a rule, the special civil action of certiorari under Rule 65 lies only when the lower court has been given the opportunity to correct the error imputed to it through a motion for reconsideration of the assailed order or resolution. The rationale of the rule rests upon the presumption that the court or administrative body which issued the assailed order or resolution may amend the same, if given the chance to correct its mistake or error. The motion for reconsideration, therefore, is a condition sine qua non before filing a petition for certiorari.
EAST ASIA TRADERS, INC. vs. REPUBLIC OF THE PHILIPPINES
433 SCRA 716, G.R. No. 152947, July 7, 2004
Doctrine: Certiorari is not intended to correct every controversial interlocutory ruling.
HELD: Interlocutory order does not terminate nor finally dispose of the case, but leaves something to be done by the court before the case is finally decided on the merits. It is always under the control of the court and may be modified or rescinded upon sufficient grounds shown at any time before final judgment. A writ of certiorari is not intended to correct every controversial interlocutory ruling; it is resorted only to correct a grave abuse of discretion or a whimsical exercise of judgment equivalent to lack of jurisdiction. Its function is limited to keeping an inferior court within its jurisdiction and to relieve persons from arbitrary acts – acts which courts or judges have no power or authority in law to perform. It is not designed to correct erroneous findings and conclusions made by the courts.”
MANILA MIDTOWN HOTEL vs. REY BORROMEO
438 SCRA 653, G.R. No. 138305, September 22, 2004
Doctrine: A petition for certiorari is not a substitute for a lapsed appeal.
HELD: Upon receipt of a copy of the Voluntary Arbitrator’s Decision, petitioner should have been filed with the Court of Appeals, within
the 15-day reglementary period, a petition for review, not a petition for certiorari, which is not a substitute for a lapsed appeal. And without an appeal (petition for review) seasonably filed, as in this case, the questioned Decision of the Voluntary Arbitrator became final and executory after ten (10) calendar days from notice.
MOBILIA PRODUCTS, INC. vs. HAJIME UMEZAWA
G.R. No. 149357, March 4, 2005
PEOPLE OF THE PHILIPPINES vs. FERNANDEZ & UMEZAWA
452 SCRA 736, G.R. 14903, March 4, 2005
Doctrine: Recognized EXCEPTIONS to rule that certiorari cannot be availed of when the period has lapsed.
ISSUE: Whether the State is barred from assailing the order of the RTC for not filing a motion for reconsideration.
HELD: While ordinarily, certiorari is unavailing where the appeal period has lapsed, there are exceptions. Among them are:
(1) when public welfare and the advancement of public policy dictates;
(2) when the broader interest of justice so requires;
(3) when the writs issued are null and void; or
(4) when the questioned order amounts to an oppressive exercise of judicial authority.
DOMINGO MANALO vs. PAIC SAVINGS BANK & TERESE VARGAS
453 SCRA 747, G.R. No. 146531, March 18, 2005
ISSUE: Whether mandamus is the proper recourse to enforce petitioner’s alleged right of redemption.
HELD: NO. Mandamus is a writ issued in order to compel the performance, when refused, of a ministerial duty, this being its main objective, it does not lie to require anyone to fulfill a contractual obligation or to compel a course of conduct, nor to control or review the exercise of discretion.
The SC held that mandamus is not the proper recourse to enforce petitioner’s alleged right of redemption. To begin with, mandamus applies as a remedy only where petitioner’s right is founded clearly in law and not when it is doubtful.
RULE 66
QUO WARRANTO
QUO WARRANTO CASE AGAINST CJ SERENO
REPUBLIC vs. MARIA LOURDES SERENO
G.R. No. 237428, May 11, 2018
FACTS: The Republic of the Philippines, represented by the Solicitor General Calida, filed a Petition for the issuance of the extraordinary writ of Quo Warranto to declare void respondent Sereno’s appointment as Chief Justice of the Supreme Court and to oust and altogether exclude her therefrom for her failure to submit SALNs as mandated by the Constitution and required by law.
ISSUES
1) Whether the Supreme Court can assume jurisdiction and give due course to the instant petition for quo warranto against respondent Sereno who is an impeachable officer and against whom an impeachment complaint has already filed with the House of Representatives.
2) Whether respondent Sereno is an impeachable officer and such that quo warranto petition cannot prosper.
3) Whether there is a forum shopping.
4) Whether impeachment is not an exclusive remedy by which an impeachable official may be removed from office.
5) Whether the petition is dismissible outright on the ground of prescription.
6) Whether respondent’s failure to file her SALNs as mandated by the Constitution and required by law voids the nomination and appointment of respondent Sereno as Chief Justice.
7) Whether respondent Sereno is a de jure or de facto officer.
RULINGS
1) YES, SC has original jurisdiction over an action for quo warranto.
Section 5, Article VIII of the Constitution states that the SC has original jurisdiction over petitions for quo warranto. This jurisdiction is concurrent with the Court of Appeals (CA) and the Regional Trial Court (RTC).
Section 7, Rule 66 of the Rules of Court provides that the venue for an action for quo warranto is in the RTC of Manila, CA, or SC when commenced by the Solicitor General.
While the hierarchy of courts serves as a general determinant of the appropriate forum for petitions for the extraordinary writs, a direct invocation of the SC’s original jurisdiction in this case is justified considering that the qualification of a member of the Court is in question, and the issue is of public concern.
2) NO. The Court held that the origin, nature and purpose of impeachment and quo warranto are materially different.
While both impeachment and quo warranto may result in the ouster of the public official, the two proceedings materially differ.
At its most basic, impeachment proceedings are political in nature while an action for quo warranto is judicial or a proceeding traditionally lodged in the courts.
3) There is NO forum shopping because quo warranto and impeachment can proceed independently and simultaneously as they differ as to (1) jurisdiction (2) grounds (3) applicable rules pertaining to institution, filing and dismissal, and (4) limitations.
The causes of action in the two proceedings are unequivocably different. In quo warranto, the cause of action lies on the usurping, intruding, or unlawfully holding or exercising a public office, while in impeachment, it is the commission of an impeachable offense.
Likewise, the reliefs sought in the two proceedings are different. Respondent in a quo warranto proceeding shall be ordered to cease holding a public office, which he/she is ineligible to hold. On the other hand, in impeachment, a conviction shall result in the removal of the respondent from the public office that he/she is legally holding.
4) YES. Impeachment is not an exclusive remedy by which an invalidly appointee or invariably elected impeachable official may be removed from office.
Even the Presidential Electoral Tribunal (PET) rules expressly provide for the remedy of either an election protest or a petition for quo warranto to question the eligibility of the President and the Vice President, both of whom are impeachable officers.
In fact, this would not be the first time the Court shall take cognizance of a quo warranto petition on impeachable officer. In the case of Estrada vs. Macapagal Arroyo where the SC took cognizance of quo warranto petition against former President Macapagal Arroyo whether the former President Estrada’s act of resignation ended his official status as President.
5) NO. Prescription does not lie against the State.
The one-year limitation is not applicable when the Petition is not mere private individual pursuing a private interest, but the government itself seeking a relief for a public wrong and suing for public interest.
In the three instances enumerated by Rules of Court, the Solicitor General is mandated under the Rules to commence the necessary quo warranto petition, as seen in the use of the word “must”
As a general principle it may be stated that ordinary statutes of limitation, civil or penal, have no application to quo warranto proceeding brought to enforce a public right. In effect, when the government is the real party and is proceeding mainly to assert its right, there can be no defense on the grounds of laches or prescription.
6) YES. Compliance with the Constitutional and statutory requirement of filing of SALN intimately relates to a person’s integrity. Contrary to respondent Sereno’s postulation that the filing of SALN bears no relation to the requirement of integrity, the filing of SALN itself is a Constitutional and statutory requirement.
7) DE FACTO OFFICER. The effect of a finding that person appointed to an office is ineligible therefore is that his presumably valid appointment will give him color of title that confers to him the status of a de facto officer.
For lack of a Constitutional qualification, Respondent is ineligible to hold the position of Chief Justice and merely holding a colorable right or title thereto. As such, respondent Sereno has never attained the status of an impeachable official and her removal from office other than by impeachment, is justified. The remedy, therefore, of a quo warranto at the instance of the State is proper to oust respondent from the appointive position of Chief Justice.
RULE 70
FORCIBLE ENTRY & UNLAWFUL DETAINER
RUBEN SANTOS vs. SPOUSES TONY and MERCY AYON
458 SCRA 83, G.R. No. 137013, May 6, 2005
ISSUE: Whether accion publiciana is the proper remedy upon a person who occupies a property by tolerance or permission.
HELD: NO. The correct remedy is unlawful detainer. The jurisdiction of a court over the subject matter is determined by the allegations of the complaint and cannot be made to defend upon the defenses set up in the answer or pleadings filed by the defendant.
Possession by tolerance is lawful but such possession becomes unlawful when the possessor by tolerance refuses to vacate upon demand made by the owner. Petitioner’s cause of action for unlawful detainer springs from respondent’s failure to vacate the questioned premises upon his demand sometime in 1996. Within one (1) year therefrom, or on November 6, 1996, petitioner filed the instant complaint.
MTC HAS JURISDICTION OVER EJECTMENT CASES
DESPITE ASSERTION OF OWNERSHIP OVER THE PROPERTY
AMELIA ROBERTS vs. MARTIN PAPIO
G.R. No. 166714, February 9, 2007, 515 SCRA 346
The summary nature of the action is not changed by the claim of ownership of the property of the dependant. The MeTC is not divested of its jurisdiction over the unlawful detainer action simply because the defendant asserts ownership over the property
LENGTH OF TIME OF DISPOSSESSION ESSENTIAL IN
DETERMINING ACTION TO BE FILED FOR RECOVERY OF POSSESSION
VICTORIANO ENCARNACION vs. NIEVES AMIGO
G.R. No. 169793, September 15, 2006, 502 SCRA 172
The material element that determines the proper action to be filed for the recovery of the possession of the property is the length of time of dispossession. If the dispossession has not lasted for more than one year, an ejectment is proper and the inferior court acquires jurisdiction. On the other hand, if the dispossession lasted for more than one year,
the proper action to be filed is an accion publiciana, which should be brought to the proper RTC.
RULE 71
CONTEMPT
PHILIPPINE GUARDIANS BROTHERHOOD, INC. vs. COMELEC
G.R. No. 190529, March 22, 2011, 646 SCRA 63
ISSUE: Whether the COMELEC may be cited for Contempt for its refusal to reinstate in the list of Party-List Candidates, Philippine Guardian Brotherhood, Inc.
HELD: YES, the COMELEC Chair and Members are found guilty of Contempt of Court for their disobedience to the lawful directive of the Supreme Court specifically the Status Quo order dated February 2, 2010.
It is a judicial notice of Comelec Chairperson Jose A.R. Melo’s resignation effective January 15, 2011 and Commissioners Nicodemo T. Ferrer and Gregorio Y. Larrazabal’s retirement on February 2, 2011. However, their departure from government service, however, do not render moot and academic their liability for indirect contempt, since “contempt of court applies to all persons, whether in or out of government. Thus, it covers government officials or employees who retired during the pendency of the petition for contempt. Otherwise, a civil servant may strategize to avail himself of an early retirement to escape the sanctions from a contempt citation, if he perceives that he would be made responsible for a contumacious act. The higher interest of effective and efficient administration of justice dictates that a petition for contempt must proceed to its final conclusion despite the retirement of the government official or employees, more so if is involves a former member of the bench. (Curata vs. Philippine Ports Authority, G.R. No. 154211-12, June 22, 2009, 590 SCRA 214).
VERIFIED PETITION NEEDED FOR INDIRECT CONTEMPT
IF COURT DID NOT INITIATE THE CHARGE
MA. CONCEPCION REGALADO vs. ANTONIO GO
G.R. No. 167988, February 6, 2007, 514 SCRA 616
In cases where the court did not initiate the contempt charge, the Rules prescribe that a verified petition which has complied with the requirements of initiatory pleadings as outlined in the heretofore quoted provision of second paragraph, Section 4, Rule 71 of the Rules of Court, must be filed.
SPECIAL PROCEEDINGS
RULE 74
SUMMARY SETTLEMENT OF ESTATES
UNION BANK OF THE PHILIPPINES vs. EDMUND SANTIBAÑEZ
452 SCRA 228, G.R. No. 149926, February 25, 2005
Doctrine: Partition among the heirs is not allowed until the will has been probated.
HELD: In testate succession, there can be no valid partition among the heirs until after the will has been probated. The law enjoins the probate of a will and the public requires it, because unless a will is probated and notice thereof given to the whole world, the right of a person to dispose of his property by will, may be rendered nugatory. The authentication of a will decides no other question than such as touch upon the capacity of the testator and the compliance with those requirements or solemnities which the law prescribes for the validity of the will. This of course, presupposes that the properties to be partitioned are the same properties embraced in the will.
APOLONIA BANAYAD FRIANELA vs. SERVILLANO BANAYAD, JR.
G.R. No. 169700, July 30, 2009, 594 SCRA 380
FACTS: Apolonia filed with RTC a petition for probate of the holographic will of the late Moises Banayad. She alleged that she was named as devisee of the will and the decedent died without an issue and left her a parcel of land in Pasay City, image of Oracion del Huerto and Pieta including the crown and all personal property.
ISSUE: Does the RTC have jurisdiction to take cognizance of the instant case.
HELD: NO. Nowhere in the petition is there a statement of the gross value of Moises’ estate. Thus, from the reading of the original petition filed, it cannot be determined which court has original and exclusive jurisdiction over the proceedings.
The RTC should have, at the outset, dismissed the case for lack of jurisdiction. Settled is the doctrine that the issue of jurisdiction may be raised at any stage of the proceedings, even on appeal, and is, not lost by waiver or by estoppel. Since the RTC has no jurisdiction over the action, all the proceedings therein, including the decision rendered, are null and void.
EXTRA-JUDICIAL SETTLEMENT/PARTITION;
EFFECT TO A PERSON WHO HAS NOT PARTICIPATED
IN THE PROCEEDINGS
MERCEDES CRISTOBAL CRUZ vs. EUFROSINA CRISTOBAL
G.R. No. 140422, August 7, 2006, 498 SCRA 37
Section 1, Rule 74 of the Rules of Court, which states: The fact of the extrajudicial settlement or administration shall be published in a newspaper of general circulation in the manner provided in the next succeeding section, but no extrajudicial settlement shall be binding upon any person who has not participated therein or had no notice thereof. Under the said provision, without the participation of all persons involved in the proceedings, the extrajudicial settlement is not binding on said persons.
CONSTRUCTIVE NOTICE THROUGH PUBLICATION
JOSEPH CUA vs. GLORIA VARGAS
G.R. No. 156536, October 31, 2006, 506 SCRA 374
FACTS: Five heirs of one Paulina Vargas executed a notarized Extra-judicial Settlement of Estate with Sale over a parcel of land left by the latter in favor of herein petitioner Joseph Cua.
However, Gloria Vargas and her co-heirs did not sign the document evidencing the said settlement which was duly published in the newspaper.
ISSUE: Whether the heirs are deemed constructively notified regardless of their failure to participate therein by an extrajudicial settlement of estate and partition which was duly published.
HELD: NO. Under Section 1, Rule 74 of the Rules of Court, constructive notice to interested parties may suffice through publication but the same should be done before the execution of the settlement and sale, unlike in the case at bar, in which, Gloria was totally unaware of the transaction.
The publication of the settlement does not constitute constructive notice to the heirs after the facts of execution. The requirement of publication is geared for the protection of creditors and was never intended to deprive heirs of their lawful participation in the decedent’s estate.
RULE 73
VENUE AND PROCESSES
EDGAR SAN LUIS vs. FELICIDAD SAN LUIS
G.R. No. 133743, February 6, 2007, 514 SCRA 294
Even where the statute uses the word “domicile” under Section 1, Rule 73 of the Revised Rules of Court, still it is construed as meaning residence and not domicile in the technical sense. In other words, “resides” should be viewed or understood in its popular sense, meaning, the personal, actual or physical habitation of a person, actual residence or place of abode.
Under Section 2, Rule 79, an “interested person” has been defined as one who would be benefited by the estate, such as an heir, or one who has a claim against the estate, such as a creditor. The interest must be material and direct, and not merely indirect or contingent.
RULE 99
ADOPTION AND CUSTODY OF MINOR
CONSENT TO ADOPTION
ROSARIO MATA CASTRO vs. JOSE MARIA GREGORIO
G.R. No. 188801, October 15, 2014, 738 SCRA 415
FACTS: Atty. Castro is the estranged husband of Rosario and the father of Joane. He filed a petition for adoption of his alleged illegitimate children, Jed and Regina, with Lilibeth.
The trial court approved the adoption, having ruled out that no opposition from any person including the OSG representing the government had been received by the court.
A year after the decree of adoption was issued, Rosario and Joane filed a petition to annul the judgment of the trial court on the ground that they should have been given notice by the trial court of the adoption proceedings as adoption laws require their consent as a requisite in the petition.
ISSUES
(1) Whether the consents of the wife and legitimate children of the adopter are required as requisite for adoption.
(2) Whether publication is a sufficient notice to the spouse and legitimate children.
(3) Whether the petition for annulment of judgment under Rule 47 is the proper action to annul the decree of adoption.
RULINGS
(1) YES. Under Article III, Section 7 of RA 8552, the husband must first obtain the consent of his wife if he seeks to adopt his own children born out of wedlock.
The provision is mandatory. The spouse seeking to adopt must first obtain the consent of his or her spouse.
In the absence of any decree of legal separation or annulment, Atty. Castro and Rosario remained legally married despite their de facto separation.
RA 8552 also requires the consent of the adopter’s children if they are 10 years old or older. It is undisputed that Joane was Atty. Castro and Rosario’s legitimate child and that she was over 10 years old at the time of adoption proceedings.
The consent of the adopter’s other children is necessary as it ensures harmony among the prospective siblings. Her written consent, therefore, was necessary for the adoption to be valid.
(2) NO. For the adoption to be valid, the consent of the spouse and legitimate children is required by RA 8552.
Personal service of summons should have effected on the spouse and all legitimate children to ensure that their substantive rights are protected.
It is not enough to rely on constructive notice by publication as in this case. Surreptitious use of procedural technicalities cannot be privileged over substantive statutory rights.
Since the trial court failed to personally serve notice on Rosario and Joane of the adoption proceedings, it never validly acquired jurisdiction.
(3) YES. The annulment of judgment is a remedy which disregards the time-honored doctrine of immutability and unalterability of final judgment, a solid corner stone in the dispensation of justice by the courts.
The doctrine of immutability and unalterability serves a two-fold purpose, namely: (a) to avoid delay in the administration of justice and thus, procedullary, to make orderly the discharge of judicial business; and (b) to put an end to judicial controversies, at the risk of occasional errors, which is precisely why the court exist.
As to the first, a judgment that has acquired finality becomes immutable and unalterable and is no longer to be modified in any respect even if the modification is meant to correct an erroneous conclusion of fact or of law, and whether the modification is made by the court that rendered the decision or by the highest court of the land.
As to the second controversies cannot drag on indefinitely because fundamental considerations of public policy and sound practice demand that the rights and obligations of every litigant must not hang in suspense for an indefinite period of time.
Because of the exceptional nature of the remedy, there are only two grounds by which annulment of judgment may be availed of: extrinsic fraud, which must be brought four years from discovery, and lack of jurisdiction, which must be brought before it is barred by estoppel or laches.
The grant of adoption should be annulled as the trial court did not validly acquire jurisdiction over the proceedings and the favorable decision was obtained through extrinsic fraud by employing tactics by Atty. Castro not only to induce the trial court in approving the petition but also to prevent Rosario and Joane from participating in the proceedings or opposing the petition.
RULE 102
HABEAS CORPUS
IN RE: APPLICATION FOR HABEAS CORPUS vs. BUCOR DIRECTOR
G.R. No. 170497, January 22, 2007, 512 SCRA 177
The writ of Habeas Corpus may also be issued where, as a consequence of a judicial proceeding, (a) there has been a deprivation of a constitutional right resulting in the restraint of a person; (b) the court has no jurisdiction to impose the sentence; or (c) an excessive penalty has been imposed, as such sentence is void as to such excess.
MARTIN GIBBS FLETCHER vs. DIRECTOR OF BUCOR
UDK – 14071, July 17, 2009, 593 SCRA 265
FACTS: Martin seeks his release from prison in his petition for the issuance of the writ of habeas corpus. He claims that his prison sentence of 12 to 17 years was commuted by then President Fidel V. Ramos to 9 to 12 years. Since he had already served 14 years, three months and 12 days including his good conduct allowance, his continued imprisonment is illegal.
OSG opposed the petition because it was neither signed or verified by Martin or a person on his behalf or by his purported counsel. The OSG further opposed the petition on the ground that Martin’s prison sentence was never commuted by then Pres. Ramos as he had not been granted the status of a colonist and there were other pending cases against him warranting his continued detention and he was put under custody of a judicial process or a valid judgment.
ISSUE: Whether the petition for the issuance of the writ of habeas corpus is meritorious.
HELD: NO. So far as the failure to comply with Section 3, Rule 102 of the Rules of Court is concerned, the strict compliance with the technical requirements for a habeas corpus petition as claimed by the OSG may be dispensed with where the allegations in the application are sufficient to make out a case for habeas corpus.
The ultimate purpose of the writ of habeas corpus is to relieve a person from unlawful restraint. The writ, however, should not be issued when the custody over the person is by virtue of a judicial process or a valid judgment.
HABEAS CORPUS JURISDICTION
MA. HAZELINA TUJAN – MILITANTE vs. RAQUEL CADA – DEAPERA
G.R. No. 210636, July 28, 2014, 731 SCRA 144
FACTS: Raquel, the biological mother of minor Criselda, filed before the Family Court of Caloocan City, a verified petition for a writ of habeas corpus, demanding that custody over the child be returned to her by Militante.
Despite diligent efforts and several attempts, however, the Sheriff was unsuccessful in personally serving Militante copies of the habeas corpus and of the writ.
Raquel then filed a criminal case for kidnapping against Militante. During the preliminary investigation, the sheriff was able to serve the alias writ upon Militante at the prosecutor’s office of Quezon City.
Following this development, Militante, by way of special appearances, moved for the quashal of the writ and prayed before the RTC of Caloocan City for the dismissal of the habeas corpus, claiming, among others, That she was not personally served with summons and the present petition should be filed in the Family Court in Quezon City since the minor resides in Quezon City.
ISSUES
(1) Whether the writ of habeas corpus issued by the Family Court of Caloocan City is enforceable in Quezon City.
(2) Whether summons is required in Petition for Habeas Corpus.
RULINGS
(1) YES. A verified petition for a writ of habeas corpus involving custody of minors shall be filed with the Family Court and shall be enforceable within its judicial region to which the Family Court belongs.
It is undisputed that Caloocan City and Quezon City both belong to the same National Capital Judicial Region.
(2) NO. Service of summons to begin with is not required in habeas corpus petition. A writ of habeas corpus plays a role somewhat comparable to a summons in ordinary civil actions.
By service of said writ, the court acquires jurisdiction over the person of Militante.
RULE 103
CHANGE OF NAME
REPUBLIC vs. TRINIDAD CAPOTE
G.R. No. 157043, February 2, 2007, 514 SCRA 76
A proceeding is adversarial where the party seeking relief has given legal warning to the other party and afforded the latter an opportunity to contest it. The fact that no one opposed the petition had not deprive the court of its jurisdiction to hear the same nor does it make the proceeding less adversarial in nature.
RULE 108 - CORRECTION OF ENTRIES
REPUBLIC vs. MERLINDA L. OLAYBAR
G.R. No. 189538, February 10, 2014, 715 SCRA 605
FACTS: Merlinda requested from the NSO a Certificate of No Marriage (CENOMAR) as one of the requirements for her marriage with her boyfriend of five years.
Upon receipt thereof, she discovered that she was already married to a certain Ye Son Sune, a Korean national, on June 24, 2002 at the office of the MTCC Palace of Justice.
She denied having contracted said marriage and claimed that she did not know the alleged husband; she did not appear before the solemnizing officer; and that the signature appearing in the marriage certificate is not hers. She, thus, filed before the RTC a Petition for Cancellation of Entries in the Marriage Contract, especially the entries in the wife portion.
The RTC granted the petition and directed the Local Civil Registrar to cancel all the entries in the WIFE portion of the alleged marriage contract of Melinda and Ye Son Sune.
The OSG, however, filed an appeal assailing the Decision on the ground that (1) there was no clerical spelling, typographical and innocuous errors in the marriage contract for it to fall within the provisions of Rule 108 of the Rules of Court; and (2) granting the cancellation of all the entries in the wife portion of the alleged contract is, in effect, declaring the marriage void ab initio.
ISSUES
(1) Whether the cancellation of entries in the marriage contract, in effect, nullifies the contract.
(2) Whether Rule 108 of the Rules of Court is the appropriate remedy for cancellation or correction of entries in the civil registry.
RULINGS
(1) NO. Melinda indeed sought, not the nullification of marriage as there was no marriage to speak about, but the correction of the record of such marriage to reflect the truth as set forth by the evidence presented.
Otherwise stated, in allowing the correction of the subject certificate of marriage by canceling the entries in the wife portion thereof, the trial court did not, in any way, declare the marriage void as there was no marriage to speak of.
(2) YES. Rule 108 of the Rules of Court provides the procedure for cancellation or correction of entries in the civil registry.
The proceeding may either be summary or adversary. If the correction is clerical, then the procedure to be adopted is summary. If the rectification affects the civil status, citizenship or nationality of a party, it is deemed substantial, and the procedure to be adopted is adversary.
An appropriate adversary suit or proceeding is one where the trial court has conducted proceedings where all relevant facts have been fully and properly developed whereas opposing counsel have been given opportunity to demolish the opposite party’s case, and where the evidence has been thoroughly weighed and considered.
In this case, the entries made in the wife portion of the certificate of marriage are admittedly the personal circumstances of Melinda. The latter, however, claims that her signature was forged and she was not the one who contracted marriage with the purported husband. In other words, she claims that no such marriage was entered into or if there was, she was not the one who entered into such marriage.
CRIMINAL PROCEDURE
RULE 111 - PROSECUTION OF CIVIL ACTION
WHEN CIVIL ACTION MAY PROCEED INDEPENDENTLY
CRISTINA B. CASTILLO vs. PHILIP R. SALVADOR
G.R. No. 191240, July 30, 2014, 731 SCRA 329
FACTS: Cristina Castillo charged Philip Salvador with estafa for allegedly enticed her to invest $100,000 in May 2002 into the remittance business
in the name of Philip Salvador and the said amount was allegedly misappropriated by the latter.
However, Philip vehemently denied the receipt of $100,000 from Cristina.
On April 26, 2006, RTC has found Philip Salvador guilty beyond reasonable doubt of the crime of estafa.
On appeal, the CA has reversed and set aside the decision of the RTC and acquitted Philip Salvador of the crime of estafa.
ISSUES
(1) What are the effects on the civil liability of the accused on his acquittal?
(2) Whether the judgment of acquittal of the accused by the CA should at least have retained the award of damages to complainant.
RULINGS
(1) Our law recognizes two kinds of acquittal, with different effects on the civil liability of the accused.
First is an acquittal on the ground that the accused is not the author of the act or omission complained of. This instance closes the door to civil liability, for a person who has been to be not the perpetrator of any act or omission cannot and can never be held liable for such an act or omission. There being no delict, civil liability ex delicto is out of the question and the civil action, if any, which may be instituted must be based on grounds other than the delict complaint of.
The second instance is an acquittal based on reasonable doubt on the guilt of the accused. In this case, even if the guilt of the accused has been satisfactorily established, he is not exempt from civil liability which may be proved by preponderance of evidence only.
(2) NO. Philip Salvador was acquitted because the prosecution failed to prove his guilt beyond reasonable doubt.
The evidence of the prosecution being insufficient to prove beyond reasonable doubt that the crime as charged had been committed by Philip, the general presumption, “that a person is innocent of the crime or wrong, stands in his favor.”
The prosecution failed to prove that all the elements of estafa are present. For in fact, Cristina herself could not even establish clearly and precisely her allegation that she gave Philip $100,000 in May 2002 and how Philip committed fraud.
EFFECT OF DEATH OF THE ACCUSED
ON CIVIL LIABILITY
DR. CLENIO YNZON vs. PEOPLE OF THE PHILIPPINES
G.R. No. 165805, July 30, 2015, 731 SCRA 214
FACTS: Dr. Ynzon performed a surgical operation upon a 10 – year - old patient, JR, of acute appendicitis and due to his negligence, carelessness and imprudence, JR died due to cardio-respiratory arrest.
On February 28, 2003, the RTC convicted Dr. Ynzon of the crime of Reckless Imprudence Resulting to Homicide.
On June 4, 2004, the Court of Appeals affirmed the conviction of Dr. Ynzon.
While pending appeal to the Supreme Court, Dr. Ynzon died on December 23, 2011 due to “multi-organ failures.”
ISSUES
(1) Whether the death of the accused pending appeal of his appeal survives the claim for civil liability.
(2) Whether the recovery of civil liability may be enforced in the same action.
RULINGS
(1) YES. The death of the accused Dr. Ynzon pending appeal of his conviction extinguishes his criminal liability. However, the recovery of civil liability survives or subsists as the same is not based on delicts but by contract and the reckless imprudence he was guilty of under Article 365 of the Revised Penal Code.
(2) NO. A separate civil action may be enforced either against the executor/administrator of the estate, depending on the sources of obligation upon which the same is based and in accordance with Section 4, Rule 111 of the Rules on Criminal Procedure.
RULE 112 - PRELIMINARY INVESTIGATION
SEC. 6 - DETERMINATION OF PROBABLE CAUSE
ALFREDO C. MENDOZA vs. PEOPLE OF THE PHILIPPINES
G.R. No. 197293, April 21, 2014, 722 SCRA 647
FACTS: Juno Cars hired Mendoza as Trade-In/Used Car Supervisor. Upon partial audit, it was discovered that five cars had been sold and released by Alfredo without permission and without remitting the payment to Juno Cars.
Juno Cars filed a criminal complaint against Mendoza for qualified theft and estafa. Mendoza contends that Juno Cars failed to prove ownership over the five (5) cars or its right to possess them with the purported unremitted payments, hence, it could not have suffered damage.
Prosecutor Rey Delgado issued a resolution finding probable cause and filed the two (2) informations before the RTC against Mendoza for qualified theft and estafa.
Mendoza moved for reconsideration but his motion was denied. He filed before the RTC a motion for determination of probable cause.
After conducting an independent assessment of the evidence on record, Judge Rizalina Capco – Umali dismissed the complaint for lack of probable cause.
ISSUES
(1) Whether the trial court may dismiss an information filed by the prosecutor on the basis of its own independent finding of lack of probable cause.
(2) What is the difference between executive determination of probable cause from judicial determination of probable cause?
(3) What are the three (3) options given to the trial court upon the filing of the criminal information under Section 6, Rule 112 of the Rules of Court?
RULINGS
(1) YES. Once the information has been filed in court, the judge shall then “personally evaluate the resolution of the prosecutor and its supporting evidence to determine whether there is probable cause to issue a warrant of arrest.
Under Section 6, Rule 112 of the Rules of Court mandates the judge to “immediately dismiss the case if the evidence on record clearly fails to establish probable cause.”
(2) The executive determination of probable cause is one made during the preliminary investigation. It is a function that properly pertains to the public prosecutor who is given a broad discretion to determine whether probable cause exists and to charge those he believes to have committed the crime as defined by law and thus should be held for trial.
Otherwise stated, such official has the quasi-judicial authority to determine whether or not a criminal case must be filed in court. Whether or not that function has been correctly discharged by the public prosecutor is a matter that the trial court itself does not and may not be competent to pass upon.
The judicial determination of probable cause, on the other hand, is one made by the judge to ascertain whether a warrant of arrest should be issued against the accused. The judge must satisfy himself that based on the evidence submitted, there is necessity for placing the accused under custody in order not to frustrate the ends of justice. If the judge finds no probable cause, the judge cannot be forced to issue the arrest warrant.
The difference is clear. The executive determination of probable cause concerns itself with whether there is enough evidence to support an information being filed. The judicial determination of probable cause, on the other hand, determines whether a warrant of arrest should be issued.
(3) Section 6, Rule 112 of the Rules of Court gives the trial court three (3) options upon the filing of the criminal information:
(a) dismiss the case if the evidence on record clearly failed to establish probable cause;
(b) issue a warrant of arrest if it finds probable cause; and
(c) order the prosecutor to present additional evidence within five (5) days from notice in case of doubt as to the existence of probable cause.
Rule 114 - Conduct of Hearing in Granting Bail
CHIEF STATE PROSECUTOR ZUÑO vs. JUDGE ALEJANDRO CABEBE
444 SCRA 382, A.M. OCA No. 03-1800 RTJ, November 26, 2004
ISSUE: Whether respondent judge’s grant of bail without the benefit of hearing justified.
HELD: NO. Under the present Rules of Court, a hearing is mandatory in granting bail whether it is a matter of right or discretion. It must be stressed that the grant or the denial of bail in cases where bail is a matter of discretion, hinges on the issue of whether or not the evidence is strong is a matter of judicial discretion which remains with the judge. In order for the latter to properly exercise his discretion, he must first conduct a hearing to determine whether the evidence of guilt is strong. In fact, even in cases where there is no petition for bail, a hearing should still be held.
PEOPLE vs. LUIS BUCALON PLAZA
G.R. No. 176933, October 2, 2009, 602 SCRA 457
FACTS: Luis was indicted for Murder. After the prosecution rested its case, Luis, with leave of court, filed a Demurrer to Evidence. The Court denied the Demurrer.
The Defense while in the course of the presentation of its evidence filed a Motion to Fix Amount of Bail Bond based on the findings of the trial court in the Demurrer that prosecution evidence is sufficient to prove only Homicide, so he could be released on bail.
The prosecution vehemently opposed the said motion contending that the case being Murder, a non-bailable offense, it is public prosecutor who has exclusive jurisdiction to determine what crime the accused should be charged.
Luis was subsequently released after he posted a P40,000 bond.
ISSUE: Whether the hearing conducted satisfies the requirement of due process and that Luis is entitled to bail.
HELD: YES. Section 4 of Rule 114 of the Revised Rules of Court provides that all persons in custody shall, before conviction by a regional trial court of an offense not punishable by death, reclusion perpetua or life imprisonment be admitted to bail as a matter of right. The exercise by the trial court of its discretionary power to grant bail to an accused with a capital offense thus depends on whether the evidence of guilt is strong.
When the trial judge denied the Demurrer and with his corresponding statement that the evidence was sufficient to convict Luis of Homicide only, a holding of a summary hearing merely to determine whether Luis was entitled to bail would have been unnecessary as the evidence in chief was already presented by the prosecution.
ANITA ESTEBAN vs. JUDGE REYNALDO ALHAMBRA
437 SCRA 560, G.R. No. 135012, September 7, 2004
FACTS: Petitioner Anita Esteban posted cash bail of P20,000 in each four criminal cases of her brother Gerardo Esteban for the latter’s temporary liberty.
While out on bail, Gerardo was again charged with another crime for which he was arrested and detained. Fed up with Gerardo’s actuation, petitioner refused to post another bail, instead she filed an application for the cancellation of the cash bonds she posted in the four criminal cases. Respondent judge denied petitioner’s application for cancellation of cash bonds.
ISSUE: Whether respondent judge committed grave abuse of discretion in denying petitioner’s application for cancellation of the accused’s cash bail.
HELD: NO. We hold that the cash bail cannot be cancelled. Petitioner did not surrender the accused charged in the four criminal cases to the trial court. The accused was arrested and detained because he was charged in a subsequent criminal case. Moreover, the bail bond posted for the accused was in the form of cash deposits which shall be applied to the payment of fine and cost and the excess, if any, shall be returned to the accused or to any person who made the deposit.
The bail shall be deemed automatically cancelled upon acquittal of the accused, dismissal of the case, or execution of the judgment of conviction.
RIGHT TO BAIL
PEOPLE vs. SANDIGANBAYAN & JINGGOY ESTRADA
G.R. No. 158754, August 10, 2007, 529 SCRA 764
Even if the capital offense charged is bailable owing to the weakness of the evidence of guilt, the right to bail may justifiably still be denied if the probability of escape is great.
RULE 119 - T R I A L
SEC. 17 - DISCHARGE OF ACCUSED TO BE STATE
WITNESS
MANUEL J. JIMENES, JR. vs. PEOPLE OF THE PHILIPPINES
G.R. No. 209195, September 17, 2014, 735 SCRA 597
FACTS: On June 11, 2009, Montero executed sworn statement confessing his participation in the killing of Ruby Rose by providing the steel box where the drum containing the victim’s body was placed, welding the steel box to seal the cadaver inside, operating the ship or tug boat and together with his co-conspirators, dropping the steel box containing the
cadaver into the seal. He named Jimenes, Lope, Lennard, Robert and Eric as his co-conspirators.
On August 20, 2009, an information was filed before the RTC charging Jimenes, Lope, Lennard, Robert, Eric and Montero of Murder for the killing of Ruby Rose.
Montero thereafter filed a motion for his discharge as a state witness. The state filed a motion to discharge Montero as a state witness for the prosecution, however, Jimenes opposed both motions.
ISSUES
(1) What are the conditions for the discharge of an accused as state witness.
(2) Whether there is an absolute necessity for the testimony of accused Montero whose discharge is requested.
(3) Whether the testimony of said accused be substantially corroborated in its material points.
(4) Whether said accused does not appear to be most guilty despite being a principal by participation.
RULINGS
(1) Under Section 17, Rule 119 of the Revised Rules of Criminal Procedure provides that in discharge of an accused in order that he may be a state witness, the following conditions must be present, namely:
(a) Two or more accused are jointly charged with the commission of an offense;
(b) The motion for discharge is filed by the prosecution before it rests its case;
(c) The prosecution is required to present evidence and the sworn statement of each proposed state witness at a hearing in support of the discharge;
(d) The accused gives his consent to be a state witness; and
(e) The trial court is satisfied that:
(1) there is absolute necessity for the testimony of the accused whose discharge is requested;
(2) there is no other direct evidence available for the prosecution of the offense committed, except the testimony of said accused;
(3) the testimony of said accused can be substantially corroborated in its material points;
(4) said accused does not appear to be the most guilty; and
(5) said accused has not at any time been convicted of any offense involving moral turpitude.
(2) YES. Absolute necessity exists for the testimony of an accused sought to be discharged when he alone has knowledge of the crimes. In more concrete term, necessity is not there when the testimony would simply corroborate or otherwise strengthen the prosecution evidence.
In the present case, not one of the accused - conspirators, except Montero, was willing to testify on the alleged murder of Ruby Rose and their participation in her killing.
Hence, there is an absolute necessity for the testimony of Montero which he alone is available to provide direct evidence of the crime.
(3) YES. Montero’s testimony can be substantially corroborated in its material points.
The evidence consisting of the steel casing where the cadaver was found, the drum containing the cadaver of Ruby Rose, the spot in the sea where the cadaver was retrieved, the apparel worn by the victim when she was killed as well as her burnt personal effects, these all partly corroborate some of the material points in the sworn statements of Montero.
Section 17, Rule 119 of the Revised Rules of Criminal Procedure only requires that the testimony of the accused sought to be discharged be substantially corroborated in its material points, not on all points.
(4) YES. By jurisprudence, “most guilty” refers to the highest degree of culpability in terms of participation in the commission of the offense and does not necessarily mean the severity of the penalty imposed. While all the accused may be given the same penalty by reason of conspiracy, yet one may be considered to have lesser or the least guilty taking into account his degree of participation in the commission of the offense.
What the rule avoids is the possibility that the most guilty would be set free while his co-accused who are less guilty in terms of participation would be penalized.
It appears that while Montero was part of the planning, preparation, and execution stage as most of his co-accused had been, he had no direct participation in the actual killing of Ruby Rose. Montero’s participation was limited to providing the steel box where the drum containing the victim’s body was placed, welding the steel box to seal the cadaver inside, operating the skip or tug boat, and together with his co-accused dropping the steel box containing the cadaver into the sea.
The discharge of an accused to be utilized as a state witness because he does not appear to be the most guilty is highly factual in nature as it largely depends on the appreciation of who had the most participation in the commission of the crime.
Demurrer to Evidence
PEOPLE OF THE PHILIPPINES vs. SANDIGANBAYAN
447 SCRA 291, G.R. No. 137707-11, December 17, 2004
FACTS: Herein private respondents were charged of several criminal complaints with the Sandiganbayan. When arraigned, they pleaded not guilty to all charges. Two of the respondents were never arraigned.
After the prosecution had rested its case, the defense filed with leave of court a demurrer to evidence on the ground that the prosecution failed to prove the guilt of the respondents beyond reasonable doubt.
Sandiganbayan rendered decision granting respondents’ demurrer to evidence and acquitting all the respondents for insufficiency of evidence.
ISSUE: Whether the Sandiganbayan in granting respondents demurrer to evidence acted without jurisdiction.
HELD: Records show that two of the respondents were never arraigned before the Sandiganbayan nor were they ever arrested. Hence, the Sandiganbayan did not acquire jurisdiction over them. Basic is the rule that before a court can act upon the case of an accused, it must first acquire jurisdiction over his person. Jurisdiction over the accused is acquired (1) his arrest, or (2) his voluntary submission. If the accused is a fugitive from justice, the court cannot even proceed with a trial in absentia unless he has been previously arraigned.
With respect to the rest of the respondents, we rule that the Sandiganbayan did not abuse its discretion in granting their demurrer to evidence.
DEMURRER TO EVIDENCE GRANT TANTAMOUNT TO ACQUITTAL
PEOPLE vs. SANDIGANBAYAN & MANUEL BARCENAS
G.R. No. 174504, March 21, 2011, 645 SCRA 726
FACTS: Barcenas was the vice mayor who obtained cash advances and
failed to liquidate the same. After the prosecution presented the COA auditor to be its last witness, Barcenas filed a Demurrer to Evidence which the Sandiganbayan granted. At the time the case was filed in Sandiganbayan, Barcenas had already liquidated his cash advances. The prosecution claimed that the settlement of the cash advances would not exonerate Barcenas but only mitigate his criminal liability.
ISSUE: Whether the granting of demurrer to evidence by the Sandiganbayan tantamount to acquittal.
HELD: YES. In criminal cases, the grant of a demurrer is tantamount to an acquittal and this would place the accused in double jeopardy. This may be reviewable through certiorari and the writ may only be issued if it could be proved that the trial court must be shown to have acted with grave abuse of discretion. In the case at bar, the Sandiganbayan granted the demurrer to evidence on the ground that the prosecution failed to prove that the government suffered any damage from Barcenas’ non-liquidation of the subject cash advances because it was later shown, as admitted by the prosecution’s witness that Barcenas liquidated the same albeit belatedly.
EXCEPTION TO DEMURRER TO EVIDENCE
PEOPLE OF THE PHILIPPINES vs. JOSE C. GO, et. al.
G.R. No. 191015, August 6, 2014, 732 SCRA 216
FACTS: Orient Bank was placed under the receivership of PDIC. As a result, PDIC began collecting on Orient Bank’s past due loans available. Among these borrowers of Orient Bank are Timmy’s Inc. and Asia Textile Mills. Both denied having applied, much less, being granted a loan by Orient Bank.
After conducting an investigation, a finding came out that loans purportedly for the said two firms were released in the form of manager’s checks and then deposited to the savings account of Jose C. Go of Orient Bank.
A complaint for estafa thru falsification of commercial documents were filed against respondents Jose C. Go, Aida C. Dela Rosa and Felecitas D. Necomedes. The private respondents pleaded not guilty during the arraignment and pre-trial was conducted. Thereafter, the trial of the case ensued.
After the presentation of prosecution’s evidence, the private respondents filed Motion for Leave to File Demurrer to Evidence. The RTC granted the demurrer and dismissed the case, acquitting all the private respondents.
The prosecution, thru the OSG, filed petition for certiorari with CA assailing the order of the trial court. CA affirmed the RTC decision and double jeopardy was attached.
ISSUE: Whether there is an exception to the granting of demurrer to evidence which would tantamount to an acquittal.
HELD: YES. As a general rule, an order granting the accused’s demurrer to evidence amounts to an acquittal. There are certain exceptions, however, as when the grant thereof would not violate the constitutional proscription on double jeopardy.
When there is a finding that there was grave abuse of discretion on the part of the trial court dismissing a criminal case by granting the accused’s demurrer to evidence, its judgment is considered void.
In this case, the evidence shows that respondents had a direct hand in the falsification and creation of fictitious loans. By disregarding what is evidence in the record, the trial court committed substantial wrong that frustrates the ends of justice and adversely affects the public interest. The trial court’s act was so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform a duty enjoined by law.
Therefore, the grant of demurrer to evidence to the accused does not amount to acquittal since the order itself is null and void, being tainted with grave abuse of discretion.
NO DOUBLE JEOPARDY FROM VOID JUDGMENT
JOSEPH CEREZO vs. PEOPLE, YANEZA, ABUNDA & AFULUGENCIA
G.R. No. 185230, June 1, 2011, 650 SCRA 222
FACTS: Joseph filed a complaint of libel against respondents Yaneza, Abunda & Afulugencia. Finding probable cause against the respondents, the Prosecutor’s Office filed the information in the RTC. Respondents sought for reconsideration of the Prosecutor’s resolution. During the intervening period, respondents were arraigned and pleaded not guilty. The Prosecutor’s Office rendered a decision reversing its earlier ruling and filed a withdrawal of
information. RTC dismissed the libel case based on prosecutor’s new resolution. Aggrieved by the order, Cerezo filed an appeal to the DOJ.
Later, the Secretary of Justice rendered a decision reversing the prosecutor’s ruling and ordered the refilling of the information. The RTC granted the ruling of the DOJ Secretary.
ISSUE: Whether or not double jeopardy exists in the present case.
HELD: NO. One of the requisites in order for double jeopardy to be present is the acquittal, conviction, dismissal or otherwise termination of the case without the offender’s express consent. The same is not present in the case.
The order of the RTC based on prosecutor’s resolution as well as the order conforming with the DOJ’s decision were made with grave abuse of discretion. In rendering such rulings, the RTC blindly followed the decision of the prosecutor and DOJ without making an independent assessment and evaluation of the merits of the case. By relying solely on the manifestation of the public prosecutor and the resolution of the DOJ Secretary, the trial court abdicated its judicial power and refused to perform a positive duty enjoined by law. Thus, the assailed orders were rendered with grave abuse of discretion and are now void and without legal effect.
Since the orders are void and do not have a legal effect, the respondents were never acquitted nor was there a valid and legal dismissal or termination of the case. With the fifth requisite missing, there can be no double jeopardy.
NO DOUBLE JEOPARDY WHEN ORDER
OF DISMISSAL WAS RECALLED
CESAR T. QUIAMBAO vs. PEOPLE OF THE PHILIPPINES
G.R. No. 185267, September 17, 2014, 735 SCRA 345
FACTS: Cesar was charged for violation of Section 74 of BP 68 before the MTC of Pasig City, Branch 69.
Before the issuance of the warrant of arrest, Cesar filed an Urgent Motion for Judicial Determination of Probable Cause.
On May 8, 2006, the MTC denied the motion and set his arraignment on October 9, 2006.
Cesar filed a Petition for Certiorari before RTC, Branch 154 of Pasig City.
Accused Cesar was arraigned on January 29, 2007.
On June 4, 2007, RTC, Branch 154, granted the Petition holding that no probable cause to hold Cesar for trial. Consequently, it directed the MTC to dismiss the criminal case for want of probable cause.
Private complainants Aderico & Bonifacio brought a direct appeal to the Supreme Court raising purely question of law.
While the petition for certiorari remains pending before the Supreme Court, the MTC on June 18, 2007 ordered the dismissal of the criminal case pursuant to the RTC - Branch 154’s order dated June 4, 2007.
Upon learning that a petition for certiorari had been filed with the Supreme Court, the MTC issued an order dated September 17, 2007 recalling the Order of Dismissal and ordered the suspension of the proceeding to await the final outcome the pending case.
ISSUES
(1) Whether the dismissal of the criminal case operates as an acquittal of the accused for the crime charged.
(2) Whether the revival of the criminal case placed the accused in double jeopardy.
RULINGS
(1) NO. MTC acted without jurisdiction when it issued the Order of Dismissal dated June 18, 2007 because the petition for review remains pending before the Supreme Court.
The issue of probable cause had already been acquired by the Supreme Court. From the moment the case had been elevated to the SC, the MTC has no longer authority to further act on the issue which was pending review.
Thus, the dismissal neither terminated the action on the merit, nor amounted to an acquittal.
(2) NO. The MTC had no longer authority to dismiss the criminal case because the jurisdiction to act on and entertain the case had already acquired by SC. Hence, it naturally follows that all the issuances and/or order by the lower court relative to the issue pending review with SC will become null and void.
There is no double jeopardy because the MTC which ordered the dismissal of the criminal case, is not a court of competent jurisdiction.
Hence, the dismissal and the subsequent revival or reinstatement of the criminal case did not effectively place the accused in double jeopardy.
DEMURRER TO EVIDENCE PREMATURELY FILED
ESTHER P. MAGLEO vs. JUDGE ROWENA QUINAG-ORAN
A.M. No. RTJ-12-2336, November 12, 2014, 739 SCRA 628
FACTS: Before the prosecution rested its case, accused Esther filed a Demurrer to Evidence and the Court granted the same.
ISSUE: Whether the granting of Demurrer to Evidence is proper.
HELD: NO. The granting of the Demurrer to Evidence is not proper considering that it was filed prematurely before the prosecution rested its case.
The RTC had not yet ruled on the admissibility of the formal offer of evidence of the prosecution when the accused Esther filed her demurrer to evidence. Hence, there was no proper acquittal.
The RTC having failed to do so, there is nary a doubt that no double jeopardy attached.
RULE 120 - J U D G M E N T
PROMULGATION - Presence of Counsel
MARINO ICDANG vs. SANDIGANBAYAN
G.R. No. 185960, January 25, 2012, 664 SCRA 233
FACTS: Marino was charged with Malversation of Public Funds and violation of Sec. 3 (a) RA 3019, before the Sandiganbayan. The trial went on and both parties rested its case. When the Sandiganbayan promulgated its judgment of conviction, Marino and his counsel were not present.
ISSUE: Whether the presence of counsel during the promulgation of judgment is indispensable.
HELD: NO. There is nothing in the rules that requires the presence of counsel for the promulgation of judgment of conviction to be valid. While notice must be served on both accused and his counsel, the latter’s absence during the promulgation of judgment would not affect the validity of the promulgation. Indeed, no substantial right of the accused was prejudiced by such absence of his counsel when the sentence was pronounced.
FAILURE TO APPEAR AT THE PROMULGATION OF JUDGMENT
REYNALDO H. JAYLO, et. al. vs. SANDIGANBAYAN
G.R. Nos. 183152-54, January 21, 2015, 746 SCRA 452
FACTS: On September 8, 1992, an information was filed before the Sandiganbayan against Jaylo, Castro, Valenzona and Habalo for the murder of De Guzman, Calanog and Manguera.
On April 17, 2007, the Sandiganbayan found Jaylo, Castro, Valenzona and Habalo guilty of homicide, however, during that promulgation, none of the accused appeared despite notice. The court promulgated the Decision in absentia, and the judgment was entered in the criminal docket. The bailbonds of the accused were cancelled and issued warrants for their arrest.
On April 30, 2007, the counsel of the accused filed a Motion for Partial Reconsideration of the Decision.
On November 29, 2007, the Sandiganbayan took no action on the motion for reconsideration and ordered the implementation for the arrest of the convicted accused.
ISSUES
(1) Whether the Sandiganbayan was correct in not taking cognizance of the Motion for Reconsideration by the accused.
(2) What are the effects of non-appearance of the accused without justifiable cause in the promulgation of the judgment of conviction?
(3) Whether the right to file motion for reconsideration is a statutory right and not merely a remedy under Section 6, Rule 120 of the Rules of Court.
(4) Whether Section 6, Rule 120 of the Rules of Court diminishes or modifies the substantive rights of the accused.
RULINGS
(1) YES. The Sandiganbayan was correct in not taking cognizance of the Motion for Reconsideration by the accused. While the motion was filed on April 30, 2007, it did not operate to regain the standing of the accused in court. For one, it is not an act of surrender that is contemplated by Section 6, Rule 120 of the Rules of Court. Moreover, nowhere in the motion was indicated that accused were asking for leave to avail of the remedies against the judgment of conviction, or that there were valid reason for their absence at the promulgation.
For the failure of the accused to regain their standing in court and avail of the remedies against the judgment of conviction, the decision of the Sandiganbayan attained finality, 15 days reckoned from 17 April 2007.
(2) If the judgment is for conviction and the failure to appear was without justifiable cause, the accused shall lose the following remedies:
(a) filing a motion for new trial or reconsideration (Rule 121); and
(b) an appeal from the judgment of conviction (Rule 122).
(3) YES. Like an appeal, the right to file a motion for reconsideration is a statutory grant or privilege.
As a statutory right, the filing of a motion for reconsideration is to be exercised in accordance with and in the manner provided by law.
Thus, a party filing a motion for reconsideration strictly comply with the requisites laid down in the Rules of Court.
(4) NO. It only works in pursuance of the power of the Supreme Court to provide a simplified and inexpensive procedure for the speedy disposition of cases. This provision protects the courts from delay in the speedy disposition of criminal cases - delay arising from the simple expediency of non-appearance of the accused on the scheduled promulgation of the judgment of conviction.
In this case, the accused have just shown their lack of faith in the jurisdiction of the Sandiganbayan by not appearing before it for the promulgation of the judgment on their cases. Surely, they cannot later on expect to be allowed to invoke the Sandiganbayan’s jurisdiction to grant them relief from its judgment of conviction.
VARIANCE DOCTRINE
PEOPLE OF THE PHILIPPINES vs. BERNABE PAREJA
G.R. No. 202122, January 15, 2014, 714 SCRA 131
FACTS: Pareja was charged with two counts of rape and one count of attempted rape of a minor AAA.
The first charge was allegedly committed by Pareja of Rape thru sexual assault by inserting his finger in the vagina of the minor while other charge alleged that Pareja committed rape by carnal knowledge.
On trial, the victim narrated that in the first charge, Pareja inserted his penis in her annus while the second charge, AAA was not able to narrate if indeed, Pareja inserted his finger in her vagina.
The trial court convicted Pareja for rape and acts of lasciviousness upon its reliance on the testimony of AAA.
ISSUES
(1) Whether the accused be convicted of the crime of rape by carnal knowledge when what was proved in the trial court was rape thru sexual assault.
(2) What is the crime committed by the accused?
(3) What are two modes of committing rape?
(4) What is the primary duty of a lawyer in public prosecution?
RULINGS
(1) NO. Since the charge in the information is rape through carnal knowledge, the accused cannot be convicted of rape by sexual assault even it was proven during trial. This is due to the material differences and substantial distinctions between the two modes of rape.
The first mode is not necessarily included in the second and vice - versa. Consequently, to convict Pareja of rape by sexual assault when what was charged with was with was rape through carnal knowledge, would be to violate his constitutional right to be informed of the nature and cause of accusation against him.
(2) Nevertheless, Pareja may be convicted of the lesser crime of acts of lasciviousness under the variance doctrine embodied in Section 4, in relation to Section 5 of Rule 120 of the Rules of Criminal Procedure.
The elements of Acts of Lasciviousness was present in the first charge incident. Thus, even though the crime charged against Pareja was for rape through carnal knowledge, he can be convicted of the crime of acts of lasciviousness without violating any of his constitutional rights because said crime is included in the crime of rape.
(3) Rape can be committed in two ways:
(a) Article 266-A paragraph 1 refers to Rape through sexual intercourse, also known as “organ rape” or “penile rape.” The central element in rape through sexual intercourse is carnal knowledge which must be proven beyond reasonable doubt.
(b) Article 266-A paragraph 2 refers to rape by sexual assault, also called “instrument or object rape, or “gender free rape.” It must be attended by any of the circumstances enumerated in subparagraphs (a) to (d) of paragraph 1.”
The two modes of committing rape can be differentiated in the following manner:
(1) In the first mode, the offender is always a man, while in the second, the offender may be a man or a woman.
(2) In the first mode, the offended party is always a woman, while in the second, the offended party may be a man or a woman.
(3) In the first mode, rape is committed through penile penetration of the vagina, while the second is committed by inserting the penis into another person’s mouth or anal orifice, or any instrument or object into the genital or anal orifice of another person, and
(4) The penalty for rape under the first mode is higher than that under the second.
(4) The primary duty of a lawyer in public prosecution is to see that justice is done - to the State, that its penal laws are not broken and order maintained; to the victim, that his or her rights are vindicated; and to the offender, that he is justly punished for his crime.
A faulty and defective information, such as that of the instant case, does not render full justice to the State, the offended party, and even the offender. Thus, the public prosecutor should always see to it that the information is accurate and appropriate.
RULE 122 - A P P E A L
PERSONALITY TO APPEAL
PEOPLE & MALAYAN INSURANCE vs. PHILIP PICCIO
G.R. No. 193681, August 6, 2014, 732 SCRA 254
FACTS: Yuchengco family and Yuchengco Group of Companies thru Malayan Insurance Company filed a criminal complaint of Libel against a group called PEPCI for posting an article in a certain website which was highly defamatory and libelous against the Yuchengo family & Group of Companies.
The RTC quashed the information and dismissed the case for lack of jurisdiction holding that the criminal information failed to allege where the article was printed and first published or where the offended parties reside.
The People of the Philippines, through the private prosecutors, and with the conformity of public prosecutor, filed a Notice of Appeal.
The PEPCI group filed a Motion to Dismiss the Appeal, citing the fact that the Brief for the Private Complainants – Appellants did not carry the conformity of the OSG and that ordinary appeal was not the appropriate remedy.
ISSUES
(1) Whether the private complainants may appeal an order of dismissal in a criminal case by the trial court without the conformity of the OSG.
(2) Whether the offended party may appeal the civil liability of the accused without the intervention of the OSG.
RULINGS
(1) NO. It is well-settled that the authority to represent the State in appeals of criminal cases before the SC and the CA is vested solely in the OSG, which is the law office of the Government.
The rationale therefore is rooted in the principle that the party affected by the dismissal of the criminal action is the People and not the private complainants who are mere complaining witnesses.
The private complainants have no personality or legal standing to interpose an appeal in a criminal proceeding. Since the OSG had expressly withheld its conformity and endorsement in the instant case, the CA, therefore, correctly dismissed the appeal.
(2) YES. The private complainant or the offended party may, however, file an appeal without the intervention of the OSG but only insofar as the civil liability of the accused is concern. He may also file a special civil action for certiorari even without the intervention of the OSG, but only to the end of preserving his interest in the civil aspect of the case.
APPEAL to Different Appellate Jurisdiction
PEOPLE vs. ROSARIO “ROSE” OCHOA
G.R. No. 173792, August 31, 2011, 656 SCRA 382
FACTS: Rose was charged with Illegal Recruitment in a Large Scale and three counts of Estafa. She recruited several individuals and took their placement fees but did not have the necessary license. The RTC found the accused guilty of Illegal Recruitment sentencing her to life
imprisonment. She was also found guilty of Estafa with the penalty of prision correctional minimum up to prision mayor maximum. The accused appealed to the Court of Appeals. The CA affirmed the conviction but then declared their decision null and void later because they do not have appellate jurisdiction of criminal cases when the penalty involves reclusion perpetua or life imprisonment.
ISSUE: Whether the Supreme Court has exclusive appellate jurisdiction even though some of the consolidated crimes does not have the penalty of life imprisonment.
HELD: YES. An appeal of a single decision cannot be split between two courts. The splitting of appeals is not conclusive to the orderly administration of justice and invites possible conflict of disposition between the reviewing courts. Specifically, the Court of Appeals has no jurisdiction to review an appeal of a judgment imposing an indeterminate sentence. If the same ruling imposes reclusion perpetua, life imprisonment and death for crimes arising out of the same facts. In other words, the Supreme Court has exclusive jurisdiction over appeals of criminal cases in which the penalty imposed below is reclusion perpetua, life imprisonment or death, even if the same decision orders, in addition, a lesser penalty of penalties for crimes arising out of the same occurrence or facts.
EFFECT OF AN APPEAL
EDIGARDO GEROCHE vs. PEOPLE OF THE PHILIPPINES
G.R. No. 179080, November 26, 2014, 742 SCRA 514
FACTS: Geroche, Garde and Marfil were charged with the crime of violation of domicile under Article 128 of the RPC committed on May 14, 1989.
On November 15, 2001, the trial court found the accused guilty beyond reasonable doubt of the crime of Less Serious Physical Injuries under Article 265 of the RPC. According to the RTC, the prosecution failed to prove that Geroche, Garde and Marfil are public officers, which is an essential element of Article 128 of the RPC.
Accused elevated the case to the CA, which on November 18, 2005, the CA set aside the trial court’s judgment and ruled that the accused are guilty of violation of domicile considering their judicial admissions that Geroche was a Barangay captain while Garde and Marfil were CAFGU members.
ISSUES
(1) Whether the CA is limited the review of their conviction for the crime of Less Serious Physical Injuries.
(2) Whether there is a double jeopardy since the trial court had already acquitted them of Violation of Domicile which is already final and executory.
RULINGS
(1) NO. An appeal in a criminal case opens the entire case for review on any question including one not raised by the parties.
An appeal confers upon the appellate court jurisdiction to examine the records, revise the judgment appealed from, increase or reduce the penalty and cite the proper provision of the penal law.
The appellate court may and generally does look into the entire records to ensure that no fact of weight or substance has been overlooked, misapprehended or misapplied by the trial court.
(2) NONE. When an accused appeals from sentence of the trial court, he or she waives the constitutional safeguard against double jeopardy and throws the whole case open to the review of the appellate court, which is then called upon to render such judgment as law and justice dictate.
When the herein accused appealed the trial court’s judgment of conviction for Less Serious Physical Injuries, they are deemed to have abandoned their right to invoke the prohibition on double jeopardy since it becomes the duty of the appellate court to correct errors as may be found in the assailed judgment.
E V I D E N C E
Electronic Evidence
ZALDY NUEZ vs. ELVIRA CRUZ – APAO
455 SCRA 288, A.M. No. CA-05-18-P, April 12, 2005
Doctrine: Ephemeral electronic communication refers to telephone conversations, text messages and other electronic forms of communication the evidence which is not recorded or retained.
HELD: Under Section 2, Rule 11 of the Rules on Electronic Evidence, “Ephemeral electronic communications shall be proven by the testimony of a person who was a party to the same or who has personal knowledge thereof.
IMPEACHING REPUTATION
CIVIL SERVICE COMMISSION vs. ALLYSON BELAGAN
440 SCRA 578, G.R. No. 132164, October 19, 2004
Doctrine: When the credibility of a witness is sought to be impeached by proof of his reputation, it is necessary that the reputation shown should be that which existed before the occurrence of the circumstances out of which the litigation arose, or at the time of the trial and prior thereto, but not at a period remote from the commencement of the suit. This is because a person of derogatory character or reputation can still change or reform himself.
REGIONAL STATE PROSECUTOR NOT AUTHORIZED
TO APPROVE FILING OR DISMISSAL OF INFORMATION
STATE PROSECUTOR vs. HON. PABLO M. PAQUEO
G.R. No. 150606, June 7, 2007, 523 SCRA 377
Since the Regional State Prosecutor is not included among the law officers authorized to approve the filing or dismissal of the information of the investigating prosecutor, the information filed by petitioner State Prosecutor Tolentino did not comply with the requirement of Section 4, Rule 112 of the Revised Rules of Criminal Procedure. Consequently, the non-compliance was a ground to quash the information under Sec. 3 (d) of the Revised Rules of Criminal Procedure.
ACCUSED’S RIGHT TO DUE PROCESS
PEOPLE vs. SPO4 EMILIANO ANONAS
G.R. No. 156847, January 31, 2007, 513 SCRA 552
The inordinate delay of several years in terminating the preliminary investigation of an accused violates his constitutional right to due process.
WAIVER OF THE RIGHT TO PRELIMINARY INVESTIGATION
BERNADETTE ADASA vs. CECILLE ABALOS
G.R. No. 168617, February 19, 2007. 516 SCRA 261
The settled rule is that when an accused pleads to the charge, he is deemed to have waived the right to preliminary investigation and the right to question any irregularity that surrounds it.
JUDICIAL NOTICE
LANDBANK OF THE PHILIPPINES vs. SPOUSES VINCENT BANAL
434 SCRA 543, G.R. No. 143276, July 20, 2004
Doctrine: Courts are not authorized to take judicial notice of the contents of the record of other cases even when said cases have been tried or are pending in the same court or before the same judge.
RULE 130, SECTION 9
PAROL EVIDENCE
SPS. WILFREDO & ANGELA AMONCIO vs. AARON GO BENEDICTO
560 SCRA 219, G.R. No. 171707, July 28, 2008
FACTS: In 1997, Aaron and Garcia entered into a contract of lease with Spouses Amoncio over 240 sq. m. and 120 sq. m. property of the petitioners, respectively. In July 1999, Garcia pre-terminated his contract with Amoncios, while Aaron stayed on until June 8, 2000. Spouses Amoncio claimed they discovered Aaron was putting up improvements on another 120 sq. m. portion of their property which was never leased to him nor to Garcia. They added he had also occupied Garcia’s portion immediately after the latter left. Petitioner spouses asked Aaron to pay his arrears and desist from continuing with his construction.
Aaron denied the said claims and accusations and alleged that it was Spouses Amoncio who owed him money. According to him, he and Amoncio agreed to construct five commercial buildings on the latter’s property. One of the buildings was to go to Garcia, two to Aaron and the last two to Amoncio. They also agreed that Aaron would finance the construction and Spouses Amoncio were to pay him for the two buildings assigned to them. Aaron added he was to pay the rentals for five years and surrender the building on his leased portion to petitioners after the lapse of said period. However, in June 2000, he vacated the premises after he and Spouses Amoncio could no longer settle things amicably.
ISSUE: Whether the parol evidence rule is applicable to the existence of separate oral agreements aside from those established by the lease contract.
HELD. NO. The so-called “parol evidence” forbids any addition to or contradiction of the terms of a written instrument by testimony purporting to show that, at or before the signing of the document, other terms were orally agreed on by the parties. Under the aforecited rule, the terms of the written contract are conclusive upon the parties and evidence aliunde is inadmissible to vary an enforceable agreement embodied in the document.
Petitioners failed to make a timely objection and to dispute the fact that Aaron undertook the construction of the buildings. Evidence further disclosed that the building permit I ssued by the Building Official bore the signature of petitioner Wilfredo Amoncio.
Where a party entitled to the benefit of the parol evidence rule allows such evidence to be received without objection, he cannot, after the trial has closed and the case has been decided against him, invoke the rule in order to secure a reversal of the judgment. Hence, by failing to object to respondent’s testimony in the trial court, petitioners waived the protection of the parol evidence rule.
DYING DECLARATION ADMISSIBLE AS PART OF RES GESTAE
PEOPLE OF THE PHILIPPINES vs. SONNY GATARIN
G.R. No. 198022, April 7, 2014, 721 SCRA 16
FACTS: One night, SPO3 Mendoza and PO1 Coronel were on board their patrol vehicle performing their routine duty when they met two men, later identified as the accused, who were running at a fast speed. The policemen, however, were unsuccessful in catching them and they continued patrolling the area.
There they saw Januario lying on the street. As he was severely injured, the policemen immediately loaded Januario to the patrol vehicle and brought him to the Zigzag Hospital.
While inside the vehicle, SPO3 Mendoza asked Januario who hurt him. He answered that it was “Jay-R and his uncle” who stabbed him. Subsequently, Januario died due to the fatal wounds he has sustained.
ISSUES
(1) Whether the victim’s statement to SPO3 Mendoza is a dying declaration.
(2) Whether the test of admissibility to SPO3 Mendoza as a part of res gestae is applicable in the case.
(3) What is corpus delicti?
RULINGS
(1) NO. A dying declaration, although generally inadmissible as evidence due to its hearsay character, may nonetheless be admitted when the following requisites occur, namely: (a) the declaration concerns the cause and the surrounding circumstances of the declarant’s death; (b) it is made when death appears to be imminent and the declarant is under a consciousness of impending death; (c) the declarant would have been competent to testify had he or she survived; and (d) the dying declaration is offered in a case in which the subject of inquiry involves the declarant’s death.
In the case at bar, it appears that not all the requisites of a dying declaration are present. From the records, no questions relative to the second requisite was propounded to Januario. It does not appear that the declarant was under the consciousness of his impending death when he made the statements.
The rule is that, in order to make a dying declaration admissible, a fixed belief in inevitable and imminent death must be entered by the declarant. It is the belief in impending death and not the rapid succession of death in point of fact that renders a dying declaration admissible. The test is whether the declarant has abandoned all hopes of survival and looked on death as certain impending. Thus, the utterances made by Januario could not be considered as a dying declaration.
(2) YES. Even if Januario’s utterance could not be appreciated as a dying declaration, his statements may still be appreciated as part of the res gestae.
Res gestae refers to the circumstances, facts, and declaration that grow out of the main fact and serve to illustrate its character and are so spontaneous and contemporaneous with the main fact as to exclude the idea of deliberation and fabrication.
The test of admissibility of evidence as a part of the res gestae is, therefore, whether the act, declaration, or exclamation is so interwoven or connected with the principal fact or event that it characterizes as to be regarded as a part of the transaction itself, and also whether it clearly negates any premeditation or purpose to manufacture testimony.
When Januario gave the identity of the assailants to SPO3 Mendoza, he was referring to a startling occurrence which is the stabbing by accused and his co-accused. At that time, Januario and the witness were in the vehicle that would bring him to the hospital, and thus, had no time to contrive his identification of the assailant. His utterance about assailant and his co-accused having stabbed him, in answer to the question of SPO3 Mendoza, was made in spontaneity and only in reaction to the startling occurrence.
Definitely, the statement is relevant because it identified the accused as the authors of the crime. Verily, the killing of Januario perpetrated by accused, is adequately proven by the prosecution.
(3) Corpus delicti has been defined as the body or substance of the crime and, in its primary sense, refers to the fact that a crime is actually been committed.
As applied to a particular offense, it means the actual commission by someone of the particular crime charged.
In this case, the element of taking, as well as the existence of the money alleged to have been lost by assailant was not to the alleged robbery.
Exception to the hearsay rule: Entries in the course of business.
BERNARDO B. JOSE, JR. vs. MICHAELMAR PHILIPPINES, INC.
G.R. No. 169606, November 27, 2009, 606 SCRA 116
FACTS: Bernardo’s services was engaged by the Michaelmar Phil., Inc. as an oiler of M/T Limar. While on board, Dr. Heath conducted a random test of the crews of M/T Limar and found Bernardo to be positive of marijuana. However, the test result does not contain the signature of Dr. Heath over his printed name therein.
When M/T Limar reached the next port, Bernardo was repatriated to the Philippines. Upon his arrival in Manila, Bernardo procured drug tests from Manila Doctors Hospital, S. M. Lazo Medical Clinic and Maritime Clinic, Inc. He was found negative for marijuana.
ISSUE: Whether the drug test results of Dr. Heath are admissible being an entry made in the course of business.
HELD: YES. The requisites for admission of entries in the course of business: (1) the person who made the entry is dead, outside the country, or unable to testify; (2) the entries were made at or near the time of the transactions to which they refer: (3) the person who made the entry was in a position to know the facts stated in the entries; (4) the entries were made in a professional capacity or in the performance of a duty; and (5) the entries were made in the ordinary or regular course of business or duty.
Here, all the requisites are present (1) Dr. Heath is outside the country; (2) the entries were made near the time the random drug test was conducted; (3) Dr. Heath was in a position to know the facts made in the entries; (4) Dr. Heath made the entries in his professional capacity or in the performance of business or duty; and (5) the entries were made in the ordinary or regular course of business or duty. The fact that the drug test result is unsigned does not necessarily lead to the conclusion that Jose, Jr. was not found positive for marijuana.
Affidavit of Recantation
RAYMUND MADALI vs. PEOPLE
G.R. No. 180380, August 4, 2009, 595 SCRA 274
FACTS: Raymund, Rodel, Bernardino, Jovencio and AAA climbed the stairs to the reservoir. As soon as they reached the reservoir, Bernardino blindfolded AAA with the handkerchief. Bernardino at once blurted out, “Join the rugby boys.” AAA replied, “That’s enough.” Bernardino then struck AAA thrice with a fresh and hard coconut frond. Raymund took his turn clobbering AAA at the back of his thighs with the same coconut frond. Before AAA could recover, he received punches to his head and body from Rodel, who was wearing brass knuckles. The punishment proved to much, as AAA lost consciousness.
Not satisfied, Raymund placed his handkerchief around the neck of AAA, with its ends tied to a dog chain. With the contraption, the malefactors pulled the body up a tree.
Stunned at the sight of his cousin being ill-treated, Jovencio could only muster a faint voice saying “Enough” every single-time AAA received the painful blows. Before leaving the scene, the three assailants warned Jovencio not to reveal to anyone, or he would be next.
Three days later, policemen found the dead body of AAA emitting a foul odor, hanging from a tree with handkerchief tied around the neck and a dog chain fastened to the handkerchief.
Upon investigation, Jovencio executed his first affidavit narrating the incident and pointing to Raymund, Rodel and Bernardino as the perpetrators of the crime. Because of threat made by the uncle of the assailants, Jovencio executed a second affidavit repudiating his first affidavit. However, when he testified in Court, he made third sworn statement substantially reverting to his first affidavit.
ISSUE: Whether the affidavit of recantation executed by Jovencio should prevail over his testimony in open court identifying the perpetrators of the crime.
HELD: NO. The affidavit of recantation executed by a witness prior to the trial cannot prevail over the testimony made during the trial. Jovencio effectively repudiated the contents of the affidavit of recantation. The recantation would hardly suffice to overturn the trial court’s finding of guilt which was based on a clear and convincing testimony given during a full-blown trial.
An affidavit of recantation, being usually taken ex-parte, would be considered inferior to the testimony given in open court.
RULE 132, SECTION 40
TENDER OF EXCLUDED EVIDENCE
PHILIP S. YU vs. COURT OF APPEALS
476 SCRA 443, G.R. No. 154115, November 29, 2005
FACTS: Viveca brought against her husband, Philip, an action for legal separation and dissolution of conjugal partnership on the grounds of marital infidelity and physical abuse. During trial, Viveca moved for the issuance of a subpoena duces tecum and subpoena ad testificandum to certain officers of Insular Life Company to compel production of the insurance policy and application of a person suspected to be Philip’s illegitimate child.
The court denied the motion and it ruled that the insurance contract is inadmissible evidence in view of Circular Letter No. II-2000 issued by the Insurance Commission preventing insurance companies from divulging confidential and privileged information pertaining to insurance policies.
When the trial court made its pronouncement that the production of insurance policy and application are inadmissible in evidence, Viveca had no choice but to make a tender of excluded evidence considering that she was left to speculate on what the insurance application and policy ruled out by the trial court would contain.
ISSUE: Whether Viveca had made a valid tender of excluded evidence as contemplated by the Rule 132, Section 40.
HELD: NO. The insurance application and insurance policy were yet to be presented in court, much less formally offered before it. In fact, Viveca was merely asking for the issuance of subpoena duces tecum and subpoena ad testificandum when the trial court issued the assail order.
Before a tender of excluded evidence is made, the evidence must have been formally offered before the court. And before formal offer of evidence is made, the evidence must have been identified and presented before the court.
While Viveca made a “Tender of Excluded Evidence,” such is not the tender contemplated by Section 40, Rule 132, for obviously, the insurance policy and insurance application were not formally offered much less presented before the trial court. At most, said “Tender of Excluded Evidence” was a manifestation of an undisputed fact that the subject documents were declared inadmissible by the trial court even before these were presented during trial.
The Doctrine of Adoptive Admission
An adoptive admission is a party’s reaction to a statement or action by another person when it is reasonable to treat the party’s reaction as an admission of something stated or implied by the other person. (Estrada vs. Desierto, G.R. Nos. 146710-15, April 3, 2001, 356 SCRA 108)
The “Sexual Abuse Shield” rule
Under the Rules on Examination of a Child Witness, the following evidence is NOT ADMISSIBLE in any criminal proceeding involving alleged child sexual abuse:
1. Evidence offered to prove 2 that the alleged victim engaged in other sexual behavior; and
2. Evidence offered to prove the sexual predisposition of the alleged victim.
EXCEPTION: Evidence of specific instances of sexual behavior by the alleged victim to prove that a person other the accused was the source of the semen, injury or other evidence.
CHAIN OF CUSTODY RULE
CORPUS DELICTI
PEOPLE vs. JOSELITO BERAN
G.R. No. 203028, January 15, 2014, 714 SCRA 165
FACTS: Joselito Beran was allegedly caught in a buy-bust operation and was convicted by the RTC for illegal sale of dangerous drugs.
On appeal, the CA ruled that Beran was caught in flagrante delicto as a result of a valid and legitimate buy - bust operation.
To sustain Beran’s conviction, CA held that the prosecution was able to establish the following facts:
a) the identities of the poseur-buyer, PO3 Sia and the seller, Beran;
b) the object of the sale, shabu contained in a heat-sealed plastic sachet handed by Beran to PO3 Sia; and
c) consideration which PO3 Sia paid the staged purchase, a marked P100 bill confiscated in the possession of Beran.
According to the CA, a complete narrative was built by an illegal sale of shabu leading to the arrest of Beran by PO3 Sia.
ISSUE: Whether the prosecution was able to establish the corpus delicti.
HELD: NO. The prosecution failed to establish the very corpus delicti of the crime charged. Beran must be set free.
It is well-settled that in the prosecution of cases involving the illegal possession of dangerous drugs, the evidence of the corpus delicti which is the dangerous drugs itself, must be independently established beyond reasonable doubt.
Thus, every fact necessary to constitute the crime must be established, and the chain of custody requirement under RA 9165 performs the function in buy-bust operation as it ensures that any doubts concerning the identity of the evidence are removed.
“Chain of Custody” means the duly recorded authorized movements and custody of seized drugs or controlled chemicals or plant sources of dangerous drugs or laboratory equipment of each stage, from the time of seizure/confiscation to receipt in the forensic laboratory to safekeeping to presentation in court for destruction. Such record of movements and custody of seized items shall include the identity and signature of the person who held temporary custody of the seized items, the date and time when such transfer of custody were made in the course of safekeeping and the use in court as evidence and the final disposition.
APPLICATION FOR SEARCH WARRANT, WHERE FILED
RET. SPO4 BIENVENIDO LAUD vs. PEOPLE
G.R. No. 199023, November 19, 2014, 741 SCRA 239
FACTS: PNP applied with RTC of Manila, Branch 50 for a warrant to search three (3) caves located inside the Laud Compound in Purok 3, Barangay Ma-a, Davao City, where the alleged remains of the victims summarily executed by the so-called “Davao Death Squad” may be found.
In support of the application, a certain Avasola was presented to the RTC and there testified that he personally witnessed the killing of six (6) persons in December 2005, and was, in fact part of the group that buried the victims.
The RTC Judge found probable cause for the issuance of a search warrant and the search of the Laud Compound caves yielded positive results for the presence of human remains.
Retired SPO4 Laud filed an Urgent Motion to Quash and to Suppress Illegally Seized Evidence.
ISSUES
(1) Whether the Manila RTC has jurisdiction to issue search warrant which was to be enforced in Davao City.
(2) Whether the human remains sought to be seized are proper subject of a search warrant.
(3) Whether the rule against forum shopping was violated as the PNP previously applied for search warrant with the RTC Davao which had been denied.
RULINGS
(1) YES. Section 12, Chapter V of A.M. No. 03-8-02-SC explicitly mentioned that the rule on search warrant application before the Manila and Quezon City RTC’s for “special criminal cases” shall be an exception to Sec. 2 of Rule 126 of the Rules of Court.
(2) YES. “Personal property” actually refers to the thing’s mobility, and not to its capacity to be owned or alienated by a particular person.
A search warrant may be said to particularly describe the things to be seized when the description therein is as specific as to circumstances will ordinarily allow.
The “human remains” description points to no other than the things that bear a direct relation to the offense committed of murder.
(3) NO. Forum shopping cannot be said to have committed in this case considering the various points of divergence attending the search warrant application before the Manila - RTC and that before Davao – RTC.
For one, the witnesses presented in each application were different.
Likewise, the application filed in Manila was in connection with Murder, while the one in Davao did not specify any crime.
Finally, and more importantly, the places to be searched were different - that in Manila sought the search of the Laud Compound caves, while in Davao was for a particular area in the Laud Gold Cup Firing Range.
There being no identity of facts and circumstances between the two applications, the rule against forum shopping was therefore not violated.
I HAVE FOUGHT THE GOOD FIGHT
I HAVE FINISHED THE RACE
I HAVE KEPT MY FAITH
- 2 Timothy 4:7
GOD SPEED
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Posted by: admin - 05-31-2019, 10:25 PM - Forum: Merchantile Law
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2018 GOLDEN BEACON MERCANTILE LAW
By: Dean MANUEL R. BUSTAMANTE
1. “DOING BUSINESS IN THE PHILIPPINES”
B. VAN ZUIDEN BROS. LTD. vs. GTVL MANUFACTURING INDUSTRIES, INC.
G.R. No. 147905, May 28, 2007, 523 SCRA 233
Q: What is the test for determining if an unlicensed foreign corporation is doing business in the Philippines?
A: To be doing or “transacting business in the Philippines” for purposes of Section 133 of the Corporation Code, the foreign corporation must actually transact business in the Philippines, that is, perform specific business transactions within the Philippine territory on a continuing basis in its own name and for its own account.
Actual transaction of business within the Philippines is an essential requisite for the Philippines to acquire jurisdiction over a foreign corporation and thus require the foreign corporation to secure Philippine business license.
If a foreign corporation does not transact such kind of business in the Philippines, even if it exports its products to the Philippines, the Philippines has no jurisdiction to require such foreign corporation to secure a Philippine business license.
Considering that petitioner is not doing business in the Philippines, it does not need a license in order to initiate and maintain a collection suit against the respondent.
“Acts” constituting doing business in the Philippines under Section 3 (D) of RA 7042 otherwise known as “Foreign Investment Act of 1991:
1. soliciting orders
2. entering into service contracts
3. opening offices by whatever name
4. participating in the management, supervision or control of any domestic entity
5. appointing representatives or distributors, operating under the control of the foreign entity, who is domiciled in the Philippines or who stays in the country for a period or periods totaling at least 180 days in any calendar year.
2. BANKING LAWS
CITIBANK N.A. vs. SPOUSES LUIS & CARMELITA CABAMONGAN
G.R. No. 146918, May 2, 2006, 488 SCRA 517
Q: What degree is expected that must be exercised by banks for the protection of the interests of its depositors?
A: Since the banking business is impressed with public interest, of paramount importance thereto is the trust and confidence of the public in general. Consequently, the highest degree of diligence is expected, and the high standards of integrity and performance are even required of it. By the nature of its functions, a bank is under obligation to treat the accounts of its depositors with meticulous care, always having in mind the fiduciary nature of their relationship.
Banks handle daily transactions involving millions of pesos. By the very nature of their works the degree of responsibility, care and trustworthiness expected of their employees and officials is far greater than those of ordinary clerks and employees. Banks are expected to exercise the highest degree of diligence in the selection and supervision of their employees. Citibank, thru Account Officer San Pedro, openly courted disaster when despite noticing discrepancies in the signature and photograph of the person claiming to be Carmelita and the failure to surrender the original certificate of time deposit, the pre-termination of the account was allowed. Even the waiver document was not notarized, a procedure meant to protect the bank. For not observing the degree of diligence required of banking institutions, whose business is impressed with public interest, Citibank is liable for damages.
Q: What is the nature of time deposit?
A: It is a simple loan or mutuum. The time deposit subject matter of herein petition is a simple loan. The provisions on the New Civil Code on simple loan govern the contract between a bank and its depositor. Specifically, Article 1980 thereof categorically provides that “ … savings … deposits of money in banks and similar institutions shall be governed by the provisions concerning simple loan.
MACLARING LUCMAN vs. ALIMANTAR MALAWI
G.R. No. 158794, December 19, 2006, 511 SCRA 268
NATURE OF BANK DEPOSITS
FACTS: Malawi, et. al. were Barangay Chairmen of various barangays of Lanao del Sur. From the 2nd quarter of 1997, the Land Bank was selected as the government depository bank of the Internal Revenue Allotments (IRAs) of the said barangays. After the failed 1997 elections, Malawi et. al. attempted to open their respective IRA bank accounts, but they were refused by Lucman, Land Bank manager, because the former needed to show their individual certifications showing their right to continue serving as Barangay Chairmen and the requisite Municipal Accountant’s Advice giving them the authority to withdraw the IRA deposits, which they were unable to show.
Later, five (5) other persons presented themselves before Lucman as the newly proclaimed Barangay chairmen each of them presenting certifications. Without verifying the authenticity of the certifications, Lucman proceeded to release the IRA funds to them. Malawi et. al. filed a petition for mandamus to compel Lucman to allow them to open and maintain deposit accounts covering the IRAs of their barangays and withdraw therefrom.
ISSUE: What is the nature of bank deposits?
HELD: Bank deposits are in the nature of irregular deposits. They are really loans because they earn interest. All kinds of bank deposits, whether fixed, savings or current are to be treated as loans are to be covered by the law on loans. (Guingona, Jr. vs. City Fiscal of Manila, 96 SCRA 96 (1980)].
There exists between the barangay as depositors and Land Bank, as depository, a creditor-debtor relationship. Fixed, savings and current deposits of money in banks and similar institutions are governed by the provisions concerning simple loan. The barangays are the lenders while the bank is the borrower. Failure of the Land Bank to honor the time deposit is failure to pay its obligations as a debtor and not a breach of trust arising from a depositor’s failure to return the subject matter of the deposit. Thus, the relationship being contractual, mandamus is not an available remedy since mandamus does not lie to enforce the performance of contractual obligations.
A PURCHASER OF MANAGER’S CHECK CAN ASSERT FORGERY
LAND BANK OF THE PHILIPPINES vs. NARCISO L. KHO
G.R. No. 205840, July 7, 2016, 796 SCRA 21
FACTS: Respondent Narciso Kho is a sole proprietor of oil trading business. Sometime in December 2006, he entered into a verbal agreement to purchase lubricants from Red Orange Trading. Red Orange insisted that it would only accept a Land Bank manager’s check for payment.
Kho, accompanied by Rudy Medel, opened a savings account at petitioner Land Bank Araneta branch. Kho the purchased a Land Bank manager’s check valued at P25,000,000 and made payable to Red Orange. Kho requested a photocopy of the manager’s check to give Red Orange a proof that he had available funds for their transaction.
Unfortunately, the deal with Red Orange did not push through. Sometimes later, BPI called Land Bank to inform them that Red Orange had deposited a Land Bank manager’s check. A faxed copy of the deposited check was then sent to the clearing office and upon examination, they thought the details matched the check purchased by Kho, Land Bank confirmed the check.
Land Bank informed Kho by phone that his check was cleared and paid the BPI. Shocked, Kho informed Land Bank that never negotiated the check because the deal did not materialize and the actual check was still in his possession. They discovered that what was deposited and encashed with BPI was a spurious manager’s check.
ISSUES
1) Whether a purchaser of manager’s check can assert forgery when the proximate cause of the loss is the negligence of the bank.
2) Whether the Land Bank is liable for the encashed P25,000,000 manager’s check.
RULINGS
1) YES, a purchaser of a manager’s check can assert forgery when the proximate cause of the loss is the negligence of the bank.
Kho’s failure to inform Land Bank that the deal did not push through does not justify Land Bank’s confirmation and clearing of a fake check bearing the forged signatures of its own officers. Whether or not the deal pushed through, the check remained in Kho’s possession. He was entitled to a reasonable expectation that the bank would not release any funds corresponding to the check.
2) YES, Land Bank breached its duty of diligence and assumed the risk of incurring a loss on account of a forged or counterfeit check.
The business of banking is imbued with public interest. It is an industry where the general public’s trust and confidence in the system is the paramount importance.
Consequently, banks are expected to exact the highest degree of, if not the utmost, diligence. They are obligated to treat their depositors’ accounts with meticulous care, always keeping in mind the fiduciary nature of their relationship.
Banks hold themselves out to the public as experts in determining the genuiness of checks and corresponding signatures thereon. Stemming from their primordial duty of diligence, one of a bank’s prime duties is to ascertain the genuineness of the drawer’s signature on check being encashed. This holds especially true for manager’s checks.
NATIVIDAD GEMPESAW vs. COURT OF APPEALS
G.R. No. 92244, February 9, 1993, 218 SCRA 682
Natividad Gempesaw, a businesswoman, completely placed her trust in her bookkeeper. She allowed her bookkeeper to prepare the checks payable to her suppliers. She signed the checks without verifying their amounts and their corresponding invoices. Despite receiving her bank statements, Gempesaw never verified the correctness of the returned checks nor confirmed if the payees actually received payment. This went on for over two years, allowing her bookkeeper to forge the indorsements of over 82 checks.
Gempesaw failed to examine her records with reasonable diligence before signing the checks and after receiving her bank statements. Her gross negligence allowed her bookkeeper to benefit from the subsequent forgeries for over two years.
Gempesaw’s negligence precluded her from asserting the forgery. Nevertheless, the Supreme Court adjudged the drawee Bank liable to share evenly in her loss for its failure to exercise utmost diligence, which amounted to a breach of is contractual obligations to the depositor.
ASSOCIATED BANK vs. COURT OF APPEALS
G.R. No. 107382, January 31, 1996, 252 SCRA 620
The Province of Tarlac (the depositor) released 30 checks payable to the order of a government hospital to a retired administrative officer/cashier of the hospital. The retired officer forged the hospital’s indorsement and deposited the checks into his personal account. This took place for over three years resulting in the accumulated loss of P203,300.00.
It was held that the Province of Tarlac was grossly negligent, to the point of substantially contributing to its loss. Nevertheless, the High Court apportioned the loss evenly between the Province of Tarlac and the drawee bank because of the bank’s failure to pay according to the terms of the check. It violated its duty to charge the customer’s account only for properly payable items.
3. SECURITIES REGULATION CODE
ABACUS SECURITIES CORPORATION vs. RUBEN AMPIL
G.R. No. 160016, February 27, 2006, 483 SCRA 315
Q: What is the mandatory close out rule in margin trading?
A: The law places the burden of compliance with margin requirements primarily upon the brokers and dealers. Sections 23 & 25 and Rule 25-1, otherwise known as the “mandatory close-out rule,” clearly vest upon petitioner the obligation, not just the right, to cancel or otherwise liquidate a customer’s order, if payment is not received within three days from the date of purchase. For transactions subsequent to an unpaid order, the broker should require its customers to deposit funds into the account sufficient to cover each purchase transaction prior to its execution. These duties are imposed upon the broker to ensure faithful compliance with the margin requirements of the law, which forbids a broker from extending undue credit to a customer.
Q: What is the macroeconomic purpose of the margin trading rule?
A: The margin requirements set out in the RSA are primarily intended to achieve a macro-economic purpose the protection of the overall economy from excessive speculation in securities. Their recognized secondary purpose is to protect small investors.
BAVIERA vs. PAGLINAWAN
G.R. No. 168380, February 8, 2007, 515 SCRA 170
A criminal charge for violation of the Securities Regulation Code is a specialized dispute which must be first be referred to an administrative agency of special competence, i.e., the SEC. The Securities Regulation Code is a special law. Its enforcement is particularly vested in the SEC. Hence, all complaints for any violation of the Code and its implementing rules and regulations should be filed with the SEC. Where the complaint is criminal in nature, the SEC shall indorse the complaint to the DOJ for preliminary investigation and prosecution.
CEMCO HOLDING, INC. vs. NATIONAL LIFE INSURANCE
G.R. No. 171815, August 7, 2007, 529 SCRA 2007
TENDER OFFER RULE
A tender offer is an offer by the acquiring person to stockholders of a public company for them to tender their shares therein on the terms specified in the offer. The Tender Offer Rule applies also in an indirect acquisition arising from the purchase of shares of a holding company of the listed firm. Tender offer is in place to protect minority stockholders against any scheme that dilutes the share value of their investments. It gives the minority shareholders the chance to exit the company under reasonable terms, giving them the opportunity to sell their shares at the same price as those of the majority shareholders.
Under existing SEC Rules, the 15% and 30% threshold acquisition of shares under the foregoing provision was increased to thirty-five percent (35%). It is further provided therein that mandatory tender of is still applicable even if the acquisition is less than 35% when the purchase would result in ownership of over 51% of the total outstanding equity securities of the public company. Whatever may be the method by which control of a public company is obtained, either through the direct purchase of its stock or an indirect means, mandatory tender offer applies.
QUEENSLAND – TOKYO COMMODITIES vs. MATSUDA
G.R. No. 159008, January 23, 2007, 512 SCRA 276
COMMODITY FUTURES TRADING
Before a future commodity merchant can be held liable under Section 20 of the Revised Rules and Regulations on Commodity Futures Trading, there must be proof that it “knowingly” permitted an unlicensed person to commit the prohibited acts. The law, therefore, prescribed an additional element to the offense. In this case, there is absolutely no evidence to show that Queensland knowingly allowed the unlicensed
persons to participate in the trading. Only Charlie Collado and Felix Sampaga had in fact, assented to the unlawful acts of respondent
corporation, and they should jointly and severally be liable for the payment of all damages sustained and which are sufficiently proven by the complainant.
4. SECRECY ON FOREIGN CURRENCY DEPOSIT
CHINA BANKING CORPORATION vs. COURT OF APPEALS
G.R. No. 140687, December 18, 2006, 511 SCRA 110
FACTS: Jose Gotianuy accused his daughter Mary Margaret Dee of stealing his US dollar deposits with Citibank N.A. amounting to not less than Php35,000,000.00 and US$864,000.00 and deposited the same to China Banking Corporation (CBC). Upon order of the court to divulge in whose name or names is in the foreign currency fund, CBC invoked RA 6426 as amended by PD 1246 which provides the absolute confidentially of foreign currency deposit which is beyond the compulsive process of the court.
ISSUE: Whether or not Jose Gotianuy being the owner of the questioned foreign currency deposit may compel CBC the disclosure of someone else’s foreign currency deposit.
HELD: YES. Under RA 6426 as amended considered absolute confidential in nature of foreign currency deposit and may not be inquired into. There is only exception to the secrecy of foreign currency deposits, that is, disclosure is allowed upon written permission of the depositor. As the owner of the funds unlawfully taken and which are undisputably now deposited with China Bank, Jose Gotianuy has the right into the said deposits.
5. BANK SECRECY LAW
*** Deposits in bank including government banks, may not be inquired into by any person, except:
a. if depositor agrees in writing;
b. impeachment cases;
c. by court order in cases of bribery and dereliction of duty against public officials;
d. deposit is subject of litigation;
e. anti-graft cases;
f. general and special examination of bank order of the Monetary Board of bank fraud or serious irregularity;
g. re-examination made by an independent auditor hired by a bank to conduct its regular trust.
EJERCITO vs. SANDIGANBAYAN
G.R. No. 157294-95, November 30, 2006, 509 SCRA 190
RA 1405 is broad enough to cover Trust Account No. 858 because the term “deposit” as used in RA 1405 is to be understood broadly and not limited only to accounts which give rise to a creditor-debtor relationship between the depositor and the bank. If the money deposited under an account may be used by banks for authorized loans to third persons, then such account, regardless of whether it creates a creditor-debtor relationship between the depositor and the bank, falls under the category of accounts which the law precisely seeks to protect for the purpose of boosting the economic development of the country.
However, there are two exceptions on the protection under RA 1405: (1) the examination of bank accounts is upon order of a competent court in cases of bribery or dereliction of duty of public officials, and (2) the money deposited or nvested is the subject matter of litigation.
The first exception applies since the plunder case pending against the petitioner is analogous to bribery or dereliction of duty and the second because the money deposited in petitioner’s bank accounts from part of the subject matter of the same.
ANTI-MONEY LAUNDERING ACT
REPUBLIC - AMLC vs. HON. JUDGE ANTONIO M. EUGENIO
545 SCRA 384, G.R. No. 174629, February 14, 2008
FACTS: A series of investigations concerning the awards of the NAIA 3 contracts to PIATCO were undertaken by the Ombudsman and Anti-Money Laundering Council (AMLC). Alvarez was already charged by the Ombudsman. As per intelligence database financial information, Alvarez maintained eight (8) bank accounts with six (6) different banks. AMLC filed an ex-parte application to examine the deposits of Alvarez as mandated by Section 11 of RA 9160 and such application was granted by the RTC.
ISSUE: Whether Section 11 of RA 9160 authorize ex parte application with respect to bank orders.
HELD: NO. Section 11 does not specifically authorize, as a general rule, the issuance ex parte of the bank inquiry order. Though, Section 11 allows the AMLC to inquire into bank accounts without having to obtain a judicial order in cases where there is a probable cause that the deposits or investments are related to kidnapping with ransom, certain violations of the Comprehensive Dangerous Drugs Act of 2002, hijacking and other violations under RA 6235, destructive arson and murder. Such special circumstances are not present in this case.
A bank inquiry order under Sec. 11 does not necessitate any form of physical seizure of property of the account holder. Said records are in the possession of the bank and therefore cannot be destroyed at the instance of the account holder alone as that would require the extraordinary cooperation and devotion of the bank.
FREEZE ORDER
LT. GEN. JACINTO C. LIGOT (Ret.) vs. REPUBLIC (AMLC)
G.R. No. 176944, March 6, 2013, 692 SCRA 509
FACTS: On June 27, 2005, AMLC filed an application for the issuance of a freeze order with the CA against certain monetary instruments and properties of Lt. Gen. Ligot and his family based on the recommendation of the Office of the Ombudsman.
The CA issued a freeze order against the Ligots various bank accounts, web accounts and vehicles.
Subsequently, ALMC filed a motion for extension of effectivity of freeze order and the CA granted the said motion.
On November 2005, the Rule in Civil Forfeiture Cases took effect. Under this rule, a freeze order could be extended for a maximum period of six months.
On January 31, 2006, the Ligots filed a motion to lift the freeze order considering it has already expired six months after it was issued on July 5, 2005.
ISSUE: Whether the freeze order should be lifted after the expiration of six months period.
HELD: YES. A freeze order cannot be issued for an indefinite period. As a rule, the effectivity of a freeze order may be extended by the CA not exceeding six months. Before or upon the lapse of this period, ideally, the AMLC should have already filed a case for civil forfeiture against property owner with the proper court.
AMLC has not offered any explanation why it took six years from the time it secured a freeze order before a civil forfeiture case was filed in court despite the clear tenor of the Rules in Civil Forfeiture Cases allowing the extension of a freeze order for only a period of six months.
6. BULK SALES LAW
*** Types of transactions which are treated as “bulk sales.”
a. Sale, transfer, mortgage or assignments of a stock of goods, wares, merchandise, provisions, or materials otherwise than in the ordinary course of trade;
b. Sale, transfer, mortgage or assignments of all or substantially all of the business of the vendor, mortgagor, transferor or assignor;
c. Sale, transfer, mortgage, or assignment of all, or substantially all, of all the fixtures and equipment used in the business of the vendor, mortgagor, transferor or assignor.
*** Only creditors at the time of the sale in violation of the law are within the protection of the laws and creditors subsequent to the sale are not covered.
7. LETTER OF CREDIT
Q - Distinguish Commercial Letter of Credit from Standby Letter of Credit
A - There are three significant differences between commercial and standby credits. First, commercial credits involve the payment of money under a contract of sale. Such credits become payable upon the presentation by the seller-beneficiary of documents that show he has taken affirmative steps to comply with the sales agreement. In the standby type, the credit is payable upon certification of a party’s non-performance of the agreement. The beneficiary of a commercial credit must demonstrate by documents that he has performed his contract. The beneficiary of the standby credit must certify that his obligor has not performed the contract. (Transfield Philippines, Inc. vs. Luzon Hydro Corporation, G.R. No. 146717, November 22, 2004, 443 SCRA 307).
Q: Whether the beneficiary has the right to call and draw on the securities under the letter of credit
A: YES. The independence principle liberates the issuing bank from the duty of ascertaining compliance by the parties in the main contract. The obligation under the letter of credit is independent of the related and originating contract. To say that the independence principle may only be invoked by the issuing banks would render nugatory the purpose of which the letter of credit are used in commercial transactions because the independence doctrine works to the benefit of both the issuing bank and the beneficiary.
Q - Is there any exception to the “independence principle”?
A - An exception to the independence principle would be fraud of the “fraud exception rule.” The untruthfulness of a certificate accompanying a demand for payment under a standby credit may qualify as a fraud sufficient to support an injunction against payment. The remedy for fraudulent abuse is an injunction. However, injunction should not be granted unless (a) there is clear proof of fraud; (b) the fraud constitutes fraudulent abuse of the independent purpose of the letter of credit and not only fraud under the main agreement; and (c) irreparable injury might follow if injunction is not granted or the recovery of damages would be seriously damaged. (Transfield Philippines, Inc. vs. Luzon Hydro Corporation, supra).
LETTERS OF CREDIT vs. TRUST RECEIPT
While the trust receipt may been executed as a security on the letter of credit, still the two documents involve different undertakings and obligations. A letter of credit is an agreement by a bank or other person made at the request of a customer that the issuer will honor drafts or other demands for payment upon compliance with the conditions specified in the credit.
By contrast, a trust receipt transaction is one where the entruster, who holds an absolute title or security interests over certain goods, documents or instruments, released the same to the entrustee, who executes a trust receipt binding himself to hold the goods, documents or instruments in trust for the entruster and to sell or otherwise dispose of the goods, documents and instruments with the obligation to turn over the entruster the proceeds thereof to the extent of the amount owing to the entruster, or as appears in the trust receipt or return the goods, documents or instruments themselves if they are unsold, or not otherwise disposed of, in accordance with the terms and conditions specified in the trust receipt. (Bank of Commerce vs. Teresita Serrano, G.R. No. 151895, February 16, 2005, 451 SCRA 484).
8. SUSPENSION OF PAYMENTS AND REHABILITATION
Q: What is the objective of the suspension order against all actions against distressed corporation when a management committee or rehabilitation receiver is appointed?
A: The avowed objective of suspending all actions against a distressed corporation when a management committee or rehabilitation receiver is appointed, as enunciated by the Court in Rubberworld Phil., Inc. vs. NLRC and in RCBC vs. IAC is to enable such management committee or rehabilitation receiver to effectively exercise its power free from any judicial or extrajudicial interference that might unduly hinder or prevent the rescue of the distressed company. However, this purpose can no longer be effectively met in the present case as the proceedings herein have already been pending for almost ten years and have already reached this Court. The management committee has been unduly burdened enough, its time and resources wasted by the proceedings that took place before the RTC and the appellate court. Hence, to decree the annulment of the previous proceedings in the lower courts will only result in further delay. The greater interest of justice demands that we now dispose of the issues raised in the present petition. (Tyson’s Super Concrete, Inc. vs. Court of Appeals, G.R. No. 140081, June 23, 2005, 461 SCRA 69).
SY CHIM and FELICIDAD CHAN SY vs. SY SIY HO & SONS, INC.
G.R. No. 164958, January 27, 2006, 480 SCRA 465
FACTS: An intra-corporate dispute ensued between Sy Chim and his wife Felicidad Chan Sy, on the one hand, and their son, Sy Tiong Shiou, on the other, when a complaint for accounting and damages against the spouses was filed alleging that Felicidad, as custodian of all cash collections has been depositing amounts less than those appearing in the financial statements which are in the custody of the spouses.
The spouses averred in their answer that any unaccounted cash account and irregularities in the management of the corporation, if any, were the full responsibility of Sy Tiong, since he has direct and actual management of the corporation under the by-laws.
The RTC issued an Order granting the motion for the creation of a management committee pendente lite. It was stated therein that while the main case is yet to be heard, the fact remains that corporate assets, funds, properties and records were in imminent danger of further dissipation or total loss and that the appointment of a receiver was justified there having been sufficient allegations of misappropriation of corporate assets.
ISSUE: Whether the creation of a management committee/appointment of a receiver proper?
HELD: NO. The creation and appointment of a management committee and a receiver is an extraordinary and drastic remedy to be exercised with care and caution; and only when the requirements under the Interim Rules are shown. It is a drastic course for the benefit of the minority stockholders, the parties-litigants or the general public are allowed only under pressing circumstances and, when there is inadequacy, the ineffectual or exhaustion of legal or other remedies. The power to intervene before the legal remedy is exhausted and misused when it is exercised in aid of such purpose. The power of the court to continue a business of a corporation, partnership or association must be exercised with the greatest care and caution. There should be a full consideration of all the attendant facts, including the interest of all the parties concerned.
SOBREJUANITE vs. ASB DEVELOPMENT CORPORATION
G.R. No. 165675, September 30, 2005, 471 SCRA 763
Q: What is the purpose of Suspension of the Proceedings and Definition of Claim?
A: The purpose for the suspension of the proceedings is to prevent a creditor from obtaining an advantage or preference over another and to protect and preserve the rights of party litigants as well as the interest of the investing public or creditors. Such suspension is intended to give enough breathing space for the management committee or rehabilitation receiver to make the business viable again, without having to divert attention and resources to litigations in various fora.
The interim rules define a claim as referring to all claims or demands, of whatever against a debtor or its property, whether for money or otherwise. The definition is all encompassing as it refers to all actions whether for money or otherwise. There are no distinctions or exemptions.
PUNONGBAYAN vs. PUNONGBAYAN
G.R. No. 157671, June 20, 2006, 491 SCRA 477
The RTC has the discretion to grant or deny an application for the creation of a management committee. Having the power to create a management committee, it follows that the RTC can order the reorganization of the existing management committee.
Such appointment of new members does not mean the creation of a new management committee. The existing management committee was not abolished. The RTC merely reorganized it by appointing new members. The management committee created by the SEC continues to exist. However, when it failed to function due to the division among the members, the RTC replaced them. Clearly, there was no revocation of the final Order of the SEC.
9. INTELLECTUAL PROPERTY
MIGHTY CORPORATION & LA CAMPANA vs. E. & J. GALLO WINERY
G. R. No. 154342, July 14, 2004, 434 SCRA 473
FACTS: Petitioner herein is a domestic corporation producing and manufacturing GALLO cigarettes for local consumption since 1974, while the respondent is a foreign corporation having no license to do business in the country, but whose GALLO wines are being distributed in the country through an exclusive distributor.
The latter filed a complaint for unfair competition and infringement against that of the former. The respondent claimed their right under the trademark law (RA 166) and that of the Paris Convention. The petitioner, however, posed as a defense that the products are not the same so as to cause confusion to the consumers, and that he had a prior right over the trademark. The petitioner further questions the locus standi of the respondent to bring the action.
ISSUE: Whether the petitioner is liable for infringement and unfair competition.
HELD: NO. The subject goods herein are in fact, different from each other. There are (1) substantial differences on the trademark itself applying the dominancy and holistic test, (2) they are of different channels of trade, (3) they have different qualities and purpose, (4) there is a marked difference on the price of goods.
Distinguish Trademark Infringement from Unfair Competition.
A - (1) Infringement of trademark is the authorized use of a trademark, whereas unfair competition is the passing off of one’s goods as those of another.
(2) In infringement of trademark, fraudulent intent is unnecessary, whereas in unfair competition, fraudulent intent is essential.
(3) In infringement of trademark, the prior registration of the trademark is a prerequisite to the action, whereas in unfair competition, registration is not necessary. (Mighty Corporation vs. E.J. Gallo Winery, supra)
FACTORS to consider in determining the likelihood of confusion:
(a) The resemblance between the trademarks;
(b) The similarity of the goods to which the trademarks are attached.
(c) The likely effect on the purchaser; and
(d) The registrant’s express or implied consent and other fair and equitable considerations. (Mighty Corporation vs. E. J. Gallo Winery, supra).
MCDONALD’S CORPORATION vs. L. C. BIG MAK BURGER, INC.
G. R. No. 143993, August 18, 2004, 437 SCRA 10
FACTS: The petitioner herein is a foreign corporation organized under the laws of Delaware, USA, while the respondent is a domestic corporation. Both of them are engaged in the selling of fast food products, including the sale of hamburgers to which the petitioner claims protection for the use of the BIG MAC trademark over the same items, in contrast to the BIG MAK trademark of the latter.
The petitioner, as a result, filed a complaint for infringement and unfair competition against that of the respondent, to which the latter opposed on the ground that the former does not have exclusive right to use the said trademark for it was previously registered by two corporations prior to the 1985 registration of the petitioner.
ISSUE: Whether the respondent is liable for infringement and unfair competition.
HELD: YES. The evidence presented to the Court reveals that there is no distinction as to the use of BIG MAK as a trademark and as a corporate name of the respondent. The wrappers submitted as evidence only used the mark BIG MAK, without any showing that it was in fact part of the corporate name of the respondent. Further, the
respondent failed to substantiate the reason behind the use of the mark as its corporate name. Further still, there was no public notice made by the respondent so as to differentiate its products as against that of the petitioner. The said circumstances prove the intent of the respondent to defraud the petitioner and that of the public.
- - - On the determination of infringement, the dominance test was used as against the holistic test.
- - - Applying the dominancy test, the Court finds that respondent use of the “BIG MAK” mark results in likelihood of confusion. First, “BIG MAK” sounds exactly the same as “BIG MAC.” Second, the first word in BIG MAK is exactly the same as the first word in ‘BIG MAC,” Third, the first two letters in “MAK” are the same as the first two letters in MAC.” Fourth, the last letter in “MAK” while a “K” sounds the same as “C” when the word “MAK” is pronounced, Fifth, in Filipino, the letter “K” replaces “C” in spelling, thus Caloocan is spelled “Kalookan.”
Q - When does trademark infringement constitute competition?
A - Trademark infringement constitutes unfair competition when there is not merely likelihood of confusion, but also actual or probable deception on the public because of general appearance of the goods. ( McDonald’s Corp. vs. LC Bigmak Burger, Inc., supra).
Q - Can there be trademark infringement without unfair competition?
A - There can be trademark infringement without unfair competition as when the infringer discloses on the labels containing the mark that he manufactures the goods, thus preventing the public from being deceived that the goods originate from the trademark owner. (McDonald’s Corp. vs. LC BigMak Burger, Inc., supra).
Q - What is the doctrine of equivalents in patent infringement?
A - The doctrine of equivalents provides that an infringement also takes place when a device appropriates a prior invention by incorporating its innovative concept and, although with some modification and change, performs substantially the same function in substantially the same way to achieve substantially the same result. The doctrine equivalents thus require satisfaction of the function-means-and-result test, the patentee having the burden to show that all three components of such equivalency test are met. (Smith Kline Beckman Corp. vs. Court of Appeals, August 14, 2003, 409 SCRA 33).
MC DONALD’S CORPORATION vs. MAC JOY FAST FOOD CORPORATION
G.R. No. 166115, February 2, 2007, 514 SCRA 95
FACTS: Mac Joy Fastfood Corporation filed an application for the registration of the trademark “MACJOY & DEVICE” for fried chicken, chicken barbeque, burgers, fries, spaghetti, palabok, tacos, sandwiches, halo-halo and steaks. Mc Donald’s Corporation opposed the application claiming that the trademark “MACJOY & DEVICE” so resembles its corporate logo, otherwise known as the Golden Arches or “M” design, and its other marks which would confuse or deceive purchasers into believing that the goods originate from the same source or origin.
Mac Joy averred that it has used the mark “MACJOY” for the past many years in good faith and spent considerable amount for the mark’s promotion, especially in Cebu City where it has been doing business long before the Mc Donald’s opened its outlet thereat sometime in 1992.
ISSUE: Whether or not there is a confusing similarity between the MCDONALD’s marks and “MACJOY & DEVICE” trademark when applied to food and food ingredients.
HELD: YES. In determining similarity and likelihood, jurisprudence has developed two tests, the dominancy test and the holistic test. The dominancy test focuses on the similarity of the prevalent features of the competing trademarks that might cause confusion or deception. In contrast, the holistic test requires the court to consider the entirety of the marks as applied to the products, including the labels and packaging, in determining confusing similarity.
Applying the dominancy test, “MCDONALD’S” and “MACJOY” marks the confusing similarity with each other such that an ordinary purchaser can conclude an association or relation between the marks. Both marks use the
corporate “M” design, logo and prefixes “Mc” and/or “Mac” as dominant features. Both trademarks are used in the sale of fastfood products. Furthermore MCDonald’s has the right claim over the marks since it has registered them successively in 1971 and 1977, while Macjoy’s application for the registration of its trademark was filed only in 1991.
REGISTRATION OF IDENTICAL MARKS
TAIWAN KOLIN CORPORATION vs. KOLIN ELECTRONICS COMPANY
G.R. No. 209843, March 25, 2015, 754 SCRA 556
FACTS: On February 29, 1996, Taiwan Kolin filed with the Intellectual Property Office (IPO) a trademark application for the use of “KOLIN” on its televisions and DVD players which are a combination of goods falling under Class 9 of the Nice Classification (NCL).
On July 13, 2006, Kolin Electronics opposed the application alleging that the mark Taiwan Kolin seeks to register is identical, if not confusing similar, with its “KOLIN” mark previously registered on November 23, 2003 covering products, e.g., automatic voltage regulator, converter, recharger and the like which are also under Class 9 of NCL.
Kolin Electronics “KOLIN” registration was the subject of a prior legal dispute between the same parties. Kolin Electronics “KOLIN” own application was opposed by Taiwan Kolin which claimed that Kolin was the prior registrant and user of the said trademark having registered the same in Taiwan in 1988.
ISSUE: Whether Taiwan Kolin is entitled to the registration of the mark “KOLIN” over its specific goods of television and DVD player.
HELD: YES. Taiwan Kolin is entitled to register the trademark “KOLIN.” The uniformity of categorization by itself does not automatically preclude the registration of what appears to be an identical mark. Such circumstance does not necessarily result in trademark infringement.
Categorization in the NCL is not the sole and decisive factor in determining a possible violation of intellectual property right.
The Hornbook Doctrine states that emphasis should be on the similarity of the products involved and not on the arbitrary classification of general description of their properties or characteristics.
The mere fact that one person has adopted and used a trademark on his goods would not, without more, prevent the adoption and the use of the same trademark by others on unrelated articles of a different kind.
In this case, the products covered by Taiwan Kolin’s application and Kolin Electrtonics’ registration are unrelated. Following the Mighty Corporation Doctrine, goods should be treated against several factors before arriving at a sound conclusion on the question of relatedness and the classification of the products under NCL is merely a part and parcel of the factors to be considered.
It is not sufficient to state that the goods under consideration are electronics products under Class 9 of the NCL. Furthermore, the ordinary intelligent buyer is not likely to be confused since the products are electronics products, relatively luxury items not easily considered affordable. The casual buyer is predisposed to be more cautious and discriminating in and would prefer to mull over his purchase.
Therefore, Taiwan Kolin is entitled to the registration of the mark “KOLIN” over its televisions and DVD players.
LEVI STRAUSS (PHIL.), INC. vs. VOGUE TRADERS CLOTHING COMPANY
462 SCRA 52, G.R. No. 132993, June 29, 2005
Q: What are the remedies of an owner of a registered mark?
A: Action for infringement and/or action for unfair competition or damages, with Injunction.
Q: May an action for infringement or unfair competition with Injunction and damages proceed independently of an administrative action for cancellation of the registered trademark?
A: YES. It bears stressing that an action for infringement or unfair competition, including the available remedies of injunction and damages, can be filed in the regular courts and can proceed independently or simultaneously with an action for the administrative cancellation of a registered trademark in the BPTTT. As applied to the present case, petitioner’s prior filing of two inter partes cases against the respondent before the BPTTT for the cancellation of the latter’s trademark registration, namely, “LIVE’S” and “LIVE’S Label Mark” does not preclude petitioner’s right (as a defendant) to include in its Answer (to respondent’s complaint for damages) a counterclaim for infringement with a prayer for the issuance of a writ of preliminary injunction.
Q: What is the nature of unfair competition?
A: More importantly, the crime of Unfair Competition punishable under Article 189 of the Revised Penal Code is a public crime. It is essentially an act against the State and it is the latter which principally stands as the injured party. The complainant’s capacity to sue in such case become immaterial. (Melbarose R. Sasot vs. People of the Philippines, G.R. No. 143193, June 29, 2005 462 SCRA 138).
UNFAIR COMPETITION
SHANG PROPERTIES REALTY CORPORATION vs. ST. FRANCIS DEVELOPMENT CORPORATION
G.R. No. 190706, July 21, 2014, 730 SCRA 275
FACTS: St. Francis Development Corporation (SFDC), a domestic corporation engaged in the real estate business and the developer of St. Francis Square Commercial Center in Ortigas Center, filed complaint for unfair competition against Shang Properties Realty Corporation (Shang) before the IPO - Bureau of Legal Affairs due to Shang’s use and filing of applications for the registration of the marks “THE ST. FRANCIS TOWER” and “THE ST. FRANCIS SHANGRILA PLACE” for use relative to Shang’s business, particularly the construction of permanent buildings or structures for residential and office purposes.
SFDC alleged that (1) it used “ST. FRANCIS: to identify numerous property development projects in Ortigas Center and (2) as a use of its continuous projects in Ortigas Center and real estate business, it has gained substantial goodwill with the public that consumers and traders closely identify the mark with its property development projects.
On the other hand, Shang contended that the mark with its property cannot be exclusively owned by SFDC since the marks is geographically descriptive of the goods or services for which it is intended to be used.
ISSUES:
(1) Whether the Shang Properties is guilty of unfair competition.
(2) Whether the mark “ST. FRANCIS” acquires a secondary meaning warranting SFDC’s right to its exclusive use.
HELD: (1) NO. Shang is not guilty of unfair competition. Unfair competition is the passing off (of palming off) or attempting to pass off upon the public of the goods or business of one person as the goods or business of another with the end and probable effect of deceiving the public.
In other words, it is when he gives his goods the general appearance of the goods of his competitors with the intention of deceiving the public, that the goods are those of his competitor.
In this case, the elements of fraud is wanting, hence, there can be no unfair competition.
There is no evidence that (1) Shang gave their goods/services the general appearance that it was SFDC which offering the same to the public (2) Shang employed any means to induce SFDC’s goods/services;
and (3) Shang made any false statement or commit acts tending to discredit the goods/services offered by SFDC.
The mark “ST. FRANCIS” is geographically descriptive in nature, thus, it cannot be exclusively appropriated unless a secondary meaning is acquired. Therefore, Shang is not guilty of unfair competition.
(2) NO. The mark ‘ST. FRANCIS” did not acquire secondary meaning. Descriptive geographical terms are in the public domain in the sense that every seller should have the right to inform customers of the geographical origin of his goods.
A geographical descriptive term is any noun or adjective that designates geographical location and would tend to be regarded by buyers as descriptive of geographic location of origin of the goods or services. A geographically descriptive term can indicate any geographic location on earth, such as continents, nations, regions, states, cities, streets and addresses.
Under Section 123.2 of the IP Code, specific requirements have to be met in order to conclude that geographically descriptive mark has acquired secondary meaning, to wit: (a) the secondary meaning must have arisen as a result of substantial commercial use of a mark in the Philippines; (b) such use must result in the distinctiveness of the mark insofar as the goods or the products are concerned; and (c) proof of substantially exclusive and continuous commercial use in the Philippines for five (5) years before the date on which the claim of distinctiveness is made. Unless secondary meaning has been established, a geographically descriptive mark, due to its general public domain classification, is perceptibly disqualified from trademark registration.
In this case, SFDC was not able to prove its compliance with the above-mentioned requirements. While it is true that SFDC had been using the mark since 1992, its use thereof has been merely confined to its realty projects within the Ortigas Center. As its use thereof has been merely confined to a certain locality.
JESSIE CHING vs. WILLIAM M. SALINAS
G.R. No. 161295, June 29, 2005, 462 SCRA 241
Q: Define trademark, copyright and patents and briefly distinguish them from each other.
A: Trademark, copyright and patents are different intellectual property rights that cannot be interchanged with one another. A trademark is any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked container of goods. In relation thereto, a trade name means the name or designation identifying or distinguishing an enterprise. Meanwhile, the scope of a copyright is confined to literary and artistic works which are original intellectual creations in the literary and artistic domain protected from the moment of their creation. Patentable inventions, on the other hand, refer to any technical solution of a problem in any field of human activity which is new involves an inventive step and is industrially applicable.
Q: What is a utility model?
A: A utility model is a technical solution to a problem in any field of human activity which is new and industrially applicable. It may be, or may relate to, a product, or process, or an improvement of any of the aforesaid. Essentially, a utility model refers to an invention in the mechanical field. This is the reason why its object is sometimes described as a device or useful object. A utility model varies from an invention, for which a patent for invention is, likewise, available, on at least three aspects: first, the requisite of “inventive step” in a patent for invention is not required; second, the maximum term of protection is only seven years compared to a patent which is twenty years, both reckoned from the date of the application; and third, the provisions on utility model dispense with its substantive examination and prefer for a less complicated system.
Q: When are useful articles and works of industrial design copyrightable?
A: Indeed, while works of applied art, original intellectual, literary and artistic works are copyrightable, useful articles and works of industrial design are not. A useful article may be copyrightable only if and only to the extent that such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of the utilitarian aspects of the article.
ELIDAD KHO vs. HON. ENRICO LANZANAS
G.R. No. 150877, May 4, 2006, 489 SCRA 444
ONLY THE CREATOR OF THE MARK MAY REGISTER IT IN HIS NAME
Kho is not the author of the trademark “Chin Chun Su” and his only claim to the use of the trademark is based on the Deed of Agreement executed in his favor by Quintin Cheng. By virtue thereof, he registered the trademark in his name. The registration was a patent nullity because Kho is not the creator of the trademark “Chin Chun Su” and, therefore, has no right to register the same in his name. Furthermore, the authority of Cheng to be the sole distributor of Chin Chun Su in the Philippine had already been terminated by Shun Yih Chemistry. Withal, he had no right to assign or to transfer the same to Kho.
COMPANIA GENERAL DE TABACOS DE FILIPINAS vs. SEVENDAL
G.R. No. 161051, July 23, 2009, 593 SCRA 593
FACTS: Tabacalera is a foreign corporation and duly registered with the Bureau of Patents and Trademarks Technology and is primarily engaged in the manufacture and sell of cigars and cigarettes using the Tabacalera trademarks. On the other hand, Gabriel Ripoli, Jr. was an employee of Tabacalera for 28 years and was General Manager before he retired in 1993. Upon retirement, he organized Tabaqueria, a domestic corporation engaged in the manufacture of tobacco products like cigars.
Tabacalera filed a complaint with the DTI and sought the issuance of a preliminary order requiring Tabaqueria to refrain from manufacturing, distributing and/or selling Tabaqueria products because the same attributed to the alleged 26% dropped of Tabacalera’s sales as a result of a confusion created in the minds of the public into believing that the Tabaqueria’s cigars are the same or are somehow connected with the Tabacalera.
However, Tabaqueria opposed the issuance of the injunctive relief on the ground that Tabacalera’s allegation of unfair competition is unproved and unsubstantiated. Besides, Tabacalera failed to establish the elements required for the issuance of an injunctive writ.
ISSUE: Whether Tabaqueria is guilty of unfair competition thus writ of preliminary injunction should be issued.
HELD: NO. In order that an injunctive relief may be issued, the applicant must show that: (1) the right of the complainant is clear and unmistakable; (2) the invasion of the right sought to be protected is material and substantial and; (3) there is an urgent and paramount necessity for the issuance of the writ to prevent serious damage.
In the case at bench, Tabacalera has failed to show that there is an urgent and paramount necessity for the issuance of the writ to prevent serious damage. Tabacalera failed to substantiate its claim that the abrupt drop in sales was the result of the acts complaint of against Tabaqueria from the alleged infringement of its trademark.
Clearly, it is incumbent upon Tabacalera to support with evidence its claim for the issuance of a preliminary injunction.
REPUBLIC GAS CORPORATION vs. PETRON CORPORATION
G.R. No. 194062, June 17, 2013, 698 SCRA 666
FACTS: Regasco is an entity duly licensed to engage in, conduct and carry on, the business of refilling, buying, selling, distributing and marketing at wholesale and retail of Liquefied Petroleum Gas (“LPG”).
The Regasco LPG Refilling Plant in Malabon was engaged in the refilling and sale of LPG cylinders bearing the registered marks of Gasul and Shellane.
ISSUE: Whether Regasco is liable for trademark infringement and unfair competition.
HELD: YES. The mere unauthorized use of a container bearing a registered trademark in connection with sale, distribution or advertising of goods or services which is likely to cause confusion, mistake or deception among the buyers or consumers can be considered as trademark infringement.
Passing off takes place where the defendant, by imitative devices on the general appearance of the goods, misleads prospective purchasers into buying his merchandise under the impression that they are buying that of his competitors. Thus, the defendant gives his goods the general appearance of the goods of his competitor with the intention of deceiving the public that the goods are those of his competitor.
The mere use of those LPG cylinders bearing the trademarks “GASUL” and “SHELLANE” will give the LPGs sold by REGASCO the general appearance of its products.
VICTORIO P. DIAZ vs. PEOPLE & LEVI STRAUSSS PHIL. INC.
G.R. No. 180677, February 18, 2013, 691 SCRA 139
FACTS: Levi’s Philippines received information that Diaz was selling counterfeit LEVI’S 501 jeans in his tailoring shops and he was not authorized to make and sell these jeans.
On the other hand, Diaz claimed that he did not manufacture Levi’s jeans and that he used the label “LS JEANS TAILORING” in the jeans that he made and sold; that the label ‘LS JEANS TAILORING” was registered with the IPO; that his shops received clothes for sewing or repair; that his shops offered made-to-order jeans, whose styles or designs were done in accordance with instructions of the customers; that “LS” stood for “Latest Style;” and that the leather patch on his jeans had two buffaloes, not two horses.
ISSUE: Whether Diaz is guilty of trademark infringement.
HELD: NO. Diaz is not guilty of trademark infringement.
The likelihood of confusion is the gravamen of the offense of trademark infringement. There are two test to determine likelihood of confusion, namely: the dominance test and the holistic test. The holistic test is applicable here. Accordingly, the jeans trademarks of Levi’s Philippines and Diaz must be considered as a whole in determining the likelihood of confusion between them.
There was no likelihood of confusion between trademarks involved in this case:
Diaz used the trademark “LS JEANS TAILORING” for the jeans he produced and sold in his tailoring shops. His trademark was visually and aurally different from the trademark “LEVI’S STRAUSS & CO” appearing on the patch of original jeans under the trademark “LEVI’S 501.” The word “LS” could not be confused as a derivative from “LEVI’S STRAUSS” by virtue of the “LS” being connected to the word ‘TAILORING,’ thereby openly suggesting that the jeans bearing the trademark “LS JEANS TAILORING” came or were bought from the tailoring shops of Diaz, not from the malls or boutique selling original LEVI’S 501 jeans to the consuming public.
Other remarkable difference between two trademarks that the consuming public would easily perceive is that LEVI’S used two horses design while Diaz used the “buffalo designs.” A horse and a buffalo are two different animals which an ordinary customer can easily distinguish.
DISTINCTIONS OF UNFAIR COMPETITION AND TRADEMARK INFRINGEMENT
ROBERTO CO vs. KENG HUAN JERRY YEUNG
G.R. No. 212705, September 10, 2014, 735 SCRA 66
FACTS: Greenstone Medicated Oil is a traditional Chinese medicine manufactured by Greenstone Pharmaceutical owned by Jerry Yeung and exclusively imported and distributed in the Philippines by Taka Trading owned by Yeung’s wife, Emma.
On April 24, 2000, Ruivivar, Emma’s brother, bought a bottle of Greenstone from Royal Chinese Drug Store. However, when he used the product, Ruivivar doubted its authenticity considering that it had a different smell and the heat it produced was not as strong as the original Greenstone he frequently used.
Investigations showed that Co offered the products in April 2000 as “Tienchi Fong Sap Oil Greenstone” to Royal Chinese Drug Store which caused confusion and deception to the public.
ISSUES: Is Co guilty of (1) Unfair Competition and (2) Trademark Infringement?
HELD: (1) YES. Unfair competition is the passing off (or palming off) or attempting to pass off upon the public of the goods or business of one person as the goods or business of another with the end and probable effect of deceiving the public.
This takes place where the defendant gives his goods the general appearance of the goods of his competitor with the intention of deceiving the public that the goods are those of his competitor.
In this case, Co conspired with the Royal Chinese Drug Store in the sale/distribution of counterfeit Greenstone products to the public, which were packaged in bottles identical to that of the original, thereby giving rise to the presumption of fraudulent intent.
(2). NO. Trademark infringement and Unfair Competition are two distinct suits:
(a) the former is the unauthorized use of a trademark, whereas the latter is the passing off one’s goods as those of another.
(b) fraudulent intent is unnecessary in the former, while it is essential in the latter.
(c) in the former, prior registration of the trademark is pre-requisite to the action, while it is not necessary in the latter. Thus the registration of the trademark is essential in the trademark infringement case.
In this case, the registration of the mark “GREENSTONE” was not proven to have existed during the time the acts complained of were committed.
10. INSURANCE
TRIPLE-V FOOD SERVICES, INC. vs. FILIPINO MERCHANTS INSURANCE CO.
G. R. No. 160544, February 21, 2005
FACTS: A certain Mary Joanne De Asis dined at petitioner’s Kamayan Restaurant. De Asis was using the car assigned to her by her employer Crispa Textile Inc. On the said date, De Asis availed of the valet parking service of petitioner. A corresponding parking ticket was issued as receipt for the car. The car was then parked by petitioner’s valet attendant at the designated parking area. Few minutes later, Madridano noticed that the car was not in its parking slot and its key no longer in the box where valley attendants usually keep the keys of the cars entrusted to them. The car was never recovered. Thereafter, Crispa filed a claim against the insurer, herein respondent Filipino Merchants Insurance Co. Inc. (FMICI). Having indemnified Crispa for the loss of the subject vehicle, FMICI, as subrogee to Crispa’s rights, filed with the RTC an action for damages against petitioner Triple-V Food Services, Inc.
Petitioner challenged FMICI’s subrogation to Crispa’s right to file a claim for the loss of the car, arguing that theft is not a risk insured against under FMICI’s insurance policy for the subject vehicle.
ISSUE: Whether FMICI was validly subrogated to Crispa’s right against petitioner under the insurance policy it issued.
HELD: YES. Petitioner’s argument that there no valid subrogation of rights between Crispa and FMICI because theft was not a risk insured against under FMICI Insurance Policy holds no water because it contains among other things, the following item: “Insured Estimated Value of Scheduled Vehicle – P800,000”. On the basis of such item, the coverage includes a full comprehensive insurance of the vehicle in case of damage or loss. Besides, Crispa paid a premium of P10,304 to cover theft. This is clearly shown in the breakdown of premiums in the same policy. Thus, having indemnified CRISPA for the stolen car, FMICI, was properly subrogated to Crispa’s right against petitioner, pursuant to Article 2207 of the New Civil Code.
INSURABLE INTEREST
A vendor or seller retains an insurable interest in the property until full payment of the value of the delivered goods. Unlike the civil law concept of res perit domino, where ownership is the basis for consideration of who bears the risk of loss, in property insurance, one’s interest is not determined by concept of title, but whether insured has substantial economic interest in the property. (Gaisano Cagayan, Inc. vs. Insurance Company of North America, G.R. No. 147839, June 8, 2006, 490 SCRA 286).
BURDEN IS UPON THE INSURER TO PROVE THAT
THE CAUSE OF LOSS WAS AN EXCEPTED RISK
The “burden of proof” refers to the duty of the insured to show that the loss/damages is covered by the policy. Thus, it is sufficient for the insured to prove the fact of damage/loss after or for which is not liable. (DBP Pool of Accredited Insurance Companies vs. Radio Mindanao Network, Inc. G.R. 147039, January 27, 2006, 480 SCRA 314).
BREACH OF WARRANTY; WAIVER; DOUBLE INTEREST
Section 74 of the Insurance Code provides that violation of a material warranty or other material provision of a policy on the part of either party thereto, entitles the other to rescind. However, for the breach of a warranty to avoid a policy, the same must be duly shown by the party alleging the same. Breach of a warranty or of a condition renders the contract defeasible at the option of the insurer, but if he so elects, he may waive his privilege and power to rescind by the mere expression of an intention to do so. In that event his liability under the policy continues as before. The insurer’s renewal of the policy is a clear intention of its waiver of the alleged breach by the insured.
An award of double interest is lawful and justified under Section 243 and 244 of the Insurance Code. The term “double interest” can only be interpreted to mean twice the legal rate of interest of 12% per annum or 24% per annum interest. (Prudential Guarantee and Assurance Inc. vs. Trans-Asia Shipping Line, G.R. No. 151890, June 20, 2006, 491 SCRA 411).
PROBLEM: X wanted to procure life insurance over Y, his son, a new lawyer. X comes to you for advice as to whether he may still insure his son who is no longer a minor and is now married. What will be your advice?
ANSWER: X may insure the life of Y, his son. Every person has an insurable interest over the life of his child. The law does not distinguish whether the child is a minor or whether he is already married.
PROBLEM: A insured the life of his wife, B. Their relationship turned sour and they sought judicial dissolution of their marriage. B died after the degree of annulment was issued by the court.
QUESTIONS:
a. Can A claim the proceeds of the insurance policy?
b. Assume that what was sought by the parties was legal separation, and not annulment, can A claim the proceeds upon the death of B?
ANSWERS:
a. YES. A can recover the proceeds because he has insurable interest over the life of B at the time the insurance was obtained.
b. YES. A decree of legal separation does not severe the marital bond. It merely allows A & B to live separately from bed and board. A has insurable interest over B at the time the insurance took effect, and upon the latter’s death. A can claim the proceeds of the policy.
PROBLEM: John insured the life of his debtor, Peter, for P1 Million, the amount of the obligation. On April 1, 2013, Peter fully paid his debt. On May 12, 2013, Peter died of a car accident.
QUESTIONS:
a. Is the insurer bound to pay John the insurance proceeds?
b. May the heirs of Peter claim the proceeds?
ANSWERS:
a. NO. The insurable interest of John over the life of Peter ceased upon full payment of the debt.
b. The heirs of Peter cannot claim the proceeds. There is no privity of contract between them and the insurer.
INCONTESTABILITY CLAUSE
MANILA BANKERS LIFE INSURANCE CORPORATION vs. CRESENCIA P. ABAN
G.R. No. 175666, July 29, 2013, 702 SCRA 417
FACTS: On July 3, 1993, Delia took out a life insurance policy from Bankers Life designating Cresencia, her niece, as her beneficiary.
On April 10, 1996, when the insurance policy had been in force for more than two years and seven months, Delia died.
Cresencia filed a claim for the insurance proceeds on July 9, 1996. Bankers Life conducted an investigation into the claim and came out with the finding that Delia did not personally apply for insurance coverage as she was illiterate and sickly.
ISSUE: Whether Bankers Life is barred by the incontestability clause provision of the Insurance Code.
HELD: YES. Section 48 of the Insurance Code provides that an insurer is given two years from the effectivity of a life insurance contract and while the insured is alive - to discover or prove that the policy is void ab initio or is rescindable by reason of the fraudulent concealment or misrepresentation of the insured or his agent.
After the two-year period lapses, or when the insured died within the period, the insurer must make good on the policy, even though the policy was obtained by fraud, concealment or misrepresentation.
Section 48 regulates both the actions of the insurers and prospective takers of life insurance.
CONCEALMENT MUST BE SATISFACTORILY PROVED
MANULIFE PHILIPPINES, INC. vs. HERMENEGILDA YBANEZ
G.R. No. 204736, November 28, 2016, 810 SCRA 516
FACTS: Petitioner Manulife issued in favor of insured Dr. Gumersindo Solidum Ybanez insurance policies. When one of the subject insurance policies had been in force for only one year and three months, the insured died.
Thus, respondent, the insured wife as beneficiary, filed a claim under the said insurance policies. Petitioner, upon investigation concluded that the insured misrepresented or concealed material facts at the time the subject insurance policies were applied for.
Averring that the insured concealed the fact that he was repeatedly confined in the Cebu Doctor Hospital within the last five years prior to the application of the insurance policy. Manulife prays for the rescission of the insurance contracts and denied the claims on those policies.
During trial, Manulife presented Ms. Victoriano, the senior manager of its Claims and Settlements Department, who identified several documents as evidence to prove concealment.
ISSUE
Whether Manulife’s complaint for rescission of the insurance contracts on ground of concealment and misrepresentation should prosper.
RULING
NO, Manulife utterly failed to prove that the insured had committed the alleged misrepresentation or concealment of material facts.
Concealment as a ground for rescission must be satisfactorily and convincing proved before Manulife can validly sue for rescission of insurance contracts.
Fraudulent intent on the part of the insured must be established to rescind the contract. Misrepresentation as a defense of the insurer to avoid liability is an affirmative defense and the duty to establish such defense by satisfactory and convincing evidence rests upon the insurer.
The hospital’s medical records that might have established the insured’s purported misrepresentation or concealment was inadmissible for being hearsay. Manulife’s sole witness, Ms. Victoriano, merely perfunctorily identified the documentary exhibits, she never testified in regard to the circumstances attending the execution of these documentary exhibits much less in regard to its contents.
Manulife failed to present the physician or any responsible official of the hospital who could confirm or attest to the due execution and authenticity of the alleged medical records.
For failure of Manulife to prove intent to defraud on the part of the insured, it cannot validly sue for rescission of insurance contracts.
11. NEGOTIABLE INSTRUMENT
SAMSUNG CONSTRUCTION CO. vs. FAR EAST BANK & TRUST CO.
G.R. No. 129015, August 13, 2004, 436 SCRA 402
FACTS: Plaintiff maintained a current account with respondent FEBTC. The sole signatory to plaintiff’s account was Jong, its Project Manager, while the checks remained in the custody of the company’s accountant, Kyu. A certain Roberto Gonzaga presented for payment FEBTC check payable to cash and drawn against the Samsung’s current account, in the amount of P999,500.00 had been encashed upon submission of proof of identity and three (3) identification cards. The following day, Kyu, examined the balance of the bank account and discovered that a check in the amount of P999,500.00 had been encashed. As the last blank check was missing, Jong learned that his signature was forged.
ISSUE: Whether a bank which pays out on a forged check is liable to reimburse the drawer from whose account the funds were paid out.
HELD: YES. The general rule is to the effect that a forged signature is “wholly inoperative” and payment made “through or under such signature” is ineffectual or does not discharge the instrument. If payment is made, the drawee cannot charge it to the drawer’s account. The traditional justification for the result is that the drawee is in a superior position to detect a forgery because he has the maker’s signature and is expected to know and compare it. The rule has a healthy cautionary effect on banks by encouraging care in the comparison of the signatures against those on the signature cards they have on file. Moreover, the very opportunity of the drawee to insure and to distribute the cost among its customers who use checks makes the drawee an ideal party to spread the risk to insurance.
- - - Under Section 23 of the Negotiable Instrument Law, forgery is a real or absolute defense by the party whose signature is forged. On the premise that Jong’s signature was indeed forged, FEBTC is liable for the loss since it authorized the discharge of the forged check. Such liability attaches even if the bank exerts due diligence and care in preventing such faulty discharge. Forgeries often deceive the eye of the
most cautious experts; and when a bank has been so deceived, it is a harsh rule which compels it to suffer although no one has suffered by its being deceived. The forgery may be so near like the genuine as to defy detection by the depositor himself and yet the bank is liable to the depositor if it pays the check.
- - - The general rule remains that the drawee who has paid upon the forged signature bears the loss. The exception to this rule arises only when negligence can be traced on the part of the drawer whose signature was forged, and the need arises to weigh the comparative negligence between the drawer and drawee to determine who should bear the burden of loss. The Court finds no basis to conclude that Samsung was negligent in the safekeeping of its checks. For one, the settled rule is that the mere fact that the depositor leaves his check book lying around does not constitute such negligence as will free the bank from liability to him, where a clerk of the depositor or other persons taking advantage of the opportunity, abstract some of the check blanks, forges the depositor’s signature and collect on the checks from the bank. And for another, in point of fact Samsung was not negligent at all since it reported the forgery almost immediately upon discovery.
VALIDITY AND NEGOTIABLE CHARACTER OF AN INSTRUMENT
With respect to Check No. 0084078, however, which was drawn against another account of Llano, albeit the date of issue bears only the year – 1999, its validity and negotiable character at the time the complaint was filed was not affected. Section 6 of the Negotiable Instrument Law provides that “the liability and negotiable character of an instrument are not affected by the fact that -- (a) it is not dated; or (b) Does not specify the value given, or that any value had been given therefore, or (c) Does not specify the place where it is drawn or the place where it is payable; or (d) Bears a seal; or (e) Designate a particular kind of current money in which payment is to be made (Victoria J. Ilano vs. Hon. Dolores Español, G.R. No. 161758, December 16, 2005, 478 SCRA 365)
AN INCOMPLETE BUT DELIVERED INSTRUMENT
ALVIN PATRIMONIO vs. NAPOLEON GUTIERREZ & MARASIGAN
G.R. No. 187769, June 4, 2014, 724 SCRA 636
FACTS: Alvin and Napoleon entered into a business venture under the name “Slam Dunk Corporation.”
In the course of their business, Alvin pre-signed several checks, which had no payee’s name, date or amount, to answer for the expenses of Slam Dunk.
The blank checks were entrusted to Napoleon with the specific instruction not to fill them out without previous notification to and approval by Alvin.
In the middle of 1993 without Alvin’s knowledge and consent, Napoleon went to Marasigan to secure a loan stating that Alvin needed the money for the construction of his house.
Marasigan acceded to Napoleon’s request and gave him P200,000.00. In exchange, Napoleon simultaneously delivered to Marasigan one of the blank checks pre-signed by Alvin with the blank portion filled out with the words “Cash,” “Two Hundred Thousand Pesos Only,” the amount “P200,000.00” and dated “May 24, 1994.”
When Marasigan deposited the check, it was dishonored for the reason “ACCOUNT CLOSED.”
Marasigan sought recovery from Napoleon and Alvin sending several demand letters for the payment of the loan but to no avail prompting Marasigan to file a criminal case for violation of B.P. 22 against Alvin.
Alvin filed a complaint for declaration of nullity of loan and damages against Napoleon and Marasigan. He denied authorizing the loan or the check’s negotiation and asserted that he was not privy to the parties’ loan agreement.
ISSUES:
(1) Whether Alvin is liable for the dishonor of the check he pre-signed.
(2) Whether Marasigan is a holder in due course.
HELD: (1) NO. Alvin is not liable. Under Section 14 of the Negotiable Instrument Law, if the maker or drawer delivers a pre-signed blank paper to another person for the purpose of converting it into a negotiable instrument, that person is deemed to have prima facie authority to fill it up.
In order, however, that any such instrument when completed may be enforced against any person who became a party thereto prior to its completion, two requisites must exist: (1) that the blank must be filled strictly in accordance with the authority given; and (2) it must be filled up within a reasonable time.
If it was proven that the instrument had not filled up strictly in accordance with the authority given and within a reasonable time, the maker can set this up as a personal defense and avoid liability.
In this case, Napoleon exceeded his authority to fill up the blanks and use the check which was limited to the use of the checks for the operation of their business and on condition that Alvin’s prior approval must be first secured.
While Napoleon had a prima facie authority to complete the check, such prima facie authority does not extend to its use, i.e., subsequent transfer or negotiation, once the check is complete. There is no evidence that Napoleon ever secured prior approval from Alvin to fill up the blank o r to use the check.
(2) NO. Marasigan is not a holder in due course. Under Section 52 (c) of the NIL, states that a holder in due course is one who takes the instrument “in good faith and for value.”
It also provides in Section 52 (d) that in order that one may be a holder in due course, it is necessary that at the time it was negotiated to him, he has no notice of any infirmity in the instrument or defect in the title of the person negotiating it.
Acquisition in good faith means taking without knowledge or notice of equities of any sort which could beset up against a prior holder of the instrument. It means that he does not have any knowledge of fact which would render it dishonored for him to take a negotiable paper. The abuse of the defense, when the instrument was taken, is the essential element of good faith.
In the present case, Marasigan’s knowledge that Alvin is not a party or a privy to the contract of loan, and correspondingly had no obligation to him, renders him dishonest, hence, in bad faith.
HOLDER NOT IN DUE COURSE
RCBC SAVINGS BANK vs. NOEL M. ODRADA
G.R. No. 219037, October 19, 2016, 806 SCRA 646
FACTS: In April 2002, respondent Odrada sold a second hand Mitsubishi Montero to Lim for P1,510,000. Lim initially paid P510,000 and the balance was to be paid by RCBC thru a car loan.
When RCBC received the OR and CR from Odrada, it issued two manager’s checks payable to Odrada for P900,000 and P13,500 and turned it over to Odrada.
Before the checks were presented to the bank, Lim notified Odrada that there was an issue regarding the roadworthiness and hidden defects of the Montero. Lim further instructed Odrada not to encash the manager’s checks until his complaints are clarified and satisfied.
Without addressing Lim’s concern, Odrada deposited the manager’s checks with IBank and redeposited them. However, the checks were dishonored both times apparently upon Lim’s instruction to RCBC. Odrada was also notified by RCBC the previous day of the cancellation of Lim’s auto loan.
ISSUES
1) Whether Odrada is a holder in due course.
2) Whether RCBC may interpose a personal defense to refuse payment.
RULINGS
1) NO, respondent Odrada is not a holder in due course because he did not acquire the instrument in good faith.
To be a holder in due course, the law requires that a party must have acquired the instrument in good faith and for value.
Good faith means that the person taking the instrument has acted with due honesty with regard to the rights of the parties liable on the instrument and that at the time he took the instrument, the holder has no knowledge of any defect or infirmity of the instrument. To constitute notice of an infirmity in the instrument or defect in the title of the person negotiating the same, the person to whom it is negotiated must have had actual knowledge of such facts that his action in taking the instrument would amount to bad faith.
Value, on the other hand, is defined as any consideration sufficient to support a simple contract.
In the present case, Odrada attempted to deposit the manager’s checks a day after Lim informed him that there was a serious problem with the Montero. Instead of addressing the issue, Odrada decided to deposit the manager’s checks. Odrada’s action in depositing the manager’s checks despite knowledge of the Montero’s defects amounted to bad faith.
2) YES, RCBC may refuse payment by interposing a personal defense of Lim that the title of Odrada had become defected when there arose a partial failure or lack of consideration.
When Odrada redeposited the manager’s checks, he was already formally notified by RCBC the previous day of the cancellation of Lim’s auto loan transaction.
MARCELO A. MESINA vs. INTERMEDIATE APPELLATE COURT
G.R. No. 70145, November 13, 1986, 229 Phil. 495
FACTS: Jose Go purchased a manager’s check from Associated Bank. As he left the bank, Go inadvertently left the check on top of the desk of the bank manager. The bank manager entrusted the check for
safekeeping to another bank official who at the time was attending to a customer named Alexander Lim.
After the bank official answered the telephone and returned from the men’s room, the manager’s check no longer be found.
After learning that his manager’s check was missing, Go immediately returned to the bank to give a stop payment order on the check.
A third party named Marcelo Mesina deposited the manager’s check with Prudential Bank but the drawee bank sent back the manager’s check to the collecting bank with the words “payment stopped.”
When asked how Mesina got hold of the check, he merely stated that Alexander Lim, who’s already at large, paid the check to him for “a certain transaction.”
ISSUE
Whether Mesina is a holder in due course.
RULING
NO. Admittedly, Mesina became the holder of the manager’s check as endorsed by Alexander Lim who stole the check. Mesina, however, refused to say how and why it was passed to him. He had therefore notice of the defect of his title over the check from the start.
The holder of a manager’s check who is not a holder in due course cannot enforce such check against the issuing bank which dishonors the same. The check in question suffers from the infirmity of not having been properly negotiated and for value by Jose Go, who is the real owner of the said instrument.
Therefore, the issuing bank could validly refuse payment because Mesina is not a holder in due course.
UCPB vs. INTERMEDIATE APPELLATE COURT
G.R. Nos. 72664-65, March 20, 1990, 262 Phil. 397
FACTS: Altura Investors, Inc. purchased a manager’s check from UCPB, which then issued a manager’s check in the amount of P494,000 to Makati Bel-Air Developers, Inc. The manager’s check represented the payment of Altura for a condominium unit it purchased from Makati Bel-Air Developers.
Subsequently, Altura instructed UCPB to hold payment due to material misrepresentations by Makati Bel-Air Developers regarding the condominium unit.
Pending negotiations, and while the stop payment order was in effect, Makati Bel-Air Developers insisted that UCPB pay the value of the manager’s check. UCPB refused to pay and filed an interpleader to allow Altuna and Makati Bel-Air Developers to litigate their respective claims.
ISSUE
Whether UCPB can validly refuse to pay the value of the manager’s check.
RULING
YES. UCPB can validly refuse to pay the value of the manager’s check since Makati Bel-Air Developers’ title to the instrument became defective when there arose a partial failure of consideration.
UCPB could validly invoke a personal defense of the purchaser against Makati Bel-Air Developers because the latter is not a holder in due course of the manager’s check.
NOTICE OF DISHONOR
The notice of dishonor of a check may be sent to the drawer or maker by the drawee bank, the holder of the check, or the
offended party either by personal delivery or by registered mail. The
notice of dishonor to the maker of a check must be in writing. (Alfredo Rigor vs. People of the Philippines, G.R. No. 144887, November 17, 2004).
INDORSEMENT BY TWO OR MORE PAYEES
METROBANK vs. B.A. FINANCE CORPORATION
G.R. No. 179952, December 4, 2009, 607 SCRA 620
FACTS: Bitanga obtained from BA Finance a P329,280 loan. To secure the loan, he mortgaged his car to BA Finance and insured the car against loss, damage and theft with Malayan Insurance.
The car was stolen. On Bitanga’s claim, Malayan Insurance issued a check payable to the order of “B. A. Finance Corporation and Lamberto Bitanga” for P224,500 drawn against China Bank. The check was crossed with notation “For Deposit Payees’ Account.” Without the indorsement or authority of his co-payee, Bitanga deposited the check
to his bank account with Asianbank. He subsequently withdrew the entire proceeds of the check.
BA Finance thereupon demanded the payment of the value of the check from Asianbank but to no avail.
ISSUE: Whether Asianbank as collecting bank liable to BA Finance Corporation.
HELD: YES. The payment of an instrument over a missing indorsement is the equivalent of payment on a forged indorsement or an unauthorized indorsement in itself in the case of joint payees.
Section 41 of the Negotiable Instrument Law provides: “Where an instrument is payable to the order of two or more payees or indorsees who are not partners, all must indorse unless the one indorsing has authority to indorse for the others.
Clearly, Asianbank was negligent when it allowed the deposit of the crossed check despite the lone indorsement of Bitanga, ostensibly ignoring the fact that the check did not carry the indorsement of BA Finance.
MATERIAL ALTERATION
BANK OF AMERICA vs. PHILIPPINE RACING CLUB, INC. (PRCI)
G.R. No. 150228, July 30, 2009, 590 SCRA 301
FACTS: On the second week of December 1988, the President and Vice President of PRCI were scheduled to go out of the country in connection with the corporation’s business. They pre-signed several checks to insure continuity of PRCI’s operation to settle obligations that might become due. These checks were entrusted to the accountant with instructions to make use of the same as the need arises.
On December 16, 1988, a John Doe presented to Bank of America for encashment a couple of PRCI’s checks with indicated value of P110,000 each. The two (2) checks had similar entries with similar infirmities and irregularities. On the space where the name of the payee should be indicated (Pay To The Order Of) the following 2-line entries were instead typewritten: on the upper line was the word “CASH” while the lower line had the following typewritten words, viz: “ONE HUNDRED TEN THOUSAND PESOS ONLY.” Despite the highly irregular entries on the face of the checks, Bank of America encashed said checks.
ISSUE: Whether Bank of America is liable to PRCI for wrongful encashment of the checks.
HELD: YES. Although not in the strict sense “material alterations,” the misplacement of typewritten entries for the payee and the amount on the same blank and the repetition of the amount using a check writer were glaringly obvious irregularities on the face of the check. Clearly, someone made a mistake in filling up the check and the repetition of the entries was possibly an attempt to rectify the
mistake. All these circumstances should have alerted the bank to the possibility that the holder or the person who is attempting to encash the check did not have proper title to the checks or did not have authority to fill up and encash the same.
PROBLEM - Amy borrowed P1,000.00 from Alice as evidenced by a promissory note. The note complied with all the requisites of negotiability, except that Amy did not affix her usual signature thereon as she was very ill at the time she prepared the instrument. Amy wrote “X” on the space intended for the signature of the maker. Is the instrument negotiable?
ANSWER: YES, the letter “X” complies with the requirement that the promissory note must be signed by the maker. In signing with “X,” Amy intended to authenticate the instrument and to be bound by the obligation. The law does not require that the maker affix her usual or customary signature in the promissory note.
QUESTION: State if the following instruments are negotiable or not. Give reasons.
a. “I promise to pay X or order P1,000.00 out of the proceeds of the sale of my house. (Signed) Y.”
b. “I promise to pay Rosario or order P1,000.00 pursuant to the Contract of Sale dated December 20, 2012. (Signed) Arnold.”
c. “I promise to pay to the order of X P1,000.00 subject to the terms and conditions of the contract of mortgage. (Signed) Y.”
d. “I promise to pay to the order of X P1,000.00 payable in two equal monthly installments. (Signed) Y.”
e. “To A: Pay to the order of the bearer P10,000.00 (Signed) X.”
f. “To A: Pay to X or order the sum of P50,000.00 five days after his pet cat, Twinkle, dies. (Signed) Y.”
g. “I promised to pay X or order P1,000.00 25 days after date. (Signed) Y.”
h. “To A: Pay to the order of X P1,000.00 25 days after sight. (Signed) Y.”
ANSWERS:
a. The instrument is non-negotiable because it fixes the fund out of which payment is to be made. Payment is subject to the condition that the sale would materialize, and that the proceeds of the sale would be sufficient to cover the obligations. The promise to pay is conditional, thereby violating Sec. 1 (b) of the NIL.
b. The instrument which was executed “pursuant to the Contract of Sale” is negotiable because this is merely statement of the transaction that gave rise to the obligation and not an indication of the fund from which payment shall be taken.
c. The instrument is burdened by a separate contract rendering it non-negotiable. The holder would have to go beyond the instrument and check the terms and conditions of the contract of mortgage. The separate agreement restricts the instrument.
d. The instrument is not negotiable as it did not comply with the rule on fixing maturity date by installments. If the obligation is payable in installments, the exact amount of each installment and the date when each installment is due must be stated in the instrument. Otherwise, the instrument is non-negotiable as in this case where the due date of each installment was not specified.
e. The instrument is negotiable. An instrument payable to the order of bearer is considered an order instrument. (American National Bank vs. Joe Kerley, 105 Or. 155, 220 Pac. 116; 32 A.L.R. 262).
f. The instrument is negotiable. It is payable at a fixed period after the occurrence of a specified event. The fact that the date when Twinkle would die is uncertain will not militate against negotiability. Death is certain to happen, though the time of happening is uncertain.
g. The instrument is negotiable. It is payable at a fixed period after date. The maturity date is counted 25 days from the date of the instrument. If undated, the 25-day period is reckoned from the date of issuance.
h. The instrument is negotiable. It is payable 25 days after the first presentment for acceptance.
PROBLEM: Lee, the President of SMX Corporation, issued a company check and signed it in his capacity as President as payment of a condominium unit which he purchased for his use. The check was later dishonored by the drawee bank.
QUESTIONS:
a. Is SMX Corporation liable for payment of the obligation?
b. Against whom can the seller of the condominium unit demand payment?
c. Can the seller recover payment from the drawee bank?
ANSWERS:
a. NO. The issuance of the check payment of the condominium unit is an ultra vires act, as it was made beyond the powers of SMX Corporation. This is a real defense that may be set up against any holder, even a holder in due course. SMX may not be held liable for the obligation of its President as it did not authorize the issuance of the check through a board resolution. (Sec. 22, NIL)
b. The seller can demand payment from President Lee. He is personally liable for the issuance of the check.
c. NO. A check by itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank. The bank is not liable to the holder, until and unless it accepts or certifies the check.
NO RIGHT TO RESCIND SALE OF MANAGER’S CHECK
METROBANK, BPI & GLOBAL BANK vs. WILFRED CHIOK
G.R. Nos. 175652, 175302 & 175394, November 28, 2014, 742 SCRA 835
FACTS: Chiok had been engaged in dollar trading for several years. He usually buys dollars from Nuguid at the exchange rate prevailing on the date of the sale.
Chiok pays Nuguid either in cash or manager’s check, to be picked up by the latter or deposited in the latter’s bank account. Nuguid delivers the dollars either on the same day or on a later date as may be agreed upon between them, up to a week later.
Chiok and Nuguid had been dealing in this manner for about six to eight years, with their transactions running into millions of pesos.
For this purpose, Chiok maintained accounts with Metrobank and Global Bank and entered into a Bills Purchase Line Agreement (BPLA).
On July 5, 1995, Chiok deposited the three (3) manager’s checks from Metrobank & Global Bank with an aggregate value of P26,068,035 in Nuguid’s account with BPI. Nuguid was supposed to deliver US$1,022,288.50 as agreed upon.
In the afternoon of the same day, Nuguid, however, failed to do so, prompting Chiok to request that payment on the three (3) checks be stopped.
Chiok was allegedly advised to secure a court order within the 24-hour clearing period, so he filed a complaint with an application for ex parte restraining order or TRO with the RTC against Metrobank and Global Bank.
ISSUES: (1) Is it legally possible for a purchaser of a manager’s check to stop payment?
(2) Can the court deviate from the general principles that manager’s checks are considered as substantially as good as the money they represent in the case?
HELD: (1) NO. Under Art. 1191 of the Civil Code, the right to rescind obligation is implied in reciprocal ones in case one of the obligors should not comply with what is incumbent upon him.
The cause of action, however, is predicated upon the reciprocity of the obligations of the injured party and the guilty party. Thus, the right of rescission can be exercised in accordance with the principle of relativity of contracts under Art. 1131 of the Civil Code.
In this case, when Nuguid failed to deliver the agreed amount to Chiok, the latter had a cause of action against Metrobank and Global Bank that would allow him to rescind the contract of sale of the manager’s checks, which would have resulted in the crediting of the amounts thereof back to Chiok’s checks. However, Metrobank and Global Bank are not parties to the contract.
Neither could Chiok be validly granted a writ of injunction against Metrobank and Global Bank to enjoin said banks from honoring the subject manager’s checks.
An injunction should never issue when an action for damages would adequately compensate the injuries caused. The very foundation of the jurisdiction to issue the writ of injunction rests in the fact that the damage caused are irreparable and that damages would not adequately compensate.
Chiok could have and should have proceeded directly against Nuguid to claim damages for breach of contract and to have the very account where he deposited the subject check be garnished.
If the intention of Chiok was for Nuguid to be allowed to withdraw the proceeds of the checks after clearing, he could have easily deposited personal checks, instead of going through the trouble of purchasing manager’s checks. Chiok actually intended that Nuguid be allowed to immediately withdraw the proceeds of the subject checks.
Therefore, Metrobank and Global Bank are not bound by such contract and cannot be prejudiced by the failure of Nuguid to comply with the terms thereof.
(2) NO. The well-settled concept and principle in commercial law is that manager’s check are primary obligation of the issuing bank and accepted in advance by mere issuance.
They are bank’s order to pay drawn itself, committing in effect its total resources, integrity and honors. Thus, they are regarded substantially as good as the money they represent.
In deviating from general banking principles and disposing the case base on equity, the courts should ensure that it is equitable.
In the case, it was observed that equity was not served. The disposition wherein Nuguid, the person who violated his contract, was absolved from his liability, leaving the banks, who were not parties to the contract, to suffer the losses is not equitable.
Thus, Chiok’s complaint should be denied insofar as it prayed for the withdrawal of the proceeds of the subject checks. Accordingly, the writ of preliminary enjoining Metrobank and Global Bank from honoring the said checks should be lifted.
12. CORPORATION LAW
FILIPINAS BROADCASTING NETWORK, INC. vs. AGO MEDICAL & EDUCATIONAL CENTER - BICOL CHRISTIAN COLLEGE OF MEDICINE
G. R. No. 141994, January 17, 2005, 448 SCRA 413
FACTS: “Expose” is a radio documentary program aired over DZRC-AM which is owned by petitioner FBNI. In two (2) mornings, the program exposed various alleged complaints from students, teachers and parents against respondent AMEC and its administrators. Claiming that the broadcasts were defamatory, AMEC and Ago, Dean of AMEC’s College of Medicine, filed a complaint for damages against FBNI. Respondent corporation alleged, among others, that due to the libelous statements, it is entitled for moral damages.
ISSUE: Whether a corporation is entitled to moral damages.
HELD: YES. A juridical person is generally not entitled to moral damages because, unlike a natural person, it cannot experience physical suffering or such sentiments as wounded feelings, serious anxiety, mental anguish or moral shock. Nevertheless, AMEC’s claim for moral damages falls under item 7 of Article 2219 of NCC. This provision expressly authorizes the recovery of moral damages in cases of libel, slander or any other form of defamation. Article 2219 (7) does not qualify whether the plaintiff is a natural or juridical person. Therefore, a juridical person such as a corporation can validly complain for libel or any other form of defamation and claim for moral damages. Moreover, where the broadcast is libelous per se, the law implies damages. In such a case, evidence of an honest mistake or the want of character or reputation of the party libeled goes only in mitigation of damages. Neither in such a case is the plaintiff required to introduce evidence of actual damages as a condition precedent to the recovery of some damages. In this case, the broadcasts are libelous per se. Thus, AMEC is entitled to moral damages.
CORPORATION NOT LIABLE FOR THE OBLIGATION
OF ITS SUBSIDIARY DESPITE BEING A MAJORITY
STOCKHOLDER OF THE LATTER
A corporation, upon coming into existence, is invested by law with a personality separate and distinct from those persons composing it as well as from any other legal entity to which it may be related. The veil of corporate fiction may only be disregarded in cases where the corporate vehicle is being used to defeat public convenience, justify a wrong, protect fraud or defend crime. Mere ownership by a single stockholder by another corporation of all or nearly all of the capital stock of a corporation is not of itself sufficient ground for disregarding the separate corporate personality. To disregard the separate juridical personality of a corporation, the wrong doing must be clearly and convincingly established (Construction and Development Corporation vs. Rodolfo Cuenca, G.R. No. 163981, August 12, 2005, 446 SCRA 714 )
BOARD RESOLUTION AUTHORIZING CORPORATE OFFICERS
TO SELL PROPERTIES BELONGING TO THE CORPORATON NECESSARY TO MAKE THE SALE BINDING AGAINST THE CORPORATION
While a corporation may appoint agents to negotiate for the sale of its real properties, the final say will have to be with the board of directors through its officers and agents as authorized by a board resolution or by by-laws. An unauthorized act of an officer of the corporation is not binding on it unless the latter ratifies the same expressly or impliedly by its board of directors. Any sale of real property of a corporation by a person purporting to be an agent thereof but without written authority from the corporation is null and void. The declarations of the agent alone are generally insufficient to establish the fact or extent of his/her authority. (Eduardo Litonjua vs. Eternit Corporation, G.R. No. 144805, June 8, 2006, 490 SCRA 204).
**** The certificate of non-forum shopping may be signed, for and on behalf of a corporation, by a specifically authorized lawyer who has personal knowledge of the facts required to be disclosed in such document. (BPI Leasing vs. Court of Appeals, G.R. No. 127624, November 18, 2004)
QUESTION: X Corporation declared cash dividends, upon approval of the Board of Directors. A, a stockholder, questions the declaration on the ground that the approval of the stockholders representing not less than 2/3 of the outstanding capital is necessary for such act. Is A correct?
ANSWER: NO. A corporation may validly declare cash or property dividends, upon approval of the Board of Directors alone. It is only when stock dividends are declared that the consent of the stockholders is needed.
SOLE PROPRIETORSHIP
ALPS TRANSPORTATION and/or ALFREDO E. PEREZ
vs. ELPIDIO M. RODRIGUEZ
G.R. No. 186732, June 13, 2013, 698 SCRA 423
FACTS: Elpidio was employed as a bus conductor of ALPS Transportation, a sole proprietorship owned by Perez. During the course of his employment, Elpidio was terminated as allegedly he had collected bus fares without issuing corresponding tickets to passengers.
The court found that Elpidio was illegally dismissed and he is entitled to the twin remedies of reinstatement and payment of full backwages.
ISSUE: Whether Perez, the owner of ALPS Transportation, is liable for backwages.
HELD: YES. Since ALPS Transportation is a sole proprietorship owned by Perez, it is he who must be held liable for the payment of backwages to Elpidio.
The owner has unlimited personal liability for all the debts and obligations of the business and it is against him that a decision for illegal dismissal is to be enforced.
TRANSFER OF SHARES
FOREST HILLS GOLF & COUNTRY CLUB vs. VERTEX SALES INC.
G.R. No. 202205, March 6, 2013, 692 SCRA 706
FACTS: Forest Hills operates and maintains a golf and country club facility in Antipolo City. Kings and FEGDI owned the shares of stocks of Forest Hills.
FEGDI sold to Asuncion Construction one (1) common share for P1.1 million. Prior to the full payment, Asuncion transferred its interest to Vertex. Asuncion advised FEGDI, in turn, requested Forest Hills to recognize Vertex as a shareholder.
Forest Hills acceded to the request, and Vertex was able to enjoy membership privileges in the gold and country club.
The share remained in the name of FEGDI, prompting Vertex to demand for the issuance of a stock certificate in its name. As its demand went unheeded, Vertex filed a complaint for rescission against Forest Hills and FEGDI.
Forest Hills denied transacting business with Vertex and claimed that it was not a party to the sale of the share.
ISSUE: Whether Forest Hills is under obligation to return the amount paid by Vertex by reason of the sale.
HELD: NO. A necessary consequence of rescission is restitution: the parties to a rescinded contract must be brought back to their original situation prior to the inception of the contract, hence FEGDI must return what it received pursuant to the contract.
Not being a party to the rescinded contract, Forest Hills is under no obligation to return the amount paid by Vertex by reason of the sale.
12. TRANSPORTATION LAW
JAPAN AIRLINES vs. MICHAEL ASUNCION
G.R. No. 161730, January 28, 2005, 449 SCRA 714
FACTS: Respondent left Manila on board Japan Airlines (JAL) Flight 742 bound for Los Angeles. His itinerary included a stopover in Narita and an overnight stay at Hotel Nikko Narita. Upon arrival at Narita, Mrs. Noriko Etou-Higuchi of JAL endorsed his application for shore pass and
directed him to the Japanese immigration official. A shore pass is required of a foreigner aboard a vessel or aircraft who desires to stay in the neighborhood of the port of call for not more than 72 hours.
During his interview, the Japanese immigration official noted that respondent Michael appeared shorter than his height as indicated in his passport. Because of this inconsistency, respondent was denied shore pass entries and was brought instead to the Narita Airport Rest House where he was billeted overnight.
Respondent filed a complaint for damages claiming that JAL did not fully apprise him of his travel requirements and he was rudely and forcibly detained at Narita Airport.
ISSUE: Whether Japan Airlines is guilty of breach of contract of carriage.
HELD: NO. JAL did not breach its contract of carriage with respondent. It may be true that JAL has the duty to inspect whether its passengers have the necessary travel documents, however, such duty does not extend to checking the veracity of every entry in these documents. JAL could not vouch for the authenticity of a passport and the correctness of the entries therein. The power to admit or not an alien into the country is a sovereign act, which cannot be interfered with even by JAL. This is not within the ambit of the contract of carriage entered into by JAL and herein respondents. As such, JAL should not be faulted for the denial of respondent’s shore pass application.
JAL or any of its representatives have no authority to interfere with or influence the immigration authorities. The most that could be expected of JAL is to endorse respondent’s application.
It bears repeating that the power to admit or not an alien into the country is a sovereign act which cannot interfere with even by JAL.
JAPAN AIRLINES vs. JESUS SIMANGAN
552 SCRA 341, G.R. No. 170141, April 22, 2008
FACTS: Simangan decided to donate a kidney to his ailing cousin in Los Angeles, California, USA. He was granted an emergency US visa by the US consulate in Manila. A roundtrip ticket was bought from Japan Airlines (JAL) and was issued corresponding boarding pass. At the date of his flight, he was able to go through immigration and security procedures, but while inside the airplane, JAL’s airline crew suspected Simangan of carrying a falsified travel document and imputed that he would only use the trip to the United States as a pretext to stay and work in Japan. In short, he was haughtily ejected, embarrassed and humiliated in the presence of other passengers and was left behind at the airport. Afterwards, he was informed that his travel documents were, indeed, in order.
ISSUE: Whether JAL is guilty of breach of contract of carriage.
HELD: YES. The fact that Simangan’s plane ticket, boarding pass, travel authority and personal articles already passed the rigid immigration and security routines, JAL, as a common carrier, ought to know the kind of valid documents Simangan carried.
As provided in Article 1755 of the New Civil Code: “A common carrier is bound to carry the passenger safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.
CORNELIO LAMPESA vs. DR. JUAN DE VERA, JR.
545 SCRA 290, G.R. No. 155111, February 14, 2008
FACTS: The passenger jeepney boarded by Dr. de Vera was hit by a truck owned by Lampesa and driven by Dario. The latter was employed by Lampesa as a driver. As a result of the accident, Dr. de Vera lost a finger. Dr. de Vera filed an action for damages against Lampesa, Dario, Felix and Modesto as the truck owner, truck driver, jeepney owner/operator and jeepney driver, respectively.
ISSUE: Whether an employer should be liable for the negligence of his driver while the latter is in the performance of his duty.
HELD: YES. Once negligent on the part of the employee is established, a presumption arises that the employer is negligent in the selection and/or supervision of said employee. To rebut this presumption, the employer must present adequate and convincing proof that he exercised care and diligence in the selection and supervision of his employees.
In this case, both the trial and appellate courts found Dario negligent in maneuvering the truck and ruled that his negligence was the proximate cause of the injury sustained by Dr. de Vera. Lampesa was also held accountable by both courts because he failed to exercise due diligence in the supervision of his driver.
HERMINIO MARIANO, JR. vs. ILDEFONSO C. CALLEJAS
G.R. No. 166640, July 31, 2009, 594 SCRA 569
FACTS: Dr. Frelinda Mariano was the passenger of Celyrosa Express bus. The passenger bus was cruising on its rightful lane along the Aguinaldo Highway when a trailer truck coming from the opposite direction, on full speed, suddenly swerved and encroached on its lane, and bumped the passenger bus on its left portion. Due to the impact, the passenger bus fell on its right side on the right shoulder of the highway and caused the death of Dr. Mariano.
ISSUE: Whether the registered owner and driver of the bus company are liable.
HELD: NO. While the law requires the highest degree of diligence from common carriers in the safe transport of their passengers and creates a presumption of negligence against them, it does not, however, make the carrier an insurer of the absolute safety of its passenger.
The totality of evidence shows that the death of Dr. Mariano was caused by the reckless negligence of the driver of the Isuzu trailer truck which lost its brakes and bumped the Celyrosa Express bus.
NORTHWEST AIRLINES, INC. vs. STEPHEN V. CHIONG
543 SCRA 308, G.R. No. 155555, January 31, 2008
FACTS: Philmare Shipping hired Steven Chiong as Third Engineer of M/V Elbia at San Diego, California. For this purpose, Philmare purchased for Chiong a Northwest plane ticket for San Diego, California.
At the scheduled time of departure at MIAA terminal 3, Chiong sought clearance from Philippine Coast Guard and after its compliance, he proceeded to queue at the Northwest check-in-counter. The Northwest personnel informed him that his name did not appear in the computer’s list of confirmed departing passengers. In order to obtain a boarding pass, a man in barong demanded US$100 in exchange therefor. Because of his refusal to such demand, Chiong was not allowed to board Northwest flight bound for San Diego and consequently was unable to work at M/V Elbia.
ISSUE: Whether Northwest Airlines is liable for breach of contract of carriage.
HELD: YES. Time and again, we have declared that a contract of carriage by air transport, is primarily intended to serve the traveling public and thus, imbued with public interest. The law governing common carriers consequently imposes an exacting standard of conduct. As the aggrieved party, Stephen Chiong only had to prove the existence of the contract and the fact of its non-performance by Northwest, as carrier, in order to be awarded compensatory and actual damages.
NORTHWEST AIRLINES, INC. vs. DELFIN S. CATAPANG
G.R. No. 174364, July 30, 2009, 594 SCRA 401
FACTS: Atty. Catapang was directed by UCPB to go to Paris on a business trip. As he intends to visit his siblings in USA, he was asked for additional US$50 for rerouting or booking of flight by the airlines.
Upon his arrival in New York, he was informed that his ticket was not rebookable or reroutable and was treated in a rude manner by an employee by the airlines since his ticket was of a “restricted type” and that unless he upgraded it by paying US$644, he could not rebook. Left with no choice, he paid that amount for rebooking.
ISSUE: Whether Northwest Airlines is liable for moral and exemplary damages for its rude treatment.
HELD: YES. Passengers have the right to be treated by a carrier’s employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal misconduct, injurious language, indignities abuses from such employees. So it is that any discourteous conduct on the part of the employees toward a passenger, gives the latter, an action for damages against the carrier.
PHIL. CHARTER INSURANCE vs. NEPTUNE ORIENT AGENCY, INC.
554 SCRA 335, G.R. No. 145044, June 12, 2008
ISSUE: What is the liability of the common carrier?
HELD: Since the cargoes were lost while being transported to the Philippines, the Civil Code applies. The rights and obligations of the common carrier are thus governed by the provisions of the Civil Code and the COGSA, which is a special law, applies suppletorily. Art. 1749 states that “A stipulation that the common carrier’s liability is limited to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value,” is binding. Art. 1750 states that “A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been fairly and freely agreed upon.”
The COGSA provides that “Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package . . . unless the nature and value of such goods have been declared by the shipper before the shipment and inserted in the bill of lading. Since in the bill of lading, the shipper did not declare the value of the goods and no additional value had been paid, the stipulation in the bill of lading that the carrier’s liability shall not exceed $500 per package applies.
PHILIPPINE NATIONAL RAILWAYS vs. COURT OF APPEALS
536 SCRA 147, G.R. No. 157658, October 15, 2007
ISSUES: 1) Whether PNR observes due diligence.
2) What is the liability of PNR?
HELD: 1) NO. It was ascertained beyond doubt that the proximate cause of the collision is the negligence and imprudence of the PNR and its locomotive driver in operating the passenger train. The train was running at a high speed, there was no crossing bar or flagman and the signaling device was in a dilapidated condition. It is the responsibility of
the railroad company to use reasonable care to keep the signal devices in working order. Failure to do so would be an indication of negligence that the train has a right of way in a railroad crossing under Section 42 (d) Article III of RA 4136, otherwise known as the Land Transportation & Traffic Code can only be invoked if the street or crossing is so designated and sign posted.
2) Under Article 2180 of the NCC, the employer is primarily liable on the 0assumption of juris tantum that the employer failed to exercise diligentissimi patris families in the selection and supervision of its employees. Even the existence of hiring procedures and supervisory employees cannot be incidentally invoked to overturn the presumption of negligence on the part of employer.
A BROKERAGE IS CONSIDERED A COMMON CARRIER
TORRES – MADRID BROKERAGE, INC. vs.
FEB MITSUI MARINE INSURANCE, INC. et. al.
G.R. No. 194121, July 11, 2016, 796 SCRA 142
FACTS: Sony Philippines engaged the services of petitioner Torres – Madrid Brokerage, Inc. (TMBI) to facilitate the release of its shipment and deliver the goods to its warehouse. In turn, TMBI subcontracted the services of BMT Trucking Service to transport the shipment from the port to the warehouse.
On the day of the scheduled delivery, four trucks left BMT’s garage, however, one of the trucks was found abandoned with both the driver and the shipment were missing.
Sony filed an insurance claim against the insurer of the goods, Mitsui. After being subrogated to Sonny’s rights, Mitsui demanded from TMBI payment of the lost goods. TMBI impleaded BMT as the proximate cause of the lost goods and said that in the event it is held liable to Mitsui, BMT should reimburse.
RTC and CA found TMBI and BMT jointly and solidarily liable. TMBI denied being a common carrier because it did not own a single truck and the service that it offered was limited to the processing of paperwork. It blamed BMT who had the full control and custody of the cargo when it was lost, and being a common carrier, is presumed negligent and shall be responsible for the loss.
BMT argued that it observed the required standard of care and that hijacking was a fortuitous event.
ISSUES
1) Whether a brokerage may be considered a common carrier if it also undertakes to deliver goods for its customers.
2) Whether TMBI and BMT are solidarily liable to Mitsui.
3) Distinguish culpa contractual from culpa aquilliana.
RULINGS
1) YES, a brokerage may be considered a common carrier if it also undertakes to deliver goods for its customers.
Common carrier are persons, corporations, firms or association engaged in the business of transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public. By the nature of their business and for reasons of public policy, they are bound to observe extraordinary diligence in the vigilance over the goods and in the safety of their passengers.
The law does not distinguish between one whose principal business activity is the carrying of goods and one who undertakes this task only in an ancillary activity.
As long as an entity holds itself to the public for the transport of goods as a business, it is considered a common carrier regardless of whether it owns the vehicle used or has to actually hire one.
TMBI admitted that it was contracted to facilitate, process, and clear the shipments from the customs authorities, withdraw them from the pier, to transport and deliver them to Sony’s warehouse in Laguna. The fact that BMT does not own trucks and has to subcontract the delivery of its client’s goods, is immaterial.
2) NO, TMBI and BMT are not solidarily liable to Mitsui.
TMBI’s liability to Mitsui does not stem from a quasi-delict (culpa aquilliana) but from its breach of contract (culpa contractual). The tie that binds TMBI with Mitsui is contractual, albeit one that passed on to Mitsui as a result of TMBI’s contract of carriage with Sony to which Mitsui has been subrogated as an insurer who had paid Sony’s insurance claim.
The legal reality that results from this contractual tie precludes the application of quasi-delict based Article 2194.
While it is undisputed that the cargo was lost under the actual custody of BMT, no direct contractual relationship existed between Sony/Mitsui and BMT. If at all, Sony/Mitsui’s cause of action against BMT could only arise from quasi-delict, as a third party suffering damage from the action of another due to the latter’s fault or negligence, pursuant to Article 2176 of the Civil Code.
In the present case, Mitsui’s action is solely premised on TMBI’s breach of contract. Mitsui did not even sue BMT, much less prove any negligence on its parts. If BMT has entered the picture at all, it is because TMBI sued it for reimbursement for the liability that TMBI might incur from its contract of carriage with Sony/Mitsui for quasi-delict.
In these lights, TMBI is liable to Sony (subrogated by Mitsui) for breaching the contract of carriage. In turn, TMBI is entitled reimbursement from BMT due to latter’s own breach of contract of carriage with TMBI.
3) In culpa contractual, the plaintiff only needs to establish the existence of the contract and the obligor’s failure to perform his obligation. It is not necessary for the plaintiff to prove or even allege that the obligor’s non-compliance was due to fault or negligence because Article 1735 already presumes that the common carrier is negligent. The common carrier can only free itself from liability by proving that it observed extra-ordinary diligence. It cannot discharge this liability by shifting the blame on its agents or servants.
On the other hand, the plaintiff in culpa aquilliana must clearly establish the defendant’s fault or negligence because this is the very basis of the action. Moreover, if the injury to the plaintiff resulted from the act or omission of the defendant’s employee or servant, the defendant may absolve himself by proving that he observed the diligence of a good father of a family to prevent the damage.
BENITO MACAM vs. COURT OF APPEALS
G.R. No. 125524, August 25, 1999, 313 SCRA 77
Under special circumstances, it was not even required presentation of any form of receipt by the consignee, in lieu of the original bill of lading, for the release of the goods.
The carrier was absolved from liabilities for releasing the goods to the consignee without the bill of lading.
In clearing the carrier from liability, it takes into consideration that the shipper sent a telex to the carrier after the goods were shipped. The telex instructed the carrier to deliver the goods without need of presenting the bill of lading upon shipper’s request.
It is well noted the usual practice of the shipper to request the shipping lines to immediately release perishable cargoes through telephone calls.
VOYAGE CHARTER
Loadstar Shipping Co., Inc. remains a common carrier notwithstanding the existence of the charter agreement with Northern Mindanao Transport Company, Inc., since the said charter is limited to the ship only and does not involve both the vessel and its crew. Its charter is only
voyage-charter, not a bareboat charter. It is only when the charter
includes both vessel and its crew, as in a bareboat or demise charter that a common carrier becomes private.
As a common carrier, Loadstar is required to observe extraordinary diligence in the vigilance over the goods it transports. When the goods placed in its care are lost, it is presumed to have been at fault or to have acted negligently. Loadstar, therefore, has the burden of proving that it observed extraordinary diligence in order to avoid responsibility for the lost cargo. (Loadstar Shipping Co. Inc. vs. Pioneer Asia Insurance Corporation, G.R. No. 157481, January 24, 2006, 479 SCRA 655).
NEGLIGENCE IN A CONTRACT OF TOWAGE
A tug and its owner must observe ordinary diligence in the performance of its obligations under the contract of towage. The negligence of the obligor in the performance of the obligation renders him liable for damages for the resulting loss suffered by the obligee. Fault or negligence of the obligor consists in his failure to exercise due care and prudence in the performance of the obligation as the nature of the obligation so demands.
The exercise of ordinary prudence by the owner means ensuring that its tugboat is free of mechanical problems. While adverse weather has always been a real threat to maritime commerce, the least that the owner could have done was to ensure that its other tugboats would be able to secure the barge at all times during the engagement. (Cargolift Shipping Inc. vs. Acuario Marketing Corporation, G.R. No. 146426, June 27, 2006, 493 SCRA 157)
WHEN CONSIGNEE BECOMES PARTY OF THE CONTRACT
A consignee, although not a signatory of the contract of carriage between the shipper and the carrier, becomes a party to the contract by reason either (a) the relationship of agency between the consignee and the shipper/consignor; b) the unequivocal acceptance of the bill of lading delivered to the consignee, with full knowledge of its contents or c) availment of the stipulated pur autrui. (MOF COMPANY, INC. vs. SHIN YANG BROKERAGE CORPORATION, G.R. No. 172822, December 18, 2009).
FREIGHT FORWARDERS
UNSWORTH TRANSPORT INTERNATIONAL (PHIL) INC. vs. COURT OF APPEALS
G.R. No. 166250, July 26, 2010, 625 SCRA 357
Where the forwarder contracts to deliver goods to their destination instead of merely arranging for their transportation, it becomes liable as a common carrier for loss or damage to goods.
A freight forwarder’s liability is limited to damages arising from its own negligence, including negligence in choosing the carrier, however, where the forwarder contracts to deliver goods to their destination instead of merely arranging for their transportation, it becomes liable as a common carrier for loss or damage to goods. A freight forwarder assumes the responsibility of a carrier, which actually executes the transport, even though the forwarder does not carry the merchandise itself.
The Civil Code does not limit the liability of the common carrier to a fixed amount per package. In all matters not regulated by the Civil Code, the rights and obligations of common carrier are governed by the Code of Commerce and special laws. Thus, the COGSA supplements the Civil Code by establishing a provision limiting the carrier’s liability in the absence of a shipper’s declaration of a higher value in the bill of lading.
TEMIC AUTOMATIVE PHILIPPINES vs. TAPI – EMPLOYEES UNION
G.R. No. 186965, December 23, 2009, 609 SCRA 355
Freight forwarders have been called travel agents for freight. Temic was within its right in entering the forwarding agreements with the forwarders as an exercise of its management prerogative.
COGSA - NOTICE OF LOSS
Under Section 3 (6) of the COGSA, notice of loss or damages must be filed within three days from delivery. Under the same provision, however, a failure to file a notice of claim within three days will not bar recovery if a suit is nonetheless filed within one year from delivery of the goods or from the date when the goods should have been delivered. (WALLEM PHILIPPINES SHIPPING INC. vs. S.P. FARMS, INC., G.R. No. 161849, July 9, 2010, 624 SCRA 329).
SURRENDER OF GOODS BY A CARRIER
DESIGNER BASKETS, INC. vs. AIR SEA TRANSPORT, INC., et. al.
G.R. No. 184513, March 9, 2016, 787 SCRA 138
FACTS: Petitioner DBI is a domestic corporation engaged in the production of housewares and handicraft items for export. Ambiente, a foreign-based company, ordered from DBI 223 cartoons of assorted wooden items.
Ambiente designated ACCLI as the forwarding agent that will ship out its order from the Philippines to the United States. ACCLI is a domestic corporation acting as agent of ASTI, a US-based corporation engaged in carrier transport business in the Philippines.
DBI delivered the shipment to ACCLI for sea transport from Manila and delivery to Ambiente. ACCLI issued to DBI triplicate copies of ASTI Bill of Lading. DBI retained possession of the originals of the Bill of Lading pending payment of the goods by Ambiente.
Later on, Ambiente and ASTI entered into an Indemnity Agreement obligating the latter to deliver the shipment to the former or to its order “without the surrender of the relevant bill of ladings due to non-arrival or loss thereof. Thereafter, ASI released the shipment to Ambiente without the knowledge of DBI, and without it receiving payment for the total cost of the shipment.
DBI then made several demands to Ambiente for the payment of the shipment but to no avail. Then, DBI filed a complaint against ASTI and ACCLI. DBI claimed that under the Bill of Lading, it provides that the release and delivery of the cargo/shipment to the consignee only after the original copies of the Bill of Lading are surrendered, otherwise, they become liable to the shipper for the value of the shipment.
ISSUES
1) Whether ASTI and ACCLI be held solidarily liable with Ambiente for the value of the shipment.
2) Whether ASTI may surrender the goods to the assignee without the surrender of Original Bill of Lading.
RULINGS
1) NO, ASTI and ACCLI may not be held solidarily liable to DBI for the value of the shipment.
ASTI as the carrier cannot be held liable for the unpaid value of the goods, as it is not a party to the contract of sale. The carrier’s liability if any should be pursuant to the contract of carriage of goods and the law on the transportation of the goods, not on the contract of sale between the unpaid seller and buyer of the goods.
Articles 1733, 1734 and 1735 speak of the common carrier’s responsibility over the goods. They refer to the general liability of common carriers in case of loss, destruction or deterioration of goods and the presumption of negligence against them. This responsibility or duty of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation, until the same is delivered, actually or constructively, by the carrier to the consignee or to the person who has the right to receive them.
It is, in fact, undisputed that the goods were timely delivered to the proper consignee or to the one who was authorized to receive them.
2) YES, the carrier has no liability for releasing the goods without the surrender of the bill of lading.
Although the general rule is that upon receipt of the goods, the consignee surrenders the bill of lading to the carrier and their respective obligations are considered canceled. Article 53 of the Code of Commerce provides for two exceptions: when the bill of lading gets lost or for any other cause. In either case, the consignee must provide a receipt to the carrier for the goods surrendered.
It is settled that the surrender of the original bill of lading is not absolute, that in case of loss or any other cause, a common carrier may release the goods to the consignee even without them.
REPUBLIC vs. LORENZO SHIPPING CORPORATION
G.R. No. 153563, February 7, 2005, 450 SCRA 550
It is ruled that the non-surrender of the original bill of lading does not violate the carrier’s duty of extraordinary diligence over the goods.
It was found that the carrier exercised extraordinary diligence when it released the shipment to the consignee, not upon the surrender of the original bill of lading is not a condition precedent for a common carrier to be discharged of its contractual obligation.
13. TRUTH IN LENDING ACT
HEIRS OF ZOILO ESPIRITU vs. SPS. LANDRITO
520 SCRA 383, G.R. No. 169617, April 4, 2007
FACTS: Spouses Landrito obtained a loan from Spouses Espiritu in the amount of P350,000 payable in 3 months and secured by a real estate mortgage. The Landritos actually received P325,000 after deducting 5% interest of the principal debt for the first month and service fee. The agreement, however, provided that the principal indebtedness earns “interest at the legal rate.”
Due to failure to pay the principal amount and interest, the Spouses Landrito and Espiritu agreed to an extension and restructuring of the loan agreement such that principal was increased to P874,125. Since the loan remained unpaid, Spouses Espiritu foreclosed the mortgage. At the auction sale, the property was sold to Spouses Espiritu as the lone bidder. Upon failure of Spouses Landrito to redeem the property, Spouses Espiritu consolidated ownership over said property and registered it in their name. Spouses Landrito filed an action for annulment/reconveyance of title against Spouses Espiritu alleging that they negotiated for the redemption of the property but Spouses Espiritu increased the price.
ISSUE: Whether the 5% interest rate imposed upon the Spouses Landrito for the first month and the varying interest rates imposed for the succeeding months are valid.
HELD: NO. The omission of interest rate in a contract, and a stipulation authorizing iniquitous or unconscionable interests are contrary to morals. The omission of the Spouses Espiritu in specifying in the contract the interest rate which was actually imposed, in contravention of the law, manifested bad faith. The real estate mortgage executed between the parties specified that “the principal indebtedness shall earn interest at the legal rate.” The agreement contained no other provision on interest or any fees or charges incident to the debt. Aside from lack of transparency of said agreements, the interest rates and the service charge imposed, at an average of 6.39% per month, are excessive.
In enacting RA 3765, otherwise known as the “Truth in Lending Act,” the State seeks to protect its citizens from a lack of awareness of the true cost of credit by assuring the full disclosure of such costs. Section 4, in connection with Section 3 (3) of the said law, gives a detailed enumeration of the specific information required to be disclosed, among which are the interest and other charges incident to the extension of credit. Section 6 of the same law imposes on anyone who willfully violates these provisions, sanctions which include civil liability, and a fine and/or imprisonment.
14. TRUST RECEIPTS LAW - PD 115
HUR TIN YANG vs. PEOPLE OF THE PHILIPPINES
G.R. No. 195117, August 14, 2013, 703 SCRA 606
FACTS: On various occasions, Metrobank extended several commercial letters of credits to Supermax. These LCs were used by Supermax to pay for the delivery of several construction materials which will be used in their construction business.
Thereafter, Metrobank required Yang, as representative and Vice President for Internal Affairs of Supermax, to sign 24 trust receipts as security for the construction materials and to hold those materials or the products of the sale in trust for Metrobank.
When the trust receipts fell due and despite the receipt of demand letter, Supermax failed to pay or deliver the goods as proceeds to Metrobank.
Hence, Metrobank filed a criminal complaints for estafa against Yang.
For his defense, while admitting signing the trust receipts, Yang argued that said receipts were demanded by Metrobank as additional security for the loan extended to Supermax for the purchase of construction materials and equipment, and that the transactions do not constitute trust receipt agreements but rather of simple loan.
ISSUE: Whether Yang is liable for estafa for violation of trust receipt law.
HELD: NO. The dealing between Yang and Metrobank was not a trust receipt transaction but one of simple loan.
When both parties enter into an agreement knowing fully that the return of the goods subject of the trust receipt is not possible even without any fault on the part of the trustee, it is not a trust receipt transactions penalizing under Sec. 13 of PD 115 in relation to Article 315 par. 1 (b) of RPC, as the only obligation actually agreed upon by the parties would be the return of the proceeds of the sale transaction.
This transaction becomes a mere loan where the borrower is obligated to pay the bank the amount spent for the purchase of the goods.
“NOTHING IS IMPOSSIBLE WITH GOD”
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Posted by: admin - 05-31-2019, 10:23 PM - Forum: Civil Law
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2018 GOLDEN BEACON
CIVIL LAW
By: Dean MANUEL R. BUSTAMANTE
1. HUMAN RELATIONS
ARTICLE 19
Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.
DART PHILIPPINES vs. SPOUSES FRANCISCO CALOGCOG
G.R. No. 149241, August 24, 2009, 596 SCRA 614
FACTS: Dart entered into Distributorship Agreement with Spouses Calogcog. Following the expiration of the agreement, Dart was only convinced to extend the period of distributorship upon the written promise of the Calogcogs that they will observe and comply the terms and conditions thereof. Dart subjected the spouses to an audit review by an auditing firm. However, Spouses Calogcog disallowed the auditing firm from inspecting their books and records. As a result, Dart only accepted the spouses’ purchase order on a prepaid basis.
ISSUE: Whether Dart acted in bad faith or intended to injure the Spouses Calogcog when it caused the auditing of the latter’s account and when it implemented the prepaid basis in treating the latter’s order.
HELD: NO. Bad faith cannot be attributed to the acts of Dart which was supported by legitimate reasons, principally to protect its own business. The exercise of its rights was not impelled by any evil motive designed, whimsically and capriciously, to injure or prejudice the Calogcogs.
HSBC vs. CATALAN
G.R. No. 159590, October 18, 2004, 440 SCRA 498
FACTS: A complaint was filed seeking to compel the bank to pay the value of checks issued to her by Thompson as it refused to pay the same despite repeated directives of the drawer to recognize the check he issued. The bank filed motion to dismiss alleging that the complaint failed to state a cause of action under Section 189 of the Negotiable Instruments Law, a check itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank and the latter is not liable to the holder unless and until it accepts or certifies it.
ISSUE: Whether the bank is liable for damages on the basis of its inaction on the drawer’s instructions.
HELD: YES. The bank can be held liable for damages. It was not a suit on the value of the check itself, but how it acted in relation to the claim for payment. The allegations in the complaint that there was gross inaction of the bank on Thompson’s instructions as well as its evident failure to inform her of the reason are insouciance (lack of concern) on its part.
The complaint was anchored on Article 19 of the New Civil Code. When a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be held responsible. But a right, though by itself legal because recognized or granted by law as such, may nevertheless become the source of some illegality. A person should be protected only when he
acts in the legitimate exercise of his right, that is, when he acts
with prudence and in good faith; but when he acts with negligence or abuse.
Thus, in order to be liable under the abuse of right principle, three elements must concur, to wit:
(a) that there is a legal right or duty;
(b) which is exercised in bad faith; and
© for the sole intent of prejudicing or injuring another.
SOLEDAD CARPIO vs. LEONORA VALMONTE
G.R. No. 151866, September 9, 2004, 438 SCRA 38
FACTS: Leonora is a wedding coordinator. Michelle and Jon Sierra engaged her services for their church wedding.
On that day, Leonora went to the Manila Hotel where the bride and her family were billeted. When she arrived at the suite, several persons were already there including Soledad, an aunt of the bride who was preparing to dress up for the occasion.
After reporting to the bride, Leonora went out of the suite carrying the items needed for the wedding rites and the gifts from the principal sponsors. She proceeded to the Maynila Restaurant where the reception was to be held.
She went back to suite after, and found several people staring at her when she entered. It was at this juncture that Soledad allegedly uttered the following words to Leonora: “Ikaw lang ang lumabas ng kwarto, nasaan ang dala mong bag? Saan ka pumunta? Ikaw lang ang lumabas ng kwarto, ikaw ang kumuha!”
Soledad then ordered one of the ladies to search Leonora’s bag.
It turned out that after Leonora left the room to attend to her duties, Soledad discovered that the pieces of jewelry which she placed inside the comfort room in a paper bag were lost.
A few days after the incident, Soledad received a letter from Leonora demanding a formal letter of apology which she wanted to be circulated to the newlywed’s relatives and guests to redeem her smeared reputation as a result of Soledad’s imputation against her. Soledad did not respond to the letter.
Thus, on 20 February 1997, Leonora filed a suit for damages against Soledad.
ISSUE
Whether Leonora is entitled to damages.
RULING
YES. Leonora is entitled for damages.
In the case at bar, Soledad’s verbal reproach against Leonora was certainly uncalled for considering that by her own account nobody knew that she brought such kind and amount of jewelry inside the paper bag.
True, Soledad had the right to ascertain the identity of the malefactor, but to malign Leonora without an iota of proof that she was the one who actually stole the jewelry is an act, by any standard or principle of law is impermissible.
Soledad had willfully caused injury to Leonora in a manner which is contrary to morals and good customs. She did not act with justice and good faith for apparently, she had no other purpose but to prejudice Leonora.
Certainly, Soledad transgressed the provision of Article 19 in relation to Article 21 for which she should be held accountable.
One is not allowed to exercise his right in a manner which would cause unnecessary prejudice to another or if he would thereby offend morals or good customs. A person should be protected
only when he acts in the legitimate exercise of his right, that is when he acts with prudence and good faith, but not when he acts with negligence or abuse.
G.F. EQUITY, INC. vs. ARTURO VALENZONA
G.R. No. 156841, June 30, 2005, 462 SCRA 466
FACTS: There was a contract whereby Valenzona was hired as a coach of the Alaska Basketball Team in the PBA for a period of two years. Paragraph 3 of the contract provides that “if at anytime during the contract, the Coach, in the sole opinion of the Corporation, fails to exhibit sufficient skills or competitive ability to coach the time, the Corporation may terminate the contract.” During his stint as head coach, the team placed third in both Open and All Filipino PBA Conferences in 1988. He was later on served with notice that the management was terminating his services. Six years thereafter, he filed a complaint for damages asking for payment of his compensation arising from the arbitrary and unilateral termination of his employment.
ISSUE: Whether paragraph 3 of the contract is a legitimate exercise of the right of petitioner to terminate respondent’s employment.
HELD: NO. The assailed condition clearly transgressed the principle of mutuality of contracts, hence, it is null and void. It leaves the determination of whether Valenzona failed to exhibit sufficient skill or competitive ability to coach Alaska team solely to the opinion of GF Equity.
When one party in an employment contract is given an unbridled prerogative to pre-terminate the contract irrespective of the soundness, fairness, reasonableness or even lack of basis of its opinion, it must be struck down. To sustain the validity of the assailed paragraph would open the gate of arbitrary and illegal dismissals, for void contractual stipulations would be used as justification therefore. Consequently, since the pre-termination of the contract was anchored on an illegal ground, hence, contrary to law and GF Equity negligently failed to provide legal basis for such pre-termination, the latter failed to exercise in a legitimate manner its right to pre-terminate the contract, thereby abusing the right of Valenzona, thus, entitling the latter to damages under Article 19 in relation to Article 20 of the Civil Code.
2. CIVIL PERSONALITY
CONTINENTAL STEEL MFG. CORP. vs. VOLUNTARY ARBITRATOR
G.R. No. 182836, October 13, 2009, 603 SCRA 621
FACTS: Hortillano’s wife, Marife, had a pre-mature delivery while she was in the 38th week of pregnancy which resulted to the death of Hortillano’s unborn child.
ISSUE: Whether Hortillano is entitled to bereavement benefits on the death of his unborn child.
HELD: YES. Even a child inside the womb already has life. No less than the Constitution recognizes the life of the unborn from conception, that the State must protect equally with the life of the mother. If the unborn already has life, then the cessation thereof even prior to the child being delivered, qualifies as death.
It was not disputed that Hortillano and his wife were validly married and that their child was conceived during said marriage, hence, making said child legitimate upon her conception, thus, Hortillano was entitled to bereavement benefits.
3. FAMILY CODE
Article 26 paragraph 2 - DIVORCE OBTAINED ABROAD
REPUBLIC vs. OBRECIDO III
G.R. No. 154380, October 5, 2005, 472 SCRA 114
FACTS: Cipriano and Lady Miros got married in 1981 and thereafter were blessed with two children. Miros went to the United States and eventually acquired American citizenship. Later, she obtained a divorce decree of her marriage with Cipriano and got married to Stanley. By reason thereof, Cipriano filed a petition for authority to marry invoking paragraph 2 of Article 26 of the Family Code. The Solicitor General opposed the petition on the ground that paragraph 2 of Article 26 is not applicable to Cipriano because it applies only to a valid mixed marriage, a marriage celebrated between a Filipino citizen and an alien.
ISSUE: Whether the Filipino spouse is legally capacitated to re-marry after the other party is naturalized as a foreign citizen and later on obtained a valid divorce decree.
HELD: YES, paragraph 2 of Article 26 should be interpreted to include cases involving parties, who at the time of the celebration of the marriage were Filipino citizens, but later on, one of them becomes naturalized as a foreign citizen and obtains a divorce decree. The Filipino spouse should likewise be allowed to re-marry as if the other party was a foreigner at the time of the solemnization of the marriage.
- - - To rule otherwise would be to sanction absurdity and injustice where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no longer married to the Filipino spouse.
- - - There are two (2) elements for the application of paragraph 2 of Article 26, namely,: (1) a valid marriage that has been celebrated between a Filipino citizen and a foreigner; and (2) a valid divorce obtained abroad by the alien spouse capacitating him or her to re-marry. The reckoning point is not the citizenship of the parties at the time of the celebration of marriage, but rather, their citizenship at the time a valid divorce is obtained abroad by the alien spouse capacitating the latter to re-marry.
- - - Moreover, it is necessary that the naturalization of the other spouse and the foreign divorce decree be proven. The party pleading it must prove the divorce law as a fact and demonstrate its conformity to the foreign law allowing it. Likewise, it must be shown that the divorce decree allows the former spouse to re-marry as specifically required in Article 26. Otherwise, there would be no evidence sufficient to declare that he is capacitated to enter into another marriage.
REPUBLIC vs. MARELYN TANEDO MANALO
G.R. No. 221029, April 24, 2018
FACTS: Manalo, a Filipina, married Yoshino, a Japanese national, in San Juan City, Metro Manila, Philippines.
While living in Japan, Manalo initiated a divorce proceeding and obtained a favorable judgment against her alient spouse who is capacitated to remarry.
Upon her return in the Philippines, Manalo filed a petition for recognition of foreign divorce with the RTC and the same was favorably granted. However, the OSG opposed the petition as it was the Filipina spouse who obtained the divorce decree and not the alien spouse.
ISSUES
1. Whether a divorce decree initiated and obtained abroad by a Filipino spouse can be recognized by Philippine court under paragraph 2 of Article 26 of the Family Court.
2. Whether the Japanese law on divorce must still be proved.
3. Differentiate vinculo matrimonii from mensa et thoro.
RULINGS
1. YES, a validly obtained foreign divorce initiated by the Filipino spouse can be recognized and given legal effects in the Philippines.
Paragraph 2 of Article 26 speaks of a validly obtained abroad by the alien spouse capacitating him or her to remarry. Based on a clear and plain reading of the provision, it only requires that there be a divorce validly obtained.
Assuming for the sake of argument, that the word “obtained” should be interpreted to mean that the divorce proceeding must be actually initiated by the alien spouse, still, the Court will not follow the letter of the statute when to do so would depart from the true intent of the legislature or would otherwise yield conclusions inconsistent with the general purpose of the act.
The purpose of paragraph 2 of Article 26 is to avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after a foreign divorce decree that is effective in the country where it was rendered, is no longer married to the Filipino spouse.
Whether the Filipino spouse initiated the foreign divorce proceeding or not, a favorable decree dissolving the married bond and capacitating his or her alien spouse to remarry will have the same result - the Filipino spouse will effectively be without a husband or a wife.
A Filipino who initiated a foreign divorce proceeding is in the same place and in like circumstance as a Filipino who is at the receiving end of an alien initiated proceeding.
Therefore, the subject provision should not make a distinction. In both instance, it is extended as a means to recognize the residual effect of the foreign divorce decree on Filipinos whose marital ties to their alien spouses are severed by operation of the latter’s national law.
2. YES, the Japanese law on divorce must still be proved.
It is well settled in our jurisdiction that our courts cannot take judicial notice of foreign laws. Like any other facts, they must be alleged and proved.
The burden of proof lies with the “party who alleges the existence of a fact or thing necessary in the prosecution or defense of an action. In civil cases, plaintiffs have the burden of proving the material allegations of the complaint when those are denied by the answer and defendants have the burden of proving the material allegations in their answer whey they introduce new matters.
3. Vinculo Matrimonii or Absolute Divorce is a divorce which terminates the marriage while Mensa et Thoro or Limited Divorce is a divorce which suspends the marriage and leaves the bond in full force.
MINORU FUJIKI vs. MARIA PAZ GALELA MARINAY et. al.
G.R. No. 196049, June 26, 2013, 790 SCRA 69
FACTS: Fujiki is a Japanese national who married Marinay in the Philippines on 23 January 2004. The marriage did not sit well with Fujiki’s parents, thus he could not bring his wife to Japan. Eventually, he lost contact with each other.
In 2008, Marinay met another Japanese, Maekera, without the first marriage being dissolved, Marinay and Maekera were married on May 15, 2008 in Quezon City. Maekera brought Marinay to Japan, however, Marinay allegedly suffered physical abuse from Maekera. She left Maekera and started to contact Fujiki.
Fujiki and Marinay met in Japan and they were able to reestablish their relationship.
In 2010, Marinay with the help of her first husband, Fujiki, was able to obtain a judgment from Japan’s family court, which declared the marriage between her and her second husband Maekera, who is a Japanese national, void on the ground of bigamy.
Upon coming to the Philippines, Fujiki filed with the RTC a petition to recognize a foreign judgment nullifying the subsequent marriage between his spouse and a foreign citizen on the ground of bigamy.
The RTC dismissed the petition on the ground that Fujiki has no personality to file the petition as he is neither a husband nor a wife of the subsequent marriage.
I S S U E
Whether Fujiki, the first husband, has the personality to file a petition to recognize the divorce decree obtained abroad.
R U L I N G
YES, Fujiki has the personality to file a petition to recognize the Japanese Family Court judgment nullifying the marriage between Marinay and Maekara on the ground of bigamy because the judgment concerns his civil status as married to Marinay. For the same reason, he has the personality to file a petition under Rule 108 to cancel the entry of marriage between Marinay and Maekara in the civil registry on the basis of the decree of the Japanese Family Court.
There is no doubt that the prior spouse has a personal and material interest in maintaining the integrity of the marriage he contracted and the property relations arising from it.
There is also no doubt that he is interested in the cancellation of an entry of a bigamous marriage in the civil registry, which comprises the public record of his marriage.
DOREEN GRACE MEDINA vs. MICHIYUKI KOIKE
G.R. No. 215723, July 27, 2016, 798 SCRA 733
FACTS: Doreen and Koike, a Japanese national, were married on June 14, 2005 in Quezon City.
On June 14, 2012, Doreen and Koike jointly filed for divorce in Japan, which was granted.
Subsequently, Doreen filed before the RTC a petition for judicial recognition of foreign divorce and declaration of capacity to remarry pursuant to paragraph 2 of Article 26 of the Family Code.
The RTC denied the petition on the ground that the foreign divorce decree and the national law of the alien spouse must be proven.
ISSUES
1) Whether a divorce decree jointly filed and obtained by the Filipino and Japanese can be recognized by RTC under paragraph 2 of Article 26 of the Family Code.
2) Whether our courts can take judicial notice of a foreign judgment of divorce.
3) Whether the existence of pertinent laws of Japan on the divorce decree is a question of fact.
RULINGS
1) YES, paragraph 2 of Article 26 of the Family Code confers jurisdiction on Philippine courts to extend the effect of a foreign divorce decree to a Filipino spouse without undergoing trial to determine the validity of the dissolution of the marriage.
It authorizes our courts to adopt the effects of a foreign divorce decree precisely because the Philippines does not allow divorce. Philippine courts cannot try the case on the merits because it is tantamount to trying a divorce case.
2) NO, our courts do not take judicial notice of foreign laws and judgment. This means that the foreign judgment and its authenticity must be proven as facts under our rules on evidence.
Both the divorce decree and the governing personal law of the alien spouse who obtained the divorce must be proven.
3) YES, considering that the validity of the divorce decree between Doreen and Koike, as well as the existence of pertinent laws of Japan on the matter are essentially factual that calls for a re-evaluation of the evidence presented before the RTC, the issue raised in the instant appeal is obviously a question of fact that is beyond the ambit of a Rule 45 petition for review.
The question of fact involved in the instant appeal and substantial ends of justice warrant that the case be referred to the CA for further proceedings.
It bears to stress that procedural rules were intended to ensure proper administration of law and justice. The rules of procedure ought not to be applied in a very rigid, technical sense, for they are adopted to help secure, not override, substantial justice. A deviation from its rigid enforcement may thus be allowed to attain its prime objective, for after all, the dispensation of justice is the core reason for the existence of the courts.
GERBERT R. CORPUS vs. DAISYLYN TIROL STO. TOMAS
G.R. No. 186571, August 11, 2010, 628 SCRA 266
FACTS: Corpus was a former Filipino citizen who acquired Canadian citizenship through naturalization. He was married to Sto. Tomas, a Filipina, in Pasig City. When he returned to the Philippines. he was shocked to discover that his wife was having an affair with another man. He went back to Canada and filed a petition for divorce and was granted.
Desirous to marry another woman he now loved, he registered the divorce decree in the civil registry office and was informed that the foreign decree must first be judicially recognized by a competent court.
Corpus filed for judicial recognition of foreign divorce and declaration of marriage as dissolved with the RTC where respondent Sto. Tomas failed to submit any response.
The RTC denied the petition on the basis that the petitioner Corpus lacked locus standi.
ISSUE
Whether the second paragraph of Article 26 of the Family Code extends to aliens the right to petition a court of this jurisdiction from the recognition of a foreign divorce.
RULING
The alien spouse cannot claim under the second paragraph of Article 26 of the Family Code because the substantive right it establishes is in favor of the Filipino spouse. Only the Filipino spouse can invoke the second paragraph of Article 26 of the Family Code.
The unavailability of the second paragraph of Article 26 of the Family Code to aliens does not necessarily strip the petitioner Corpus of legal interest to petition the RTC for the recognition of his foreign divorce.
Petitioner Corpus being a naturalized Canadian citizen now, is clothed by the presumptive evidence of the authenticity of foreign divorce with conformity to alien’s national law.
Article 40
LUCIO MORIGO vs. PEOPLE OF THE PHILIPPINES
G. R. No. 145226, February 6, 2004, 422 SCRA 376
FACTS: When Lucio and Lucia got married, they merely signed the marriage contract without the presence of solemnizing officer. Since Lucia has been working in Canada for many years, she was able to obtain a divorce decree in 1991 from Canadian Court. The following year, Lucio contracted a second marriage with Maria. On September 21, 1993, Lucio filed a complaint for judicial declaration of nullity of the first marriage on the ground that no marriage ceremony actually took place. In October 1993, he was charged with bigamy and was later on convicted by the lower court. The first marriage was nullified by the court after the celebration of the second marriage.
ISSUE: Whether judicial declaration of nullity of the first marriage is necessary before the spouse may validly contract a second marriage.
HELD: NO. In this case, it was found out that the first marriage is void ab initio in accordance with Articles 3 and 4 of the Family Code. This simply means that there was no marriage to begin with and such declaration of nullity retroacts to the date of the first marriage. In other words, for all intents and purposes, reckoned from the date of the declaration of the first marriage as void as initio to the date of the celebration of the first marriage, the accused was, under the eyes of the law, never married.
The first element of bigamy requires that the accused must be legally married. But in this case, legally speaking, the accused was never married. Thus, there is no first marriage to speak of. Under the principle of retroactivity of a marriage being declared void ab initio, the two were never married from the beginning. Accordingly, accused was not married to his wife at the time he contracted the second marriage with another woman.
The mere private act of signing a marriage contract bears no semblance to a valid marriage and thus, needs no judicial declaration of nullity. Such act alone, without more, cannot be deemed to constitute an ostensibly valid marriage for which accused might be held liable for bigamy unless he secures a judicial declaration of nullity before he contracts a subsequent marriage.
What is contemplated by Article 40 of the Family Code as the void marriage that must be declared void before a party may contract a subsequent marriage is one that must exist although, it is void.
Article 41
EDUARDO MANUEL vs. PEOPLE OF THE PHILIPPINES
G. R. 165842, November 29, 2005, 476 SCRA 461
FACTS: Eduardo was married to Rubylus on July 28, 1975. Later, Rubylus was charged with estafa and thereafter imprisoned. He visited her in jail after three months and never saw her again.
In 1996, he married Tina believing that his first marriage was no longer valid because he had not heard from Rubylus for more than 20 years.
When Tina discovered that Eduardo was previously married to Rubylus, she charged him of bigamy. During the trial, Eduardo alleged that he was not criminally liable for bigamy because when he married Tina, he did so in good faith and without any malicious intent. He maintained that at the time he married Tina, he was of the honest belief that his first marriage no longer subsisted.
ISSUE: Whether a judicial declaration of presumptive death is necessary before the other spouse may legally re-marry.
HELD: YES. There must be a judicial declaration of presumptive death of the absent spouse. Otherwise, the spouse who contracted the second marriage may be convicted of the crime of bigamy. Such judicial declaration constitutes proof that he acted in good faith and would negate criminal intention on his part when he married the complainant. According to Article 41 of the Family Code, there is a need for judicial declaration of presumptive death of the absent spouse to enable the present spouse to remarry. Parties should not be permitted to
judge for themselves such matter. The latter should be submitted to the proper court for resolution.
The requirement for a judicial declaration of presumptive death of the absent spouse is for the benefit of the spouse present as protection from the pains and the consequences of a second marriage precisely because he or she could be charged and convicted of bigamy if the defense of good faith based on mere testimony is found incredible. It is also for the benefit of the State. Marriage is a social institution of the highest importance. Public policy, good morals and the interest of society require that the marital relation should be surrounded with every safeguard and its severance in the manner prescribed and the causes specified by law.
SOCIAL SECURITY SYSTEM vs. TERESITA JARQUE VDA. DE BAILON
G.R. No. 165545, March 24, 2006, 485 SCRA 376
FACTS: On April 25, 1955, Clemente G. Bailon, who was a member of SSS and Alice P. Diaz contracted marriage. More than 15 years later, Bailon filed before the CFI a petition to declare Alice presumptively dead. The CFI granted the petition. Close to 13 years after his wife Alice was declared presumptively dead, Bailon contracted marriage with respondent Teresita Jarque.
Upon Bailon’s death, respondent thereupon filed a claim for funeral benefits and was granted P12,000 by the SSS. Cecilia Bailon-Yap, who claimed to be a daughter of Bailon and one Elisa Jayona, contested before the SSS the release to respondent of the death and funeral benefits. She claimed that Bailon contracted three marriages in his lifetime, the first with Alice Diaz, the second with her mother Elisa Jayona and the third with respondent, all of whom are still
alive. In the meantime, a certain Hermes P. Diaz, claiming to be the brother and guardian of “Aliz P. Diaz,” filed before the SSS a claim for death benefits accruing from Bailon’s death.
ISSUE: Who between Alice Diaz and the herein respondent is entitled to the death benefits?
HELD: Respondent is entitled to the death benefits. The two marriages involved herein having been solemnized prior to the effectivity on August 3, 1988 of the Family Code, the applicable law to determine their validity is the Civil Code which was the law in effect at the time of their celebration.
Under Art. 83 of the Civil Code, a subsequent marriage contracted during the lifetime of the first spouse is illegal and void ab initio unless the prior marriage is first annulled or dissolved or contracted under any of the three exceptional circumstances. It bears noting that the marriage under any of these exceptional cases is deemed valid “until declared null and void by competent court.” If follows that the onus probandi in these cases rests on the party assailing the second marriage. In the case at bar, as found by the CFI, Alice has been absent for 15 consecutive years when Bailon sought declaration of her presumptive death, which judicial declaration was not even a requirement then for purposes of remarriage.
Under the Civil Code, a subsequent marriage being voidable, it is terminated by final judgment of annulment in a case instituted by the absent spouse who reappears or by either of the spouses in the subsequent marriage.
Under the Family Code, specifically Art. 42, no judicial proceeding to annul a subsequent marriage is necessary. If the absentee reappears, but no step is taken to terminate the subsequent marriage, either by affidavit or by court action, such absentee’s mere reappearance even if made known to the spouses in the subsequent marriage, will not terminate such marriage. Since the second marriage has been contracted because of the presumption that the former spouse is dead, such
presumption continues in spite of the spouse’s physical reappearance and by fiction of law, he or she still be regarded as legally an absentee until the subsequent marriage is terminated as provided by law. In the case at bar, as no step was taken to nullify in accordance with law, Bailon’s and respondent’s marriage prior to the former’s death in 1998, respondent rightfully the defendant spouse - beneficiary of Bailon.
Article 36 - PSYCHOLOGICAL INCAPACITY
REPUBLIC vs. LAILA TANYAG - SAN JOSE et. al.
G.R. No. 168328, February 28, 2007, 517 SCRA 123
FACTS: Laila and Manolito were married on June 12, 1988 when Laila was 19 years old and Manolito was 20 years old.
For nine (9) years, the couple stayed with Manolito’s parents. Manolito was jobless, drug user and spent time with his friends drinking intoxicating substances and gambling while Laila was selling fish at the wet market.
On August 20, 1998, Laila left Manolito and transferred to her parents’ house.
On March 9, 1999, Laila filed a petition for Declaration of Nullity of Marriage under Article 36 of the Family Code on the ground of psychological incapacity.
ISSUES
1) Who has the burden of proof to show the nullity of marriage.
2) What is psychological incapacity?
3) Whether a person sought to be declared psychologically incapacitated should be examined by a physician or psychologist.
RULINGS
1) Laila, as petitioner, had the burden of proof to show the nullity of the marriage.
2) The term “psychological incapacity” to be a ground for the nullity of marriage under Article 36 of the Family Code refers to a serious psychological illness afflicting a party even before the celebration of the marriage. It is a malady so grave and permanent as to deprive one of the awareness of the duties and responsibilities of the matrimonial bonds one is about to assume.
3) There is of course no requirement that the person sought to be declared psychologically incapacitated should be examined by a physician or psychologist as a condition sine qua non to arrive at such declaration. If it can be proven by independent means that one is psychologically incapacitated, there is no reason why the same should not be credited.
MA. TERESA TANI – DELA FUENTE vs. RODOLFO DELA FUENTE, JR.
G.R. No. 188400, March 8, 2017, 819 SCRA 638
FACTS: While they were still sweethearts, Ma. Teresa already noticed that Rodolfo was an introvert and was prone to jealousy.
On June 21, 1984, Ma. Teresa and Rodolfo got married in Mandaluyong City.
Rodolfo’s attitude worsened as they went on their marital life. At first, Rodolfo only inflicted non-physical forms of mistreatment on Ma. Teresa by alienating her from her family and friends due to his jealousy, and stalking her due to his paranoia. However, his jealousy soon escalated into physical violence when on separate instances, he poked a gun at his teenage cousin and at Ma. Teresa.
On June 3, 1999, Ma. Teresa filed a petition for declaration of nullity of marriage against Rodolfo before the RTC of Quezon City.
On August 14, 2002, the trial court held that the marriage between Ma. Teresa and Rodolfo should be declared null and void because Rodolfo’s psychological incapacity was grave, serious and incurable.
On appeal, the CA reversed the decision of the RTC on the ground that the findings of psychologist Dr. Lopez on Rodolfo’s psychological incapacity is a hearsay as it was based solely on information given by Ma. Teresa to Dr. Lopez.
ISSUE
Whether the non-examination of the defendant party invalidate the findings of the examining psychologist.
RULING
NO, the Court found sufficient compliance with Molina ruling to warrant the nullity of Ma. Teresa’s marriage with Rodolfo. Ma. Teresa was able to discharge the burden of proof that Rodolfo suffered from psychological incapacity.
In the case of Reyes vs. Reyes, it states that the non-examination of one of the parties will not automatically render as hearsay or invalidate the findings of the examining psychologist since “marriage, by its very definition,” necessarily involves only two persons. The totality of the behavior of one spouse during the cohabitation and marriage is generally witnessed mainly by the other.
Marcos vs. Carlos case emphasizes that Molina ruling does not require a physician to examine a person and declare him/her to be psychologically incapacitated. What matters is that the totality of evidence presented establishes the party’s psychological condition.
Dr. Lopez’s testimony, as corroborated by Ma. Teresa, sufficiently proved that Rodolfo’s paranoid personality disorder made him distrustful and prone to extreme jealousy and acts of depravity, incapacitating him to fully comprehend and assume the essential obligations of marriage.
RACHEL A. DEL ROSARIO vs. JOSE O. DEL ROSARIO
G.R. No. 222541, February 15, 2017, 818 SCRA 83
FACTS: Sometime in 1988, Rachel went to Hongkong to work as a domestic helper. During this period, Rachel allegedly provided for Jose’s tuition fees for his college education.
Rachel and Jose eventually decided to get married on December 28, 1989 and were blessed with a son named Wesley on December 1, 1993.
In September 2011, Rachel filed a petition for declaration of nullity of marriage before the RTC alleging that Jose was psychologically incapacitated to fulfill his marital obligations.
In support of her petition, Rachel claimed that during their marriage, Jose conspicuously tried to avoid his duties as husband and father; that he was hot tempered and violent; that he would represent himself as single and flirt openly; and would refuse any chance of sexual intimacy between them as they slowly drifted apart.
She also presented the testimony of Dr. Tayag who prepared the Pschological Report in which she primarily based on her interviews with Rachel and Wesley and stated that Jose suffered from Antisocial Personality Disorder (APD).
The RTC granted the petition, relying on the findings and testimony of Dr. Tayag and declared that Jose’s APD interfered with his capacity to perform his marital and paternal duties.
On appeal, the CA reversed the ruling of the RTC holding that the totality of the evidence Rachel presented was not enough to sustain a finding that Jose is psychologically incapacitated to comply with the essential obligations of marriage.
ISSUE
Whether the totality of evidence in this case demonstrate the existence of psychological incapacity.
RULING
NO, based on the totality of the evidence presented, there exist insufficient factual or legal basis to conclude that Jose’s immaturity, irresponsibility or infidelity amount to psychological incapacity.
In Santos vs. CA, the Court declared that psychological incapacity under Article 36 of the Family Code must be characterized by: (1) gravity, (2) juridical antecedence, and (3) incurability. Additionally, an expert opinion is not absolutely necessary and may be dispensed with if the totality of evidence shows that psychological incapacity exists and its gravity, juridical antecedence and incurability can be duly established.
In this case, Dr. Tayag’s assessment when taken together with the various testimonies, failed to show that Jose’s immaturity, irresponsibility and infidelity rise to the level of psychological incapacity that would justify the nullification of the parties’ marriage.
Psychological incapacity must be more than a “difficulty,” “refusal” or “neglect” in the performance of the marital obligations. It is not enough that a party prove that the other failed to meet the responsibility and duty of a married person. There must be proof of a natal or supervening disabling factor in the person which must be linked with the manifestation of the psychological incapacity. These were not proven in this case.
NOEL BUENAVENTURA vs. CA & ISABEL SING BUENAVENTURA
G. R. No. 127449, March 31, 2005, 454 SCRA 261
FACTS: Petitioner Noel Buenaventura filed a petition for the declaration of nullity of marriage on the ground that he and his wife were psychologically incapacitated to comply with the essential obligations of marriage. The trial court decreed the marriage null and void ab initio. It likewise ordered petitioner to pay private respondent moral damages in the amount of 2.5 million pesos and exemplary damages of 1 million pesos with 6% interest from the date of this decision plus attorney’s fees of P100,000.00.
ISSUES: 1. Whether the award of moral and exemplary damages are proper.
2. Whether petitioner’s acts and omissions justify the award of
attorney’s fees and litigation expenses.
HELD: 1. NO. Article 21 of the New Civil Code is one of the instances when moral damages may be recovered. It must be noted that Article 21 states that the individual must willfully cause loss or injury to another. There is a need that the act is willful and hence done in complete freedom. However, the marriage was declared void ab initio on the ground of psychological incapacity. The latter is confined to the most serious cases of personality disorders clearly demonstrative of an utter insensitivity or inability to give meaning and significance to the marriage.
It is contradictory to characterize acts as a product of psychological incapacity, and hence beyond the control of the party because an innate inability, while at the same time considering the same set of acts as willful. By declaring the petitioner as psychologically incapacitated, the possibility of awarding moral damages on the same facts was negated. The award of moral damages should be predicated, not on the mere act of entering into the marriage, but on specific evidence that it was done deliberately and with malice by a party who had knowledge of his or her disability and yet willfully concealed the same. No such evidence appears to have been adduced in this case.
2. NO. The acts or omissions of petitioner which led the lower court to deduce his psychological incapacity, and his act of filing the complaint for the annulment of his marriage cannot be considered as unduly compelling the private respondent to litigate, since both are grounded on petitioner’s psychological incapacity, which as explained above is a mental incapacity causing an utter inability to comply with the obligations of marriage. Hence, neither can be a ground for attorney’s fees and litigation expenses. Furthermore, since the award of moral and exemplary damages is no longer justified, the award of attorney’s fees and expenses of litigation is left without basis.
Art. 45 - VITIATED CONSENT - Ground for Annulment of Marriage
ORLANDO VILLANUEVA vs. COURT OF APPEALS
G.R. No. 132955, October 27, 2006, 505 SCRA 564
FACTS: Orlando married Lilia. The former filed a petition for annulment of their marriage stating that he was under threat and duress when he contracted the said marriage since Lilia was already pregnant. In her answer with compulsory counterclaim, she prayed for the dismissal of the petition contending that the petitioner married her voluntarily and he even wrote letters to her to check on the progress of her pregnancy.
ISSUE: Whether the subject marriage may be annulled on the ground of vitiated consent.
HELD: NO. To begin with, it was only on November 17, 1992 or after a span of not less than four (4) years and eight (8) months when Orlando took a serious step to have the same marriage annulled. Unexplained, the prolonged inaction evidently finds basis in Lilia’s allegation that this annulment suit was filed by Orlando solely in the hope that a favorable judgment thereon would bolster his defense in the criminal case for bigamy. Viewed in this perspective,
the instant appeal is, therefore, understandable. But even in terms of merit, the recourse must have fail. The Court is not convinced that appellant’s apprehension of danger to his person is so overwhelmingly at that time, being a security guard, it is reasonable to assume that appellant knew the rudiments of self-defense.
Orlando’s excuse that he could not have impregnated Lilia because he did not have an erection during their tryst is flimsy at best and an outright lie at worst. The complaint is bereft of any reference to his inability to copulate with Lilia. His counsel also conceded before the lower court that his client had a sexual relationship with Lilia.
Article 120 - CONJUGAL PARTNERSHIP PROPERTY
JOSEFA FERRER vs. SPOUSES MANUEL FERRER
G.R. No. 166496, November 29, 2006, 508 SCRA 570
FACTS: The late Alfredo Ferrer acquired a piece of land. Through a loan he introduced several improvements including a residential house and a 2-door apartment building. However, it was only during his marriage with petitioner Josefa that he was only able to pay the loan using the couple’s conjugal funds. From their conjugal funds, Josefa claimed, they constructed a warehouse on the lot. Moreover, petitioner averred that respondent Manuel Ferrer occupied one door of the apartment building, as well as the warehouse; however, he stopped paying rentals, alleging that he had acquired ownership over the property by virtue of Deed of Sale executed by Alfredo in favor of respondents, Manuel and Ismael and their spouses.
It is petitioner’s contention that when her husband was already bedridden, respondents Ismael and Flora Ferrer made him sign a document, purportedly to be his last will and testament. The document, however, was a Deed of Sale covering Alfredo’s lot and the improvement thereon. Learning of this development, Alfredo filed a Complaint for Annulment of the said sale against respondents. The RTC dismissed the same and ruled that the terms and conditions of the Deed of Sale are not contrary to law, morals, good customs, and public policy, and should be complied with by the parties in good faith, there being no compelling reason under the law to do otherwise. The dismissal was affirmed by the Court of Appeals. Although the Supreme Court reaffirmed the CA’s decision, herein petitioner filed another case claiming that, based on the RTC decision, when Alfredo died on 29 September 1999, or at the time of the liquidation of the conjugal partnership, she had the right to be reimbursed for the cost of the improvements on Alfredo’s lot. She alleged that the cost of the improvements amounted to P500,000.00; hence, one-half thereof should be reimbursed and paid by respondents as they are now the registered owners of Alfredo’s lot.
ISSUE: Whether or not respondents have the obligation to reimburse petitioner.
HELD: YES. Article 120 provides the solution in determining the ownership of the improvements that are made on the separate property of the spouses at the expense of the partnership or through the acts or efforts of either or both spouses. Thus, when the cost of the improvement and any resulting increase in value are more than the value of the property at the time of the improvement, the entire property of one of the spouses shall belong to the conjugal partnership, subject to reimbursement of the value of the property of the owner-spouse at the time of the improvement; otherwise, the said property shall be retained in ownership by the owner-spouse, likewise subject to reimbursement of the cost of the improvement. The subject property was precisely declared as the exclusive property of Alfredo on the basis of Article 120 of the Family Code.
PROPERTY RELATIONS - Consent of the Spouse in the disposal of their conjugal property
DAVID AND LORENZA PELAYO vs. MELKI E. PEREZ
G. R. No. 141323, June 8, 2005, 459 SCRA 475
FACTS: David Pelayo, thru a Deed of Absolute Sale, conveyed to Melki Perez, two parcels of agricultural lands. The sale was witnessed by David’s wife, Lorenza, who signed only on the third page in the space provided for witnesses of which Perez’ application for registration of the deed with the Office of the Register of Deeds was denied.
ISSUE: Whether the deed of sale was null and void for lack of marital consent.
HELD: By affixing her signature to the Deed of Sale on the space provided for witnesses, Lorenza is deemed to have given her implied consent to the contract of sale. A wife’s consent to the husband’s disposition of conjugal property does not always have to be explicit or set forth in any particular document, as long it is shown by acts of the wife that such consent or approval was indeed given.
In the present case, although it appears on the face of the deed of sale that Lorenza signed only as an instrumental witness, evidence shows that Lorenza was fully aware of the sale of their conjugal property and consented to the sale. Under Article 173, in relation to Article 166 of the New Civil Code, the lack of marital consent to the disposition of conjugal property does not make the contract void ab initio but merely voidable.
HOMEOWNER AND SAVINGS LOAN BANK vs. COURT OF APPEALS
G.R. No. 153802, March 11, 2005, 453 SCRA 283
FACTS: Miguela and Marcelino were married on August 8, 1967. During their marriage, the spouses purchased a house and lot from certain Sandra.
The subject property was declared for tax assessment purposes. The Deed of Absolute Sale, however, was executed only in favor of the late Marcelino as vendee thereof to the exclusion of his wife.
On December 1, 1993, Marcelino executed a SPA in favor of one Lilibeth, authorizing the latter to obtain loan from Homeowners Bank to be secured by the Spouses Marcelino & Miguela’s house and lot,
Pursuant to the SPA, Lilibeth obtained a loan in the amount of P300,000 from Homeowners Bank. As a security therefor, Lilibeth executed on the same day a Real Estate Mortgage constituted on the subject property. The above-mentioned transaction took place without the knowledge and consent of Miguela.
.
Upon maturity, the loan remained outstanding. As a result, Homeowners Bank instituted extrajudicial foreclose proceeding on the mortgaged property.
After the lapse of one year without the property being redeemed, Homeowners Bank consolidated the ownership by executing Affidavit of Consolidation and a Deed of Absolute Sale.
In the meantime, Marcelino died on December 20, 1995. In one of her visits to the subject property, Miguela learned that Homeowner’s Bank had already employed a certain Roldan to clean its premises and that her car was razed because Roldan allowed a boy to play with fire in the premises
Claiming that she had no knowledge of the mortgage constituted on the subject property, which was conjugal in nature, Miguela instituted with the RTC a complaint for Nullity of Real Estate, Certificate of Sale, Affidavit of Consolidation of Ownership and Deed of Sale and Reconveyance.
In its answer, Homeowners Bank prayed for the dismissal of the complaint on the ground that the property in question was the exclusive property in question of the late Marcelino.
ISSUE
Whether the sale of conjugal property without the consent of the other spouse is valid in so far as the husband’s share is concerned.
RULING
NO. The sale of a conjugal property requires the consent of both the husband and wife. The absence of one renders the entire sale null and void, including the portion of the conjugal property pertaining to the husband who contracted the sale.
The rules of co-ownership do not apply to the property relations of the husband and wife even in a suppletory manner. The regime of conjugal partnership of gains is a special type of partnership, where the husband and wife place in a common fund the proceeds, products, fruits and income from their separate properties and those acquired by either or both spouses through their efforts or by chance.
PHILIPPINE NATIONAL BANK vs. VENANCIO C. REYES, JR.
G.R. No. 212483, October 5, 2016, 805 SCRA 327
FACTS: Venancio is married to Lilia since 1973. During their union, they acquired three (3) parcels of land in Malolos, Bulacan.
The said properties were mortgaged to Philippine National Bank (PNB) on August 25, 1994 to secure a loan..
According to PNB, the Reyes Spouses contracted and duly consented to the loan. When the Reyes Spouses failed to loan obligations, PNB foreclosed the mortgaged real properties.
Venancio assailed the validity of the mortgage, claiming that his wife undertook the loan and the mortgage without his consent and his signature was falsified on the promissory notes and the mortgage. Since the lots involved were conjugal properties, he argued that the mortgage constituted over them was void.
During trial, Flores, a NBI handwriting expert, testified and proved that Venancio’s signatures on the bank documents were falsified.
ISSUES
1) Whether the mortgage constituted over the properties is void.
2) Whether the conjugal partnership can be held liable for the loan contracted unilaterally by Lilia C. Reyes.
3) Whether Venancio is guilty of laches and whether his claim is barred by estoppel.
RULINGS
1) YES, real estate mortgage over a conjugal property is void if the non-contracting spouse did not give consent.
Article 124 of the Family Code is the applicable provision regarding the administration of their conjugal property. It provides that the written consent of the spouse who did not encumber the property is necessary before any disposition or encumbrance of a conjugal property can be valid.
Flores, a handwriting expert of the NBI, compared the signature on the loan documents with the standard signature of Venancio. He concluded that they were not written by the same person. The PNB loan division chief admitted that he merely relied on the documents presented to him, and he never actually saw Venancio sign the documents.
Hence, having established that Venancio’s signature was forged, Venancio proved that he did not consent to the real estate mortgage.
2) YES, while the mortgage is void, the principal obligation is not affected.
In Article 122 of the Family Code, the payment of personal debts contracted by the husband or the wife before or during the marriage shall not be charged to the conjugal partnership, except insofar as they redounded to the benefit of the family.
It is settled how Article 122 should be applied: there are two scenarios considered: one is when the husband, or in this case, the wife, contracts a loan to be used for the family business and the other is when she acts as a surety or guarantor. If she is a mere surety or guarantor, evidence that the family benefited from the loan need to be presented before the conjugal partnership can be held liable. On the other hand, if the loan was taken out to be used for the family business, there is no need to prove actual benefit. The law presumes the family benefited from the loan and the conjugal partnership is held liable. Although PNB cannot foreclose the mortgage over the conjugal property in question, it can still recover the loan amount from the conjugal partnership.
Also, if the conjugal properties of the Reyes Spouses are not enough to answer for the loan, PNB can then recover the remaining unpaid balance from the separate properties of either Venancio or his wife, Lilia. This is based on the last paragraph of Article 121 of the Family Code which provides that if the conjugal partnership is insufficient to cover the foregoing liabilities, the spouses shall be solidarily liable for the unpaid balance from their separate properties.
3) NO, laches does not apply where the delay is within the period prescribed by law.
It is well settled that a delay within the prescriptive period is sanctioned by law and is not considered as one that would bar relief. Laches apply only in the absence of a statutory prescriptive period.
Records show that upon learning about the mortgage, Venancio immediately informed the bank about his forged signature. He filed the complaint for Annulment of Certificate of Sale and Real Estate Mortgage against PNB on September 22, 1998 which was still the prescribed period to redeem a mortgaged property.
JOSEFINA FRANCISCO vs. MASTER IRON WORKS
G.R. No. 151967, February 16, 2005, 451 SCRA 494
FACTS: Josefina Castillo married Eduardo G. Francisco, who at that time was already married to Carmelita Carpio. On August 31, 1984, the Imus Rural Bank, Inc. executed a deed of absolute sale in favor of Josefina Castillo Francisco, covering two parcels of residential land with a house thereon. On the basis of the said deed of sale, the Register of Deeds issued TCT Nos. 87976 and 87977 in the name of “Josefina Castillo Francisco married to Eduardo G. Francisco.” On February 15, 1985, the Register of Deeds made of record Entry No. 85-18003 at the dorsal portion of the said titles. This referred to an Affidavit of Waiver executed by Eduardo where he declared that before his marriage to Josefina, the latter purchased two parcels of land, including the house constructed thereon, with her own savings, and that he was waiving whatever claims he had over the property.
On June 11, 1990, Eduardo, who was then the General Manager and President of Reach Out Trading International, bought bags of cement from Master Iron Works & Construction Corporation (MIWCC) but failed to pay the same. MIWCC filed a complaint against him in the court. After the judgment in favor of MIWCC has become final, the court issued a writ of execution against the aforementioned parcels of land. In the
light of this, Josefina executed an Affidavit of Third Party Claim over the two parcels of land in which she claimed that they were her paraphernal properties and that her husband Eduardo had no propriety
right or interest over them as evidenced by his Affidavit of Waiver. She
alleged that she was the sole owner of the property levied on execution by Sheriff Alejo. Hence, the levy on execution of the property was null and void.
ISSUE: Whether the subject properties are conjugal properties of Josefina Castillo and Eduardo Francisco.
HELD: NO. Article 148 of the Family Code provides: “In cases of cohabitation not falling under the preceding Article, only the properties acquired by both of the parties through their actual joint contribution
of money, property, or industry shall be owned in common in proportion to their respective contributions. In the absence of proof to the contrary, their contributions and corresponding shares are presumed to be equal. The same rule and presumption shall apply to joint deposits of money and evidences of credit. If one of the parties is validly married to another, his or her share in the co-ownership shall accrue to the absolute community or conjugal partnership existing in such valid marriage. If the party who acted in bad faith is not validly married to another, his or her share shall be forfeited in the manner provided in the last paragraph of the preceding Article. The foregoing rules on forfeiture shall, likewise, apply even if both parties are in bad faith.”
Indeed, the Family Code has filled the hiatus in Article 144 of the New Civil Code by expressly regulating in Article 148 the property relations of couples living in a state of adultery or concubinage. The petitioner failed to prove that she had any vested right over the property in question. Since the subject property was acquired during the subsistence of marriage of Eduardo and Carmelita, under normal circumstances, the same should be presumed to be conjugal property. Article 148 of the Family Code also debilitates against the petitioner’s claim since, according to the said article, a co-ownership may ensue in case of cohabitation where, for instance, one party has a pre-existing valid marriage provided that the parties prove their actual joint contribution of money, property or industry and only to the extent of their proportionate interest thereon. We agree with the findings of the appellate court that the petitioner failed to adduce preponderance of evidence that she contributed money, property or industry in the acquisition of the subject property and, hence, is not a co-owner of the property.
CHARGES AGAINST THE CONJUGAL PROPERTY
ELENITA M. DEWARA vs. SPOUSES RONNIE & GINA LAMELA
G.R. No. 179010, April 11, 2011, 647 SCRA 483
FACTS: Eduardo and Elenita were married before the enactment of the Family Code and thus the New Civil Code governed their marital relations. They were separated-in-fact because Elenita went to work in California, USA, while Eduardo stayed in Bacolod City. On January 20, 1985, while Eduardo was driving the private jeep registered in the name of Elenita, hit Ronnie. As a result, MTCC found Eduardo guilty of reckless imprudence and sentenced him to pay civil indemnities. The judgment became final and executory and the sheriff levied the real property registered to Elenita married to Eduardo. Elenita claimed that the said property was her paraphernal property or exclusive property and could not be made to answer for the personal liability of her husband.
ISSUE: Whether the subject property is the paraphernal/exclusive property of Elenita.
HELD: NO. All property of the marriage is presumed to belong to the conjugal partnership, unless it can be proved that it pertains exclusively to the husband or to the wife. Registration in the name of the husband or the wife alone does not destroy this presumption. The separation-in-fact between the husband and wife without judicial approval shall not affect the conjugal partnership. The lot retains its conjugal nature.
Moreover, the presumption of conjugal partnership applies even when the manner in which the property was acquired does not appear. The use of the conjugal funds is not an essential requirement for the presumption to arise. The presumption that the property is conjugal property may be rebutted only by strong, clear,
categorical, and convincing evidence -- there must be strict proof of
the exclusive ownership of one of the spouses, and the burden of proof rests upon the party asserting it.
NULL AND VOID OR INEXISTENT MARRIAGE
SALLY GO - BANGAYAN vs. BENJAMIN BANGAYAN, JR.
G.R. No. 201061, July 3, 2013, 700 SCRA 702
FACTS: Benjamin married Azucena and they had three (3) children. When Azucena left for USA, Benjamin had romantic relationship with Sally where they lived as husband and wife. In order to appease her father, Sally asked Benjamin to sign purported marriage contract without marriage license knowing well that of Benjamin’s marital status. Their cohabitation produced two (2) children and Benjamin acquired several properties.
As the relationship of Benjamin and Sally ended, Sally left for Canada bringing their two (2) children. She then filed a bigamy case against Benjamin using the simulated marriage contract as evidence. In retaliation, Benjamin filed an annulment of non-existent marriage against Sally.
ISSUES: (1) What is the nature of the marriage of Benjamin
and Sally?
(2) What is the property relations governing the marriage
Benjamin and Sally?
HELD: (1) The marriage of the parties is not bigamous because there was no marriage license, therefore, the crime of bigamy was not committed and the marriage was null and void ab initio and inexistent.
(2) Since Benjamin and Sally cohabitated without the benefit of marriage while the first marriage is still existing, their property relation is governed by Article 148 of the Family Code where only the properties acquired by both of the parties through their actual contribution of money, property or industry shall be owned by them in common in proportion to their respective contribution. Since there is no proof of Sally’s contributions to their cohabitation, there can be no co-ownership under Article 148 of the Family Code.
NO MARRIAGE - APPROPRIATE REMEDY
REPUBLIC vs. MERLINDA L. OLAYBAR
G.R. No. 189538, February 10, 2014, 715 SCRA 605
FACTS: Merlinda requested from the NSO a Certificate of No Marriage (CENOMAR) as one of the requirements for her marriage with her boyfriend of five years.
Upon receipt thereof, she discovered that she was already married to a certain Ye Son Sune, a Korean national, on June 24, 2002 at the office of the MTCC Palace of Justice.
She denied having contracted said marriage and claimed that she did not know the alleged husband; she did not appear before the solemnizing officer; and that the signature appearing in the marriage certificate is not hers. She, thus, filed before the RTC a Petition for Cancellation of Entries in the Marriage Contract, especially the entries in the wife portion.
The RTC granted the petition and directed the Local Civil Registrar to cancel all the entries in the WIFE portion of the alleged marriage contract of Melinda and Ye Son Sune.
The OSG, however, filed an appeal assailing the Decision on the ground that (1) there was no clerical spelling, typographical and innocuous errors in the marriage contract for it to fall within the provisions of Rule 108 of the Rules of Court; and (2) granting the cancellation of all the entries in the wife portion of the alleged contract is, in effect, declaring the marriage void ab initio.
ISSUES
(1) Whether the cancellation of entries in the marriage contract, in effect, nullifies the contract.
(2) Whether Rule 108 of the Rules of Court is the appropriate remedy for cancellation or correction of entries in the civil registry.
RULINGS
(1) NO. Melinda indeed sought, not the nullification of marriage as there was no marriage to speak about, but the correction of the record of such marriage to reflect the truth as set forth by the evidence presented.
Otherwise stated, in allowing the correction of the subject certificate of marriage by canceling the entries in the wife portion thereof, the trial court did not, in any way, declare the marriage void as there was no marriage to speak of.
(2) YES. Rule 108 of the Rules of Court provides the procedure for cancellation or correction of entries in the civil registry.
The proceeding may either be summary or adversary. If the correction is clerical, then the procedure to be adopted is summary. If the rectification affects the civil status, citizenship or nationality of a party, it is deemed substantial, and the procedure to be adopted is adversary.
An appropriate adversary suit or proceeding is one where the trial court has conducted proceedings where all relevant facts have been fully and properly developed whereas opposing counsel have been given opportunity to demolish the opposite party’s case, and where the evidence has been thoroughly weighed and considered.
In this case, the entries made in the wife portion of the certificate of marriage are admittedly the personal circumstances of Melinda. The latter, however, claims that her signature was forged and she was not the one who contracted marriage with the purported husband. In other words, she claims that no such marriage was entered into or if there was, she was not the one who entered into such marriage.
JO-ANN DIAZ - SALGADO vs. LUIS G. ANSON
G.R. No. 204494. July 27, 2016, 798 SCRA 541
FACTS: Luis alleged that he is the surviving spouse of the late Severina, with whom he was married in a civil ceremony in 1966. During the marital union, they acquired several real properties, which Luis claimed pertained to the conjugal partnership.
Without his knowledge and consent, Severina executed three (3) separate Unilateral Deeds of Sale transferring the properties in favor of Jo-Ann, Severina’s daughter from a previous relationship. Jo-Ann secured new certificates of title over the said property while the properties subject of the Unilateral Deeds of Sale were acquired exclusively by Severina.
Claiming that he was divested of his lawful share in the conjugal properties, and of his inheritance as a compulsory heir of Severina, Luis filed a complaint to annul the deeds of sale.
On the other hand, Jo-Ann contends that she was unaware of any marriage contracted by her mother with Luis, only knowing theirs to be a common-law relationship which they both acknowledged and formally terminated through a Partition Agreement by virtue of which Luis had already received the properties apportioned to him.
Jo-Ann disputed the validity of Luis and Severina’s marriage on the ground of lack of marriage license. The marriage contract presented to court contained an equivocal declaration that no marriage license was exhibited to the solemnizing officer at the time of marriage.
The RTC nonetheless ruled that the marriage is valid. It noted that the marriage contract, being a public document, enjoys the presumption of regularity in its execution and is conclusive to the fact of marriage.
The CA sustained the RTC ruling because Jo-Ann did not present any evidence to controvert the evidence presented by law.
ISSUES
1) Whether the presumption of regularity attached to public document stand in the presence of prima facie evidence of the non-existence of the marriage license.
2) Whether the partition agreement is valid.
RULINGS
1) NO, the presumption of regularity does not hold water vis-à-vis a prima facie (marriage license), which on its face has established that no marriage license was presented to the solemnizing officer.
To be considered void on the ground of absence of a marriage license, the law requires that the absence of such marriage license must be apparent on the marriage contract, or the very least, supported by a certification from the local civil registrar that no such marriage license was issued to the parties.
Considering that the absence of the marriage license is apparent on the marriage itself, with a false statement therein that the marriage is of an exceptional character and no proof to the contrary was presented, there is no plausible conclusion other than that the marriage between Luis and Severina was celebrated without a valid marriage license and is thus, void ab ignitio.
2) YES, the provision on co-ownership under the Civil Code shall apply in the partition of the properties co-owned by Luis and Severina.
As there is no showing that Luis and Severina were incapacitated to marry each other at the time of their cohabitation and considering that their marriage is void from the very beginning for lack of a valid marriage license, Article 144 of the Civil Code in relation to Article 147 of the Family Code, are the pertinent provisions of law governing their properly relations.
Article 147 of the Family Code “applies to union of parties who are legally capacitated and not barred by any impediment to contract marriage, but whose marriage is nonetheless void for other reasons, like absence of a marriage license. Under this property regime, property acquired by both spouses through their work and industry shall be governed by the rules on equal co-ownership. Any property acquired during the union is prima facie presumed to have been obtained through their joint efforts. A party who did not participate in the acquisition of the property shall still be considered as having contributed thereto jointly if said party’s effort consisted in the care and maintenance of the family household.
It is stated under Article 1079 of the Civil Code that “partition, in general, is the separation, division and assignment of a thing held in common among those to whom it may belong. The thing itself may be divided, or its value.
As to how partition may be validly done, Article 496 of the Civil Code is precise that “partition may be made by agreement between the parties or by Judicial proceedings x x x,” The law does not impose a judicial approval for the agreement to be valid. Hence, even without the same, the partition was validly done by Luis and Severina through the execution of the Partition Agreement.
PROPERTY OWNED IN COMMON TO BE DIVIDED UNDER THE RULES ON CO-OWNERSHIP
MARIETTA N. BARRIDO vs. LEONARDO V. NONATO
G.R. No. 176492, October 20, 2014, 738 SCRA 510
FACTS: In the course of their marriage, Leonardo and Marrieta were able to acquire a parcel of land.
Eventually, their marriage was declared void on the ground of psychological incapacity.
Since there was no more reason to maintain their co-ownership over the property over the property, Leonardo asked Marietta for partition, but the latter refused.
ISSUE: Whether the action for partition is proper.
HELD: YES. Leonardo and Marrieta’s marriage had been declared void for psychological incapacity under Article 36 of the Family Code.
During their marriage, however, the conjugal partnership regime governed their property relations. Although Article 129 provides for the procedure in case of dissolution of the conjugal partnership regime, however, Article 147 specifically covers the effects of void marriages on the spouses’ property relations.
This particular kind of co-ownership under Article 147 applied when a man and a woman, suffering no illegal impediment to marry each other, live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage.
Here, the former spouses both agreed that they acquired the subject property during the subsistence of their marriage. Thus, it shall be presumed to have obtained by their joint effort, work or industry and shall be jointly owned by them in equal shares.
Therefore, the subject property remains to be owned in common by Leonardo and Marietta, which should be divided in accordance with the rules on co-ownership.
PATERNITY AND FILIATIONS
GERARDO CONCEPCION vs. CA & MA. TERESA ALMONTE
G.R. No. 123450, August 31, 2005, 468 SCRA 438
FACTS: Gerardo and Ma. Theresa were married on December 29, 1989. Almost a year later, Ma. Theresa gave birth to Jose Gerardo. Gerardo and Ma. Theresa’s relationship turned out to be short-lived, however. On December 19, 1991, Gerardo filed a petition to have his marriage to Ma. Theresa annulled on the ground of bigamy.
The trial court ruled that Ma. Theresa’s marriage to Mario was valid and subsisting when she married Gerardo and annulled her marriage to the latter for being bigamous. It declared Jose Gerardo to be an illegitimate child as a result. The custody of the child was awarded to Ma. Theresa while Gerardo was granted visitation rights.
ISSUE: Can a child born during a marriage subsequently annulled be declared as an illegitimate child on the basis of his mother’s statements?
HELD: NO. The status and filiation of a child cannot be compromised. Article 164 of the Family Code is clear. A child who is conceived or born during the marriage of his parents is legitimate. As a guaranty in favor of the child and to protect his status of legitimacy, Article 167 of the Family Code provides:
Article 167. The child shall be considered legitimate although the mother may have declared against his legitimacy or may have been sentenced as an adulteress.
The import of Ma. Teresa’s statement is that Jose Gerardo is not her legitimate son with Mario but her illegitimate son with Gerardo. This declaration an avowal by the mother that her child is illegitimate is the very declaration that is proscribed by Article 167 of the Family Code. Gerardo invokes Article 166 (1) (b) of the Family Code. He cannot. He has no standing in law to dispute the status of Jose Gerardo. Only Ma. Theresa’s husband, Mario, or in a proper case, his heirs, who can contest the legitimacy of the child Jose Gerardo born to his wife. Impugning the legitimacy of a child is a strictly personal right of the husband or, in exceptional cases, his heirs. Since the marriage of Gerardo and Ma. Theresa was void from the very beginning, he never became her husband and thus never acquired any right to impugn the legitimacy of her child.
The presumption of legitimacy proceeds from the sexual union in marriage, particularly during the period of conception. To overthrow this presumption on the basis of Article 168 (1) (b) of the Family Code, it must be shown beyond reasonable doubt that there was no access that could have enabled the husband to father the child. Sexual intercourse is to be presumed where personal access is not disproved, unless such presumption is rebutted by evidence to the contrary. The presumption is quasi-conclusive and may be refuted only by the evidence of physical impossibility of coitus between husband and wife within the first 120 days of the 300 days which immediately preceded the birth of the child.
BELEN SAGAD ANGELES vs. ALELI “CORAZON” ANGELES MAGLAYA
G.R. No. 153798, September 2, 2005, 469 SCRA 363
FACTS: Francisco Angeles died intestate on January 21, 1998 in the City of Manila leaving behind four (4) parcels of land and a building.
Respondent Corazon claims that as the legitimate child of the deceased Francisco and Genoveva Mercado has all the qualifications and none of the disqualification required of an administrator.
Petitioner Belen claims, as Francisco’s second wife and surviving spouse, that she should be made administratrix of Francisco’s estate. She claims that respondent Corazon could not be the daughter of Francisco, although she was recorded as Francisco’s legitimate daughter, the corresponding birth certificate was not signed by him. Further, she said that Corazon, despite her claim of being the legitimate child of Francisco and Genoveva Mercado, has not presented the marriage contract between her supposed parents or produced any acceptable document to prove such union.
Corazon offered as evidence a certification from Civil Registrar of Bacolor, Pampanga where the alleged 1938 Francisco-Genoveva wedding took place, were destroyed. She testified having been in open and continuous possession of a legitimate child.
ISSUE: Is a child presumed legitimate in the absence of any concrete proof of a lawful marriage between her parents?
HELD: NO. A legitimate child is a product of, and therefore, implies a valid and lawful marriage. Remove the element of lawful union and there is strictly no legitimate filiation between parents and child. Article 164 of the Family Code cannot be more empathic on the matter: “Children conceived or born during the marriage of the parents are legitimate,
VIRGILIO MAQUILAN vs. DITA MAQUILAN
G.R. No. 155409, June 8, 2007, 524 SCRA 166
FACTS: Virgilio and Dita are spouses who once had a blissful married life and were blessed with a son.
However, their one sugar coated romance turned bitter when Virgilio discovered that Dita was having illicit sexual affair with her paramour. Thus, prompted him to file an adultery case against Dita and her paramour. Consequently, both accused were convicted of the crime charged.
Thereafter, Dita filed a Petition for Declaration of Nullity of Marriage and Dissolution and Liquidation of Conjugal Partnership of Gains against Virgilio. During the pre-trial, both parties entered into a Compromise Agreement for the liquidation of conjugal partnership of gains.
Subsequently, Virgilio filed a motion for the repudiation of the Agreement on the ground that the conviction of Dita of the crime of adultery disqualifies her from sharing in the conjugal property.
ISSUES
(1) Whether the partial voluntary separation of property by the spouses pending the petition for declaration of nullity of marriage is valid.
(2) Whether the conviction of Dita of the crime of adultery a disqualification for her to share in the conjugal property..
RULINGS
(1) YES. Under Article 143 of the Family Code, separation of property may be effected voluntarily or for sufficient cause, subject to judicial approval. The questioned Compromise Agreement which was judicially approved is exactly such a separation of property allowed by law. This conclusion holds true even if the proceedings for the declaration of nullity of marriage was still pending.
(2) Finally, the conviction of adultery does not carry the accessory penalty of civil interdiction. Article 43 of the RPC enumerates the accessory penalties of prision correccional and civil interdiction is not one of them and does not deprive the person of the rights to manage her property and to dispose of such property inter vivos.
GLORIA ZOLETA – SAN AGUSTIN vs. ERNESTO SALES
G.R. No. 189289, August 31, 2016, 801 SCRA 683
FACTS: On March 14, 1994, brothers Teodoro and Ernesto Sales filed an action for the judicial approval of their recognition as the illegitimate children of the late Louis Fernandez and his common-law wife Epitacia Sales who was a housekeeper in the Fernandez household. Louis and his legal wife Marie Louise did not have any child.
According to the Sales brothers, Louis formally recognized them as his children by Epitacia in two public documents bearing his thumb marks, viz: (1) a notarized document dated November 11, 1980 jointly executed by Louis and Epitacia formally recognizing the Sales brothers as their children and (2) a document solely executed by Louis on December 2, 1980, dominated as Acknowledgment of Children.
Petitioner Gloria raised her opposition and alleged that the Spouses Fernandez informally adopted her as their child when she was only 2 years old as she was treated as their own child by showing photographs. She insisted that the father of the Sales brothers is Corpus, the former houseboy of the Fernandez household.
Gloria asserted that the documents presented by the Sales brothers were spurious as Louis could still write, rendering incredible the mere affixing of his thumbprints to the contested documents.
Palad, a fingerprint examiner of the NBI, compared the thumbprint of Louis on the documents of recognition with the other documents containing his thumb marks. Thereafter, he concluded that all the thumbprints in the disputed documents belong to Louis.
ISSUE
Whether the documents submitted by the Sales brothers sufficiently established their recognition as illegitimate children of Louis Fernandez.
RULING
YES, the documents submitted by the Sales brothers sufficiently established their recognition as illegitimate children of Louis Fernandez.
The legitimate filiation of a child may be established, among others, by an admission of legitimate filiation in a public document or a private handwritten instrument and signed by the parent concerned. The same requirement applies in establishing the filiation of illegitimate children.
In the case at hand, although Louis’ thumb mark appears in the notarized document, a thumb mark has been repeatedly considered by the Court as a valid mode of signature.
The Court, in the case of Yason vs. Arciaga, held that a signature may be made by a person’s cross or mark.
Moreover, a notarized document is a public document and as such, it enjoys the presumption of regularity, which can be only be overthrown by clear and convincing evidence. It serves as a prima facie evidence of the truth of the facts stated therein and a conclusive presumption of its existence and due execution.
The bare allegations of Gloria cannot qualify as clear and convincing evidence to overturn such presumption.
ROMEO F. ARA et. al. vs. DRA FELY S. PIZARRO et. al.
G.R. No. 187273, February 15, 2017, 817 SCRA 518
FACTS: Romeo, William, Dr. Pizarro and Henry all claimed to be children of the late Josefa who died on November 18, 2002.
The late Josefa left properties in Dr. Pizarro’s possession and so Romeo, William and Henry filed for judicial partition of the properties before the RTC.
Dr. Pizarro averred that she was the only legitimate and only child of Josefa. She denied that any of the plaintiffs a quo were her siblings.
Petitioners Ramon and William argued that during Josefa’s lifetime, she acknowledged all of them as her children directly, continuously, spontaneously and without concealment and that in the absence of any record of birth in the civil register, filiation may be established on admission of filiation in a public or handwritten document.
ISSUE
Whether filiation be proved through open and continuous possession of the status of illegitimate children after the death of the putative parent.
RULING
NO, it is clear that any action seeking to prove filiation sought under the second paragraph of Article 172 of the Family Code must be brought during the lifetime of the alleged parent.
To establish filiation as illegitimate children after the death of a putative parent, the only evidence allowed is a record of birth appearing in the civil register, or a final judgment, or an admission of legitimate filiation made in a public document or a privately signed handwritten instrument by Josefa.
After Josefa’s death in 2002, petitioners could no longer be allowed to introduce evidence of open and continuous illegitimate filiation to Josefa. Petitioners also did not present the kind of evidence contemplated under Article 172 of the Family Code. They did not present evidence of an admission of filiation as a public document or a privately handwritten instrument signed by the putative parent.
PARENTAL CONSENT
JOCELYN GUALBERTO vs. CRISANTO GUALBERTO
G.R. No. 154994, June 28, 2005, 461 SCRA 450
FACTS: During the pendency of an action for declaration of nullity of marriage of the spouses, the husband, Crisanto Gualberto, moved that the custody of their child below age of seven be transferred to him. He alleged that his wife was a lesbian. The trial court awarded custody to the mother, but was reversed by the appellate court.
ISSUE: Whether lesbianism per se is a sufficient ground to remove custody of the child below seven years old from the mother.
HELD: NO. It is not enough that the woman is a lesbian. He must also demonstrate the she carried on her purported relationship with a person of the same sex in the presence of their son or under circumstances not conducive to the child’s proper moral development.
Sexual preference or moral laxity alone does not prove parental neglect or incompetence. Not even the fact that a mother is a prostitute or has been unfaithful to her husband would render her unfit to have custody of her minor child. To deprive the wife of custody, the husband must clearly establish that her moral lapses have an adverse effect on the welfare of the child or have distracted the offending spouse from exercising proper parental care.
Article 213 of the Family Code takes its bearing from Article 363 of the Civil Code which prohibits in no uncertain terms the separation of a mother and her child below seven years, unless a separation is grounded upon compelling reasons as determined by a court.
CONSENT TO ADOPTION
DIWATA RAMOS LANDINGIN vs. REPUBLIC
G.R. No. 164948, June 27, 2006, 493 SCRA 415
FACTS: Diwata, a US citizen, filed a petition for the adoption of 3 minors, natural children of Manuel, the former’s brother and Amelia.
In her petition, she alleged that when her brother died, the children were left to the care of their paternal grandmother as their biological mother Amelia went to Italy, re-married there and now has 2 children by her second marriage and no longer communicate with them from the time she left up to the institution of the adoption proceedings.
After the paternal grandmother passed away, the minors were being supported by Diwata and her children abroad who gave their written consent for their adoption.
ISSUE
Whether minors be adopted without the written consent of their biological mother.
RULING
NO. The general requirement of consent and notice to the natural parents is intended to protect the natural parental relationship from unwarranted interference by interlopers, and to insure the opportunity to safeguard the best interests of the child in the manner of the proposed adoption. Clearly, the written consent of the biological parents is indispensable for the validity of a decree of adoption.
FAMILY HOME
Article 153
JOSE HONRADO vs. COURT OF APPEALS
G.R. No. 166333, November 25, 2005, 476 SCRA 280
FACTS: The Family Home of the petitioner therein was levied upon to answer for his judgment debt, and the sale of the said property was set. Petitioner was served with a copy of the notice of sale which he opposed. Petitioner, however, allowed the sale at the public auction to proceed and the Sheriff to execute a certificate of sale over the property in favor of the private respondent therein. The petitioner remained silent and failed to seek relief from the Sheriff or the Court until one year from the date of the auction sale when he filed his motion to declare the property exempt from execution. But even in the said motion, petitioner failed did not present evidence that the property was a family home.
ISSUE: Whether or not a family home may not be exempt for execution.
HELD: YES. While it is true that the family home is constituted on a house and lot from the time it is occupied as a family residence and is exempt from execution or forced sale under Article 153 of the Family Code, such claim for exemption should be set up and proved to the Sheriff before the sale of the property at public auction. Failure to do so would estop the party from later claiming the exemption.
PERLA G. PATRICIO vs. MARCELINO G. DARIO III
G.R. No. 170829, November 20, 2006, 507 SCRA 438
FACTS: On July 5, 1987, Marcelino died intestate. He was survived by his wife, Perla and their two (2) sons: Marcelino Marc and Marcelino III. Among the properties left by the late Marcelino was a residential house covering an area of 755 square meters.
On August 10, 1987, Perla, Marcelino Marc and Marcelino III extrajudicially settled the estate of Marcelino. Accordingly, a new title was issued in the names of Perla, Marcelino Marc and Marcelino III.
After ten (10) years on August 10, 1997, Perla and Marcelino Marc formally advised Marcelino V to partition the subject property and terminate the co-ownership. Marcelino III refused the partition of the subject property on the ground that it that the subject property is being used as the Family Home by his son Marcelino III that should continue despite the death of one or both spouses as long as there is a minor beneficiary residing in the premises. The minor beneficiary is the son of Marcelino III, who is the grandson of Spouses Marcelino and Perla.
ISSUE
Whether the partition of the family home is proper where one of the co-owners refuse to accede to such partition on the ground that a minor beneficiary still resides in the said home.
HELD
NO. The family home may be preserved for a minimum of 10 years following the death of the spouses or the unmarried family head who constituted the family home, or of the spouse who consented to the constitution of his or her separate property as family home. After 10 years and a minor beneficiary still lives therein, the family home shall be preserved only until the minor beneficiary reaches the age of majority. The intention of the law is to safeguard and protect the interests of the minor beneficiary until reaches legal age and would now be capable of supporting himself. However, three (3) requisites must concur before a minor beneficiary is entitled to the benefits of Art. 159: (1) the relationship enumerated in Art. 154 of the Family Code; (2) they live in the family home; and (3) they are dependent for legal support upon the head of the family.
ALBINO JOSEF vs. OTELIO SANTOS
G.R. No. 165060, November 27, 2008, 572 SCRA 57
FACTS: Albino was held liable by the trial court to pay to Otelio the sum of P400,000 representing the shoe materials he bought on credit. Otelio moved for the issuance of writ of execution and to satisfy the judgment award, Albino’s house and lot was attached, auctioned and awarded to Otelio as the highest bidder. Albino protested and claimed that he had no other property to answer for the judgment credit and the house and lot in which he was residing was his family home thus exempt from execution.
ISSUE: Whether the judgment or judicial order is legal for the attachment and sale on public auction of the family home to satisfy the judgment award.
HELD: NO. The judgment or judicial order to attach and sell on public auction of the family home to satisfy the judgment award is null and void and it may be said to be a lawless thing, which can be treated as an outlaw and slain at sight or ignored wherever and whenever it exhibits its head.
The family home is a real right which is gratuitous, inalienable and free from attachment, constituted over the dwelling place and the land on which it is situated, which confers upon a particular family the right to enjoy such properties, which must remain with the person constituting it and his heirs. It cannot be seized by creditors except in certain special cases under Article 155 of the Family Code.
SIMEON CABANG vs. MR. & MRS. GUILLERMO BASAY
G.R. No. 180587, March 20, 2009, 582 SCRA 172
FACTS: Simeon had established his family home over the property of registered owner Felix Odong and he had been in continuous, open, peaceful and adverse possession of the same parcel of land since 1956 up to present. Mr. & Mrs. Guillermo Basay bought the subject property from the heirs of Felix Odong and upon discovery that Simeon was actually occupying the lot, they filed a complaint for recovery of property.
ISSUE: Whether the property subject of the controversy is a duly constituted family home.
HELD: NO. Under Article 153 of the Family Code, a family home is deemed constituted on a house and a lot from the time it is occupied as a family residence. It is likewise a given fact that the family home must be constructed on property owned by the persons constituting it. Since the property on which the alleged family home stands is owned by the Odongs, their continued stay on the subject land is by mere tolerance of the late Felix Odong.
SUPPORT PENDENTE LITE
MA. BELEN B. MANGONON vs. COURT OF APPEALS
G.R. No. 125041, June 30, 2006, 494 SCRA 1
FACTS; Belen and Federico were married. But the same was later annulled because it was solemnized without the required consent per Article 85 of the New Civil Code. Seven (7) months after said annulment, petitioner gave birth to twin daughters which she later raised in the U.S. with the help of her second husband. A petition for declaration of legitimacy and support, with application for support pendente lite was filed by petitioner against Federico since they were no longer capable of paying the college education of the twins.
Because the parents are no longer capable of providing support, petitioner alleges that the twins’ grandfather should be ordered to provide the support. On the other hand, respondent Francisco avers that the order of liability for support under Art. 199 is not concurrent such that the obligation must be borne by those related to the recipient and in this case petitioner and her second husband. He also alleges that even if he is responsible for said support, he could not be made to answer beyond what petitioner and the father could afford.
ISSUE: Whether the obligation to give support devolves on the grandfather in default of the financial capacity of twin daughters’ parents.
HELD; YES. Respondent Francisco is liable for half of the amount of school expenses incurred by twin daughters as support pendente lite. The petitioner was able to establish, by prima facie proof, the filiation of her twin daughters to private respondents and the twins’ entitlement to support pendente lite thus the next question is who should be made liable for said award.
Anent respondents Francisco and Federico’s claim that they have the option under the law as to how they could perform their obligation to support the twins. Art. 204 provides that “the person obliged to give support shall have the option to fulfill the obligation either by paying the allowance fixed, or by receiving and maintaining in the family dwelling the person who has a right to receive support. The latter alternative cannot be availed of in case there is a moral or legal obstacle thereto.” Under the said provision, Francisco could not avail for himself of the second option.
Articles 175 & 176 - PROOF OF FILIATION
JENIE SAN JUAN DELA CRUZ vs. RONALD PAUL GARCIA
G.R. No. 177728, July 31, 2009, 594 SCRA 648
FACTS: Jenie and Dominique were living together as husband and wife without the benefit of marriage and resided with Dominique’s parents. Thereafter, Dominique died. After almost two month, Jenie gave birth to Christian. Jenie applied for the registration of the child’s birth using the surname of Dominique in support of which she submitted affidavit to use the surname of the father and affidavit of acknowledgement executed by Dominique’s father. Attached to the affidavit is a document entitled “Autobiography” which was handwritten by Dominique. The Civil Registrar denied Jenie’s application because the child was born out of wedlock and the father unfortunately died prior to his birth and has no more capacity to acknowledge the paternity of the child.
ISSUE: Whether the unsigned handwritten statement by the deceased father can be considered as recognition of paternity.
HELD: YES. A father who acknowledges paternity of a child through a written instrument must affix his signature. It is clearly implied in Article 176 of the Family Code. However, special circumstances exist to hold that the unsigned Autobiography of Dominique substantially satisfies the requirement of law. First, Dominique died about two months prior to the child’s birth. Second, the relevant matters in the Autobiography, unquestionably handwritten by Dominique. Third, Jenie’s testimony is corroborated by the Affidavit of Acknowledgment of Dominique’s father. These circumstances indicating Dominique’s paternity of the child give life to his statements in his Autobiography.
3. PROPERTY
FEL ENERGY, INC. vs. THE PROVINCE OF BATANGAS
G.R. No. 168557, February 16, 2007, 516 SCRA 186
ISSUE: Whether power barges are considered personal properties.
HELD: NO. Power barges are real property and are thus subject to real property tax. Article 415 (9) of the New Civil Code provides that “docks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake, or coast” are considered immovable property. Thus, power barges are categorized as immovable property by destination, being in the nature of machinery and other implements intended by the owner for an industry or work which may be carried on in a building or on a piece of land and which tend directly to meet the needs of said industry or work.
LUIS MARCOS P. LAUREL vs. HON. ZEUS ABROGAR
G.R. No. 155076, January 13, 2009, 576 SCRA 108
FACTS: Luis was charged of the crime of theft by stealing and using the international long distance calls belonging to PLDT by conducting International Simple Resale (ISR) which is a method of routing and completing international long distance calls using lines, cables, antennae, and/or airwave frequency which connect directly to the local or domestic exchange facilities of the country where the call is destined. Luis claimed that international long distance calls and the business of the providing telecommunications or telephone services are not personal properties under Article 308 of the Revised Penal Code.
ISSUE: Whether the business of providing telecommunications and the telephone services are personal property under Article 308 of the Revised Penal Code.
HELD: YES. The only requirement for a personal property to be the object of theft under the penal code is that it can be capable of appropriation. It need not be capable of “asportation” which is defined as “carrying away.” Jurisprudence is settled that to “take” under the theft provision of the penal code does not require asportation or carrying away.
Appropriation of forces of nature which are brought under control by science such as electrical energy can be achieved by tampering with any apparatus used for generating or measuring such forces of nature. Luis was charged with engaging in International Simple Resale (ISR) or the unauthorized routing and completing of international long distance calls using lines, cables, antennae, and/or air wave frequency and connecting these calls directly to the local or domestic exchange facilities of the country where destined.
4. CO-OWNERSHIP
Article 487
RESUENA vs. COURT OF APPEALS
454 SCRA 42, G.R. No. 128338, March 28, 2005
* * * It was held that anyone of the co-owners may sue for ejectment.
- - this is an unqualified and categorical authority of anyone of the co-owners to evict possessors or lessees.
When the action is brought by one of them for the benefit of all, a favorable decision will benefit the co-owners, but an adverse decision cannot prejudice their rights.
ARNELITO ADLAWAN vs. EMETERIO ADLAWAN
479 SCRA 275, G. R. No. 161916, January 20, 2006
FACTS: Arnelito Adlawan was acknowledged illegitimate son of Dominador Adlawan who died without an issue and survived by his wife Graciana. Claiming to be the sole heir of Dominador, petitioner executed an affidavit adjudicating to himself Lot 7226 and the house
built thereon. Arnelito filed an unlawful detainer suit to eject respondents from the property in his own name and as the sole owner of the property.
ISSUE: Whether petitioner can validly maintain the instant case for ejectment.
HELD: NO. The late Dominador Adlawan was survived not only by petitioner but also by the legal wife of the decedent, Graciana, who died 10 years after the demise of Dominador on May 28, 1987.
- - - By intestate succession, Graciana and petitioner became co-owners of Lot 7226 under Article 998 of the New Civil Code.
- - - the death of Graciana on May 6, 1997, did not make petitioner the absolute owner of Lot 7226 because the share of Graciana passed to her relatives by consanguinity and not to petitioner with whom she had no blood relations.
- - - Article 487 provides that “any one of the co-owners may bring an action in ejectment.”
- - - this article covers all kinds of actions for the recovery of possession: forcible entry and unlawful detainer (accion interdictal), recovery of possession (accion publiciana) and recovery of ownership (accion de reivindicacion).
A co-owner may bring such an action without the necessity of joining all the other co-owners as co-plaintiffs because the suit if presumed to have been filed to benefit his co-owners.
- - - Where the suit for the benefit of the plaintiff alone who claims to be the sole owner and entitled to the possession of the litigated property, the action should be dismissed. (Baloloy vs. Hular, 438 SCRA 80, G. R. No. 157767, September 9, 2004).
- - - It is not disputed that petitioner brought the suit for unlawful detainer in his name alone and for his own benefit to the exclusion of the heirs of Graciana as he even executed an affidavit of self-adjudication over the disputed property.
- - - It is clear therefore that petitioner cannot validly maintain the instant action considering that he does not recognize the co-ownership that necessarily flows from his theory of succession to the property of his late father Dominador.
PUBLIC DOMINION
DOMALSIN vs. SPOUSES VALENCIANO
G.R. No. 158687, January 25, 2006, 480 SCRA 114
Q: What is the property of public dominion?
A: Property of public dominion is defined by Article 420 of the Civil Code as follows:
(1) Those intended for public use such as roads, canals, rivers, torrents, ports and bridges constructed by the state, banks, shores, roadsteads and other of similar character;
(2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth.
Q: Who owns property of public dominion?
A: Properties of public dominion are owned by the general public. Public use is “use that is not confined to privileged individuals, but open to the indefinite public.” As the land in controversy is a portion of Kennon Road which is for the use of the people, there can be no dispute that same is part of public domain. This being the case, the parties cannot appropriate the land for themselves. Thus, they cannot claim any right of possession over it.
REGALIAN DOCTRINE
HEIRS OF ZOSIMO MARAVILLA vs. PRIVALDO TUPAS
G.R. No. 192132, September 14, 2016, 803 SCRA 1
FACTS: Privaldo, along with the other heirs of the late Asisclo, has maintained their occupation and possession of the subject property located in Boracay island.
The heirs of the late Zosimo claimed ownership over 10,000 square meters of said property by a virtue of a Deed of Sale dated February 8, 1975 betweem Zosimo and Asiclo.
The heirs of Zosimo filed a case for quieting of title with recovery of possession and the RTC ruled in their favor.
While the motion for execution was pending, the Supreme Court declared Boracay island as government property.
The CA ordered the decision of the RTC granting the motion for execution as null and void and ruled that the Boracay Decision was a supervening event and the RTC erred in not declaring null and void the sale of unregistered land considering that Boracay island has been classified as an inalienable land.
The heirs of Zosimo argued that the Boracay Decision is not a supervening event and the settled dispute between the parties as to who has the better right to the property is distinct and separate from the issue of titling sought in the Boracay decision.
ISSUE
Whether private individual may acquire vested right of ownership over the Boracay island, considering that they have been in open and continuous possession for several years.
RULING
NO. In the present case, the basis of Zosimo’s claim over the subject property is the Deed of Sale of Unregistered Land.
This Deed of Sale has been acknowledged and adjudged by the RTC to be binding between the parties and in fact, has attained finality.
The SC in the Boracay Decision ruled that the entire island of Boracay as state owned except for lands already covered by existing titles.
Therefore, the Boracay island, being owned by the State, can only be declared or made subject of private ownership by the government.
Only the government can determine the manner in which the Boracay island should be disposed of or conveyed to private individuals, pursuant to the Regalian Doctrine which dictates that all lands not clearly within private ownership shall be presumed to be part of the public domain belonging to the State.
Thus, all lands that have not acquired from the government, either by purchase or by grant, remain part of the inalienable public domain.
In this case, at the time of the sale of the subject property, the late Asisclo had no right to sell a property that has not been declared alienable by the State. One cannot dispose of a thing he does not own.
Therefore, the “Sale of Unregistered Land” is void ab initio for having an object outside the commerce of men.
5. S U C C E S S I O N
IN THE MATTER OF THE INTESTATE ESTATES OF DELGADO & RUSTIA vs. HEIRS OF MARCIANA RUSTIA VDA. DE DAMIAN
G.R. No. 155733, January 27, 2006, 480 SCRA 334
FACTS: Guillermo Rustia and Josefa Delgado died intestate and without descendants. Guillermo outlived Josefa by two years. Petitioners and respondents are their respective relatives claiming rights to their intestate estate.
The petition for letters of administration stated that Josefa Delgado and Guillermo Rustia were never married. According to petitioners, sometime in 1917, Guillermo proposed marriage to Josefa. They eventually lived together as husband and wife but were never married. To prove their assertion, petitioners pointed out that no record of the contested marriage existed in the civil registry. Moreover, a baptismal certificate naming Josefa Delgado as one of the sponsors referred to her as “Señorita” or unmarried.
Josefa was the daughter of Felisa Delgado by one Lucio Ocampo with five other children without the benefit of marriage. Felisa had another son by way of Ramon Osorio who is Luis Delgado, one of the claimants in Josefa’s estate. But, unlike her relationship with Lucio Ocampo which was admitted one without the benefit of marriage, the legal status of Ramon Osorio’s and Felisa Delgado’s union is in dispute.
The question of whether Felisa Delgado and Ramon Osorio ever got married is crucial to the claimants because if Ramon Osorio and Felisa Delgado had been validly married, then their only child Luis Delgado was a legitimate half-blood brother of Josefa Delgado and therefore excluded from the latter’s intestate estate. He and his heirs would be barred by the principle of absolute separation between legitimate and illegitimate families. Conversely, if the couple were never married, Luis Delgado and his heirs would be entitled to inherit from Josefa Delgado’s estate, as they would all be within the illegitimate line.
ISSUE
1) Are grandnephews and grandnieces entitled to inherit by the right of representation in the collateral line?
2) Whether there was a valid marriage between Guillermo and Josefa and between Felisa and Ramon.
RULINGS
1) NO. Under Article 972 of the new Civil Code, the right of representation in the collateral line takes place only in favor of the children of brothers and sisters (nephews and nieces), Consequently, it cannot be exercised by grandnephews and grandnieces. Therefore, the only collateral relatives of Josefa Delgado who are entitled to partake of her intestate estate are her brothers and nieces, or their children who were still alive at the time of her death on September 8, 1972. They have a vested right to participate in the inheritance.
2) YES. In this case, several circumstances give rise to the presumption that a valid marriage existed between Guillermo Rustia and Josefa Delgado. Their cohabitation of more than 50 years cannot be doubted. Their family and friends knew them to be married. Their reputed status as husband and wife was such that even the original petition for letters of administration filed by Luisa Delgado vda. de Danao in 1975 referred them as spouses.
FELIX AZUELA vs. COURT OF APPEALS
G.R. No. 122880, April 12, 2006, 487 SCRA 119
FACTS: Felix Azuela sought to admit to probate the notarial will of Eugenia E. Igsolo.
However, this was opposed by Geralda Castillo, who was the attorney-in-fact of “the 12 legitimate heirs” of the deceased.
According to her, the will was forged and imbued with several defects.
Particularly, the issue relevant in this subject is that the will was not properly acknowledged. The notary public Petronilo Y. Bautista, only wrote “Nilagdaan ko at ninotaryo ko ngayong 10 ng Hunyo, 1981 dito sa Lungsod ng Maynila.
ISSUE
Whether the will is fatally defective.
RULING
YES. The notarial will is fatally defective.
A will whose attestation clause does not contain the number of pages on which the will is written is fatally defective. A will whose attestation clause is not signed by the instrumental witnesses is fatally defective. The attestation clause is “a memorandum of the facts attending the execution of the will” required by law to be made by the attesting witnesses and it must necessarily bear the signatures. An unsigned attestation clause cannot be considered as an act of the witnesses, since the omission of their signatures at the bottom thereof negatives their participation.
And perhaps most importantly, a will, which does not contain an acknowledgment, but a mere jurat, is fatally defective. A jurat is that part of an affidavit where the notary certifies that before him/her; the document was subscribed and sworn to by the executor. Any one of these defects is sufficient to deny probate. A notarial will with all three defects is just aching by judicial rejection. There is a distinct and consequential reason the Civil Code provides a comprehensive catalog of imperatives for the proper execution of notarial will.
CELESTINO BALUS vs. SATURNINO BALUS
G.R. No. 168970, January 15, 2010, 610 SCRA 178
FACTS: Rufo, the father of Celestino and Saturnino, mortgaged a parcel of land he owns as a security for a loan with the Rural Bank. For his failure to pay his loan, the mortgaged property was foreclosed and was subsequently sold to the Bank as the sole bidder. The property was not redeemed within the period allowed by law and a new title was issued in the name of the bank.
Later, Celestino and Saturnino executed an Extrajudicial Settlement where they intended to redeem the property mortgaged by their father with the Bank.
Saturnino bought the subject property from the bank and thereafter, he filed a complaint for recovery of possession against Celestino.
ISSUE: Whether there ever a co-ownership between Celestino and Saturnino over the subject property at any given point of time.
HELD: NONE. At the time of the execution of the Extrajudicial Settlement, the subject property formed part of the estate of their deceased father. The rights to a person’s succession are transmitted from the moment of his death. In addition, the inheritance of a person consists of the property and transmissible rights and obligations existing at the time of his death, as well as those which have accrued thereto since the opening of the succession. Since Rufo lost ownership of the subject property during his lifetime, it only follows that at the time of his death, the disputed parcel of land no longer formed part of his estate.
RAFAEL C. UY vs. ESTATE OF VIPA FERNANDEZ LAHAYLAHAY
G.R. No. 200612, April 5, 2017, 822 SCRA 382
FACTS: Vipa is the registered owner of land situated in Jaro, Iloilo City. Vipa and her husband, Levi, have two children, Grace Joy and Jill Frances.
A contract of lease was executed in 1990 between Vipa and Rafael over the subject property and the improvement thereon.
On March 5, 1994, Vipa died leaving no will or testament whatsoever. Grace Joy became the de facto administrator of the Estate of Vipa.
In June 1998, Rafael stopped paying the monthly rentals. Consequently, on June 12, 2003, the Estate of Vipa, through Grace Joy, filed a complaint for unlawful detainer with MTCC against Rafael. At the time of filing of the complaint, Rafael’s unpaid rents amounted to P271,150.00.
In his answer, Rafael denied that he refused to pay the rent for the lease of the subject property. He claimed that Patria, Vipa’s sister, demanded for the payment of the rents, claiming that she is the rightful heir of Vipa.
Since Rafael had no idea who is entitled to receive the rent for the subject property, he deposited the amount of P10,000 with the Office of the Clerk of Court on November 20, 1998 and that Grace Joy was informed of such consignation.
The MTCC rendered a Decision in favor of the Estate of Vipa.
On appeal, the RTC reversed the MTCC’s decision and dismissed the complaint for unlawful detainer.
The RTC held that the MTCC erred in including the entire subject property as part of the Estate of Vipa. The RTC explained that the subject property was acquired by Vipa during the subsistence of her marriage with Levi, and as such, is part of their conjugal properties.
Accordingly, the RTC ruled that Rafael, as co-owner of the subject property, having bought Levi’s one - half share thereof, had the right to possess the same.
However, the CA reversed RTC’s decision on the ground that the issue of ownership of the subject property was raised for the first time on his appeal with the RTC.
ISSUES
1) Whether Rafael is barred from raising the claim that he owns Levi’s one-half undivided share in the subject property for the first time on appeal to RTC.
2) Whether Rafael becomes a co-owner and has the right to possess the subject property as an incident of ownership.
3) Whether Rafael could still be directed to vacate property and be not obliged to pay the unpaid rents.
RULINGS
1) NO. It is true that fair play, justice and due process dictate that parties should not raise for the first time on appeal issues that they could have raised but never did during trial.
However, before a party may be barred from raising an issue for the first time on appeal, it is imperative that the issue could have been raised during trial.
What escaped the CA’s attention is that the sale of the one-half undivided share in the subject property to Rafael was consummated only on December 29, 2005, more than two years after Rafael filed with the MTCC his answer to the complaint for unlawful detainer on July 18, 2003.
Obviously, Rafael could not have raised his acquisition of Levi’s share in the subject property as an affirmative defense in the answer he filed with the MTCC.
Thus, the CA should have exerted efforts to resolve the said issue instead of dismissing the same on the flimsy ground that it was not raised during the proceeding before the MTCC.
2) YES. The sale by Levi of his one-half undivided share in the subject property to Rafael effectively transferred his right as a co-owner thereof thus making the buyer, Rafael, a co-owner of the subject property.
Upon Vipa’s death, one-half of the subject property was automatically reserved in favor of the surviving spouse, Levi, as his share in the conjugal partnership. The other half, which is Vipa’s share, was transmitted to Vipa’s heirs - Grace J oy and Jill Frances.
Under Article 493 of the Civil Code, a co-owner could sell his undivided share, hence, Levi had the right to freely sell and dispose of his undivided interest.
Thus, the sale by Levi of his one-half share in the subject property was not necessarily void, for the right as a co-owner thereof was effectively transferred, making the buyer, Rafael, a co-owner of the subject property.
3) NO. Rafael could no longer be directed to vacate the property since he became a co-owner of the subject property on December 29, 2005 - the time when Levi sold his one-half undivided share over the subject property to Rafael.
Otherwise stated, prior to his acquisition of Levi’s one-half undivided share, Rafael was a mere lessee of the subject property and is thus obliged to pay the rents for his possession thereof.
RESERVA TRONCAL
MARIA MENDOZA vs. JULIA P. DELOS SANTOS
G.R. No. 176422, March 20, 2013, 694 SCRA 74
FACTS: Placido and Dominga had four (4) children: Antonio, Exequiel married to Leonor, Apolonio and Valentin. Three (3) parcels of land located in Sta. Maria, Bulacan were registered in the name of Exequiel married to Leonor in which Exequiel was in possession of the properties. After Exequiel’s death, the properties passed to his spouse Leonor and only daughter Gregoria. After Leonor’s death, her share went to Gregoria. In 1992, Gregoria died intestate and without issue and these properties were adjudicated to Julia, Leonor’s sister, as the sole surviving heirs of Leonor and Gregoria.
On the other hand, the heirs of Antonio: Apolonio and Valentin claimed that these properties should be reserved by Julia in their behalf and must now revert back to them applying Article 891 of the New Civil Code on reserva troncal.
ISSUES: (1) Who are the person involved in reserve troncal?
(2) Whether Julia, sister of Leonor and aunt of Gregoria,
qualifies as reservoir or reservista.
(3) Whether the heirs of Antonio, namely: Apolonio and Valentin
as reservees or reservatarios.
HELD: (1) As contemplated in Article 891 of the New Civil Code, the following persons are involved in reserva troncal:
a) the ascendant or brother or sister from whom the property was received by the descendant by lucrative or gratuitous title;
b) the descendant or prepositus (propositus) who received the property;
c) the reservor (reservista), the other ascendant who obtained the property from the prepositus by operation of law; and
d) the reservee (reservatario) who is within the third degree from the prepositus and who belongs to the line from which the property came and for whom the property should be reserved by the reservor.
The ownership of the properties should be reckoned only from Exequiel as he was the ascendant from where the first transmission occurred, or from whom Gregoria inherited the properties in dispute as the descendant who received the properties by gratuitous title.
(2) YES. In determining the collateral line of relationship, ascent is made to the common ancestor and then descent to the relative from whom the computation is made. In the case of Julia’s collateral relationship with Gregoria, ascent is to be made from Gregoria to her mother Leonor (one line/degree), then to the common ancestor, that is Julia and Leonor’s parents (second line/degree), and then descent to Julia,
her aunt (third line/degree). Thus, Julia is Gregoria’s collateral relative within the third degree and not her ascendant.
(3) NO. They cannot be considered reservee/reservatarios as they are not relatives within the third degree of Gregoria from whom the properties came. They are first cousins of the propositus who are fourth degree relatives and are not reservees/reservatarios.
COLLATION - Article 1061
CORAZON M. GREGORIO vs. ATTY. JOSE R. MADARANG
G.R. No. 185226, February 11, 2010, 612 SCRA 340
FACTS: During the lifetime of Casimiro, he transferred one lot by way of Deed of Donation to his son, Vicente. Upon the death of Casimiro, an inventory report of the properties of the decedent was made before the probate court excluding the donated lot to Vicente.
ISSUE: Whether the donated lot be excluded from the inventory of the properties of the decedent.
HELD: NO. Article 1061 of the New Civil Code expressly provides that “every compulsory heir, who succeeds with other compulsory heirs, must bring into the mass of the estate any property or right which he may have received from the decedent, during the lifetime of the latter, by way of donation, or any other gratuitous title, in order that it may be computed in the determination of the legitime of each heir and in the account of partition.
By express provision of law then, the lot which was donated by the decedent to his son, Vicente, should be included in the inventory of the properties of the decedent.
AMELIA P. ARELLANO vs. FRANCISCO PASCUAL
G.R. No. 189776, December 15, 2010, 638 SCRA 826
FACTS: Angel died intestate and single leaving as heirs his three (3) siblings: Amelia, Francisco and Miguel.
During the settlement of estate of the decedent, Francisco & Miguel claimed that the parcel of land donated by Angel during his lifetime to Amelia is subject to collation and considered the same as advance legitime.
ISSUES: (1) Whether the collateral relatives of the
decedent are entitled to legitime.
(2) Whether the property donated by Angel to Amelia should be formed part of his estate at the time of his death.
(3) Whether the property donated is subject to collation.
(4) Whether the estate of Angel be partitioned equally among the three (3) siblings as his legal or intestate heirs.
HELD: (1) NO. The decedent was survived by his siblings, who are his collateral relatives and therefore, are not entitled to any legitime which the law has reserved it for compulsory heirs.
(2) NO. The decedent not having left any compulsory heir who is entitled to any legitime, he was at liberty to donate all his properties to anyone, even if nothing was left for his siblings-collateral relatives to inherit. His donation to his sister Amelia is valid as is deemed as donation to a “stranger.”
(3) NO. Collation takes place when there are compulsory heirs and one of its purposes is to determine the legitime and the free portion. There being no compulsory heir, the donated property is not subject to collation.
(4) YES. The decedent’s remaining estate should be partitioned equally among his heirs-siblings-collateral relatives pursuant to Articles 1003 and 1004 of the New Civil Code which provides that “the collateral relatives shall succeed to the entire estate of the deceased . . . and
should the only survivors be brother and sisters of the full blood, they shall inherit in equal shares.
NULLITY OF MARRIAGE AND INTESTATE SUCCESSION
JUAN DE DIOS CARLOS vs. FELICIDAD SANDOVAL
G.R. No. 179922, December 16, 2008, 574 SCRA 116
FACTS: Teofilo died intestate and was survived by his compulsory heirs, wife Felicidad and their son, Teofilo II. He was predeceased by his parents and he had no other siblings except Juan. Upon Teofilo’s death, all his property, rights and obligations to the extent of the value of his inheritance are transmitted to his compulsory heirs. Later, Juan filed an action for declaration of nullity of marriage against Felicidad in view of the absence of the required marriage license; declaration of nullity of the status of a child as the latter was
neither natural or adopted son of his late brother; and recovery and reconveyance of the property. The trial court rendered judgment in favor of Juan based on summary judgment, however, the Court of Appeals reversed the judgment.
ISSUES
1) Whether or not the summary judgment is applicable in an action for annulment of marriage.
2) Whether or not the brother has the legal personality to file the declaration of nullity of marriage.
HELD: 1) NO. Both the rules on judgment on the pleadings and summary judgment have no place in cases of declaration of absolute nullity of marriage and annulment of marriage.
By issuing said summary judgment, the trial court has divested the State of its lawful right and duty to intervene in the case. Both the Civil Code and the Family Code ordain that the court should order the prosecuting attorney to appear and intervene for the State. It is at this stage when the public prosecutor sees to it that there is no suppression of evidence and to make sure the evidence to be presented or laid down before the court is not fabricated.
2) Generally, NO, because the rule makes it the sole right of the husband or the wife to file a petition for declaration of nullity of marriage, however, the compulsory heir in order to protect his successional right has the right to question the validity of the marriage of the spouses in the settlement of estate proceedings filed in regular court.
The legal personality of Juan to bring the nullity of marriage case is contingent upon the final declaration that Teofilo II is not legitimate, adopted or illegitimate son of Teofilo.
If Teofilo II is proven to be a legitimate, illegitimate or legally adopted son of Teofilo, then Juan has no legal personality to ask for the nullity of marriage of his deceased brother and Felicidad. This is based on the ground that he has no successional right to be protected. The presence of descendant, illegitimate or even an adopted child excludes the collateral relatives from inheriting from the decedent.
LOLITA BAS CAPABLANCA vs. HEIRS OF PEDRO BAS
G.R. No. 224144, June 28, 2017, 828 SCRA 482
FACTS: Andres and Pedro Bas acquired Lot 2535 with an area of 6,120 square meters on May 12, 1937.
On November 28, 1939, Pedro Bas sold to Faustina his portion of Lot 2535 as evidenced by a notarized Deed of Sale.
After the death of Faustina and her husband, their heirs executed a notarized Extra-Judicial Declaration of Heirs and Deed of Sale where Lot 2535 was conveyed to one of their heirs, Alejandra.
Alejandra sold the land to Edith Deen, who in turn sold it to Atty. Eddie Deen.
Upon the death of Atty. Deen, an Extra-judicial Settlement with Absolute Deed of Sale was executed and they sold the land to Norberto Bas, who took possession of and built a house on it.
On December 15, 1995, Norberto Bas died without a will and succeeded by his niece and only heir, Lolita Bas Capablanca (Lolita).
In October 1996, Josefina Bas Espinosa (Josefina), representative of Heirs of Pedro Bas, filed a complaint for Clarification of Ownership of Lot 2535 against Lolita before the Lupong Tagapamayapa, but it was not resolved.
Lolita sought to register her portion in Lot 2535 but was denied by the Register of Deeds citing the need for a court order. She learned that the TCT in favor of Andres and Pedro Bas on Lot 2535 has been cancelled and a new one was issued in the name of the Heirs of Pedro Bas.
On December 16, 1997, Lolita filed a complaint before the RTC for the cancellation of titles thereon.
In their answer, the Heirs of Pedro Bas claimed that “the sale between Pedro Bas and Faustina in 1939 was fake, spurious and invalid because Pedro who was an illiterate never learned how to write his name so that the signature thereon could not have been made by Pedro.
Lolita’s claim is anchored on a sale of the property to his predecessor-in-interest and not any filiation with the original owner Pedro Bas.
ISSUES
1) Whether the dispute in this case is the heirship of Lolita to Norberto or the validity of sale of the property in 1939 from Pedro to Faustina that culminates to Norberto.
2) Whether Lolita should be declared first as the sole heir for a separate proceeding in a proper special proceeding to resolve her action for cancellation of titles of the property.
RULINGS
1) The dispute in this case is not about the heirship of Lolita to Norberto but the validity of the sale of the property in 1939 from Pedro to Faustina, from which followed a series of transfer transactions that culminated in the sale of the property to Norberto.
For with Pedro’s sale of the property in 1939, it follows that there would be no more ownership or right to property that would have been transmitted to his heirs.
Lolita’s claim is anchored on a sale of the property to her predecessor-in-interest and not on any filiation with the original owner. What Lolita is pursuing is Norberto’s right of ownership over the property which was passed to Lolita upon the latter’s death.
2) NO, the Court finds no need for a separate proceeding for a declaration of heirship in order to resolve Lolita’s action for cancellation of titles of the property.
In Bordalla vs. Court of Appeals, the Court has stated that no judicial declaration of heirship is necessary in order that as heir may assert his or her rights to the property of the deceased.
In this case, there is no necessity for a separate special proceeding and to require it would be superfluous considering that Lolita had already presented evidence to establish her filiation and heirship to Norberto which the heirs of Pedro never disputed. Moreover, to dismiss the case and require Lolita to institute a special proceeding to determine her status as heir of the late Norberto would hamper, instead of serve, justice.
6. CONFLICT OF LAWS
Article 15 - Laws relating to family rights and duties, or to the status, condition and legal capacity of person are binding upon citizens of the Philippines even though living abroad.
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Article 16 - Real properties as well as personal property is subject to the law of the country where it is situated.
However, intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found.
Article 17 - The forms and solemnities of contracts, wills and other public instruments shall be governed by the laws of the country in which they are executed.
Article 1039 - Capacity to succeed is governed by the law of the nation of the decedent.
Domiciliary Theory posits that the personal status and rights of a person are governed by the law of his domicile or the place of his habitual residence.
Nationality Theory postulates that it is the law of the person’s nationality that governs such status and rights.
OBLIGATION OF A FOREIGN NATIONAL TO SUPPORT MINOR CHILD
NORMA DEL SOCORRO vs. ERST JOHAN BRINKMAN JAN WILSEM
G.R. No. 193707, December 10, 2014, 744 SCRA 516
FACTS: Norma and Brinkman contracted marriage in Holland on September 25, 1990 and thereafter were blessed with a son, Roderigo.
Unfortunately, their marriage bond ended by virtue of a Divorce Decree issued by the appropriate Court of Holland.
Brinkman made a promise to provide monthly support to their son in the amount of 250 Guildene which is equivalent to Php17,500.00. However, since the arrival of Norma and her son in the Philippines, Brinkman never gave his promised support.
Not long thereafter, Brinkman came to the Philippines and remarried. Norma sent a letter demanding for support, however, Brinkman refused to receive the letter.
Norma filed a complaint against Brinkman for violation of RA 9262 for the latter’s unjust refusal to support his minor child.
According to Brinkman, under to the laws of Netherlands, he is not obliged to support his son, however, he never proved it in court.
ISSUE: Whether a foreign national is obliged to support his minor child under Philippine law.
HELD: YES. Under private international law, the party who wants to have a foreign law applied to a dispute or case has the burden of proving the foreign law.
In the present case, Brinkman hastily concludes that being a national of the Netherlands, he is governed by such laws on the matter of provision of and capacity to support.
While Brinkman pleaded the laws of Netherlands that parents are not obliged to support their child after the issuance of a divorce decree, he failed to prove the same.
In view of Brinkman’s failure to prove the national law of the Netherlands in his favor, the doctrine of processual presumption shall govern.
Under the doctrine of processual presumption, if the foreign law involved is not properly pleaded and proved, our courts will presume that the foreign law is the same as our local or domestic or internal law.
Thus, since the law of the Netherlands as regards the obligation to support has not properly pleaded and proved in the instant case, it is presumed to be the same with Philippine Law, which enforces the obligation of parents to support their children and penalizing the non-compliance therewith.
DIVORCE OBTAINED ABROAD OF FOREIGN NATIONAL
MA. REBECCA MAKAPUGAY BAYOT vs. COURT OF APPEALS
G.R. No. 163979, November 7, 2008, 570 SCRA 472
FACTS: Rebecca was born in Guam, U.S.A. to parents both of American citizenship, married Vicente in the Philippines. They begot a daughter in 1982. In 1996, Rebecca initiated a divorce proceeding before the Dominican Republic court which it granted ordering the dissolution of the couple’s marriage and “leaving them to remarry after completing the legal requirements,”
ISSUE: Whether the divorce granted by the foreign court binds Rebecca and Vicente.
HELD: YES. There can be no serious dispute that Rebecca at the time she applied for and obtained her divorce from Vicente was an American citizen. The divorce granted by the foreign court during which Rebecca is an American citizen is valid and binds her and her Filipino husband.
In determining whether or not a divorce secured abroad would come within the pale of the country’s policy against absolute divorce, the reckoning point is the citizenship of the parties at the time a valid divorce is obtained.
EDGAR SAN LUIS vs. FELICIDAD SAN LUIS
G.R. No. 133743, February 6, 2007, 514 SCRA 294
FACTS: During his lifetime, Felicisimo San Luis contracted 3 marriages. His first marriage was with Virginia Sulit out of which were born six children. Virginia predeceased Felicisimo. Five years later, Felicisimo married Merry Lee Corwin, an American citizen with whom he had a son, Tobias. However, Merry Lee filed a Complaint for Divorce before the court in the State of Hawaii, U.S.A., which issued a Decree Granting Absolute Divorce and Awarding Child Custody.
Felicisimo married respondent Felicidad then surnamed Sagalongos in the U.S.A. He had no children with respondent but lived with her for 18 years from the time of their marriage up to his death. Thereafter, respondent sought the dissolution of their conjugal partnership assets and the settlement of Felicisimo’s estate. She filed
a petition for letters of administration. Petitioner Rodolfo, one of the children of Felicisimo by his first marriage, filed a motion to dismiss on the ground, inter alia, asserting that paragraph 2, Article 26 of the Family Code (FC) cannot be given retroactive effect to validate respondent’s bigamous marriage with Felicisimo because this would impair vested rights in derogation of Article 256 of the FC.
ISSUE: Whether a Filipino who is divorced by his alien spouse abroad may validly remarry in the Philippines considering that Felicidad’s marriage to Felicisimo was solemnized before the FC took effect.
HELD: YES. Firstly, in the case of Van Dorn vs. Romillo, Jr., 139 SCRA 139 (1985), the SC held that after a valid divorce had been obtained by the foreign husband, the Filipino wife should no longer be considered married to alien spouse. Further, she should not be required to perform her marital duties and obligations.
This principle was thereafter applied in Pilapil vs. Ibay-Somera where the Court recognized the validity of a divorce obtained abroad. In the said case, it was held that the alien spouse is not a proper party in filing the adultery suit against his Filipino wife. The Court stated that “the severance of the marital bond had the effect of disassociating the former spouses from each other, hence the actuations of one would not affect or cast obloquy on the other.”
FELICITAS AMOR – CATALAN vs. COURT OF APPEALS
G.R. No. 167109, February 6, 2007, 514 SCRA 607
FACTS: Felicitas married Orlando. Thereafter, they migrated to the United States of America and became naturalized citizens thereof. After 38 years of marriage, Felicitas and Orlando divorced.
Two months after the divorce, Orlando married respondent Merope. Contending that said marriage was bigamous since Merope had a prior subsisting marriage with Eusebio Bristol, petitioner filed a petition for declaration of nullity of marriage with damages against Orlando and Merope.
ISSUE: Whether or not petitioner has the personality to file a petition for the declaration of nullity of marriage of the respondents on the ground of bigamy.
HELD: YES. Divorce means the legal dissolution of a lawful union for a cause arising after marriage. But divorces are of different types. The two basic ones are (1) absolute divorce or a vinculo matirmonii and (2) limited divorce or a mensa et toro. The first kind terminates the marriage, while the second suspends it and the leaves the bond in full force. A divorce obtained abroad by an alien may be recognized in our jurisdiction, provided such decree is valid according to the national law of the foreigner. However, before it can be recognized by our courts, the party pleading it must prove the divorce as a fact and demonstrate its conformity to the foreign law allowing it, which must be proved considering that courts cannot take judicial notice of foreign laws. If this is done, the SC remanded the case to the trial court for its proper disposition for the determination of whether a divorce decree was indeed obtained in accordance with American law and will thus, NOT restrict marriage.
7. OBLIGATIONS
Civil Obligation is a juridical necessity to give, to do and not to do. It gives the creditor the legal right to compel by an action in court the performance of such obligation.
A natural obligation is based on equity and natural law. There is no legal right to compel performance thereof but if the debtor voluntarily pays it, he cannot recover what was paid.
Article 1182 - When the fulfillment of the condition depends upon the will of the debtor, the conditional obligation shall be void. If it depends upon chance or upon the will of a third person, the obligation shall take effect in conformity with the provisions of this Code.
Article 1197 - If the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a period was intended, the courts may fix the duration thereof.
The courts shall also fix the duration of the period when it depends upon the will of the debtor.
In every case, the courts shall determine such period as may be under the circumstances have been probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by them.
CONCHITA SONLEY vs. ANCHOR SAVINGS BANK
G.R. No. 205623, August 10, 2016, 800 SCRA 108
FACTS: Conchita agreed to purchase a parcel of land from Anchor Savings Bank. She, however, defaulted in paying her monthly obligations which prompted Anchor to rescind the Contract to Sell.
In filing the complaint, Conchita averred that the rescission of the contract to sell was null and void because she had already substantially paid her obligations to the bank. Anchor contended that the post-dated checks issued by Conchita in its favor covering her monthly obligation were all dishonored.
During the pre-trial, the parties entered into a Compromise Agreement. On the basis thereof, the trial court rendered a Judgment whereby Conchita agreed to repurchase the subject property from Anchor.
However, Conchita failed to comply with her obligations. Thus, Anchor prayed that a writ of execution be issued in its favor ordering, among others, that the Contract to Sell entered into between the parties rescinded. This was granted by the trial court.
Conchita now argues that Anchor is not entitled to execution as the Compromise Agreement does not specifically provide that in case of default, a writ of execution may issue; that the remedies available to Anchor are to charge penalties and/or rescind the agreement as provided for under the Contract to Sell; and that before a writ of execution may issue, Anchor must first institute an action for rescission and secure a judicial declaration that the Contract to Sell is rescinded, which were not done in this case.
ISSUE
Whether an action for rescission required for a party aggrieved by the breach of compromise agreement to be able to enforce the compromise or insists on his original demand.
RULING
NO, an action for rescission is not required.
Under Article 2041 of the Civil Code, “if one of the parties fails or refuses to abide by the compromise, the other party may either enforce the compromise or regard it as rescinded and insist upon his original demand.
The language of this Article 2041 denotes that no action for rescission is required, and that the party aggrieved by the breach of a compromise agreement may, if he chooses, bring the suit contemplated or involved in his original demand as if there had never been any compromise agreement, without bringing an action for rescission thereof. He need not seek, a judicial declaration of rescission, for he may ‘regard’ the compromise agreement already ‘rescinded.’
Conchita may be right in arguing that Anchor has the option to proceed with the sale and charge corresponding penalties instead, pursuant to the stipulations in the Contract to Sell.
However, Anchor chose to rescind the same, an option to which it is equally entitled to by contract and under the law, and thus evict Conchita from the premises.
8. DOUBLE SALES
Article 1544 - If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith who in good faith was first in the possession; in the absence thereof, to the person who presents the oldest title, provided there is good faith.
RURAL BANK OF STA. BARBARA vs. MANILA MISSION
G.R. No. 130223, August 19, 2009, 596 SCRA 415
FACTS: Spouses Soliven sold the subject property to Manila Mission. However, it was only on 28 April 1994 when title was transferred in the name of Manila Mission. In the meantime, on 15 April 1993, Rural Bank of Sta. Barbara filed an action for sum of money before the RTC against Spouses Soliven. The RTC issued a writ of attachment on 21 May 1993 attaching the subject property which was still then in the name of Spouses Soliven.
ISSUE: Which is superior, a previous but unregistered sale or a subsequent but duly annotated attachment?
HELD: The settled rule is that levy on attachment, but duly registered, takes preference over a prior unregistered sale. This result is a necessary consequence of the fact that the property involved was duly covered by the Torrrens system which works under the fundamental principle that registration is the operative which gives validity to the transferor creates a lien upon the land.
SPOUSES SABITSANA vs. JUANITO F. MUERTEGUI
G.R. No. 181359, August 5, 2013, 703 SCRA 145
FACTS: On September 2, 1981, Alberto executed an unnotarized deed of sale in favor of Juanito over a parcel of unregistered land.
On October 17, 1991, Alberto sold the lot to Juanito’s family lawyer, Atty. Sabitsana, through a notarized deed of sale of absolute sale. The sale was registered with the Register of Deeds and correspondingly paid real property taxes and introduced concrete improvements.
In 1998, Juanito applied for registration of the lot under the Public Land Act with the DENR, however, Atty. Sabitsana opposed the application claiming that he was the true owner of the lot.
On April 11, 2000, Juanito filed an action for quieting of title against Atty. Sabitsana claiming that the latter bought the lot in bad faith and was exercising acts of possession and ownership over the same, which acts thus constitute a cloud over his title.
ISSUES: 1) Whether Article 1544 on double sales applies in this case.
2) Whether Juanito has a better right with unnotarized deed of
sale over the subsequent notarized deed of sale of Atty.
Sabitsana.
3) Whether the sale is valid in the absence of marital consent.
4) Whether Juanito is entitled for the award of attorney’s fees
and litigation expenses.
HELD: 1) NO. The provision of Article 1544 of the Civil Code does not apply to sales involving unregistered land.
The issue of the buyer’s good or bad faith is relevant only where the subject of the sale is registered land, and the purchaser is buying the same from the registered owner whose title to the land is clean.
The purchaser who relies on the clean title of the registered owner is protected if he is a purchaser in good faith for value.
2) YES. The sale to Juanito was executed on Septemer 2, 1981 via an unnotarized deed of sale, while the sale to Atty. Sabitsana was made via a notarized document only on October 17, 1991 or ten (10) years thereafter.
Thus, Juanito who was the first buyer has a better right to the lot, while the subsequent sale to Atty. Sabitsana is null and void because when it was made, the seller Alberto was no longer the owner of the lot.
The fact that the sale to Juanito was not notarized does not alter anything, since the sale between him and Alberto remains valid nevertheless. Notarization or the requirement of a public document under the Civil Code is only for convenience and not for validity or enforceability.
3) YES. Even admittedly the lot was a conjugal property, the absence of the wife’s signature and consent to the deed did not render the sale to Juanito absolutely null and void, but merely voidable.
Since Alberto and his wife were married prior to the effectivity of the Family Code, Article 173 of the Civil Code should apply. Under the said provision, the disposition of conjugal property without the wife’s consent is not void but merely voidable. In the absence of a decree annulling the deed of sale in favor of Juanito, the same remains valid.
4) YES. Atty. Sabitsana’s actual and prior knowledge of the first sale to Juanito makes him purchaser in bad faith.
Moreover, as Juanito’s family lawyer, Atty. Sabitsana was under obligation to safeguard his client’s property and not jeopardize it. Such is his duty as an attorney, and pursuant to his general agency.
9. MACEDA LAW (RA 6552)
(Buyer’s Protection on Sales of immovable property on installments)
Most important features:
(1) After having paid installments for at least two years, the buyer is entitled to a mandatory grace period of one month for every year of installment payments made, to pay the unpaid installments without interest.
If the contract is cancelled, the seller shall refund to the buyer the cash surrender value equivalent to fifty percent (50%) of the total payments made, and after five years of installments, an additional five percent (5%) every year but not to exceed ninety percent (90%) total payments made.
(2) In case the installments paid were less than 2 years, the seller shall give the buyer period of not less than 60 days. If the buyer fails to pay the installments due at the expiration of the grace period, the seller may cancel the contract after 30 days from receipt by the buyer of the notice of cancellation or demand for rescission by notarial act.
MOLDEX REALTY, INC. vs. FLORA SEBERON
G.R. No. 176289, April 8, 2013, 695 SCRA 331
FACTS: Moldex entered with a Contract to Sell of a certain property at Metrogate Cavite with Flora despite of its lack of license to sell.
Flora had made installment payments from March 11, 1992 to July 19, 1996 in the aggregate amount of P375,295.49. She had defaulted in her succeeding payments.
Moldex sent notices to Flora to update her account but to no avail. Finally, Moldex sent Flora a Notarized Notice of Cancellation of Contract to Sell.
ISSUES: 1) Whether the contract to sell despite the lack of license
to sell is valid.
2) What is the right available to Flora under the Maceda Law?
HELD: 1) YES. PD 957 provides that the lack of license to sell on the part of a subdivision developer does not result for the nullification or invalidation of the contract to sell it entered into with a buyer.
Thus, the contract to sell entered into between Flora and Moldex remains valid despite the lack of license to sell on the part of the latter at the time the contract was entered into.
2) Since Moldex had already sent Flora a Notarized Notice of Cancellation of Contract to Sell, the only option available is Section 3 (b) under Maceda Law or RA 6552, whereby Moldex shall refund to Flora the cash surrender value of her payments on the property equivalent to the 50% of the total payments made or P187,647.75.
GATCHALIAN REALTY, INC. vs. EVELYN M. ANGELES
G.R. No. 202358, November 27, 2013, 711 SCRA 163
FACTS: Angeles purchased a house and lot under a Contract to Sell from Gatchalian payable for a period of ten years.
After 48 monthly installment payments, Angeles failed to satisfy her monthly installments with Gatchalian.
Several demands were made by Gatchalian but the same were continually disregarded by Angeles. Finally, Gatchalian served Angeles with a Notice of Notarial Rescission thru registered mail.
Consequently, Angeles was furnished by Gatchalian a demand letter demanding her to pay the outstanding reasonable rentals for her use and occupation of the house and lot to date and to vacate the same. She was informed in said letter that the 50% refundable amount that she is entitled to has already been deducted with the reasonable value for the use of the properties.
ISSUES: 1) Whether there is a valid cancellation of the Contract to Sell.
2) Whether Angeles is entitled to the benefit of Maceda Law or
RA 6552.
3) Whether Angeles can be ejected for non-payment of monthly
installments.
HELD: 1) NO. A valid and effective cancellation under RA 6552 must comply with the mandatory twin requirements of a notarized notice of cancellation and a refund of the cash surrender value.
Although there was a notarial rescission sent thru registered mail but it was not accompanied by the refund of the cash surrender value equivalent to 50% of the total payments made.
For failure to refund the cash surrender value to the defaulting buyer Angeles, Gatchalian cannot deduct the same for the amount of the rentals due to Gatchalian as there was nothing in the contract to apply compensation under Art. 1279 of the New Civil Code.
2) Angeles is entitled to receive the cash surrender value equivalent to 50% of the total payments made as provided for by Section 3 (b) of RA 6552.
3) In the absence of a valid cancellation of the Contract to Sell between Gatchalian and Angeles, the contract remains valid and existing. Thus the complaint for unlawful detainer would be a violation of the mandate of RA 6552.
OPTIMUM DEVELOPMENT BANK vs. SPOUSES JOVELLANOS
G.R. No. 189145, December 4, 2013, 711 SCRA 548
FACTS: Spouses Jovellanos entered into a Contract to Sell with Palmera Homes for the purchase of a residential house and lot payable for a period of 10 years.
Later, Palmera Homes assigned all its rights, title and interest in the Contract to Sell in favor of Optimum.
A year later, Optimum issued a Notice of Delinquency and Cancellation of Contract to Sell to Spouses Jovellanos for their failure to pay their monthly installments despite several written and verbal demands.
A month later, a final Demand Letter by Optimum required Spouses Jovellanos to vacate and deliver possession of the subject property within seven (7) days, which however remained unheeded.
Optimum instituted the action for unlawful detainer within one year from the final demand to vacate.
ISSUE: Whether the validity of the cancellation of the Contract to Sell under RA 6552 lies within the competence or jurisdiction of the Metropolitan Trial Court (MeTC).
HELD: YES. Under RA 6552, the mechanics of cancellation of Contract to Sell is based on the amount of installments already paid by the buyer under the said contract.
Since Jovellanos had paid less than two years in installments, Section 4 of RA 6552 provides for three (3) requisites before the seller may actually cancel the subject contract: first, the buyer shall give the buyer a 60-day grace period to be reckoned from the date the installment became due; second, the seller must give the buyer a notice of cancellation/demand for rescission by notarial act if the buyer fails to pay the installments due at the expiration of the said grace period; and
third, the seller may actually cancel the contract only after 30 days from the buyer’s receipt of the said notice of cancellation/demand for rescission by notarial act.
There was a valid and effective cancellation of the Contract to Sell in accordance with Section 4 of RA 6552 and since Spouses Jovellanos had already lost their right to retain possession of the subject property as a consequence of such cancellation, their refusal to vacate and turn over possession to Optimum makes out a valid case for unlawful detainer.
SPOUSES FAUSTINO & JOSEFINA GARCIA vs. COURT OF APPEALS
G.R. No. 172036, April 23, 2010, 619 SCRA 280
FACTS: On May 28, 1993, Spouses Garcia and Dela Cruz entered into a Contract to Sell wherein the latter agreed to sell to the former for P3M the five (5) parcels of land covered by Transfer Certificates of Title (TCT).
The Contract to Sell entered into contains a proviso that failure of Spouses Garcia to pay the purchase price in full shall cause the rescission of the contract and forfeiture of one – half (1/2%) percent of the total amount paid to Dela Cruz.
At the time of the execution of the said contract, three (3) of the subject lots were registered in the name of Abelida from whom Dela Cruz allegedly acquired said properties by virtue of a Deed of Absolute Sale.
As agreed upon, Spouses Garcia shall make a down payment upon signing of the contract. The balance shall be paid in three (3) installments.
On its due date December 31, 1993, Spouses Garcia failed to pay the last installment in the amount of P1.672M.
Sometime in July 1995, Spouses Garcia offered to pay the unpaid balance, which had already been delayed by one and half year, which Dela Cruz refused to accept.
On September 23, 1995, Dela Cruz sold the same parcels of land to Atty. Bartolome for P7.793M.
In order to compel Dela Cruz to accept Spouses Garcia’s payment in full satisfaction of the purchase price and thereafter, execute the necessary document of transfer in their favor, Spouses Garcia filed a complaint for specific performance before the RTC.
ISSUES: 1) Whether Spouses Garcia may compel Dela Cruz to
accept the payment in full and execute a Deed of Absolute Sale.
2) Whether Dela Cruz has the power to rescind the contract
upon the failure of the Spouses Garcia to pay the balance
of the purchase price.
3) Whether judicial intervention is necessary despite the automatic
rescission provided for in the contract to sell.
4) Whether the provisions of RA 6552 otherwise known as the
Maceda Law are applicable in the present case.
5) Whether Atty. Bartolome is a buyer in bad faith for having
knowledge of the previous contract to sell.
HELD: 1) NO. Contracts are law between the parties, and they are bound by its stipulations.
It is clear from the provisions of the contract that the parties intended their agreement to be a Contract to Sell: Dela Cruz retains ownership of the subject lands and does not have the obligation to execute a Deed of Absolute Sale until Spouses Garcia’s payment of the full purchase price.
Payment of the price is a positive suspensive condition, failure of which is not a breach but an event that prevents the obligation of the vendor to convey title from becoming effective.
Strictly speaking, there can be no rescission or resolution of an obligation that is still non-existent due to the non-happening of the suspensive condition.
Dela Cruz is not obliged to execute a Deed of Absolute Sale in Spouses Garcia’s favor because of their failure to make full payment on the stipulated date.
2) YES. Pursuant to Art. 1191, the law makes it available to the injured party alternative remedies such as the power to rescind or enforce
fulfillment of the contract, with damages in either case if the obligor does not comply with what is incumbent upon him.
There is nothing in this law which prohibits the parties from entering into an agreement that a violation of the terms of the contract would cause its cancellation even without court intervention.
The vendor’s right in contract to sell with reserved title to extrajudicially cancel the sale upon failure of the vendee to pay the stipulated installments and retain the sums and installments already received has long been recognized by the well-established doctrine.
The validity of the stipulation in the contract providing for automatic recession upon non-payment cannot be doubted.
It is in the nature of an agreement granting a party the right to rescind a contract unilaterally in case of breach without need of going to court.
Thus, rescission under Article 1191 was inevitable due to Spouses Garcia’s failure to pay the stipulated price within original period fixed in the agreement.
3) YES. Judicial intervention is necessary not for purposes of obtaining a judicial declaration rescinding a contract already deemed rescinded by virtue of an agreement providing for rescission even without judicial intervention, but in order to determine whether or not the rescission was proper.
Where such propriety is sustained, the decision of the court will be merely declaratory of the revocation, but it is not in itself the revocatory act.
4) NO. The Maceda Law applies to contracts of sale of real estate on installment payments including residential condominium apartments but excluding industrial lots, commercial buildings and sales to tenants.
The subject lands, comprising five (5) parcels do not comprise residential real estate within the contemplation of the Maceda Law.
Even it we apply the Maceda Law to the present case, Spouses Garcia’s offer of payment to Dela Cruz was made a year and a half after the stipulated date.
This is beyond the sixty-day grace period under Section 4 of the Maceda Law.
5) NO. It is undeniable that Spouses Garcia failed to pay the balance of the purchase price on the stipulated date of the Contract to sell.
Thus, Dela Cruz is within her rights to sell the subject lands to Atty. Bartolome.
Neither Dela Cruz nor Bartolome can be said to be in bad faith.
10. PRESCRIPTION AND RECONVEYANCE
SPOUSES SOFRONIO SANTOS vs. HEIRS OF DOMINGA LUSTRE
G.R. No. 151016, August 6, 2008, 561 SCRA 120
FACTS: Dominga Lustre mortgaged her residential lot to Spouses Santos. She then sold the property to Natividad Santos. The cancellation of the mortgage and the sale of the property were both inscribed in the title. Thereafter, the Spouses Santos transferred the property, by way of sale, to their son, Froilan. The heirs of Dominga Lustre filed a complaint for Declaration of inexistence of contract, annulment of title and reconveyance, averring that the sale to Natividad was simulated as Dominga’s signature was forged and that the spouses Santos also simulated the Deed of Sale transferring the property to their son, Froilan. The Santoses allege that the heirs of Dominga Lustre’s right of action had prescribed.
ISSUE: Whether or not the action of the heirs of Dominga Lustre is barred by prescription.
HELD: NO. The action for reconveyance on the ground that the certificate of title was obtained by means of a fictitious deed of sale is an action for the declaration of its nullity, which does not prescribe.
A person acquiring property through fraud becomes, by operation of law, a trustee of an implied trust for the benefit of the real owner of the property. An action for reconveyance based on implied trust prescribes in ten (10) years.
The prescriptive period applies only if there is an actual need to reconvey the property as when the plaintiff is not in possession of the property. Otherwise, if plaintiff is in possession of the property, prescription does not commence to run against him.
When an action for reconveyance is nonetheless filed, it would be in a nature of a suit for quieting of title, an action that is imprescriptible.
ANICETO UY vs. COURT OF APPEALS
G.R. No. 173186, September 16, 2015, 770 SCRA 491
FACTS: In 1979, Carmencita acquired ownership of a parcel of land from her brother.
The land was later subdivided into Lots No. 54-B-8 and No. 54-B-9 covered by TCT # T-58334 and T-58335.
Subsequently, Carmencita sold Lot No. 54-B-8 to a certain Bobby Adil on installment, on the condition that the absolute deed of sale will be executed only upon full payment.
Adil failed to pay the amortization, and he was forced to sell his unfinished building on the property to spouses Omandac.
Meanwhile, Carmencita borrowed money from a certain Grace Ng and as a security, she delivered TCTs No. T-58334 and T-58335.
Grace Ng, on the other hand, borrowed money from Aniceto and also delivered to the latter the two TCTs to guarantee payment of the loan.
Sometime thereafter, Carmencita learned that Aniceto filed a case for recovery of possession against spouses Omandac before the RTC which ruled in favor of Aniceto.
The decision became final and executory in 2001 and the spouses Omandac were ejected from the property and Aniceto gained possession of the property.
In July 1999, Carmencita filed a complaint for Annulment of Deed with Damages against Aniceto.
The subject of the complaint was the deed of sale allegedly executed between Carmencita and Aniceto involving Lots # 54-B-8 and 54-B-9. Carmencita prayed that the deed of sale be declared null and void because the alleged sale between her and Aniceto was a forgery considering that she never sold the lots and her signature in the purported deed of sale is spurious.
On July 29, 1999, an Amended Complaint was filed and the same was not signed by Carmencita but by her counsel.
Aniceto, on the other hand, claimed that the action is a collateral attack on the title which is prohibited by law under the principle of indefeasibility of the title after the lapse of one year from registration.
He further claimed that the action for annulment of deed of sale is already barred by the statute limitation, guilty of estoppel and laches and the certification against forum shopping is defective.
ISSUES
1) Distinguish whether an action is a direct attack or
a collateral attack
2) Whether an action for annulment of the deed of sale is
either a direct attack or a collateral attack on the title.
3) What is the nature of the action for reconveyance?
4) Whether an action for reconveyance may be based on a void
contract.
5) What is laches? How can it be proved.
6) Whether there is a substantial compliance with the requirements
against forum shopping.
HELD: 1) An action is a direct attack when the object of an action is to annul or set aside the judgment in the registration proceedings.
On the other hand, a collateral attack is when, in an action to obtain a different relief, an attack on the judgment or registration proceeding is nevertheless made as incident.
2) NO. Carmencita is seeking a relief for an annulment of the deed of sale, which is not an attack on the judgment or registration proceeding pursuant to which the titles were decreed.
It does not seek to set aside the judgment of registration of titles nor does it seek to nullify the title by challenging the judgment or proceeding that decreed its issuance.
The action is in reality one for reconveyance, which is imprescriptible when based on a void contract.
3) An action for reconveyance is a legal and equitable remedy granted to the rightful owner of land which has been wrongfully or erroneously registered in the name of another for the purpose of compelling the latter to transfer or reconvey the land to him.
In an action for reconveyance, the decree of registration is respected as incontrovertible. What is sought instead is the transfer of the property which has been wrongfully or erroneously registered in another person’s name, to its rightful and legal owner, or to one with a better right.
However, such recourse cannot be availed of once has passed to an innocent purchaser for value.
For an action for reconveyance to prosper, the property should not have passed into the hands of an innocent purchaser for value.
Here, Carmencita does not only seek to annul the purported deed of sale but also to cancel the titles in the name of Aniceto.
If the reliefs are granted and the TCTs are cancelled, the titles to the lots will revert to Carmencita as she was the previously registered owner.
Thus, a ruling in favor of Carmencita would be equal to what an action for reconveyance seeks to accomplish.
Under Article 1390 of the Civil Code, a contract is voidable when the consent of one of the contracting parties is vitiated by mistake, violence, intimidation, undue influence or fraud.
When the consent is totally absent and not merely vitiated, the contract is void.
4) YES. An action for reconveyance may also be based on a void contract.
When the action for reconveyance is based on a void contract, as when there was no consent on the part of the alleged vendor. The action is imprescriptible.
The property may be reconveyed to the true owner, notwithstanding the TCTs already issued in another’s name. The issuance of a certificate of title in the latter’s favor could not vest upon him or could it validate the purchase thereof which is null and void.
Our land registration laws do not give the holder any better title than what he actually has. Being null and void, the sale produces no legal effects whatsoever.
Whether an action for reconveyance prescribes or not is therefore determined by the nature of the action, that is, whether it is founded on a claim of an implied or constructive trust or one based on the existence of a void or inexistent contract.
There is no dispute that an action for reconveyance based on a void contract is imprescriptible.
5) Laches is a doctrine in equity, and applied only in the absence of, and never against statutory law.
The positive mandate of Article 1410 of the Civil Code conferring imprescriptibility to actions or defense for the declaration of the inexistence of a contract should pre-empt and prevail over all abstract arguments based only on equity.
The elements of laches must be proven positively. Laches is evidentiary in nature, a fact cannot be established by mere allegations in the pleadings.
Therefore, at this stage, the dismissal as to the ground of laches would be premature. The issues must be resolved in the trial on the merits.
6) YES. The original complaint contained a proper verification and certification against forum shopping duly signed by Carmencita.
What was signed by Carmencita’s counsel was the Amended Complaint dated July 29, 1999, who was not authorized to sign on her behalf. However, its verification and certification specified the statement that this amended complaint should be taken and read together with the original complaint which the CA took this as “cautionary move” on the part of Carmencita which is tantamount to substantial compliance.
A certification against forum shopping is a peculiar and personal responsibility of the party, an assurance given to the court or other tribunal that there are no pending cases involving basically the same parties, issues and causes of action.
It is recognized rule that the certification must be executed by the party-pleader, not by her counsel, however, the Court chose to overlook the procedural lapses in the interest of substantial justice and the existence of prima facie merit of the petition.
LUCIA CARLOS ALIÑO vs. HEIRS OF ANGELICA LORENZO
G.R. No. 159550, June 27, 2008, 556 SCRA 139
An action for reconveyance prescribes in 10 years, the reckoning point is the date of registration of the deed or the date of issuance of the certificate of title over the property.
If the person claiming to be the owner is in actual possession thereof, the right to seek to quiet title to the property, does not prescribe.
One in actual possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right.
RECONVEYANCE NOT INDIRECT ATTACK
ON VALIDITY OF TITLE
MARIFLOR T. HORTIZUELA vs. GREGORIA TAGUFA
G.R. No. 205867, February 23, 2015, 751 SCRA 371
FACTS: Spouses Epifanio Tagufa owned an untitled property containing an area of 539 square meters. They mortgaged the property to DBP.
For failure to redeem the property, DBP foreclosed the same and sold it to Atty. Romulo Marquez.
On April 4, 2002, Mariflor, the daughter of Epifanio and an American citizen, purchased the subject property from Atty. Marquez by executing a SPA in favor of her brother, Runsted, with an agreement that the latter will reconvey the said property to his sister when demanded.
Mariflor discovered that the same unregistered property was titled in the name of Gregoria, wife of Runsted, under OCT No. P-84609 by virtue of a free patent application before the DENR.
Because of fraud, Mariflor instituted an action for reconveyance and recovery of property of the subject property.
Gregoria claimed that the action for reconveyance would amount to a collateral attack on the title, which was proscribed under the principle of indefeasibility of a Torrens title.
ISSUE: Whether the action for reconveyance constitutes an indirect or collateral attack on the validity of the title.
HELD: NO. In a complaint for reconveyance, the decree of registration is respected as incontrovertible and is not being questioned.
An action for reconveyance is a recognized remedy, an action in personam, available to a person whose property has been wrongfully registered under the Torrens system in another’s name.
What is being sought is the transfer of the property wrongfully or erroneously registered in another’s name to its rightful owner or to the one with a better right.
If the registration of the land is fraudulent, the person in whose name the land is registered holds it as a mere trustee, and the
real owner is entitled to file an action for reconveyance of the property.
The fact that Gregoria was able to secure a title in her name does not operate to vest ownership upon her of the subject land.
Registration of a piece of land under the Torrens System does not create or vest title, because it is not a mode of acquiring ownership.
A certificate of title is merely an evidence of ownership or title over the particular property described thereon. It cannot be used to protect a usurper from the true owner, nor can it be used as a shield for the commission of fraud, neither it permits one to enrich himself at the expense of others.
Its issuance in favor of a particular person does not foreclose the possibility that the real property may be co-owned with person not named in the certificate or that it may be held in trust for another person by the registered owner.
11. ADVERSE CLAIM
SPOUSES JESUS CHING vs. SPOUSES ADOLFO ENRILE
G.R. No. 156076, September 17, 2008, 565 SCRA 402
FACTS: Spouses Jesus Ching purchased from Raymunda a property in Las Piñas City. The sale was perfected upon delivery of a duly notarized Deed of Absolute Sale with the owner’s duplicate copy of the TCT and they immediately took physical possession of the subject property.
The couple failed to register the sale and instead they executed an Affidavit of Adverse Claim and the same was annotated at the back of the title.
Three years after the sale, Spouses Ching received a Notice of Levy on Attachment and Writ of Execution on account of court decision in favor of Spouses Adolfo against the vendor Raymunda. Spouses Jesus Ching filed a petition to remove cloud or quiet title to real property, however, it was countered by Spouses Adolfo that the Annotated Adverse Claim had already prescribed after a lapse of thirty (30) days from the date of registration.
ISSUE: Whether or not the levy on attachment later annotated shall prevail over the Adverse Claim earlier annotated at the back of the title by the mere lapse of 30 days and even without any petition in court for its cancellation.
HELD: NO. A notice of Adverse Claim remains valid even after the lapse of the 30-day period as provided by Section 70 of PD 1529. As long as there is yet no petition for cancellation for its cancellation, the notice of adverse claim remains subsisting. After the lapse of 30 days, the annotation of the adverse claim may be cancelled upon filing of a verified petition by the party in interest.
The law does not require a person dealing with the owner of registered land to go beyond the certificate of title as he may rely on the notices of the encumbrances on the property annotated on the certificate of title or absence of any annotation. Here, the adverse claim is annotated at the back of title coupled with the fact that the Spouses Ching are in possession of the disputed property. Spouses Adolfo should have put in guard and required them to ascertain the property offered to them has already been sold to another to prevent injury to prior innocent buyers.
NAVOTAS INDUSTRIAL CORPORATION vs. GERMAN D. CRUZ
G.R. No. 159212, September 12, 2005, 469 SCRA 530
The annotation of an adverse claim is a measure designed to protect the interest of a person over a part of real property, and serves as a notice and warning to third parties dealing with the said property that someone is claiming an interest over it or has a better right than the registered owner.
ROGELIA P. DIAZ - DUARTE vs. SPOUSES BEN & ESTHER ONG
G.R. No. 130352, November 3, 1998, 298 SCRA 388
In a petition for cancellation of adverse claim, a hearing must first be conducted. The hearing will afford the parties an opportunity to prove the propriety or impropriety of the adverse claim. Petitioner was unlawfully denied this opportunity when the Register of Deeds automatically cancelled the adverse claim. Needless to state, the cancellation of adverse claim in ineffective.
ALFREDO SAJONAS vs. COURT OF APPEALS
G.R. No. 102377, July 5, 1996, 258 SCRA 79
The general rule it that a person dealing with registered land is not required to go behind the register to determine the condition of the property. However, such person is charged with notice on the face of the register or certificate of title.
A person who deals with registered land is bound by the liens and encumbrances including adverse claim annotated therein.
12. RIGHT OF FIRST REFUSAL
PURIFICACION ESTANISLAO vs. SPOUSES NORMA & DAMIANO GUDITO
G.R. No. 173166, March 13, 2013, 693 SCRA 330
FACTS: Estanislao family have been renting and occupying the lot owned by Gaspar since 1934. The former built the house on the subject lot in accordance with the lease agreement with Gaspar.
When Gaspar died, the subject property was inherited by his son, Victorino married to Esther.
In the 1980s, Victorino wanted the Estanislao family to vacate the said property, but the tenants refused because of laws allegedly prohibited their ejectment therefrom. Resultantly, Estanislao, with due notice to Victorino, deposited the amount of monthly rentals at Allied Bank under the savings account in the name of Victorino.
In the interim, a Deed of Donation was executed by the Victorino couple in favor of their daughter Norma married to Damiano Gudito. Hence, in October 1994, Spouses Gudito notified Estanislao family to remove their house and vacate the premises within 3 months.
When Estanislao family failed to comply with the demand to vacate, the Spouses Gudito filed a complaint for unlawful detainer/ejectment against them.
ISSUES
1) Whether the right of possession is established by virtue of
the Deed of Donation.
2) Whether the right of first refusal applies to Estanislao.
HELD: 1) YES. The Deed of Donation had been prepared and acknowledged before a notary public is vested with public interest, the sanctity of which deserves to be upheld unless overwhelmed by clear and convincing evidence.
Thus, the donation made by the Victorino couple is a valid exercise of their right as owner of the subject property and the Spouses Gudito are legally entitled to the said property as donees.
2) NO. The right of first refusal applies only to a case where the owner of the property intends to sell it to a third party.
Since the subject property was donated by the Victorino couple to their daughter Norma and her husband, Damiano Gudito, their right to possess the subject property for their own use as family residence cannot be denied.
13. QUIETING OF TITLE
SEVERINO BARICUATRO, JR. vs. COURT OF APPEALS
G.R. No. 105902, February 9, 2000, 325 SCRA 137
FACTS: On October 16, 1968, Severino bought two (2) lots on an installment basis from Galeos. The two lots are part of Spring Village Subdivision.
After the sale, Severino introduced certain improvements on said lots and started to reside therein in 1970. Since then he has been in actual and physical possession of the said two (2) lots.
However, on December 7, 1968, two months after the sale, Galeos sold the entire subdivision including the two (2) lots to Amores. Subsequently, Galeos informed Severino about the sale to Amores and advised him to pay the balance of the purchase price of the two (2) lots directly to Amores.
On December 27, 1974, Amores sold the two (2) lots to Nemenio. Prior to the sale, Amores informed Severino about the impending sale of the two (2) lots, but the latter failed to respond.
Before Nemenio caused the transfer of the titles to the two (2) lots and issuance of tax declaration in his name, he visited the residence of Severino.
Thereafter, Nemenio demanded from Severino to vacate the said lots but the latter refused to do so.
A complaint for quieting of title was filed by Nemenio against Severino.
ISSUES
(1) Whether the action for quieting of title is the best remedy.
(2) Whether Amores is a purchaser in good faith.
(3) Whether Nemenio is also a purchaser in good faith upon his reliance in the indefeasibility of the Torrens Title.
HELD: (1) YES. Quieting of title is a common law remedy for the removal of any cloud upon or doubt or uncertainty with respect to title to real property.
Its purpose is to secure an adjudication that a claim of title to or an interest in property, adverse to that of the complainant, is invalid, so that the complainant and those claiming under him may be forever afterward free from any danger of hostile claim.
In an action for quieting of title, the competent court is tasked to determine the respective rights of the complainant and other
claimants not only to place things in their proper place but to
make the one who has no rights to said immovable, respect and not to disturb the other, but also for the benefit of both, so that he who has the right would see every cloud of doubt over the property dissipated, and he could afterwards without fear introduce the improvements he may desire, to use and even to abuse the property as he deems best.
(2) NO. Amores did not act in good faith when he bought two disputed lots, however, when he registered his title, the preponderance of evidence supports the finding that he already had knowledge of the previous sale of the disputed lots to Severino. Such knowledge tainted his registration with bad faith.
The prior registration of the disputed property by the second buyer does not by itself confer ownership or a better right over the property.
Under Article 1544, the ownership of an immovable property shall belong to the purchaser who in good faith registers it first in the registry of property.
For a second buyer to successfully invoke the protection by Article 1544 of the Civil Code, he must possess good faith until the registration of the deed of conveyance covering the same.
(3) NO. Nemenio cannot claim to be purchaser in good faith because he visited the residence of Severino before he registered the disputed lots on his name. The registration of Nemenio was done in bad faith. The defense of indefeasibility of a Torrens Title does not extend to a transferee who takes the certificate of title with notice of a flaw.
A holder in bad faith of a certificate of title is not entitled to the prosecution of the law, for the law cannot be used as a shield for fraud.
ELIAS GALLAR vs. HERMENEGILDA HUSAIN
G.R. No. L-20954, May 24, 1967, 20 SCRA 186
FACTS: On January 9, 1919, Teodoro sold his land to Serapio for P30 with the right to repurchase within six years in a private document.
On January 28, 1919, shortly after the execution of the deed of sale, Serapio transferred his right to Graciana, sister of Teodoro.
Graciana subsequently transferred her rights to the land to Elias on April 2, 1919 in exchange for one cow in a private document.
On the same occasion, April 2, 1919, possession of the land together with the TCT was delivered to Elias.
On October 10, 1960, after 41 years, Elias filed a suit against the heirs of Teodoro to execute a deed of conveyance in his favor so that he could get a transfer certificate of title.
On the other hand, the heirs of Teodoro invoked prescription to bar Elias’ action.
ISSUES
(1) Is Elias’ suit one for specific performance or one for the quieting of title?
(2) Has the action prescribed?
(3) If the heirs of Teodoro had been the possessor of the property (instead of Elias) would the answer be the same?
HELD: (1) Elias’ suit should be considered an action to quiet title as it seeks to quiet title, to remove the cloud cast on his ownership despite the fact that the transactions had all been merely in private document.
(2) As Elias is in possession of the land, the action is imprescriptible.
(3) If the heirs of Teodoro were in possession of the property, Elias’ action would have been prescribed for then the action would not be one to quiet title, but one to recover real property which must be brought within the statutory period of limitation governing such action.
VICENTE SAPTO vs. APOLONIO FABIANA
G.R. No. L-11285, May 16, 1958, 103 Phil 683
FACTS: On June 8, 1931, Samuel and Constancio Sapto executed a deed of sale of a portion of land covered by TCT # T-5701 in favor of Apolonio for P245.00.
The sale was never registered. Possession of the land was conveyed to Apolonio and the latter has been in the possession thereof since 1931.
Thereafter, Constantino died without any issue. Samuel upon his death was survived by his widow and children, Laureana and Vicente.
On October 19, 1954, the widow of Samuel, together with their two children, filed an action for the recovery of the parcel of land sold by their predecessors to Apolonio in 1931.
ISSUES
(1) Whether an action for quieting of title would compel the sellers’ successors-in-interest to execute the proper deed of conveyance in 1954 in favor of the buyer.
(2) Has the action prescribed?
(3) Whether the deed of sale over the land in question, although was never registered, is still valid and binding?
HELD: (1) YES. The action for quieting of title is to remove the cloud cast upon the buyer’s ownership by the refusal of the sellers’ successors-in-interest to recognize the sale by their predecessors.
Thus, Apolonio, being a buyer of the land in 1931 who possessed it from that date may still compel the sellers’ successors-in-interest to execute the proper deed of conveyance in 1954 so that the deed may be registered.
(2) NO. Since Apolonio has been in possession of the property, the action DOES NOT PRESCRIBE or IMPRESCRIPTIBLE.
(3) YES. Since the property has remained and still in the possession of the vendee of the property, it is clear that conveyance between buyer and his vendors is valid and binding upon the vendors, and is equally binding and effective against the heirs of the vendors. To hold otherwise would make of the Torrens system a shield for the commission of fraud by the vendors or his heirs.
HERMINIO M. DE GUZMAN vs. TABANGAO REALTY INC.
G.R. No. 154262, February 11, 2015, 750 SCRA 271
FACTS: Sometime in 1980, Serafin and Josefino de Guzman purchased on credit oil and lubricating products from FSPC, but they eventually failed to pay for their credit purchases from FSPC.
FSPC filed a complaint for sum of money against Serafin and Josefino before the RTC of Manila.
After trial, decision was rendered finding Serafin and Josefino liable to pay their outstanding obligation to FSPC and the judgment became final and executory.
On June 30, 1983, FSPC levied upon a parcel of land covered by TCT # 3531 in the name of Spouses Serafin & Amelia de Guzman.
At the public auction, the sheriff awarded the certificate of sale to Tabangao Realty as the highest bidder and the same was annotated on TCT # 3531 on April 13, 1988.
The Spouses De Guzman did not redeem the subject property within one year from registration of the Sheriff’s Certificate of Sale on TCT # 3531.
On October 19, 2001, upon the deaths of Spouses De Guzman, their heirs filed a complaint for quieting of title on the ground that the Sheriff’s Certificate of Sale has lost its effectivity as it had been terminated and extinguished by prescription, laches and estoppel, since more than 13 years having elapsed from its registration on April 13, 1988 without the buyer taking any step to consolidate its ownership and/or take possession of the property.
ISSUE; Whether the action for quieting of title would prosper in the instant case.
HELD: NO. For an action to quiet title to prosper, two indispensable requisites must concur: (1) the plaintiff or complainant has a legal or equitable title or interest in the real property subject of the action;
and (2) the deed, claim, encumbrances, or proceeding claimed to be casting a cloud on his title must be shown to be in fact or inoperative despite its prima facie appearance of validity or legal efficacy.
Complainants’ allegation that they were children and only heirs of the deceased Spouses De Guzman and that the subject property was still registered in Spouses De Guzman’s names under TCT # 3531. However, these allegations are insufficient to establish complainants’ title to the property.
Respondent Tabangao was already substituted to and acquired all the rights, title, interest, and claims of the Spouses De Guzman to the subject property on April 13, 1989, when the one – year redemption period expired. Upon the deaths of Amelia de Guzman on January 1, 1997 and her husband Serafin de Guzman on April 23, 2001, they had no more rights, title, interest and claim to the subject property on by succession to complainants as their heirs.
The execution of the final deed of sale and/or conveyance to Tabangao is a mere formality and confirmation of the title already vested in respondent under Rule 39, Section 33 of the Rules of Court. There is nothing in the rules requiring the institution of a separate action for execution of such a deed. Therefore, no prescription period for any action has begun to run.
CLT REALTY DEV’T CORP. vs. PHIL-VILLE DEV’T CORP.
G.R. No. 160726, March 11, 2015, 752 SCRA 289
FACTS: A complaint for quieting of title was filed by Phil-Ville against CLT claiming that it has been in “actual, open, notorious, public, physical and continuous possession” of the 16 parcels of land before 1980 up to the present. It fenced said parcels of land in 1980 and 1991.
On the other hand, CLT claimed to be the owner of a parcel of land known as Lot 26 of the Maysilo Estate as evidenced by TCT No. 177013.
However, CLT’s TCT No. 177013, although apparently valid as effective, is in truth and in fact, invalid and ineffective and unless declared by the Court, will inevitably prejudice Phil-Ville’s title over its 16 parcels of land, as said title of CLT is a potential cause of litigation between Phil-Ville and CLT as both parties are claiming title to the subject properties when CLT’s TCT # T-177013 actually overlaps the 16 parcels of land of Phil-Ville’s 16 TCTs.
The RTC declared Phil-Ville as “the true, absolute and legitimate owner of the sixteen (16) parcels of land and CLT’s TCT # T-177013 was declared null and void. It was found out that CLT purchased or acquired its TCT # T-177013 on December 10, 1988 from its predecessor Estrellita Hipolito who acquired the land covered by her TCT # R-17994 by virtue of an approved Compromise Agreement between her and Atty. Jose B. Dimson wherein the latter transferred to Hipolito on September 2, 1976 Lot 26 of the Maysilo Estate covered by TCT # R-15166, which property in turn appears to have been acquired by Dimson by virtue of an court order dated June 13, 1966 awarding to him as his attorney’s fees whatever remained undisposed of in Lots 25-A, 26, 27, 28 and 29 of the Maysilo Estate of Maria De La Concepcion Vidal. Finally, the LRTC Verification Committee found that “nothing more was left for the heirs
of Maria dela Concepcion Vidal to convey to Jose R. Dimson as his attorney’s fees and consequently, nothing at all was left for Jose R. Dimson to convey to Hipolito. In short, Hipolito’s TCT No. R-17974 is null and void as no land had been registered and TCT No. T-177013 which was derived from TCT # T-17974 is similarly null and void.
ISSUE: Whether TCT # T-177013 imposes a cloud on Phil-Ville’s titles to their 16 parcels of land.
HELD: YES. Quieting of title is common law remedy for the removal of any cloud, doubt, or uncertainty affecting title to real property or any interest but is in truth and in fact invalid, ineffective, voidable or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet title.
In order that an action for quieting of title may prosper, two requisites must concur: (1) the plaintiff or complainant has a legal or equitable title or interest in the real property subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy.
Both requisites in order for an action for quieting of title have been met: (1) Phil-Ville had established its equitable title or interest in the 16 parcels of land subject of the action; and (2) TCT No. T-177013, found to overlap titles to said properties of Phil-Ville, was previously declared invalid.
VILMA I. QUINTOS vs. PELAGIA I. NICOLAS
G.R. No. 210252, June 16, 2014, 726 SCRA 482
FACTS: Spouses Ibarra were owners of a parcel of land consisting of 281 square meters covered by TCT # 318717.
In 1990, Spouses Ibarra had already passed away, leaving to their ten (10) children ownership over the subject property.
Having failed to secure a decision for partition, the siblings instead resorted to executing a Deed of Adjudication on September 21, 2004 to transfer the property in favor of the ten (10) siblings.
Subsequently, respondents (7 siblings) sold their 7/10 undivided share over the property in favor of the Spouses Candelario.
On June 1, 2009, the petitioners (remaining 3 siblings) filed a complaint for quieting of title against the respondents and Spouses Candelario and alleged that they have been in adverse, open, continuous, and uninterrupted possession of the property for over four (4) decades and there are entitled to equitable title.
However in 2005, the respondents entered into a Contract of Lease with Avico Lending Investor over the subject matter without the objection of the petitioners.
ISSUE: Whether the petitioners were able to prove equitable title or ownership over the property.
HELD: NO. Quieting of title in a common law remedy for the removal of any cloud, doubt, or uncertainty affecting title to real property.
For an action to quiet title to prosper, two indispensable requisites must concur, namely: (1) the plaintiff or complainant has a legal or equitable title to or interest in the real property subject of the action, and (2) the deed, claim, encumbrance, or proceeding claimed to be casting doubt on the title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or efficacy.
IMELDA SYJUCO vs. FELISA D. BONIFACIO
G.R. No. 148748, January 14, 2015, 745 SCRA 468
FACTS: The Syjucos are the registered owners of a parcel of land situated in Caloocan City covered by TCT # T-108530 issued on March 26, 1984.
They have been in open, continuous and uninterrupted possession of the subject land, by themselves or through their predecessors-in-interest since 1926 and they have been paying the real property taxes over the subject land since 1949.
Sometime in 1994, Syjucos learned that the purported owner of the subject land was Felisa Bonifacio who was able to register the subject land in her name under TCT No. 265778 on March 29, 1993.
Bonifacio’s title was issued pursuant to an order dated October 8, 1992 by RTC, Branch 125 of Caloocan City in the Petition for Authority to Segregate.
For unexplained reasons, the Registry of Deeds of Caloocan issued TCT No. 265778 to Bonifqacio on March 29, 1993 even before RTC - Branch 125 declared its Order dated October 8, 1992 granting Bonifacio’s
petition for segregation final and executory on April 6, 1993.
On July 28, 1994, to protect their rights and interest over the subject property, the Syjucos lodged a special civil action for quieting of title especially praying for declaration of nullity and cancellation of Bonifacio’s TCT No. 265778.
Subsequently, the Syjucos discovered that Bonifacio sold the subject land to VSD Realty. Bonifacio’s TCT # 265778 was cancelled and replaced by TCT # 285313 in the name of VSD Realty.
As a result, the Syjucos amended their petition impleading VSD Realty on April 25, 1995.
ISSUES
(1) Whether an action for quieting of title is a direct attack on the certificates of title of Bonifacio and VSD Realty.
(2) Whether an action for quieting of title has prescribed.
RULINGS
(1) YES. The instituted action in this case is clearly a direct attack on a certificate of title to real property.
In their complaint for quieting of title, the Syjucos specifically pray for the declaration of nullity and/or cancellation of Bonifacio’s TCT # 265778 and VSD TCT # 285313 over the subject land.
The relief sought is certainly feasible since the objective of an action for quieting of title as provided under Article 476 of the Civil Code, is precisely to quiet title, remove, invalidate, annul and/or nullify a cloud on title to real property or any interest therein by reason of any instrument, record, claims, encumbrance or proceeding which is apparently valid or effective but is in truth and in fact, ineffective, voidable or unenforceable and may be prejudicial to the title.
(2) NO. It is an established doctrine in land ownership dispute that the filing of an action to quiet title is imprescriptible if the disputed property is in the possession of the plaintiff. One who is in actual possession of a piece of land claiming to be the owner thereof may wait his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for this rule being that his undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effects on his own title, which right can be claimed only by one who is in possession.
14. A VERBAL CONTRACT OF SALE IS VALID
SPOUSES MAGDALINO & CLEOPE BADILLA vs. FE BRAGAT
G.R. No. 187013, April 22, 2015, 757 SCRA 131
FACTS: On November 18, 1968, Spouses Pastrano sold their property consisting of 1,015 square meters to Ledesma thru Deed of Sale of Unregistered Land.
In 1970, Ledesma sold to Spouses Badilla “on installment basis” a 200 square meter portion of his property. The sale was not reduced in writing, however, but the Badillas took possession of the portion sold.
On April 18, 1978, Spouses Bragat bought 991 square meters of the property from Ledesma, thru a Deed of Absolute Sale of a Residential Lot.
On May 5, 1989, Spouses Pastrano executed another Deed of Absolute Sale of Registered Land in favor of Fe Bragat covering the entire area of 1,105 square meters of the subject property.
Alleging that Bragat is the absolute owner of the subject property, she is now demanding the Spouses Badilla to vacate the area which they are occupying.
ISSUE: Whether the ownership of the portion occupied by the Badillas of the subject property passed to Spouses Badilla upon their verbal purchase of said portion from Ledesma.
HELD: YES, the ownership of the portion occupied by the Badillas of the subject property passed to them upon their verbal purchase of said portion from Ledesma.
The Civil Code states that ownership of the thing sold is transferred to the vendee upon the actual or constructive delivery of the same.
And the thing is understood as delivered when it is placed in the control and possession of the vendee. Delivery (traditio) operated to divest the vendor of title to the property which may not be regained or recovered until and unless the contract is revoked or rescinded in accordance with law.
The same is true even if the sale is a verbal one, because it is held that when verbal contract has been completed, executed or partially consummated, its enforceability will not be barred by the Statute of Frauds, which applies only to an executory agreement.
And, where it was proven that one party had delivered the thing sold to another, then the contract was partially executed and the Statute of Frauds does not apply. Hence, the ownership of the portion of the subject property in question has been validly and legally passed to Spouses Badilla upon their purchase of such portion.
It is undisputed that the spouses Pastrano had previously sold on November 18, 1968 their property to Ledesma. Therefore as early as such date, it is established that the Pastranos no longer had ownership over the property.
Then, as Ledesma subsequently sold in 1970 a portion of the property to the Badillas who immediately took delivery and possession, ownership of this portion had also been transferred to the said spouses.
Although the sale appears to be merely verbal, and payment therefore was to be made on installment, it is a partially consummated sale, with the Bandillas paying the initial price and Ledesma surrendering possession.
That the parties intended for ownership to be transferred may be inferred from their lack of any agreement stipulating that ownership of the property is reserved by the seller and shall not pass to the buyer until the latter has fully paid the purchase price. The fact is, Ledesma, even delivered to the Badillas the owner’s duplicate copy of the title.
15. CONTRACT OF ANTICHRESIS
CHARITO & VILMA MAGTALAS vs. HEIRS OF BENJAMIN MALANCE
G.R. No. 219071, August 24, 2016, 801 SCRA 485
FACTS: Malance obtained a loan of P600,000 from Magtalas Sisters evidenced by a Kasulatan which provides that the latter shall have the right to the fruits of the subject land owned by Malance for six (6) years or until the loan is fully paid.
After the death of Malance, his heirs filed a Complaint for Recovery of Possession and Declaration of Nullity of the Kasulatan against Magtalas sisters.
During trial, the heirs questioned the validity of the Kasulatan claiming that the same was executed at the time when Malance was mentally incapacitated and that his signature thereon was simulated.
In their answer, Magtalas sisters averred, among others, that the Kasulatan was executed before a notary public at the time when Malance was of sound mind, though sickly, and the heirs must pay Malance’s indebtedness prior to recovery of possession.
ISSUE
Whether the heirs of Malance are entitled to the possession of the property.
RULING
NO, the heirs of Malance are not entitled to the possession of the property.
The evidence as to the genuineness of Malance’s signature and the consequent due execution and authenticity of the Kasunduan preponderance in favor of Magtalas sisters, who were likewise able to prove Melance’s receipt of the amount of P600,000.
A contract of antichresis exists if the following elements are present: (1) the creditor will have possession of the debtor’s real property given as a security; (2) such creditor will apply the fruits of the said property to the interest owed by the debtor, if any, then to the principal amount; (3) the creditor retains the enjoyment of such property until the debtor has totally paid what he owes and (4) should the obligation be duly paid, then the contract is automatically extinguished proceeding from the accessory character of the agreement.
In the case at hand, the language of the Kasulatan leaves no doubt that the loan was secured by an antichresis over the property of Malance, specifically authorizing the Magtalas sisters to receive the fruits of the subject landholding with the obligation to apply them as payment to his principal loan for a period of six (6) years.
As antichretic creditors, the Magtalas sisters are entitled to retain enjoyment of the subject land until the debt has been totally paid.
16. RECONSTITUTION - TITLE NOT ACTUALLY LOST
SPS. ERNESTO & GONIGONDA IBIAS vs. BENITA P. MACABEO
G.R. No. 205004, August 17, 2016, 800 SCRA 694
FACTS: On August 13, 1999, Ernesto executed an Affidavit of Loss alleging that the owner’s duplicate of TCT # 24605 was missing among his files. The petition for reconstitution was granted and a new TCT # 24514 was issued to Spouses Ernesto & Gonigonda Ibias.
Benita filed a complaint for annulment of title. She averred that she is the heir of Albina and Marcelo, the registered owners of the parcel of land covered by TCT # 24604; and Ernesto knew that the title to the land was not lost but was in her possession, as proved by his letter dated 23 July 1999 where he asked her (Benita) for the whereabouts of TCT # 24605 which was in her possession.
In their defense, Spouses Ibias countered that Ernesto and his late brother, Rodolfo, are the only heirs of Marcelo and Albina Ibias. After the death of their parents, Ernesto inquired from Benita the whereabouts of the title but the latter failed to turn over the title. Believing in good faith that the title was lost, he applied for a reconstitution of the title.
ISSUE
Whether a prior knowledge of the certificate of title’s whereabouts a ground for cancellation of the reconstituted title.
RULING
YES, knowledge of the certificate of title’s whereabouts is a ground for cancellation of the reconstituted title.
In the case of Alonso vs. Cebu Country Club, Inc., it was held that “the reconstitution of a title is simply the re-issuance of a lost duplicate certificate of title in its original form and conditions. It does not determine or resolve the ownership of the land covered by the lost or destroyed title. A reconstituted title, like the original certificate of title, by itself does not vest ownership of the land or estate covered thereby.
Reconstitution of title, under Sec. 109 of PD 1529, applies only if the owner’s duplicate certificate of title is indeed lost or destroyed. If a certificate of title has not been lost and is in fact in possession of another person, then the reconstituted title is void and the court that rendered the decision had no jurisdiction.
In the instant case, the allegedly lost owner’s duplicate copy of TCT # 24605 was in the possession of Benita. The alleged lost of TCT # 24605 was offered in evidence during the trial, which was uncontested by the parties. There is no reason to justify the issuance of a constituted title in the name of Spouses Ernesto & Gorgonia Ibias.
Hence, there is no error in the cancellation of the same reconstituted title. It follows that the reconstituted title under the name of Spouses Ibias should be canceed.
17. PROHIBITION TO FOREIGNER TO ACQUIRE LAND
TAINA MANIGQUE – STONE vs. CATTLEYA LAND, INC.
G.R. No. 195975, September 5, 2016, 802 SCRA 173
FACTS: On November 6, 1992, Cattleya entered into a Contract of Conditional Sale with the Tecson spouses covering nine parcels of land, including the subject property.
However, while following up the registration of the August 30, 1993 Deed of Absolute Sale at the Office of the Register of Deeds, Cattleya learned that the owner’s copy of the title to the land in question was with Taina.
The subject land had apparently been sold to Taina’s common-law husband, Michael Stone, by Spouses Tecson in 1985, but the title was placed in Taina’s name as Stone was a foreigner.
Cattleya instituted a civil action for quieting of title and/or recovery of ownership and cancellation of title.
Taina posits that while Michael’s legal capacity to own or acquire real property in the Philippines was not entirely unassailable, there was nevertheless no actual violation of the constitutional prohibition, because in this case no real transfer of ownership had been effected in favor of Michael from Col. Tecson. Taina claimed that she was not exactly dummy Michael’s dummy at all but his active partner.
Cattleya counters that the sale between Col. Tecson and Michael was absolutely null and void, as this was a flagrant violation of the constitutional provision barring or prohibiting aliens or foreigners from acquiring or purchasing land in the Philippines.
ISSUE
Whether the sale of land by Spouses Tecson to Michael Stone, a foreigner although ostensibly made in Taina’s name, was valid, despite the constitutional prohibition against the sale of lands in the Philippines to foreigners.
RULING
NO, the sale is null and void by reason of the constitutional prohibition against the sale of lands in the Philippines to foreigners or aliens.
Section 7, Article XII of the 1987 Constitution states that “Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations or associations qualified to acquire or hold lands of the public domain.”
Given the plain and explicit language of this constitutional mandate, it has been held that “aliens, whether individual or corporations, are disqualified from acquiring lands of public domain. Hence, they are also disqualified from acquiring private lands. The primary purpose of the constitutional provision is the conservation of the national patrimony.
In the case at bench, Taina admitted that it was Michael who paid with his own funds the subject lot, hence, Michael Stone was its real purchaser or buyer. More than that, it bears stressing that if the deed of sale proclaimed that she was the purchaser or buyer of the subject property and this subject property was placed under her name, it was simply because she and Michael wanted to skirt or circumvent the constitutional prohibition barring or outlawing foreigners or aliens from
acquiring or purchasing lands in the Philippines.
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| Taxation Cases Digest |
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Posted by: admin - 05-31-2019, 10:19 PM - Forum: Taxation
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2018 GOLDEN BEACON
T A X A T I O N
By: Dean MANUEL R. BUSTAMANTE
1. GENERAL PRINCIPLES
TAXES are the enforced contribution from persons and property levied by the law-making body of the state by virtue of its sovereignty for the support of the government and all public needs.
Essential characteristics of taxes
1. It is an enforced contribution
2. It is proportionate in character
3. It is levied by the law-making body of the state
4. It is levied for public purpose
5. It is generally payable in money
6. It is levied on persons and property by the State which has jurisdiction over the person or property.
NATURE OF THE TAXING POWER
It is inherent in sovereignty - The power of taxation is inherent in sovereignty as an incident or attribute thereof, being essential to the existence of every government. It exists apart from the Constitution and without being expressly conferred by the people.
Constitutional provisions concerning the power of taxation do not operate as grants of the power to the government. They merely constitute limitations upon a power which would otherwise be practically without limit.
It is legislative in character - The power of taxation is pecuniary and exclusively legislative and cannot be exercised by the executive or judicial branch of government. Hence, only Congress can impose taxes.
THE POWER TO TAX INCLUDES THE POWER TO DESTROY in the sense that a lawful tax cannot be defeated just because its exercise would be destructive of his business for otherwise every lawful tax would become unlawful and no taxation whatever could be levied. The tax if in accordance with the limitations, constitutional or otherwise, cannot be judicially restraint merely because of its prejudicial results to the taxpayer.
THE POWER TO TAX IS NOT THE POWER TO DESTROY
WHILE THIS COURT SITS
This should be understood as referring to a situation where the tax imposed violates its limits and injustice, not sanctioned by the fundamental law is done to the taxpayer.
Taxes cannot be subject of set-off or compensation
Taxes are not in the nature of contracts between the parties but grow out of duty to and are the positive acts of the government to the making and enforcement of which, the personal consent of the individual taxpayers is not required. A taxpayer cannot refuse to pay a tax on the ground that the government owes him an amount equal to or greater than the tax being collected. The collection of a tax cannot await the results of the lawsuit against the government.
Exceptions:
1. the government and the taxpayer are creditors and debtors of each other;
2. it is due and demandable;
3. it is fully liquidated.
*** A taxpayer cannot refuse to pay his taxes when they fall due simply because he has a claim against the government or that the collection of the tax is contingent on the result of the lawsuit it filled with the government. (Philex Mining Corp. vs. CIR, G.R. No. 125704, August 28, 1998).
*** A corporation’s outstanding claims for reimbursement against the Oil Price Stabilization Fund (OPSF) cannot be offset against its contributions to said fund. PD 1956, as amended, explicitly provides that the source of the OPSF is taxation. A taxpayer may not offset taxes due from claims that he may have against the Government.
Taxes and debts cannot be the subject of compensation because the Government and the taxpayer are not mutually creditors and debtors of each other and a claim for taxes is not a debt, demand, contract or judgment as is allowable to be set off. (Caltex Philippines vs. Commission on Audit, G.R. No. 92585, May 8, 1992).
*** No compensation is legally authorized where it appears that the parties involved are not creditors and debtors of each other (Art. 1279, Civil Code). In the case at bar, what was sought to be set off against the taxpayer’s real estate tax liability to the City of Pasay was the amount of money that the taxpayer was supposed to receive as payment for his property that was expropriated by the National Government. (Francia vs. Intermediate Appellate Court, G.R. No. L-67649, June 28, 1988).
*** In this case, what appeared to be due and demandable debt of the Government to the estate of the late Walter Scott Price, as payment for the latter’s services, was allowed as a set-off against the transfer taxes due from the decedent’s estate. The Court opined, citing Arts. 1279 and 1290 of the Civil Code, that when two obligations are both due and demandable of the two obligations takes effect by operations of law. (Domingo vs. Garlitos, G.R. No. L-18994, June 29, 1963).
STAGES IN IMPOSITION OF TAXES
1. LEVY - enactment of tax laws
2. ASSESSMENT - ascertaining the amount of tax due
3. COLLECTION - getting of tax imposed
BASIC PRINCIPLES OF SOUND TAX SYSTEM
1. FISCAL AUTONOMY - sources of revenue must be sufficient to meet the demands of public expenditures.
2. THEORETICAL JUSTICE - tax burden should be in proportion to taxpayer’s ability to pay.
3. ADMINISTRATIVE FEASIBILITY - tax must be clear and concise; capable of proper enforcement; not burdensome; convenient to time and manner of payment.
**** Violation of theoretical justice doctrine would be fatal because the Constitution mandates that taxation is equitable. An unequitable tax measure, however, may be declared void because of the constitutional provision requiring taxation to be equitable.
TAXATION MUST BE UNIFORM AND EQUITABLE
To be Uniform - persons and properties of the same class should be taxed at the same rate.
To be Equitable - tax should be imposed in proportion to taxpayer’s ability to pay.
*** Uniformity in taxation means that all taxable articles or kinds of property of the same classes shall be taxed at the same rate. A tax is uniform when it operates with the same force and effect in every place where the subject of it is found. (Churchill vs. Concepcion, G.R. No. 11572, September 22, 1916).
*** Uniformity of taxation, like the kindred concept of equal protection, merely requires that all subjects or objects of taxation, similarly situated are to be treated alike both in privileges and liabilities. (Tan vs. Del Rosario, G.R. No. 109289, October 3, 1994).
*** Taxation is said to be equitable when its burden falls on those better able to pay. Taxation is progressive when its rate goes up depending on the resources of the person affected. (Reyes vs. Almanzor, G.R. 49839-46, April 26, 1991).
DIRECT TAXES vs. INDIRECT TAXES
DIRECT TAXES are demanded from the very person who should pay the tax and which he cannot shift to another. e.g. - income tax, estate tax & donor’s tax.
INDIRECT TAXES are demanded from one person with the expectation that he can shift the burden to someone else, not as a tax but as part of the purchase price. e.g. value added tax, excise and percentage tax.
*** The sales tax that is passed on to the purchaser as part of the purchase price of the commodity is tax on the seller, and not the buyer. Hence, if the buyer happens to be tax-exempt, the seller is nonetheless liable for the payment of the tax as the same is a tax not on the buyer but actually a tax on the seller.
When the consumer or end-user of a manufactured product is tax-exempt, such exemption covers only those taxes for which such consumer or end-user is directly liable. Indirect taxes are not included. Hence, the manufacturer cannot claim exemption from the payment of sales tax; neither can the consumer nor buyer of the product demand the refund of the tax that the manufacturer might have passed. (Philippine Acetylene Co. vs. Commissioner of Internal Revenue, G.R. No. L-19707, August 17, 1967).
*** Where the exemption from indirect tax is given to the contractee, but the evident intention is to exempt the contractor so that the contractor may no longer shift or pass on any tax to the contractee. (Commissioner of Internal Revenue vs. John Gotamco & Sons, G.R. L-31092, February 27, 1987).
DIFFERENCE BETWEEN PHIL. ACETYLENE AND GOTAMCO CASE
In the Phil. Acetylene case, the Napocor is exempt from “direct taxes” while in Gotamco case, the WHO is exempt from both “direct and indirect taxes.” Hence, if the buyer is exempt from indirect taxes, the seller cannot shift the tax to the former and as such he can avail of such benefit, but if the buyer is only exempted from “taxes,” the seller cannot allege the exemption for his benefit because the exemption on the part of the buyer is only with respect to direct taxes and not indirect taxes.
COMMISSIONER vs. CENTRAL LUZON DRUG CORPORATION
456 SCRA 414, G.R. No. 159647, April 15, 2005
The 20 percent discount required by the law to be given to senior citizens is a tax credit, not merely a tax deduction from the gross income or gross sale of the establishment concerned.
A tax credit is used by the private establishment only after the tax has been computed;
A tax deduction before the tax is computed.
Q: If in a taxable year a drug store has no tax due on which to apply the tax credits, can the drug store claim from BIR a tax refund in lieu of tax credit? Explain.
A: NO, the drugstore cannot claim from the BIR a tax refund in lieu of tax credit. There is nothing in the law that grants a refund when the drugstore has no tax liability against which the tax credit can be used. A tax credit is in the nature of a tax exemption and in case of doubt, the doubt should be resolved in strictissimi juris against the claimant.
Q: Can the BIR require the drugstore to deduct the amount of the discount from their gross income?
A: NO. Tax credit which reduces the tax liability is different from a tax deduction which merely reduces the tax base. Since the law allowed the drugstores to claim in full the discount as a tax credit, the BIR is not allowed to expand or contract the legislative mandate.
Q: If a drugstore closes its business due to losses without being able to recoup the discount, can it claim reimbursement of the discount from the government on the ground that without such reimbursement, the law constitutes taking of private property for public use without just compensation? Explain.
A: A drugstore, closing its business due to losses, cannot claim reimbursement of the discount from the government. If the business continues to operate at a loss and no other taxes, thus compelling it to close shop, the credit can never be applied and will be lost altogether.
MANILA MEMORIAL PARK, INC. vs. DSWD & DOF SECRETARY
G.R. No. 175356, December 3, 2013, 711 SCRA 302
FACTS: Upon the enactment of RA 9257 amending Sec. 4 of RA 7432 otherwise known as Expanded Senior Citizen Act, the DSWD and DOF issued IRRs allowing business establishment to claim 20% discount given to senior citizens as a tax deduction. Petitioner questions said tax treatment as it contravenes to the former Sec. 4 (a) of RA 7432 which allows 20% discount given to senior citizens as a tax credit. It further claims that allowing the 20% tax deduction scheme would violate Sec. 9 (1) Art. III of the Constitution which provides that “private property shall not be taken for public use without just compensation.
ISSUE: Whether or not the 20% discount to senior citizens that may be claimed as a tax deduction by private establishments, valid and constitutional.
HELD: YES. The 20% senior citizen discount is an exercise of public power where just compensation is not warranted contrary to the claim that it is an exercise of eminent domain which would render it unconstitutional because it is not a peso to peso reimbursement of the 20% discount given to senior citizens.
The 20% discount is a regulation affecting the ability of private establishments to price their products and services relative to a special class of individuals, senior citizens, for which the Constitution affords preferential concern.
TAX EXEMPTION vs. TAX AMNESTY
Tax Exemption is an immunity from the civil liability only. It is an immunity or privilege, a freedom from a charge or burden to which others are subjected.
Tax Amnesty is an immunity from all criminal, civil and administrative liabilities arising from non-payment of taxes. It is a general pardon given to all taxpayers. It applies only to past tax periods, hence, of retroactive application.
*** The salaries of justices and judges in the judiciary are taxable. The clear intent of the Constitutional Commission was to delete the proposed express grant of exemption from payment of income tax to members of the judiciary, so as to give substance to equality among the three branches of Government. (Nitafan vs. Commissioner of Internal Revenue, G.R. No. L-78780, July 23, 1987).
*** The exemption from income tax on base-connected income of non-resident American base personnel under the U.S. Bases Treaty does not extend to the income realized from the sale by an American civilian base employee of his car inside the base to another American national. (Reagan vs. CIR, G.R. No. L-26379, December 27, 1969).
MANILA INTERNATIONAL AIRPORT AUTHORITY vs.
COURT OF APPEALS
495 SCRA 591, G.R. No. 155650, July 20, 2006
FACTS: Upon the enactment of the 1991 Local Government Code, the tax exemption on real property tax enjoyed by the government-owned and controlled corporations like MIAA has been withdrawn. The City of Parañaque filed notice of assessment to MIAA to settle its tax obligations.
ISSUE: Whether or not the land and buildings of MIAA are exempt from real property tax.
HELD: YES. MIAA is not a government-owned and controlled corporation but an instrumentality of the national government and thus exempt from local taxation. The real properties of MIAA are owned by the Republic of the Philippines and thus exempt from real estate tax. Only the portions of the Manila International Airport Authority leased to private parties are subject to tax.
LUNG CENTER OF THE PHILIPPINES vs. QUEZON CITY
433 SCRA 119, G.R. No. 144104, June 29, 2004
FACTS: The Lung Center of the Philippines was established by virtue of PD 1823 as charitable institution. It is the registered owner of a parcel of land with a hospital in the middle, located at Quezon City. A big space at the ground floor is being leased to private parties, for canteen and small store spaces, and to medical or professional practitioners who use the same as their private clinics. A big portion of the land is being leased for commercial purposes to a private enterprise.
The Lung Center accepts paying and non-paying patients. It also renders medical services to out-patients, both paying and non-paying. It also receives annual subsidies from the government. Both the land the hospital building were assessed for real property taxation.
ISSUE: Whether Lung Center of the Philippines is a charitable institution within the context of the Constitution and thus its real properties are exempt from real property taxes.
HELD: YES. To be exempt from real property tax, the land and buildings of Lung Center of the Philippines should be used actually, directly and exclusively for charitable purposes. Lung Center of the Philippines as a charitable institution does not lose its character as such and its exemptions from taxes simply because it derives income from paying patients, rentals of private persons and receives subsidies from the government so long as the money received is devoted or used altogether to the charitable object which it is intended to achieve and no money inures to the private benefit of the persons managing or operating the institution.
TAX AVOIDANCE vs. TAX EVASION
A Tax Avoidance is the exploitation by the taxpayer of legally permissible alternative tax rates or methods of assessing taxable property or income, in order to avoid or reduce tax liability. Tax avoidance is also called TAX MINIMIZATION.
A Tax Evasion is the use by the taxpayer of illegal or fraudulent means to defeat or lessen the payment of a tax. Tax evasion is punishable by law.
DISTINCTION:
Evasion should be applied to the escape from taxation accomplished by breaking the letter of the tax law; deliberate omission to report a taxable item, for example.
Avoidance covers escape accompanied by legal procedures which may be contrary to the intent of the sponsors of the tax laws but nevertheless do not violate the letter of the law.
Whereas the tax evader breaks the law, the tax avoider sidesteps it.
*** A tax return which does not correctly reflect income may only be false but not necessarily fraudulent where it appears that the return was not prepared by the taxpayer himself but by his accountant and that after the original deficiency tax assessment was made, the same was subsequently reduced by the BIR by a substantial amount. Hence, the 50% surcharge for fraud may be dispensed with but the tax may still be assessed within the prescriptive period of ten years from discovery thereof. (Aznar vs. CTA, G.R. No. L-20569, August 23, 1974).
EQUAL PROTECTION CLAUSE
**** The remission or condonation of taxes due and payable to the exclusion of taxes already collected does not constitute unfair discrimination. Each set of taxes is a class by itself and the law would be open to attack as a class legislation only if all taxpayers belonging to one class were not treated alike. (Juan Luna Subdivision, Inc. vs. Sarmiento, G.R. No. L-3538, May 28, 1952).
**** A law (RA 3843) which imposes a preferential franchise tax rate of 2% on a particular franchise grantee while other franchise grantees are subject to 5% is not violative of the equal protection or equality of taxation rule in the Constitution. The legislature has the inherent power not only to select the subjects of taxation but also to grant tax exemptions. (Commissioner of Internal Revenue vs. Lingayen Gulf, G.R. No. L-23771, August 4, 1988).
**** A local tax which levies an ad valorem tax on motor vehicles registered in Manila without also taxing those which are registered outside the city but which enter the city and use its streets occasionally violates the rule on the equality of taxation. (Association of Customs Brokers vs. Municipality Board, G.R. No. L-4376, May 22, 1953).
NON-IMPAIRMENT OF CONTRACTS
**** Where a mining concession was granted under a Royal Decree and where it appears that under said decree, no other taxes except mentioned therein shall be imposed on mining and metallurgical industries, the levy of a tax on said mining claim plus an ad valorem tax on mineral output under a subsequent law (Act 1189) constitute an impairment of contract because a mining concession is a contract. (Casanovas vs. Hord, G.R. No. L-3473, March 22, 1907).
DOUBLE TAXATION
DOUBLE TAXATION means taxing twice by the same taxing authority with the same jurisdiction or taxing district for the same purpose in the same year or taxing period.
Where double taxation occurs, the taxpayer may seek relief under the uniformity rule or the equal protection guarantee.
**** Double taxation is not prohibited by the Constitution and there is double taxation when the same person is taxed by the same jurisdiction for the same purpose. This is not the case at bar, the ordinance in question imposes a tax on the sale or disposals of every “bottle or container” of liquor or intoxicating beverages, and as such is a typical tax or revenue measure, whereas the fee it pays annually is for a “second-class wholesale liquor license,” which is a license to engage in the business of wholesale liquor in Cebu City, and accordingly constitutes a regulatory measure, in the exercise of police power. (San Miguel Brewery vs. City of Cebu, G.R. No. L-20312, February 26, 1972).
SITUS OF TAXATION
Situs of taxation is the state or country which has jurisdiction to tax a person, property or interest. In short, situs of taxation is the place of taxation.
The situs of taxation of the following:
1. Real Property tax - the place where it is located.
2. Tangible Personal Property tax - where it is physically located.
3. Intangible Personal Property tax - taxable in the domicile of the owner under the maxim of “Mobilia Seguuntur Personam”
4. Income Tax - source of income
5. Poll or Residence Tax - residents or domiciled of the state whether citizen or not
6. Transfer Tax - where the transferor is a citizen or resident or where the property is located
7. Business, Occupation and Transaction - place where the act is done or occupation is pursued.
**** The absence of flight operations to and from the Philippines is not determinative of the source of income or the situs of income taxation. The test of taxability is the “source” and the source of an income is that activity which produced the income. Income from the sale of tickets was derived from the Philippines. The word “source” conveys one essential idea, and that of origin, and the origin of the income herein is the Philippines. (CIR vs. British Overseas Airways Corp, G.R. No. L-657773-74, April 30, 1987).
NON-RETROACTIVITY OF RULINGS
Any revocation, modification or reversal of any of the rules and regulations promulgated in accordance with the preceding section, or any of the rulings or circulars promulgated by the Commissioner shall not be given retroactive application if the revocation, modification or reversal will be prejudicial to the taxpayer except in the following cases:
a) where the taxpayer deliberately misstates or omits material facts from his return or in any document required of him by the Bureau of Internal Revenue.
b) where the facts subsequently gathered by the Bureau of Internal Revenue are materially different from the facts on which the ruling is based.
c) where the taxpayer acted in bad faith.
CIR vs. BENGUET CORPORATION
G.R. No. 145559, July 14, 2006, 495 SCRA 59
ISSUE: Whether or not Revenue Regulations should have retroactive application when they are prejudicial to the taxpayer.
HELD: NO. The Tax Code explicitly states that “Any revocation, modification, or reversal of any rules and regulations promulgated by the Commissioner of Internal Revenue shall not be given retroactive application if the revocation, modification or reversal will be prejudicial to the taxpayer. Clearly, the prejudice to respondent by the retroactive application of VAT Ruling No. 008-92 is patently evident.
TAX TREATY vs. RMO
DEUTSHE BANK vs. COMMISSIONER OF INTERNAL REVENUE
G.R. No. 188550, August 19, 2013, 704 SCRA 216
FACTS: Deutshe Bank filed an administrative claim for refund with the BIR TAID on its 15% BPRP upon RBU profits and at the same time requested the International Tax Affairs Division (ITAD) a confirmation of its entitlement to the preferential tax rate of 10% under the RP-Germany Tax Treaty.
The claim for a refund was denied by the BIR on the ground that the application for a tax treaty relief was not filed with ITAD prior to the payment of Deutshe Bank of its BRPT and actual remittance of its branch profits to DB Germany or prior to its availment of the preferential rate of 10% under the RP-Germany Tax Treaty provisions.
The tax court ruled that Deutshe Bank violated the 15 day period mandated under Section III paragraph (2) of Revenue Memorandum Order (RMO) No. 1-2000.
ISSUE: Whether the failure to strictly comply with RMO No. 1-2000 will deprive Deutshe Bank of the benefits of the RP-Germany Tax Treaty.
HELD: NO. Tax treaties are entered into to minimize, if not eliminate the harshness of international juridical double taxation, which is why they are also known as double tax treaty or double tax agreement.
The BIR must not impose additional requirements that should negate the availment of the reliefs provided for under international agreements. More so, when the RP-Germany Tax Treaty does not provide for any pre-requisite for the availment of the benefits under said agreement.
Logically, non-compliance with tax treaties has negative implications on international relations and unduly discourages foreign investors.
INQUIRE INTO BANK DEPOSITS
As a general rule, the Commissioner of Internal Revenue has no authority to inquire into the bank deposits of any person as provided in RA 1405. However, there are some exceptions:
1) inquire into the bank deposits of a decedent for the purpose of determining the gross estate of such decedent;
2) in case a taxpayer offers to compromise the payment of his tax liabilities on the ground that his financial position demonstrates a clear inability to pay assessed, his offer shall not be considered unless he waives his privilege under the said law and such waiver shall serve as authority of the Commissioner to inquire into the bank deposits of said taxpayer.
COMMISSIONER AUTHORITY TO COMPROMISE
Q: Under what conditions may the Commissioner of Internal Revenue be authorized to compromise the payment of internal revenue tax?
A: The Commissioner of Internal Revenue may be authorized to compromise the payment of any internal revenue tax where:
1) A reasonable doubt as to the validity of the claim against the taxpayer exists; or
2) The financial position of the taxpayer demonstrates a clear inability to pay the assessed tax.
Q: Under what conditions may the Commissioner of Internal Revenue be authorized to abate or cancel a tax liability?
A: The Commissioner of Internal Revenue may abate or cancel a tax liability when:
1) The tax or any portion thereof appears to be unjustly or excessively assessed; or
2) The administration and collection costs involved do not justify the collection of the amount due.
2. T A X R E M E D I E S
Q: When will the 3-year prescriptive period to assess begin to run?
A: Payment made ON or BEFORE last day of payment fixed by law.
[img=27x12]file:///C:/Users/Rey/AppData/Local/Temp/msohtmlclip1/01/clip_image002.gif[/img] period starts to run ON THE LAST DAY FOR PAYMENT OF TAX.
Payment made AFTER the last day fixed by law
[img=27x12]file:///C:/Users/Rey/AppData/Local/Temp/msohtmlclip1/01/clip_image003.gif[/img] period starts to run from actual date of payment.
RULES ON PRESCRIPTIVE PERIODS
OF ASSESSMENT & COLLECTION
1. The prescriptive period of assessment of internal revenue taxes is three years. Exceptions:
a) Where false or fraudulent returns are filed or omission to file return, in which case the tax may be assessed within ten (10) years after discovery of the falsity, fraud or omission.
b) When there is a waiver of the statute of limitations, signed by the taxpayer and accepted by the commissioner before the lapse of three (3) year period.
2. The three (3) year period for assessment commences to run “on the date of filing or when the return is due whichever comes later.”
3. The prescriptive period for collection is five (5) years, counted from the date of assessment either by summary proceedings or judicial proceedings.
Where no return filed, or the return filed was false or fraudulent, collection should be made within ten (10) years from the date of discovery of the failure to file returns or of the falsity or fraud in the return, if there is no prior assessment. Collection should be by judicial proceedings.
ABSENCE OF LETTER OF AUTHORITY (LOA)
MEDICARD PHILIPPINES, INC. vs.
COMMISSIONER OF INTERNAL REVENUE
G.R. No. 222743, April 5, 2017, 822 SCRA 444
FACTS: Medicard filed its Quarterly VAT Returns through Electronic Filing and Payment System.
Upon finding some discrepancies between Medicard’s Income Tax Return and VAT returns, the CIR issued on September 20, 2007 a Preliminary Assessment Notice (PAN) and Letter Notice (LN) against Medicard for deficiency VAT.
On January 4, 2008, Medicard received the Final Assessment Notice (FAN). The CIR argued that since Medicard does not actually provide medical and/or hospital service, but merely arranges for the same, its services are not VAT exempt.
Medicare filed its protest against the FAN arguing that its services include actual and direct rendition of medical and laboratory services.
On February 14, 2008, the CIR issued a Tax Verification Notice (TVN) to verify the supporting documents of Medicard’s protest. Medicard submitted additional supporting documentary evidence in aid of its protest on March 18, 2008.
On June 19, 2009, Medicard received CIR’s final decision on disputed assessment denying Medicard’s protest.
On July 20, 2009, Medicard filed a petition for review before CTA contending that the absence of a Letter of Authority (LOA) violated its right to due process.
ISSUE
Whether the absence of the Letter of Authority (LOA) violates Medicard’s right to due process.
RULING
YES, the absence of the Letter of Authority (LOA) disregards Medicard’s right to due process which warrants the reversal of the assailed decision and resolution.
An LOA is the authority given to the appropriate revenue officer assigned to perform assessment functions. It empowers or enables said revenue officer to examine the books of account and other accounting records of a taxpayer for the purpose of collecting the correct amount of tax. It is clear that under Section 6 of the NIRC that unless authorized by the Commissioner of Internal Revenue or by his duly authorized representative, through an LOA, an examination of the taxpayer cannot ordinarily be taken.
In this case, there is no dispute that no LOA was issued prior to the issuance of a PAN and FAN against Medicard. The LN that was issued earlier was also not converted into an LOA contrary to Section 6 of the NIRC.
The Court cannot convert the LN into an LOA as required under the law even if the same was issued by the CIR himself. In the absence of such authority, the assessment or examination is a nullity.
PRESCRIPTION OF ASSESSMENT AND COLLECTION
CHINA BANKING CORPORATION vs. COMMISSIONER (CIR)
G.R. No. 172509, February 4, 2015, 749 SCRA 525
FACTS: CBC was engaged in transactions involving sales of foreign exchange to the Central Bank under the SWAP transactions.
On April 19, 1989, CBC received an assessment from the BIR finding CBC liable for deficiency DST on sales of foreign exchange to the Central Bank for the years 1982 to 1985.
On May 8, 1989, CBC filed a letter of protest and a reinvestigation.
On December 6, 2001, more than 12 years after the filing of the protest, the Commissioner rendered a decision reiterating the deficiency DST assessment and ordered the payment within 30 days.
On appeal to the Supreme Court, CBC invoked for the first time the argument of prescription that the government has three years from April 19, 1989, the date CBC received the assessment of the BIR to collect the tax and within that frame, however, neither a warrant of distraint of levy was issued nor a collection case was filed in court.
ISSUES:
(1) Whether the right of the BIR to collect the assessed DST is barred by the statute of limitation.
(2) Whether the request for reinvestigation suspends the running of the prescriptive period.
(3) Whether the issue of prescription cannot be raised for the first time on appeal.
HELD: (1) YES. The assessment of the tax is deemed made and the three – year period for collection of the assessed tax begins to run on the date the assessment notice had been released, mailed or sent by the BIR to the taxpayer. Thus, failure of the BIR to file a warrant of distraint or serve a levy on taxpayer’s properties nor file collection case in court within the three – year period is fatal.
In this case, assuming that April 19, 1989 is the reckoning date, the BIR had three years to collect the assessed DST, however, the records show that there was neither a warrant of distraint or levy served on CBC’s properties nor a collection case filed in court by the BIR within the three-year period.
The attempt of the BIR to collect the tax through its Answer with a demand for CBC to pay the assessed DST in the CTA on March 11, 2002 is not deemed compliance with Tax Code.
The demand was made almost thirteen years from the date from which the prescriptive period is to be reckoned. Thus, the attempt to collect the tax was made beyond the three-year prescriptive period.
(2) NO, the running of the statute of limitations was not suspended by the request for reinvestigation.
The fact that the taxpayer in this case may have requested a reinvestigation did not toll the running of the three-year prescriptive period.
Under Section 320 of the NIRC, the act of requesting a reinvestigation alone does not suspend the period. The request should first be granted, in order to effect suspension.
In the present case, there is no showing from the records that the Commissioner ever granted the request for reinvestigation filed by the CBC. That being the case, it cannot be said that the running of the three-year prescriptive period was effectively suspended.
(3) NO. If the pleading or the evidence on record show that the claim is barred by prescription, the court is mandated to claim even if prescription is not raised as a defense.
To determine prescription, what is essential only is that the facts demonstrating the lapse of the prescriptive period were sufficiently and satisfactorily apparent on the record either in the allegation of the plaintiff, or otherwise established by the evidence.
Estoppel or waiver prevents the government from invoking the rule against raising the issue of prescription for the first time on appeal.
Under the rule on taxation, estoppel does not prevent the government from collecting taxes, it is not bound by the mistake or negligence of its agent.
The rule is based on the political law concept “the king can do wrong” which liken to a king: it does not commit mistakes, and it does not sleep on its rights. Thus, the mistake or negligence of government officials should not bind the state, lest it bring harm to the government and ultimately the people, in whom sovereignty resides.
4. In case of a false or fraudulent return with intent to evade tax or failure to file a return, a proceeding in court for the collection of such tax may be filed without assessment within ten (10) years after discovery.
When return filed was not false or fraudulent, and there is no prior assessment, collection should be made within three (3) years from the date of filing the return (or from the last day required by law for filing, if return was filed before such last date). Collection should be by judicial proceeding.
COMMISSIONER OF INTERNAL REVENUE vs.
ASALUS CORPORATION
G.R. No. 221590, February 22, 2017, 818 SCRA 543
FACTS: On January 10, 2011, CIR issued Preliminary Assessment Notice (PAN) finding respondent Asalus liable for deficiency VAT for 2007. Asalus filed its protest against the PAN but it was denied by the CIR.
On August 26, 2014, Asalus received the Final Assessment Notice (FAN) stating that it was liable for deficiency VAT for 2007. Thereafter, Asalus filed a supplemental protest stating that the deficiency VAT assessment had prescribed pursuant to Section 203 of the NIRC.
The CIR claims that Asalus was informed in the PAN of the ten-year prescriptive period and that the FAN made specific reference that there was substantial understatement in Asalus’ income which exceeded 30% of what was declared in its VAT returns, according to an audit investigation.
ISSUE
Whether the ten-year prescriptive period under Sec. 222 of NIRC applies when there is an understatement of income in the return.
RULING
YES, the ten-year prescriptive period under Sec. 222 of the NIRC applies in this case.
Generally, internal revenue taxes shall be assessed within three years after the last day prescribed by law for the filing of the return, or where the return is filed beyond the period, from the day the return was actually filed.
Under Section 222 of the NIRC, however, states that in case of a false or fraudulent return with intent to evade tax or failure to file a return, the assessment may be made within ten years from the discovery of the falsity, fraud, or omission.
Under Section 248 (B) of the NIRC, there is a prima facie of a false return if there is a substantial under declarations of taxable sales, receipt, or income. The failure to report sales, receipts, or income in an amount exceeding 30% of what is declared in the returns constitute substantial underdeclaration.
In this case, there was undeclared VATable sales more than 30% of that declared in Asalus’ VAT return. Hence, failure to overcome the presumption of falsify of the returns warranted the application of the ten-year prescription period for assessment under Section 222 of NIRC.
Q: Can the taxpayer and the Commissioner agree on the suspension of the prescriptive period to assess?
A: YES. If before the expiration of the time prescribed (3 years) for assessment, both the commissioner and the taxpayer have agreed in writing to its assessment after such time, the tax may be assessed within the period agreed upon. The period so agreed upon may be extended by subsequent written agreement made before the expiration of the period previously agreed upon.
Q: Can a taxpayer waive his right to claim that the period to assess for any deficiency tax has prescribed? When can this waiver be made?
A: YES, a taxpayer may waive the said right. He may renounce his right to invoke the defense of prescription even after the prescribed period. There is nothing unlawful or immoral about this kind of waiver. Just like any other right, the right to avail of the defense of prescription is waivable.
Q: Is the filing of a wrong return equivalent to a non-return scenario wherein the prescriptive period would be ten (10) years and not three (3) years?
A: YES. In the case of Butuan Sawmill, the ruling was to the effect that since no percentage tax return was actually filed by the taxpayer to effect the sales of its log, the 10 year prescriptive period for cases where no returns are filed applies.
Q: The BIR levied and sold the properties of the decedent without the prior approval of the probate court. The estate questions its legality on the ground that the probate or settlement court’s approval is necessary before the government can collect estate taxes. Decide.
A: In the case of Marcos vs. Court of Appeals, the SC stated that the approval of the court sitting in probate is not mandatory in the collection of estate taxes. There is nothing in the Tax Code and in the pertinent remedial laws that implies the necessity of the probate court’s approval of the State’s claim for estate taxes before the same can be enforced and collected.
LACK OF TERMINATION LETTER BY BIR
ASIATRUST DEVELOPMENT BANK, INC. vs.
COMMISSIONER OF INTERNAL REVENUE
G.R. Nos. 201530 & 201680, April 19, 2017, 823 SCRA 648
FACTS: Asiatrust manifested that it availed of the Tax Abatement Program (TAP) for its deficiency final withholding tax-trust assessments for fiscal years ending June 30, 1996, 1997 and 1998, and that on June 29, 2007, it paid the basic taxes for the fiscal years 1996, 1997 and 1998, respectively. Asiatrust also claimed that on March 6, 2008, it availed of the provision of RA 9480, otherwise known as the Tax Amnesty Law of 2007.
The CTA En Banc ruled that in the absence of a termination letter, it cannot be established that Asiatrust validly availed of the Tax Abatement Program.
ISSUE
Whether Asiatrust considered to have availed of Tax Abatement Program (TAP) without a termination letter from CIR.
RULING
NO, Asiatrust had not given a substantial proof that it had availed the Tax Abatement Program (TAP).
Based on the guidelines by RR No. 15-06 on the implementation of the one-time administrative abatement of all penalties/surcharges and interest on delinquent accounts and assessments, the last step in the tax abatement process is the issuance of the termination letter.
The presentation of the termination letter is essential as it proves that the taxpayer’s application for tax abatement has been approved. Thus, without a termination letter, a tax assessment cannot be considered closed and terminated.
In this case, Asiatrust failed to present a termination letter from the BIR. Instead, it presented a Certification issued by the BIR to prove that it availed of the Tax Abatement Program (TAP) and paid the basic tax. These documents, however, do not prove that Asiatrust’s application for tax abatement has been approved. If at all, these documents only prove Asiatrust’s payments of basic taxes, which is not a ground to consider its deficiency tax assessment closed and terminated.
INDIVIDUALS NOT REQUIRED TO FILE INCOME TAX RETURN
1) an individual whose gross income does not exceed his total personal and additional exemptions for dependents, UNLESS, that a citizen of the Philippines, who has more than one employer and any alien individual engaged in business or practice of profession within the Philippines shall file an income tax returns regardless of the amount of gross income.
2) an individual whose pure compensation derived from sources within the Philippines does not exceed Php60,000.00 otherwise he shall also file income tax return.
3) an individual whose sole income has been subjected to final withholding tax.
4) an individual who is exempt from income tax pursuant to the provisions of the Code and other laws, general or special.
Q: Can criminal prosecution for tax evasion be enjoined?
A: As a general rule, criminal prosecution cannot be enjoined.
EXCEPTIONS: as summarized in Brocka vs. Enrile:
1. to afford adequate protection to the constitutional rights of the accused.
2. when necessary for the orderly administration of justice or to avoid oppression or multiplicity of action.
3. when there is a prejudicial question which is subjudice.
4. when the acts of the officer are without or in excess of authority.
5. when the prosecution is under an invalid law, ordinance or regulation.
6. where the court had no jurisdiction over the offense.
7. when double jeopardy is clearly apparent.
8. where it’s a case of persecution rather than prosecution.
9. where the charges are manifestly false and motivated by the lust for vengeance.
10. where there is clearly no prima facie case against the accused and a motion to quash on that ground has been denied.
Q: Should the fact that the deficiency taxes be first established before a taxpayer can be prosecuted for tax evasion?
A: The SC in the case of CIR vs. CA held that before one is prosecuted for willful attempt to evade or defeat any tax, the fact that a tax is due must first be proved.
The SC did not subscribe to the ruling in Ungab vs. Cusi that the lack of a final determination of FORTUNE’s correct tax liability is not a bar to criminal prosecution, and that while a precise computation and assessment is required for a civil action to collect tax deficiencies, the Tax Code does not require such computation and assessment prior to criminal prosecution.
For criminal prosecution to proceed before assessment, there must be a prima facie showing of a willful attempt to evade taxes.
Unless the BIR has made a final determination of what is supposed to be the correct taxes, the taxpayer should be placed in the crucible of criminal prosecution.
PROBABLE CAUSE FOR TAX EVASION
BUREAU OF INTERNAL REVENUE vs. CA & SPOUSE MANLY
G.R. No. 197590, November 24, 2014, 741 SCRA 536
FACTS: Manly is a stockholder & executive vice president of family-owned realty corporation and also engaged in rental business.
On April 27, 2005, BIR issued Letter of Authority (LA) authorizing its revenue officers to investigate Spouses Manly’s internal revenue tax liabilities for taxable year 2003 and prior years.
On June 6, 2005, BIR issued a letter to Manly spouses requiring them to submit documentary evidence to substantiate the source of their cash purchase of a 256-square meter log cabin in Tagaytay City, a Toyota Rav 4 and a Toyota Prado.
Since Spouses Manly failed to comply with the letter, the revenue officers concluded that Manly’s Income Tax Return (ITR) for taxable years 2000, 2001 and 2003 were underdeclared. And since the underdeclaration exceeded 30% of the reported or declared income, it was considered a prima facie evidence of fraud with intent to evade the payment of proper tax due to the government.
The BIR, thus, recommended the filing of criminal cases against Spouses Manly for failing to supply correct and accurate information in their ITRs.
The Spouses Manly opposed the said complaint due to lack deficiency tax assessment.
ISSUE: Whether a deficiency assessment is necessary before one can be prosecuted for tax evasion.
HELD: NO. A deficiency assessment is not necessary before one can be prosecuted for tax evasion.
In this case, tax evasion is deemed complete when the violator has knowingly and willfully filed a fraudulent return with intent to evade and defeat a part or all of the tax.
Corollarily, an assessment of the tax deficiency is not required in a criminal prosecution for tax evasion.
However, it is necessary to prove the fact that a tax is due before one can be prosecuted for tax evasion.
*** A warrant of distraint and levy (wdl) is proof of the finality of the assessment and renders hopeless a request for reconsideration, being tantamount to an outright denial of the same and makes it deemed rejected.
The remedy is to file an appeal to the Court of Tax Appeals within fifteen (15) days from the issuance of a warrant of distraint and levy.
*** The Court of Tax Appeals (CTA) is empowered to suspend the collection of internal revenue taxes and custom duties in cases pending appeal only when:
1) in the opinion of the court the collection by the BIR will jeopardize the interest of the government and/or the taxpayer;
2) the taxpayer is willing to deposit the amount being collected or to file a surety bond for not more than double the amount of the tax to be fixed by the court.
PRESCRIPTIVE PERIOD FOR CLAIM OF REFUND
The taxpayer has within thirty (30) days from receipt of the commissioner’s decision to file the appeal to the Court of Tax Appeals and within two (2) years from the date of payment.
PREMATURE FILING AT CTA BEFORE
THE 120-DAY PERIOD
SAN ROQUE POWER CORPORATION vs. COMMISSIONER (CIR)
G.R. No. 205543, June 30, 2014, 727 SCRA 565
FACTS: San Roque is a domestic corporation principally engaged in the power generation business.
The corporation filed a claim for refund allegedly that in 2006, it incurred creditable input taxes from its purchase of imported capital goods.
San Roque subsequently filed with the BIR separate claim for refund or tax credit of its creditable input taxes for all four quarters of 2006.
Meanwhile, San Roque filed its amended administrative claims for the third and fourth quarters of 2006 on September 21, 2007, however, the CTA denied the petition for having no jurisdiction thereof being a premature invocation of the judicial relief.
ISSUE: Whether the premature judicial claim would render CTA to acquire jurisdiction over the judicial relief.
HELD: NO. There is no dispute that the 120 – day period is mandatory and jurisdictional and that the CTA does not acquire jurisdiction over a judicial claim that is filed before the expiration of the 120 – day period.
The taxpayer can file his administrative claim for refund or credit at anytime within the two-year prescriptive period. If he files his claims on the last day of the two-year prescriptive period, his claim is still filed on time.
The Commissioner will have 120 day from such filing of the claim. If the Commissioner decides on the 120th day or does not decide it on that day, the taxpayer still has 30 days to file his judicial claim with the CTA.
There are, however, two exceptions to the premature filing of judicial claim with the CTA.
The first exception is if the Commissioner, through a specific ruling, misleads a particular taxpayer to premature file a judicial claim with the CTA. Such specific ruling is applicable only to such particular taxpayer.
The second exception is where the Commissioner through a general interpretative rule issued under Section 4 of the Tax Code, misleads all taxpayers into filing premature judicial claims with the CTA.
In these cases, the Commissioner cannot be allowed to later on question the CTA’s assumption of jurisdiction over such claims since equitable estoppel has set in as expressly authorized under Section 248 of the Tax Code.
INACTION OF COMMISSIONER EQUIVALENT
TO DENIAL OF CLAIM
COMMISSIONER (CIR) vs. TEAM SUAL CORPORATION (TSC)
G.R. No. 205055, July 18, 2014, 730 SCRA 242
FACTS: On December 21, 2005, TSC filed an administrative claim for refund of its input VAT, which it incurred for the four quarters of 2004.
On April 24, 2006, due to the BIR’s inaction, TSC filed a petition with CTA and prayed for the refund or issuance of tax credit certification for its alleged unutilized input VAT for the year 2004.
On March 4, 2010, CTA granted the claim for a refund or issuance of tax credit of TSC.
On appeal to the CTA en banc, the Commissioner of internal revenue (CIR) claimed that TSC is not entitled for refund or tax credit for its failure to submit the complete documents in RMO 53-98 within the 120-day period to act on the claim.
ISSUES
(1) Whether the failure of the Commissioner to act within the 120-day period is deemed a denial of its application for tax refund or credit.
(2) Whether the failure to submit the complete documents would not warrant the grant of tax refund or credit.
HELD: (1) YES. Under Section 112 (C) of the NIRC, in case of failure on the part of the Commissioner to act on the application, the taxpayer affected may, within 30 days after the expiration of the 120-day period, appeal the inacted claim with the CTA.
If the Commissioner fails to decide within “a specific period” required by law, such “inaction shall be deemed a denial” of the application for tax refund.
In this case, when TSC filed its administrative claim on 21 December 2005, the Commissioner had a period of 120 days or until 20 April 2006, to act on the claim.
Thus, TSC filed its petition for review with the CTA on 24 April 2006, or within 30 days after the expiration of the 120-day period. Hence, the judicial claim was not prematurely filed.
(2) NO. There is nothing in Section 112 of the NIRC or relevant revenue regulations that require submission of the complete documents
enumerated in RMO 53-98 for a grant of a refund or credit of input VAT.
The subject of RMO 53-98 states that it is a “checklist of documents to be submitted by a taxpayer upon audit of his Tax Liabilities x x.”
In this case, TSC was applying for a grant of refund or credit of the input tax. There was no allegation of an audit being conducted by the Commissioner.
Moreover, if TSC indeed failed to submit the complete documents in support of its application, the Commissioner could have informed TSC of its failure. Hence, TSC is entitled to the refund or tax credit.
COMMISSIONER OF INTERNAL REVENUE vs.
GOODYEAR PHILIPPINES, INC.
G.R. No. 216130, August 3, 2016, 799 SCRA 489
FACTS: Goodyear Tire and Rubber Company (GTRC), a U.S. foreign company, was the sole and exclusive subscriber of all preferred shares of stock of the respondent Goodyear. The Board of Directors of respondent authorized the redemption of GTRC preferred shares.
Respondent filed an application for relief from double taxation with the BIR to confirm that the redemption was not subject to Philippine Income Tax.
As a conservative approach, respondent withheld and remitted an amount representing 15% FWT on November 3, 2008.
On October 21, 2010, respondent filed a claim for refund before the BIR. Thereafter, or on November 3, 2010, it filed a judicial claim before the CTA.
ISSUES
1) Whether the filing of administrative and judicial claims only 13 days apart satisfy the requirement of exhaustion of administrative remedy.
2) Whether the net capital gain by GRTC from the redemption of its preferred shares should be subject to 15% Final Withholding Tax (FWT).
RULINGS
1) YES. Section 229 of the Tax Code states that judicial claims for refund must be filed within two (2) years from the date of payment of the tax or penalty, providing further that the same may not be maintained until a claim for refund or credit has been duly filed with the Commissioner of Internal Revenue.
Verily, the primary purpose of filing an administrative claim was to serve as notice to the CIR that court action would follow unless the tax or penalty alleged to have been collected erroneously or illegally is refunded. To clarify, Section 229 of the Tax Code, however, does not mean that the taxpayer must await the final resolution of its administrative claim for refund, since doing so would be tantamount to the taxpayer’s forfeiture of its right to seek judicial recourse should the two (2) year prescriptive period expire without the appropriate judicial claim being filed.
In the case at bar, records show that both administrative and judicial claims for refund of respondent for its erroneous withholding and remittance of FWT were indubitably filed within the two (2) year prescriptive period.
Notably, Section 229 of the Tax Code, as worded, only required that an administrative claim should first be filled. It bears stressing that respondent could not be faulted for resorting to court action, considering that the prescriptive period stated therein was about to expire.
Had respondent awaited the action of petitioner knowing fully well that the prescriptive period was about to lapse, it would have resultantly forfeited its right to seek a judicial review of its claim, thereby suffering irreparable damage. Thus, respondent correctly and timely sought judicial redress, notwithstanding that its administrative and judicial claims were filed only 13 days apart.
2) NO, the redemption price representing the amount of its preferred shares received by GFRC could not be treated as accumulated dividends in arrear that could be subjected to 15% Final Withholding Tax (FWT).
Verily, respondent’s annual financial statements (AFS) covering the years 2003 to 2009 show that it did not have unrestricted retained earnings, and in fact, operated from a position of deficit. Thus, absent the availability of unrestricted retained earnings, the board of directors of respondent had no power to issue dividends.
It is also worth mentioning that one of the primary features of an ordinary dividend is that the distribution should be in the nature of a recurring return on stock, which, however, does not obtain in this case.
3. LOCAL TAXATION
The Local Taxing Power is directly conferred by the 1987 Constitution in Section 5 Article X, to wit:
“Each local government unit shall have the power to create it own sources of revenue and to levy taxes, fees and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy. Such taxes, fees and charges shall accrue exclusively to the local governments.”
***** Congress cannot abolish local taxing power which is expressly granted by the Fundamental Law. The only authority conferred to Congress is to provide the guidelines and limitations on the local government’s exercise of the power to tax through the enactment of the 1991 Local Government Code.
***** The imposition of a tax, fee or charges or the generation of revenue under the Local Government Code, shall be exercised by the Sanggunian of the local government unit concerned through an appropriate ordinance.
--- the city or municipal mayor nor governor alone could not order the collection of any tax as the same is exercised by the Sanggunian of the local government concerned through an appropriate ordinance.
**** Any question on the constitutionality or legality of a tax ordinance may be raised on appeal to the Secretary of Justice within 30 days form the effectivity thereof.
**** Remedies available to the local government units to enforce the collection of taxes, fees and charges are:
(a) Administrative remedies of distraint of personal property of whatever kind whether tangible or intangible and levy of real property and interest therein; and
(b) Judicial remedy by institution of an ordinary civil action for collection with the regular courts of proper jurisdiction.
**** Professional Tax Receipt (PTR) is collected by the city government or the provincial government from the professionals who practice their professions payable either in the place they maintain their principal office or the place of their residence.
CITY OF MANILA vs. HON. ANGEL VALERA COLET
G.R. No. 120051, December 10, 2014, 744 SCRA 265
FACTS: The City Council of Manila enacted Ordinance No. 7794 otherwise known as Manila Revenue Code and approved by then Mayor Alfredo S. Lim on June 29, 1993.
Under Section 21 (B) of the Manila Revenue Code, as amended, imposes business tax on transportation business.
Ten (10) petitions were filed against City of Manila challenging the unconstitutionality of Section 21 (B) of the Manila Revenue Code being in violation of the guidelines and limitations on the taxing power of the Local Government Unit.
ISSUE: Whether the City of Manila has an inherent power to tax.
HELD: NO. The power of taxation is inherent in the state, the same is not true for the LGUs whose power must be exercised within the guidelines and limitations that Congress may provide.
In the case at bar, the sanggunian of the municipality or city cannot enact an ordinance imposing business tax on the gross receipts of transportation business as they are prohibited from doing so under Section 133 (j) of the LGC.
The power to tax is an attribute of sovereignty and such, it is inherent in the State. Such, however, is not true for provinces, cities, municipalities and barangays as they are not the sovereign, rather, they are mere “territorial and political subdivision of the Republic of the Philippines.
Section 5, Article X of the 1987 Constitution, the power to tax is no longer vested exclusively on Congress. The Constitution has given direct authority to each local government unit to levy taxes, fees and other charges subject to such guidelines and limitations by Congress in the enactment of RA 7160 otherwise known as the Local Government Code of 1991.
4. REAL PROPERTY TAXATION
*** Fundamental Principles of real property taxation:
1) The appraisal must be at the current and fair market value;
2) Classification for assessment must be on the basis of actual use;
3) Assessment must be on the basis of uniform classification;
4) Appraisal, assessment, levy and collection shall not let to private persons; and
5) Appraisal and assessment must be equitable.
CALTEX PHIL. vs. CBAA
G.R. No. L-50466, May 31, 1982
The machines and equipment in question consist of underground tanks, elevated tanks, gasoline pumps, computing pumps, water pumps, car washer, car hoist, truck hoist, air compressors and tireflaters. We hold that the said equipment and machinery, as appurtenances to the gas station building or shed owned by Caltex as to which it is subject to realty tax and which fixtures are necessary to the operation of the gas station, for without them the gas station would be useless, are taxable improvements and machinery within the meaning of the Assessment Law and the Real Property Tax Code.
Gasoline station equipment and machineries are permanent fixtures for purposes of realty taxation. Improvements on land are commonly taxed as realty even though for some purposes they might be considered personalty. It is a familiar phenomenon to see things classed as real
property for purposes of taxation which on general principle might be considered personal property.
**** Properties exempt from real property taxes:
1) Real property owned by the Republic of the Philippines or any of its political subdivision except when the beneficial use thereof has been granted for consideration or otherwise to a taxable person;
2) Charitable institutions, churches, parsonages or convents appurtenant thereto, mosques, non-profit or religious cemeteries, and all lands, buildings and improvements actually, directly and exclusively used for religious, charitable or educational purposes;
3) All machineries and equipment that are actually, directly and exclusively used by local water utilities and government-owned and controlled corporation engaged in the supply and distribution of water and/or generation and transmission of electric power;
4) All real property owned by duly registered cooperatives as provided for under RA 6938; and
5) Machinery and equipment used for pollution control and environmental protection.
**** Public hearings must be observed in the enactment of an ordinance imposing real property taxes.
**** May local governments impose an annual realty tax in addition to the basic real property tax in addition to the basic real property tax on idle or vacant lots located in residential subdivisions within their respective territorial jurisdictions?
A: Not all local government units may do so. Only provinces, cities and municipalities within Metro Manila area, may impose an ad valorem tax not exceeding 5% of the assessed value of idle or vacant residential lots in a subdivision, duly approved by proper authorities regardless of area.
SPS. RAMON & ROSITA TAN vs. BANTEGUI
G.R. No. 154027, October 24, 2005, 473 SCRA 663
The auction tax sale did not conform to the requirements prescribed under PD 464. No notice of tax delinquency was given to the delinquent owner or to her representatives. The auction sale of real property for the collection of delinquent taxes is in personam and not in rem. Although sufficient in proceedings in rem like land registration, mere notice by publication will not suffice, considering that the procedure in tax sale is in personam. It is incumbent upon the city treasurer to send the notice directly to the taxpayer — the registered owner of the property in order to protect the latter’s interests. Although preceded by proper advertisement and publication, an auction sale is void absent an actual notice to a delinquent taxpayer.
5. CUSTOMS AND TARIFF CODE
**** The basis of dutiable value of an imported article subject to an ad valorem tax under the Tariff and Customs Code is its transaction value, which shall be the price actually paid or payable for the goods when sold for export to the Philippines, adjusted by adding certain cost elements to the extent that they are incurred by the buyer but are not included in the price actually paid or payable for the imported goods.
COUNTERVAILING DUTY vs. DUMPING DUTY
Distinctions:
1) BASIS: The countervailing duty is imposed whenever there is granted upon the imported article by the country of origin a specific subsidy upon its production, manufacture or exportation and this results or threatens injury to local industry while the basis for the imposition of dumping duty is the importation and sale of imported items at below their normal value causing or likely to cause injury to local industry.
2) AMOUNT: The countervailing duty imposed is equivalent to the value of the specific subsidy while the dumping duty is equivalent to the margin of dumping which is equal to the difference between the export price to the Philippines and the normal value of the imported article.
Requirements for tax exemptions on conditionally free importation of returning nationals (residents):
1) they have stayed in a foreign country for a period of at least six (6) months;
2) for military attaché, they must have served abroad for not less than two (2) years and served his tour of duty and had not availed of the tax exemption for the past four years.
Flexible Tariff Clause refers to the authority given to the President to adjust tariff rates under Section 401 of the Tariff and Customs Code, which is the enabling law that made effective the delegation of the taxing power to the President under the Constitution.
**** Regular courts have no jurisdiction to replevin a property subject of seizure & forfeiture proceedings at the Bureau of Customs.
**** Decision of the Collector of Customs is appealable to the Commissioner of Customs.
Q: What is the basis of the automatic review procedure in the Bureau of Customs?
A: Automatic review is intended to protect the interest of the Government in the collection of taxes and custom duties in seizure and protest cases. Without such automatic review, neither the Commissioner of Customs nor the Secretary of Finance would know about the decision laid down by the Collector favoring the taxpayer.
6. ESTATE TAXATION
KINDS OF TAXPAYERS FOR GROSS ESTATE TAXATION PURPOSES:
1. Citizen and non resident citizen - value of the properties within and without the Philippines.
2. Resident alien - properties within and without the Philippines.
3. Non-resident alien - only properties within the Philippines.
Composition of Gross Estate of the decedent
1. for citizen and non-resident citizen and resident alien - all properties within and without the Philippines.
2. for non-resident alien - only properties situated in the Philippines.
3. transfer in contemplation of death;
4. transfer for insufficient consideration;
5. revocable transfer;
6. proceeds of life insurance policy where the beneficiary’s appointment is revocable;
7. transfer conditioned on survivorship;
8. property passing under a general power of appointment.
Exclusions from Gross Estate
1. insurance proceeds or other benefits from GSIS
2. accruals from SSS
3. proceeds of life insurance policies where the beneficiary was irrevocably appointed;
4. transfer by way of bonafide sale for an adequate and full consideration;
5. transfer of property to the national government or to any of its political subdivisions;
Deductions from Gross Estate
1. funeral expenses - 5% of the gross estate but not to exceed Php200,000 whichever is lower;
2. medical expenses - incurred within one year prior to death not to exceed Php500,000;
3. expenses, losses, claims, indebtedness and taxes;
4. property previously taxed (vanishing deduction);
5. transfer for public use;
6. the family home;
7. standard deduction;
8. amount received by heirs;
9. net share of the surviving spouse in the conjugal partnership.
*** Prohibition on withdrawal of bank deposits upon depositor’s death:
a) if a bank has knowledge of
b) the death of a person
1) who maintained a bank deposit
2) alone or jointly with another.
c) it shall not allow any withdrawal from said deposit account.
d) UNLESS the Commissioner of Internal Revenue has certified that the estate taxes have been paid.
7. DONOR’S TAXATION
*** Donation to candidate for elective positions shall not be subject of donor’s tax but under Omnibus Election Code.
*** Donated lot shall be based on the acquisition cost as a basis for deduction from gross income.
*** Sale of shares of stock below the fair market value is considered a donation.
For the purpose of the donor’s tax, a stranger is a person who is not:
a. Brother, sister (whether by whole or half-blood), spouse, ancestor, and lineal ascendant, or
b. A relative by consanguinity in the collateral line within the fourth degree of relationship.
Gift Splitting is spreading the gift over numerous calendar years in order to avail of lower donor’s tax.
*** In order that donations to non-stock, non-profit educational institution may be exempt from the donor’s tax, it is required that not more than 30% of the said gift shall be used by the donee-institution for administration purposes.
8. INCOME TAXATION
***Income is all wealth that flows into the taxpayer other than as a mere return of capital.
Exclusions from Gross Income:
1) Proceeds of life insurance policy;
2) Amount received by insured as return of premium;
3) Gift, bequests and devises;
4) Interest on government securities;
5) compensation for injuries or sickness;
6) retirement benefits, pensions: at least 10 years of service & 50 years of age; with approved retirement plan and availed once; age requirement below 50 years is excluded when separated beyond the control of the employee;
7) separation pay beyond the control of the employee;
8) prizes and awards made primarily in recognition of religious, charitable, scientific, educational, artistic, literary or civic achievement but only if: (a) the recipient was selected without any action on his part to enter the contest or proceeding; (b) the recipient is not required to render substantial future services as a condition to receiving the prize or reward.
*** A “fringe benefit” is defined as being any good, service or other benefit furnished or granted in cash or in kind by an employer to an individual employee.
It is the employer who is legally required to pay an income tax on the fringe benefit. The fringe benefit tax is imposed as final withholding tax placing the legal obligation to remit the tax on the employer.
*** In order that debts be considered as bad debts because they have become worthless, the taxpayer should establish that during the year for which the deduction is sought, a situation developed as a result of which it became evident in the exercise of sound, objective business judgment that there remained no practical but only vaguely theoretical prospect that the debt would ever be paid.
POSSIBLE Q & A
Q: Explain the symbiotic relationship theory
A: It is said that taxes are what we pay for civilized society. Without taxes, the government would be paralyzed for lack of the motive power to activate and operate it. Hence, despite the natural reluctance to surrender part of one’s hard-earned income to the taxing authorities, every person who is able to must contribute his share in the running of the government. The government, for its part, is expected to respond in the form of tangible and intangible benefits intended to improve the lives of the people and enhance their moral and material values. This symbiotic relationship is the rationale of taxation and should dispel the erroneous notion that it is an arbitrary method of exaction by those in the seat of power.
Q: In matters involving taxes, is the government bound by the errors committed by its agents?
A: NO. It is axiomatic that the government cannot and must not be estopped particularly in matters involving taxes. Taxes are the lifeblood of the nation through which the government agencies continue to operate and with which the state effects its functions for the welfare of its constituents. The errors of certain administrative officers should never be allowed to jeopardize the government’s financial position.
Q: Proclamation No. 430 reserved certain parcel of lands in Cebu for warehousing purposes under the administration of the National Warehousing Corporation (now NDC). A warehouse was built thereon. Are the land and warehouse subject to real estate tax?
A: As to the land, it is exempt from taxation because it was simply reserved by the Republic. It is still owned by the Republic.
As to the warehouse, it is not exempt since it is owned by NDC which is separate and distinct from the government which Is its stockholder.
Q: Is there a double taxation if a surcharge is imposed upon bank reserve deficiency tax and at the same time another tax is likewise imposed for the same violation?
A: No double taxation. The payment of 1/10 of 1% for incurring deficiencies is a penalty as the primary purpose is regulation, while the payment of 1% of the same violation is a tax for the generation of revenue which is the primary purpose in this instance. This is covered by tax laws - the other one is a banking law.
Q: Distinguish global system of taxation from schedular system of taxation.
A: A global system of taxation is one where the taxpayer is required to report all income earned during a taxable period in one income tax return, which income shall be taxed under the same rule of income taxation; whereas, a schedular system of taxation requires a separate return for each type of income and the tax is computed on a per return or per schedule basis. Schedular system provides for different tax treatment of different types of income.
Q: Define capital asset.
A: Capital asset means property held by the taxpayer (whether or not connected with his trade or business), but does not include:
a) stock in trade of the taxpayer or other property of a kind which would properly be included in the inventory of the taxpayer.
b) property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business;
c) property used in the trade or business and subject to the allowance for depreciation; and
d) real property used in trade or business of the taxpayer.
Q: What is meant by theoretical interest?
A: It is an interest “calculated” or computed (and not incurred or paid) for the purpose of determining the “opportunity cost” of investing funds in a given business. Such theoretical or computed interest does not arise from a legally demandable interest-bearing obligation incurred by the taxpayer who, however, wishes to find out, e.g. whether he would have been better off by lending out his funds and earning interest rather than investing such funds in his business.
Q: Is theoretical interest on capital deductible?
A: NO. It is not deductible as it does not represent a change arising under an interest-bearing obligation.
Q: What is meant by jeopardy assessment?
A: It is a tax assessment which was made without the benefit of complete or partial audit by an authorized revenue officer who has reason to believe that the assessment and collection of a deficiency tax will be jeopardized by delay because of the taxpayer’s failure to comply with audit and/or pertinent records or to substantiate all or any of the deductions, exemptions or credits claimed in his return.
PURPOSE OF TAXATION
PLANTERS PRODUCTS, INC. vs. FERTIPHIL CORPORATION
548 SCRA 485, G.R. No. 166066, March 14, 2008
FACTS: Pursuant to the LOI 1465 which provided for the imposition of a capital recovery component on the domestic sale of all grades of fertilizers in the Philippines, Fertiphil paid P10 for every bag of fertilizer it sold in the domestic market to the Fertilizer and Pesticide Authority (FPA). FPA then remitted the amount collected to the FEBC, the depository bank of Planters Products, Inc. (PPI). After the 1986 EDSA Revolution, FPA voluntarily stopped the imposition of the P10 levy. With the return of democracy, Fertiphil demanded from PPI a refund of the amounts it paid but PPI refused to accede to the demand invoking the State’s legitimate exercise of the power of taxation.
ISSUE: Whether or not the P10 levy under LOI No. 1465 is a valid exercise of the power of taxation.
HELD: NO. The imposition of the levy was an exercise by the State of its power of taxation. While it is true that the power of taxation can be used as an implement of police power, the primary purpose of the levy is revenue generation. If the purpose is primarily revenue or if revenue is at least one of the real and substantial purposes, then the exaction is properly called a tax.
The P10 levy under LOI No. 1465 is too excessive to serve as a mere regulatory measure. The levy, no doubt, was a big burden on the seller or the ultimate consumer. It increased the price of a bag of fertilizer by as much as five percent. The P10 levy is unconstitutional because it was not for a public purpose. The levy was imposed to give undue benefit to PPI.
STRICTISSIMI JURIS OF TAX EXEMPTIONS
DAVAO ELECTRIC COOPERATIVE vs. PROVINCE OF DAVAO ORIENTAL
576 SCRA 645, G.R. No. 170901, January 20, 2009
FACTS: Petitioner was organized under P.D. 269. The same granted a number of tax and duty exemption privileges to electric cooperatives. In 1984, PD 1955 withdrew all exemptions from or any preferential treatment in the payment of duties, taxes, fees, imposts, and other charges granted to private business enterprises and/or persons engaged in any economic activity. PD 2008 issued on January 8, 1986 subsequently restored exemptions withdrawn by PD 1955.
In December 1986, Executive Order (EO) No. 93 withdrew all tax and duty exemptions granted to private entities effective March 10, 1987. Finally on July 1, 1987, FIRB No. 24-87 restored the tax and duty exemption privileges of electric cooperatives under PD 269.
In May 1990, the Province of Davao Oriental filed a complaint for collection of delinquent real property taxes against petitioner for the years 1984 to 1989 but petitioner cooperative contends that it was exempt from the payment of real estate taxes from 1984 to 1989 because the restoration of tax exemption under FIRB No. 24-87 retroacts to the date of withdrawal of said exemptions.
ISSUE: Whether or not the tax exemption under FIRB Resolution No. 24-87 be given retroactive effect.
HELD: NO. FIRB Resolution No. 24-87 is crystal clear in stating that “the tax and duty exemption privileges of electric cooperatives granted under the terms and conditions of PD 269 are restored effective July 1, 1987.” There is no other way to construe it. The language of the law is plain and unambiguous. When the language of the law is clear and unequivocal, the law must be taken to mean exactly what it says.
Further, because taxes are the lifeblood of the nation, the court has always applied the doctrine of strict interpretation in construing tax exemptions. A claim for exemption from tax payments must be clearly shown and be based on language too plain to be mistaken. Elsewhere stated, taxation is the rule, exemption thereof is the exception.
EXEMPTION FROM REAL PROPERTY TAX
PHILIPPINE FISHERIES DEVELOPMENT AUTHORITY vs. COURT OF APPEALS
G.R. No. 169836, July 31, 2007, 528 SCRA 706
Philippine Fisheries Development Authority (PFDA), being an instrumentality of the national government, is exempt from real property tax but the exemption does not extend to the portions of the Navotas Fishing Port Complex (NFPC) that were leased to taxable or private persons and entities for their beneficial use.
The Court rules that PFDA is not GOCC but an instrumentality of the national government which is generally exempt from payment of real property tax. However, said exemption does not apply to the portions of the NFPC which the authority leased to private entities.
WHAT IS THE APPELLATE JURISDICTION OF CTA?
*** The CTA shall exercise exclusive appellate jurisdiction to review by appeal:
1. Decisions of Commissioner of Internal Revenue (CIR)
2. Inaction of Commissioner of Internal Revenue (CIR)
3. Decisions of Regional Trial Court (RTC) on local tax cases
4. Decisions of Commissioner of Customs
5. Decisions of Central Board of Assessment Appeals (CBAA) on exercise
of appellate jurisdiction over real property tax cases decided by LBAA
6. Decisions of Department of Finance (DOF) on custom cases
elevated to him on automatic review due to adverse decision
versus the government
7. Decisions of DTI (on non-agricultural products) and Department of
Agriculture (on agricultural products) involving dumping and
countervailing duties.
CTA Authority to issue Writ of Certiorari
CITY OF MANILA vs. HON. CARIDAD G. CUERDO
G.R. No. 175723, February 4, 2014, 715 SCRA 182
FACTS: The City of Manila assessed local business taxes for the year 2002 against SM Group of Retail Business in addition to the regular local business taxes assessment as a precondition for the issuance of their business permits.
On January 24, 2004, SM Group filed a complaint with the RTC for “Refund of Illegally and/or Erroneously Collected Local Business Tax, Prohibition with Prayer to Issue TRO and Writ of Preliminary Injunction.”
On July 9, 2004, the RTC granted the application for a writ of preliminary injunction. The City of Manila filed a motion for reconsideration but the RTC denied it.
Petitioner City of Manila filed a special civil action for Certiorari with the CA assailing orders of the RTC.
The CA dismissed the petition for certiorari holding that it has no jurisdiction over the said petition.
The CA ruled that since appellate jurisdiction over SMs complaint for tax refund, which was filed with the RTC, is vested in the CTA pursuant to its expanded jurisdiction under RA 9282.
ISSUE: Whether or not CTA has jurisdiction over the power to issue writ of certiorari.
HELD: YES. Since appellate jurisdiction over complaint for tax refund is vested in the CTA, it follows that a petition for certiorari seeking nullification of an interlocutory order issued in the said case should likewise be filed in the same court.
It is more in consonance with logic and legal soundness that the grant of appellate jurisdiction to the CTA over tax cases filed in and decided by the RTC carries with it the power to issue a writ of certiorari when necessary in aid of such appellate jurisdiction.
PROPER PARTY TO CLAIM A TAX REFUND
EXXONMOBIL PETROLEUM & CHEMICAL HOLDINGS, INC. vs. COMMISSIONER OF INTERNAL REVENUE
G.R. No. 180909, January 19, 2011, 640 SCRA 203
FACTS: Exxon is a foreign corporation authorized to do business in the Philippines. In pursuit of its business, Exxon purchased from Caltex and Petron jet A-1 fuel and other petroleum products. However, Caltex and Petron had paid and remitted the excise taxes on the purchases of Exxon. Two years later, Exxon filed an administrative claim for refund with the BIR.
ISSUE: Whether or not Exxon is the proper party to claim refund for the excise taxes paid.
HELD; NO. The excise tax, when passed to the purchaser, becomes part of the purchase price. Excise taxes are of the nature of indirect taxes, the liability for payment of which may fall on a person other than he who actually bears the burden of the tax. The party liable for the tax can shift the burden to another, as part of the purchase price of the goods or services.
In a case where the party statutorily liable for the tax is different from the party who bears the burden of such tax, the proper party to question, or to seek a refund of an indirect tax, is the statutory taxpayer, or the person on whom the tax is imposed by law and who passed the same, even if he shifts the burden thereof to another. Therefore, Exxon is not the party statutorily liable for payment of excise tax and it is not the proper party to claim a refund of any taxes erroneously paid.
SILKAIR (Singapore) PTE, LTD. vs.
COMMISSIONER OF INTERNAL REVENUE
G.R. No. 166482, January 25, 2012, 664 SCRA 33
FACTS: Silkair is a foreign corporation duly licensed to do business in the Philippines as on-line international carrier. It purchased aviation fuel from Petron, the latter paying the excise taxes thereon. Later on, Silkair filed an administrative claim for refund on the purchase of jet fuel from Petron, which it alleged to have been erroneously paid.
ISSUE: Whether Silkair has the legal personality to file an administrative claim for refund of excise taxes allegedly to have been erroneously paid to its supplier of aviation fuel.
HELD: NO. The person entitled to claim a tax refund is the statutory taxpayer, the person on whom the tax is imposed by law and who paid the same even when he shifts the burden thereof to another.
JURISDICTION OF CTA ON REAL PROPERTY TAXES
ATTY. DENIS HABAWEL vs. COURT OF TAX APPEALS
G.R. No. 1747590, September 7, 2011, 657 SCRA 138
FACTS: Surfield sought from Mandaluyong City Treasurer refund of excess realty taxes paid. After the City government denied its claim, Surfield brought an action for mandamus with the RTC. However, RTC dismissed the petition.
Unsatisfied, Surfield elevated the case to the CTA, however CTA denied the appeal for lack of jurisdiction.
ISSUE: Whether CTA has jurisdiction over decisions of the RTC in real property tax cases.
HELD: NO. The CTA has no jurisdiction over decisions of the RTC in real property tax cases. LGC covers only appeals of the decisions, orders or resolutions of the RTC in local taxes. The provision is clearly limited to local tax disputes decided by the RTC. In contrast, the CTA is cognizance of appeals of the decisions of the Central Board of Assessment Appeals in the exercise of its appellate jurisdiction over cases involving the assessment and taxation of real property originally decided by the provincial or city board of assessment appeals. Real property tax, being an ad valorem tax, could not be treated as a local tax.
EFFECT OF WITHDRAWAL OF AN APPEAL
AGAINST CTA DECISION
CENTRAL LUZON DRUG CORPORATION vs. COMMISSIONER OF BIR
G.R. No. 181371, March 2, 2011, 644 SCRA 433
FACTS: Petitioner is a duly registered corporation engaged in the retail of medicines and other pharmaceutical products operating under the name of “Mercury Drug.” Central Luzon filed with the Commissioner of Internal Revenue a request for the issuance of a tax credit certificate representing the 20% sales discount granted to senior citizens. The following day, Central Luzon filed with the CTA a petition for review, however, the CTA denied the claim for insufficiency of evidence.
Unsatisfied, Central Luzon filed a review on certiorari before the SC. However, instead of filing a reply to the comments of the CTA, Central Luzon filed a Motion to Withdraw on the theory that it would just be included in its future claims for issuance of a tax certificate.
ISSUE: Whether the motion to withdraw rendered the assailed decision of the CTA final.
HELD: YES. By withdrawing the appeal, Central Luzon is deemed to have accepted the decision of the CTA. And since CTA had already denied Central Luzon’s request for the issuance of a tax certificate for insufficiency of evidence, it may no longer be included in its future claims. Central Luzon cannot be allowed to circumvent the denial of its request for a tax credit by abandoning its appeal and filing a new claim. An appellant who withdraws his appeal x x x must face the consequence of his withdrawal, such as the decision becomes final and executory.
***** GODSPEED *****
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Posted by: admin - 05-31-2019, 10:13 PM - Forum: Political Laws
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2018 GOLDEN BEACON POLITICAL LAW
By: Dean MANUEL R. BUSTAMANTE
1. WRIT OF AMPARO PROCEEDINGS
PETITION FOR WRIT OF AMPARO OF NORIEL H.
RODRIQUEZ vs. GLORIA MACAPAGAL ARROYO et. al.
G.R. 191805, November 15, 2011, 660 SCRA 84
FACTS: Rodriguez, a member of KMP, was abducted by military men and was tortured when he refused to confess to his membership in the NPA. When released, he filed a Petition for the Writ of Amparo and Habeas Data against President Arroyo et. al.
ISSUES
1) Whether President GMA may be held liable under the command responsibility doctrine within the context of the amparo proceedings.
2) Whether the rights to life, liberty and property of Rodriguez are violated or threatened by respondents.
RULINGS
1) YES. To hold someone liable under the doctrine of command responsibility, the following elements must obtain: (a) the existence of a superior - subordinate relationship between the accused as his superior and the perpetrator of the crime as his subordinate; (b) the superior knew or had reason to know that the crime was about or had been committed; and (c) the superior failed to take the necessary and reasonable measures to prevent the criminal acts or punish the perpetrators thereof. The President, being the commander-in-chief of all armed forces, necessarily possesses control over the military that qualifies him as a superior within the purview of the command responsibility.
2) YES. The totality of the evidence adduced by Rodriguez indubitably prove the responsibility and accountability of some respondents in violating his life, liberty and security. The right to security of a person includes the positive obligation of the government to ensure the observance of the duty to investigate. In this case, there was an abject failure to conduct a fair and effective official investigation of his ordeal in the hands of the military wherein respondents solely relied on the reports and narration of the military.
While on military custody, he was forced to sign documents declaring that he had surrendered in an encounter and the soldiers did not shoot him because he became a military asset.
SPOUSES NERIO & SOLEDAD PADOR vs. BARANGAY
CAPTAIN BERNABE ARCAYAN et. al.
G.R. No. 183460, March 12, 2013, 693 SCRA 192
FACTS: Respondents conducted a raid on the property of Padors based on information that the latter were cultivators of marijuana. The barangay captain sent them invitation letters without stating the purpose of the invitation. Barangay Captain Arcayan refused to receive Padors’ letter-reply. Anticipating the possibility more harassment cases, false accusations and potential violence from respondents, the Padors filed a writ of amparo.
ISSUE: Whether or not the Padors are entitled to a writ of Amparo.
HELD: NO. To be entitled to the privilege of the writ of Amparo, petitioners must be proven by substantial evidence that their rights to life, liberty and security are being violated or threatened by an unlawful act or omission. It was undisputed that the intrusion occurred, whether the entry was done with or without permission, it was merely a violation of Padors’ property rights. The writ of Amparo does not envisage the protection of concerns that are purely property or commercial in nature.
2. FREEDOM OF EXPRESSION, ASSEMBLY AND OF THE PRESS
FRANCISCO CHAVEZ vs. RAUL M. GONZALES
G.R. No. 168338, February 15, 2008, 545 SCRA 441
FACTS: Press Secretary Bunye told reporters that the opposition was planning to destabilize the administration by releasing an audiotape of a mobile phone conversation allegedly between the President GMA and Comelec Commissioner Garcillano. The conversation was audiotaped allegedly through wire-tapping. Atty. Allan Paguia subsequently released an alleged authentic tape recording of the wiretap. Included in the tapes were purportedly conversations of the President, First Gentlemen, Comelec Commissioner Garcillano and the late Senator Barbers. DOJ Secretary Gonzales warned reporters that those who had copies of the CD and those broadcasting or publishing its contents could be held liable under the Anti-Wiretapping Act. In another press briefing, Secretary Gonzales ordered the NBI to go after media organizations “found to have caused the spread, the playing and the printing of the contents of a tape of an alleged wiretapped conversations involving the President about fixing votes in the 2004 national elections. The NTC issued this press release: “NTC GIVES FAIR WARNING TO RADIO AND TELEVISION OWNERS/OPERATORS TO OBSERVE ANTI-WIRETAPPING LAW AND PERTINENT CIRCULARS ON PROGRAM STANDARDS.”
ISSUE: Whether free speech and freedom of the press have been infringed at the case at bar.
HELD: YES. Government action that restricts freedom of speech or of the press based on content is given the strictest scrutiny, with the government having the burden of overcoming the presumed unconstitutionality by the clear and present danger rule.
This rule applies equally to all kinds of media, including broadcast media. The acts of respondents focused solely on but one object -- a specific content -- fixed as these were on the alleged taped conversations between the President and a COMELEC official. Undoubtedly these did not merely provide regulations as to the time, place or manner of the dissemination of speech or expression.
Free speech and free press may be identified to discuss publicly and truthfully any matter of public interest without censorship and punishment. There is to be no previous restraint on the communication of view or subsequent liability whether in libel suits, prosecution for sedition, or action for damages or contempt proceedings unless there be a clear and present danger of substantive evil that Congress has right to prevent.
BAYAN vs. ERMITA
G.R. No. 169838, April 29, 2006, 488 SCRA 226
*** Calibrated Pre-emptive Response (CPR) used to disperse rallies is unconstitutional.
1) Authorities must strictly observe the policy of “maximum tolerance” in dealing with rallies.
2) The “no permit, no rally” policy under BP 880 is upheld.
3) Local governments are ordered to designate “freedom parks” where rallies can be held without a permit within 30 days after the court ruling becomes final.
3)
fter the court
4) All parks in cities and municipalities that fail to designate “Freedom Park” will become freedom parks.
5) Mayors have two days to act on rally permit applications. Applications are deemed approved if no action is taken.
6) Specific reasons must be stated in writing if a rally permit application is denied, namely “clear and present danger to public order, public safety, public convenience, public morals or public health.
INTEGRATED BAR OF THE PHILIPPINES vs. MAYOR LITO ATIENZA
G.R. No. 175241, February 24, 2010, 613 SCRA 518
FACTS: On June 15, 2006, the IBP filed with the Office of the Mayor of Manila an application for a permit to rally at the foot of Mendiola Bridge on June 22, 2006 from 2:30 p.m. to 5:30 p.m.
Mayor Atienza issued a permit dated June 16, 2006 allowing the IBP to stage a rally on a given date but indicated therein Plaza Miranda as the venue, instead of Mendiola Bridge, which permit the IBP received on June 19, 2006.
Aggrieved, IBP filed on June 21, 2006 a petition for certiorari at the Court of Appeals. The petition having been unresolved within 24 hours from filing brought the matter to the Supreme Court. The high court’s resolution of November 20, 2006 denied the petition for being moot and academic.
ISSUES
1. Whether the instant petition no longer present a justiciable controversy.
2. Whether the modification of the venue in IBP’s rally permit constitutes grave abuse of discretion.
RULINGS
1. NO. An exception to the rule on mootness, courts will decide a question otherwise moot if it is capable of repetition, yet evading review.
In the present case, the question of the legality of a modification of a permit to rally will arise each time the terms of an intended rally are altered by the concerned official, yet it evades review, owing to the limited time in processing the application where the shortest allowable period is five days to the assembly.
2. YES. It is an indispensable condition to such refusal or modification that the clear and present danger test be the standard for the decision reached. If he is of the view that there is such an imminent and grave danger of a substantive evil, the applicant must be heard on the matter. Thereafter, his decision whether favorable or adverse, must be transmitted to them at the earliest opportunity. Thus, if so minded, they can have recourse to the proper judicial authority.
In modifying the permit outright, Mayor Atienza gravely abused his discretion when he did not immediately inform the IBP who should have been heard first on the matter of his perceived imminent and grave danger of a substantive evil that may warrant the changing of the venue. The opportunity to be heard precedes the action on the permit, since the applicant may directly go to court after an unfavorable action on the permit.
PHILIPPINE JOURNALISTS, INC. vs. FRANCIS THOENEN
G.R. No. 143372, December 13, 2005, 477 SCRA 482
FACTS: A news item was published by the petitioner that a certain Swiss national was shooting cats and dogs that come up his walls and driving barbarously with children playing around. It was proven at the trial that the news article contained several inaccuracies.
ISSUE: Whether or not the constitutional privilege granted under the freedom of speech and of the press extends to the petitioner in this case.
HELD: NO. The freedom of speech and of the press is not absolute. Libel is not protected speech. Although it has been stressed that a newspaper “should not be held to account to a point of suppression for honest mistakes, or imperfection in the choice of words,” even the most liberal view of free speech has never countenanced the publication of falsehoods, especially the persistent and unmitigated dissemination of patent lies. “There is no constitutional value in false statement of facts.”
POSTING OF TARPAULIN
THE DIOCESE OF BACOLOD vs. COMMISSION ON ELECTIONS
G.R. No. 205728, January 21, 2015, 747 SCRA 1
FACTS: On February 21, 2013, the Diocese of Bacolod posted two (2) tarpaulins within a private compound housing the San Sebastian Cathedral of Bacolod.
The second tarpaulin contains the heading “Conscience Vote” and list candidates as either “(Anti-RH) Team Buhay” with a check mark, or “(PRO-RH) Team Patay” with an “X” mark.
The electoral candidates were classified according to their vote on the adoption of the RH law. Those who voted for the passage of the law were classified as comprising “Team Patay,” while those who voted against it form “Team Buhay.”
The tarpaulins were neither sponsored nor paid for by any candidate. In contains names of candidates for the 2013 elections.
The Comelec issued a Notice to Remove Campaign ordering the tarpaulins’ removal within three (3) days from receipt, otherwise, it will be constrained to file an election offense against the Diocese of Bacolod.
ISSUE: Whether the removal of the tarpaulins violate the right to freedom of expression and right to property.
HELD: YES. The removal of tarpaulins violates petitioner’s right to freedom of expression. Comelec had no legal basis to issue an order as the tarpaulins were not paid for by any candidate or political party and the candidates were not consulted regarding the posting.
Comelec does not have the authority to regulate the enjoyment of the preferred right to freedom of expression exercised by a non-candidate in this case.
First, the petitioner is a private individual who has lost his right to give commentary on the candidates when the Comelec ordered the tarpaulin removed.
Second, the tarpaulin is protected speech.
Third, the tarpaulins and their message are not religious speech.
More importantly, every citizen’s expression with political consequences enjoys a high degree of protection. While the tarpaulin may influence the success or failure of the named candidates and political parties, this does not mean it is election propaganda.
3. RIGHT TO FORM ASSOCIATION
- Right of government employees to organize: limited to the formation of unions or associations only, no right to strike.
GSIS vs. KAPISANAN NG MGA MANGAGAWA NG GSIS (KMG)
G.R. No. 170132, December 6, 2006, 510 SCRA 622
FACTS: For four (4) straight days, participating KMG members and other GSIS employees staged a walkout and waged or participated in a mass protest or demonstration right at the very doorstep of the GSIS main building against Winston Garcia’s mismanagement of the financial resources of the GSIS. Administrative sanctions were imposed against those who participated in said mass action.
ISSUES
(1) Whether or not GSIS, a government owned and controlled corporation (GOCC) is covered by Civil Service Law and thus its employees are prohibited to conduct concerted mass actions.
(2) Whether or not the four-day mass actions of GSIS employees to air grievances be considered an “assembly of citizens” or a “striking crowd.”
RULING
(1) YES, under the 1987 Constitutions, government owned and controlled corporations with original charters like GSIS are covered by the Civil Service Law. As such, employees of GSIS are part of the civil service system and are subject to the guidelines for the exercise of the right to organize of government employees, however, they are prohibited on concerted mass action in the public sector.
(2) It is an “STRIKING CROWD,” the stubborn fact remains that the erring employees, instead of exploring non-crippling activities during their free time, had taken a disruptive approach to attain whatever it was they were specifically after. As events evolved, they assembled in front of the GSIS main office building during office hours and staged rallies and protests, and even tried to convince others to join their cause, thus provoking work stoppage by government personnel and service-delivery disruptions, the very evil sought to be forestalled by the prohibition against strikes by government personnel.
Any collective activity undertaken by government employees with the intent of effective work stoppage or service disruption in order to realize their demands or force concession, economic or otherwise, is a prohibited concerted mass actions.
4. POLICE POWER OF THE STATE
MMDA vs. DANTE GARIN
G.R. No. 130230, April 5, 2005, 456 SCRA 176
FACTS: Respondent Garin assails the validity of Section 5 (f) of RA 7924 creating the MMDA which authorized it to confiscate and suspend or revoke driver’s license in the enforcement of traffic laws and regulations. He further contended that the provision violates the constitutional prohibition against delegation of legislative authority, allowing as it does the MMDA to fix and impose unspecified and therefore unlimited fines and other penalties.
ISSUE: Whether or not MMDA is vested with police and legislative power?
HELD: NO. RA 7924 does not grant the MMDA with police power, let alone legislative power, and that all its functions are administrative in nature.
MMDA is not a local government unit or a public corporation endowed with legislative power. It has no power to enact ordinances for the welfare of the community. With the passage of RA 7924, Metropolitan Manila was declared as a “special development and administrative region” and the administration of “metro-wide” basic services affecting the region placed under “a development authority” referred to as the MMDA.
The powers of the MMDA are limited to the following acts: formulation, coordination, regulation, implementation, preparation, management monitoring, setting of policies, installation of a system and administration.
“Police power, as an inherent attribute of sovereignty, is the power vested by the Constitution in the legislature to make, ordain and establish all manner of wholesome and reasonable laws, statues and ordinances, either with penalties or without, not repugnant to the Constitution, as they judge to be for the good and welfare of the commonwealth and for the subjects of the same.”
MMDA vs. TRACKWORKS RAIL TRANSIT ADVERTISING PROMOTIONS
G.R. No. 179554, December 16, 2009, 608 SCRA 335
FACTS: Pursuant to MMDA Regulation No. 96-009, MMDA prohibited the posting, installation and display of any kind or form of billboards, signs, posters, streamers, in any part of the road, sidewalk, center island, posts, trees, parks and open space. Trackworks entered into contract with MRT3 for advertising services, however, when Trackworks refused the request of MMDA, MMDA proceeded to dismantle the former’s billboards and similar forms of advertisement.
ISSUE: Whether MMDA has authority to dismantle the subject billboards and signages
HELD: NO, it is futile for MMDA to simply invoke its legal mandate to justify the dismantling of Trackworks’ billboards, signages and other advertising media. MMDA simply had no power of its own to dismantle, remove the billboards, signages and other advertising media on the MRT3 structures by Trackworks. The MMDA’s power were limited to the formulation, coordination, regulation, implementation, preparation, management monitoring, setting of policies, installing a system and administration. Nothing in RA 7924 granted MMDA police power, let alone legislative power.
The prohibitions against posting, installation and display of billboards, signages and other advertising media applied only to public areas but MRT3, being private property, was not one of the areas to which the prohibition applied.
RODOLFO BELTRAN et. al. vs. SECRETARY OF HEALTH
G.R. No. 133640, November 25, 2005, 476 SCRA 168.
RA 7719 required the phase-out of commercial blood banks. Petitioners, who operated commercial blood banks, argued that the law constituted deprivation of property without due process.
HELD: The avowed policy of the law is the protection of public health by ensuring an adequate supply of safe blood in the country through voluntary blood donation. To give meaning to the purpose of the law, the legislature deemed it necessary to phase out commercial blood banks. RA 7719 is a valid exercise of police power. The legislature adopted a course of action that is both necessary and reasonable for the common good.
“Police power in the state authority to enact legislation that may interfere with personal liberty or property in order to promote the general welfare.” (Pita vs. Court of Appeals, G.R. No. 80806, October 5, 1989, 178 SCRA 362).
“The State, in order to promote the general welfare, may interfere with personal liberty, with property, and with business and occupations. Thus, persons may be subjected to certain kinds of restraints and burdens in order to secure the general welfare of the State and to this fundamental aim of government, the rights of the individual may be subordinated.” (Patalinghug vs. Court of Appeals, G.R. No. 104786, January 27, 1994, 229 SCRA 554).
“The non-impairment clause of the Constitution must yield to the loftier purpose targeted by the government.” (Philippine Association of Service Exporters vs. Drilon, G.R. No. L-81958, June 30, 1988, 163 SCRA 386).
AMELIA CABRERA vs. MANUEL LAPID
G.R. No. 129098, December 6, 2006, 510 SCRA 55
FACTS: Petitioner’s fishpond was ordered demolished by the respondent Governor in the presence of media representatives and other government officials because it was purportedly illegal and blocked the flow of the Pasak River. Respondent claimed that the demolition of the fishpond is an exercise of police power.
ISSUE: Whether the demolition of the fishpond is valid.
HELD: YES. The demolition of the illegal fishpond following the declaration thereof as a nuisance per se constitutes exercise of the police power of the state. The acts of blasting of the subject fishpond were only impelled to serve the best interest of the general public - for the good and the highest good.
ROBERT TAYABAN et. al. vs. PEOPLE
G.R. No. 150194, March 6, 2007, 517 SCRA 488
FACTS: A formal contract was executed by contractor Pugong and the Cordillera Executive Board, the project owner, for the construction of the Tinoc public market. While the construction was on progress, the Sangguniang Bayan of Tinoc adopted Resolution No. 20 to demolish the erected structures for the purpose of erecting the Public Market Building. On that same day, Mayor Tayaban and his co-petitioners, together with some men, proceeded to the construction site and demolished the structures and improvements introduced thereon.
As a result, Mayor Tayaban and his co-petitioners were charged for violation of Section 3 (e) of the Anti-Graft and Corrupt Practices Act alleging that in the performance of their official functions and acting in evident bad faith, willfully and unlawfully pass and unanimously approve Resolution No. 20, vesting upon themselves powers and authority to demolish the half-finished Tinoc Public Market construction to the damage and prejudice of the government particularly the Cordillera Executive Board (CEB), being the owner of 0the project.
ISSUE: Whether or not there was a valid exercise of police power in the demolition.
HELD: NO. petitioners were guilty of bad faith in causing the demolition. Evidence of this is the fact that Resolution No. 20 was implemented on the same day that it was adopted without due notice of the planned demolition given to the CEB and the private contractor.
Likewise, the Court is not persuaded by petitioner’s contention that the subject demolition is a valid exercise of police power. The exercise of police power by the local government is valid unless it contravenes the fundamental law of the land, or an act of the legislatures, or unless it is against public policy, or is unreasonable, oppressive, partial, discriminating, or in derogation of a common right. In the present case, the acts of petitioner have been established as a violation of law, particularly of the provisions of Section 3 (e) of R.A. No. 3019.
WHITE LIGHT CORPORATION vs. CITY OF MANILA
G.R. No. 122846, January 20, 2009, 576 SCRA 416
FACTS: Manila City Ordinance No. 7774 prohibits short time rates and admissions, wash-up rates in hotels, motels, inns and other similar establishments in the City of Manila. The said ordinance was questioned for being unconstitutional and void since it violates the right to privacy and freedom of movement. It is also criticized as an invalid exercise of police power and it is an unreasonable and oppressive interference in their business.
ISSUE: Is a city ordinance absolutely prohibiting “short time” rates and admissions in hotels, motels and other similar establishments a valid exercise of police power?
HELD: NO. The prohibition not only affects the property rights of the owners but also of third persons who would wish to avail of the short time rates. The rights involved not only the property rights of the petitioners but the liberty and privacy of third persons who may be their customers.
It bears stressing that the test for the valid exercise of police power requires that (1) it must be for the interests of the public in general as distinguished from that of a particular class and (2) the means employed must be reasonably necessary for the accomplishment of the purpose and must not unduly oppressive of private rights.
MMDA vs. VIRON TRANSPORTATION CO. INC.
G.R. No. 170656, August 15, 2007, 530 SCRA 341
FACTS: E.O. 179 was issued providing for the establishment of greater Manila transport system and designated MMDA to implement the removal of bus terminals located along major Metro Manila thoroughfares and providing a more convenient access to the mass transport system and to the commuting public through the provision of mass transport terminal facilities.
ISSUE: Is E.O. 179 constitutional as a valid exercise of police power?
HELD: NO. The said E.O. failed to satisfy one of the valid tests of the proper exercise of police power, namely, the means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals. Closure of the bus terminals would not solve the traffic congestions in the street.
Furthermore, MMDA has no authority be it police power or legislative power to implement the said E.O. for the order of closure of bus terminals.
MANILA MEMORIAL PARK, INC. vs. DSWD & DOF SECRETARY
G.R. No. 175356, December 3, 2013, 711 SCRA 302
FACTS: Upon the enactment of RA 9257 amending Sec. 4 of RA 7432 otherwise known as Expanded Senior Citizen Act, the DSWD and DOF issued IRRs allowing business establishment to claim 20% discount given to senior citizens as a tax deduction. Petitioner questions said tax treatment as it contravenes to the former Sec. 4 (a) of RA 7432 which allows 20% discount given to senior citizens as a tax credit. It further claims that allowing the 20% tax deduction scheme would violate Sec. 9 (1) Art. III of the Constitution which provides that “private property shall not be taken for public use without just compensation.
ISSUE: Whether the 20% discount to senior citizens that may be claimed as a tax deduction by private establishments, valid and constitutional.
HELD: YES. The 20% senior citizen discount is an exercise of police power where just compensation is not warranted contrary to the claim that it is an exercise of eminent domain which would render it unconstitutional because it is not a peso to peso reimbursement of the 20% discount given to senior citizens.
The 20% discount is a regulation affecting the ability of private establishments to price their products and services relative to a special class of individuals, senior citizens, for which the Constitution affords preferential concern.
5. AMENDMENTS AND REVISIONS
LAMBINO vs. COMELEC
G.R. No. 174153, October 25, 2006, 505 SCRA 160
FACTS: On 15 February 2006, petitioners, namely Lambino and Aumentado (“Lambino Group”), commenced gathering signatures for an initiative petition to change the 1987 Constitution. On 25 August 2006, the Lambino Group filed a petition with the COMELEC to hold a plebiscite that will ratify their initiative petition under Section 5 (b) and (c) and Section 7 of R.A. No. 6735 or the Initiative and Referendum Act (RA 6735).
However, in a Resolution dated 31 August 2006, the COMELEC denied due course to the initiative petition to amend the 1987 Constitution. The COMELEC invoked the Court’s ruling in Santiago vs. Comelec declaring RA 6735 inadequate to implement the initiative clause on proposals to amend the Constitution.
Thereafter, the Lambino Group prayed for the issuance of the writs of certiorari and mandamus to set aside the COMELEC Resolution and to compel the COMELEC to give due course to their initiative petition. The Lambino Group contends that the COMELEC committed grave abuse of discretion in denying their petition since Santiago is not a binding precedent. Alternatively, the Lambino Group
claims that Santiago binds only the parties to that case, and their petition deserves cognizance as an expression of the “will of the sovereign people.”
ISSUES
1. Whether or not the Lambino Group’s initiative petition complies with Section 2 , Article XVII of the Constitution on amendment to the Constitution through a people’s initiative.
2. Whether or not the Court should revisit its ruling in Santiago declaring RA 6735 “incomplete, inadequate or wanting in essential terms and conditions” to implement the initiative clause on proposals to amend the Constitution.
RULINGS
1. NO. Section 2, Article XVII of the Constitution does not expressly state that the petition must set forth the full text of the proposed amendments. However, the deliberations of the framers of our Constitution clearly show that the framers intended to adopt the relevant American jurisprudence on people’s initiative. In particular, the deliberations of the Constitutional Commission explicitly reveal that the framers intended that the people must first see the full context of the proposed amendments before they sign, and that the people must sign on a petition containing such full text. Indeed, Section 5 (b) of RA 6735, the Initiative and Referendum Act that the Lambino Group invokes as valid, requires that the people must sign the “petition x x x as signatories.”
In the instant case, there is not a single word, phrase, or sentence of text of the Lambino Group’s proposed changes in the signature sheet. Neither does the signature sheet state that the text of the proposed changes is attached to it. The signature sheet merely asks a question whether the people approve a shift from the Bicameral - Presidential to the Unicameral – Parliamentary system of government. The signature sheet does not show to the people the draft of the proposed changes before they are asked to sign the signature sheet. Clearly, the signature sheet is not the “petition” that the framers of the Constitution envisioned when they formulated the initiative clause in Section 2, Article XVII of the Constitution.
Furthermore, the initiative petition violates Sec. 12, Article XVI of the Constitution disallowing revision through initiatives. A people’s initiative to change the Constitution applies only to an amendment of the Constitution and not to its revision. Certainly, the Lambino group’s initiative is a revision and not merely an amendment. Quantitatively, the proposed changes alter substantially the basic plan of government, from presidential to parliamentary; and from bicameral to unicameral legislature.
2. NO. The present petition warrants dismissal for failure to comply with the basic requirements of Section 2, Article XVII of the Constitution on the conduct and scope of a people’s initiative to amend the Constitution. There is no need to revisit this Court’s ruling in Santiago declaring RA 6735 “incomplete, inadequate or wanting in essential terms and conditions “to cover the system of initiative to amend the Constitution.” The Court must avoid revisiting a ruling involving the constitutionality of a statute if the case before the Court can be resolved on some other grounds. Such avoidance is a logical consequence of the well-settled doctrine that courts will not pass upon the constitutionality of a statute if the case can be resolved on some other grounds.
The Court added that, even assuming that RA 6735 is valid to implement the constitutional provision on initiatives to amend the Constitution, this will not change the result because the present petition violates Section 2, Article XVII of the Constitution. To be a valid initiative, the present initiative must first comply with Section 2, Article XVII of the Constitution even before complying with RA 6735.
6. CITIZENSHIP
TABASA vs. COURT OF APPEALS
G.R. No. 125793, August 29, 2006, 500 SCRA 9
FACTS: The petitioner, Joevanie Arellano Tabasa, was a natural-born citizen of the Philippines. His father, Rodolfo Tabasa, having acquired US citizenship through naturalization, the petitioner also acquired American citizenship by derivative naturalization.
Petitioner arrived in the Philippines on August 3, 1995, and was admitted as a “balikbayan” for one year. Thereafter, petitioner was arrested and detained by agent Wilson Soluren of the BID on May 23, 1996. The reason for the arrest and detention was a letter of the Consul General of the US Embassy, Kevin Herbert, to the Bureau of Immigration and Deportation (BID) saying that the petitioner’s passport has been revoked by the US Department of State making the petitioner an undocumented and undesirable alien in the Philippines. Thereafter, the BID ordered deportation to his country of origin.
Petitioner then filed before the Court of Appeals a Petition for Habeas Corpus. Afterwards, he also filed a Supplemental Petition alleging Filipino citizenship by repatriation in accordance with RA 8171 and that because he is now a Filipino citizen, he cannot be deported or detained by the respondent Bureau. The Court of Appeals ruled against the petitioner.
ISSUE: Whether petitioner has validly reacquired Philippine citizenship under RA 8171 and therefore cannot be summarily deported to his country of origin.
HELD: NO. The Court said that the only persons entitled to repatriation under RA 8171 are the following:
(1) Filipino women who lost their Philippine citizenship by marriage to aliens; and
(2) Natural - born Filipinos including minor children who lost their Philippine citizenship on account of political or economic necessity.
Petitioner overlooks the fact that the privilege of repatriation under RA 8171 is available only to natural-born Filipinos who lost their citizenship on account of political or economic necessity, and to the minor children of said natural - born citizen. This means that if a parent who had renounced his Philippine citizenship due to political or economic reasons later decides to repatriate under RA 8171, his repatriation will also benefit his minor children according to the law. To claim the benefit of RA 8171, however, the children must be of minor age at the time the petition for repatriation is filed by the parent. This is so because a child does not have the legal capacity for all acts of civil life much less the capacity to undertake a political act like the election of citizenship.
In the case at bar, petitioner was no longer a minor at the time of his “repatriation” on June 13, 1996. The privilege under RA 8171 belongs to children who are of minor age at the time of the filing of the petition for repatriation. Neither can petitioner be a natural-born Filipino who left the country due to political or economic necessity. Clearly, he lost his Philippine citizenship by operation of law and not due to political or economic exigencies. It was his father who could have been motivated by economic or political reasons in deciding to apply for naturalization. The decision was his parent’s and not his.
SPOUSES DAVID & MARISA WILLIAMS vs. ATTY. RUDY ENRIQUEZ
A.C. No. 6353, February 26, 2006, 483 SCRA 204
FACTS: Respondent is the counsel of record of the plaintiffs in Civil Case pending before the RTC of Dumaguete City where complainants are the defendants. According to the complainant - spouses William, Marisa Williams bought the lot subject of the controversy. A TCT was then issued in her favor, stating that she is a “Filipino married to David W. Williams, an American Citizen.”
On January 8, 2004, respondent charged her with falsification of public documents before the Office of the City Prosecutor of Dumaguete City. Respondent maintained that complainant Marisa Williams was no longer a citizen of the Republic of the Philippines as a result of her marriage to David Williams.
ISSUE: Whether or not Mrs. Williams lose her Filipino citizenship when she married David Williams.
HELD: NO. Section 4, Article IV of the Constitution provides: “Sec. 4. Citizens of the Philippines who marry aliens shall retain their citizenship, unless by their act or omission they are deemed under the law, to have renounced it.”
There is no evidence shown by respondent that complainant Marisa Bacatan - Williams has renounced her Filipino citizenship, except her Certificate of Marriage, which does not show that she has automatically acquired her husband’s citizenship upon her marriage to him.
MA. JEANETTE TECSON et. al. vs. COMELEC & FPJ
G.R. No. 161634, March 3, 2004, 424 SCRA 277
FACTS: Atty. Fornier filed a “Petition for Disqualification of Presidential Candidate FPJ. He asserted that Poe is not a citizen, much more a natural-born citizen. Fornier would have it appeared that even if Allan F. Poe were a Filipino citizen, he could not have transmitted his citizenship to FPJ, the latter being an illegitimate child.
According to Fornier, prior to his marriage to Bessie Kelley, Allan F. Poe, on July 5, 1936, contracted marriage with a certain Paulita Gomez, making his subsequent marriage to Bessie Kelley bigamous and FPJ an illegitimate child. The veracity of the supposed certificate of marriage between Allan F. Poe and Paulita Gomez could be most doubtful at best. But the documentary evidence introduced by no less than FPJ himself, consisting of a birth certificate of FPJ and marriage certificate of his parents showed that FPJ was born on 20 August 1939 to a Filipino father and an American mother who were married to each other a year later, or on 16 September 1940. Birth to unmarried parents would make FPJ an illegitimate child. Atty. Fornier further contended that as an illegitimate child, FPJ so followed the citizenship of his mother, Bessie Kelley, an American citizen.
ISSUE: Whether Fernando Poe Jr., the hero of silver screen and one of the main contenders for the May 2004 presidency, a natural - born Filipino.
HELD: YES. The question whether grave abuse of discretion has been committed by the Comelec, it is necessary to take on the matter of whether or not respondent FPJ is a natural-born citizen, which, in turn, depended on whether or not the father of respondent, Allan F. Poe, would have himself been a Filipino citizen and, in the affirmative, whether or not the alleged illegitimacy of FPJ prevents him from taking after the Filipino citizenship of his putative father. Any conclusion on the Filipino citizenship of Lorenzo Pou could only be drawn from the presumption that having died in 1954 at 84 years old, Lorenzo would have been born sometime in the year 1870, when the Philippines was under Spanish rule, and that San Carlos, Pangasinan, his place of residence upon his death in 1954, in the absence of any other evidence, could have well been his place residence before death, such that Lorenzo Pou would have benefited from the “en masse Filipinization” that the Philippine Bill had effected in 1902. That citizenship of Lorenzo Pou, if acquired, would thereby extend to his son, Allan F. Poe, father of respondent FPJ. The 1935 Constitution, during which regime FPJ has seen first light, confers citizenship to all persons whose fathers are Filipino citizens regardless of whether such children are legitimate or illegitimate.
But while the totality of the evidence may not establish conclusively that respondent FPJ is a natural-born citizen of the Philippines, the evidence on hand still would preponderate in his favor enough to hold that he cannot be held guilty of having made a material misrepresentation in his certificate of candidacy in violation of Section 78, in relation to Section 74, of the Omnibus Election Code.
2ND LT. SALVADOR PARREÑO vs. COMMISSION ON AUDIT (COA)
G.R. No. 162224, June 7, 2007, 523 SCRA 390
FACTS: Salvador Parreño served in the Armed Forces of the Philippines (AFP) for 32 years. On 5 January 1982, petitioner retired from the Philippine Constabulary with the rank of 2nd Lieutenant. Parreño availed and received payment of a lump sum pension equivalent to three years pay. In 1985, Parreño started receiving his monthly pension amounting to Php13,680.00.
Parreño migrated to Hawaii and became a naturalized American citizen. In January 2001, the AFP stopped Parreño’s monthly pension in accordance with Section 27 of PD 1638 as amended by PD 1650, provides that a retiree who losses his Filipino citizenship shall be removed from the retired list and his retirement benefits terminated upon loss of Filipino citizenship. Parreño filed a claim before the COA for the continuance of his monthly pension but COA denied the same.
ISSUES
(1) Whether or not the COA has jurisdiction to rule on the constitutionality of Section 27 of PD 1638 as amended.
(2) Whether or not COA commits grave abuse of discretion in dismissing petitioner’s money claim.
(3) Whether PD 1638 as amended has retroactive or prospective effect.
(4) Whether or not petitioner has vested right to his retirement benefits.
(5) Whether petitioner was denied of equal protection and due process clause of the Constitution.
RULINGS
(1) NO. The jurisdiction of the COA over money claims against the government does not include the power to rule on the constitutionality or validity of laws.
The 1987 Constitution vests the power of judicial review or the power to declare unconstitutional a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the Supreme Court and in all Regional Trial Courts.
(2) NO. Assuming that COA assumed jurisdiction over the instance case, claimant’s entitlement to the retirement benefits he was previously receiving must necessarily be severed or stopped upon loss of his Filipino citizenship as prescribed in Section 27, PD 1638 as amended.
The COA effectively denied petitioner’s claim because of the loss of his Filipino citizenship.
(3) Since PD 1638, as amended, is about the new system of retirement and separation from service of military personnel, it should apply to those who were in the service at the time of its approval.
In fact, Section 2 of PD 1638 as amended provides that “the decree shall apply to all military personnel in the service of the AFP. PD 1638, as amended, was signed on 10 September 1979. Parreño retired in 1982, long after the approval of PD 1638 as amended. Hence, the provisions of PD 1638, as amended, apply to Parreño.
(4) NO. As a rule, where the employee retires and meets the eligibility requirements, he acquires a vested right to the benefits that is protected by the due process clause. At the time of the approval of PD 1638 and at the time of its amendments, Parreño was still in active service. Hence, his retirement benefits were only future benefits and did not constitute a vested right. Before a right to retirement benefits or pension vests in an employee, he must have met the stated conditions of eligibility with respect to the nature of employment, age and length of service.
It is only upon retirement that military personnel acquires a vested right to retirement benefits. Retirees enjoy a protected property interest wherever they acquire a right to immediate payment under pre-existing law.
Further, the retirement benefits of military personnel are purely gratuitous in nature. They are not similar to pension plans where employer participation is mandatory, hence, the employers have contractual or vested rights in the pension which forms part of the compensation.
(5) NO. The constitutional right to equal protection of the laws is not absolute but is subject to reasonable classification. To be reasonable, the
classification (a) must be based on substantial distinctions which make real differences; (b) must be germane to the purpose of the law; (c) must not be limited to existing conditions only; and (d) must apply equally to each member of the class.
There is compliance with all these conditions. There is a substantial difference between retirees who are citizens of the Philippines and retirees who lost their Filipino citizenship by naturalization in another country such as Parreño in this case.
The constitutional right of the state to require all citizens to render personal and military service necessarily includes not only private citizen but also citizen who have retired from military service. A retiree who had lost his Filipino citizenship already renounced his allegiance to the state, thus, he may no longer be compelled by the state to render compulsory military service when the need arises. Parreño’s loss of Filipino citizenship constitutes a substantial distinction that distinguishes him from other retirees who retain their Filipino citizenship. If the groupings are characterized by substantial distinctions that make real differences, one class may be treated and regulated differently from another.
There was no denial of due process in this case. When Parreño lost his Filipino citizenship, the AFP had no choice but to stop his monthly pension in accordance with Section 27 of PD 1638, as amended. He had opportunity to contest the termination of his pension when he requested for reconsideration of the removal of his name from the list of retirees and the termination of his pension. The JAGS denied the request pursuant to Section 27 of PD 1638, as amended.
REPUBLIC vs. LIM
G.R. No. 153883, January 13, 2004, 419 SCRA 123
“By being an illegitimate child of a Filipino mother, she is a Filipino since birth without having to elect Filipino citizenship when she reached the age of majority.”
ERNESTO MERCADO vs. EDUARDO MANZANO
G.R. No. 135083, May 26, 1999, 307 SCRA 630
FACTS: Edu Manzano was born in San Francisco, California, USA and he acquired US citizenship by operation of the US Constitution and laws under the principle of jus soli. He was a natural born Filipino citizen by operation of the 1935 Philippine Constitution, as his father and mother were Filipinos at the time of his birth.
During the 1998 local elections, Manzano obtained the highest number of votes among the candidates for vice mayor of Makati City but his proclamation was suspended in view of a petition for disqualification as Manzano was not a citizen of the Philippines but of the United States.
ISSUE: Whether or not Manzano is a natural born citizen and qualified as candidate for vice mayor of Makati City.
HELD: YES. Since the Philippines adheres to the principle of jus sanguinis, while the United States follows the doctrine of jus soli, at birth, he was a national of both of the Philippines and of the United States. By participating in 1998 Philippine elections, Manzano effectively renounced his U.S. citizenship under American law so that now he is solely a Philippine national. The filing of certificate of candidacy sufficed to renounce his American citizenship and effectively removing any disqualification he might have as a dual citizen.
CIRILO VALLES vs. COMELEC & ROSALIND Y. LOPEZ
G.R. No. 137000, August 9, 2000, 337 SCRA 543
FACTS: Rosalind Ybasco Lopez was born on May 16, 1934 in Western Australia to Filipino father and Australian mother. In 1952, she married to a Filipino citizen, Leopoldo Lopez, in Manila. Since then, she has continuously participated in the Philippine electoral process not only as a voter but as a candidate. When she ran for governor of Davao Oriental, her election was contested by her opponent as she was an Australian citizen.
ISSUE: Whether or not Rosalind Ybasco Lopez is a natural born citizen.
HELD: YES. Rosalind Ybasco Lopez is a Filipino citizen, having born to a Filipino father. The fact of her being born in Australia is not tantamount to her losing her Philippine citizenship. If Australia follows the principle of jus soli, then at most, she can also claim Australian citizenship resulting to her possession of dual citizenship. When she filed her certificate of candidacy, such fact alone terminated her Australian citizenship.
EUSEBIO EUGENIO K. LOPEZ vs. COMELEC
G.R. No. 182701, July 23, 2008, 559 SCRA 696
FACTS: Eusebio Lopez was born a Filipino but he deliberately sought American citizenship and renounced his Filipino citizenship. By virtue of RA 9225, he became a dual citizen by re-acquiring Filipino citizenship. He returned to the Philippines and established his residence in Barangay Bagacay where he ran as barangay chairman. He won the elections, took his oath and began to discharge the functions of Barangay chairman but this victory was challenged as he failed to personally swear to a renunciation of foreign citizenship at the time of filing his certificate of candidacy.
ISSUE: Whether or not the filing of a certificate of candidacy operate as an effective renunciation of foreign citizenship.
HELD: NO. It is undisputed that Lopez reacquired his Filipino citizenship under RA 9225. This new law explicitly provides that should one seek elective public office, he should first “make a personal and sworn renunciation of any and all foreign citizenship before any public officer authorized to administer an oath.” Lopez failed to renounce his American citizenship as proven by the absence of an affidavit that will prove the contrary. For failure of Lopez to prove that he abandoned his allegiance to the United States, he is disqualified from running for an elective position in the Philippines and the votes cast in his favor should be considered stray votes.
NESTOR JACOT vs. ROGEN T. DAL & COMELEC
G.R. No. 179848, November 27, 2008, 572 SCRA 295
FACTS: Nestor Jacot was a natural born citizen of the Philippines who became a naturalized citizen of the U.S. on December 13, 1989. He reacquired his Filipino citizenship under RA 9225. During the 2007 elections, he ran for vice mayor in Catarman, Camiguin and garnered the highest number of votes for the said position. Just before the election, Rogen Dal sought his disqualification for his failure to renounce his U.S. citizenship as required under Section 5 (2) of RA 9225. Jacot countered that his oath of allegiance in Los Angeles operated as an effective renunciation of his foreign citizenship.
ISSUE: Whether or not Nestor Jacot is disqualified from running as a candidate for his failure to make a personal and sworn renunciation of his U.S. citizenship.
HELD: YES. Under Section 5 (2) of RA 9225, it categorically requires person seeking elective public office, who either retained their Philippine citizenship or those who reacquired it, to make a personal and sworn renunciation of any and all foreign citizenship, before a public officer authorized to administer an oath simultaneous with or before the filing of the certificate of candidacy. For his failure to comply with election requirements applicable to dual citizen, he is declared disqualified to run for the position of vice mayor of Catarman, Camiguin.
LOSS AND REACQUISITION OF PHILIPPINE CITIZENSHIP
RENATO M. DAVID vs. EDITHA A. AGBAY & PEOPLE
G.R. No. 199113, March 18, 2015
FACTS: In 1974, David migrated to Canada where he became a Canadian citizen by naturalization. Upon their retirement, David and his wife returned to the Philippines.
Sometime in 2000, David purchased a 600 - square meter lot along the beach in Gloria, Oriental Mindoro where he constructed a residential house.
However, in the year 2004, he came to know that the portion where he built his house is public land and part of salvage zone.
On April 12, 2007, David filed a Miscellaneous Lease Application (MLA) over the subject land with the DENR and indicated that he is a Filipino citizen.
Agbay opposed his application on the ground that David is a Canadian citizen and disqualified to own land and also filed a criminal complaint for falsification of public document for indicating in his MLA application that he is a Filipino citizen.
Meanwhile, David re-acquired his Filipino citizenship under the provisions of RA 9225 on October 11, 2007.
David argued that he is a natural - born Filipino citizen and by re-acquiring the same status under RA 9225, he was by legal fiction “deemed not to have lost” it at the time of his naturalization is Canada and through the time when he was said to have falsely claimed Philippine citizenship in his Miscellaneous Lease Application.
ISSUE: Whether the general policy that Filipinos who have become citizens of another country shall be deemed “not to have lost their Philippine citizenship” under RA 9225 on dual citizenship.
HELD: YES. Section 3 of RA 9225 lays down such conditions for two categories of natural - born Filipinos.
Under the first paragraph are those natural – born Filipinos who have lost their citizenship by naturalization in a foreign country who shall re-acquire their Filipino citizenship upon taking the oath of allegiance to the Republic of the Philippines.
The second paragraph covers those natural – born Filipinos who became foreign citizens after RA 9225 took effect, who shall retain their Philippine citizenship upon taking the same oath.
The taking of oath of allegiance is required for both categories of natural - born citizens who became citizens of a foreign country but the terminology used is different, “re-acquired” for the first group, and “retain” for the second group.
In fine, for those who were naturalized in a foreign country, they shall be deemed to have re-acquired their Philippine citizenship which was lost pursuant to CA 63, under which naturalization in a foreign country is one of the ways which Philippine citizenship may be lost.
RA 9225 amends CA 63 by doing away with the provision in the old law which takes away Philippine citizenship from natural – born Filipinos who become naturalized citizens of other countries and allowing dual citizenship, and also provides for the procedure for re-acquiring and retaining Philippine citizenship.
In the case of those who became foreign citizens after RA 9225 took effect, they shall retain Philippine citizenship despite having acquired citizenship provided they took the oath of allegiance under the new law.
Considering that David was naturalized as a Canadian citizen prior to the effectivity of RA 9225, he belongs to the first category of natural – born Filipinos under the first paragraph of Section 3 who lost Philippine citizenship by naturalization in a foreign country. As the new law allows dual citizenship, he was able to re-acquire his Philippine citizenship by taking the required oath of allegiance.
David made the untruthful statement in the MLA, a public document, that he is a Filipino citizen at the time of the filing of said application, when in fact he was still a Canadian citizen. Under CA 63, the governing law at the time he was naturalized as Canadian citizen, naturalization in a foreign country was among those ways by which a natural – born citizen loses his Philippine citizenship.
While he re-acquired Philippine citizenship under RA 9225 six months later, the falsification was already a consummated act, the said law having no retroactive effect insofar as his dual citizenship status is concerned.
7. S U F F R A G E
LOIDA NICOLAS - LEWIS vs. COMELEC
G.R. No. 162759, August 4, 2006, 497 SCRA 649
A perusal of the Constitution suggests that Section 1 of Article V prescribes residency requirement as a general eligibility factor for the right to vote. On the other hand, Section 2 of the same article authorizes Congress to devise a system wherein an absentee may vote, implying that a non-resident may, as an exception to the residency prescription in the preceding section, be allowed to vote. In response to this mandate, the Congress enacted RA 9189 of the Overseas Absentee Voting Act of 2003.
The Court also noted that there is no provision in the dual citizenship law - RA 9225 - requiring “duals” to actually establish and physically stay in the Philippine first before they can exercise their right to vote. On the contrary, RA 9225, in implicit acknowledgment that “duals” are most likely non-residents, grants under its Section 5 (1) the same right of suffrage as that granted an absentee voter under RA 9189. It cannot be overemphasized that RA 9189 aims, in essence, to enfranchise as much as possible all overseas Filipinos who, save for the residency requirements exacted of an ordinary voter under ordinary conditions, are qualified to vote.
** “Absentee Voting” refers to the process by which qualified citizens of the Philippines abroad exercise their right to vote.
** “Overseas Absentee Voter” refers to a citizen of the Philippines who is qualified to register and vote under this Act, not otherwise disqualified by law, who is abroad on the day of election.
ATTY. ROMULO MACALINTAL vs. COMELEC
G.R. No. 157013, July 10, 2003, 405 SCRA 614
Section 5 (d) of RA 9189 is not a violation of Sec. 1, Art. V of the Constitution and is therefore not unconstitutional. The interpretation here of “residence” is synonymous with “domicile.” Under our election laws and the countless pronouncements of the Court pertaining to elections, an absentee remains attached to his residence in the Philippines, as residence is considered synonymous with domicile.
Comelec should not be allowed to usurp a power that constitutionally belongs to the Congress. The provisions of the Constitution should be harmonized with the Overseas Absentee Voting Act of 2003 and hence, the canvassing of the votes and the proclamation of the winning candidates for president and vice president for the entire nation must remain in the hands of Congress.
8. LEGISLATIVE DEPARTMENT
ARTURO TOLENTINO vs. COMELEC
G.R. No. 148334, January 21, 2004, 420 SCRA 438
In case of vacancy in the Senate or in the House of Representatives, a special election may be called to fill such vacancy in the manner prescribed by law, but the Senator or Member of the House of Representatives thus elected shall serve only for the unexpired term.
In case a vacancy arises in Congress at least one year before the expiration of the term, Sec. 2 of RA 6645, as amended, requires Comelec: (1) to call a special election by fixing the date of the special election, which shall not be earlier than sixty (60) days nor later than ninety (90) days after the occurrence of the vacancy but in case of a vacancy in the Senate, the special election shall be held simultaneously with the next succeeding regular election; and (2) to give notice to the voters of, among other things, the office or offices to be voted for.
An election held at the time thus prescribed is not invalidated by the fact that the body charged by law with the duty of calling the election failed to do so.
The test in determining the validity of a special election in relation to the failure to give notice of the special election is whether the want of notice has resulted in misleading a sufficient number of votes as would change the results of the special election. If the lack of official notice misled a substantial number of voters who wrongly believed that there was no special election to fill a vacancy, a choice by a small percentage of voters would be void.
In a general election, where the law fixes the date of the election, the election is valid without any call by the body charged to administer the elections.
In a special election to fill a vacancy, the rule is that a statute that expressly provides that an election to fill a vacancy shall be held at the next general election fixes the date at which the special election is to be held and operates as the call for that election. Consequently, an election held at the time thus prescribed is not invalidated by the fact that the body charged by law with the duty of calling the election failed to do so. This is because the right and duty to hold the election by some authority and the law thus charges voters with knowledge of the time and place of the election.
SENATE OF THE PHILIPPINES vs. ERMITA
G.R. No. 169777, April 20, 2006, 488 SCRA 1
While attendance to Congressional hearings is discretionary on the part of department heads during the “question hour,” such is not the case in inquiries in aid of legislation, except upon a valid and express claim of “executive privilege.”
The principle of separation of powers is the reason why executive officials may not be compelled to attend hearings when the Congress exercises its oversight functions. Though, this is not the case when the Congress exercises its power of inquiry in aid of legislation. Sections 21 and 22, Article VI therefore, while closely related and complementary to each other, should not be considered as pertaining to the same power of Congress. One specifically relates to the power to conduct inquiries in aid of legislation, the aim of which is to elicit information that may be used for legislation, while the other pertains to the power to conduct a question hour, the objectives of which is to obtain information in pursuit of Congress’ oversight function.
ROMULO L. NERI vs. SENATE COMMITTEE ON ACCOUNTABILITY
G.R. No. 180643, March 25, 2008, 549 SCRA 77
FACTS: Neri was invited by the Senate Committee to attend the joint investigation on NBN project. He testified that Abalos brokered for ZTE and was offered P200 million for his approval of the project. He informed the president about the bribery attempt and was told not to accept the bribe. When asked what had Neri and the President discussed about the NBN project, he refused to answer invoking “executive privilege.”
ISSUE: Whether or not the questions that Neri refused to answer are covered by “executive privilege.”
HELD: YES. The questions are covered by presidential communications privilege and that this privilege has been validly claimed by the executive department.
Ultimately, the power of Congress to compel the appearance of executive officials under Section 21 and the lack of it under Section 22 find their basis in the principle of separation of powers. While the executive branch is a co-equal branch of the legislature, it cannot frustrate the power of Congress to legislate by refusing to comply with its demand for information.
STANDARD CHARTERED BANK vs. SENATE COMMITTEE ON BANKS
G.R. No. 167173, December 27, 2007, 541 SCRA 456
FACTS: The Senate Committee conducted an inquiry in aid of legislation on account of Senator Enrile’s privilege speech denouncing Standard Chartered Bank (SCB) for selling unregistered foreign securities in violation of RA 8799. During that investigation, SCB representative submitted a letter presenting its position that these were cases pending in court involving the same issues subject of the legislative inquiry.
ISSUE: Whether or not the pending cases before the courts could divest the power of inquiry from the legislature
HELD: NO. The unmistakable objective of the investigation was simply “to denounce the illegal practice committed by a foreign bank in selling unregistered foreign securities by conducting an inquiry in aid of legislation so as to prevent the occurrence of a similar fraudulent activity in the future.
Indeed, the mere filing of a criminal or an administrative complaint before a court or a quasi-judicial body should not automatically bar the conduct of legislative investigation.
ANTONIO F. TRILLANES IV vs. HON. OSCAR PIMENTEL
G.R. No. 179817, June 27, 2008, 556 SCRA 471
FACTS: Trillanes is currently under detention due to charge of coup d’etat filed against him for his participation in the Oakwood accident. As a result of his election as Senator, he asked the RTC to allow him to leave detention in order to attend to his functions as a Senator and to be allowed to set up an office at his place of detention.
ISSUE: Whether or not Trillanes be allowed to leave detention in order to attend to his duties as Senator?
HELD: NO. Election to public office does not itself merit the temporary release of a detention prisoner in order for him to attend to his official duties. The necessary consequence of arrest and detention is to curtail the detainee’s physical movement and practice of profession or occupation including that of holding offices.
ANTERO J. POBRE vs. SEN. MIRIAM DEFENSOR SANTIAGO
A.C. No. 7399, August 25, 2009, 597 SCRA 1
FACTS: Out of personal anger and frustration at not being considered for the post of Chief Justice, Senator Miriam Defensor Santiago delivered a privilege speech on the Senate floor where she was quoted as saying that she wanted “to spit on the face of Chief Justice Artemio Panganiban and his cohorts in the Supreme Court” and calling the Court a “Supreme Court of idiots.”
ISSUE: Whether or not the privilege speech is actionable criminally or in a disciplinary proceeding under the Rules of Court.
HELD: NO, because her statements, being part of her privilege speech as a member of Congress was covered by the constitutional provision on parliamentary immunity. Indeed, her privilege speech is not actionable criminally or in a disciplinary proceeding under the Rules of Court.
9. EXECUTIVE DEPARTMENT
GEN. GUDANI vs. GEN. SENGA
G.R. No. 170165, August 15, 2006, 498 SCRA 671
The President has constitutional authority to prevent a member of the armed forces from testifying before a legislative inquiry, by virtue of her power as commander-in-chief, and that as a consequence a military officer who defies such injunction is liable under military justice. At the same time, any chamber of Congress which seeks the appearance before it of a military officer against the consent of the President has adequate remedies under the law to compel such attendance. Any military official whom Congress summons to testify before it may be compelled to do so by the President. If the President is not so inclined, the President may be commanded by judicial order to compel
the attendance of the military officer. Final judicial orders have the force of the law of the land which the President has the duty to faithfully execute.
PIMENTEL vs. ERMITA
G.R. No. 164978, October 13, 2005, 472 SCRA 587
The President has the authority to issue acting appointments while Congress is in session.
The office of a department secretary may become vacant while Congress is in session. Since a department secretary is the alter ego of the president, the acting appointee to the office must necessarily have the President’s confidence. Thus, by the very nature of the office of a department secretary, the President must appoint in an acting capacity a person of her choice even while Congress is in session. That person may or may not be the permanent appointee, but practical reason may make it expedient that the acting appointee will also be the permanent appointee.
Distinguishing ad-interim appointments from appointments in an acting capacity:
Both of them are effective upon acceptance.
But ad-interim appointments are extended only during a recess of Congress, whereas acting appointments may be extended any time there is a vacancy.
Moreover, ad-interim appointments are submitted to the Commission on Appointments for confirmation or rejection; acting appointments are not submitted to the Commission on Appointments.
PIMENTEL vs. EXECUTIVE SECRETARY
G.R. No. 158088, July 6, 2005, 462 SCRA 622
Under our Constitution, the power to ratify is vested in the President, subject to the concurrence of the Senate. The role of the Senate, however, is limited only to giving or withholding its consent or concurrence, to the ratification. Hence, it is within the authority of the President to refuse to submit a treaty to the Senate, or having secured its consent for its ratification, refuse to ratify it. Although the refusal of a state to ratify a treaty which has been signed in its behalf is a serious step that should not be taken lightly, such decision is within the competence of the President alone, which cannot be encroached by the Court via a writ of mandamus.
CONSTANTINO vs. CUISIA
472 SCRA 505, G.R. No. 106064, October 13, 2005, 472 SCRA 505
*** Whether the President can delegate to the Secretary of Finance the constitutional authority to incur foreign debts.
- - - It fell upon the Secretary of Finance as the alter ego of the President to formulate a scheme for the implementation of the policy expressed by the President and respect sovereign debt.
- - - the lack of showing that the President countermanded the acts of the Secretary of Finance lead to the conclusion that they carried presidential approval.
RUFINO vs. ENDRIGA
G.R. Nos. 139554 & 139565, July 21, 2006, 496 SCRA 112
The source of the President’s power to appoint, as well as the Legislature’s authority to delegate the power to appoint, is found in Section 16, Article VII of the 1987 Constitution. Under the same section, the Congress may, by law, vest in the heads of departments, agencies, commissions, or boards the appointment of officers lower in rank. However, the express language of the Constitution and its framers intend that the heads of departments, agencies, commissions, or boards, upon whom the legislature may delegate the power of appointment, must appoint officers of lower rank and not of co-equal rank. Section 6 (b) and (c) of PD 15 is, thus, irreconcilably inconsistent with Section 16,
Article VII of the 1987 Constitution. Section 6 (b) and (c) of PD 15 empowers the remaining trustees of the CCP Board to fill vacancies in the CPP Board, allowing them to elect their fellow trustees. And since the pertinent section is unconstitutional, the President has the power to appoint the trustees by virtue of Sec. 16, Art. VII of the Constitution which gives the President the power to appoint officers whose appointments are not provided for by the law.
CLUSTERING OF NOMINEES BY THE JBC
Judge PHILIP A. AGUINALDO et. al. vs. President
BENIGNO SIMEON AQUINO III et. al.
G.R. No. 224302, November 29, 2016, 811 SCRA 304
FACTS: The Judicial and Bar Council (JBC) submitted to President Aquino six shortlists contained in six separate letters for the six newly created positions of Associate Justice of Sandiganbayan. The nominees were clustered into several lists like for example 17th, 18th, 19th, 20th, 21st with five (5) nominees for each cluster.
On January 20, 2015, President Aquino appointed Justices to the vacant positions, but did not pick up the nominees from the clustered concerned but appointed Justices from one cluster to another position.
Petitioners who were listed in the cluster for the 17th Justice questioned the appointments. They contented that the President could chose one nominee from each of the six separate shortlists for each specific vacancy and no other and the appointment made in deviation of this procedure is a violation of Section 9, Article VIII of the Constitution.
ISSUE
Whether the President is limited to appoint only from the nominees in the shortlist submitted by the JBC for each specific vacancy.
RULING
NO. The power to recommend of the JBC cannot be used to restrict or limit the President’s power to appoint as the latter’s prerogative to choose someone whom he considers worth appointing to the vacancy in the judiciary is still paramount.
As long as in the end, the President appoints someone nominated by the JBC, the appointment is valid.
President Aquino was not obliged to appoint one new Sandiganbayan from each of the shortlists submitted by the JBC, especially when the clustering of nominees into the six shortlists encroached on President Aquino’s power to appoint members of the Judiciary from all those whom the JBC had considered to be qualified for the same position of Sandiganbayan Associate Justice.
Clustering nominees for the six simultaneous vacancies for Sandiganbayan Associate Justice into six separate shortlists impairs the President’s power to appoint members of the Judiciary and his statutory power to determine seniority of the newly appointed Sandiganbayan Associate Justice.
Moreover, the clustering can be used as device to favor or prejudice a qualified nominee. A favored nominee can be included in a cluster with no other strong contender to ensure his/her appointment, or conversely, a nominee can be placed in a cluster with many strong contenders to minimize his/her chances of appointment. Furthermore, the Court ruled that there are no objective criteria, standards, or guidelines for the clustering of nominees set by the JBC.
10. RIGHT TO PRIVACY OF COMMUNICATION AND CORRESPONDENCE
ALEJANO vs. CABUAY
468 SCRA 188, G.R. No. 160792, August 25, 2005
*** Whether the right to privacy of the petitioners who were detained and charged with staging a coup d’etat was violated because the officials of the detention center opened and read the letters they were sending for mailing.
- - Inmates are deemed to have no right to correspond confidentially with anyone.
- - Inmate mail may be censored for the furtherance of a substantial government interest such as security or discipline.
- - The inspection of the letters is a valid measure as it serves the same purpose as the opening of sealed letters for the inspection of the contraband.
- - Since the letters were not confidential communication between the detainees and their lawyer, the officials of the detention center could read the letter.
- - If the letters are marked confidential communications between the detainees and their lawyer, the officials should not read the letter but only open the envelop for inspection in the presence of detainees.
11. JUDICIARY DEPARTMENT
KILOSBAYAN vs. EDUARDO ERMITA
G.R. No. 177721, July 3, 2007, 526 SCRA 353
FACTS: Justice Gregory Ong was appointed Associate Justice of the Supreme Court by the president through the Executive Secretary. The appointment was questioned because Ong is a Chinese citizen as indicated in his own birth certificate which also reveals both his parents were Chinese at the time of his birth. Justice Ong claimed he is a natural born citizen as indicated in the certification of the Bureau of Immigration and the opinion of the DOJ Secretary Guingona.
ISSUE: Whether or not Gregory Ong is a natural born citizen.
HELD: NO. He is a naturalized Filipino citizen because his Chinese father was naturalized in 1964 when he was only eleven years old. The alleged subsequent recognition of his natural born status by the Bureau of Immigration and the DOJ cannot prevail since citizenship status cannot be changed without a judicial order. Until he obtains a judicial order changing his citizenship status, he cannot accept an appointment to the Supreme Court as that would be a violation of the Constitution.
Naturalized Filipino citizens are disqualified from being a member of the Supreme Court. Under the Constitution, only natural born Filipino citizen can be appointed as member of the Supreme Court.
FRANCISCO CHAVEZ vs. JUDICIAL & BAR COUNCIL
G.R. No. 202242, April 16, 2013, 696 SCRA 496
FACTS: Under Section 8 (1), Article VIII of the 1987 Constitution provides that: “A Judicial and Bar Council is hereby created under the supervision of the Supreme Court composed of the Chief Justice as ex officio Chairman, the Secretary of Justice, and a representative of the Congress, as ex officio Members, a representative of the Integrated Bar, a professor of law, a retired member of the Supreme Court and a representative of the private sector.”
In 1994, the seven-member composition of the JBC was substantially altered. An eight member was added to the JBC as the two (2) representatives from Congress began sitting simultaneously in the JBC, with each having one-half (1/2) of a vote.
In 2001, the JBC En Banc decided to allow the representatives from the Senate and the House of Representatives one full vote each.
ISSUE: Whether or not the practice of having two (2) representatives from each House of Congress with one (1) vote each is sanctioned by the Constitution.
HELD: NO, the provision is clear and unambiguous and does not need any further interpretations. Construction and interpretation come only after it has been demonstrated that application is impossible or inadequate without them.
Further, to allow Congress to have two representatives in the Council, with one vote each, is to negate the principle of equality among the three branches of government which is enshrined in the Constitution.
The unmistakable tenor of Article VIII, Section 8 (1), was to treat each ex officio member as representing one co-equal branch of the government. Thus, the JBC was designed to have seven voting members with the three ex-officio members having equal say in the choice of judicial nominees.
12. TERM LIMITS
FRANCIS ONG vs. JOSEPH ALEGRE
G.R. No. 163295, January 23, 2006, 479 SCRA 473
FACTS: In May 1995 elections, Francis Ong was elected mayor of San Vicente, Camarines Norte. He was re-elected in May 1998 elections, however, respondent Alegre filed an election protest. The RTC declared Alegre as the duly elected mayor in 1998 mayoralty contest, albeit the decision came out only on July 4, 2001, when Francis Ong had fully served the 1998-2001 mayoralty term and was in fact already starting to serve the 2001-2004 term as mayor-elect of the municipality of San Vicente.
ISSUE: Whether or not Francis Ong’s assumption of office as Mayor for the mayoralty term 1998 to 2001 should be considered as full service for the purpose of the three - term limit rule.
HELD: YES. The Court held that such assumption of office constitutes, for Francis Ong, “service for the full term,” and should be counted as a full term in contemplation of the three-term limit prescribed by the Constitutional and statutory provisions barring local executive officials from being elected and serving for more than three consecutive term for the same position.
It is true that the RTC ruled in Election Protest that it was respondent Alegre who “won” in the 1998 mayoralty race and therefore, was the legally elected mayor of San Vicente. However, that disposition, it must be stressed, was without practical and legal use and value, having been promulgated after the term of the contested office has expired. Petitioner Francis Ong’s contention that he was only a presumptive winner in the 1998 mayoralty derby as his proclamation was under protest did not make him less than a duly elected Mayor. His proclamation by the Municipal Board of Canvassers of San Vicente as the duly elected mayor in the 1998 mayoralty election coupled by his assumption of office and his continuous exercise of the functions thereof from start to finish of the term, should legally be taken as service for a full term in contemplation of the three-term rule.
For the three - term limit for elective government officials to apply, two conditions or requisites must concur, to wit: 1) that the official concerned has been elected for three (3) terms in the same local government post, and 2) that he has fully served three (3) consecutive terms.
ROMEO LONZANIDA vs. COMELEC
G.R. No. 135150, July 28, 1999, 311 SCRA 602
Petitioner Lonzanida was elected and served for two consecutive terms as mayor of San Antonio, Zambales prior to the May 8, 1995 elections. He then ran again for the same position in the May 1995 elections, won and discharged his duties as Mayor. However, his opponent contested his proclamation and filed an election protest before the RTC of Zambales, which, in a decision dated January 9, 1997, ruled that there was a failure of election and declared the position vacant. The Comelec affirmed this ruling and petitioner Lonzanida acceded to the order to vacate the post. Lonzanida assumed the
office and performed his duties up to March 1998 only. Now, during the May 1998 elections, Lonzanida again ran for mayor of the same town. A petition to disqualify, under the three-term rule, and was eventually granted. However, the Court held that Lonzanida cannot be considered as having been duly elected to the post in the May 1995, and that he did not fully serve the 1995-1998 mayoralty term by reason of involuntary relinquishment of office. As the Court pointed observed, Lonzanida “cannot be deemed to have served the May 1995 to 1998 term because he was ordered to vacate and in fact vacated his post before the expiration of the term.
DIFFERENCE between ONG & LONZANIDA rulings
In Lonzanida, the result of the mayoralty election was declared a nullity for the stated reason of “failure of election,” and as a consequence thereof, the proclamation of Lonzanida as mayor - elect was nullified, followed by an order for him to vacate the office of mayor. For another, Lonzanida did not fully serve the 1995-1998 mayoral term, there being an involuntary severance from office as a result of legal processes. In fine, there was an effective interruption of the continuity of service.
On the other hand, the failure - of - election factor does not obtain in Ong’s case. There was actually no interruption or break in the continuity of Francis Ong’s service respecting the 1998-2001 term. Unlike Lonzanida, Ong was never unseated during the term in question, he never ceased discharging his duties and responsibilities as Mayor of San Vicente, Camarines Norte for the entire period covering the 1998-2001 term.
ATTY. VENANCIO RIVERA vs. COMELEC & MARINO MORALES
G.R. No. 167591, May 9, 2007, 523 SCRA 41
FACTS: It is undisputed that respondent Marino Morales was elected to the position of mayor of Mabalacat for the following consecutive terms:
a) July 1, 1995 to June 30, 1998
b) July 1, 1998 to June 30, 2001
c) July 1, 2001 to June 30, 2004
d) July 1, 2004 to June 30, 2007
Respondent Morales argued and the Comelec held that the July 1, 2004 to June 30, 2007 term is not his fourth because his second term, July 1, 1998 to June 30, 2001 to which he was elected and which he served, may not be counted since his proclamation was declared void by the RTC of Angeles City, which decision became final and executory on August 6, 2001 and besides he was preventively suspended by the Ombudsman in an anti-graft case from January 16, 1999 to July 15, 1999. He claimed he was only a “caretaker of the office” or as a “de facto officer.”
ISSUE: Whether or not respondent Morales had served as mayor for three consecutive terms and therefore is ineligible to run for another term or fourth term.
HELD: YES. Respondent Morales was elected for the term July 1, 1998 to June 30, 2001. He assumed the position. He served as Mayor until June 30, 2001. He was mayor for the entire period notwithstanding the decision of the RTC in the electoral protest case filed by petitioner Dee ousting respondent as mayor. Such circumstance does not constitute an interruption in serving the full term. Respondent Morales is now serving his fourth term. He has been mayor of Mabalacat continuously without any break since July 1, 1995. By June 30, 2007, he will have been mayor of Mabalacat for twelve (12) continuous years. Respondent Morales should be promptly ousted from the position of mayor of Mabalacat.
In the light of the foregoing, respondent Morales cannot be considered a candidate in the May 2004 elections. Not being a candidate, the votes cast for him SHOULD NOT BE COUNTED and must be considered stray votes.
As a consequence of Morales’ ineligibility, a permanent vacancy in the contested office has occurred. This should now be filled by the vice mayor in accordance with Section 44 of the Local Government Code.
RAYMUNDO ADORMEO vs. COMELEC & RAMON TALAGA
G.R. No. 147927, February 4, 2002, 376 SCRA 90
Assumption of the office of mayor in a recall election for the remaining term is not the “term” contemplated under Section 8, Article X of the Constitution and Section 43 (b) of RA 7160.
As the Court observed, there was a “break” in the service of private respondent Ramon T. Talaga as mayor. He was a “private citizen” for a time before running for mayor in the recall elections.
JOEL G. MIRANDA vs. ANTONIO M. ABAYA
G.R. No. 136351, July 28, 1999, 311 SCRA 617
“There can be no valid substitution where a candidate is excluded not only by disqualification but also by denial and cancellation of his certificate of candidacy.”
ROBERTO LACEDA vs. RANDY LIMENA
G.R. No. 181867, November 25, 2008, 571 SCRA 603
Where a person has been elected for three consecutive terms as Punong Barangay and prior to the end or termination of such three-year term, the municipalities of Sorsogon and Bacon were merged and converted into Sorsogon City as a new political unit, without the city charter interrupting his term until the end of the three-year term, the prohibition applies to prevent him from running for the fourth time as Punong Barangay thereof, there being no break in the continuity of his term.
FEDERICO MONTEBON vs. COMELEC & SESINANDO POTENCIOSO
G.R. No. 180444, April 9, 2008, 551 SCRA 50
FACTS: Potencioso was elected for three consecutive terms as municipal councilor in 1998-2001, 2001-2004 and 2004-2007. However, the service of his second term in 2001-2004 was interrupted on January 12, 2004 when he succeeded as vice mayor due to the retirement of Vice Mayor Petronilo L. Mendoza. During the 2007 elections, his candidacy for municipal councilor was assailed because he is allegedly disqualified from running for the same position as it would be his fourth consecutive terms.
ISSUE: Whether or not Potencioso deemed to have fully served his second term thereby disqualifying him to run for municipal councilor.
HELD: NO. His assumption of office as vice mayor in January 2004 was an involuntary severance from his office as municipal councilor, resulting in an interruption in the service of his 2001-2004 term. Consequently, he is qualified to run for municipal councilor.
13. LAW ON PUBLIC OFFICER
CONSTANTINO GUMARU vs. QUIRINO STATE COLLEGE
G.R. No. 161496, June 22, 2007, 525 SCRA 412
FACTS: On June 25, 1985, C. T. Gumaru Construction and Quirino State College through its president Julian Alvarez, entered into an agreement for the construction of the state college’s building. On October 17, 1997, Gumaru filed a complaint for damages against the respondent college and its president. Respondent state college was instead represented by a private lawyer who made no move to protect its interest except to file a motion to dismiss the complaint filed against the state college, which was eventually denied by the trial court. No answer to the complaint was filed notwithstanding due receipt of the order directing its filing, as a consequence of which the state college was declared in default. The order of default itself was not reconsidered, no move whatsoever having been made in that direction. Gumaru was allowed to present its evidence ex-parte. When the decision was rendered adjudging the state college and its president Alvarez liable to the plaintiff, no effort was made to appeal the decision notwithstanding due receipt of a copy thereof by the private lawyer. Thus, a writ of execution was issued
against the properties of the state college which by this time remained as the sole defendant, Julian Alvarez having died during the pendency of the case.
ISSUE: Whether or not the state college be bound by or estopped by the mistakes or negligent acts of its officials or agents, much more non-suited as a result thereof.
HELD: NO. The State has to protect its interests and cannot be bound by, or estopped by the mistakes or negligent acts of its officials or agents, much more non-suited as a result thereof. The legality of legal representation can be raised and questioned at any stage of the proceedings.
The Office of the Solicitor General (OSG) is mandated to act as the law office of the government, its agencies, instrumentalities, officials and agents in any litigation or proceeding requiring the services of a lawyer. With respect to government–owned or controlled corporations (GOCCs), the OSG shall act as counsel only when authorized by the President or by the head of the office concerned.
The principal law office of GOCCs is the Office of the Government Corporate Counsel (OGCC).
Respondent state college is classified under the Administrative Code as a chartered institution, viz:
(12) Chartered institution refers to any agency organized or operating under a special charter, and vested by law with functions relating to specific constitutional policies or objectives. This term includes the state universities and colleges and the monetary authority of the State.
The Solicitor General cannot refuse to represent the government, its agencies, instrumentalities, officials and agents without a just and valid reason. He should not desist from appearing before the Court even in those cases where his opinions may be inconsistent with the government or any of its agents he is expected to represent. (Orbos vs. Civil Service Commission, G.R. No. 92561, September 12, 1990, 189 SCRA 459).
As in the case of fiscals or prosecutors, bias or prejudice and animosity or hostility do not constitute legal and valid excuses for inhibition. (Enriquez vs. Hon. Gimenez, 107 Phil. 932 (1960)]
Unlike a practicing lawyer who has the right to decline employment, a fiscal or prosecutor, or the Solicitor General in the case at bar, cannot refuse to perform his functions without violating his oath of office. (Enriquez vs. Gimenez, supra).
Government agencies were admonished not to reject the services of the Solicitor General, or otherwise fail or refuse to forward the papers of a case to the OSG for appropriate action. (Orbos vs. Civil Service Commission, supra).
The fee of the lawyer who rendered legal service to the government in lieu of the OSG or the OGCC is the personal liability of the government official who hired his services without the prior written conformity of the OSG or the OGCC, as the case may be. (Polloso vs. Gangan, 390 Phil. 1101 (2000).
The Solicitor General is thus expected to be the official who would best uphold and protect the legal interests of the government. His non-representation of the government is dangerous and should not be allowed.
GERARDO R. VILLASEÑOR vs. SANDIGANBAYAN
G.R. No. 180700, March 4, 2008, 547 SCRA 658
FACTS: Villaseñor is facing both criminal and administrative charges in connection with the Manor Hotel disaster. He was preventively suspended for a period of six months in the administrative case. During the pendency of the criminal case, the Sandiganbayan ordered his suspension for a period of 90 days upon the motion of the Special Prosecutor. He questions the said suspension as the same was absorbed in the administrative case as both the criminal and administrative cases were anchored on the same set of facts.
ISSUE: Whether or not the preventive suspension in an administrative proceeding a bar for a preventive suspension in a criminal case on the same facts and circumstances.
HELD: NO. It is well-settled preventive suspension under Section 13 of RA 3019 is mandatory. There are three kinds of remedies that are available against a public officer for impropriety in the performance of his powers and discharge of his duties: (1) civil, (2) criminal, and (3) administrative. These remedies may be invoked separately, alternately, simultaneously or successively. Sometimes, the same offense may be the subject of all three kinds of remedies.
It is clear that criminal and administrative cases are distinct from each other. The settled rule is that criminal and civil cases are altogether different from administrative matters. Verily, administrative case may proceed independently of criminal proceedings.
PRUDENCIO QUIMBO vs. DEPUTY OMBUDSMAN GERVACIO
G.R. No. 155620, August 9, 2005, 466 SCRA 277
FACTS: Quimbo was placed under preventive suspension without pay for a period of two (2) months and seventeen (17) days. The Deputy Ombudsman found him guilty of oppression and recommended that he be suspended from office for a period of eight (8) months. On appeal, the appellate court modified the decision and reduced the penalty for a period of two (2) months suspension without pay.
ISSUE: Whether or not the service of preventive suspension of 2 months and 17 days be credited as service of penalty of 2 months suspension without pay.
HELD: NO. Preventive suspension is not a penalty but merely a preventive measure, a preliminary step in an administrative investigation. The purpose of the suspension order is to prevent the accused from using his position and the powers and prerogatives of his service to influence potential witnesses or tamper with records which may be vital in the prosecution of the case against him. If after such investigation, the charge is established and the person investigated is found guilty of acts warranting his suspension or removal, then he is suspended, removed or dismissed. This is the penalty.
Clearly, service of the preventive suspension cannot be credited as service of penalty.
DR. DEMETRIO BEROÑA vs. SANDIGANBAYAN
G.R. No. 142456, July 27, 2004, 435 SCRA 303
FACTS: Dr. Beroña was the Provincial Health Officer when he was charged for violation of RA 3019 before the Sandiganbayan. During the pendency of the proceeding, he resigned from the Health Office and he ran and won as Municipal Mayor of Pilar, Abra. After the arraignment, Sandiganbayan suspended him from office for 90 days. Dr. Beroña claims that preventive suspension would no longer applicable to him as he no longer occupying the position when he was charged under RA 3019.
ISSUE: Whether or not suspension pendente lite applies to any office the officer might be currently holding.
HELD: YES. The provision of suspension pendente lite applies to all persons indicted upon a valid information. The term “office” in Section 13 of the law applies to any office which the officer might currently be holding and not necessarily the particular office in relation to which he is charged.
Preventive suspension is mandatory and there are no “ifs” and “buts” about it.
GUALBERTO CASTRO vs. HON. RICARDO GLORIA
G.R. No. 132174, August 20, 2001, 363 SCRA 417
FACTS: Castro was found guilty of immorality by the DECS Regional Office and was meted the penalty of dismissal from the service. He impugns the correctness of the penalty of dismissal from the service and seeks the payment of back salaries.
ISSUE: Whether or not Castro is entitled for reduction of his penalty of dismissal, reinstatement and payment of back salaries.
HELD: YES so far as the reduction of penalty of dismissal from the service and reinstatement are concerned. Inasmuch as the present charge of immorality constitutes the first charge of this nature, the Supreme Court reduced the penalty of dismissal imposed to one (1) year suspension from office without pay. In view of the length of time he has been out of the service, the penalty of suspension to have been fully served. He was ordered to be reinstated to office immediately.
The issue regarding payment of back salaries during the period that a member of the civil service is out of work, but subsequently ordered reinstated is settled in our jurisdiction. Such payment of salaries corresponding to the period when an employee is not allowed to work may be decreed if he is found innocent of the charges. However, if the employee is not completely exonerated of the charges such as when the penalty of dismissal is reduced to mere suspension, he would not be entitled to the payment of his back salaries.
UPON DEATH OF RESPONDENT - DENIAL OF DUE PROCESS PRECLUDES ADMINISTRATIVE CASE
CIVIL SERVICE COMMISSION vs. CAROLINA P. JUEN
G.R. No. 200577, August 17, 2016, 800 SCRA 646
FACTS: In an administrative case, respondent Carolina, Budget Officer I, was adjudged guilty of dishonesty, grave misconduct and conduct prejudicial to the best interest of the service, when she allegedly paid someone to take the December 20, 1996 Civil Service Professional Examinations on her behalf. Carolina denied the allegations and claimed that she personally took the examinations.
On appeal, Carolina argued that she was denied of her right to due process and of her right to be informed of the cause of accusations against her.
On the other hand, CSORO V claims that Carolina was given an opportunity to present her case. It stated that although it was true that the notice for the September 3, 2003 hearing was only received by Carolina on the same day, her counsel received the notice of hearing for November 13, 2003 two days prior to the scheduled hearing or on November 11, 2003.
However, during the pendency of her appeal to the CA, Carolina died from ovarian cancer. The counsel manifested that the Carolina’s heirs are very much interested on the outcome of the petition as they stand to benefit from whatever claims and benefits Carolina may be entitled should a favorable judgment be rendered.
ISSUE
Whether Carolina was denied of her right to due process for CSC’s failure to notify her of the hearing.
RULING
YES. Carolina was denied of her right to due process for CSC’s failure to notify her of the hearing.
As a general rule, the death of a respondent does not preclude the finding of administrative case, except in cases when: (a) due process may be subverted (b) equitable and humanitarian cases and (c) the penalty imposed or imposable would render the proceeding useless. The Court finds that first exception applies.
Here, the case was pending appeal with the CA when the respondent Carolina passed away. The CA was duty bound to render a ruling on the issue of whether or not the respondent was indeed administratively liable of the alleged infraction. However, in its decision, the CA found that the respondent Carolina was deprived of her right to due process.
Nonetheless, the Court agrees with the CA when it found that the respondent was deprived of her right to due process. The Court noted that Carolina’s non-appearance cannot be attributed to her. As Carolina’s counsel was in Cebu City and the hearing was to be conducted in Legazpi City, it would be impossible for Carolina to attend the hearing. Also, Carolina and her counsel were not given enough time to attend the scheduled hearing, As such, she was deprived of her right to adduce evidence.
MERE MISDECLARATION OF SALN IS NOT DISHONESTY
ATTY. AMADO Q. NAVARRO vs. OFFICE OF THE OMBUDSMAN
G.R. No. 210128, August 17, 2016, 801 SCRA 46
FACTS: Navarro, a CPA-Lawyer, was employed by the BIR as chief revenue officer IV.
Subsequently, DOF-RIPS found that Navarro, based on his SALN, amassed landholdings in Baguio since he became the Revenue District Officer there and had already constructed three structures on these lands. The DOF-RIPS came to the conclusion that Navarro’s substantial real property ownership is manifestly out of proportion to his lawful income.
Afterwards, the Ombudsman found Navarro guilty of the charges against him.
Navarro submits that he accomplished his annual SALN in accordance with the prescribed format by the CSC, the details of which. to the best of his knowledge and belief, were generally accepted in the government service and was in substantial compliance with the provisions of law. He could not have declared other assets or exclusively his as he co-owns these properties with his siblings.
ISSUE
Whether Navarro’s failure to declare in detail his assets and business interests in his SALN sufficient to hold him administratively liable for dishonesty and grave misconduct.
RULING
NO. Dishonesty implies that the person intends to lie, cheat, deceive, betray, or defraud.
Misconduct, on the other hand, is the intentional wrongdoing or deliberate violation of a rule of law or standard of behavior. The misconduct must relate to or be connected with the performance of the public officer’s duties for it to be considered an administrative offense.
In this case, the Court believes that Navarro’s lumping of his properties in his SALN does not automatically amount to making an untruthful statement. The mere misdeclaration in the SALN does not automatically amount to dishonesty except in cases where public employee’s wealth becomes manifestly disproportionate to the income without sufficient explanation. Also Navarro cannot be said to have committed simple negligence for improper accomplishment of SALNs, as he was not given the opportunity to correct the entries in his SALNs.
CIVIL SERVICE EMPLOYEE INVALIDLY DISMISSED IS ENTITLED FOR BACKWAGES AND REINSTATEMENT
JULIUS B. CAMPOL vs. MAYOR RONALD S. BALAO-AS et. al.
G.R. No. 197634, November 28, 2016, 810 SCRA 501
FACTS: Campol served as Secretary of the Sanggunian Bayan (SB) of the Municipality of Baliney, Abra since 1999.
During the 2004 elections, Balao-as and Sianen won as mayor and vice mayor, respectively. Thereafter their assumption to office, The SB passed a resolution terminating Campol as SB Secretary on the ground that he was absent without approved leave from August 1, 2004 to September 30, 2004.
Campol challenged his dismissal before the CSC-CAR which ruled in his favor, however, Vice Mayor Sianen issued a Memorandum dropping Campol from the rolls.
The CSC granted his appeal and ruled that Campol was properly dropped from the rolls.
The CA ruled that Campol was illegally dropped from the rolls, however, it refused his reinstatement as he was gainfully employed with the PAO since October 2005. He was awarded backwages only from the time of his dismissal until October 2005, prior to his employment with another government agency.
ISSUES
1) Whether Campol is entitled to reinstatement.
2) Whether Campol should be awarded backwages only for the period covering his illegal dismissal until his new employment with the PAO.
RULINGS
1) YES, Campol should be reinstated to his position as SB Secretary.
In the event that another person has already been appointed to his post, that person has to give way to the employee whose right to the office has been recognized by the competent authorities.
In the eyes of the law, the position never became vacant since Campol was illegally dropped from the rolls.
2) NO. Campol is entitled to the payment of backwages from the time of his illegal dismissal until he is reinstated to his position. The CA erred in ruling that the backwages should only cover the period of his illegal dismissal until his new employment with the PAO.
An employee of the civil service who is ordered reinstated is also entitled to the full payment of his backwages during the entire period that he was wrongfully prevented from performing the duties of his position and from enjoying its benefits. This is necessarily so because, in the eyes of the law, the employee never truly left the office.
In cases like this, the twin award of reinstatement and payment of full backwages as dictated by the constitutional mandate to protect civil service employee’s right to security of tenure. Anything less that this fails short of the justice due to government employee unfairly removed from office.
14. NATIONAL EMERGENCY
RANDY DAVID vs. GLORIA MACAPAGAL ARROYO
G.R. No. 171390, May 3, 2006, 489 SCRA 160
*** DECLARATION OF A STATE OF REBELLION vs. DECLARATION OF A STATE OF NATIONAL EMERGENCY.
- - - President Arroyo’s declaration of a “state of rebellion” was merely an act declaring a status or condition of public moment or interest.
- - - it is harmless, without legal significance and deemed not written. (Sanlakas vs. Executive Secretary, 421 SCRA 656, G.R. No. 159085, February 3, 2004).
- - - In declaring a state of national emergency, President Arroyo did not only rely on Section 18, Article VII of the Constitution - - - a provision calling on the AFP to prevent or suppress lawless violence, invasion or rebellion. (CALLING-OUT POWER).
- - - She also relied on Section 17, Article XII -- a provision on the state’s extra ordinary power to take over privately-owned public utility and business affected with public interest.
- - - Indeed, PP 1017 calls for the exercise of an awesome power
- - Obviously, such Proclamation cannot be deemed harmless, without legal significance or not written, as in the case of declaration of a state of rebellion.
*** The DECLARATION OF MARTIAL LAW is a “warning to citizens that the military power has been called upon by the executive to assist in the maintenance of law and order, and that, while emergency lasts, they must, upon pain of arrest and punishment, not commit any acts which will any way render more difficult the restoration of order and the enforcement of law. (Aquino vs. Ponce Enrile, 59 SCRA 183 (1974).
*** Powers that can be exercised by the President as commander-in-chief where there is a valid declaration of Martial Law or suspension of the writ of habeas corpus:
1. arrests and seizures without judicial warrants
2. ban on public assemblies
3. take-over of news media and agencies and press censorship
4. issuance of Presidential Decrees
*** “TAKE CARE” POWER
- - - the primary function of the President is to enforce the laws as well as to formulate policies to be embodied in existing laws.
- - - he sees to it that all laws are enforced by the officials and employees of his department.
- - - we all know that it was PP 1081 which granted President Marcos legislative power. Its enabling clause states: “to enforce obedience to all the laws and decrees, orders and regulations promulgated by me personally or upon my direction.
- - - Upon the other hand, the enabling clause of PP 1017 issued by President Arroyo is: “ to enforce obedience to all the laws and to all decrees, orders and regulations promulgated by me personally or upon my direction.”
**** Is it within the domain of President Arroyo to promulgate “decrees”?
- - - - She cannot issue decrees similar to those issued by former Pres. Marcos under PP 1081.
- - - - Presidential Decrees are laws which are of the same category and binding force as statutes because they were issued by the President in the exercise of his legislative power during the period of Martial Law under the 1973 Constitution.
- - - the President is granted an Ordinance Power where she may issue any of the following:
1. Executive Order (EO)
2. Administrative Order (AO)
3. Proclamations (PP)
4. Memorandum Order (MO)
5. Memorandum Circular (MC)
6. General or Special Orders (GO or SO)
- - - President Arroyo’s ordinance power is limited to the foregoing issuances.
- - - The Court rules that the assailed PP 1017 is unconstitutional insofar as it grants President Arroyo the authority to promulgate “decrees.”
**** Can President Arroyo enforce obedience to all decrees and laws through the military?
- - - With respect to “laws,” she cannot call the military to enforce or implement certain laws, such as custom laws, laws governing family and property relations, laws on obligations and contracts and the like.
- - - She can only order the military, under PP 1017, to enforce laws pertinent to its duty to suppress lawless violence.
*** POWER TO TAKE OVER
- - - President’s authority to declare “a state of national emergency” vs. authority to exercise emergency powers.
- - - President Arroyo could validly declare the existence of a state of national emergency even in the absence of a Congressional enactment.
- - - But the exercise of emergency powers, such as the taking over of privately owned public utility or business affected with public interest, is a different matter -- this requires delegation from Congress.
- - - Generally, Congress is the repository of emergency powers. Certainly, a body cannot delegate a power not reposed upon it.
- - - During grave emergencies, for possible or practical purposes, it is deemed wise to allow Congress to grant emergency powers to the President, subject to certain conditions, thus:
1. there must be a war or other emergency
2. the delegation must be for a limited period only.
3. the delegation must be subject to such restrictions as the Congress may prescribe.
4. the emergency powers must be exercised to carry out a national policy declared by Congress.
- - - Section 17, Article XII must be understood as an aspect of the emergency powers clause and that power refers to Congress, not the president.
- - - the taking over of private business affected with public interest is just another facet of the emergency powers generally reposed upon Congress.
- - - “tsunami,” “typhoon,” “hurricane” and “similar occurrences” are limited view of “emergency.”
- - - “Emergency” as contemplated in our Constitution may include rebellion, economic crisis, pestilence or epidemic, typhoon, flood or other similar catastrophe of nationwide proportion or effect.
- - - Legislative power, through which extraordinary measures are exercised, remains in Congress even in times of crisis. (Araneta vs. Dinglasan, 84 Phil. 368 (1949).
- while the President alone can declare a state of national emergency, however, without legislation, he has no power to take over privately-owned public utility or business affected with public interest.
- - - Likewise, without legislation, the President has no power to point out the types of businesses affected with public interest that should be taken over.
- - - in short, the President has no absolute authority to exercise all the powers of the State under Section 17, Article XII in the absence of an emergency powers act passed by Congress.
**** “AS APPLIED CHALLENGE”
- - - the rights against unreasonable search and seizure, the right against warrantless arrest, and the freedom of speech, of expression, of the press, and of assembly under the Bill of Rights suffered the greater blow
**** Can the Court adjudge as unconstitutional PP 1017 and G.O. No. 5 on the basis of these illegal acts? In general, does the illegal implementation of a law render it unconstitutional?
- - - Settled is the rule that courts are not at liberty to declare statutes invalid although they may be abused and misabused and may afford an opportunity for abuse in the manner of application.
- - - the validity of a statute or ordinance is to be determined from its general purpose and its efficiency to accomplish the end desired, not from its effects in a particular case.
- - - PP 1017 is merely an invocation of the President’s calling-out power but there is nothing in PP 1017 allowing the police, expressly or impliedly, to conduct illegal arrest, search or violate the citizen’s constitutional rights.
- - - the Court cannot adjudge a law or ordinance unconstitutional on the ground that its implementation committed illegal acts.
- - - the criterion by which the validity of the statute or ordinance is to be measured is the essential basis for the exercise of power and not a mere incidental result arising from its execution.
- - - the absence of a law defining “acts of terrorism” may result in abuse and oppression on the part of the police or military and therefore the Court declares that the “acts of terrorism” portion of G.O. No. 5 is unconstitutional.
- - - there is nothing in G.O. No. 5 authorizes the military or police to commit acts beyond what are necessary and appropriate to suppress and prevent lawless violence the limitation of their authority in pursuing the Order. Otherwise such acts are considered illegal.
- - - “Assembly” means a right on the part of the citizens to meet peaceably for consultation in respect to public affairs. It is a necessary consequence of our republican institution and complements the right of speech.
- - - As in the case of freedom of expression, this right is not to be limited, much less denied, except on a showing of a clear and present danger of a substantive evil that Congress has a right to prevent.
- - - Like other rights embraced in the freedom of expression, the right to assemble is not subject to previous restraint or censorship.
- - - it may not be conditional upon the prior issuance of a permit or authorization from the governmental authorities except, of course, if the assembly is intended to be held in a public place and not for the assembly itself, may be validly required.
- - - the ringing truth is that petitioner David et. al. were arrested while they were exercising their right to peaceful assembly. They were not committing any crime, neither was there a showing of a clear and present danger that warranted the limitation of that right.
- - - Peaceable assembly for lawful discussion cannot be made a crime. The holding of meetings for peaceable political action cannot be proscribed. Those who assist in the conduct of such meeting cannot be branded as criminals on that score.
- - - the dispersal and arrest of the members of the KMU was done merely on the basis of Malacañang directives canceling all permits previously issued by local government unit is arbitrary - - - the wholesale cancellation of all permits to rally is a blatant disregard of the principle that “freedom of assembly is not be limited, much less denied, except on a showing of a clear and present danger of a substantive evil that the State has a right to prevent.
- - - Under BP 880, the authority to regulate assemblies and rallies is lodged with the local government units. They have the power to issue permits and to revoke such permit after due notice and hearing on the determination of the presence of clear and present danger.
- - - while admittedly, the Daily Tribune was not padlocked and sealed like the “Metropolitan Mail” and “We Forum” newspapers, yet it cannot be denied that the CIDG operatives exceeded their enforcement duties.
- - - the search and seizure of materials for publication, the stationing of policemen in the vicinity of the Daily Tribune offices, and the arrogant warning of government officials to media, are plain censorship.
15. ELECTION LAW
COMELEC JURISDICTION vs. HRET JURISDICTION
REGINA ONGSIAKO REYES vs. COMMISSION ON ELECTIONS
G.R. No. 207264, June 25, 2013, 699 SCRA 522
G.R. No. 207264, October 22, 2013, 709 SCRA 197
FACTS: On 31 October 2012, Joseph Tan filed before the Comelec a petition to deny due course or to cancel the certificate of candidacy of Regina Reyes on the ground of material representations specifically among others that she is not a Filipino citizen but rather an American citizen.
During the course of the proceedings, Joseph Tan presented a database record of the Bureau of Immigration indicating that Regina O. Reyes is an American citizen and a holder of a U.S. passport which she used in the various travels abroad.
On 27 March 2013, the Comelec First Division found that, contrary to the declarations she made in her COC, Regina O. Reyes is not a citizen of the Philippines because of her failure to comply with requirements of RA 9225 or the Citizenship Re-acquisition and Retention Act of 2003 namely: (1) to take an oath of allegiance to the Republic of the Philippines; and (2) to make a personal and sworn renunciation of her American citizenship before any public officer to administer an oath. In addition, the Comelec ruled that she did not have the one year residency requirement under Section 6, Article VI of the 1987 Constitution. Thus, she is ineligible to run for the position of representative for the lone district of Marinduque.
On 8 April 2013, Reyes filed a Motion for Reconsideration claiming that she is a natural-born Filipino citizen and that she has not lost such status by simply obtaining and using an American passport.
On 14 May 2013, the Comelec en banc promulgated a resolution denying Reyes’ Motion for Reconsideration for lack of merit.
Four days thereafter or on 18 May 2013, Regina Reyes was proclaimed winner of the 13 May 2013 elections.
On 5 June 2013, the Comelec en banc issued a Certificate of Finality declaring its 14 May 2013 Resolution final and executory.
On same day, Regina Reyes took her oath of office before Speaker Belmonte of the House of Representatives.
Reyes has yet to assume office, the term of which officially starts at noon of 30 June 2013.
ISSUES: (1) Who has jurisdiction over the case?
(2) When is a candidate considered a Member of the House of
Representatives?
HELD: (1) The Comelec retains jurisdiction for the following reasons:
First, the HRET does not acquire jurisdiction over the issue of Reyes’ qualifications, as well as over the assailed Comelec Resolutions, unless a petition is duly filed with said tribunal. Petitioner has not averred that she has filed such action.
Second, the jurisdiction of the HRET begins only after the candidate is considered a member of the House of Representatives as stated in Section 17, Article VI of the 1987 Constitution.
(2) To be considered a Member of the House of Representatives, there must be a concurrence of the following requisites: (a) a valid proclamation; (b) a proper oath; and (c) assumption of office.
The Court has invariably hold that once a winning candidate has been proclaimed, taken his oath, and assumed office as a Member of the House of Representatives, the Comelec jurisdiction over election contests relating to his election, returns, and qualification ends, and the HRET’s own jurisdiction begins.
Here, the petitioner cannot be considered a Member of the House of Representatives because, primarily, she has not yet assumed office as the term of office begins only at noon on the 30th day of June next following their election. Thus, until such time, the Comelec retains jurisdiction.
Disqualified Candidate cannot be voted upon
REV. FR. NARDO B. CAYAT vs. COMELEC
G.R. No. 163776, April 24, 2007, 522 SCRA 23
FACTS: Cayat and Palileng were the only candidates for the mayoralty post in Buguias, Benguet, in the 10 May 2004 local elections. Palileng filed a petition for disqualification against Cayat. Palileng’s petition alleged that: Cayat is not eligible to run as Mayor having been convicted by final judgment for a criminal offense for the Crime of Acts of Lasciviousness. In fact, Cayat is still under probation at the time he filed his Certificate of Candidacy.
COMELEC cancelled Cayat’s COC. In the local elections held on 10 May 2004, Cayat’s name remained on the COMELEC’s list of candidates. Cayat received the highest number of votes. Cayat was thus proclaimed the duly elected Mayor of Buguias, Benguet. Cayat took his oath of office on 17 May 2004.
Palileng moved for the execution of COMELEC’s order canceling the certificate of candidacy of Cayat. The latter thereby, annulled the proclamation of petitioner Rev. Fr. Nardo B. Cayat. The new MBOC proclaimed Palileng as Mayor of Buguias, Benguet. Palileng took his oath of office on the same day.
ISSUE: Whether or not the orders canceling Cayat’s COC, nullifying Cayat’s proclamation as Mayor of Buguias, Benguet, and declaring Palileng as Mayor of Buguias, Benguet are valid.
HELD: YES. There is no doubt as to the propriety of Palileng’s proclamation. The COMELEC’s Resolution of 12 April 2004 canceling Cayat’s certificate of candidacy due to disqualification became final and executory on 17 April 2004 when Cayat failed to pay the prescribed filing fee. Thus, Palileng was the only candidate for Mayor of Buguias, Benguet in the 10 May 2004 elections. Twenty-three days before Election Day, Cayat was already disqualified by final judgment to run for Mayor in the 10 May 2004 elections. Palileng was not a second placer. On the contrary, Palileng
was the sole and only placer. Consequently, Palileng’s proclamation as Mayor of Buguias, Benguet is beyond question.
The law expressly declares that a candidate disqualified by final judgment before an election cannot be voted for, and votes cast for him shall not be counted. This is a mandatory provision of law under Section 6 of Republic Act No. 6646, The Electoral Reforms Law of 1987.
Cayat’s proclamation is void because the decision disqualifying him had already become final on 17 April 2004. There is no longer any need to ascertain whether there was actual knowledge by the voters of Cayat’s disqualification when they cast their votes on Election Day because the law mandates that Cayat’s votes “shall not be counted.” There is no disenfranchisement of the 8,164 voters. Rather, the 8,164 voters are deemed by law to have deliberately voted for a non-candidate, and thus their votes are stray and shall not be counted.
Valid Substitution to non-age Candidate
JOY CHRISMA B. LUNA vs. COMELEC
G.R. No. 165983, April 24, 2007, 522 SCRA 107
FACTS: On 15 January 2004, Luna filed her COC for the position of vice-mayor of Lagayan, Abra as a substitute for Hans Roger, who withdrew his certificate of candidacy on the same date. The name of Hans Roger was removed from the list of candidates and was replaced by the name of Luna.
Private respondent filed a petition for the cancellation of the certificate of candidacy or disqualification of Luna alleging that Luna’s COC was not validly filed because the substitution by Luna for Hans Roger was invalid due to the fact that Hans Roger was only 20 years old on election day and therefore, was disqualified to run for vice-mayor and cannot be substituted by Luna.
The COMELEC ruled that Hans Roger, being under age, could not be considered to have filed a valid COC and therefore, is not a valid candidate who could be substituted by Luna.
ISSUE: Whether the COMELEC committed grave abuse of discretion when it ruled that there was no valid substitution by Luna for Hans Roger.
HELD: YES. The substitution of Luna for Hans Roger was valid. When a candidate files his COC, the COMELEC has a ministerial duty to receive and acknowledge its receipt pursuant to Sec. 76 of the Election Code. Since Hans Roger withdrew his COC and the COMELEC found that Luna complied with all the procedural requirements for a valid substitution, Luna may validly substitute for Hans Roger.
The COMELEC may not, by itself, without the proper proceedings, deny due course to or cancel a certificate of candidacy filed in due form. In Sanchez vs. Del Rosario, the Court ruled that the question of eligibility or ineligibility of a candidate for non-age is beyond the usual and proper cognizance of the COMELEC.
If Hans Roger made a material misrepresentation as to his date of birth or age in his COC, his eligibility may only be impugned through a verified petition to deny due course to or cancel such COC under Section 78 of the Election Code.
UNDER AGE CANDIDATE VALIDLY SUBSTITUTED
OLIVIA DA SILVA CERAFICA vs. COMMISSION ON ELECTIONS
G.R. No. 205136, December 2, 2014, 743 SCRA 426
FACTS: On 1 October 2012, Kimberly filed her COC for councilor of Taguig City for the 2013 Elections. Her COC stated that she was born on 29 October 1992, or that she will be twenty (20) years of age on the day of elections, in contravention of the requirement that one must be at least twenty three (23) years of age on the day of election.
As such, Kimberly was summoned to a clarificatory hearing due to the age qualification.
Instead of attending the hearing, Kimberly opted to file a sworn Statement of Withdrawal of COC on 17 December 2012. Olivia, who belongs to and is certified by the same political party filed her own COC as a substitute of Kimberly. Owing to these events, the clarificatory hearing no longer pushed through.
However, the Comelec Law Department recommended the cancellation of Kimberly’s COC, and consequently, the denial of the substitution of Kimberly by Olivia. This recommendation was affirmed by Comelec.
ISSUES
(1) Whether the cancellation of Kimberly’s COC was proper.
(2) Whether Olivia complied with all of the requirements for a valid substitution.
RULINGS
(1) NO. The Comelec has the ministerial duty to receive and acknowledge receipts of COCs.
Comelec has no discretion to give or not to give due course to COCs and its duty to give due course to COCs in due form is ministerial in character.
While the Comelec may look into patent defects in the COCs, it may not go into matters not appearing on their face.
The question of eligibility or ineligibility of a candidate is thus beyond the usual and proper cognizance of the Comelec.
As such, the cancellation of Kimberly’s COC was not proper.
(2) YES. Under the express provision of Sec. 77 of BP Bldg. 881, not just any person, but only “an official candidate of a registered or accreditated political party may be substituted.
In the case at bar, Kimberly was an official nominee of the Liberal Party, thus, she can be validly substituted.
All the foregoing requisites were complied with in the case at bar. First, there was a valid withdrawal of Kimberly COC after the last day for the filing of COCs. Second, Olivia belongs to and is certified to by the same political party to which Kimberly belongs; and third, Olivia filed her COC not later than mid-day of election day.
Therefore, Olivia can substitute Kimberly.
No valid Substitution - Material Representation
SILVERIO TAGOLINO vs. COMELEC & LUCY TORRES GOMEZ
G.R. No. 202202, March 19, 2013, 693 SCRA 574
FACTS: Richard Gomez filed his COC with Comelec for congressman of Leyte for May 2010 elections. A petition was filed before the Comelec to cancel COC of Richard Gomez for his failure to meet the one (1) year residency requirement. The Comelec granted the petition without qualification stating that Richard Gomez is disqualified. Thereafter, Richard’s wife, Lucy Torres filed her COC as official substitute candidate of Richard Gomez with the party’s endorsement. Comelec allowed the substitution.
When the elections were conducted, Richard Gomez, whose name remained on the ballots, garnered the highest number of votes. In view of substitution, Lucy Torres was proclaimed the winner.
ISSUE: Whether Lucy Torres validly substituted Richard Gomez as a congressional candidate in the said election.
HELD: NO. The substitution is invalid. Considering that section 77 of the OEC requires that there be a candidate in order for substitution to take place, as well as the precept that a person without a valid COC is not considered as a candidate at all, it necessarily follows that if a person’s COC had been denied due course to and/or cancelled, he or she cannot be validly substituted in the electoral process. The existence of a valid COC is therefore a condition sine qua non for a disqualified candidate to be validly substituted.
Moreover, Section 77 expressly enumerates that substitution is permissible when an official candidate of a registered or accredited political party “dies, withdraws or is disqualified for any cause.” Noticeably, material representation cases are not included and therefore cannot be a valid basis to proceed with candidate substitution.
Richard Gomez’ failure to comply with the residency requirement constitutes a material representation of one’s qualification which is a ground for the denial to and/or cancellation of his COC and not for disqualification. This makes COC void ab initio. Consequently, his wife cannot validly substitute him as a candidate in the said election.
NUISANCE CANDIDATE
JOSEPH B. TIMBOL vs. COMMISSION ON ELECTIONS
G.R. No. 206004, February 24, 2015, 751 SCRA 456
FACTS: On October 5, 2012, Timbol filed a certificate of candidacy for councilor of the Second District of Caloocan City.
On January 15, 2013, Timbol was ordered to appear before the Comelec for a clarificatory hearing in connection with his certificate of candidacy.
Timbol, together with his counsel, appeared before Election Officer Valencia. During the clarificatory hearing, Timbol argued that he was not a nuisance candidate and contended that in the 2010 elections, he ranked eight among all the candidates who ran for councilors in the second district. He allegedly had sufficient resources to sustain his campaign.
The clarificatory panel assured him that his name would be deleted from the list of nuisance candidates and that his certificate of candidacy would be given due course.
Despite Election Officer Valencia’s favorable recommendation, Timbol’s name was not removed from the list of nuisance candidates posted in the Comelec website.
With the printing of ballots for the automated elections set on February 4, 2013, Timbol filed on February 2, 2013, a petition praying that his name be included in the certified list of candidates.
In the Minute Resolution dated February 5, 2013, the Comelec denied the petition for being moot considering that the printing of ballots had already begun.
ISSUES:
(1) Whether Timbol was denied due process for being considered a nuisance candidate.
(2) Who are nuisance candidates?
(3) When is a case moot and academics and what are the recognized exceptions.
HELD: (1) YES. The opportunity to be heard is a chance “to explain one’s side or an opportunity to seek a reconsideration of the action or ruling complained of. In election cases, due process requirements are satisfied when the parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand.
To minimize the logistical confusion caused by nuisance candidates, their certificate of candidacy may be denied due course or cancelled by Comelec. This denial or cancellation may be “moto propio or upon a verified petition of an interested party subject to an opportunity to be heard.
(2) Nuisance candidates are persons who file their certificate of candidacy “to put the election process in mockery or disrespect or to cause confusion among the voters by the similarity of the name of the registered candidates or other circumstances or acts clearly demonstrate that the candidate has no bona fide intention to run for the office for which the certificate of candidacy has been filed and, thus prevent a faithful determination of the true will of the electorate.
(3) A case is moot and academic, if it “ceases to present a justiciable controversy because of supervening events so that a declaration thereon would be of no practical use or value.
When a case is moot and academic, court generally declines jurisdiction over it. There are recognized exceptions to this rule:
(1) there was a grave violation of the Constitution.
(2) the case involved a situation of exceptional character and was of paramount public interest.
(3) the issues raised required the formulation of controlling principles to guide the Bench, the Bar and the public, and
(4) the case was capable of repetition yet evading review.
16. PUBLIC INTERNATIONAL LAW - Prospective Extraditee is entitled to
the grant of bail
GOVERNMENT OF HONGKONG vs. HON. FELIXBERTO OLALIA, JR.
G.R. No. 153675, April 19, 2007, 521 SCRA 470
While the Court in Purganan limited the exercise of the right to bail to criminal proceedings, however, in light of the various international treaties giving recognition and protection to human rights, particularly the right to life and liberty, a re-examination of the Court’s ruling in Purganan is in order.
First, the Court noted that the exercise of the State’s power to deprive an individual of his liberty is not necessarily limited to criminal proceedings. Respondent, in administrative proceedings, such as deportation and quarantine, have likewise been detained.
Second, to limit bail to criminal proceedings would be to close our eyes to our jurisprudential history. Philippine jurisprudence has not limited the exercise of the right to bail to criminal proceedings only. The Court had admitted to bail persons who are not involved in criminal proceedings.
In fact, bail has been allowed in this jurisdiction to persons in detention during the pendency of administrative proceedings (e.g. deportation proceedings) taking into cognizance the obligation of the Philippines under international conventions to uphold human rights. If bail can be granted in deportation cases, the Court sees no justification why it should not also be allowed in extradition cases. Likewise, considering that the Universal Declaration of Human Rights applies to deportation cases, there is no reason why it cannot be invoked in extradition cases. After all, both are administrative proceedings where the innocence or guilt of the person detained is not in issue.
Finally, while our extradition law does not provide for the grant of bail to an extraditee, however, there is no provision prohibiting him or her from filing a motion for bail, a right to due process under the Constitution. The applicable standard of due process, however, should not be the same as that in criminal proceedings. A new standard which is termed “clear and convincing evidence” should be used in granting bail in extradition cases. This standard should be lower than proof beyond reasonable doubt but higher than preponderance of evidence.
EDUARDO RODRIGUEZ vs. PRESIDING JUDGE, RTC BRANCH 17 of MANILA
G.R. No. 157977, February 27, 2006, 483 SCRA 290
In Purganan case, the Court said that a prospective extraditee is not entitled to notice and hearing before the issuance of a warrant of arrest, because notifying him before his arrest only tips him of his pending arrest. But this is for cases pending the issuance of a warrant of arrest, not in a cancellation of a bail that had been issued after determination that the extraditee is a no-flight risk. The policy is that a prospective extraditee is arrested and detained to avoid his flight from justice. On the extraditee lies the burden of showing that he will not flee once bail is granted. If after his arrest and if the trial court find that he is no-flight risk, it grants him bail. The grant of the bail, presupposes that the co-petitioner has already presented evidence to prove her right to be on bail, that she is no-flight risk, and the trial court had already exercised its sound discretion and had already determined that under the Constitution and laws in force, co-petitioner is entitled to provisional release. Considering, therefore, that she has not been shown to be a flight risk nor a danger to the community, she is entitled to notice and hearing before her bail could be cancelled. Absent prior notice and hearing, the bail’s cancellation was in violation of her right to due process.
NON - SIGNATORY TO UNCLOS
MOST REV. PEDRO D. ARIGO, et. al. vs. SCOTT H. SWIFT et. al.
G.R. No. 206510, September 16, 2014, 735 SCRA 102
FACTS: On January 15, 2013, the USS Guardian while transiting the Sulu Sea ran aground on the shoal of Tubbataha Reefs which caused environmental damage.
On April 17, 2013, the above-named petitioners, including minors or generations yet unborn filed a petition against the U.S. military officers involved, President Pinoy and officials of the Philippine government involved in military exercise and environmental protection for the institution of civil, administrative and criminal suits for acts committed in violation of environmental laws and regulations in connection with the grounding incident.
The U.S. government invoked the doctrine of immunity from suit and being a non-signatory to the treaty of UNCLOS.
ISSUES
(1) Whether the minors petitioners have personality to sue on behalf of generations yet unborn.
(2) Whether the acts of U.S. respondents are governed by the doctrine of sovereign immunity.
3) Whether the non-membership in the UNCLOS of U.S. would disregard the rights of the Philippines as a Coastal State over its internal waters and territorial sea.
RULINGS
(1) YES. Their personality to sue in behalf of the succeeding generations can only be based on the concept of intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned.
Such right is based on “rhythm and harmony of nature” indispensably include the judicious disposition, utilization and conservation of country’s natural resources.
Every generation has a responsibility to the next to preserve that rhythm and harmony for the full enjoyment of a balanced and healthful ecology.
The minors’ assertion of their right to a sound environment constitutes, at the same time, the performance of their obligation to ensure the protection of that right for the generations to come.
(2) YES. The U.S. respondents were sued in their official capacity as commanding officers of the U.S. Navy who had control and supervision over the USS Guardian and its crew.
The alleged act or omission resulting in the unfortunate grounding of the USS Guardian on the Tubbataha Reefs was committed while they were performing military duty.
Considering that the satisfaction of the judgment against said officials will require remedial actions and appropriation of funds by the U.S. government, the suit is deemed to be one against the U.S. itself.
The principle of State Sovereign Immunity therefore bars the exercise of jurisdiction of our Supreme Court over the persons of respondents Swift, Rice and Robling.
(3) NO. The non-membership in the UNCLOS does not mean that the U.S. will disregard the rights of the Philippines as a Coastal State over its internal waters and territorial sea.
The U.S. government has to bear “international responsibility” under Art. 31 in connection with the USS Guardian grounding which adverse affected the Tabbataha reefs.
The rationale of U.S. refusal to join the UNCLOS was centered on its disagreement with UNCLOS’ regime of deep seabed mining which considers the ocean and deep seabed commonly owned by mankind and has nothing to do with the U.S. acceptance of customary international rules on navigation.
CONDUCT OF THE FOREIGN RELATIONS BY THE EXECUTIVE
- PACTA SUNT SERVANDA
ISABELITA C. VINUYA et. al. vs. EXECUTIVE SECRETARY ROMULO
G.R. No. 162230, August 13, 2014, 732 SCRA 596
FACTS: Petitioners pray that the Court reconsider the April 28, 2010 decision and declare (1) that the rapes, sexual slavery, torture and other forms of sexual violence committed against the Filipina comfort women are crimes against humanity and war crimes under customary international law; (2) that the Philippines is not bound by the Treaty of Peace with Japan, insofar as the waiver of the claims of the Filipina comfort women against Japan is concerned; (3) that the Secretary of Foreign Affairs and the Executive Secretary committed grave abuse of discretion
in refusing to espouse the claims of Filipina comfort women and for an apology, legal compensation and other forms of reparation from Japan.
ISSUE: Whether the public respondents can be compelled to espouse their claims for official apology and other forms of reparations against Japan.
HELD: NO. The Constitution has entrusted to the Executive Department the conduct of foreign relations for the Philippines whether or not to espouse petitioners’ claim against the Government of Japan is left to the exclusive determination and judgment of the Executive Department.
The Court cannot interfere with or question the wisdom of the conduct of foreign relations by the Executive Department.
The Waiver Clause in the Treaty of Peace with Japan bound the Republic of the Philippines pursuant to the international law principle of pacta sunt servanda. The validity of the Treaty of Peace was the result of the ratification by two consenting parties.
Consequently, the obligations embodied in the Treaty of Peace must be carried out in accordance with the common and real intention of the parties at the time the treaty was concluded.
17. FREEDOM OF RELIGION
ALEJANDRO ESTRADA vs. SOLEDAD ESCRITOR
A.M. No. P-02-1651, June 22, 2006, 492 SCRA 1
Benevolent neutrality recognizes that government must pursue its secular goals and interests but at the same time strive to uphold religious liberty to the greatest extent possible within flexible constitutional limits. Thus, although the morality contemplated by laws is secular, benevolent neutrality could allow for accommodation of morality based on religion, provided it does not offend compelling state interests.
The compelling state interest test involves a three-step process. The Court explained this process in detail, by showing the questions which must be answered in each step, viz:
First, “Has the statute or government action created a burden on the free exercise of religion?” The court often looks into the sincerity of the religious belief, but without inquiring into the truth of the belief because the Free Exercise Clause prohibits inquiring about its truth.
Second, the court asks: “Is there a sufficiently compelling state interest to justify this infringement of religious society?” In this step, the government has to establish that its purposes are legitimate for the state and that they are compelling.
Third, the court asks: “Has the state in achieving its legitimate purposes used the least intrusive means possible so that the free exercise is not infringed any more than necessary to achieve the legitimate goal of the state?” The analysis requires the state to show that the means in which it is achieving its legitimate state objective is the least intrusive means, i.e., it has chosen a way to achieve its legitimate state end that imposes as little as possible on religious liberties.
18. QUALIFICATION OF SENATORIAL CANDIDATES
SOCIAL JUSTICE SOCIETY vs. DANGEROUS DRUG BOARD
G.R. No. 157870, November 3, 2008, 570 SCRA 410
ISSUE: May RA 9165 add drug testing as a requirement for candidacy for Senator?
HELD: NO. The Constitution expressly limits the qualifications of a person to run and become a Senator as those that are limited to the following matters:
(1) citizenship
(2) voter registration
(3) age
(4) residency.
Congress’ power to legislate while given broad recognition must not overflow the bounds set by the Constitution. Where the Constitution has expressly set out the qualification, these are exclusive and may not be broadened nor circumscribed by legislative fiat.
19. REMOVAL OF AN ELECTIVE LOCAL OFFICIAL
SANGGUNIANG BARANGAY OF BARANGAY DON MARIANO MARCOS vs. MARTINEZ
G.R. No. 170626, March 3, 2008, 547 SCRA 416
ISSUE: May the Sangguniang Bayan remove an elective official from office?
HELD: NO. An elective local official may be removed from office on the grounds provided by law only by order of the proper court.
20. POWER OF EMINENT DOMAIN
FORFORM DEVELOPMENT CORPORATION vs. P N R
G.R. No. 124795, December 10, 2008, 573 SCRA 350
FACTS: The San Pedro - Carmona Commuter Line Project was implemented with the installation of railroad facilities and appurtenances to serve the squatters’ resettlement areas. The properties of Forform were traversed as right-of-way and the PNR occupied the Forform properties without previous condemnation proceedings and payment of just compensation.
ISSUES
1. Whether Forform can recover possession of its property because PNR failed to file any expropriation case and just compensation.
2. Whether leasing out of portion of the property to third person is beyond the scope of public use.
HELD
1. NO. The owner of the land, who stands by, without objection, and sees as public railroad constructed over it, cannot, after the road is completed, or large expenditures have been made thereon upon the faith of his apparent acquiescence, reclaim the land, or enjoin its use by the railroad company.
In such a case, there can only remain to the owner a right of compensation.
2. NO. The public use requisite for the valid exercise of the power of eminent domain is a flexible and evolving concept influenced by changing conditions.
At present, it may be amiss to state that whatever is beneficially employed for the general welfare satisfies the requirement of public use. The term “public use” has now been held to be synonymous with “public interest,” “public benefit,” “public welfare,” and “public convenience.” Whatever may be beneficially employed for the general welfare satisfies the requirement of public use.
REPUBLIC vs. SPOUSES AGUSTIN & IMELDA CANCIO
G.R. No. 170147, January 30, 2009, 577 SCRA 346
- The payment of the provisional value as a condition for the issuance of a writ of possession is different from the payment of just compensation for the expropriated property.
- While the provisional value is based on the current zonal valuation, just compensation is based on the prevailing fair market value of the property.
HON. VICENTE P. EUSEBIO vs. JOVITO M. LUIS
G.R. No. 162474, October 13, 2009, 603 SCRA 576
FACTS: The City of Pasig had taken the parcel of land of Luis and used the same as municipal road now known as Sandoval Avenue. After 16 years, Mayor Eusebio informed Luis that Pasig City cannot pay him more than the amount set by the Appraisal Committee. Thereafter, Luis filed an action for reconveyance. Mayor Eusebio contended that Luis’ action for just compensation for the property taken for public use is already barred by prescription.
ISSUE: Whether Luis’ action to claim just compensation for the property taken for public use is already barred by prescription.
HELD: NO. Where private property is taken by the government for public use without first acquiring title either through expropriation or negotiated sale, the owner’s action to recover the land or the value thereof does not prescribe.
NATIONAL POWER CORPORATION vs. SANTA LORO VDA. DE CAPIN
G.R. No. 175176, October 17, 2008, 569 SCRA 648
- Expropriation is not limited to the acquisition of real property with a corresponding transfer of title or possession. The right of way easement resulting in a restriction or limitation on property rights over the land traversed by transmission lines also falls within the ambit of the term “expropriation.”
21. RIGHT TO TRAVEL
REV. FR. ROBERT REYES vs. RAUL M. GONZALEZ
G.R. No. 182161, December 3, 2009, 606 SCRA 58
ISSUE: Whether petitioner’s right to travel is covered by the Rule on the Writ of Amparo.
HELD: NO. The right to travel refers to the right to move one place to another. Here, the restriction on petitioner’s right to travel as a consequence of the pendency of the criminal case filed against him was not unlawful. Fr. Reyes failed to establish that his right to travel was impaired in the manner and to the extent that it amounted to a serious violation of his right, liberty and security, for which there exists no readily available legal resource or remedy.
The direct recourse to the Supreme Court is inappropriate considering the provision of Section 22 of the Rule of the Writ of Amparo which states that “when a criminal action has been commenced, no separate petition for the writ shall be filed. The reliefs under the writ shall be available by motion in the criminal case.
22. CREATION OF LEGISLATIVE DISTRICT
SEN. BENIGNO C. AQUINO III vs. COMMISSION ON ELECTIONS
G.R. No. 189793, April 7, 2010, 617 SCRA 623
FACTS: RA 9716 created an additional district for the Province of Camarines Sur by reconfiguring the existing first and second legislative districts of the province.
Sen. Aquino contends that the reapportionment run afoul of the explicit constitutional standard that requires a minimum population of 250,000 for the creation of a legislative district and RA 9716 is unconstitutional because the proposed first district will end up with a population of less than 250,000 or only 176,383.
ISSUE: Whether a population of 250,000 is an indispensable constitutional requirement for the creation of a new legislative district in a province.
HELD: NO. Section 5 (3) of the Constitution requires a 250,000 minimum population only for a city to be entitled to a representative, but not so for a province.
BAI SANDRA SEMA vs. COMMISSION ON ELECTIONS
G.R. No. 177597, July 16, 2008, 558 SCRA 700
FACTS: ARMM Regional Assembly exercised its power to create provinces under Section 19, Article VI of RA 9054, enacted MMA Act 201 creating the Province of Shariff Kabunsuan.
ISSUES
1. Whether the ARMM Regional Assembly can create the Province of Shariff Kabunsuan.
2. Whether Congress can validly delegate to the ARMM Regional Assembly the power to create legislative districts for the House of Representatives.
3, Whether Sharif Kabunsuan is entitled to one representative in Congress under Section 5 (3), Article VI of the Constitution.
RULINGS
1. NO. A province cannot be created without a legislative district because it will violate Section 5 (3), Article VI of the Constitution as well as Section 3 of the Ordinance appended to the Constitution.
2. NO, the power to create a province or a city with a population of 250,000 or more requires also the power to create a legislative district exclusively vested in Congress.
3. NO. The Constitution empowered Congress to create or reapportion legislative districts, not the regional assemblies.
23. MIDNIGHT APPOINTMENT
IN RE: APPOINTMENT DATED MARCH 30, 1998 OF JUDGES MATEO VALENZUELA AND PLACIDO VALLARTA
A.M. No. 98-5-01-SC, November 9, 1998, 298 SCRA 408
FACTS: President Ramos appointed Judges Mateo Valenzuela and Placido Vallarta as RTC Judges on March 30, 1998 during the election ban and the said appointment was transmitted to the Office of the Chief Justice on May 14, 1998. Both Judges took their oath of office and entered upon the performance of their duties on the basis of the appointment documents coming from Malacañang.
ISSUE: Whether the president can make appointments to the judiciary during the period of an election ban in the interest of public service.
HELD: NO. While the filling of vacancies in the judiciary is undoubtedly in the public interest, there is no showing of any compelling reason to justify the making of the appointments during the period of the ban.
ARTURO M. DE CASTRO vs. JUDICIAL & BAR COUNCIL
G.R. No. 191002, March 17, 2010
- the appointment of Justice Renato Corona as the new Chief Justice of the Supreme Court during the election ban as successor to retiring Chief Justice Reynato Puno is valid under the principle of pro hac vice.
24. JURISDICTION IN ELECTION CASES
Contests involving SK Officials
INDIRA R. FERNANDEZ vs. COMMISSION ON ELECTIONS
G.R. No. 176296, June 30, 2008, 556 SCRA 765
- The 1987 Constitution vests in the COMELEC appellate jurisdiction over all contests involving elective barangay officials decided by trial courts of limited jurisdiction.
- Construed in relation to the provision in RA 7160 that includes in the enumeration of barangay officials the SK Chairman, the constitutional provision indeed sanctions the appellate review by the COMELEC of election protests involving the position of SK Chairman.
Intra Party Disputes
JOSE L. ATIENZA, JR. vs. COMMISSION ON ELECTIONS
G.R. No. 188920, February 16, 2010, 612 SCRA 761
- The COMELEC may resolve an intra-party leadership dispute in a proper case brought about it as an incident of its power to register political parties.
Validity of Voter’s Registration
JAMELA SALIC MARUHOM vs. COMMISSION ON ELECTIONS
G.R. No. 179430, July 27, 2009, 594 SCRA 108
- It must be underscored that in addition to the express jurisdiction of COMELEC over petition for cancellation of COCs on the ground of false material representations, under Section 78 of the OEC, the Constitution also extends to COMELEC all the necessary and incidental powers for it to achieve the holding of free, orderly, honest, peaceful and credible elections.
Interlocutory Order
EDDIE T. PANLILIO vs. COMMISSION ON ELECTIONS
G.R. No. 181478, July 15, 2009, 593 SCRA 139
- Only final orders of the COMELEC in Division may be raised before the COMELEC en banc.
- Section 3, Article IX-C of the 1987 Constitution mandates that only motion for reconsideration of final decision shall be decided by the COMELEC en banc.
Jurisdiction of the PET and the SET
BANAT PARTY LIST vs. COMMISSION ON ELECTIONS
G.R. No. 177508, August 7, 2009, 595 SCRA 477
- The jurisdiction of the PET and the SET can only be invoked once the winning presidential, vice presidential or senatorial candidates have been proclaimed.
- Under Section 37, Congress and the COMELEC en banc shall determine only the authenticity and due execution of the certificates of canvass. Congress and COMELEC en banc shall exercise this power before the proclamation of the winning presidential, vice presidential and senatorial candidates.
HRET Jurisdiction over Party-List Representatives
CONGRESSMAN JOVITO S. PALPARAN vs. H R E T
G.R. No. 189506, February 11, 2010, 612 SCRA 375
- Since party-list nominees are “elected members” of the House of Representatives no less than the district representatives are, the HRET has jurisdiction to hear and pass upon their qualification.
25. AUTHORITY TO ENTER INTO CONTRACTS
SEVERINO B. VERGARA vs. OMBUDSMAN
G.R. No. 174567, March 12, 2009, 580 SCRA 693
- When the local chief executive enters into contracts, the law speaks of prior authorization or authority from the Sangguniang Panlunsod and not ratification.
- It cannot be denied that the City Council issued Resolution No. 280 authorizing Mayor Lajara to purchase the subject lots. As aptly pointed out by the Ombudsman, ratification by the City Council is not a condition sine qua non for Mayor Lajara to enter into contracts.
26. CONCURRENCE OF SANGGUNIAN
MELANIE MONTUERTO vs. MAYOR ROLANDO TY
G.R. No. 177736, October 6, 2008, 567 SCRA 670
- The verbal concurrence allegedly given by the Sanggunian is not the concurrence required and envisioned under RA 7160. The Sanggunian, as a body, acts through a resolution or an ordinance.
27. PROHIBITION TO HOLD ANY OTHER OFFICE
DENNIS FUNA vs. EXECUTIVE SECRETARY
G.R. No. 184740, February 11, 2010, 612 SCRA 308
FACTS: President Gloria M. Arroyo appointed Maria Elena H. Bautista as undersecretary of DOTC. Upon the resignation of MARINA Administrator, Bautista was designated as OIC Administrator of MARINA in concurrent capacity as DOTC undersecretary.
ISSUE: Whether the designation of Bautista as OIC of MARINA and concurrently DOTC undersecretary violated the constitutional proscription against dual or multiple offices for cabinet members and their deputies and assistants.
HELD: YES. The 1987 Constitution in prohibiting dual or multiple offices, as well as incompatible offices, refers to the holding of the office and not the nature of the appointment or designation. To “hold” an office means to “possess or occupy” the same or “to be in possession and administration” which implies nothing less than the actual discharge of the function and duties of the office.
DENNIS A.B. FUNA vs. ACTING DOJ SECRETARY ALBERTO C. AGRA
G.R. No. 191644, February 19, 2013, 691 SCRA 196
FACTS: Agra was the Government Corporate Counsel when he was designated as Acting Solicitor General and Acting Secretary of Justice when Agnes Devanadera resigned in order to run for Congress in the May 2010 elections. He relinquished the position as Government Corporate Counsel and assumed the positions of Acting Secretary of Justice and Acting Solicitor General in concurrent capacity.
ISSUE: Whether the designation of Agra as Acting Secretary of Justice, concurrently with his position of Acting Solicitor General, violates the constitutional prohibition against dual or multiple offices for the members of the Cabinet and their deputies and assistants.
HELD: YES. The designation of Agra as Acting Secretary of Justice concurrently with his position of Acting Solicitor General was unconstitutional and void for being in violation of the constitutional prohibition under Section 13, Article VII of the l987 Constitution.
It was of no moment that Agra’s designation was in an acting or temporary capacity.
To hold an office means to possess or to occupy the office, or to be in possession and administration of the office, which implies nothing less than the actual discharge of the functions and duties of the office.
The language of Section 13 makes no reference to the nature of the appointment or designation. The prohibition against dual or multiple offices being held by one official must be construed as to apply to all appointments or designations, whether permanent or temporary.
28. DOCTRINE OF OPERATIVE FACTS
The doctrine of operative facts means that before a law was declared unconstitutional, its actual existence must be taken into account and whatever was done while the law was in operation should be recognized as valid.
CLAUDIO S. YAP vs. THENAMARIS SHIP’S MANAGEMENT
AND INTERMARE MARITIME AGENCIES, INC.
G.R. No. 179532, May 30, 2011, 649 SCRA 369
FACTS: Claudio was employed by Vulture Shipping as electrician for a vessel. The contract was for a duration of 12 months. On the 3rd month, he was illegally dismissed. The Court of Appeal awarded him salaries for three months, however, on appeal, the clause “for three months for every year of the unexpired term under Section 10 of RA 8042 was declared unconstitutional for being violative of the rights of OFWs to equal protection of the law.
ISSUE: Whether the declaration of unconstitutionality of Section 10 of RA 8042 applies retroactive to the present case.
HELD: NO. As a general rule, an unconstitutional act is not a law; it confers no rights; it imposes no duties; it affords no protection; it creates no office; it is inoperative as if it has not been passed at all. An exception to this is the doctrine of operative fact. The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on those who have relied on the invalid law. Thus, if it was applied to a criminal case when a declaration of unconstitutionality would put the accused in double jeopardy or would put in limbo the acts done by a municipality in reliance upon a law creating it.
MIRALLOSA vs. CARMEL DEVELOPMENT, INC.
G.R. No. 194538, November 27, 2013, 711 SCRA 30
FACTS: Carmel was the registered owner of Pangarap Village with a total land area of 156 hectares. On October 14, 1973, President Marcos issued PD 293 which invalidated the titles of Carmel and declared them open for disposition to the members of MHAI.
On the basis of PD 293, Juan, member of MHAI, occupied Lot 32 and subsequently built houses there.
On January 29, 1988, the Supreme Court declared PD 293 as unconstitutional and void ab initio in all its part in Tuason case.
Sometime in 1995, Juan executed an affidavit authorizing Mirallosa to occupy Lot 32 and built his structures on the premises.
In April 2002, Carmel made several oral & written demands on Mirallosa to vacate the premises but to no avail until Carmel filed a complaint for unlawful detainer.
Mirallosa claimed that Carmel has no cause of action against him under the doctrine of operative fact and he should not be prejudiced by Tuason case because he was not a party to the case.
ISSUE: Whether or not Mirallosa can avail of the Operative Fact Doctrine.
HELD: NO. The Operative Fact Doctrine is a rule in equity. As such, it must be applied as an exception to the general rule that an unconstitutional laws produces no effects. The doctrine is applicable when
a declaration of unconstitutionality will impose an undue burden on those who relied on the invalid law but it can never be invoked, to validate as constitutional an unconstitutional act.
Mirallosa merely anchored his right over the property to an Affidavit issued by Juan in 1995 or seven years after the Tuason case was promulgated. At the time he built the structures on the premises, he aught to have been aware of the binding effects of the Tuason case and the subsequent unconstitutionality of PD 293. These circumstances necessarily remove him from the ambit of the operation fact doctrine.
29. CALLING-OUT POWER
DATU ZALDY UY AMPATUAN vs. HON. RONALDO PUNO
G.R. No. 190259, June 7, 2011, 651 SCRA 228
FACTS: After the Maguindanao Massacre, PGMA issued Proclamation 1946 placing Maguindanao, Sultan Kudarat and City of Cotabato under a state of emergency. She directed the AFP and PNP to undertake such measures as may be allowed by the Constitution and by law to prevent and suppress all incidents of lawless violence in the named places.
ISSUE: Whether then President Arroyo invalidly exercised emergency powers when she ordered the deployment of the AFP and PNP.
HELD: NO. Such deployment is not by itself an exercise of emergency powers under Section 23 (2), Article VI of the Constitution. The President did not proclaim a national emergency, only a state of emergency in the three places mentioned. And she did not act pursuant to any law enacted by Congress that authorized her to exercise extraordinary powers. The calling out of the armed forces to prevent or suppress lawless violence in such places is a power that the Constitution directly vests in the President under Section 18, Article VII, and to suppress or prevent violence springs from the power vested in her as the Commander-in-Chief of the AFP.
30. CITIZENSHIP - NATURALIZATION AND NATURAL-
BORN CITIZEN
RENALD F. VILANDO vs. HOUSE OF
REPRESENTATIVE ELECTORAL TRIBUNAL
G.R. No. 192147 & 192149, August 23, 2011, 656 SCRA 17
FACTS: Limkalchong won as the Representative of Negros Oriental in the 2007 elections. Vilando, a losing candidate, filed a petition for quo warranto before the HRET. The petition challenged the eligibility of Limkalchong asserting that she was a Chinese citizen, having been born to a father whose naturalization had not attained finality and to a mother also acquired the Chinese citizenship of Julio Sy from the time of her marriage to the latter.
ISSUES
1. Whether the HRET has jurisdiction to rule on one’s citizenship.
2. Whether Limkalchong is a natural-born citizen.
RULINGS
(1) NO. The HRET has no authority to delve into the legality of the judgment of naturalization. To rule otherwise would operate as a collateral attack on the citizenship of Limkalchong’s father which is not
permissible. In our jurisdiction, an attack on a person’s citizenship may only be done through a direct action for its nullity.
(2) YES. It was ruled that with Limkalchong’s father having been conferred the status as a naturalized Filipino, it follows that she is a naturalized Filipino born to a Filipino father. Even on the assumption that the naturalization proceeding and the subsequent issuance of certificate of naturalization were invalid, Limkalchong can still be considered a natural-born citizen, having been born to a Filipino mother and having impliedly elected Filipino citizenship when she reached majority age.
31. RULES ON SUCCESSION OF ELECTIVE OFFICERS
BARBARA TALAGA vs. COMMISSION ON ELECTIONS
G.R. No. 196804, October 9, 2012, 683 SCRA 197
FACTS: Mayor Ramon Talaga and Vice Mayor Castillo filed their respective Certificates of Candidacy (CoCs) for the position of Mayor of Lucena City in the scheduled May 10, 2010 elections.
Four (4) days later, Castillo filed with the Comelec a petition to Cancel Certificate of Candidacy of Ramon Talaga for having already served three (3) terms as a City Mayor of Lucena.
The Comelec declared Ramon Disqualified to run for mayor of Lucena City. Three (3) days before the election, Barbara filed her own CoC for Mayor of Lucena City in substitution of Ramon.
On election day, Barbara garnered 44,099 votes as against Castillo’s 39,615 votes.
Castillo promptly filed a petition for annulment of proclamation of Barbara with the Comelec where he alleged that Barbara could not substitute Ramon because his CoC had been cancelled and denied due course, and Barbara could not be considered a candidate because the Comelec en banc had approved her substitution three (3) days after the elections, hence, the votes cast for Ramon should be considered stray.
ISSUES
(1) Was the substitution of Barbara as candidate valid in place of her husband Ramon?
(2) In case of permanent vacancy, who must succeed and assume the position of Mayor?
(3) When may a second placer be allowed to take the place of a disqualified winning candidate?
RULINGS
(1) NO. The filing of a CoC within 60 days prior to the regular election is mandatory requirement to be a candidate in a national or local election. Since Barbara filed her own CoC three (3) days before the election, there can be no valid substitution of the candidate under Section 77 of the Omnibus Election Code as she has no valid CoC to be considered a candidate.
(2) The duly elected Vice-Mayor must succeed and assume the position of Mayor due to a permanent vacancy in the office.
(3) The only time that a second placer is allowed to take the place of a disqualified winning candidate is when two requisites concur, namely: (a) the candidate who obtained the highest number of votes is disqualified, and (b) the electorate was fully aware in fact and in law of that candidate’s disqualification as to bring such awareness within the realms of notoriety but the electorate still cast the plurality of votes in favor of the ineligible candidate. Under this sole exception, the electorate may be said to have waived the validity and efficacy of their votes by notoriously misapplying their franchise or throwing away their votes. In which case the eligible candidate with the second highest number of votes may be deemed elected.
RENATO M. FEDERICO vs. COMMISSION ON ELECTIONS
G.R. No. 199612, January 22, 2013, 689 SCRA 134
FACTS: Edna Sanchez (Edna) and Maligaya were candidates for the position of Mayor of Sto. Tomas, Batangas in the May 2010 elections.
On April 27, 2010, Armando Sanchez, husband of Edna and gubernatorial candidate for the province of Batangas, died. Two days later, Edna withdrew her Certificate of Candidacy (CoC) for the position of mayor and filed a new CoC for the position of Governor as substitute candidate for her deceased husband.
On May 5, 2010, Renato filed his CoC as substitute candidate for Mayor, in view of the withdrawal of Edna.
On May 10, 2010, the day of elections, the name “SANCHEZ, Edna P.” was retained in the list of candidates for Mayor of Sto. Tomas and garnered the highest number of votes - 28,389 against Maligaya’s 22, 577 votes. A second print-out of the COCVP was issued by the MBOC crediting the votes garnered by Edna to Renato. Subsequently, Maligaya filed his Petition to Annul Proclamation of Renato.
ISSUES
(1) Did Renato validly substitute Edna who withdrew her candidacy for the mayoralty position?
(2) Should Maligaya be proclaimed as the duly elected mayor?
RULINGS
(1) NO. When Edna withdrew her candidacy for Mayor on April 29, 2010, the deadline for substitution in case of withdrawal had already lapsed, no person could substitute her as mayoralty candidate. Her substitution as the widow of her late husband in the gubernatorial race could not justify a belated substitution in the mayoralty race.
(2) Therefore, there being no valid substitution, the candidate with the highest number of votes should be proclaimed as the duly elected mayor. Being the only candidate, Maligaya received the highest number of votes. Accordingly, he should be proclaimed as the duly elected mayor of Sto. Tomas, Batangas.
CASAN MAQUILING vs. COMELEC & ROMMEL ARNADO
G.R. No. 195649, April 16, 2013, 696 SCRA 420
FACTS: Arnado is a natural born Filipino citizen. As a consequence of his subsequent naturalization as US citizen, he lost his Filipino citizenship. He applied for repartriation under RA 9225 and took the Oath of Allegiance to the Republic of the Philippines on July 10, 2008 in San Francisco, California, USA.
On April 3, 2009, Arnado again took his Oath of Allegiance to the Republic and executed an Affidavit of Renunciation of his foreign citizenship. He ran and won the mayoralty of Kauswagan, Lanao del Norte, in connection with the May 10, 2010 elections. Casan Maquiling, placed second having garnered highest number of votes, filed a petition to disqualify Arnado or cancel his COC on the ground that Arnado’s nationality is USA - American as per certification of the Bureau of Immigration and Deportation (BID). The Comelec En Banc granted the petition for disqualification of Arnado.
ISSUE: Whether or not the second placer eligible candidate be declared as the winner.
HELD: YES. The votes cast in favor of an ineligible candidate do not constitute the sole and total expression of sovereign voice. The votes cast in favor of eligible and legitimate candidate form part of that voice, then the eligible candidate obtaining the next higher number of votes may be deemed elected.
Knowledge by the electorate of a candidate’s disqualification is not necessary before a qualified candidate who placed second to a disqualified one can be proclaimed as the winner. The second-placer in
the vote count is actually the first placer among the qualified candidates. That the disqualified candidate has already been proclaimed and has assumed office is of no moment. The subsequent disqualification based on a substantial ground that existed prior to the filing of the Certificate of Candidacy void not only the COC but also the proclamation.
32. THE POWER OF REMOVAL OF THE PRESIDENT
EMILIO A. GONZALES III vs. OFFICE OF THE PRESIDENT
G.R. No. 196231, September 4, 2012, 679 SCRA 614
FACTS: For finding Deputy Ombudsman Emilio Gonzales guilty of Gross Neglect of Duty and Grave Misconduct constituting betrayal of public trust, the Office of the President (OP) dismissed him from service.
Gonzales claims that the Office of the President (OP) has no jurisdiction over him considering that the Office of the Ombudsman to which he belongs is clothed with constitutional independence thus necessarily bear the constitutional attributes of said office.
ISSUE: Does the Office of the President have a constitutional or valid statutory authority to subject Deputy Ombudsman to an administrative investigation and to thereafter order his removal from office?
HELD: YES. Under the doctrine of implication, the power to appoint carries with it the power to remove. As a general rule, therefore, all officers appointed by the President are also removable by him. The exception to this is when the law expressly provides otherwise - that is, when the power to remove is expressly vested in an office or authority other than the appointing power.
In giving the President the power to remove a Deputy Ombudsman simply laid down in express terms an authority that is implied from the President’s constitutional authority to appoint the aforesaid official in the Office of the Ombudsman.
It is true that the authority of the Office of the Ombudsman to conduct administrative investigations proceeds from its constitutional mandate to be an effective protector of the people against inept and corrupt government officers and employees. While the Ombudsman’s authority to discipline administratively is extensive and covers all government officials, whether appointive or elective with the exception only of those officials removable only by impeachment, the members of Congress and the Judiciary, such authority is by no means exclusive. Gonzales cannot insist that he should be solely and directly subject to the disciplinary authority of the Ombudsman.
While the removal of the Ombudsman himself is also expressly provided for in the Constitution which is by impeachment, there is, however, no constitutional provision similarly dealing with the removal from the office of a Deputy Ombudsman for that matter.
33. TERMINATION OF OFFICIAL RELATION - INACTION OF THE COMMISSION ON APPOINTMENTS
EVALYN I. FETALINO vs. COMMISSION ON ELECTIONS
G.R. No. 191890, December 4, 2012, 686 SCRA 813
FACTS: On February 10, 1998, President Ramos extended an interim appointment to Fetalino and Calderon as Comelec Commissioners. Congress, however, adjourned in May 1998 before the CA could act on their appointments. The constitutional ban on midnight appointments later took effect and Fetalino and Calderon were no longer re-appointed as Comelec Commissioners. Thus, the two merely served as Comelec Commissioners for more than four months.
Subsequently, Fetalino and Calderon applied for their retirement benefits and monthly pension with the Comelec pursuant to RA 1568. However, the Comelec disapproved their claim for a lump sum benefit stating that they whose ad interim appointments were not acted upon by the
Commission on Appointments (CA) and who were subsequently, not reappointed, are not entitled to the five-year lump sum gratuity because they did not complete in full the seven-year term of office.
ISSUE: Can ad interim appointments lapsed by the inaction of the CA be considered as a having served a “term of office” to entitle such appointees to benefits?
HELD: NO. While an ad interim appointment is characterized as a permanent appointment that takes effect immediately and can no longer be withdrawn by the President once the appointee has qualified into office. To hold otherwise would mean that the President by his unilateral action could start and complete the running of a term of office in
the Comelec without the consent of the Commission on Appointments.
Therefore, based on these considerations, Fetalino and Calderon can never be considered to have retired from the service not only because they did not complete the full term, but more importantly because they did not serve a “term of office” as required by Section 1 of RA 1568, as amended.
34. WARRANTLESS ARREST
PEOPLE vs. NAZARENO VILLAREAL
G.R. No. 201363, March 18, 2013, 693 SCRA 549
FACTS: PO3 Renato de Leon was driving his motorcycle on his way home along 5th Avenue when he saw Nazareno from a distance of about 8 to 10 meters, holding and scrutinizing in his hand a plastic sachet of shabu. Thus, PO3 de Leon alighted from his motorcycle and approached Nazareno whom he recognized as someone he had previously arrested from illegal drug possession. Upon seeing PO3 de Leon, Nazareno tried to escape but was quickly apprehended with the help of a tricycle driver. PO3 de Leon was able board Nazareno on to his motorcycle and confiscate the plastic sachet of shabu in his possession.
ISSUE: Whether or not the warrantless arrest was valid.
HELD. NO. Nazareno’s acts of walking along the street and holding something in his hands even if they appeared to be dubious, coupled with his previous criminal charge for the same offense, are not by themselves sufficient to incite suspicion of criminal activity or to create probable cause enough to justify a warrantless arrest under Section 5 of Rule 113.
“Probable Cause” has been understood to mean a reasonable ground of suspicion supported by circumstances sufficiently strong in themselves to warrant a cautious man’s belief that the person accused is guilty of the offense with which he is charged.
UNCONSUMMATED BUY-BUST OPERATION PRECLUDES WARRANTLESS SEARCH AND SEIZURE
PEOPLE OF THE PHILIPPINES vs. OLIVER RENATO EDAÑO
G.R. No. 188133, July 7, 2014, 729 SCRA 255
FACTS: On the evening of August 6, 2002, member of Drug Enforcement Group together with a female informant went to the parking area of McDonalds to conduct an entrapment operation.
Edaño arrived at around 7:00 p.m. on board a space wagon. The informant approached Edaño and talked to him inside the vehicle.
Afterwards, the informant waived at PO3 Corbe who then approached Edaño. The latter went out of the vehicle and ran away.
PO3 Corbe was able to grab Edaño, causing the latter to fall on the ground. PO3 Corbe recovered a “knot-tied” transparent plastic bag from Edaño’s right hand.
ISSUES: Whether the search and seizure that followed warrantless arrest is valid.
HELD: NO, the warrantless arrest of Edaño was not valid. Consequently, the search and seizure that followed the warrantless arrest was likewise not valid.
In this case, there was no overt act indicative of a felonious enterprise that could be properly attributed to Edaño to rouse suspicion in the mind of the police that he had just committed, was actually committing or was attempting to commit a crime in their presence.
Informant and Edaño were just talking to each other, there was no exchange of money and drugs as the police approached the car.
Edaño is entitled to acquittal since the shabu purportedly seized from him is inadmissible in evidence for being the proverbial fruit of the poisonous tree.
35. SEARCHES AND SEIZURES - “STOP AND FRISK”
PEOPLE OF THE PHILIPPINES vs. VICTOR COGAED
G.R. No. 200334, July 30, 2014, 731 SCRA 427
FACTS: An informant thru a text message told the police that a certain Marvin would be transporting marijuana from Barangay Lun-Oy.
The police organized checkpoints in order “to intercept the suspect.” A passenger jeepney from Barangay Lun-Oy arrived at the checkpoint. The jeepney driver disembarked and signaled to SPO1 Taracatas indicating a male passenger was carrying marijuana.
SPO1 Taracatas approached the male passenger who was identified as Victor who was carrying a blue bag. SPO1 Taracatas asked Victor about the contents of his bag and he said he did not know since he was transporting the bag as a favor to his barrio mate named Marvin.
After this exchange, Victor opened the blue bag revealing three bricks of marijuana. SPO1 arrested Victor and was brought to the police station.
The RTC and the CA found Victor guilty beyond reasonable doubt for violation of RA 9165 when Victor waived his right against warrantless searches “without prompting from SPO1 Taracatac, he voluntarily opened his bag.
ISSUE: Whether the search and seizure was illegal.
HELD: YES. “Stop and frisk” searches should be balanced with the need to protect the privacy of citizens in accordance with Article III, Section 2 of the Constitution.
The balance lies in the concept of “suspiciousness” present in the situation where the police officer finds himself in. Experienced police officers have personal experience dealing with criminal and criminal behavior.
Thus, a basic criterion would be that the police officer, with his personal knowledge, must observe the facts leading to the suspicion of an illicit act.
In the case at bar, Victor was simply a passenger carrying a bag and traveling aboard a jeepney. There was nothing suspicious, moreover, criminal, about riding jeepney or carrying a bag. Hence, the search and seizure against the accused Victor is illegal because of the absence of the requisite of “suspiciousness.”
The assessment of suspicion was not made by the police officer but by the jeepney driver who signaled to the police that Victor was “suspicious.”
The known jurisprudential instances of reasonable warrantless searches and seizures are:
1. warrantless search incident to a lawful arrest.
2. seizure of evidence in “plain view”
3. search of moving vehicle
4. consented warrantless search
5. customs search
6. stop and frisk, and
7. exigent and emergency circumstances.
Searches incidental to a lawful arrest require that a crime be committed in flagrante delicto, and the search conducted within the vicinity and within reach by the person arrested is done to ensure that there are no weapons, as well as to preserve the evidence.
“Stop and frisk” are conducted to prevent the occurrence of a crime. It’s object is either to determine the identity of a suspicious individual or to maintain the status quo momentarily while the police officer to obtain more information.
There can be no valid waiver of Victor’s constitutional rights even if we assume that he did not object when the police asked him to open his bag.
His silence should not be lightly taken as consent to such search as it is a mere passive conformity given under intimidating or coercive circumstances created by the presence of the police officer and thus no consent at all within the purview of the constitutional guarantee.
37. RIGHT AGAINST SELF - INCRIMINATION
JAIME D. DELA CRUZ vs. PEOPLE OF THE PHILIPPINES
G.R. No. 200748, July 23, 2014, 730 SCRA 655
FACTS: On January 31, 2006, the NBI Regional office received a complaint from Corazon and Charito that Ariel, the live-in partner of Corazon and son of Charito, was detained at the police station for selling drugs. In the said police station, they met PO1 James who demanded P40,000 in exchange for the release of Ariel.
A team was immediately formed to implement an entrapment operation which took place inside Jolibee where the nbi operatives were able to nab PO1 James by using a pre-marked 500 – peso bill dusted with fluorescent powder.
PO1 James was brought to the NBI forensic laboratory and was required to submit his urine for drug testing and it later yielded a positive result for presence of dangerous drugs.
Petitioner claimed that he refused the urine sample collection and requested to be allowed to call his lawyer prior to the taking of his urine sample but to no avail.
The RTC found the accused guilty beyond reasonable doubt of violating Sec. 15, Art. II of RA 9165.
The CA affirmed the ruling of the RTC.
ISSUE: Whether the drug test conducted upon the accused is legal.
HELD: NO. The drug test is illegal. It violates the constitutional right of an accused against self-incrimination which proscribes the use of physical or moral compulsion to extort communication from the accused and not the inclusion of his body in evidence when it may be material.
First, the drug test in Sec. 15, Art. II of RA 9165 does not cover person apprehended or arrested for any unlawful act, but only for unlawful acts listed under Art. II of RA 9165.
Second, the drug test is not covered by allowable non-testimonial compulsion. The RTC and CA failed to see how a urine sample could be material to the charge of extortion.
Third and most importantly, the drug test was a violation of PO1 James’ right to privacy and right against self-incrimination. He refused and also asked for a lawyer prior to the urine test. However, all of his efforts proved futile because he was still compelled to submit his urine for drug testing.
38. STATE IMMUNITY FROM SUIT
HEIRS OF DIOSDADO MENDOZA vs. DPWH
G.R. No. 203834, July 9, 2014, 729 SCRA 299
FACTS: Mendoza, who is doing business under the name and style Superior Builders, won in the biddings for the construction of roads in Benguet.
Due to delay in the construction, Superior Builders incurred negative spillage of 31.852% prompting the DPWH to order the forfeiture of the contract and rebidding and awarding the project to another contractor.
Mendoza filed with the RTC an action for specific performance and enjoining the DPWH from rebidding and awarding the project to another contractor.
DPWH claimed its contractual obligation was made in the exercise of its governmental functions.
ISSUE: Whether the DPWH is immune from suit.
HELD: YES. Pursuant to Sec. 3, Art. XVI of the Constitution: The State may not be sued without consent.
The DPWH is an unincorporated government agency without any separate juridical personality of its own and it enjoys immunity from suit.
Hence, Mendoza cannot claim that there was an implied waiver by the DPWH simply entering into a contract. Thus, the DPWH enjoys immunity from suit and may not be sued without its consent.
HERMANO OIL MANUFACTURING vs. TOLL REGULATORY BOARD
G.R. No. 167290, November 26, 2014, 742 SCRA 395
FACTS: Hermano owned a parcel of land located at the right side of the Sta. Rita Exit of the NLEX and the said parcel of land was bounded by the access fence along NLEX.
Hermano requested the TRB for the grant of an easement of right of way considering that it had been totally deprived of the enjoyment and possession property by the access fence that barred its entry into and exit from NLEX.
The TRB denied the Hermano’s request because it would have an adverse effect on the schedule rehabilitation and improvement of NLEX interchange.
Hermano sued the TRB and its officers for specific performance for the grant of right of way and damages. It impleaded PNCC and DPWH as indispensable parties.
TRB filed a motion to dismiss as the action could be considered as a suit against the state without its consent.
ISSUE: Whether TRB and DPWH can invoke the doctrine of sovereign immunity.
HELD: YES. The TRB and the DPWH perform purely an essentially government or public function. As such, they are invested with the inherent power of sovereignty.
Being unincorporated agencies or entities of the national government, they not be sued, otherwise the doctrine of sovereign immunity is violated.
It appears that Hermano’s complaint principally sought to restrain TRB & DPWH from implementing an access fence on its property and to direct them to grant a right of way to NLEX.
Clearly, the reliefs being sought by Hermano were beyond the jurisdiction of the RTC because no court except the Supreme Court could issue an injunction against an infrastructure project of the government.
This is because PD 1818 issued on January 16, 1981 prohibited judges from issuing restraining order against government infrastructure projects.
39. EXECUTIVE CLEMENCY
ATTY. ALICIA R. VIDAL vs. COMELEC & JOSEPH ESTRADA
G.R. No. 206666, January 21, 2015, 747 SCRA 210
FACTS: On September 22, 2007, the Sandiganbayan convicted former President Estrada for the crime of plunder and sentenced him to suffer Reclusion Perpetua and an accessory penalty of perpetual absolute disqualification.
On October 25, 2007, former President Gloria Macapagal Arroyo extended executive clemency by way of pardon to former President Estrada.
In the text of the said pardon especially in the whereas clause states that Joseph Ejercito Estrada has publicly committed to no longer seek any elective position or office, however, Joseph Estrada was granted executive clemency of pardon and restored his civil and political rights.
On October 2, 2012, former President Estrada filed a Certificate of Candidacy for Mayor of Manila.
ISSUES: (1) Whether Erap Estrada is qualified to vote and be voted.
(2) What are the instances in which the President may not extend pardon?
HELD: (1) YES. Former President Estrada was granted an absolute pardon that fully restored all his civil and political rights, which naturally includes the right to seek public elective office.
The wording of the pardon extended to former President Estrada is complete, unambiguous and unqualified.
A close scrutiny of the text of the pardon extended to former President Estrada shows that both the principal penalty of reclusion perpetua and his accessory penalties are included in the pardon.
(2) The instances in which the President may not extend pardon are the following:
a) impeachment cases.
b) cases that have yet resulted in a final conviction.
c) cases involving violation of election laws, rules and regulation in which there was no favorable recommendation coming from the Comelec.
40. MARITIME REGIMES UNDER UNCLOS
1) Internal water is 12 nautical miles from the shore to the baseline.
2) Territorial sea is 12 nautical miles from the baseline.
3) Contiguous zone is a zone contiguous to the territorial sea. The maximum limit is 24 nautical miles from the baseline of the territorial sea.
4. The Exclusive Economic Zone extends no farther than 200 nautical miles from the baselines of the territorial sea.
5. The Continental Shelf gives the coastal state rights to explore and exploit the resources of the shelf by operation of law.
41. NATIONAL PATRIMONY
PROHIBITION TO FOREIGNER TO ACQUIRE LAND
TAINA MANIGQUE – STONE vs. CATTLEYA LAND, INC.
G.R. No. 195975, September 5, 2016, 802 SCRA 173
FACTS: On November 6, 1992, Cattleya entered into a Contract of Conditional Sale with the Tecson spouses covering nine parcels of land, including the subject property.
However, while following up the registration of the August 30, 1993 Deed of Absolute Sale at the Office of the Register of Deeds, Cattleya learned that the owner’s copy of the title to the land in question was with Taina.
The subject land had apparently been sold to Taina’s common-law husband, Michael Stone, by Spouses Tecson in 1985, but the title was placed in Taina’s name as Stone was a foreigner.
Cattleya instituted a civil action for quieting of title and/or recovery of ownership and cancellation of title.
Taina posits that while Michael’s legal capacity to own or acquire real property in the Philippines was not entirely unassailable, there was nevertheless no actual violation of the constitutional prohibition, because in this case no real transfer of ownership had been effected in favor of Michael from Col. Tecson. Taina claimed that she was not exactly dummy Michael’s dummy at all but his active partner.
Cattleya counters that the sale between Col. Tecson and Michael was absolutely null and void, as this was a flagrant violation of the constitutional provision barring or prohibiting aliens or foreigners from acquiring or purchasing land in the Philippines.
ISSUE
Whether the sale of land by Spouses Tecson to Michael Stone, a foreigner although ostensibly made in Taina’s name, was valid, despite the constitutional prohibition against the sale of lands in the Philippines to foreigners.
RULING
NO, the sale is null and void by reason of the constitutional prohibition against the sale of lands in the Philippines to foreigners or aliens.
Section 7, Article XII of the 1987 Constitution states that “Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations or associations qualified to acquire or hold lands of the public domain.”
Given the plain and explicit language of this constitutional mandate, it has been held that “aliens, whether individual or corporations, are disqualified from acquiring lands of public domain. Hence, they are also disqualified from acquiring private lands. The primary purpose of the constitutional provision is the conservation of the national patrimony.
In the case at bench, Taina admitted that it was Michael who paid with his own funds the subject lot, hence, Michael Stone was its real purchaser or buyer. More than that, it bears stressing that if the deed of sale proclaimed that she was the purchaser or buyer of the subject property and this subject property was placed under her name, it was simply because she and Michael wanted to skirt or circumvent the constitutional prohibition barring or outlawing foreigners or aliens from acquiring or purchasing lands in the Philippines.
42 PRESIDENT DUTERTE’S DECISION OF MARCOS REMAINS TO BE INTERRED AT LIBINGAN NG MGA BAYANI IS A POLITICAL QUESTION
SATURNINO C. OCAMPO et. al. vs. Rear Admiral
ERNESTO C. ENRIQUEZ, et. al.
G.R. No. 225973, November 8, 2016, 807 SCRA 223
FACTS: During the campaign period for the 2016 Presidential Election, then candidate Rodrigo R. Duterte publicly announced that he would allow the burial of former President Ferdinand E. Marcos at the Libingan Ng Mga Bayani (LNMB).
Duterte won the election and thereafter formally assumed his office. The Secretary of the National Defense issued a memorandum to the AFP regarding the interment of Marcos to the LNMB.
Petitions were filed alleging grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the President for reasons that Marcos is not qualified to be interred at the LNMB on the ground that he was dishonorably discharged when he was ousted from power by the 1986 February Revolution. They likewise alleged that he committed offenses involving moral turpitude for his gross human rights violations, massive graft and corruption and dubious military records. By going into exile, he deliberately evaded liability for his actions.
It was further contended that in 1992, the government and the Marcos family entered into an agreement that the body of President Marcos would be interred in Batac, Ilocos Norte. Hence, the contention that he should not be buried at the LMNB.
ISSUES
1) Whether President Duterte’s determination to have the remains of Marcos interred at the LNMB poses a justiciable controversy on the ground of grave abuse of discretion.
2) Whether historical facts, laws enacted to recover ill-gotten wealth from the Marcos and their cronies, and the pronouncements of the Court on the Marcos regime have nullified his entitlement as a soldier and former president to the interment at the LNMB.
3) Whether the Marcos family is deemed to have waived the burial of the remains of former President Marcos at the LNMB after they entered into an agreement with the government as for the conditions and procedures by which his remains shall be brought back and interred in the Philippines.
RULINGS
1) NO, President Duterte’s decision to have the remains of Marcos interred at the LNMB involves a political question.
In the exercise of his powers under the Constitution and the Administrative Code to allow the interment of Marcos at the LNMB, which is a land of the public domain devoted for national military cemetery and military shine purposes.
President Duterte decided a question of policy based on the wisdom that it shall promote national healing and forgiveness. Presumption of regularity in the performance of his official duty prevails over the petitioners’ highly disputed factual allegation that, in the guise of exercise,
a presidential prerogative, the Chief Executive is actually motivated by utang na loob (debt of gratitude) and bayad utang (payback) to the Marcoses.
2) NO. For his alleged human right abuses and corrupt practices, the Court may disregard Marcos as a President and a Commander-in-chief, but the Court cannot deny him the right to be acknowledged based on the other positions he held or the awards he received. Despite all the ostensibly persuasive arguments, the fact remains that Marcos was not convicted by final judgment of any offense involving moral turpitude. No less than the 1987 Constitution mandates that the person shall not be held to answer for a criminal offense without due process.
At present, there is no law or executive issuance specifically excluding the land in which the LNMG is located from the use it was originally interred by the past presidents. In the absence of any executive issuances or law to the contrary, the AFP regulation remains to be the sole
authority in determining who are entitled and disqualified to be interred at the LNMB. Interestingly, even they were empowered to do so, former Presidents Corazon Aquino and Benigno Simeon Aquino III, who were themselves aggrieved at the Martial Law, did not revise the rules by expressly prohibiting the burial of Marcos at the LNMB.
3) NO, it was not waived.
The presidential power of control over the Executive Branch of Government is a self-executing provisions of the Constitution and does not require statutory implementation nor may its exercise be limited, much less be withdrawn by the legislature. This is why President Duterte is not bound by the alleged 1992 Agreement between former President Ramos and the Marcos family to have the remains of Marcos interred in Batac, Ilocos Norte.
43 QUO WARRANTO CASE AGAINST CJ SERENO
REPUBLIC vs. MARIA LOURDES SERENO
G.R. No. 237428, May 11, 2018
FACTS: The Republic of the Philippines, represented by the Solicitor General Calida, filed a Petition for the issuance of the extraordinary writ of Quo Warranto to declare void respondent Sereno’s appointment as Chief Justice of the Supreme Court and to oust and altogether exclude her therefrom for her failure to submit SALNs as mandated by the Constitution and required by law.
ISSUES
1) Whether the Supreme Court can assume jurisdiction and give due course to the instant petition for quo warranto against respondent Sereno who is an impeachable officer and against whom an impeachment complaint has already filed with the House of Representatives.
2) Whether respondent Sereno is an impeachable officer and such that quo warranto petition cannot prosper.
3) Whether there is a forum shopping.
4) Whether impeachment is not an exclusive remedy by which an impeachable official may be removed from office.
5) Whether the petition is dismissible outright on the ground of prescription.
6) Whether respondent’s failure to file her SALNs as mandated by the Constitution and required by law voids the nomination and appointment of respondent Sereno as Chief Justice.
7) Whether respondent Sereno is a de jure or de facto officer.
RULINGS
1) YES, SC has original jurisdiction over an action for quo warranto.
Section 5, Article VIII of the Constitution states that the SC has original jurisdiction over petitions for quo warranto. This jurisdiction is concurrent with the Court of Appeals (CA) and the Regional Trial Court (RTC).
Section 7, Rule 66 of the Rules of Court provides that the venue for an action for quo warranto is in the RTC of Manila, CA, or SC when commenced by the Solicitor General.
While the hierarchy of courts serves as a general determinant of the appropriate forum for petitions for the extraordinary writs, a direct invocation of the SC’s original jurisdiction in this case is justified considering that the qualification of a member of the Court is in question, and the issue is of public concern.
2) NO. The Court held that the origin, nature and purpose of impeachment and quo warranto are materially different.
While both impeachment and quo warranto may result in the ouster of the public official, the two proceedings materially differ.
At its most basic, impeachment proceedings are political in nature while an action for quo warranto is judicial or a proceeding traditionally lodged in the courts.
3) There is NO forum shopping because quo warranto and impeachment can proceed independently and simultaneously as they differ as to (1) jurisdiction (2) grounds (3) applicable rules pertaining to institution, filing and dismissal, and (4) limitations.
The causes of action in the two proceedings are unequivocably different. In quo warranto, the cause of action lies on the usurping, intruding, or unlawfully holding or exercising a public office, while in impeachment, it is the commission of an impeachable offense.
Likewise, the reliefs sought in the two proceedings are different. Respondent in a quo warranto proceeding shall be ordered to cease holding a public office, which he/she is ineligible to hold. On the other hand, in impeachment, a conviction shall result in the removal of the respondent from the public office that he/she is legally holding.
4) YES. Impeachment is not an exclusive remedy by which an invalidly appointee or invariably elected impeachable official may be removed from office.
Even the Presidential Electoral Tribunal (PET) rules expressly provide for the remedy of either an election protest or a petition for quo warranto to question the eligibility of the President and the Vice President, both of whom are impeachable officers.
In fact, this would not be the first time the Court shall take cognizance of a quo warranto petition on impeachable officer. In the case of Estrada vs. Macapagal Arroyo where the SC took cognizance of quo warranto petition against former President Macapagal Arroyo whether the former President Estrada’s act of resignation ended his official status as President.
5) NO. Prescription does not lie against the State.
The one-year limitation is not applicable when the Petition is not mere private individual pursuing a private interest, but the government itself seeking a relief for a public wrong and suing for public interest.
In the three instances enumerated by Rules of Court, the Solicitor General is mandated under the Rules to commence the necessary quo warranto petition, as seen in the use of the word “must”
As a general principle it may be stated that ordinary statutes of limitation, civil or penal, have no application to quo warranto proceeding brought to enforce a public right. In effect, when the government is the real party and is proceeding mainly to assert its right, there can be no defense on the grounds of laches or prescription.
6) YES. Compliance with the Constitutional and statutory requirement of filing of SALN intimately relates to a person’s integrity. Contrary to respondent Sereno’s postulation that the filing of SALN bears no relation to the requirement of integrity, the filing of SALN itself is a Constitutional and statutory requirement.
7) DE FACTO OFFICER. The effect of a finding that person appointed to an office is ineligible therefore is that his presumably valid appointment will give him color of title that confers to him the status of a de facto officer.
For lack of a Constitutional qualification, Respondent is ineligible to hold the position of Chief Justice and merely holding a colorable right or title thereto. As such, respondent Sereno has never attained the status of an impeachable official and her removal from office other than by impeachment, is justified. The remedy, therefore, of a quo warranto at the instance of the State is proper to oust respondent from the appointive position of Chief Justice.
“GODSPEED”
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Posted by: admin - 05-31-2019, 01:59 PM - Forum: Labor Laws
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2018 GOLDEN BEACON LABOR LAW
By: Dean MANUEL R. BUSTAMANTE
1. SEXUAL HARASSMENT LAW (RA 7877)
To commit sexual harassment, the following elements must be present:
1). the employer, employee, manager, supervisor, agent of the employer, teacher, instructor, professor, coach trainer, or any other persons has authority, influence or moral ascendancy over another;
2). the authority, influence or moral ascendancy exists in a working environment:
3). he should have demanded, requested or otherwise required a sexual favor from his employee.
Q: Can greeting by kissing on the cheek, in a beso-beso fashion, be considered as sexual harassment?
A: A mere casual buss on the cheek is not a sexual harassment conduct or favor and does not fall within the purview of the sexual harassment under the Anti-Sexual Harassment Act, otherwise known as RA 7877. (Atty. Susan Aquino vs. Hon. Ernesto Acosta, A.M. No. CTA-01-1, April 2, 2002).
2. EMPLOYER - EMPLOYEE RELATIONSHIP
Four-fold Test
The control test is the most crucial indication of the existence of an employer-employee relationship (The Manila Hotel Corp. vs. NLRC, 343 SCRA 1, 2000). In determining whether a given set of circumstances constitute or exhibit an employer-employee relationship, the accepted rule is that the elements or circumstances relating to the following matters shall be examined and considered:
a. the selection and engagement of the employees
b. the payment of wage
c. the power of dismissal; and
d. the power of control the employees’ conduct
and determinative indicator of the presence or absence of an employer-employee relationship. (Great Pacific Life Assurance Corp. vs. NLRC, 187 SCRA 694, 1990).
The relationship between jeepney owners/operators on one hand and jeepney drivers on the other under the boundary system is that of employer-employee and not of lessor-lessee. (Jardin vs. NLRC, 326 SCRA 299, 2000). By analogy, the doctrine also applies to the relationship between bus owner/operator and bus conductor, auto-calesa owner/operator and driver, taxi owners/operators and taxi drivers.
There is no employer-employee relationship between a resident physician and the training hospital (UERMMC Resident Doctors Union vs. Undersecretary of Labor, G.R. No. 125425-26, November 24, 1993).
Cases where employer-employee relationship exists (Control Test used):
a. Jeepney drivers on boundary system (NLM vs. Dinglasan, 98 Phil. 649)
b. Drivers or helpers of salesmen are employees of the Company (Alhambra Industries vs. CIR, 355 SCRA 553, 1999)
c. Handicraft workers on “pakyaw” system (Dy Keh Beng vs. International Labor, 90 SCRA 161, 1979)
d, Tailors, pressers and stitchers in COD tailoring department (Rosario Bros. vs. Ople, 131 SCRA 72, 1984)
Cases where there is no employer-employee relationship (but one of independent contractor)
a. Insurance company vis-à-vis commission agents (Insular Life vs. NLRC, 179 SCRA 459, 1989)
b. Company vs. collecting agents on commission basis (Singer Sewing Machine vs. Drilon, 193 SCRA 270, 1991).
c. Softdrinks company vs. independent contractors selling softdrinks (Mafinco vs. Ople, 70 SCRA 139, 1976)
d. Shoe shine boys (Besa vs. Trajano, 146 SCRA 501, 1986)
DIFFERENCE BETWEEN AN EMPLOYEE AND INDEPENDENT CONTRACTOR
Of the four elements of the employer-employee relationship, the “control test” is the most important. Compared to an employee, an independent contractor is one who carries on a distinct and independent business and undertakes to perform the job, work or service on its own account and under its own responsibility according to its own manner and method, free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof. Hence, while an independent contractor enjoys independence and freedom from the control and supervision of his principal, an employee is subject to the employer’s power to control the means and methods by which the employee’s work is to be performed and accomplished.
ALEXANDER LOPEZ vs. MWSS
G.R. No. 154472, June 30, 2005
The control test merely calls for the existence of the right to control, and not the exercise thereof. It is not essential for the employer to actually supervise the performance of duties of the employee, it is not enough that the former has a right to wield the power. While petitioners were contract-collectors and were even subject to disciplinary measures. Contrary to MWSS’ assertion that petitioners were free to adopt their own method/strategy in the matter of collection, the Agreement clearly provided that the procedure and/or manner of the collection of bills to be followed shall be in accordance with the provisions of the Manual of Procedures.
ABIDING WITH EMPLOYER’S STANDARD
ALLAN BAZAR vs. CARLOS A. RUIZOL
G.R. No. 198782, October 19, 2016, 806 SCRA 496
FACTS: Respondent Carlos Ruizol was a mechanic at Norkis Distributors, Inc. (NDI) and was assigned at the Surigao City Branch.
He filed a complaint for illegal dismissal against petitioner Allan Bazar. He claimed that Bazar came from Tandag branch before he was assigned as a new manager in the Surigao City branch and that he was dismissed by Bazar because the latter wanted to appoint his protégé as a mechanic.
Bazar countered that Ruizol is not an employee but a franchise mechanic of NDI pursuant to a retainership agreement. He averred that Ruizol, being the owner of a motor repair shop, performed repair warranty service, back repair of Yamaha units, and ordinary repair of his own shop and that NDI did not exercise control over respondent Ruizol because he is free to use his own means and methods by which his work is to be accomplished.
Respondent Ruizol asserted that he had to abide by the standard set by NDI in conducting repair work on Yamaha motorbikes done in NDI’s service shop.
ISSUE
Whether abiding by the employer’s standard justify the control test.
RULING
YES, it justifies the control test.
The four-fold test used in determining the existence of employer-employee relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee with respect to the means and methods by which the work is to be accomplished.
The control test is the most crucial and determinates indicator of the presence or absence of an employer-employee relationship. Under the control test, an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end achieved, but also the manner and means to be used in reaching the end.
Petitioner Bazar asserts that NDI did not exercise the power of control test over respondent Ruizol because he is free to use his own means and method by which his work is to be accomplished.
The records show the contrary. It was shown that respondent Ruizol had to abide by the standards set by NDI in conducting repair work on Yamaha motorbikes done in NDI’s service shop. As a matter of fact, on allegations that respondent failed to live up to the demands of the work, he was sent several memoranda by NDI.
PAKYAW WORKERS ARE REGULAR EMPLOYEES
A. NATE CASKET MAKER et. al. vs. ELIAS V. ARANGO et. al.
G.R. No. 192282, October 5, 2016, 805 SCRA 169
FACTS: Petitioners Spouses Nate are the owners/proprietors of A. Nate Casket Maker. They employed respondents as carpenters, mascilladors and painters in their casket making business from 1998 until their alleged termination in March 2007.
Respondents claimed that they worked from Monday to Saturday, from 7:00 a.m. to 10:00 p.m. with no overtime pay and any monetary benefits.
Sometimes on March 15, 2007, petitioners proposed a “Contract of Employment” but the respondents were adamant and eventually refused to sign said contract as it is unfavorable to them. Later, petitioners told respondents to go home because their employment has been terminated.
Petitioners claimed that respondents are pakyaw workers who are paid per job order. They are “stay-in” workers with free board and lodging.
ISSUE
Whether pakyaw workers are considered regular employees even when their mode of compensation is on a per-piece basis.
RULING
YES, pakyaw workers are considered regular employees for as long as their employers exercise power of control over them.
There is no dispute that the tasks performed by respondents as carpenters, painters and mascilladors were necessary and desirable in the usual business of the petitioners who are engaged in the manufacture and selling of caskets.
The power of control by petitioners over respondents is clearly present in this case. Respondents follow the steps in making a casket, as instructed by the petitioners, like carpentry, mascilla, rubbing and painting. They had their own notebooks where they listed the work completed with their signatures and the date completed. The same could be checked by petitioners as basis for the compensation for the day.
It should be remembered that the control test merely calls for the existence of the right to control, and not necessarily the exercise thereof. It is not essential that the employers actually supervises the performance of duties by the employees. It is enough that the former has a right to wield the power.
Hence, pakyaw workers are considered regular employees for as long as their employers exercise control over them. Thus, while respondents’ mode of compensation was on a per-piece basis, the status and nature of their employment was that of regular employees. As regular employees, respondents were entitled to security of tenure and could be dismissed only for just or authorized causes and after the observance of due process.
3. KINDS OF EMPLOYMENT
Test in determining regular employment; reasonable connection rule
The primary standard of determining a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. (De Leon vs. NLRC, 176 SCRA 615, 1989).
Repeated rehiring and the continuing need for the employee’s services are sufficient evidence of the necessity and indispensability of his services to the employer’s business or trade. (Baguio Country Club Corporation vs. NLRC, 206 SCRA 643, 1992)
PROBATIONARY EMPLOYMENT
Probationary period of employment; general rule and exception
Generally, the probationary period of employment is limited to six months. The exception to this general rule is when the parties to an employment contract may agree otherwise, such as when the same is established by company policy or when the same is required by the nature of work to be performed by the employee. In the latter case, there is recognition of the exercise of managerial prerogatives in requiring a longer period of probationary employment, especially where the employee must learn a particular kind of work such as selling, or when the job requires qualifications, skills, experience or training. (Busier vs. Leogardo, 131 SCRA 151, 1984).
In all cases involving employees on probationary status, the employer shall make known to the employee at the time he is hired, the standards by which he will qualify as a regular employee. (A. M. Oreta & Co. vs. NLRC, 176 SCRA 218, 1989).
During the probationary period, the employee enjoys security of tenure
Jurisprudence is rich in cases guaranteeing the security of tenure, limited thought it may be, of probationary employees. Except for just cause as provided by law or under the employment contract, a probationary employee cannot be terminated. A probationary employee may be terminated on two grounds: (a) for just cause; or (b) when he fails to qualify as regular employee in accordance with reasonable standards made known by the employer at the time of his engagement. (Biboso vs. Victorias Milling, 76 SCRA 250, 1977).
UNIVAC DEVELOPMENT, INC. vs. WILLIAM M. SORIANO
G.R. No. 182072, June 19, 2013, 699 SCRA 88
FACTS: Soriano was hired as legal assistant by Univac on probationary basis. Eight (8) day prior to the completion of his six months probationary period, the employer’s department head informed him that he was being terminated from employment due to the company’s cost cutting expenses.
On the other hand, Univac claimed that during the company’s meeting, Soriano expressed his intention to leave the company because he wanted to review for the bar examinations and also in that meeting, he was informed of his unsatisfactory performance.
ISSUE: Whether the employer is guilty of illegal dismissal of a probationary employee.
HELD: YES. The power of the employer to terminate a probationary employee is subject to three limitations, namely: (1) it must be exercised in accordance with the specific requirements of the contract; (2) the dissatisfaction on the part of the employer must be real and in good faith, not feigned so as to circumvent the contract or the law; and (3) there must be no unlawful discrimination in the dismissal.
It is undisputed that Soriano was hired as a probationary employee. As such, he did not enjoy a permanent status. Nevertheless, he is accorded the constitutional protection of security of tenure which means that he can only be dismissed from employment for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known to him by the employer at the time of his engagement.
In this case, not only did the employer fail to show that Soriano was apprised of the standards for regularization but it was likewise not shown how these standards had been applied in his case.
JOCELYN HERRERA – MANAOIS vs. ST. SCHOLASTICA’S COLLEGE
G.R. No. 188914, December 11, 2013, 712 SCRA 418
FACTS: Manaois applied for a position as full-time instructor for school year 2000-2001 at SSC. She mentioned in her application letter that she had been taking masteral studies majoring in creative writing at UP Diliman and she was completing her master’s thesis.
SSC approved her application on the basis that she finishes her MA.
At the completion of her third year of probationary employment, SSC terminated her services for failure to finish her master’s degree.
ISSUE: Whether the completion of a master’s degree is required in order for a tertiary level educator to earn the status of permanency in a private educational institution.
HELD: YES. The mere completion of the 3 year probationary period does not guarantee that the employee will automatically acquire a permanent status. Probationer can only qualify upon fulfillment of the reasonable
standards set for permanent employment as a member of the teaching personnel.
Probationary employment refers to the trial stage or period during which the employer examines the competency and qualification of job applicants and determines whether they are qualified to be extended permanent employment status. Such an arrangement allows an employer the ability to scrutinize the fitness and competency of the probationary employee while on the job.
Here, Manaois failed to comply with the stated academic requirements for the position of a permanent full-time faculty member.
PROJECT EMPLOYMENT
Principal test for determining “project employees”
The principal test for determining whether particular employees are properly characterized as “project employees” as distinguished from “regular employees” is whether or not the “project employees” were assigned to carry out a “specific project or undertaking,” the duration (and scope) of which were specified at the time the employees were engaged for that project. (ALU-TUCP vs. NLRC, 234 SCRA 678, 1994).
Project employees who worked for an aggregate period of at least one year are deemed regular employees.
Although the work to be performed is only for a specific project or seasonal, where a person thus engaged has been performing the job for at least one year, “even if the performance is not continuous or is merely intermittent, the law deems the repeated and continuing need for its performance as being sufficient to indicate the necessity or desirability of that activity to the business or trade of the employer. The employment of such person is also then deemed to be regular with
respect to such activity and while such activity exists. (Magsalin vs. National Organization Working Men, May 9, 2003).
Failure of the employer to report to the nearest employment office the termination of workers everytime a project is completed proves that the employees are not project employees (Fernandez vs. NLRC). Contrariwise, the faithful and regular effort of the Company in reporting every completion of its project and submitting the lay-off list of its employees proves the nature of employment of the workers involved therein as project employees.
D.M. CONSUNJI CORPORATION vs. ROGELIO P. BELLO
G.R. No. 159371, July 29, 2013, 702 SCRA 347
FACTS: Bello was employed by DMCI as a mason without any interruption from February 1, 1990 until October 10, 1997. He had been a very diligent and devoted worker and his job as a mason had been necessary and desirable in the usual business or trade of DMCI.
During his employment, he had been diagnosed to be suffering from pulmonary tuberculosis, thereby necessitating his leave of absence.
Upon his recovery, he had reported back to work but DMCI had refused to accept him and instead handed to him a termination paper.
ISSUE: Whether Bello is a regular employee and no longer a project employee.
HELD: YES. Bello has already acquired the status of a regular employee although he had started as a project employee of DMCI by his having been employed as a mason who had performed tasks that had been usually necessary and desirable in the business or trade of DMCI continuously from February 1, 1990 to October 5, 1997. His repeated re-hiring and the continuing need for his services over a long span of time had undeniably made him a regular employee.
A project employee is one who is hired for specific project or undertaking and the completion or termination of such project or undertaking has been determined at the time of engagement of the employee.
It is settled that the extension of the employment of a project employee long after the supposed project has been completed removes the employee from the scope of a project employee and makes him a regular employee.
FAILURE TO INFORM DURATION OF EMPLOYMENT
ISIDRO QUEBRAL et. al. vs. ANGBUS CONSTRUCTION, INC.
G.R. No. 221897, November 7, 2016, 807 SCRA 176
FACTS: Petitioners Quebral et. al. are allegedly employed as construction workers of respondent Angbus Construction, Inc. from 2008 to 2011. They alleged that they are regular employees since they were engaged to perform tasks necessary and desirable to the usual business of Angbus and that they rendered their services for several years already.
They were, however, summarily dismissed without just or authorized cause and due process thus the filing of the complaint for illegal dismissal.
Angbus maintains that Quebral et. al. were first employed by Angelfe Management & Consultancy for a one-time project only. Two or three years after the completion of the project, they were hired by Angbus.
However, no employment contracts with respect to Angelfe was produced allegedly because these were destroyed by a flood.
The LA gave credence to the Establishment Employment Report submitted to the DOLE which showed that the cause of petitioners’ termination was project completion.
ISSUE
Whether petitioners be considered regular employees based on the evidence submitted.
RULING
YES. A project based employee is assigned to a project which begins and ends at determined or determinable period of time.
In the case of Omni Hauling Services, Inc. vs. Bon, the Court ruled that employers claiming that their workers are project based employees have the burden to prove that (a) the employees were assigned to carry out a specific project or undertaking and (b) the duration and scope of which were specified at the time they were engaged for such project.
In this case, Angbus did not state the specified project or undertaking to petitioners. As to the second requirement, not only was Angbus unable to produce petitioners’ employment contract, it also failed to present other evidence to show that it informed petitioners the duration and scope of their work.
Although the absence of a written contract does not by itself grant regular status to the employees, it is evidence that they were informed of the duration and scope of their work and their status as project employees at the start of their engagement. When no other evidence is offered, the absence of employment contract raises a serious question of whether employees were sufficiently apprised at the start of their employment and their status as project employees.
Absent such proof, it is presumed that they are regular employees, thus can only be dismissed for just or authorized causes upon compliance with procedural due process.
ROY D. PASOS vs. P N C C
G.R. No. 192394, July 3, 2013, 700 SCRA 608
When the services of a project employee is extended without any specification of as to the duration, he becomes a regular employee.
SUCCESSIVE REHIRING OF PROJECT EMPLOYEE
E. GANZON, INC. (EGI) vs. FORTUNATO B. ANDO, JR.
G.R. No. 214183, February 20, 2017, 818 SCRA 165
FACTS: Respondent Ando alleged that he was a regular employee working as a finishing carpenter in the construction business of EGI. He was repeatedly hired from January 21, 2010 until April 30, 2011 when he was terminated without prior notice and hearing.
EGI countered that Ando was engaged as a project worker as evidenced by three (3) project employment contracts. He was paid the correct salary based on regional based wage order. He was adequately notified of his employment status at the time of his services were engaged by EGI.
ISSUE
Whether the repeated hiring of Ando confers him a regular employee of EGI.
RULING
NO, the length of service through repeated and successive rehiring is not the controlling determinant of the employment tenure of a project employee. The rehiring of construction workers on a project – to - project basis does not confer upon them regular employment status as it is only dictated by the practical consideration that experienced workers are more preferred.
Ando’s tenure as a project employee remained because there was certainty of completion or termination of the projects. The project employment contracts sufficiently apprised him that his security of tenure with EGI would only last as long as the specific projects he was assigned to were subsisting. When the projects were completed, he was
validly terminated from employment since his engagement was co-terminus thereto.
The fact that Ando was required to render services necessary or desirable in the operation of EGI’s business for more than a year does not in any way impair the validity of his project employment contracts. Ando was rehired precisely because of his previous experience working with the other phase of the project. EGI took into account similarity of working environment.
Finally, the second paragraph of Article 280 stating that an employee who has rendered service for at least one (1) year shall be considered a regular employee, is applicable only to a casual employee and not to a project or a regular employee referred to in paragraph one thereof.
SEASONAL EMPLOYMENT
Seasonal workers who work for more than one season are deemed to have acquired regular employment. (Hacienda Fatima vs. National Federation of Sugarcane Workers, January 28, 2003).
Seasonal workers during the off-season are merely considered on leave. (Hacienda Fatima, supra).
Effect of repeated re-hiring and length of service upon status of seasonal employee
In this case, it may appear that the work in the company is seasonal, however, the records reveal that the employee was repeatedly re-hired, sufficiently evidencing the necessity and indispensability of her services to the former’s business or trade. Owing to her length of service, she became a regular employee, by operation of law, one year after she was employed. Being a regular employee, she enjoys security of tenure in the sense that she cannot be dismissed from employment except for just and authorized cause. (Gaco vs. NLRC, 230 SCRA 260, 1994).
JAIME N. GAPAYAO vs. ROSARIO FULO & SSS
G.R. No. 193493, June 13, 2013, 698 SCRA 485
FACTS: Jaime Fulo had been in the employ of Gapayao for 14 years, from 1983 to 1997 until his death while doing repairs at the residence and business establishment of the latter. During that period, he was made to work as a laborer in the agricultural landholdings, a harvester in the abaca plantation and a repairman/utility worker in several establishments owned by Gapayao.
On the other hand, Gapayao alleges that the deceased Fulo is a freelance worker. Since he was engaged on a pakyaw basis and worked for a short period of time, in the nature of a farm worker every season, he was not precluded from working with other persons and in fact worked for them. Citing Article 280 of the Labor Code, “seasonal employees are not covered by the definition of regular and casual employees.”
ISSUE: Whether the deceased Jaime Fulo be considered a regular employee despite being a pakyaw worker.
HELD: YES. Pakyaw workers are considered employees for as long as their employers exercise control over them. Here, Gapayao wielded control over the deceased in the discharge of his functions. Being the owner of the farm on which the deceased worked, Gapayao, on his own or through his overseer, necessarily had the right to review the quality of work produced by his laborers. It matters not whether the deceased conducted his work inside Gapayao’s farm or not because the latter retained the right of control him in his work.
Farm workers generally fall under the definition of seasonal employees. Regular seasonal employees are those called to work from time to time. The nature of their relationship with the employer is that during the off season, they are temporarily laid off, but reemployed during the summer season or when their services may be needed. They are in regular employment because of the nature of their job and not because of the length of time they have worked.
Indeed the deceased was a farm worker who was in the regular employ of Gapayao. From year to year, starting January 1983 up until his death, the deceased had been working on Gapayao’s land by harvesting abaca and coconut, processing copra and cleaning weeds. His employment was continuous in the sense that it was done for more than one harvesting season. Moreover, no amount of reasoning could detract from the fact that these tasks were necessary or desirable in the usual business of Gapayao.
CASUAL EMPLOYMENT
Seafarers are contractual employees for a fixed term, governed by the contracts they sign; an exception to Art. 280 of Labor Code. It is clear that seafarers are considered contractual employees. Their employment is governed by the contracts they sign every time they are rehired and their employment is terminated when the contract expires. Their employment is contractually fixed for a certain period of time. They fall under the exception of Article 280 whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. (Millares vs. NLRC, 385 SCRA 306, 2002).
JOB CONTRACTING AND LABOR-ONLY CONTRACTING
Permissible job contracting or subcontracting
Permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to put out or farm out with a contractor or subcontractor the performance or completion of a specific job, work or service within a definite or predetermined period regardless of whether such job, work or service is be performed within or outside the premises of the principal. (Vinoya vs. NLRC, 324 SCRA 469, 2000).
Effect of a finding that a contractor is a “labor-only” contractor
A finding that a contractor is a “labor-only” contractor is equivalent to declaring that there is an employer-employee relationship between the principal and the employees of the “labor-only” contractor. (Associated Anglo-American Tobacco Corp. vs. Clave, 189 SCRA 127). In such cases, the person or intermediary shall be considered merely as an agent of the employer, who shall be responsible to the workers in the manner and extent as if the latter were directly employed by him. (Sandoval Shipyards vs. Pepito, 359 SCRA 555, 2001).
Liability of principal in legitimate job contracting
vis-à-vis employees of job contractor
In legitimate job contracting, the law creates an employer-employee relationship for a limited purpose, i.e., to ensure that the employees are paid their wages. The principal employer becomes jointly and severally liable with the job contractor only for the payment of the employees’ wages whenever the contractor fails to pay the same. Other than that, the principal employer is not responsible to any claim made by the employees. (San Miguel Corporation vs. MAERC-Integrated Services, Inc.)
4. MANAGEMENT PREROGATIVE
Exercised in good faith
The free will of management to conduct its own affairs to achieve its purpose cannot be denied. (San Miguel Brewery Sales Force Union vs. Ople, 170 SCRA 25, 1989).
Although the employer has the prerogative to discipline or dismiss its employee, such prerogative cannot be exercised wantonly, but must be controlled by substantive due process and tempered by the fundamental policy of protection to labor enshrined in the Constitution.
As a general rule, the employer has the inherent right to transfer or assign an employee (PT&T vs. Laplana, 199 SCRA 485, 1991). The employer has the inherent right to transfer or assign an employee in the pursuance of its legitimate business interest subject only to the condition that it not motivated by discrimination or bad faith.
Where transfer may constitute constructive dismissal
To say that the employees were not constructively dismissed inasmuch as the transfer was effected without demotion in rank or diminution of salary benefits is, in this case, inaccurate. It is well to remember that constructive dismissal does not always involve forthright dismissal or diminution in rank, compensation, benefits and privileges. For an act of clear discrimination, insensibility, or disdain by an employer may become so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment. (Zafra vs. Court of Appeals, 389 SCRA 200, 2002)
Employment contracts providing for disclosure of marriages
An employment contract providing for a disclosure to management of any existing or future relationship with competitor company is valid exercise of management prerogatives. A company’s policy prohibiting an employee from having relationship with an employee of a competitor company is a valid exercise of management prerogative. The company has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information from competitors. (Duncan Association of Detailman-PTGWO vs. Glaxo Wellcome Philippines, Inc. G. R. 162994, September 17, 2004).
ALILEM CREDIT COOPERATIVE, INC. vs. SALVADOR BANDIOLA, JR.
G.R. No. 173489, February 25, 2013, 691 SCRA 533
FACTS: Bandiola carried an illicit relationship with a married woman, not his fellow worker in the office. He was dismissed based on one of the grounds under Personnel Policy.
ISSUE: Whether Bandiola is validly dismissed.
HELD: YES. An employer is free to regulate all aspects of employment it may make reasonable rules and regulations for the government of its employees which become part of the contract of employment provided they are made known to the employees.
6. SEPARATION PAY
Q: Will an employee who voluntarily resigns be granted separation pay?
A: An employee who voluntarily resigns may not be granted separation pay as a general rule, however, there is an exception, that is, when it is stipulated in the employment contract or CBA or such payment is authorized by the employer’s practice or policy, as in this case (Hanford Philippines, Inc. and Victor Te vs. Shirley Joseph, G.R. No. 158251, March 31, 2005).
Q: What are the instances when award of separation pay is proper?
A: Under the Code, separation pay may be awarded only in cases when the termination of employment is due to:
a) installation of labor saving devices;
b) redundancy;
c) retrenchment;
d) closing or cessation of business operations;
e) disease of an employee and his continued employment is
prejudicial to himself or his co-employees; and
f) when an employee is illegally dismissed but reinstatement is
no longer feasible.
Q: When may an employer refuse to provide separation pay?
A: Separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is an offense involving moral turpitude, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice. (Alan D. Gustilo vs. Wyeth Philippines, Inc., G.R. No. 149629, October 4, 2004)
UNILEVER PHILIPPINES, INC. vs. MARIA RUBY M. RIVERA
G.R. No. 201701, June 3, 2013, 697 SCRA 136
FACTS: Rivera was dismissed from work because she intentionally circumvented a strict company policy, manipulated another entity to carry out her instructions without company’s knowledge and approval and directed the diversion of funds, which she even admitted doing under the guise of shortening laborious process of securing funds for promotional activities from the head office. These transgressions were serious offenses that warranted her dismissal from employment and proved that her termination from work was for a just cause.
ISSUE: Whether she is entitled for separation pay.
HELD: YES. She was granted separation pay as an act of “social justice” or on “equitable” grounds taking into considerations two (2) criteria that it is required that a dismissal for a just cause (1) was not for serious misconduct and (2) did not reflect on the moral character of the employee.
7. RIGHT TO SELF - ORGANIZATION
Existence of employer-employee relationship is necessary
Existence of employer-employee relationship is essential for the determination of whether or not one may exercise right of self-organization for purposes of collective bargaining. It is a condition sine qua non for a bargaining unit that it be composed of employees, failing which affects the legality of the union itself and means the ineligibility of union membership to present a petition for certification election, as well as to vote therein. (La Suerte Cigar & Cigarette Factory vs. Director of BLR, 123 SCRA 769, 1983).
Who may unionize for purposes of collective bargaining negotiations?
General Rule: Any employee may be eligible to join and be a member of a labor union, beginning on his first day of service, whether employed for a definite period or not. (UST Faculty Union vs. Betonio, 318 SCRA 185, 1999).
Test to determine the constituency of a bargaining unit
The “community or mutuality of interests” test has provided the standard in determining the proper constituency of a collective bargaining unit.
However, where the employer operates two enterprises engaged in two different kinds of business (e.g., garment factory and cinema), the employees may be separated into two (2) distinct bargaining units for purposes of certification election. This is so because the employees in the two businesses do not share community of interest as the work they perform are different from each other. (Cruzvale vs. Laguesma, 238 SCRA 389, 1994).
8. CERTIFICATION ELECTION
Nature of Certification Election
A certification election is not a litigation but merely an investigation of a non-adversarial fact-finding character in which the BLR plays the part of a disinterested investigator seeking merely to ascertain the desires of the employees as to the matter of their representation. (Airline Pilots Association vs. CIR, 76 SCRA 274, 1977).
Role of employer in certification election
General Rule: The employer is not a party in a certification election, which activity is the sole concern of the workers.
Exception: Where the employer has to file a petition for certification election pursuant to Art. 258 of the Labor Code because it was requested to bargain collectively. Even then, it becomes a neutral bystander. (Asian Design and Mfg. Corp. vs. Calleja, 174 SCRA 477, 1989).
Petition to cancel/revoke registration is not a prejudicial question to petition for Certification Election
An order to hold a certification election is proper despite the pendency of the petition for cancellation of the registration certificate of the union. The rationale for this is that at the time the union filed its petition, it still had the legal personality to perform such act absent an order directing the cancellation. (Pepsi-Cola Products Phil. vs. Secretary of Labor, 312 SCRA 104, 1995).
Jurisdiction in determining employer-employee relationship in certification election cases
The Med-Arbiter or the Secretary of Labor has the authority to determine the existence of an employer-employee relationship between the parties in a petition for certification election. (M.Y. San Biscuits, Inc. vs. Laguesma, 198 SCRA 256, 1991).
However, the decision of the Med-Arbiter or the Secretary of Labor in this regard will not constitute res judicata in an illegal dismissal case., i.e., the principle of bar by prior judgment will not apply. (Manila Golf and Country Club, Inc. vs. IAC, 237 SCRA 207, 1994).
Disaffiliation of the local union from the mother union
Generally, a labor union may disaffiliate from the mother union to form a local union or independent union only during the 60-day freedom period immediately preceding the expiration of the CBA. Even before the onset of the freedom period (and despite the closed-shop provision in the CBA between the mother union and management) disaffiliation may still be carried out, but such disaffiliation must be affected by a majority of the members in the bargaining unit. This happens when there is a substantial shift in allegiance on the part of the majority of the member of the union. (Associated Labor Union-PTGWO vs. NLRC, 188 SCRA 123, 1990).
Date of acquisition of legal personality of a union
The issuance of the certificate of registration by the Bureau or Regional Office is not the operative act that vests legal personality upon a local/chapter under Department Order No. 9. Such legal personality is acquired from the filing of the complete documentary requirements enumerated in Section 1, Rule VI. It could be discerned that the intention of the Labor Code and its Implementing Rules that only those labor organizations that have acquired legal personality are capacitated to file petitions for certification elections. Such is the general rule. (SMC – Mandaue Packaging Products Plants vs. Mandaue Packing Plants- San Packaging Products – SMC Monthlies Rank and file Union-FFF, G.R. No. 152356, August 16, 2005).
HERITAGE HOTEL MANILA vs. SECRETARY OF LABOR
G.R. No. 172132, July 23, 2014, 730 SCRA 400
FACTS: On October 11, 1995, National Union of Workers (NUWHRAIN) filed a petition for certification election seeking to represent all the supervisory employees of Heritage Hotel Manila.
On February 14, 1996, Heritage Hotel Manila filed an opposition on the conduct of the certification election on the ground that the membership of NUWHRAIN consisted of managerial, confidential and rank-in-file employees.
On May 12, 2000, Heritage Hotel filed a petition for the cancellation of NUWHRAIN’s registration as a labor union for failure to submit its annual financial reports and an updated list of members as required by articles 238 and 239 of the Labor Code.
The opposition by the Heritage Hotel was denied by the Labor Med-arbiter and finally DOLE directed the certification elections on June 23, 2000.
The certification election proceeded as scheduled and NUWHRAIN obtained the majority votes of the bargaining unit.
ISSUES
(1) Whether the employer has the legal right to oppose the certification election on the ground that the membership of the union consisted of managerial, confidential and rank-and-file employees.
(2) Whether the filing of the petition for the cancellation of union’s registration bar the conduct of the certification election.
RULINGS
(1) NO. Basic is the realm of labor union rights is that the certification election is the sole concern of the workers, and the employer is deemed an intruder as far as certification election is concern.
Thus, Heritage Hotel Manila lacked the legal personality to assail the proceeding for the certification election, and should stand aside as a mere bystander who could not oppose the petition, or even appeal the Med-Arbiter’s order to the conduct of the certification election.
Except when it is requested to bargain collectively, an employer is a mere bystander to any petition to any petition for certification election, such proceeding is non-adversarial and merely investigative, for the purpose thereof is to determine which organization will represent the employees in their collective bargaining with the employer.
The choice of their representative is the exclusive concern of the employees; the employer cannot have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it, not even a mere allegation that some employees participating in a petition for certification election are actually managerial employees will lend an employer legal personality to block the certification election.
The employer’s only right in the proceeding is to be notified or informed thereof.
The employer’s meddling in the conduct of the certification election among its employees unduly gave rise to the suspicion that it intended to establish a company union.
(2) NO. Under the long established rule, the filing of the petition for the cancellation of NUWHRAIN’s registration should not bar the conduct of the certification election.
In that respect, only a final order for the cancellation of the registration would have prevented NUWHRAIN from continuing to enjoy all the rights conferred on it as a legitimate labor union, including the right to the petition for the certification election.
The employer’s petition for cancellation of union registration can be accused of interfering union activities.
Article XIII, Section 3 of the Constitution enumerates the fundamental rights of the employees such as (1) the right of all workers to self-organization, (2) collective bargaining and negotiations and (3) peaceful concerted activities.
Thus, the cancellation of a certificate or registration is the equivalent of snuffing out the life of a labor organization. For without such registration, it loses as a rule - its right under the Labor Code.
Under RA 9481, it amended and inserted in the Labor Code Article 242-A on reportorial requirements shall not be a ground for cancellation of union registration but shall subject the erring officers or members to suspension, expulsion from membership or any appropriate penalty.
9. COLLECTIVE BARGAINING
The CBA is the law between the contracting parties and compliance therewith is mandated by the express policy of the law. (Marcopper Mining Corp. vs. NLRC, 255 SCRA 322).
Collective Bargaining Agreements are unenforceable against persons not parties thereto. (Razon vs. Secretary of Labor, 222 SCRA 1, 1993).
The union representative need not be an employee of the company. However, the union officer must be an employee in the bargaining unit of the company. (Sec. 4(f), Rule III of the implementing rules of PD 1391).
The fundamental factors in determining the appropriate collective bargaining unit are:
(1) will of the employees (Globe Doctrine)
(2) affinity and unity of the employees’ interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions (Substantial Interests Rule)
(3) prior collective bargaining history;
(4) similarity of employment status.
(San Miguel Corporation vs. Laguesma, 236 SCRA 595, 1994)
The grievance handling and grievance procedure stipulated and provided for in the collective bargaining agreement are binding upon both the contracting parties. (Elizalde Rope Factory, Inc. vs. CIR, 8 SCRA 67, 1963)
GOOD FAITH BARGAINING AND CBA DEADLOCK MAY CO-EXIST
TABANGAO SHELL REFINERY EMPLOYEES ASSOCIATION vs. PILIPINAS SHELL PETROLEUM CORPORATION
G.R. No. 170007, April 7, 2014, 720 SCRA 631
FACTS: The company and the union started negotiation for a new CBA. After several negotiation, the company proposed the declaration of a deadlock and recommended that the help of a third party be sought.
On that same day, the union filed a Notice of Strike in the NCMB alleging bad faith bargaining on the part of the company. The NCMB immediately summoned the parties for the mandatory conciliation mediation proceedings but the parties failed to reach an amicable settlement.
During the cooling off period, the union conducted the necessary strike vote. The members of the union, who participated in the voting, unanimously voted for the holding of a strike.
Upon being aware of this development, the company filed a petition for Assumption of Jurisdiction with the Secretary of Labor and Employment.
ISSUE: Whether there is an absence of good faith on the part of the company.
HELD: NO. While the purpose of collective bargaining is the reaching of an agreement between the employer and the employees’ union resulting in a binding contract between the parties, the failure to reach an agreement after negotiation continued for a reasonable period does not mean lack of good faith.
The laws invite and contemplate a collective bargaining contract but do not compel one. For after all, a CBA, like any contract is a product of mutual consent and not of compulsion. As such, the duty to bargain does not include the obligation to reach an agreement.
As there was no bad faith on the part of Shell in its bargaining with the union, deadlock was possible and did occur.
Each party found the other’s offer unacceptable and neither party was willing to yield.
The company suggested seeking the assistance of a third party to settle the issue but the union preferred the remedy of filing a notice of strike. Each party was adamant in its position.
Because of the unresolved issue on wage increase, there was actually a complete stoppage of the ongoing negotiation between the parties.
The absence of the parties’ mutual declaration of deadlock does not mean that there was no deadlock. At most, it would have been simply a recognition of the prevailing status quo between the parties.
What was lacking was the formal recognition or the existence of such a deadlock because the union refused a declaration of deadlock.
As the term “assume jurisdiction” connotes, the intent of the law is to give the Labor Secretary full authority to resolve all matters within the dispute that give rise to or which arose out of the strike or lockout.
It includes and extends to all questions and controversies arising from or related to the dispute including cases over which the labor arbiter has exclusive jurisdiction.
The employer, by its refusal to bargain, is guilty of violating the duty to bargain collectively in good faith. Hence, the Union’s draft CBA proposal may unilaterally be imposed upon the employer as the collective agreement to govern their relationship. (Divine Word vs. Secretary of Labor, 213 SCRA 759, 1992).
Although a CBA has expired, it continues to have legal effects as between the parties until a new CBA has been entered into. (Pier 8 Arrastre & Stevedoring, Inc. vs. Roldan-Confesor, 241 SCRA 294, 1995).
10. UNFAIR LABOR PRACTICE
Test to determine whether or not employer is guilty of ULP
The test of whether an employer has interfered with and coerced employees within the meaning of Art. 248 (a) of the Labor Code is whether the employer has engaged in conduct which it may reasonably be said tends to interfere with the free exercise of employee’s right to self-organization and it is not necessary that there be direct evidence that any employee was in fact intimidated or coerced by statement of threats of the employer if there is a reasonable interference that anti-union conduct of the employer does not have and adverse effect of self-organization and collective bargaining. (Insular Life Assurance Co. Ltd. Employees Association-NATU vs. Insurance Life Insurance Co., 37 SCRA 244, 1971).
ULP of Labor Organization
Unions are not entitled to arbitrarily exclude qualified applicants for membership, and a closed-shop provision would not justify the employer in discharging, or a union in insisting upon a discharge of an employee whom the union thus refuses to admit to membership, without any reasonable ground therefore. Needless to say, if said unions may be compelled to admit new members, who have requisites qualifications, with more reason may the law and the courts exercise coercive power when the employee involved is a long standing union member, who, owing to provocations of union officers, was impelled to tender his resignation, which he forthwith withdrew or revoked. (Salunga vs. CIR, 21 SCRA 216, 1967)
Union Security Clause
Union Security clauses are also governed by law and by principles of justice, fair play, and legality. Union security clauses cannot be used by union officials against an employer, much less their own members, except with a high sense of responsibility, fairness, prudence, and judiciousness. A union member may not be expelled from her union, and consequently from her job, for personal or impetuous reasons or for causes foreign to the closed-shop agreement and in a manner characterized by arbitrariness and whimsically. (Manila Mandarin Employees Union vs. NLRC, 154 SCRA 368, 1987).
11. STRIKES AND LOCKOUTS
Good faith no longer a defense
if no procedural compliance for valid strike
A union’s claim of good faith is not a valid excuse to dispense with the procedural steps for a lawful strike. The Supreme Court’s previous rulings in People’s Industrial & Commercial Employees & Workers Organization vs. PICC did not rule that procedural requirements can be dispensed with, even if the Union believed in good faith that ULP was being committed. The good faith defense invoked in the Philippine Metal Foundries vs. CIR case had been decided in 1979, but with the enactment of RA 6715, compliance with the procedural requirements for the validity of a strike is now mandatory. (Grand Boulevard Hotel vs. Genuine Labor Organizations in Hotel Restaurant & Allied Industries, G.R. No. 153654, July 18, 2003).
Lawful means in conducting strike
A strike though valid may be declared invalid where the means employed are illegal. (Association of Independent Unions in the Philippines vs. NLRC, 305 SCRA 219, 1999).
Seven-day strike ban
The seven-day strike ban starts from the day after the results of the strike vote is submitted to the Department of Labor. In computing the period for the seven-day strike ban, the first day shall be excluded and the last day included. A deficiency of one-day from the mandatory seven-day strike ban is a fatal defect which renders the strike illegal -- strict adherence to the mandate of the law is required as substantial compliance with a mandatory provision will not suffice. (CCBPI Postmix Workers Union vs. NLRC, 299 SCRA 410, 1998).
Compensation of striking workers
The union members who were merely instigated to participate in the illegal strike should be treated differently from their leaders. Part of the benign consideration for labor is the policy of reinstating rank-and-file workers who were merely misled in supporting illegal strikes. Nonetheless, these reinstated workers shall not be entitled to backwages as they should not be compensated for services skipped during the illegal strike. (Lapanday Workers Union vs. NLRC, 248 SCRA 97, 1995).
Requisites for a valid lockout
All the requisites for a valid strike likewise apply for a lockout to be valid. Thus, it must be for a lawful purpose, undertaken through lawful means, and in compliance with the procedural requirements of law such as: notice of lockout, cooling-off period, taking and filing of lockout vote, and seven-day lock-out ban. (Association of Independent Unions in the Philippines vs. NLRC, 305 SCRA 219, 1999).
12. ASSUMPTION OF JURISDICTION BY THE SECRETARY OF LABOR
The Secretary of Labor is not precluded from assuming jurisdiction over a labor dispute in a vital industry even if there is no notice of strike or a formal complaint. He need not wait for a notice of strike or a formal complaint about a strike already in progress before he could exercise the powers given him by law to avoid the strikes, picketing or lockouts contemplated in the grant of power. (Saulog Transit vs. Lazaro, 128 SCRA 591, 1984).
While termination by reason of an illegal strike requires hearing, replacement by reason of violation of a return-to-work order does not need one. (Free Telephone Workers Union vs. PLDT, 113 SCRA 663, 1982).
The authority of the Secretary of Labor to assume jurisdiction in accordance with Art. 263 (g) of the Labor Code necessarily includes and extends to all questions and controversies arising from the labor dispute, including cases over which the labor arbiter has exclusive jurisdiction. (International Pharmaceuticals, Inc. vs. Secretary of Labor, 205 SCRA 59, 1992).
13. TERMINATION OF EMPLOYMENT
As an Exercise of Management Prerogative
The discipline of employees is a management prerogative. If this prerogative is exercised in good faith for the advancement of employer’s interest and need not for the purpose of defeating the rights of the employees by law or contract, the court will uphold it. (SMB Sales Force Union vs. Ople, 170 SCRA 25, 1989).
Illegality in the Manner of Dismissal
(Dismissal without Due Process)
The Supreme Court has apparently abandoned the Serrano ruling and reverted to the Wenphil ruling. In so far as it ruled that in cases where there was substantial evidence proving just cause BUT that due process was not followed, the termination will be upheld but the employer will be penalized the amount of P30,000.00. The Supreme Court stated that “it would not be right to order either reinstatement of the dismissed employee or payment of backwages to the employee. But for failing to comply with the procedure prescribed by law in terminating the services of an employee, the employer should be made liable for payment of separation pay. (Agabon vs. NLRC, G.R. No. 158693, November 17, 2004).
If the dismissal is based on a just cause under Article 282 but the employer failed to comply with the notice requirement, the sanction to be imposed upon him should be tempered because the dismissal process was, in effect, initiated by an act imputable to the employee; and
If the dismissal is based on an authorized cause under Article 283 but the employer failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by the employer’s exercise of his management prerogative. (Jaka Food Processing Corporation vs. Darwin Pacot, G.R. No. 151378, March 28, 2005).
Constructive Dismissal
After 30-day period of preventive suspension, the employee must be reinstated to his former position because suspension beyond this maximum period amounts to constructive dismissal. (Hyatt Taxi Services vs. Catinoy, 359 SCRA 686, 2001).
Temporary Lay-off
There is no specific provision of law which treats of a temporary retrenchment or lay-off and provides for the requisites in effecting it or a period or duration therefore. These employees cannot however be forever “temporary” laid-off. To remedy this situation, Article 286 may be applied but only by analogy to set a specific period that employees may remain temporarily laid-off or in a floating status for only a period of six months. After six months, the employees should either be recalled to work or permanently retrenched in accordance with the requirements of law. Failing to comply with this would be tantamount to dismissing the employees without cause, and holding employer liable for such illegal dismissal. (Sebuguero vs. NLRC, 245 SCRA 532, 1995)
Suspension of operations
Article 286 of the Labor Code is clear -- there is termination of employment when an otherwise bona fide suspension of work exceeds 6 months. The cessation of employment for more than six months was patent and the employer has the burden of proving that the termination was for a just or authorized cause. (Mayon Hotel & Restaurant vs. Rolando Adana, G.R. No. 157634, May 16, 2005).
14. JURISDICTION
Money Claim
The “money claims of workers” referred to in par. 3 of Article 217 embraces money-claims which arises out of or in connection with the employer-employee relationship, or some aspect or incident of such relationship. (San Miguel Corp. vs. NLRC, 161 SCRA 719, 1988)
Factors in determining jurisdiction
It is the character of the principal relief sought that appears essential in this connection. Where such principal relief is to be granted under labor legislation or a collective bargaining agreement, the case should fall within the jurisdiction of the Labor Arbiter and NLRC. (San Miguel Corp. vs. NLRC, 161 SCRA 719, 1988).
The general rule is that an employer-employee relationship must exist between the party litigants for the labor courts to exercise jurisdiction over a particular case. The exception to the rule is found in Article 212 (i) of the Labor Code where a labor dispute can nevertheless exist regardless of whether the disputants stand in the proximate relationship of employer and employee provided the controversy concerns, among others, the terms and conditions of employment or a change or arrangement thereof. The existence of a labor dispute is not negatived by the fact that the plaintiffs and defendants do not stand in the proximate relation of employer and employee. (San Miguel Corporation Employees Union-PTGWO vs. Bersamira, 186 SCRA 496)
Jurisdiction of Labor Arbiters
Complaints for illegal dismissal filed by the employees who were terminated pursuant to the CBA’s union security clause falls within the jurisdiction of the Labor Arbiter and not the Grievance Machinery. (Sanyo Phil. Workers Union-PSSLU vs. Cañizares, 211 SCRA 361, 1994).
Jurisdiction of Regional Director
The Regional Director exercises both visitorial and enforcement power over labor standard cases, and is therefore empowered to adjudicate uncontested money claims of persons still employed. (Maternity Children’s Hospital vs. Secretary of Labor, 174 SCRA 632, 1989).
15. REMEDIES
Appeal
The requirement to perfect the appeal from the Labor Arbiter to the NLRC within 10 calendar days (Art. 223) is mandatory and jurisdictional. Failure to do so renders the questioned decision final and executory, and is deprive the appellate court or body of the legal authority to alter the final judgment, much less to entertain, the appeal. (Sublay vs. NLRC, 324 SCRA 188, 2000).
An appeal is perfected to the NLRC once an appellant files the memorandum of appeal, pays the required appeal fee and, where an employer appeals and a monetary award is involved, the latter posts an appeal bond or submits a surety bond issued by a reputable bonding company. (Soliman Security Services, Inc. vs. Court of Appeals, 384 SCRA 514, 2000)
Where the decision of the Labor Arbiter involves a monetary award, the appeal is deemed perfected only upon the posting of a cash or surety bond but also within ten (10) days from receipt to such decision in an amount equivalent to the monetary award. (Mary Abigalis Food Services vs. Court of Appeals, G. R. No. 140294, May 9, 2005)
Motion for Reconsideration
Before a petition for certiorari under Rule 65 of the Rules of Court may be availed of, the filing of a motion for reconsideration is a condition sine qua non to afford an opportunity for the correction of the error or mistake complained of (ABS-CBN Supervisors Employees Union Members vs. ABS CBN Broadcasting Corp., 304 SCRA 199). However, as an exception, the failure of an appellant to file a motion for reconsideration may be excused where the error sought to be reviewed is a patent nullity. (Zurbano vs. NLRC, 228 SCRA 556, 1993)
A second motion for reconsideration is a prohibited pleading which should not be entertained at all. (Jardin vs. NLRC, 326 SCRA 299, 2000)
Petition for Certiorari under Rule 65
The period or manner of appeal from the NLRC to the Court of Appeals is governed by Rule 65 pursuant to the ruling in the case of St. Martin Funeral Homes vs. NLRC, 295 SCRA 494, 1998. It states that the petition may be filed not later than 60 days from notice of the judgment, or resolution sought to be assailed.
The fact that the assailed decision becomes final and executory after a ten-day period does not preclude the adverse party from challenging it by way of an original action for certiorari under Rule 65 of the Rules of Court. He may even further pray for the issuance of a restraining order or a temporary injunction to prevent the immediate execution of the assailed decision. (Caramol vs. NLRC, 225 SCRA 582, 1993).
Petition for Review under Rule 45
From the Court of Appeals, the aggrieved party may appeal to the Supreme Court thru a verified petition for review on certiorari under Rule 45 of the Rules of Court. Questions of facts cannot be raised in a petition for review on certiorari. (Abalos vs. Philex Mining Corp., November 27, 2002).
Review of decision of Secretary of Labor
In conformity with the case of St. Martin Funeral Homes vs. NLRC, the remedy of an aggrieved party is to timely file a motion for reconsideration with the Office of the Secretary of Labor as a precondition for any further or subsequent remedy, and then seasonably file a special civil action for certiorari to the Court of Appeals under Rule 65 of the Rules of Court.
Finality of BLR decision in petitions for cancellation of union registration
If the petition for cancellation is directly filed with BLR, its decision canceling union registration is not yet final and executory as it may still be appealed to the Office of the Secretary. However, if the petition for cancellation was filed with the Regional Office, the decision of the BLR resolving an appeal of the said Regional Office is final and executory. (Abbot Laboratories Philippines, Inc. vs. Abbot Laboratories Employees Union, 323 SCRA 392, 2000).
Review of decision of Voluntary Arbitrators
Sections 1, 3 and 4 of the Rule 43 of the 1997 Rules of Civil Procedure provides the rule on appeals. In consonance with Rule 43, the petitioner, upon receipt of a copy of the Voluntary Arbitrator’s Decision, should have filed with the CA, within the 15-day reglementary period, a petition for review, not a petition for certiorari, which is not a substitute for a lapsed appeal. Without an appeal (petition for review) seasonably filed, the questioned Decision of the Voluntary Arbitrator became final and executory after ten calendar days from notice. Moreover, Article 262-A of the Labor Code provides that the award or decision of the Voluntary Arbitrator or panel of Voluntary Arbitrator shall be final and executory after ten calendar days from receipt of the copy of the award or decision by the parties. Indeed, once a decision or resolution becomes final and executory, it is the ministerial duty of the court or tribunal to order its execution. Such order is not appealable. (Manila Midtown Hotel vs. Voluntary Arbitrators Borromeo, G. R. No. 138305, September 22, 2004).
16. EXECUTION OF JUDGMENTS
The general rule is that when a decision becomes final and executory, it is the ministerial of the court to issue a writ of execution to enforce the judgment. (Torres vs. NLRC, 330 SCRA 311, 2000). As an exception to the rule, a writ of execution may be refused on equitable grounds as when there was a change in the situation of the parties that would make execution inequitable or when certain circumstances, which transpired after judgment became final, rendered execution of judgment unjust. (Baclayan vs. Court of Appeals, 181 SCRA 761, 1990).
Under Rule 39, Section 6 of the 1997 Rules of Civil Procedure, a final and executory judgment may be executed on motion within 5 years from the date of its entry. After the lapse of such time, and before it is barred by the statute of limitations, a judgment may be enforced by action. This rule applies to labor cases as the Rules of Court are applicable to labor cases in a suppletory capacity. (Tag Fibers vs. NLRC, 344 SCRA 29, 2000).
17. DOCTRINES
Q: Explain the principle of “A Fair day’s wage for a fair day’s labor”?
A: The age-old rule governing the relation between labor and capital, or management and employee of a “fair day’s wage for a fair day’s labor” remains as the basic factor in determining employees’ wages. If there is no work performed by the employee, there can be no wage or pay unless, of course, the laborer was able, willing and ready to work, but was illegally locked out, suspended or dismissed, or otherwise illegally prevented from working (Caltex Refinery Employees Association (CREA) vs. Brillantes, 279 SCRA 218), a situation which we find is not present in the instant case. It would neither be fair nor just to allow private respondents to discover something they have not earned and could not have earned because they did not render services at the Kalibo office during the stated period. ( Aklan Electric Cooperative vs. NLRC, G.R. No. 121439, January 25, 2000.)
Q: What is the “Equal pay for equal work” principle?”
A: Persons who work with substantially equal qualifications, skills, effort and responsibility, under similar conditions should be paid similar salaries. (International School Alliance of Educators vs. Quisumbing, 333 SCRA 13, 2000).
Q: What is a “Red Circle Rate?”
A: Red Circle Rate allowance is an amount, not included in the basic salary, that is granted by the company to an employee who is promoted to a higher position grade but whose equal actual basic salary at the time of the promotion already exceeds the maximum salary for the position to which he or she is promoted. It applies to specific individuals whose salary levels are unique with respect to their new and higher positions. (Meralco vs. Secretary of Labor).
Q: Are non-Muslim entitled to Muslim Holiday pay?
A: Yes. While Article 3 (3) of the Code of Muslim Laws provides that the provisions of the Code shall be applicable only to Muslims, there should no distinction between Muslims and non-Muslims as regard the payment of benefits of Muslim Holidays. Otherwise, Muslims throughout the Philippines are also not entitled to holiday pays on Christian Holidays as declared by law as regular holidays. (San Miguel Corp. vs. Court of Appeals, 30 January 2002).
Q: What is “surface bargaining” or “blue sky bargaining?”
A: Surface Bargaining as defined as “going through the motions of negotiating” without any legal intent to reach an agreement. (Standard Chartered Bank Employees Union vs. Confesor, G.R. No. 114974, June 16, 2004).
Q: What is a yellow dog contract?
A: It is a promise exacted from workers as a condition of employment that they are not to belong to or attempt to foster a union during their period of employment.
Q: What is a substitutionary doctrine?
A: This doctrine holds that since the CBA is binding on the parties for the period therein specified, the employees cannot validly revoke the same by the simple expedient of changing their bargaining representative. If the employees do change their representative, the CBA nonetheless continues to bind the parties, though the new agent may bargain for the shortening of the contract period.
Q: What is the Doctrine of INNOCENT BY-STANDER?
A: The right to picket is not absolute. The courts can confine the sphere of communication or demonstration to the disputants and insulate establishments or persons with no industrial connection or interest to the dispute.
Q: What is the Successor-in-interest Doctrine?
A: The rule is that employment contracts and collective bargaining agreements are not enforceable against a transferee of an enterprise, labor contracts being in personal, thus binding only between the parties.
Exceptions:
(1) When expressly assumed by the transferor;
(b) When transfer was done with intent to circumvent the law;
© When transfer was clothed with bad faith.
Q: What is the Doctrine of MEANS and PURPOSES?
A: A strike is legal when lawful means concur with lawful purpose or a strike may be legal at the start but it may be declared illegal when the means used in attaining the same are illegal.
Q: What is “featherbedding”?
A: Featherbedding refers to the practice of the union or its agents in causing or attempting to cause an employer to pay or deliver or agree to pay or deliver money or other things of value, in the nature of an action, for services which are not performed or not to be performed. The essence of featherbedding is the exaction of money, or other things of value from the employer by the union. It is not featherbedding where work is performed no matter how unnecessary or useless it may be.
SOCIAL SECURITY ACT OF 1997 (R.A. 8282)
YOLANDA SIGNEY vs. SOCIAL SECURITY SYSTEM
G.R. No. 173582, January 28, 2008, 542 SCRA 629
FACTS: Rodolfo Signey died on May 21, 2001, in his SSS member records, he had designated his common-law wife, Yolanda as primary beneficiaries and his four illegitimate children as secondary beneficiaries. The deceased had a legal wife, Editha, while their only legitimate child predeceased him.
ISSUE: Who is entitled to the death benefits?
HELD: YOLANDA is disqualified to be a beneficiary being a common-law wife while it follows that the dependant illegitimate minor children of the deceased, because the legitimate child of the deceased predeceased him, as the only qualified primary beneficiaries of the deceased, are entitled to 100% of the death benefits.
PREMIUM PAYMENTS OF PERIOD OF SERVICE TO GSIS INCLUDED IN THE RETIREMENT COMPUTATION
G.S.I.S. vs. APOLINARIO C. PAUIG
G.R. No. 210328, January 30, 2017, 816 SCRA 200
FACTS: Pauig was the Municipal Agriculturist of San Pedro, Isabela. He started in the government service as Emergency Laborer on casual status. Later, he became a temporary employee from 1972 to 1977. He thereafter became a permanent employee and he also became a GSIS employee as indicated in his information for membership.
On November 3, 2004, he retired from the service upon reaching the mandatory retirement age of sixty five (65) years old. But when he filed his retirement papers with the GSIS, the latter processed his claim based on a Record of Creditable Service (RCS) and a total length of service of only 27 years.
Disagreeing with the computation, Pauig wrote a letter-complaint to the GSIS arguing that his first fourteen (14) years in the government service had been erroneously omitted.
The GSIS ratiocinated that Pauig’s fourteen (14) years in the government were excluded in the computation of his retirement benefits because during those years, as no premium payments were remitted to it.
ISSUE
Whether Pauig is correct in asserting that his first fourteen (14) years of service should be included to the computation of his retirement benefits.
RULING
NO. Based on the records, Pauig began his career in the government as Emergency Laborer on a casual status. Then he became a temporary employee from 1972 to 1977. The Court noted that it was not until 1997 that the compulsory membership in the GSIS was extended to employees other than those on permanent status.
The law provides under Sec. 3 of RA 4968 that membership in the GSIS shall be compulsory for all employees receiving compensation who have not reached the compulsory retirement age irrespective of employment status.
The primordial reason why there were no deductions during the fourteen (14) years was because Pauig was not yet a GSIS member at that time. There was thus no legal obligation to pay the premium as no basis for the remittance of the same existed. And since only periods of service when premium payments were actually made and duly remitted to the GSIS shall be included in the computation of retirement benefits, said period of fourteen (14) years must necessarily be excluded from Pauig’s creditable service for retirement purposes.
WHEN EMPLOYMENT NOT DEEMED TERMINATED
LAGONOY BUS CO., INC. vs. COURT OF APPEALS
G.R. No. 165598, August 14, 2007, 530 SCRA 121
An employer may bona fide suspend the operations of its business for a period not exceeding six months. In such a case, there is no termination of the employment of the employees, but only a temporary displacement. When the suspension of the business operations exceeds six months, then the employment of the employees could be deemed terminated. If the operation of the business is resumed within six months, it shall be the duty of the employer to reinstate his employees to their former positions without the loss of seniority rights, if the latter would indicate their desire to resume work within one month from such resumption of operations.
EXTRA-MARITAL AFFAIRS WITH CO-TEACHER
A JUST CAUSE FOR DISMISSAL
DANILO OGALISCO vs. HOLY TRINITY COLLEGE OF GENSAN
G.R. 172913, August 9, 2007, 529 SCRA 672
Substantial evidence existing on record showed convincingly the extra-marital affairs of Ogalisco with his co-teacher. Hence, his termination is valid and legal under Article 282 of the Labor Code.
MOTION TO REDUCE APPEAL BOND
COLBY CONSTRUCTION CORP. vs. COURT OF APPEALS
G.R. No. 170099, November 28, 2009, 539 SCRA 159
ISSUE: Whether or not an appeal is perfected by its timely filing of a motion to reduce bond?
HELD: NO. An employer who files a motion to reduce the appeal bond is still required to post the full amount of cash or surety bond within the ten-day reglementary period, even pending resolution of his motion.
HERITAGE HOTEL MANILA vs. NLRC, RAÑON & VILLA
G.R. Nos. 180478-79, September 3, 2009, 598 SCRA `127
No motion to reduce bond shall be entertained except on meritorious grounds, and only upon the posting of a bond in a reasonable amount in relation to the monetary award. The mere filing of a motion to reduce bond without complying with the requisites shall not stop the running of the period to perfect an appeal. The payment of the appeal bond is a jurisdictional requisite for the perfection of an appeal to the NLRC.
UNIVERSITY PLANS, INC. vs. BELINDA P. SOLANO
G.R. No. 170416, June 22, 2011
The Supreme Court ruled that although the requirement of an appeal bond is indispensable in the perfection of an appeal as clearly provided for in Art. 223 of the Labor Code, and as emphasized in the Rules of Procedure of the NLRC. It is likewise provided that reduction of the same is allowed in very specific instances.
The NLRC was not precluded from making a preliminary determination of the employer’s financial capacity to post the required bond without necessarily passing upon the merits of the justification for the reduced bond, the evidence for the purpose would necessarily be less than the evidence required for a ruling on the merit.
UNION REGISTRATION
20% of the Bargaining Unit
TAKATA PHILIPPINES vs. BUREAU OF LABOR RELATIONS
G.R. No. 196276, June 4, 2014, 725 SCRA 61
FACTS: On July 7, 2009, Takata filed with DOLE Regional Office a petition for cancellation of the certificate of union registration of SALAMAT on the ground of misrepresentation, false statement and fraud with respect to the numbers who participated in the organization meeting on May 1, 2009.
During the organizational meeting of SALAMAT, only 68 attendees signed the attendance sheet and which number comprised only 17% of the total number of 396 regular rank-in-file employees. Takata claimed that the union failed to comply the 20% minimum membership requirement.
Takata further insisted that only 119 union members were listed in the union registration instead of 396 rank-and-file employees.
On the other hand, SALAMAT claimed that the 119 union members were more than the 20% required for union registration and further argued that the 68 attendees to the organizational meeting constituted more than 50% of the total union membership of 119.
ISSUES:
(1) Whether the 68 attendees in the organization meeting was obviously less than 20% of the total number of 396 regular rank-and-file employees.
(2) Whether the 119 union members with no signature properly represented the 396 members of the rank-and-file employees.
HELD: (1) The 68 attendees to the organizational meeting represents more than 50% of the total union membership.
The list of employees who participated in the organization meeting was a separate and distinct requirement from the list of the name of members comprising at least 20% of the employees in the bargaining unit.
(2) YES. There was no requirement for signatures opposite the names of the 119 union members.
The 119 union members were more than the 20% for union registration as well the requirement for petition for certification election.
Therefore, no ground of misrepresentation was present to warrant the cancellation of the union registration
Retraction
MARIWASA SIAM CERAMICS, INC. vs. SECRETARY OF LABOR
G.R. No. 183317, December 21, 2009, 608 SCRA 706
FACTS: SMMSC was issued a Certificate of Registration as a legitimate labor organization by the DOLE. A month later, Mariwasa filed a petition for Cancellation of Union Registration against SMMSC for failure to comply with the 20% union membership requirement for its registration as a legitimate labor organization because 102 employees had executed affidavits of recantation of their union membership.
ISSUE: Whether the Union Registration should be cancelled by reason of the affidavits executed by the employees recanting their union membership.
HELD: NO. Withdrawals made before the filing of the petition for certification election are presumed voluntary unless there is a convincing proof to the contrary, whereas withdrawals made after the filing of the petition are deemed involuntary, because then the employees supporting the petition become known to the employer since their names are attached to the petition. Thus, the employer may use foul means for said employees to withdraw their support.
The fact remains that at the time of the union’s application for registration, the affiants were members of SMMSC and they comprised more than the required 20% membership for purposes of registration as a labor union. Article 234 of the Labor Code merely requires a 20% minimum membership during the application for union membership. It does not mandate that a union must maintain the 20% minimum membership requirement all throughout its existence.
Cancellation
STA. LUCIA EAST COMMERCIAL CORPORATION
vs. THE SECRETARY OF LABOR
G.R. No. 162355, August 14, 2009, 596 SCRA 92
ISSUE: Whether the inclusion of disqualified employees is the ground for cancellation for registration as legitimate labor organization.
HELD: NO. The inclusion in the union of disqualified employees is not among the grounds for cancellation of registration unless such inclusion is due to misrepresentation, false statement or fraud under the Labor Code. Thus, CLUP having been validly issued a certificate of registration, should be considered as having acquired juridical personality which may not be attacked collaterally.
Collateral Attack on Legal Personality
SAMAHANG MANGGAGAWA (SMCC-SUPER) vs. CHARTER
CHEMICAL AND COATING CORPORATION
G.R. No. 169717, March 16, 2011, 645 SCRA 538
The legal personality of the union cannot be collaterally attacked in the certification election proceedings.
Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for certification election, such proceeding is non-adversarial and mere investigation, for the purpose thereof is to determine which organization will represent the employees in their collective bargaining with the employer. The choice of their representative is the exclusive concern of the employees; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it, not even a mere allegation that some employees participating in a petition for certification election are actually managerial employees, will lend an employer legal personality to block the certification election. The employer’s only right in the proceeding is to be notified or informed thereof.
CONSTRUCTIVE DISMISSAL
NELSON GAN vs. GALDERMA PHILIPPINES, INC.
G.R. No. 177167, January 17, 2013, 688 SCRA 666
FACTS: Nelson was hired by Galderma as Product Manager for its Consumer Products Division to handle the marketing of CBPL. With his satisfactory performance since during the first year, Nelson was acknowledged and rewarded by Galderma through positive performance appraisal, salary and benefits increases, and informal notations on his marketing reports.
Nelson’s above-average performance in handling CBPL continued in the first quarter of 2002. On April 11, 2002, feeling he was harassed, coerced and intimated by his superior, Nelson severed his employment ties with Galderma. On the same day, his immediate superior at the time accepted the resignation tendered.
ISSUE: Whether Nelson was illegally or constructively dismissed.
HELD: NO. Constructive dismissal is defined as quitting of work because continued employment is rendered impossible, unreasonable or unlikely.
The test of constructive dismissal is whether a reasonable person in the employee’s position would have felt compelled to give up his employment/position under the circumstances. Since Nelson submitted a resignation letter, it is incumbent upon him to prove with clear, positive, and convincing evidence that his resignation was not voluntary but was actually a case of constructive dismissal, that it is a product of coercion or intimidation. Nelson could not have been coerced.
The acts of “harassment,” if true, do not suffice to be considered as “peculiar circumstances” material to the execution of the subject resignation letter that is couched in a clear, concise and categorical language. Its content confirmed his unmistakable intent to resign.
Further, Nelson is no ordinary laborer with limited education and skills, he is not a rank and file employee with inadequate
understanding such that he would be easily beguiled or forced into doing something against his will. He was a management employee holding a responsible position.
GIRLY G. ICO vs. SYSTEM TECHNOLOGY INSTITUTE, INC.
G.R. No. 185100, July 9, 2014, 729 SCRA 439.
When another employee is soon after appointed to a position which the employer claims has been abolished, while the employee who had to vacate the same is transferred against her will to a position which does not exist in the corporate structure, there is evidently a case of illegal constructive dismissal.
MCMER CORPORATIONS, INC. vs. NLRC & FELICIANO LIBUNAO
G.R. No. 193421, June 4, 2014, 725 SCRA 1
Constructive dismissal is defined as a cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee.
The test of constructive dismissal is whether a reasonable person in the employer’s position would have felt compelled to give up his position under the circumstances. It is an act amounting to dismissal but made to appear as if is were not. Constructive dismissal, is therefore, a dismissal in disguise.
As maybe gleaned from the records, what transpired on July 20, 2007 was not merely an isolated outburst on the part of the employer. The latter’s behavior towards his employee shows a clear insensibility rendering the working condition of Libunao unbearable.
Libunao had reason to dawdle and refuse to comply with the summons of his employer out of severe fear that he will be physically harmed.
In fact, the same w as clearly manifested by his immediate reaction to the situation by going to the Valenzuela Police to report the incident.
VICENTE ANG vs. CEFERINO SAN JOAQUIN, JR.
G.R. No. 185549, August 7, 2013, 703 SCRA 269
FACTS: San Joaquin testified in court relative to the 41 criminal cases filed by his former co-employees against his employer, Vicente Ang. The latter began treating him with hostility and antagonism.
Later on, a heated argument ensued between them and led Ang tearing his Daily Time Record.
The following day, he received a Memorandum from Ang placing him under preventive suspension.
ISSUE: Whether the act of tearing employee’s time card constitutes constructive dismissal.
HELD: YES. By destroying his time card, Ang discontinued his relationship with San Joaquin. The purpose of a time card is to show an employee’s attendance in office for work and to be paid accordingly, taking into account the policy of “no work, no pay.”
A daily time record is primarily intended to prevent damage or loss to the employer which could result in instances where it pays an employee for no work done.
VENANCIO S. REYES vs. RP GUARDIANS SECURITY AGENCY
G.R. No. 193756, April 10, 2013, 695 SCRA 620
There is an illegal dismissal when employees were placed on floating status beyond the reasonable six-month period.
ORCHARD GOLF & COUNTRY CLUB vs. AMELIA R. FRANCISCO
G.R. No. 178125, March 18, 2013, 693 SCRA 497
Demotion in rank constitutes constructive dismissal.
VOLUNTARY ARBITRATOR
7K CORPORATION vs. EDDIE ALBANICO
G.R. No. 182295, June 26, 2013, 699 SCRA 700
The voluntary arbitrator has jurisdiction over the legality of the dismissal and entitlement to backwages only when made through the agreement of the parties.
DEATH OF SEAFARER - INSTANCE WHEN DEATH BENEFITS MAY BE DENIED
AGILE MARITIME RESOURCES, INC. vs. APOLINARIO N. SIADOR
G.R. No. 191034, October 1, 2014, 737 SCRA 360
FACTS: Dennis, son of Apolinario, was hired as ordinary seaman by petitioner Agile.
Apolinario filed a complaint for death benefits against petitioner Agile for the death of Dennis who fell from the vessel and died in the high seas.
According to Apolinario, Dennis’ actuation a few days and moments before the incident point to the conclusion that Dennis was already mentally disturbed a few days before he plunged into and drowned in the ocean and cannot be considered willful.
Although the unfortunate incident was undisputed, Agile contends that someone saw Dennis jumped overboard. Additionally, Agile argues that because of the personal circumstances of Dennis characterized by heavy personal and psychological problems may have driven him to take his own life.
This was also backed up by statements of crew members and as found by LA in dismissing the complaint. On appeal, NLRC affirmed the LA’s ruling.
The CA reversed the NLRC and sustained the position that prior to his death, Dennis had been suffering from mental instability and could not be considered to have intentionally taken his life.
ISSUE: Whether Apolonio is entitled to the death benefits.
HELD: NO. Under the POEA-SEC, no compensation shall be payable in respect of any injury, incapacity, disability or death of the seafarer resulting from his willful or criminal act or intentional breach of his duties, provided however, that the employer can prove that such injury, incapacity, disability or death is directly attributable to the seafarer.
As a claimant, Apolinario has the burden of proving that the seafarer’s death (1) is work-related and (2) happened during the term of the employment.
Sufficient proof of insanity or mental sickness may be presented to negate the requirement of willfulness as a matter of counter - defense.
Since the willfulness may be inferred from the physical act itself of the seafarer, the insanity or mental illness required to be proven must be one that deprived him of the full control of his senses. In this regard, selected circumstances prior to and surrounding his death might have provided substantial evidence of the existence of such insanity or mental sickness.
Thus, having proved that the death of Dennis was through his own fault, his father, Apolinario, is not entitled to death benefits.
SEPARATION PAY UNDER THE CBA
BENSON INDUSTRIES EMPLOYEES UNION vs. BENSON INDUSTRIES
G.R. No. 200746, August 6, 2014, 732 SCRA 318
FACTS: Benson Industries sent its employees a notice of their intended termination from employment on the ground of closure and/or cessation of business operations.
The employees were paid of their separation pay computed at 15 days for every year of service.
Despite receipt of their separation pay, the employees were still claiming for the payment of additional separation pay at the rate of four (4) days for every year of service based on the provision of the collective bargaining agreement (CBA) granting separation pay equivalent to not less than nineteen (19) days pay for every year of service.
Benson opposed its employees claim averring that the separation pay already paid to them was already more than what the law requires.
ISSUES: (1) Whether Benson is still liable to pay the additional separation pay.
(2) What is a collective bargaining agreement? Is it the law between the parties?
(3) Whether serious business losses generally exempt the employer from paying separation benefits.
HELD: (1) YES, it is undisputed that a CBA was forged by the employer, Benson, and its employees, through the union, to govern their relations.
It is equally undisputed that Benson agreed to and was thus obligated under the CBA to pay its employees who had been terminated without any fault attributable to them separation benefits at the rate of 19 days for every year of service.
(2) A collective bargaining agreement refers to the negotiated contract between a legitimate labor organization and the employer concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit.
Where the CBA is clear and unambiguous, it becomes the law between the parties and compliance therewith is mandated by the express policy of the law.
(3) YES. Serious business losses generally exempt the employer from paying separation benefits under Article 297 of the Labor Code.
A FACEBOOK POST WITHOUT DIVULGING COMPANY’S INFORMATION IS NOT A GROUND FOR DISMISSAL
INTERADENT ZAHNTECHNIC PHIL., INC. vs. REBECCA SIMBILLO
G.R. No. 207315, November 23, 2016, 810 SCRA 331
FACTS: Respondent Rebecca Simbillo was petitioner Interadent Zahntechnic Phil., Inc.’s treasurer.
Petitioner, through a Notice to Explain, required Simbillo to explain and to attend an administrative hearing regarding a message she posted on her Facebook account referring to company concerns with the BIR.
Respondent Simbillo wrote a reply-letter arguing that she was already constructively dismissed prior to her receipt of the notice.
Petitioner argued that the act alleged to have caused their lost and confidence in Simbillo was her Facebook post disclosing confidential information that gives the impression that Interadent is under investigation by the BIR for irregular transactions.
Respondent Simbillo asserts that her dismissal was without just cause. She averred that the Facebook entry cannot support the breach of trust since it did not mention Interadent.
ISSUE
Whether the Facebook post of the respondent Simbillo referring to the company concerns with the BIR constitutes a valid ground for dismissal.
RULING
NO, it is not a valid ground for dismissal.
As a managerial employee, the existence of a basis for believing that Simbillo has breached the trust of petitioner justifies her dismissal. However, to be a valid ground, loss of trust and confidence must be based on willful breach of trust, that is, done intentionally, knowingly and purposely without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly, or inadvertently.
The Facebook entry of Simbillo did not contain any corporate record or any confidential information. No company information or corporate record was divulged by Simbillo.
Respondent Simbillo can only be said to have acted carelessly in making such a comment on Facebook, however, such would not amount to loss of trust and confidence as to justify her termination from employment.
When the breach of trust or loss of confidence conjectured upon is not borne by clearly established facts, such dismissal on the ground of loss and trust and confidence cannot be upheld.
CIVIL SERVICE EMPLOYEE INVALIDLY DISMISSED IS ENTITLED FOR BACKWAGES AND REINSTATEMENT
JULIUS B. CAMPOL vs. MAYOR RONALD S. BALAO-AS et. al.
G.R. No. 197634, November 28, 2016, 810 SCRA 501
FACTS: Campol served as Secretary of the Sanggunian Bayan (SB) of the Municipality of Baliney, Abra since 1999.
During the 2004 elections, Balao-as and Sianen won as mayor and vice mayor, respectively. Thereafter their assumption to office, The SB passed a resolution terminating Campol as SB Secretary on the ground that he was absent without approved leave from August 1, 2004 to September 30, 2004.
Campol challenged his dismissal before the CSC-CAR which ruled in his favor, however, Vice Mayor Sianen issued a Memorandum dropping Campol from the rolls.
The CSC granted his appeal and ruled that Campol was properly dropped from the rolls.
The CA ruled that Campol was illegally dropped from the rolls, however, it refused his reinstatement as he was gainfully employed with the PAO since October 2005. He was awarded backwages only from the time of his dismissal until October 2005, prior to his employment with another government agency.
ISSUES
1) Whether Campol is entitled to reinstatement.
2) Whether Campol should be awarded backwages only for the period covering his illegal dismissal until his new employment with the PAO.
RULINGS
1) YES, Campol should be reinstated to his position as SB Secretary.
In the event that another person has already been appointed to his post, that person has to give way to the employee whose right to the office has been recognized by the competent authorities.
In the eyes of the law, the position never became vacant since Campol was illegally dropped from the rolls.
2) NO. Campol is entitled to the payment of backwages from the time of his illegal dismissal until he is reinstated to his position. The CA erred in ruling that the backwages should only cover the period of his illegal dismissal until his new employment with the PAO.
An employee of the civil service who is ordered reinstated is also entitled to the full payment of his backwages during the entire period that he was wrongfully prevented from performing the duties of his position and from enjoying its benefits. This is necessarily so because, in the eyes of the law, the employee never truly left the office.
In cases like this, the twin award of reinstatement and payment of full backwages as dictated by the constitutional mandate to protect civil service employee’s right to security of tenure. Anything less that this fails short of the justice due to government employee unfairly removed from office.
DISEASE NOT A GROUND FOR TERMINATION IN THE ABSENCE OF PUBLIC HEALTH AUTHORITY CERTIFICATION
MARINA’S CREATION INTERPRISES et. al. vs. ROMEO V. ANCHETA
G.R. No. 218333, December 7, 2016, 813 SCRA 531
FACTS: Marina is engaged in the business of making shoes and bags. In January 2010, Marina hired respondent Ancheta as a sole attacher in Marina.
In March 2011, Ancheta suffered an intra-cranial hemorrhage (stroke) and was placed under home care. On May 12, 2011, he suffered a second stroke and was confined at St. Victoria Hospital for four days.
On May 26, 2011, Ancheta filed a Sickness Notification with the SSS and was paid sickness benefits. The physician who physically examined him stated that Ancheta would be fit to resume work after ninety (90) days.
On August 13, 2011, Ancheta reported for work, Marina, however, wanted him to submit a new medical certificate before he could resume his work in Marina. Ancheta did not comply and was not able to resume his work in Marina. Ancheta filed a complaint for illegal dismissal against Marina.
Ancheta alleged that after he recovered from his illness, he reported for work in Marina but was advised by Marina to just wait for the company’s call. When Ancheta went back to Marina, he was told to take more rest. Ancheta claimed that Marina had employed two new workers as his replacement. Ancheta alleged that he was not served a notice for his termination and a subsequent notice for hearing as mandated by the Labor Code.
Marina claimed that Ancheta was employed on a piece rate basis and was not terminated but instead was refused job assignments due to his failure to submit a medical clearance showing that he was fit to resume his work.
ISSUE
Whether Marina properly terminated Ancheta in the absence of medical clearance showing that he was fit to resume his work.
RULING
NO. The employer shall not terminate his employment unless there is a certification by a competent public health authority that the disease is of nature or such a stage that it cannot be cured within a period of six months even with proper medical treatment.
The implementing Rules of the Labor Code imposes upon the employer the duty not to terminate an employee until there is a certification by a competent public health authority that the employee’s
disease is of such nature or such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment.
In this case, Marina terminated Ancheta from employment without seeking a prior certification from a competent public health authority that Ancheta’s disease is of such nature or of such stage that it cannot be cured within a period of six (6) months even with proper medical treatment. Hence, Ancheta was illegally dismissed.
BAD FAITH OF CORPORATE OFFICER MAKES HIM SOLIDARILY LIABLE WITH THE COMPANY
RAMIL R. VALENZUELA vs. ALEXANDRA MINING AND OIL VENTURES INC. and CESAR E. DETERA
G.R. No. 222419, October 5, 2016, 805 SCRA 475
FACTS: Valenzuela was hired as a company driver of Alexandra Mining on January 12, 2008, with an eight-hour work shift from 8 a.m. to 5:00 p.m. He did not just suffer to work for the company but also drove for the members of the Detera family.
On June 15, 2013, after five years and five months of service, he was prevented to report for work by Detera who told him that his service is no longer needed as there were no funds forthcoming for his salary.
Respondents alleged that Valenzuela was actually hired as a family driver of the Deteras. They alleged that the monthly salary of Valenzuela was charged to Alexandra Mining account for convenience.
ISSUE
Whether a corporate officer Detera is solidarily liable with the company for money claims of illegally dismissed corporate employee.
RULING
YES, a corporate officer is solidarily liable with the company for money claims of illegally dismissed corporate employee.
As a rule, “a corporate officer is not personally liable for the money claims of discharged corporate employees unless he acted with evident malice and bad faith in terminating their employment.”
Here, Detera’s bad faith was manifested by his persistent assertion that Valenzuela was merely a family driver in order to justify his unceremonious dismissal. He repeatedly insisted that as a family driver or member of the household service, Valenzuela may be terminated at will, which was exactly what he did.
He unreasonably sent Valenzuela home when the latter reported for work, the latter unaware of what he had done to merit such an abrupt termination. Detera’s admission on the reckless manner of Valenzuela’s dismissal justifies holding him solidarily liable with Alexandra Mining.
****GOD’S WAY IS THE BEST WAY****
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