2012 Supreme Court Decisions On Political Law

February 2012 Supreme Court Decisions on Political Law
Posted on March 14, 2012 by Vicente D. Gerochi IV
Here are selected February 2012 rulings of the Supreme Court of the Philippines on political law. Constitutional Law Autonomous Region; plebiscite requirement. Section 18, Article X of the Constitution provides that the creation of the autonomous region shall be effective when approved by majority of the votes cast by the constituent units in a plebiscite called for the purpose. The Supreme Court interpreted this to mean that only amendments to, or revisions of, the Organic Act constitutionally-essential to the creation of autonomous regions i.e., those aspects specifically mentioned in the Constitution which Congress must provide for in the Organic Act require ratification through a plebiscite. While it agrees with the petitioners underlying premise that sovereignty ultimately resides with the people, it disagrees that this legal reality necessitates compliance with the plebiscite requirement for all amendments to RA No. 9054. For if we were to go by the petitioners interpretation of Section 18, Article X of the Constitution that all amendments to the Organic Act have to undergo the plebiscite requirement before becoming effective, this would lead to impractical and illogical results hampering the ARMMs progress by impeding Congress from enacting laws that timely address problems as they arise in the region, as well as weighing down the ARMM government with the costs that unavoidably follow the holding of a plebiscite. Also, Sec. 3 of R.A. No. 10153 cannot be seen as changing the basic structure of the ARMM regional government. On the contrary, this provision clearly preserves the basic structure of the ARMM regional government when it recognizes the offices of the ARMM regional government and directs the OICs who shall temporarily assume these offices to perform the functions pertaining to the said offices. Datu Michael Abas Kida, etc., et al. vs. Senate of the Phil., etc., et al./Basari D. Mapupuno vs. Sixto Brillantes, etc., et al./Rep. Edcel C. Lagman vs.
Paquito N. Ochoa, Jr., etc., et al./Almarin Centi Tillah, et al. vs. The Commission on Elections, etc., et al./Atty. Romulo B. Macalintal vs. Commission on Elections, et al./Luis Barok Biraogo, G.R. No. 196271, February 28, 2012. Citizenship; proceeding for declaration of Philippine citizenship. There is no specific statutory or procedural rule which authorizes the direct filing of a petition for declaration of election of Philippine citizenship before the courts. The special proceeding provided under Section 2, Rule 108 of the Rules of Court on Cancellation or Correction of Entries in the Civil Registry, merely allows any interested party to file an action for cancellation or correction of entry in the civil registry, i.e., election, loss and recovery of citizenship, which is not the relief prayed for by the respondent. The Republic of the Philippines v. Nora Fe Sagun, G.R. No. 187567, February 15, 2012. COMELEC; authority to hold special elections. The Constitution merely empowers the COMELEC to enforce and administer all laws and regulations relative to the conduct of an election. Although the legislature, under the Omnibus Election Code (Batas Pambansa Bilang [BP] 881), has granted the COMELEC the power to postpone elections to another date, this power is confined to the specific terms and circumstances provided for in the law. Specifically, this power falls within the narrow confines of Sections 5 and 6, which address instances when elections have already been scheduled to take place but do not occur or had to be suspended because of unexpected and unforeseen circumstances, such as violence, fraud, terrorism, and other analogous circumstances. In contrast, the ARMM elections were postponed by law, in furtherance of the constitutional mandate of synchronization of national and local elections. Obviously, this does not fall under any of the circumstances contemplated by Section 5 or Section 6 of BP 881. More important, RA No. 10153 has already fixed the date for the next ARMM elections and COMELEC has no authority to set a different election date. Datu Michael Abas Kida, etc., et al. vs. Senate of
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the Phil., etc., et al./Basari D. Mapupuno vs. Sixto Brillantes, etc., et al./Rep. Edcel C. Lagman vs. Paquito N. Ochoa, Jr., etc., et al./Almarin Centi Tillah, et al. vs. The Commission on Elections, etc., et al./Atty. Romulo B. Macalintal vs. Commission on Elections, et al./Luis Barok Biraogo, G.R. No. 196271, February 28, 2012. Commission on Audit; authority to determine if price is excessive; power to conduct post-audit. The COA, under the Constitution, is empowered to examine and audit the use of funds by an agency of the national government on a post-audit basis. For this purpose, the Constitution has provided that the COA shall have exclusive authority, subject to the limitations in this Article, to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government funds and properties. Candelario Verzosa Jr. v. Guillermo Carague and COA, et. al, G.R. No. 157838, February 7, 2012. Commission on Audit; Memorandum No. 07-012; relevance of brand of an equipment as basis for what is reasonable. The COA, under the Constitution, is empowered to examine and audit the use of funds by an agency of the national government on a post-audit basis. For this purpose, the Constitution has provided that the COA shall have exclusive authority, subject to the limitations in this Article, to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government funds and properties. As such, CDAs decisions regarding procurement of equipment for its own use, including computers and its accessories, is subject to the COAs auditing rules and regulations for the prevention and disallowance of irregular, unnecessary, excessive and extravagant
expenditures. Necessarily, CDAs preferences regarding brand of its equipment have to conform to the criteria set by the COA rules on what is reasonable price for the items purchased. Candelario Verzosa Jr. v. Guillermo Carague and COA, et. al, G.R. No. 157838, February 7, 2012. Commission on Audit; Memorandum No. 97-012 (guidelines on evidence to support audit findings of over-pricing). 3.1 When the price/prices of a transaction under audit is found beyond the allowable ten percent (10%) above the prices indicated in reference price lists referred to in pa[r].2.1 as market price indicators, the auditor shall secure additional evidence to firmup the initial audit finding to a reliable degree of certainty. 3.2 To firm-up the findings to a reliable degree of certainty, initial findings of over-pricing based on market price indicators mentioned in pa[r]. 2.1 above have to be supported with canvass sheets and/or price quotations indicating: a) the identities/names of the suppliers or sellers; b) the availability of stock sufficient in quantity to meet the requirements of the procuring agency; c) the specifications of the items which should match those involved in the finding of over-pricing; and d) the purchase/contract terms and conditions which should be the same as those of the questioned transaction. Candelario Verzosa Jr. v. Guillermo Carague and COA, et. al, G.R. No. 157838, February 7, 2012. Commission on Audit; Memorandum No. 97-012; no retroactive effect. In Arriola v. COA, this Court ruled that the disallowance made by the COA was not sufficiently supported by evidence, as it was based on undocumented claims. The documents that were used as basis of the COA Decision were not shown to petitioners therein despite their repeated demands to see them; they were denied access to the actual canvass sheets or price quotations from accredited suppliers. Absent due process and evidence to support COAs disallowance, COAs ruling on petitioners liability has no basis. We categorically ruled in Nava v. Palattao that neither Arriola nor the COA Memorandum No. 97-012 can be given any retroactive effect. Thus, although Arriolawas already promulgated at the
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time, it is not correct to say that the COA in this case violated the aforequoted guidelines which have not yet been issued at the time the audit was conducted in 1993. Candelario Verzosa Jr. v. Guillermo Carague and COA, et. al, G.R. No. 157838, February 7, 2012. Commission on Audit; pre-audit. On 26 October 1982, the COA issued Circular No. 82-195, lifting the system of pre-audit of government financial transactions, albeit with certain exceptions. With the normalization of the political system and the stabilization of government operations, the COA saw it fit to issue Circular No. 89-299, which again lifted the pre-audit of government transactions of national government agencies (NGAs) and government-owned or -controlled corporations (GOCCs). Petitioner claims that the constitutional duty of COA includes the duty to conduct pre-audit. The Supreme Court found that there is nothing in section 2 of Article IX-D of the 1987 Constitution that requires the COA to conduct a pre-audit of all government transactions and for all government agencies. The only clear reference to a pre-audit requirement is found in Section 2, paragraph 1, which provides that a post-audit is mandated for certain government or private entities with state subsidy or equity and only when the internal control system of an audited entity is inadequate. In such a situation, the COA may adopt measures, including a temporary or special pre-audit, to correct the deficiencies. Hence, the conduct of a pre-audit is not a mandatory duty that the Supreme Court may compel the COA to perform. This discretion on its part is in line with the constitutional pronouncement that the COA has the exclusive authority to define the scope of its audit and examination. When the language of the law is clear and explicit, there is no room for interpretation, only application. Neither can the scope of the provision be unduly enlarged by the Court. Gualberto J. Dela Llana v. The Chairperson, Commission on Audit, the Executive Secretary and the National Treasurer, G.R. No. 180989, February 7, 2012. Constitutionality; locus standi. Pres. Aquino, on September 8, 2010, issued EO 7 ordering (1) a moratorium on the increases in the salaries and other
forms of compensation, except salary adjustments under EO 8011 and EO 900, of all GOCC and GFI employees for an indefinite period to be set by the President, and (2) a suspension of all allowances, bonuses and incentives of members of the Board of Directors/Trustees until December 31, 2010. The petitioner claims that as a PhilHealth employee, he is affected by the implementation of EO 7, which was issued with grave abuse of discretion amounting to lack or excess of jurisdiction. Locus standi or legal standing has been defined as a personal and substantial interest in a case such that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged. The gist of the question on standing is whether a party alleges such personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court depends for illumination of difficult constitutional questions. This requirement of standing relates to the constitutional mandate that this Court settle only actual cases or controversies. The Supreme Court was not convinced that the petitioner has demonstrated that he has a personal stake or material interest in the outcome of the case because his interest, if any, is speculative and based on a mere expectancy. In this case, the curtailment of future increases in his salaries and other benefits cannot but be characterized as contingent events or expectancies. To be sure, he has no vested rights to salary increases and, therefore, the absence of such right deprives the petitioner of legal standing to assail EO 7. Neither can the lack of locus standi be cured by the petitioners claim that he is instituting the present petition as a member of the bar in good standing who has an interest in ensuring that laws and orders of the Philippine government are legally and validly issued. This supposed interest has been branded by the Court in Integrated Bar of the Phils. (IBP) v. Hon. Zamora, as too general an interest which is shared by other groups and [by] the whole citizenry. Thus, the Court ruled in IBP that the mere invocation by the IBP of its duty to preserve the rule of law and nothing more, while undoubtedly true, is not sufficient to clothe it with standing in that case. Jelbert B. Galicto vs. H.E. President Benigno Simeon C. Aquino III, et al. G.R. No. 193978, February 28, 2012.
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DAR Administrative Order No. 01; 2003 Rules Governing Issuance of Notice of Coverage and Acquisition of Agricultural Lands under RA No. 6657; procedure; commencement. Commencement by the Municipal Agrarian Reform Officer (MARO) After determining that a landholding is coverable under the CARP, and upon accomplishment of the Pre-Ocular Inspection Report, the MARO shall prepare the NO (CARP Form No. 5-1). Corolarilly, Administrative Order No. 01, Series of 1998, which outlines the steps in the acquisition of lands, details that in the 3 rd step, the Department of Agrarian Reform Municipal Office (DARMO) should conduct a preliminary ocular inspection to determine initially whether or not the property maybe covered under the CARP, which findings will be contained in CARP Form No. 3.a, or the Preliminary Ocular Inspection Report. Gonzalo Puyat & Sons, Inc. vs. Ruben Alcaide (deceased), substituted by Gloria Alcaide representative of the Farmer-Beneficiaries, G.R. No. 167952, February 1, 2012. Declaratory relief. Under the Rules of Court, petitions for Certiorari and Prohibition are availed of to question judicial, quasi-judicial and mandatory acts. Since the issuance of an EO is not judicial, quasi-judicial or a mandatory act, a petition for certiorari and prohibition is an incorrect remedy; instead a petition for declaratory relief under Rule 63 of the Rules of Court, filed with the Regional Trial Court (RTC), is the proper recourse to assail the validity of EO 7. Jelbert B. Galicto vs. H.E. President Benigno Simeon C. Aquino III, et al. G.R. No. 193978, February 28, 2012. Double jeopardy. The rule against double jeopardy cannot be properly invoked in a Rule 65 petition, predicated on two (2) exceptional grounds, namely: in a judgment of acquittal rendered with grave abuse of discretion by the court; and where the prosecution had been deprived of due process. The rule against double jeopardy does not apply in these instances because a Rule 65 petition does not involve a review of facts and law on the merits in the manner done in an appeal. In certiorari proceedings, judicial review does not examine and assess the evidence of the parties nor weigh the
probative value of the evidence. It does not include an inquiry on the correctness of the evaluation of the evidence. A review under Rule 65 only asks the question of whether there has been a validly rendered decision, not the question of whether the decision is legally correct. In other words, the focus of the review is to determine whether the judgment is per se void on jurisdictional grounds. Arnold James M. Ysidoro vs. Hon. Teresita J. Leonardo-de Castro, et al, G.R. No. 171513, February 6, 2012. Double jeopardy; exceptions. The rule on double jeopardy is one of the pillars of our criminal justice system. It dictates that when a person is charged with an offense, and the case is terminated either by acquittal or conviction or in any other manner without the consent of the accused the accused cannot again be charged with the same or an identical offense. This principle is founded upon the law of reason, justice and conscience. It is embodied in the civil law maxim non bis in idem found in the common law of England and undoubtedly in every system of jurisprudence. It found expression in the Spanish Law, in the Constitution of the United States, and in our own Constitution as one of the fundamental rights of the citizen, viz: The rule on double jeopardy thus prohibits the state from appealing the judgment in order to reverse the acquittal or to increase the penalty imposed either through a regular appeal under Rule 41 of the Rules of Court or through an appeal by certiorari on pure questions of law under Rule 45 of the same Rules. The requisites for invoking double jeopardy are the following: (a) there is a valid complaint or information; (b) it is filed before a competent court; (c) the defendant pleaded to the charge; and (d) the defendant was acquitted or convicted, or the case against him or her was dismissed or otherwise terminated without the defendants express consent. A verdict of acquittal is immediately final and a reexamination of the merits of such acquittal, even in the appellate courts, will put the accused in jeopardy for the same offense. The finality-of-acquittal doctrine has several avowed purposes. Primarily, it prevents the State from using its criminal processes as an instrument of harassment to wear out the accused by a multitude of cases with accumulated trials. It also serves the additional
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purpose of precluding the State, following an acquittal, from successively retrying the defendant in the hope of securing a conviction. And finally, it prevents the State, following conviction, from retrying the defendant again in the hope of securing a greater penalty. An acquitted defendant is entitled to the right of repose as a direct consequence of the finality of his acquittal. This prohibition, however, is not absolute. The state may challenge the lower courts acquittal of the accused or the imposition of a lower penalty on the latter in the following recognized exceptions: (1) where the prosecution is deprived of a fair opportunity to prosecute and prove its case, tantamount to a deprivation of due process; (2) where there is a finding of mistrial; or (3) where there has been a grave abuse of discretion. Artemio Villareal vs. People of the Philippines/People of the Philippines vs. The Honorable Court of Appeals, et al./Fidelito Dizon vs. People of the Philippines/Gerarda H. Villa vs. Manuel Lorenzo Escalona II, et al. G.R. No. 151258/G.R. No. 154954/G.R. No. 155101/G.R. Nos. 178057 & G.R. No. 178080, February 1, 2012. Due process; deprivation of the States right to due process. The State, like any other litigant, is entitled to its day in court; in criminal proceedings, the public prosecutor acts for and represents the State, and carries the burden of diligently pursuing the criminal prosecution in a manner consistent with public interest. The States right to be heard in court rests to a large extent on whether the public prosecutor properly undertook his duties in pursuing the criminal action for the punishment of the guilty. The prosecutors role in the administration of justice is to lay before the court, fairly and fully, every fact and circumstance known to him or her to exist, without regard to whether such fact tends to establish the guilt or innocence of the accused and without regard to any personal conviction or presumption on what the judge may or is disposed to do. The prosecutor owes the State, the court and the accused the duty to lay before the court the pertinent facts at his disposal with methodical and meticulous attention, clarifying contradictions and filling up gaps and loopholes in his evidence to the end that the courts mind may not be tortured by doubts; that the innocent may not suffer; and
that the guilty may not escape unpunished. In the conduct of the criminal proceedings, the prosecutor has ample discretionary power to control the conduct of the presentation of the prosecution evidence, part of which is the option to choose what evidence to present or who to call as witness. In this case, the State was not denied due process in the proceedings before the Sandiganbayan. There was no indication that the special prosecutor deliberately and willfully failed to present available evidence or that other evidence could be secured. People of the Philippines, v. Hon. Sandiganbayan (Fourth Division), et al., G.R. No. 153304-05, February 7, 2012. Elections; synchronization of ARMM elections with local elections. The Court was unanimous in holding that the Constitution mandates the synchronization of national and local elections. While the Constitution does not expressly instruct Congress to synchronize the national and local elections, the intention can be inferred from Sections 1, 2 and 5 of the Transitory Provisions (Article XVIII) of the Constitution. The framers of the Constitution could not have expressed their objective more clearly there was to be a single election in 1992 for all elective officials from the President down to the municipal officials. Significantly, the framers were even willing to temporarily lengthen or shorten the terms of elective officials in order to meet this objective, highlighting the importance of this constitutional mandate. That the ARMM elections were not expressly mentioned in the Transitory Provisions of the Constitution on synchronization cannot be interpreted to mean that the ARMM elections are not covered by the constitutional mandate of synchronization. It is to be considered that the ARMM, as we now know it, had not yet been officially organized at the time the Constitution was enacted and ratified by the people. Keeping in mind that a constitution is not intended to provide merely for the exigencies of a few years but is to endure through generations for as long as it remains unaltered by the people as ultimate sovereign, a constitution should be construed in the light of what actually is a continuing instrument to govern not only the present but also the
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unfolding events of the indefinite future. Although the principles embodied in a constitution remain fixed and unchanged from the time of its adoption, a constitution must be construed as a dynamic process intended to stand for a great length of time, to be progressive and not static. Article X of the Constitution, entitled Local Government, clearly shows the intention of the Constitution to classify autonomous regions, such as the ARMM, as local governments. The inclusion of autonomous regions in the enumeration of political subdivisions of the State under the heading Local Government indicates quite clearly the constitutional intent to consider autonomous regions as one of the forms of local governments. That the Constitution mentions only the national government and the local governments, and does not make a distinction between the local government and the regional government, is particularly revealing, betraying as it does the intention of the framers of the Constitution to consider the autonomous regions not as separate forms of government, but as political units which, while having more powers and attributes than other local government units, still remain under the category of local governments. Since autonomous regions are classified as local governments, it follows that elections held in autonomous regions are also considered as local elections. Datu Michael Abas Kida, et. al v. Senate of the Philippines, G.R. No. 196271, February 28, 2012. Eminent domain; just compensation. When the State exercises its inherent power of eminent domain, the Constitution imposes the corresponding obligation to compensate the landowner for the expropriated property. When the State exercises the power of eminent domain in the implementation of its agrarian reform program, the constitutional provision which governs is Section 4, Article XIII of the Constitution. Notably, this provision also imposes upon the State the obligation of paying the landowner compensation for the land taken, even if it is for the governments agrarian reform purposes. That the compensation mentioned here pertains to the fair and full price of the taken property is evident from the exchange between the members of the Constitutional Commission
during the discussion on the governments agrarian reform program. Land Bank of the Philippines v. Honeycomb Farms Corporation, G.R. No. 169903, February 29, 2012. Equal protection clause. The equal protection clause means that no person or class of persons shall be deprived of the same protection of laws enjoyed by other persons or other classes in the same place in like circumstances. Thus, the guarantee of the equal protection of laws is not violated if there is a reasonable classification. For a classification to be reasonable, it must be shown that (1) it rests on substantial distinctions; (2) it is germane to the purpose of the law; (3) it is not limited to existing conditions only; and (4) it applies equally to all members of the same class. Unfortunately, CMO 27-2003 does not meet these requirements. It was not seen how the quality of wheat is affected by who imports it, where it is discharged, or which country it came from. Commissioner of Customs and the District Collector of the Port of Subic v. Hypermix Feeds Corporation, G.R. No. 179579, February 1, 2012. Executive agreement; requisites. An executive agreement is similar to a treaty, except that the former (a) does not require legislative concurrence; (b) is usually less formal; and (c) deals with a narrower range of subject matters. Despite these differences, to be considered an executive agreement, the following three requisites provided under the Vienna Convention must nevertheless concur: (a) the agreement must be between states; (b) it must be written; and (c) it must governed by international law. China National machinery & Equipment Corp. v. Hon. Cesar Santamaria, et. al, G.R. No. 185572, February 7, 2012. Executive Power; power to classify or reclassify lands. The power to classify or reclassify lands is essentially an executive prerogative, albeit local government units, thru zoning ordinances, may, subject to certain conditions, very well effect reclassification of land use within their respective territorial jurisdiction. Reclassification decrees issued by the
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executive department, through its appropriate agencies, carry the same force and effect as any statute. As it were, PD 27 and Proclamation 1637 are both presidential issuances, each forming, by virtue of Sec. 3(2), Article XVII of the 1973 Constitution, a part of the law of the land. Land Bank of the Philippines vs. Estate of J. Amado Araneta / Department of Agrarian Reform vs. Estate of J. Armado Araneta / Ernesto B. Duran, Lope P. Abalos (deceased) represented by Lope Abalos, Jr., et al. vs. Estate of J. Amado Araneta, G.R. Nos. 161796;161830 & 190456, February 8, 2012. Irrepealable law. The supermajority vote requirement set forth in Section 1, Article XVII of RA No. 9054 is unconstitutional for violating the principle that Congress cannot pass irrepealable laws. The power of the legislature to make laws includes the power to amend and repeal these laws. Where the legislature, by its own act, attempts to limit its power to amend or repeal laws, the Court has the duty to strike down such act for interfering with the plenary powers of Congress. Under our Constitution, each House of Congress has the power to approve bills by a mere majority vote, provided there is quorum. In requiring all laws which amend RA No. 9054 to comply with a higher voting requirement than the Constitution provides (2/3 vote), Congress, which enacted RA No. 9054, clearly violated the very principle which the Supreme Court sought to establish in Duarte. To reiterate, the act of one legislature is not binding upon, and cannot tie the hands of, future legislatures. Datu Michael Abas Kida, etc., et al. vs. Senate of the Phil., etc., et al./Basari D. Mapupuno vs. Sixto Brillantes, etc., et al./Rep. Edcel C. Lagman vs. Paquito N. Ochoa, Jr., etc., et al./Almarin Centi Tillah, et al. vs. The Commission on Elections, etc., et al./Atty. Romulo B. Macalintal vs. Commission on Elections, et al./Luis Barok Biraogo, G.R. No. 196271, February 28, 2012. President; judicial courtesy. Firstly, the principle of judicial courtesy is based on the hierarchy of courts and applies only to lower courts in instances where, even if there is no writ of preliminary injunction or TRO issued by a higher court, it would be proper for a lower court to suspend its
proceedings for practical and ethical considerations. In other words, the principle of judicial courtesy applies where there is a strong probability that the issues before the higher court would be rendered moot and moribund as a result of the continuation of the proceedings in the lower court or court of origin. Consequently, this principle cannot be applied to the President, who represents a co-equal branch of government. To suggest otherwise would be to disregard the principle of separation of powers, on which our whole system of government is founded upon. Secondly, the fact that our previous decision was based on a slim vote of 8-7 does not, and cannot, have the effect of making our ruling any less effective or binding. Regardless of how close the voting is, so long as there is concurrence of the majority of the members of the en banc who actually took part in the deliberations of the case, a decision garnering only 8 votes out of 15 members is still a decision of the Supreme Court en banc and must be respected as such. The petitioners are, therefore, not in any position to speculate that, based on the voting, the probability exists that their motion for reconsideration may be granted. Datu Michael Abas Kida, etc., et al. vs. Senate of the Phil., etc., et al./Basari D. Mapupuno vs. Sixto Brillantes, etc., et al./Rep. Edcel C. Lagman vs. Paquito N. Ochoa, Jr., etc., et al./Almarin Centi Tillah, et al. vs. The Commission on Elections, etc., et al./Atty. Romulo B. Macalintal vs. Commission on Elections, et al./Luis Barok Biraogo, G.R. No. 196271, February 28, 2012. President; power to appoint officer in charge. The power to appoint has traditionally been recognized as executive in nature. Section 16, Article VII of the Constitution describes in broad strokes the extent of this power. The main distinction between the provision in the 1987 Constitution and its counterpart in the 1935 Constitution is the sentence construction; while in the 1935 Constitution, the various appointments the President can make are enumerated in a single sentence, the 1987 Constitution enumerates the various appointments the President is empowered to make and divides the enumeration in two sentences. The change in style is significant; in providing for this change, the framers of the 1987 Constitution clearly
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sought to make a distinction between the first group of presidential appointments and the second group of presidential appointments. he first group of presidential appointments, specified as the heads of the executive departments, ambassadors, other public ministers and consuls, or officers of the Armed Forces, and other officers whose appointments are vested in the President by the Constitution, pertains to the appointive officials who have to be confirmed by the Commission on Appointments. The second group of officials the President can appoint are all other officers of the Government whose appointments are not otherwise provided for by law, and those whom he may be authorized by law to appoint. The second sentence acts as the catch-all provision for the Presidents appointment power, in recognition of the fact that the power to appoint is essentially executive in nature. The wide latitude given to the President to appoint is further demonstrated by the recognition of the Presidents power to appoint officials whose appointments are not even provided for by law. In other words, where there are offices which have to be filled, but the law does not provide the process for filling them, the Constitution recognizes the power of the President to fill the office by appointment. There is no incompatibility between the Presidents power of supervision over local governments and autonomous regions, and the power granted to the President, within the specific confines of RA No. 10153, to appoint OICs. Datu Michael Abas Kida, etc., et al. vs. Senate of the Phil., etc., et al./Basari D. Mapupuno vs. Sixto Brillantes, etc., et al./Rep. Edcel C. Lagman vs. Paquito N. Ochoa, Jr., etc., et al./Almarin Centi Tillah, et al. vs. The Commission on Elections, etc., et al./Atty. Romulo B. Macalintal vs. Commission on Elections, et al./Luis Barok Biraogo, G.R. No. 196271, February 28, 2012. State immunity; doctrine of state immunity. According to the classical or absolute theory, a sovereign cannot, without its consent, be made a respondent in the courts of another sovereign. According to the newer or restrictive theory, the immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a state, but not with regard to
private acts or acts jure gestionis. Since the Philippines adheres to the restrictive theory, it is crucial to ascertain the legal nature of the act involved whether the entity claiming immunity performs governmental, as opposed to proprietary, functions. A thorough examination of the basic facts of the case would show that CNMEG is engaged in a proprietary activity. Piecing together the content and tenor of the Contract Agreement, the Memorandum of Understanding dated 14 September 2002, Amb. Wangs letter dated 1 October 2003, and the Loan Agreement would reveal the desire of CNMEG to construct the Luzon Railways in pursuit of a purely commercial activity performed in the ordinary course of its business. Even assuming arguendo that CNMEG performs governmental functions, such claim does not automatically vest it with immunity. It is readily apparent that CNMEG cannot claim immunity from suit, even if it contends that it performs governmental functions. Its designation as the Primary Contractor does not automatically grant it immunity, just as the term implementing agency has no precise definition for purposes of ascertaining whether GTZ was immune from suit. Although CNMEG claims to be a government-owned corporation, it failed to adduce evidence that it has not consented to be sued under Chinese law. Thus, following this Courts ruling in Deutsche Gesellschaft, in the absence of evidence to the contrary, CNMEG is to be presumed to be a government-owned and -controlled corporation without an original charter. As a result, it has the capacity to sue and be sued under Section 36 of the Corporation Code. China National machinery & Equipment Corp. v. Hon. Cesar Santamaria, et. al, G.R. No. 185572, February 7, 2012. State immunity; waiver by submission to arbitration. In the United States, the Foreign Sovereign Immunities Act of 1976 provides for a waiver by implication of state immunity. In the said law, the agreement to submit disputes to arbitration in a foreign country is construed as an implicit waiver of immunity from suit. Although there is no similar law in the Philippines, there is reason to apply the legal reasoning behind the waiver in this case. Under the provisions of The Conditions of Contract which is an
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integral part of the Contract Agreement,, if any dispute arises between Northrail and CNMEG, both parties are bound to submit the matter to the HKIAC for arbitration. In case the HKIAC makes an arbitral award in favor of Northrail, its enforcement in the Philippines would be subject to the Special Rules on Alternative Dispute Resolution (Special Rules). Rule 13 thereof provides for the Recognition and Enforcement of a Foreign Arbitral Award. Under Rules 13.2 and 13.3 of the Special Rules, the party to arbitration wishing to have an arbitral award recognized and enforced in the Philippines must petition the proper regional trial court (a) where the assets to be attached or levied upon is located; (b) where the acts to be enjoined are being performed; (c) in the principal place of business in the Philippines of any of the parties; (d) if any of the parties is an individual, where any of those individuals resides; or (e) in the National Capital Judicial Region. From all the foregoing, it is clear that CNMEG has agreed that it will not be afforded immunity from suit. Thus, the courts have the competence and jurisdiction to ascertain the validity of the Contract Agreement. China National machinery & Equipment Corp. v. Hon. Cesar Santamaria, et. al, G.R. No. 185572, February 7, 2012. Supreme Court; respect to factual findings of administrative agencies. It is the general policy of the Court to sustain the decisions of administrative authorities, especially one which is constitutionally-created, not only on the basis of the doctrine of separation of powers but also for their presumed expertise in the laws they are entrusted to enforce. Findings of quasijudicial agencies, such as the COA, which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but at times even finality if such findings are supported by substantial evidence, and the decision and order are not tainted with unfairness or arbitrariness that would amount to grave abuse of discretion. Candelario Verzosa Jr. v. Guillermo Carague and COA, et. al, G.R. No. 157838, February 7, 2012.
Taxpayers suit; standing. A taxpayer is deemed to have the standing to raise a constitutional issue when it is established that public funds from taxation have been disbursed in alleged contravention of the law or the Constitution. Gualberto J. Dela Llana v. The Chairperson, Commission on Audit, the Executive Secretary and the National Treasurer, G.R. No. 180989, February 7, 2012. Administrative Law Administrative Rule; due process; publication, when required. The Commissioner of Customs issued CMO 27-2003. Under the Memorandum, for tariff purposes, wheat was classified according to the following: (1) importer or consignee; (2) country of origin; and (3) port of discharge. The regulation provided an exclusive list of corporations, ports of discharge, commodity descriptions and countries of origin. Depending on these factors, wheat would be classified either as food grade or feed grade. The corresponding tariff for food grade wheat was 3%, for feed grade, 7%.CMO 27-2003 further provided for the proper procedure for protest or Valuation and Classification Review Committee (VCRC) cases. Considering that the regulation would affect the substantive rights of respondent, it therefore follows that petitioners should have applied Sections 3 and 9 of Book VII, Chapter 2 of the Revised Administrative Code. When an administrative rule is merely interpretative in nature, its applicability needs nothing further than its bare issuance, for it gives no real consequence more than what the law itself has already prescribed. When, on the other hand, the administrative rule goes beyond merely providing for the means that can facilitate or render least cumbersome the implementation of the law but substantially increases the burden of those governed, it behooves the agency to accord at least to those directly affected a chance to be heard, and thereafter to be duly informed, before that new issuance is given the force and effect of law. Because petitioners failed to follow the requirements enumerated by the Revised Administrative Code, the assailed regulation must be struck down. Commissioner of Customs and the District Collector
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of the Port of Subic v. Hypermix Feeds Corporation, G.R. No. 179579, February 1, 2012. Void government contract; payment for services. Parties who do not come to court with clean hands cannot be allowed to profit from their own wrongdoing. The action (or inaction) of the party seeking equity must be free from fault, and he must have done nothing to lull his adversary into repose, thereby obstructing and preventing vigilance on the part of the latter. Here, even with the respondents supposed failure to ascertain the validity of the contract and the authority of the public official involved in the construction agreements, there is no such confusion as to the matter of the contracts validity and the equivalent compensation. As found by the court a quo, petitioner had assured the contractors that they would be paid for the work that they would do, as even DPWH Undersecretary Teodoro T. Encarnacion had told them to fast-track the project. Hence, respondents cannot by any stretch of logic, be deprived of compensation for their services when despite their ostensible omissions they only heeded the assurance of DPWH and proceeded to work on the urgent project. DPWH v. Ronaldo Quiwa, et. al, G.R. No. 183444, February 8, 2012. Agrarian Reform Agrarian Reform Law; agricultural lands. The primary governing agrarian law with regard to agricultural lands, be they of private or public ownership and regardless of tenurial arrangement and crops produced, is now RA 6657. Section 3(c) of RA 6657 defines agricultural lands as lands devoted to agricultural activity as defined in the Act and not classified as mineral, forest, residential, commercial or industrial land. Land Bank of the Philippines vs. Estate of J. Amado Araneta / Department of Agrarian Reform vs. Estate of J. Armado Araneta / Ernesto B. Duran, Lope P. Abalos (deceased) represented by Lope Abalos, Jr., et al. vs. Estate of J. Amado Araneta, G.R. Nos. 161796;161830 & 190456, February 8, 2012.
Agrarian Reform Law; applicability of PD 27, RA 6657, and Proclamation 1637. From the standpoint of agrarian reform, PD 27, being in context the earliest issuance, governed at the start the disposition of the rice-and-corn land portions of the Doronilla property. And true enough, the DAR began processing land transfers through the OLT program under PD 27 and thereafter issued the corresponding CLTs. However, when Proclamation 1637 went into effect, DAR discontinued with the OLT processing. The tenants of Doronilla during that time desisted from questioning the halt in the issuance of the CLTs. It is fairly evident that DAR noted the effect of the issuance of Proclamation 1637 on the subject land and decided not to pursue its original operation, recognizing the change of classification of the property from agricultural to residential. When it took effect on June 15, 1988, RA 6657 became the prevailing agrarian reform law. This is not to say, however, that its coming into effect necessarily impeded the operation of PD 27, which, to repeat, covers only rice and corn land. Far from it, for RA 6657, which identifies rice and corn land under PD 27 as among the properties the DAR shall acquire and distribute to the landless, no less provides that PD 27 shall be of suppletory application. Land Bank of the Philippines vs. Estate of J. Amado Araneta / Department of Agrarian Reform vs. Estate of J. Armado Araneta / Ernesto B. Duran, Lope P. Abalos (deceased) represented by Lope Abalos, Jr., et al. vs. Estate of J. Amado Araneta, G.R. Nos. 161796; 161830 & 190456, February 8, 2012. Agrarian Reform Law; certificates of title; merely an evidence of recognition by the government; inchoate right. While the PD 27 tenantfarmers are considered the owners by virtue of that decree, they cannot yet exercise all the attributes inherent in ownership, such as selling the lot, because, with respect to the government represented by DAR and LBP, they have in the meantime only inchoate rights in the lotthe being amortizing owners. This is because they must still pay all the amortizations over the lot to Land Bank before an EP is issued to them. Then and only then do they acquire, in the phraseology ofVinzons-Magana, the vested right of absolute ownership in the landholding. Land Bank of
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the Philippines vs. Estate of J. Amado Araneta / Department of Agrarian Reform vs. Estate of J. Armado Araneta / Ernesto B. Duran, Lope P. Abalos (deceased) represented by Lope Abalos, Jr., et al. vs. Estate of J. Amado Araneta, G.R. Nos. 161796; 161830 & 190456, February 8, 2012. Agrarian Reform Law; private rights; just compensation. As payment the farmer-beneficiaries who were given the 75 CLTs prior to the issuance of Proclamation 1283, as amended by Proclamation 1637, are deemed full owners of the lots covered by 75 CLTs vis--vis the real registered owner. The farmer-beneficiaries have private rights over said lots as they were deemed owners prior to the establishment of the LS Townsite reservation or at least are subrogated to the rights of the registered lot owner. Those farmer-beneficiaries who were issued CLTs or EPs after June 21, 1974 when Proclamation 1283, as amended, became effective do not acquire rights over the lots they were claiming under PD 27 or RA 6657, because the lots have already been reclassified as residential and are beyond the compulsory coverage for agrarian reform under RA 6657. Perforce, the said CLTs or EPs issued after June 21, 1974 have to be annulled and invalidated for want of legal basis, since the lots in question are no longer subject to agrarian reform due to the reclassification of the erstwhile Doronilla estate to non-agricultural purposes. Land Bank of the Philippines vs. Estate of J. Amado Araneta / Department of Agrarian Reform vs. Estate of J. Armado Araneta / Ernesto B. Duran, Lope P. Abalos (deceased) represented by Lope Abalos, Jr., et al. vs. Estate of J. Amado Araneta, G.R. Nos. 161796;161830 & 190456, February 8, 2012. Agricultural tenancy relationship; de jure tenant; grounds for ejection provided by law. Respondent, as landowner/agricultural lessor, has the burden to prove the existence of a lawful cause for the ejectment of petitioner, the tenant/agricultural lessee. This rule proceeds from the principle that a tenancy relationship, once established, entitles the tenant to a security of tenure. The tenant can only be ejected from the agricultural landholding on grounds provided by law, in this case Section 36 of R.A.
No. 3844. SEC. 36. Possession of Landholding; Exceptions. Notwithstanding any agreement as to the period or future surrender of the land, an agricultural lessee shall continue in the enjoyment and possession of his landholding except when his dispossession has been authorized by the Court in a judgment that is final and executory if after due hearing it is shown that: (1) The agricultural lessor-owner or a member of his immediate family will personally cultivate the landholding or will convert the landholding, if suitably located, into residential, factory, hospital or school site or other useful non-agricultural purposes: Provided; That the agricultural lessee shall be entitled to disturbance compensation equivalent to five years rental on his landholding in addition to his rights under Sections 25 and except when the land owned and leased by the agricultural lessor is not more than five hectares, in which case instead of disturbance compensation the lessee may be entitled to an advance notice of at least one agricultural year before ejectment proceedings are filed against him: Provided, further, That should the landholder not cultivate the land himself for three years or fail to substantially carry out such conversion within one year after the dispossession of the tenant, it shall be presumed that he acted in bad faith and the tenant shall have the right to demand possession of the land and recover damages for any loss incurred by him because of said dispossession; (2) The agricultural lessee failed to substantially comply with any of the terms and conditions of the contract or any of the provisions of this Code unless his failure is caused by fortuitous event orforce majeure; (3) The agricultural lessee planted crops or used the landholding for a purpose other than what had been previously agreed upon; (4) The agricultural lessee failed to adopt proven farm practices as determined under paragraph 3 of Section 29; (5) The land or other substantial permanent improvement thereon is substantially damaged or destroyed or has unreasonably deteriorated through the fault or negligence of the agricultural lessee; (6) The agricultural lessee does not pay the lease rental when it falls due: Provided, That if the non-payment of the rental shall be due to crop failure to the extent of seventy-five per centum as a result of a fortuitous event, the non-payment shall not be a ground for
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dispossession, although the obligation to pay the rental due that particular crop is not thereby extinguished; or (7) The lessee employed a sub-lessee on his landholding in violation of the terms of paragraph 2 of Section 27. Juan Galope v. Cresencia Bugarin, G.R. No. 185669, February 1, 2012. Agricultural tenancy relationship; requisites; may be established through written or oral contract. The essential elements of an agricultural tenancy relationship are: (1) the parties are the landowner and the tenant or agricultural lessee; (2) the subject matter of the relationship is agricultural land; (3) there is consent between the parties to the relationship; (4) the purpose of the relationship is to bring about agricultural production; (5) there is personal cultivation on the part of the tenant or agricultural lessee; and (6) the harvest is shared between the landowner and the tenant or agricultural lessee. Section 5 of Republic Act (R.A.) No. 3844, otherwise known as the Agricultural Land Reform Code, recognizes that an agricultural leasehold relation may exist upon an oral agreement. Juan Galope v. Cresencia Bugarin, G.R. No. 185669, February 1, 2012. Jurisdiction of DAR; DARAB. The DARAB has been created and designed to exercise the DARs adjudicating functions. And just like any quasijudicial body, DARAB derives its jurisdiction from law, specifically RA 6657, which invested it with adjudicatory powers over agrarian reform disputes and matters related to the implementation of CARL. The Supreme Court need not belabor that DARABs jurisdiction over the subject matter, the Doronilla property, cannot be conferred by the main parties, let alone the intervening farmer-beneficiaries claiming to have vested rights under PD 27. As earlier discussed, the process of land reform covering the 1,266 hectares of the Araneta estate was not completed prior to the issuance of Proclamation 1637. So the intervenors, with the exception of the 79 tenantbeneficiaries who were granted CLTs, failed to acquire private rights of ownership under PD 27 before the effective conversion of the Doronilla property to non-agricultural uses. Hence, the Doronilla property, being outside of CARP coverage, is also beyond DARABs jurisdiction. Land
Bank of the Philippines vs. Estate of J. Amado Araneta / Department of Agrarian Reform vs. Estate of J. Armado Araneta / Ernesto B. Duran, Lope P. Abalos (deceased) represented by Lope Abalos, Jr., et al. vs. Estate of J. Amado Araneta, G.R. Nos. 161796;161830 & 190456, February 8, 2012. Social justice; laches. There can be little quibble about Duran, et al. being guilty of laches. They failed and neglected to keep track of their case with their lawyer for 14 long years. As discussed above, Atty. Lara died even prior to the promulgation of the DARAB Decision. Even then, they failed to notify the DARAB and the other parties of the case regarding the demise of Atty. Lara and even a change of counsel. It certainly strains credulity to think that literally no one, among those constituting the petitioningintervenors, had the characteristic good sense of following up the case with their legal counsel. Only now, 14 years after, did some think of fighting for the right they slept on. Thus, as to them, the CA Decision is deemed final and executory based on the principle of laches. Agrarian reform finds context in social justice in tandem with the police power of the State. But social justice itself is not merely granted to the marginalized and the underprivileged. But while the concept of social justice is intended to favor those who have less in life, it should never be taken as a toll to justify let alone commit an injustice. Land Bank of the Philippines vs. Estate of J. Amado Araneta / Department of Agrarian Reform vs. Estate of J. Armado Araneta / Ernesto B. Duran, Lope P. Abalos (deceased) represented by Lope Abalos, Jr., et al. vs. Estate of J. Amado Araneta, G.R. Nos. 161796;161830 & 190456, February 8, 2012.
Public Land

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Public Land Act; alienable and disposable land. Public Land Act requires that the applicant for registration must prove (a) that the land is alienable public land; and (b) that the open, continuous, exclusive and notorious possession and occupation of the land must have been either since time immemorial or for the period prescribed in the Public Land Act. Certifications of the DENR are not sufficient to prove the foregoing. DENR Administrative Order (DAO) No. 20, 18 dated 30 May 1988, delineated the functions and authorities of the offices within the DENR. Under DAO No. 20, series of 1988, the CENRO issues certificates of land classification status for areas below 50 hectares. Further, it is not enough for the PENRO or CENRO to certify that a land is alienable and disposable. The applicant for land registration must prove that the DENR Secretary had approved the land classification and released the land of the public domain as alienable and disposable, and that the land subject of the application for registration falls within the approved area per verification through survey by the PENRO or CENRO. In addition, the applicant for land registration must present a copy of the original classification approved by the DENR Secretary and certified as a true copy by the legal custodian of the official records. These facts must be established to prove that the land is alienable and disposable. Respondent failed to do so because the certifications presented by respondent do not, by themselves, prove that the land is alienable and disposable. The CENRO is not the official repository or legal custodian of the issuances of the DENR Secretary declaring public lands as alienable and disposable. The CENRO should have attached an official publication of the DENR Secretarys issuance declaring the land alienable and disposable. Republic of the Philippines v. Lucia Gomez, G.R. No. 189021, February 22, 2012. Public Land Act; confirmation of of imperfect titles. It is explicit under Section 14 (1) that the possession and occupation required to acquire an imperfect title over an alienable and disposable public land must be open, continuous, exclusive and notorious in character. In Republic of the Philippines v. Alconaba, the Supreme Court explained that the intent
behind the use of possession in conjunction with occupation is to emphasize the need for actual and not just constructive or fictional possession. The law speaks of possession and occupation. Since these words are separated by the conjunction and, the clear intention of the law is not to make one synonymous with the other. Possession is broader than occupation because it includes constructive possession. When, therefore, the law adds the word occupation, it seeks to delimit the all-encompassing effect of constructive possession. Taken together with the words open, continuous, exclusive and notorious, the word occupation serves to highlight the fact that for an applicant to qualify, his possession must not be a mere fiction. Actual possession of a land consists in the manifestation of acts of dominion over it of such a nature as a party would naturally exercise over his own property. On the other hand, Section 14 (2) is silent as to the required nature of possession and occupation, thus, requiring a reference to the relevant provisions of the Civil Code on prescription. And under Article 1118 thereof, possession for purposes of prescription must be in the concept of an owner, public, peaceful and uninterrupted. It is concerned with lapse of time in the manner and under conditions laid down by law, namely, that the possession should be in the concept of an owner, public, peaceful, uninterrupted and adverse. Possession is open when it is patent, visible, apparent, notorious and not clandestine. It is continuous when uninterrupted, unbroken and not intermittent or occasional; exclusive when the adverse possessor can show exclusive dominion over the land and an appropriation of it to his own use and benefit; and notorious when it is so conspicuous that it is generally known and talked of by the public or the people in the neighborhood. The party who asserts ownership by adverse possession must prove the presence of the essential elements of acquisitive prescription. Republic of the Philippines v. East Silverlane Realty Development Corporation, G.R. No. 186961, February 20, 2012.
Public Officers
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Public officer; preventive suspension. The Sandiganbayan preventively suspended Ysidoro for 90 days in accordance with Section 13 of R.A. No. 3019. Clearly, by well-established jurisprudence, the provision of Section 13, Republic Act 3019 makes it mandatory for the Sandiganbayan to suspend, for a period not exceeding ninety (90) days, any public officer who has been validly charged with a violation of Republic Act 3019, as amended or Title 7, Book II of the Revised Penal Code or any offense involving fraud upon government of public funds or property. Arnold James M. Ysidoro vs. Hon. Teresita J. Leonardo-de Castro, et al. G.R. No. 171513, February 6, 2012. Public officers; liability for overpricing; personal and solidary liability; reimbursement. The Court upholds the COAs ruling that petitioner is personally and solidarily liable for the overpricing in the computers purchased by CDA. The directive for the payment of the amount of disallowance finally determined by the COA did not change the nature of the obligation as solidary because the demand thus made upon petitioner did not foreclose his right as solidary debtor to proceed against his codebtors/obligors, in this case the members of the PBAC charged under Notice of Disallowance No. 93-0016-101, for their share in the total amount of disallowance. Petitioner is therefore liable to restitute the P881,819.00 to the Government without prejudice, however, to his right to recover it from persons who were solidarily liable with him. Candelario Verzosa Jr. v. Guillermo Carague and COA, et. al, G.R. No. 157838, February 7, 2012. Public officials; holdover. The clear wording of Section 8, Article X of the Constitution expresses the intent of the framers of the Constitution to categorically set a limitation on the period within which all elective local officials can occupy their offices. The Supreme Court has already established that elective ARMM officials are also local officials; they are, thus, bound by the three-year term limit prescribed by the Constitution. It, therefore, becomes irrelevant that the Constitution does not expressly
prohibit elective officials from acting in a holdover capacity. Short of amending the Constitution, Congress has no authority to extend the threeyear term limit by inserting a holdover provision in RA No. 9054. Thus, the term of three years for local officials should stay at three (3) years, as fixed by the Constitution, and cannot be extended by holdover by Congress. Admittedly, the Supreme Court has, in the past, recognized the validity of holdover provisions in various laws. One significant difference between the present case and these past cases is that while these past cases all refer to elective barangay or sangguniang kabataan officials whose terms of office are not explicitly provided for in the Constitution, the present case refers to local elective officials the ARMM Governor, the ARMM Vice Governor, and the members of the Regional Legislative Assembly whose terms fall within the three-year term limit set by Section 8, Article X of the Constitution. Even assuming that a holdover is constitutionally permissible, and there had been statutory basis for it (namely Section 7, Article VII of RA No. 9054), the rule of holdover can only apply as an available option where no express or implied legislative intent to the contrary exists; it cannot apply where such contrary intent is evident. Datu Michael Abas Kida, etc., et al. vs. Senate of the Phil., etc., et al./Basari D. Mapupuno vs. Sixto Brillantes, etc., et al./Rep. Edcel C. Lagman vs. Paquito N. Ochoa, Jr., etc., et al./Almarin Centi Tillah, et al. vs. The Commission on Elections, etc., et al./Atty. Romulo B. Macalintal vs. Commission on Elections, et al./Luis Barok Biraogo, G.R. No. 196271, February 28, 2012. Signing bonus; legality. There is no dispute that the grant of a signing bonus had been previously disallowed by the express mandate of then President Gloria Macapagal-Arroyo (President Arroyo). On July 22, 2002, this Court declared in SSS v. COA that Social Services Commissions authority to fix the compensation of its employees under its charter, Republic Act (R.A.) No. 1161 as amended, is subject to the provisions of R.A. No. 6758, which provides for the consolidation of allowances and compensation in the prescribed standardized salary rates. While there are exceptions provided under Sections 12 and 17 of R.A. No. 6758 in
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observance of the policy on non-diminution of pay, the signing bonus is not one of the benefits contemplated. This Court also ruled that the signing bonus is not a truly reasonable compensation since conduct of peaceful collective negotiations should not come with a price tag. hat MIAAs Board of Directors did not make a mistake and their real intention was to reward the successful conclusion of collective negotiations by some pecuniary means is belied by simultaneous approval of the grant and the CNA between SMPP and MIAA betrays their real intention. Moreover, prior to the issuance of AOM No. JPA 03-35 declaring the subject benefit illegal, there was no effort on the part of its Board of Directors to rectify the alleged mistake in nomenclature. It was only after then Corporate Auditor Manalo and Director Nacion called MIAAs attention as to the illegality of a signing bonus that MIAA alleged that the subject benefit is a CNA Incentive. Easily, such is a mere afterthought. Manila International Airport Authority v. Commission on Audit, G.R. No. 194710, February 14, 2012. Signing bonus; return of illegal bonus. Good faith is anchored on an honest belief that one is legally entitled to the benefit. In this case, the MIAA employees who had no participation in the approval and release of the disallowed benefit accepted the same on the assumption that Resolution No. 2003-067 was issued in the valid exercise of the power vested in the Board of Directors under the MIAA charter. As they were not privy as to reason and motivation of the Board of Directors, they can properly rely on the presumption that the former acted regularly in the performance of their official duties in accepting the subject benefit. Furthermore, their acceptance of the disallowed grant, in the absence of any competent proof of bad faith on their part, will not suffice to render liable for a refund. The same is not true as far as the Board of Directors. Their authority under Section 8 of the MIAA charter is not absolute as their exercise thereof is subject to existing laws, rules and regulations and they cannot deny knowledge of SSS v. COA and the various issuances of the Executive Department prohibiting the grant of the signing bonus. In fact, they are duty-bound to understand and know the law that they are tasked to
implement and their unexplained failure to do so barred them from claiming that they were acting in good faith in the performance of their duty. The presumptions of good faith or regular performance of official duty are disputable and may be contradicted and overcome by other evidence. Manila International Airport Authority v. Commission on Audit, G.R. No. 194710, February 14, 2012.
Tariff and Customs Code; Revised Administrative Code Customs Memorandum Order No. 27-2003. Customs Memorandum Order No. 27-2003 (CMO 23-2007) is invalid. The Commissioner of Customs (1) violated the right to due process in the issuance of CMO 27-2003 when he failed to observe the requirements under the Revised Administrative Code, (2) violated the right to equal protection of laws when he provided for an unreasonable classification in the application of the regulation, and (3) went beyond his powers of delegated authority when the regulation limited the powers of the customs officer to examine and assess imported articles. CMO 27-2003 was issued without following the mandate of the Revised Administrative Code on public participation, prior notice, and publication or registration with the University of the Philippines Law Center. For tariff purposes, CMO 27-2003 classified wheat according to the following: (1) importer or consignee; (2) country of origin; and (3) port of discharge. This is a violation of the equal protection clause under the Constitution. The Court does not see how the quality of wheat is affected by who imports it, where it is discharged, or which country it came from. Thus, on the one hand, even if other millers excluded from CMO 27-2003 have imported food grade wheat, the product would still be declared as feed grade wheat, a classification subjecting them to 7% tariff. On the other hand, even if the importers listed under CMO 27-2003 have imported feed grade wheat, they would only be made to pay 3% tariff, thus
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depriving the state of the taxes due. The regulation, therefore, does not become disadvantageous to respondent only, but even to the state. Section 1403 of the Tariff and Customs Law, as amended mandates that the customs officer must first assess and determine the classification of the imported article before tariff may be imposed. Unfortunately, CMO 23-2007 has already classified the article even before the customs officer had the chance to examine it. Finally, Commissioner of Customs diminished the powers granted by the Tariff and Customs Code with regard to wheat importation when it no longer required the customs officers prior examination and assessment of the proper classification of the wheat. Commissioner of Customs vs. Hypermix Feeds C
Here are select March 2012 rulings of the Supreme Court of the Philippines on criminal law and procedure: 1. REVISED PENAL CODE
evidence and by the petitioners own admissions. The first element was established by the evidence showing that the petitioner received various sums of money from the private complainants to be held in trust for them under the Paluwagan operation. The petitioner admitted that she was under obligation, at a fixed date, to account for and to deliver the Paluwagan funds to the private complainants in the sequential order agreed upon among them. The second element was established by the evidence that the petitioner failed to account for and to deliver the Paluwagan funds to the private complainants on the agreed time of delivery. The third and fourth elements of the offense were proven by evidence showing that the petitioner failed to account for and to deliver the Paluwagan funds to the private complainants despite several demands made upon her by the private complainants. Each of the private complainants testified as to how they were prejudiced when they failed to receive their allotted Paluwagan funds. Given the totality of evidence, the Supreme Court upheld the conviction of the petitioner of the crime charged. Esla Macandog Magtira v. People of the Philippines, G.R. No. 170964, March 7, 2012. Murder; treachery and evident premeditation. The essence of treachery is the sudden attack by an aggressor without the slightest provocation on the part of the victim, depriving the latter of any real chance to defend himself, thereby ensuring the commission of the crime without risk to the aggressor. The evidence on record shows treachery in the killing of Atty. Alipio, thus qualifying the crime as murder. The assailant, identified as accusedappellant Renato Ramos, just suddenly fired upon Atty. Alipio at a very close distance, without any provocation from said unarmed victim, who was then just conversing with some other people. There is also evident premeditation because the evidence shows that a couple of days before the actual shooting of Atty. Alipio, Raymundo Zamora already saw and heard accused-appellants Norberto (Jun) Adviento, Renato Ramos, and Lolito Aquino, talking to Francisca Talaro and coming to an agreement to kill Atty. Alipio. Thus, the Supreme Court finds no reason to overturn the Court
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Estafa; elements. The offense of estafa committed with abuse of confidence has the following elements under Article 315, paragraph 1(b) of the Revised Penal Code, as amended: (a) that money, goods or other personal property is received by the offender in trust or on commission, or for administration, or under any other obligation involving the duty to make delivery of or to return the same; (b) that there be misappropriation or conversion of such money or property by the offender, or denial on his part of such receipt; (c) that such misappropriation or conversion or denial is to the prejudice of another; and (d)there is demand by the offended party to the offender. Esla Macandog Magtira v. People of the Philippines, G.R. No. 170964, March 7, 2012. Estafa; elements. The Supreme Court ruled that all the above elements [of estafa] are present in this case, having been established by the prosecutions
of Appeals decision of conviction. People of the Philippines v. Francisca Talaro, et al, G.R. No. 175781, March 20, 2012. Rape. For a charge of rape to prosper under Article 266-A of the Revised Penal Code, as amended, the prosecution must prove that (1) the offender had carnal knowledge of a woman; and (2) he accompanied such act through force, threat, or intimidation, or when she was deprived of reason or otherwise unconscious, or when she was under twelve years of age or was demented. In her September 20, 2000 testimony, the victim (AAA) narrated in detail how the appellant and Kino threatened to kill her, and then took turns in raping her. The Supreme Court ruled that the prosecution positively established the elements of rape required under Article 266-A of the Revised Penal Code. First, the appellant and Kino succeeded in having carnal knowledge with the victim. AAA was steadfast in her assertion that both the appellant and Kino had raped her, as a result of which, she felt pain. She also felt that something sticky came out of the appellants and Kinos private parts. Second, the assailants employed force, threat and intimidation in satisfying their bestial desires. According to AAA, the appellant and Kino threatened to kill her if she refused to obey them. People of the Philippines v. Alias Kino Lascano, et al, G.R. No. 192180, March 21, 2012. Rape. In deciding rape cases, courts are guided by these three wellentrenched principles:(a) an accusation for rape is easy to make, difficult to prove and even more difficult to disprove; (b) in view of the intrinsic nature of the crime, the testimony of the complainant must be scrutinized with utmost caution; and (c) the evidence of the prosecution must stand on its own merits and cannot draw strength from the weakness of the evidence for the defense. As a result of these guiding principles, the credibility of the victim becomes the single most important issue.Furthermore, testimonies of child victims are given full weight and credit, for youth and immaturity are badges of truth. Here, the Supreme Court finds that the testimony of AAA is straightforward and convincing with no inconsistency with regard to the
material elements of the crime of rape, and since all the elements of qualified rape were duly alleged and proved during the trial, accusedappellants conviction is affirmed. People of the Philippines v. Ben Rubio y Acosta, G.R. No. 195239, March 7, 2012. Robbery; damages. The award of damages are correct and in accordance with law for in robbery with homicide, civil indemnity and moral damages in the amount of P50,000 each are granted automatically in the absence of any qualifying aggravating circumstances. An award of P25,000 for temperate damages may be allowed under Article 2224 of the Civil Code because the victims family undeniably incurred expenses in his burial. The Court of Appeals decision finding appellants Eduardo Castro y Peralta and Renerio Delos Reyes y Bonus guilty is affirmed with modification that appellants further pay the heirs of Ricardo Pacheco Benedicto P25,000 as temperate damages. People of the Philippines v. Eduardo Castro y Peralta, et al, G.R. No. 187073, March 14, 2012. Self-defense. Article 11 of the Revised Penal Code states that anyone who acts in defense of his person or rights do not incur any criminal liability, provided that the following circumstances concur: (i) unlawful aggression, (ii) reasonable necessity of the means employed to prevent or repel it, and (iii) lack of sufficient provocation on the part of the person defending himself. SPO2 Lito T. Nacnac v. People of the Philippines, G.R. No. 191913, March 21, 2012. Self-defense. Unlawful aggression is an indispensable element of selfdefense; and ordinarily, there is a difference between the act of drawing ones gun and the act of pointing ones gun at a target in determining the presence of unlawful aggression. The former cannot be said to be an unlawful aggression on the part of the victim, while the latter is generally considered unlawful aggression. Here, a warning shot fired by a fellow police officer (petitioner) was left unheeded as the victim reached for his own firearm and pointed it at petitioner. Petitioner was justified in
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defending himself from an inebriated and disobedient colleague. As to the second circumstance above, the nature and number of wounds inflicted by the accused are constantly and unremittingly considered as important indicia of the means employed by the accused, which must be reasonably commensurate to the nature and the extent of the attack sought to be averted. Here, the lone gunshot was a reasonable means chosen by petitioner in defending himself in view of the proximity of the armed victim, his drunken state, disobedience of an unlawful order, and failure to stand down despite a warning shot. There is also lack of sufficient provocation on the part of the person defending himself or herself in this case. Petitioner gave the victim a lawful order and fired a warning shot before shooting the armed and drunk victim. There was no evidence on petitioner sufficiently provoking the victim prior to the shooting. Thus, petitioner was only defending himself on the night he shot his fellow police officer, and must therefore be acquitted. SPO2 Lito T. Nacnac v. People of the Philippines, G.R. No. 191913, March 21, 2012. 2. SPECIAL PENAL LAWS
affirms the assailed decision of conviction by the Court of Appeals. People of the Philippines v. Jerome Paler, G.R. No. 188103, March 7, 2012. 3. CRIMINAL PROCEDURE
Dangerous Drugs; illegal sale; elements. The elements necessary for the prosecution of illegal sale of drugs are the (1) identities of the buyer and the seller, object, and consideration, and (2) delivery of the thing sold and payment therefor. What is material to the prosecution for illegal sale of dangerous drugs is the proof that the transaction or sale actually took place, coupled with the presentation in court of evidence of corpus delicti. The delivery of the illicit drug to the poseur-buyer and the receipt by the seller of the marked money successfully consummate the buy-bust transaction. The testimonial and the documentary pieces of evidence adduced by the prosecution in support of its case against the appellant establish the presence of these elements. First, the identity of the seller was duly established. Second, the police officers saw the appellant handing the sachet to the poseur-buyer in exchange of the P100.00 peso bill that the appellant earlier received from the poseur-buyer. Thus, the Supreme Court
Evidence; credibility of victims testimony. Sabadlab appealed his conviction for the crime of rape before the Supreme Court by assailing, among others, the credibility of the victims (AAAs) testimony.The supposed inconsistencies dwelled on minor details or collateral matters of AAAs testimony were held to be badges of veracity and manifestations of truthfulness due to their tendency of demonstrating that the testimony had not been rehearsed or concocted. It is also basic that inconsistencies bearing on minor details or collateral matters should not adversely affect the substance of the witness declaration, veracity, or weight of testimony. The only inconsistencies that might have discredited the victims credible testimony were those that affected or related to the elements of the crime. The supposed inconsistencies were inconsequential to the issue of guilt. For one, the matter of who of the three rapists had blindfolded and undressed AAA was trifling, because her confusion did not alter the fact that she had been really blindfolded and rendered naked. Nor did the failure to produce any torn apparel of AAA disprove the crime charged, it being without dispute that the tearing of the victims apparel was not necessary in the commission of the crime charged. In fact, she did not even state that her clothes had been torn when Sabadlab had forcibly undressed her. Verily, details and matters that did not detract from the commission of the crime did not diminish her credibility. The task of assigning values to the testimonies of witnesses and of weighing their credibility is best left to the trial judge by virtue of the first-hand impressions he derives while the witnesses testify before him. The demeanor on the witness chair of persons sworn to tell the truth in judicial proceedings is a significant element of judicial adjudication because it can draw the line between fact and fancy. Their forthright answers or hesitant pauses, their quivering voices or angry tones, their flustered looks or sincere gazes, their modest blushes or guilty
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blanches all these can reveal if the witnesses are telling the truth or lying in their teeth. People of the Philippines v. Erland Sabadlab y Bayquel, G.R. No. 175924, March 14, 2012. Evidence; credibility of victims testimony. As the final appellate reviewer in this case, the Supreme Court accorded utmost respect to the findings and conclusions on the credibility of witnesses reached by the trial judge on account of his unmatched opportunity to observe the witnesses and on account of his personal access to the various indicia available but not reflected in the record. AAAs recollection of the principal occurrence and her positive identification of the rapists, particularly Sabadlab, were firm. It is reassuring, too, that her trustworthiness in identifying Sabadlab as one of the rapists rested on her recognition of him as the man who had frequently flirted with her at the store where she had usually bought pan de sal for her employers table. As such, the identification of him as one of the rapists became impervious to doubt. The Supreme Court sustained the conviction of Sabadlab. People of the Philippines v. Erland Sabadlab y Bayquel, G.R. No. 175924, March 14, 2012. Evidence; denial and alibi.The well-established rule is that denial and alibi are self-serving negative evidence; they cannot prevail over the spontaneous, positive, and credible testimonies of the prosecution witnesses who pointed to and identified the accused-appellant as the malefactor. Indeed, alibi is easy to concoct and difficult to disprove. Although accusedappellant presented other witnesses to supposedly corroborate his alibi, the Supreme Court could not ascribe much probative weight to said witnesses testimonies. None of said witnesses actually saw the shooting, most only heard the gunshots and arrived at the scene after the shooting took place and, thus, had no personal knowledge of the said incident. Except for Aida, no other witness for the defense was physically with accused-appellant at the exact time of the shooting. And even Aidas testimony is unreliable given the observation of the Regional Trial Court that it is in conflict with that of accused-appellant. Accused-appellant claimed that he first went to
the billiard hall owned by Ilustre where he played with a certain Zaldy and then he transferred to Retotas billiard hall where he was playing with Danilo and Dominador Baldaba when he heard the gunshots. Yet, Aida attested that she was watching accused-appellant playing billiards with a certain Zaldy when she heard the gunshots. In sum, the prosecution has proven beyond reasonable doubt the guilt of accused-appellant for the murder of Danilo in Criminal Case No. Q-01-105875 and attempted murder of Babelito in Criminal Case No.Q-01-105877. People of the Philippines v. Noel Adallom y Tunge, G.R. No. 182522, March 7, 2012. Ombudsman; power to impose administrative penalties. The Ombudsman has the power to directly impose administrative penalties, including removal from office. The Ombudsman has the power to impose the penalty of removal, suspension, demotion, fine, censure, or prosecution of a public officer or employee, in the exercise of its administrative disciplinary authority. The challenge to the Ombudsmans power to impose these penalties, on the allegation that the Constitution only grants it recommendatory powers, had already been rejected by the Supreme Court in Ledesma v. Court of Appeals. The conclusion reached by the Supreme Court in Ledesma is clear: the Ombudsman has been statutorily granted the right to impose administrative penalties on erring public officials. Office of the Ombudsman v. Nellie R. Apolonio, G.R. No. 165132, March 7, 2012. Petition for review; computation of period for filing petition for review. Petitioner assailed, among others, the resolution issued by the Court of Appeals dismissing his petition for review for being filed out of time. In this case, the original period for filing the petition for review with the Court of Appeals was on May 19, 2007, a Saturday. Petitioner filed a petition for extension of time to file a petition for review on May 21, 2007, the next working day which followed the last day for filing which fell on a Saturday. However, petitioner prayed in his petition for extension that he be granted 15 days from May 21, 2007 or up to June 5, 2007 within which to file his petition. He then filed his petition for review on June 5, 2007. Petitioners
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filing with the Court of Appeals a petition for extension of time to file petition for review under Rule 42 of the Rules of Court praying for an extended period of 15 days from May 21, 2007, or until June 5, 2007, within which to file his petition (reckoning the extension from May 21, 2007 [Monday] and not from May 19, 2007 [Saturday]) is in violation A.M. No. 00-2-14-SC dated February 29, 2000 (Re: Computation of Time When the Last Day Falls on a Saturday, Sunday or a Legal Holiday and a Motion for Extension on Next Working Day is Granted). Alfredo Jaca Montajes v. People of the Philippines, G.R. No. 183449, March 12, 2012. Petition for review; computation of period for filing petition for review. A.M. No. 00-2-14-SC [of the Supreme Court] provides, among others, that if the period to file a pleading or a motion is extended ipso jure to the next working day immediately following where the last day of the period is a Saturday, Sunday or a legal holiday and a motion for extension of time is filed and granted, any extension of time to file the required pleading or motion should be counted from the expiration of the period regardless of the fact that said due date is a Saturday, Sunday or legal holiday. Petitioner here should have reckoned the 15-day extension from May 19, 2007 and not from May 21, 2007. The Supreme Court ruled that the Court of Appeals correctly found that the petition for review was filed out of time pursuant to A.M. No. 00-2-14-SC-that the 15-day extension period prayed by petitioner should be tacked to the original period and commences immediately after the expiration of such period. Thus, counting 15 days from the expiration of the period which was on May 19, 2007, the petition filed on June 5, 2007 was already two days late. Alfredo Jaca Montajes v. People of the Philippines, G.R. No. 183449, March 12, 2012. Petition for review; computation of period for filing petition for review. Nonetheless, the Supreme Court ruled that the circumstances obtaining in this case merit the liberal application of the rule in the interest of justice and fair play. Notably, the petition for review was already filed on June 5, 2007, which was long before the Court of Appeals issued its resolution dated
September 21, 2007 dismissing the petition for review for being filed out of time. There was no showing that respondent suffered any material injury or his cause was prejudiced by reason of such delay. The late filing of the petition for review for few days did not warrant the automatic dismissal thereof where strong considerations of substantial justice are manifest in the petition. In this case, the Supreme Court relaxed the stringent application of technical rules in the exercise of its equity jurisdiction. Alfredo Jaca Montajes v. People of the Philippines, G.R. No. 183449, March 12, 2012. Here are select March 2012 rulings of the Supreme Court of the Philippines on legal and judicial ethics: Attorney; lifting of indefinite suspension. Professional misconduct involving the misuse of constitutional provisions for the purpose of insulting Members of the Supreme Court is a serious breach of the rigid standards that a member of good standing of the legal profession must faithfully comply with. Thus, the penalty of indefinite suspension was imposed. However, in the past two years during which Atty. Lozano has been suspended, he has repeatedly expressed his willingness to admit his error, to observe the rules and standards in the practice of law, and to serve the ends of justice if he should be reinstated. And in these two years, this Court has not been informed of any act that would indicate that Atty. Lozano had acted in any unscrupulous practices unsuitable to a member of the bar. While the Court will not hesitate to discipline its erring officers, it will not prolong a penalty after it has been shown that the purpose for imposing it had already been served. Re: subpoena Duces Tecum dated January 11, 2010 of Acting Director Aleu A. Amante, PIAB-C, Office of the Ombudsman/Re: Order of the Office of the Ombudsman referring the complaint of Attys. Oliver O. Lozano & Evangeline J. Lozano-Endriano against Chief Justice Reynato S. Puno(ret.). A.M. No. 10-1-13-SC & A.M. NO. 10-9-9-SC, March 20, 2012.

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Court personnel; administrative case; quantum of evidence. The Uniform Rules on Administrative Cases in the Civil Service govern the conduct of disciplinary and non-disciplinary proceedings in administrative cases. In Section 3, it provides that, Administrative investigations shall be conducted without necessarily adhering strictly to the technical rules of procedure and evidence applicable to judicial proceedings. The weight of evidence required in administrative investigations is substantial evidence. For these reasons, only substantial evidence is required to find Malunao guilty of the administrative offense charged against her. In the hierarchy of evidentiary values, substantial evidence, or that amount of relevant evidence which a reasonable man might accept as adequate to justify a conclusion, is the lowest standard of proof provided under the Rules of Court. In assessing whether there is substantial evidence in administrative investigations such as this case, the Court is not bound by technical rules of procedure and evidence. Dela Cruzs Sinumpaang Salaysay, the joint affidavit of arrest executed by the NBI agents, the Booking Sheet and Arrest Report, photocopy of the marked money, the Complaint Sheet, and the photographs of Malunao entering Dela Cruzs house, and the contents of Malunaos bag after receipt of the money, all prove by subsantial evidence the guilt of Malunao for the offense of grave misconduct. Sheryll C. Dela Cruz vs. Pamela P. Malunao, Clerk III, RTC, Branch 28, Bayombong, Nueva Vizcaya. A.M. No. P-11-2019, March 20, 2012. Court personnel; grave misconduct. Misconduct is a transgression of some established and definite rule of action, more particularly, unlawful behavior or gross negligence by the public officer. The misconduct is grave if it involves any of the additional elements of corruption, willful intent to violate the law or to disregard established rules. Corruption, as an element of grave misconduct, consists in the act of an official or fiduciary person who unlawfully and wrongfully uses his position or office to procure some benefit for himself or for another person, contrary to duty and the rights of
others. Section 2, Canon 1 of the Code of Conduct for Court Personnel states: Court personnel shall not solicit or accept any gift, favor or benefit based on any or explicit understanding that such gift, favor or benefit shall influence their official actions. Respondents use of her position as Clerk III in Branch 28 to solicit money from Dela Cruz with the promise of a favorable decision violates Section 2, Canon 1 of the Code of Conduct for Court Personnel and constitutes the offense of grave misconduct meriting the penalty of dismissal. Sheryll C. Dela Cruz vs. Pamela P. Malunao, Clerk III, RTC, Branch 28, Bayombong, Nueva Vizcaya. A.M. No. P-112019, March 20, 2012. Judges; judicial clemency. In A.M. No. 07-7-17-SC (Re: Letter of Judge Augustus C. Diaz, Metropolitan Trial Court of Quezon City, Branch 37, Appealing for Clemency), the Court laid down the following guidelines in resolving requests for judicial clemency, thus: 1. There must be proof of remorse and reformation. These shall include but should not be limited to certifications or testimonials of the officer(s) or chapter(s) of the Integrated Bar of the Philippines, judges or judges associations and prominent members of the community with proven integrity and probity. A subsequent finding of guilt in an administrative case for the same or similar misconduct will give rise to a strong presumption of non-reformation. 2. Sufficient time must have lapsed from the imposition of the penalty to ensure a period of reform. 3. The age of the person asking for clemency must show that he still has productive years ahead of him that can be put to good use by giving him a chance to redeem himself. 4. There must be a showing of promise (such as intellectual aptitude, learning or legal acumen or contribution to legal scholarship and the
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development of the legal system or administrative and other relevant skills), as well as potential for public service. 5. There must be other relevant factors and circumstances that may justify clemency. Applying the foregoing standards to this case, the Court finds merit in petitioners request. A review of the records reveals that petitioner has exhibited remorse for her past misdeeds, which occurred more than ten (10) years ago. While she was found to have belatedly filed her motions for additional time to resolve the cases then pending in her sala, the Court noted that she had disposed of the same within the extended period sought, except in A.M. No. 99-2-79-RTC where she submitted her compliance beyond the approved 45-day extended period. Nevertheless, petitioner has subsequently shown diligence in the performance of her duties and has not committed any similar act or omission. In the Memorandum of the Office of the Court Administrator, her prompt compliance with the judicial audit requirements of pending cases was acknowledged and she was even commended for her good performance in the effective management of her court and in the handling of court records. Moreover, the Integrated Bar of the Philippines (IBP) Bohol Chapter has shown its high regard for petitioner per the letter of support signed by a number of its members addressed to the IBP dated October 15, 1999 during the pendency of her administrative cases and the IBP Resolution No. 11, Series of 2009 endorsing her application for lateral transfer to the RTC of Tagbilaran City. Re: Petition for judicial clemency of Judge Irma Zita V. Masamayor. A.M. No. 12-2-6-SC, March 6, 2012. Here are select March 2012 rulings of the Supreme Court of the Philippines on labor law and procedure.
Dismissal; constructive dismissal. Constructive dismissal exists where there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay. Constructive dismissal is a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not. In constructive dismissal cases, the employer is, concededly, charged with the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity. In the instant case, the overt act relied upon by petitioner is not only a doubtful occurrence but is, if it did transpire, even consistent with the dismissal from employment posited by the respondent. The factual appraisal of the Court of Appeals is correct. Petitioner was displeased after incurring expenses for respondents medical check-up and, it is credible that, thereafter, respondent was prevented entry into the work premises. This is tantamount to constructive dismissal. The Supreme Court agreed with the Court of Appeals that the incredibility of petitioners submission about abandonment of work renders credible the position of respondent that she was prevented from entering the property. This was even corroborated by the affidavits of Siarot and Mendoza which were made part of the records of this case. Ma. Melissa A. Galang vs. Julia Malasuqui, G.R. No. 174173. March 7, 2012. Dismissal; loss of trust and confidence. The rule is long and well settled that, in illegal dismissal cases like the one at bench, the burden of proof is upon the employer to show that the employees termination from service is for a just and valid cause. The employers case succeeds or fails on the strength of its evidence and not on the weakness of that adduced by the employee, in keeping with the principle that the scales of justice should be tilted in favor of the latter in case of doubt in the evidence presented by them. Often described as more than a mere scintilla, the quantum of proof is substantial evidence which is understood as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other equally reasonable minds might conceivably opine otherwise. Failure
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of the employer to discharge the foregoing onus would mean that the dismissal is not justified and therefore illegal. In the case at bar, the Supreme Court agreed with the petitioners that mere substantial evidence and not proof beyond reasonable doubt is required to justify the dismissal from service of an employee charged with theft of company property. However, the Court found no error in the CAs findings that the petitioners had not adequately proven by substantial evidence that Arlene and Joseph indeed participated or cooperated in the commission of theft relative to the six missing intensifying screens so as to justify the latters termination from employment on the ground of loss of trust and confidence. Blue Sky Trading Company, Inc. et al. vs. Arlene P. Blas and Joseph D. Silvano, G.R. No. 190559. March 7, 2012. Dismissal; probationary employees. Gala insists that he cannot be sanctioned for the theft of company property on May 25, 2006. He maintains that he had no direct participation in the incident and that he was not aware that an illegal activity was going on as he was at some distance from the trucks when the alleged theft was being committed. He adds that he did not call the attention of the foremen because he was a mere lineman and he was focused on what he was doing at the time. He argues that in any event, his mere presence in the area was not enough to make him a conspirator in the commission of the pilferage. Gala misses the point. He forgets that as a probationary employee, his overall job performance and his behavior were being monitored and measured in accordance with the standards (i.e., the terms and conditions) laid down in his probationary employment agreement. Under paragraph 8 of the agreement, he was subject to strict compliance with, and nonviolation of the Company Code on Employee Discipline, Safety Code, rules and regulations and existing policies. Par. 10 required him to observe at all times the highest degree of transparency, selflessness and integrity in the performance of his duties and responsibilities, free from any form of
conflict or contradicting with his own personal interest. Manila Electric Company vs. Jan Carlo Gala, G.R. No. 191288. March 7, 2012. Dismissal; relief of illegally dismissed employee. An illegally dismissed employee is entitled to two reliefs: back wages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement if such is viable, or separation pay if reinstatement is no longer viable, and to back wages. The normal consequences of respondents illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of back wages computed from the time compensation was withheld from him up to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to payment of back wages. Petitioners question the CA Resolution dated October 24, 2008, arguing that it modified its March 31, 2008 Decision which has already attained finality insofar as respondent is concerned. Such contention is misplaced. The CA merely clarified the period of payment of back wages and separation pay up to the finality of its decision (March 31, 2008) modifying the Labor Arbiters decision. In view of the modification of monetary awards in the Labor Arbiters decision, the time frame for the payment of back wages and separation pay is accordingly modified to the finality of the CA decision. Norkis Distribution, Inc., et al. vs. Delfin S. Descallar, G.R. No. 185255. March 14, 2012 Employees; project vs. regular 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
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or undertaking, the duration and scope of which were specified at the time the employees were engaged for that project. In a number of cases, the Court has held that the length of service or the rehiring of construction workers on a project-to-project basis does not confer upon them regular employment status, since their re-hiring is only a natural consequence of the fact that experienced construction workers are preferred. Employees who are hired for carrying out a separate job, distinct from the other undertakings of the company, the scope and duration of which has been determined and made known to the employees at the time of the employment are properly treated as project employees and their services may be lawfully terminated upon the completion of a project. Should the terms of their employment fail to comply with this standard, they cannot be considered project employees. Applying the above disquisition, the Court agreed with the findings of the CA that petitioners were project employees. It is not disputed that petitioners were hired for the construction of the Cordova Reef Village Resort in Cordova, Cebu. By the nature of the contract alone, it is clear that petitioners employment was to carry out a specific project. Wilfredo Aro, Ronilo Tirol, et al. vs. NLRC, Fourth Division, et al., G.R. No. 174792. March 7, 2012. Jurisdiction; power of the DOLE to determine the existence of employeremployee relationship. If a complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original and exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other terms and conditions of employment, if accompanied by a claim for reinstatement. In the present case, the finding of the DOLE Regional Director that there was an employer-employee relationship has been subjected to review by the
Supreme Court, with the finding being that there was no employeremployee relationship between petitioner and private respondent, based on the evidence presented. The DOLE had no jurisdiction over the case, as there was no employer-employee relationship present. Thus, the dismissal of the complaint against petitioner is proper. Peoples Broadcasting Service (Bombo Rado Phils., Inc.) vs. The Secretary of the Dept. of Labor & Employment, et al. G.R. No. 179652. March 6, 2012. Management prerogative; resignation of employees running for public office. The Supreme Court has consistently held that so long as a companys management prerogatives are exercised in good faith for the advancement of the employers interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, the Court will uphold them. In the instant case, ABSCBN validly justified the implementation of Policy No. HR-ER-016. It is well within its rights to ensure that it maintains its objectivity and credibility and freeing itself from any appearance of impartiality so that the confidence of the viewing and listening public in it will not be in any way eroded. Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. Ernesto Ymbong vs. ABS-CBN Broadcasting Corporation, Veranda Sy & Dante Luzon, G.R. No. 184885. March 7, 2012. Separation pay; payment to those who participated in illegal strikes. Separation pay may be given as a form of financial assistance when a worker is dismissed in cases such as the installation of labor-saving devices, redundancy, retrenchment to prevent losses, closing or cessation of operation of the establishment, or in case the employee was found to have been suffering from a disease such that his continued employment is prohibited by law. It is a statutory right defined as the amount that an employee receives at the time of his severance from the service and is
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designed to provide the employee with the wherewithal during the period that he is looking for another employment. It is oriented towards the immediate future, the transitional period the dismissed employee must undergo before locating a replacement job. As a general rule, when just causes for terminating the services of an employee exist, the employee is not entitled to separation pay because lawbreakers should not benefit from their illegal acts. The rule, however, is subject to exceptions. Here, not only did the Court declare the strike illegal, rather, it also found the Union officers to have knowingly participated in the illegal strike. Worse, the Union members committed prohibited acts during the strike. Thus, as the Court has concluded in other cases it has previously decided, such Union officers are not entitled to the award of separation pay in the form of financial assistance. C. Alcantara & Sons, Inc. vs. Court of Appeals, et al./Nagkahiusang Mamumuo sa Alsons-SPFL, et al. vs. C. Alcantara & Sons, Inc., et al./Nagkahiusang Mamumuo sa Alsons-SPFL, et al. vs. C. Alcantara & Sons, Inc., et al. G.R. No. 155109/G.R. No. 155135/G.R. No. 179220. March 14, 2012. Here are select March 2012 rulings of the Supreme Court of the Philippines on labor law and procedure. Dismissal; constructive dismissal. Constructive dismissal exists where there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay. Constructive dismissal is a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not. In constructive dismissal cases, the employer is, concededly, charged with the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity. In the instant case, the overt act relied upon by petitioner is not only a doubtful occurrence but is, if it did transpire, even consistent with the dismissal from employment posited by the respondent. The factual
appraisal of the Court of Appeals is correct. Petitioner was displeased after incurring expenses for respondents medical check-up and, it is credible that, thereafter, respondent was prevented entry into the work premises. This is tantamount to constructive dismissal. The Supreme Court agreed with the Court of Appeals that the incredibility of petitioners submission about abandonment of work renders credible the position of respondent that she was prevented from entering the property. This was even corroborated by the affidavits of Siarot and Mendoza which were made part of the records of this case. Ma. Melissa A. Galang vs. Julia Malasuqui, G.R. No. 174173. March 7, 2012. Dismissal; loss of trust and confidence. The rule is long and well settled that, in illegal dismissal cases like the one at bench, the burden of proof is upon the employer to show that the employees termination from service is for a just and valid cause. The employers case succeeds or fails on the strength of its evidence and not on the weakness of that adduced by the employee, in keeping with the principle that the scales of justice should be tilted in favor of the latter in case of doubt in the evidence presented by them. Often described as more than a mere scintilla, the quantum of proof is substantial evidence which is understood as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other equally reasonable minds might conceivably opine otherwise. Failure of the employer to discharge the foregoing onus would mean that the dismissal is not justified and therefore illegal. In the case at bar, the Supreme Court agreed with the petitioners that mere substantial evidence and not proof beyond reasonable doubt is required to justify the dismissal from service of an employee charged with theft of company property. However, the Court found no error in the CAs findings that the petitioners had not adequately proven by substantial evidence that Arlene and Joseph indeed participated or cooperated in the commission of theft relative to the six missing intensifying screens so as to justify the latters termination from employment on the ground of loss of trust and
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confidence. Blue Sky Trading Company, Inc. et al. vs. Arlene P. Blas and Joseph D. Silvano, G.R. No. 190559. March 7, 2012. Dismissal; probationary employees. Gala insists that he cannot be sanctioned for the theft of company property on May 25, 2006. He maintains that he had no direct participation in the incident and that he was not aware that an illegal activity was going on as he was at some distance from the trucks when the alleged theft was being committed. He adds that he did not call the attention of the foremen because he was a mere lineman and he was focused on what he was doing at the time. He argues that in any event, his mere presence in the area was not enough to make him a conspirator in the commission of the pilferage. Gala misses the point. He forgets that as a probationary employee, his overall job performance and his behavior were being monitored and measured in accordance with the standards (i.e., the terms and conditions) laid down in his probationary employment agreement. Under paragraph 8 of the agreement, he was subject to strict compliance with, and nonviolation of the Company Code on Employee Discipline, Safety Code, rules and regulations and existing policies. Par. 10 required him to observe at all times the highest degree of transparency, selflessness and integrity in the performance of his duties and responsibilities, free from any form of conflict or contradicting with his own personal interest. Manila Electric Company vs. Jan Carlo Gala, G.R. No. 191288. March 7, 2012. Dismissal; relief of illegally dismissed employee. An illegally dismissed employee is entitled to two reliefs: back wages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement if such is viable, or separation pay if reinstatement is no longer viable, and to back wages. The normal consequences of respondents illegal dismissal, then, are reinstatement
without loss of seniority rights, and payment of back wages computed from the time compensation was withheld from him up to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to payment of back wages. Petitioners question the CA Resolution dated October 24, 2008, arguing that it modified its March 31, 2008 Decision which has already attained finality insofar as respondent is concerned. Such contention is misplaced. The CA merely clarified the period of payment of back wages and separation pay up to the finality of its decision (March 31, 2008) modifying the Labor Arbiters decision. In view of the modification of monetary awards in the Labor Arbiters decision, the time frame for the payment of back wages and separation pay is accordingly modified to the finality of the CA decision. Norkis Distribution, Inc., et al. vs. Delfin S. Descallar, G.R. No. 185255. March 14, 2012 Employees; project vs. regular 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. In a number of cases, the Court has held that the length of service or the rehiring of construction workers on a project-to-project basis does not confer upon them regular employment status, since their re-hiring is only a natural consequence of the fact that experienced construction workers are preferred. Employees who are hired for carrying out a separate job, distinct from the other undertakings of the company, the scope and duration of which has been determined and made known to the employees at the time of the employment are properly treated as project employees and their
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services may be lawfully terminated upon the completion of a project. Should the terms of their employment fail to comply with this standard, they cannot be considered project employees. Applying the above disquisition, the Court agreed with the findings of the CA that petitioners were project employees. It is not disputed that petitioners were hired for the construction of the Cordova Reef Village Resort in Cordova, Cebu. By the nature of the contract alone, it is clear that petitioners employment was to carry out a specific project. Wilfredo Aro, Ronilo Tirol, et al. vs. NLRC, Fourth Division, et al., G.R. No. 174792. March 7, 2012. Jurisdiction; power of the DOLE to determine the existence of employeremployee relationship. If a complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original and exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other terms and conditions of employment, if accompanied by a claim for reinstatement. In the present case, the finding of the DOLE Regional Director that there was an employer-employee relationship has been subjected to review by the Supreme Court, with the finding being that there was no employeremployee relationship between petitioner and private respondent, based on the evidence presented. The DOLE had no jurisdiction over the case, as there was no employer-employee relationship present. Thus, the dismissal of the complaint against petitioner is proper. Peoples Broadcasting Service (Bombo Rado Phils., Inc.) vs. The Secretary of the Dept. of Labor & Employment, et al. G.R. No. 179652. March 6, 2012. Management prerogative; resignation of employees running for public office. The Supreme Court has consistently held that so long as a companys management prerogatives are exercised in good faith for the
advancement of the employers interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, the Court will uphold them. In the instant case, ABSCBN validly justified the implementation of Policy No. HR-ER-016. It is well within its rights to ensure that it maintains its objectivity and credibility and freeing itself from any appearance of impartiality so that the confidence of the viewing and listening public in it will not be in any way eroded. Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. Ernesto Ymbong vs. ABS-CBN Broadcasting Corporation, Veranda Sy & Dante Luzon, G.R. No. 184885. March 7, 2012. Separation pay; payment to those who participated in illegal strikes. Separation pay may be given as a form of financial assistance when a worker is dismissed in cases such as the installation of labor-saving devices, redundancy, retrenchment to prevent losses, closing or cessation of operation of the establishment, or in case the employee was found to have been suffering from a disease such that his continued employment is prohibited by law. It is a statutory right defined as the amount that an employee receives at the time of his severance from the service and is designed to provide the employee with the wherewithal during the period that he is looking for another employment. It is oriented towards the immediate future, the transitional period the dismissed employee must undergo before locating a replacement job. As a general rule, when just causes for terminating the services of an employee exist, the employee is not entitled to separation pay because lawbreakers should not benefit from their illegal acts. The rule, however, is subject to exceptions. Here, not only did the Court declare the strike illegal, rather, it also found the Union officers to have knowingly participated in the illegal strike. Worse, the Union members committed prohibited acts during the strike.
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Thus, as the Court has concluded in other cases it has previously decided, such Union officers are not entitled to the award of separation pay in the form of financial assistance. C. Alcantara & Sons, Inc. vs. Court of Appeals, et al./Nagkahiusang Mamumuo sa Alsons-SPFL, et al. vs. C. Alcantara & Sons, Inc., et al./Nagkahiusang Mamumuo sa Alsons-SPFL, et al. vs. C. Alcantara & Sons, Inc., et al. G.R. No. 155109/G.R. No. 155135/G.R. No. 179220. March 14, 2012. Here are selected July 2010 rulings of the Supreme Court of the Philippines on political law: Agrarian reform; coverage. Lands that are not directly, actually and exclusively used for pasture nor devoted to commercial livestock raising are not excluded from the coverage of the Comprehensive Agrarian Reform Program. A.Z. Arnaiz Realty, Inc. vs. Office of the President. G.R. No. 170623, July 7, 2010. Certificate of candidacy; residency requirement. The Omnibus Election Code provides that a certificate of candidacy may be denied due course or cancelled if there is any false representation of a material fact. The critical material facts are those that refer to a candidates qualifications for elective office, such as his or her citizenship and residence. The false representation must be a deliberate attempt to mislead, misinform, or hide a fact that would otherwise render a candidate ineligible. Given the purpose of the requirement, it must be made with the intention to deceive the electorate as to the would-be candidates qualifications for public office. Thus, the misrepresentation cannot be the result of a mere innocuous mistake, and cannot exist in a situation where the intent to deceive is patently absent, or where no deception on the electorate results. The foregoing are the legal standards by which the COMELEC must act on a petition to deny due course or to cancel a certificate of candidacy. Thus, in considering the residency of a candidate as stated in the certificate of candidacy, the COMELEC must determine whether or not the candidate deliberately
attempted to mislead, misinform or hide a fact about his or her residency that would otherwise render him or her ineligible for the position sought. The COMELEC gravely abused its discretion in this case when, in considering the residency issue, it based its decision solely on very personal and subjective assessment standards, such as the nature or design and furnishings of the dwelling place in relation to the stature of the candidate. Abraham Kahlil B. Mitra vs. Commission on Elections, et al. G.R. No. 191938, July 2, 2010. Citizenship; election and constructive registration. The statutory formalities of electing Philippine citizenship are the following: (1) a statement of election under oath; (2) an oath of allegiance to the Constitution and Government of the Philippines; and (3) registration of the statement of election and of the oath with the nearest civil registry. Here, petitioners complied with the first and second requirements upon reaching the age of majority. However, registration of the documents of election with the civil registry was done belatedly. Under the facts peculiar to the petitioners, the right to elect Philippine citizenship has not been lost and they should be allowed to complete the statutory requirements for such election. Their exercise of suffrage, being elected to public office, continuous and uninterrupted stay in the Philippines, and other similar acts showing exercise of Philippine citizenship do not on their own take the place of election of citizenship. But where, as here, the election of citizenship has in fact been done and documented within the constitutional and statutory timeframe, registration of the documents of election beyond the timeframe should be allowed if in the meanwhile positive acts of citizenship have been done publicly, consistently and continuously. These acts constitute constructive registration. In other words, the actual exercise of Philippine citizenship for over half a century by the petitioners is actual notice to the Philippine public, which is equivalent to formal registration of the election of Philippine citizenship. It is not the registration of the act of election, although a valid requirement under Commonwealth Act No. 625, that will confer Philippine citizenship on the petitioners. It is only a means of
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confirming the fact that citizenship has been claimed. Having a Filipino mother is permanent. It is the basis of the right of the petitioners to elect Philippine citizenship. Petitioners elected Philippine citizenship in form and substance. The failure to register the election in the civil registry should not defeat that election and negate the permanent fact that petitioners have a Filipino mother. The lacking requirements may still be complied with subject to the imposition of appropriate administrative penalties, if any. The documents petitioners submitted supporting their allegations that they have registered with the civil registry, although belatedly, should be examined for validation purposes by the appropriate agency, in this case the Bureau of Immigration. Other requirements embodied in the administrative orders and other issuances of the Bureau of Immigration and the Department of Justice must be complied with within a reasonable time. Balgamelo Cabiling Ma, et al. vs. Commissioner Alipio F. Fernandez, Jr., et al. G.R. No. 183133, July 26, 2010. Double jeopardy; elements. Following are the elements of double jeopardy: (1) the complaint or information was sufficient in form and substance to sustain a conviction; (2) the court had jurisdiction; (3) the accused had been arraigned and had pleaded; and (4) the accused was convicted or acquitted, or the case was dismissed without his express consent. These elements are present in this case. The information filed in each of the criminal cases against respondent was sufficient in form and substance to sustain a conviction. The regional trial court had jurisdiction over these cases. The respondent was arraigned and entered a plea of not guilty. The court dismissed both cases on a demurrer to evidence on the ground of insufficiency of evidence, which amounts to an acquittal from which no appeal can be had as that would place respondent in double jeopardy. People of the Philippines vs. Dante Tan. G.R. No. 167526, July 26, 2010. Double jeopardy; exceptions. The rule on double jeopardy is not without exceptions. Double jeopardy will not attach when the trial court acted with
grave abuse of discretion, or when the prosecution was denied due process. Here, the prosecution was given more than ample opportunity to present its case. No grave abuse of discretion can be attributed to the trial court simply because it chose not to hold in abeyance the resolution of the demurrer to evidence filed by the accused. While it would have been ideal for the trial court to hold in abeyance the resolution of the demurrer to evidence, nowhere in the rules is it mandated to do so. Furthermore, even if the Supreme Court were to consider the same as an error on the part of the trial court, the same would merely constitute an error of procedure or of judgment and not an error of jurisdiction. Errors or irregularities, which do not render the proceedings a nullity, will not defeat a plea of double jeopardy. People of the Philippines vs. Dante Tan. G.R. No. 167526, July 26, 2010. Due process; administrative proceedings. Due process, as a constitutional precept, does not always, and in all situations, require a trial-type proceeding. Litigants may be heard through pleadings, written explanations, position papers, memoranda or oral arguments. The standard of due process that must be met in administrative tribunals allows a certain degree of latitude as long as fairness is not ignored. It is, therefore, not legally objectionable for violating due process for an administrative agency to resolve a case based solely on position papers, affidavits or documentary evidence submitted by the parties. Even if no formal hearing took place, it is not sufficient ground for petitioner to claim that due process was not afforded it. In this case, petitioner was given all the opportunity to prove and establish its claim that the properties were excluded from the coverage of the Comprehensive Agrarian Reform Program. Petitioner actively participated in the proceedings by submitting various pleadings and documentary evidence. It filed motions for reconsideration of every unfavorable outcome in all tiers of the administrative and judicial processes. The essence of due process is simply an opportunity to be heard, or, as applied to administrative proceedings, an opportunity to explain ones side or an opportunity to seek for a reconsideration of the action or ruling
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complained of. Any seeming defect in its observance is cured by the filing of a motion for reconsideration. Denial of due process cannot be successfully invoked by a party who has had the opportunity to be heard on his motion for reconsideration. A.Z. Arnaiz Realty, Inc. vs. Office of the President. G.R. No. 170623, July 7, 2010. Exhaustion of administrative remedies. The doctrine of exhaustion of administrative remedies requires that where a remedy before an administrative agency is provided, the administrative agency concerned must be given the opportunity to decide a matter within its jurisdiction before an action is brought before the courts. Failure to exhaust administrative remedies is a ground for dismissal of the action. In this case, however, the doctrine does not apply because petitioners failed to demonstrate that recourse to the Commission on Higher Education is mandatory or even possible in an action such as that brought by the respondent, which is essentially one for mandamus and damages. The doctrine admits of numerous exceptions, one of which is where the issues are purely legal and well within the jurisdiction of the trial court, as in the present case. Petitioners liability, if any, for damages will have to be decided by the courts, since any judgment inevitably calls for the application and the interpretation of the Civil Code. As such, exhaustion of administrative remedies may be dispensed with. University of Santo Tomas, et al. vs. Danes B. Sanchez. G.R. No. 165569. July 29, 2010. Freedom of speech. Government workers, whatever their rank, have as much right as any person in the land to voice out their protests against what they believe to be a violation of their rights and interests. Civil Service does not deprive them of their freedom of expression. It would be unfair to hold that by joining the government service, the members thereof have renounced or waived this basic liberty. This freedom can be reasonably regulated only but can never be taken away. Thus, Section 5 of Civil Service Commission Resolution No. 02-1316, which regulates the political rights of those in the government service, provides that the concerted
activity or mass action proscribed must be coupled with the intent of effecting work stoppage or service disruption in order to realize their demands of force concession. Such limitation or qualification in the above rule is intended to temper and focus the application of the prohibition, as not all collective activity or mass undertaking of government employees is prohibited. Otherwise, government employees would be deprived of their constitutional right to freedom of expression. Respondents act of wearing similarly colored shirts, attending a public hearing for just over an hour at the office of the GSIS Investigation Unit, bringing with them recording gadgets, clenching their fists, and some even badmouthing the GSIS guards and GSIS President and General Manager Winston F. Garcia, are not constitutive of an (i) intent to effect work stoppage or service disruption and (ii) for the purpose of realizing their demands of force concession. These actuations did not amount to a prohibited concerted activity or mass action. Government Service Insurance System and Winston F. Garcia vs. Dinnah Villaviza, et al. G.R. No. 180291, July 27, 2010. Government agencies; reorganization. Reorganization in a government agency is valid provided that it is done in good faith. As a general rule, the test of good faith is whether or not the purpose of the reorganization is for economy or to make the bureaucracy more efficient. Removal from office as a result of reorganization must pass the test of good faith. A demotion in office, i.e., the movement from one position to another involving the issuance of an appointment with diminution in duties, responsibilities, status or rank, which may or may not involve a reduction in salary, is tantamount to removal, if no cause is shown for it. Consequently, before a demotion may be effected pursuant to reorganization, the observance of the rules on bona fide abolition of public office is essential. There was no demotion in this case because petitioner was appointed to a position comparable to her former position. In fact, her new position entailed an increase in her salary grade from 20 to 24. There is, thus, no evidence to suggest that the Development Bank of the Philippines acted in bad faith.
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Virginia D. Bautista vs. Civil Service Commission and Development Bank of the Philippines. G.R. No. 185215, July 22, 2010. Government contracts; perfection. Contracts to which the government is a party are generally subject to the same laws and regulations that govern the validity and sufficiency of contracts between private individuals. A government contract, however, is perfected only upon approval of competent authority, where such approval is required. With respect to contracts of government-owned and controlled corporations, the provisions of existing laws are clear in requiring the governing boards approval thereof. For the Philippine Ports Authority (PPA), its charter (Presidential Decree 857) vests the general manager with power to sign contracts and to perform such other duties as the Board of Directors may assign. Therefore, unless the Board validly authorizes the general manager, the latter cannot bind PPA to a contract. The authority of government officials to represent the government in any contract must proceed from an express provision of law or valid delegation of authority. Without such actual authority being possessed by PPAs general manager, there could be no real consent, much less a perfected contract, to speak of. A notice of award signed by the general manager does not embody a perfected contract without the PPA Boards prior approval of the contract. Sargasso Construction & Development Corporation, et al. vs. Philippine Ports Authority. G.R. No. 170530, July 5, 2010. Local governments; authority of local chief executive. Under Section 444(b)(1)(iv) of the Local Government Code, a municipal mayor is required to secure the prior authorization of the Sangguniang Bayan (municipal council) before entering into a contract on behalf of the municipality. In this case, the Sangguniang Bayan of Tiwi unanimously passed Resolution No. 15-92 authorizing the Mayor to hire a lawyer of her choice to represent the interest of Tiwi in the execution of this Courts Decision in another case. Such authority necessarily carried with it the power to negotiate, execute and sign on behalf of Tiwi the Contract of
Legal Services. That the authorization did not set the terms and conditions of the compensation of the lawyer signifies that the council empowered the Mayor to reach a mutually agreeable arrangement with the lawyer of her choice subject to the general limitation that the contractual stipulations should not be contrary to law, morals, good customs, public order or public policy, and, considering that this is a contract of legal services, to the added restriction that the agreed attorneys fees must not be unreasonable and unconscionable. On its face, and there is no allegation to the contrary, the prior authorization given under Resolution No. 15-92 appears to have been given by the council in good faith in order to expeditiously safeguard the rights of Tiwi. Thus, there is nothing objectionable to this manner of prior authorization, and the Mayor was sufficiently authorized to enter into said Contract of Legal Services. Such contract need not be ratified first by the Sangguniang Bayan to be enforceable against Tiwi. The law speaks of prior authorization and not ratification with respect to the power of the local chief executive to enter into a contract on behalf of the local government unit. That authority was granted by the Sangguniang Bayan to the Mayor under Resolution No. 15-92. Municipality of Tiwi, represented by Hon. Mayor Jiame C. Villanueva and Sangguniang Bayan of Tiwi Vs. Antonio B. Betito, G.R. No. 171873, July 9, 2010. Municipal ordinance; deed of restrictions. While a zoning ordinance can override the deed of restrictions on the use of a property on the basis of the municipalitys exercise of police power, the Court will reconcile seemingly opposing provisions in the deed of restrictions and the zoning ordinance rather than nullify one or the other, particularly where, as here, the continued enforcement of the deed of restrictions is reasonable and the municipality was not asserting any interest or zoning purpose contrary to the interest of the subdivision developer that is seeking to enforce the deed of restrictions. The Learning Child, Inc., et al. vs. Ayala Alabang Village Association, et al./Jose Marie V. Aquino, minor and represented by his parents Dr. Errol Aquino and Atty. Marilyn Aquino, et al. vs. Ayala Alabang Village Association, et al./Ayala Alabang Village Association, et
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al. vs. Municipality of Muntinlupa, et al. G.R. No. 134269/G.R. No. 134440/G.R. No. 144518, July 7, 2010. Ombudsman; jurisdiction. The primary jurisdiction of the Ombudsman to investigate any act or omission of a public officer or employee applies only in cases cognizable by the Sandiganbayan. In cases cognizable by regular courts, the Ombudsman has concurrent jurisdiction with other investigative agencies of government. Republic Act No. 8249 (Act Further Defining the Jurisdiction of the Sandiganbayan) limits the cases that are cognizable by the Sandiganbayan to public officials occupying positions corresponding to salary grade 27 and higher. The Sandiganbayan has no jurisdiction over private respondent who, as punong barangay, is occupying a position corresponding to salary grade 14. Under the Local Government Code, the sangguniang bayan has disciplinary authority over any elective barangay official. Clearly, therefore, the Ombudsman has concurrent jurisdiction with the sangguniang bayan over administrative cases against elective barangay officials occupying positions below salary grade 27, such as private respondent in this case. In administrative cases involving the concurrent jurisdiction of two or more disciplining authorities, the body in which the complaint is filed first, and which opts to take cognizance of the case, acquires jurisdiction to the exclusion of other tribunals exercising concurrent jurisdiction. In this case, since the complaint was filed first in the Ombudsman, and the Ombudsman opted to assume jurisdiction over the complaint, the Ombudsmans exercise of jurisdiction is to the exclusion of the sangguniang bayan exercising concurrent jurisdiction. Jurisdiction is a matter of law. Jurisdiction, once acquired, is not lost upon the instance of the parties but continues until the case is terminated. When complainants first filed the complaint in the Ombudsman, jurisdiction was already vested on the latter. Jurisdiction could no longer be transferred to the sangguniang bayan by virtue of a subsequent complaint filed by the same complainants. As a final note, under Section 60 of the Local Government Code, the sangguniang bayan has no power to remove an elective barangay official. Apart from the Ombudsman, only a proper court may do so. Unlike the
sangguniang bayan, the Ombudsmans powers are not merely recommendatory. The Ombudsman is clothed with authority to directly remove an erring public official other than officials who may be removed only by impeachment. Office of the Ombudsman vs. Rolson Rodriquez. G.R. No. 172700, July 23, 2010. Primary jurisdiction; Commission on Higher Education. The rule on primary jurisdiction applies only where the administrative agency exercises quasi-judicial or adjudicatory functions. Petitioners have not shown that the Commission on Higher Education (CHED) has power to investigate facts or ascertain the existence of facts, hold hearings, weigh evidence, and draw conclusions. Section 8 of Republic Act No. 7722 (the Higher Education Act of 1994), which enumerates the powers and functions of CHED) does not contain any express grant to CHED of judicial or quasijudicial power. In any event, CHED has no authority to adjudicate an action for damages. University of Santo Tomas, et al. vs. Danes B. Sanchez. G.R. No. 165569. July 29, 2010. Public lands; registration. All lands not appearing to be clearly of private dominion presumptively belong to the State. Public lands not shown to have been reclassified or released as alienable agricultural land or alienated to a private person by the State remain part of the inalienable public domain. The onus to overturn, by incontrovertible evidence, the presumption that the land subject of an application for registration is alienable or disposable rests with the applicant. A notation on the advanced survey plan stating in effect that the subject property is alienable and disposable is not sufficient to establish the actual legal classification of the disputed lot. It is not the kind of evidence required by law to establish that the land is alienable and disposable. The approved survey plan merely identifies the property preparatory to a judicial proceeding for adjudication of title. Republic of the Philippines vs. Domingo Espinosa. G.R. No. 176885, July 5, 2010.
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Public officers; demotion. There is demotion when an employee is appointed to a position resulting in diminution of duties, responsibilities, status or rank, which may or may not involve a reduction in salary. Where an employee is appointed to a position with the same duties and responsibilities but with rank and salary higher than those enjoyed in his previous position, there is no demotion and the appointment is valid. In this case, the appointment of petitioner to Bank Executive Officer II did not constitute a demotion. Her duties and responsibilities as Account Officer (her previous position) and as BEO II are practically the same. Rather than lowering her rank and salary, petitioners appointment as BEO II had, in fact, resulted in an increase thereof from salary grade 20 to 24. Further, her appointment to BEO II was done in good faith and pursuant to a valid reorganization. Virginia D. Bautista vs. Civil Service Commission and Development Bank of the Philippines. G.R. No. 185215, July 22, 2010. Review of COMELEC Decision. In light of the Supreme Courts limited authority to review findings of fact, it does not ordinarily review in a certiorari case the COMELECs appreciation and evaluation of evidence. Findings of fact of the COMELEC, supported by substantial evidence, are final and non-reviewable. Any misstep by the COMELEC in this regard generally involves an error of judgment, not of jurisdiction. In exceptional cases, however, when the COMELECs action on the appreciation and evaluation of evidence oversteps the limits of its discretion to the point of being grossly unreasonable, the Supreme Court is not only obliged, but has the constitutional duty to intervene. When grave abuse of discretion is present, resulting errors arising from the grave abuse mutate from error of judgment to one of jurisdiction. Abraham Kahlil B. Mitra vs. Commission on Elections, et al. G.R. No. 191938, July 2, 2010. Right to information. Like all constitutional guarantees, the right to information is not absolute. The peoples right to information is limited to matters of public concern, and is further subject to such limitations as may be provided by law. Similarly, the States policy of full disclosure is
limited to transactions involving public interest, and is subject to reasonable conditions prescribed by law. National board examinations, such as the certified public accountant board examinations, are matters of public concern. The populace in general, and the examinees in particular, would understandably be interested in the fair and competent administration of these examinations in order to ensure that only those qualified are admitted into the accounting profession. And as with all matters pedagogical, these examinations could be not merely quantitative means of assessment, but also means to further improve the teaching and learning of the art and science of accounting. On the other hand, there may be valid reasons to limit access to the examination papers in order to properly administer the tests. More than the mere convenience of the examiner, it may well be that there exist inherent difficulties in the preparation, generation, encoding, administration, and checking of the multiple choice examinations that require that the questions and answers remain confidential for a limited duration. However, the Professional Regulation Commission is not a party to the proceedings. It has not been given an opportunity to explain the reasons behind the regulations or articulate the justification for keeping the examination documents confidential. In view of the far-reaching implications of the cases, which may impact on every board examination administered by the Professional Regulation Commission, and in order that all relevant issues may be ventilated, the Court remanded the cases to the Regional Trial Court for further proceedings. Hazel Ma. C. Antolin vs. Abelardo R. Domondon, et al./Hazel Ma. C. Antolin vs. Antonieta FortunaIbe. G.R. No. 165036/G.R. No. 175705, July 5, 2010. Sanggunian resolution; validity. A municipal resolution correcting an alleged typographical error in a zoning ordinance does not have to comply with the requirements of notice and hearing, which are required for the validity and effectiveness of zoning ordinances. The Learning Child, Inc., et al. vs. Ayala Alabang Village Association, et al./Jose Marie V. Aquino, minor and represented by his parents Dr. Errol Aquino and Atty. Marilyn Aquino, et al. vs. Ayala Alabang Village Association, et al./Ayala Alabang
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Village Association, et al. vs. Municipality of Muntinlupa, et al. G.R. No. 134269/G.R. No. 134440/G.R. No. 144518, July 7, 2010. Standing to sue. Legal standing refers to a partys personal and substantial interest in a case, arising from the direct injury it has sustained or will sustain as a result of the challenged governmental action. Legal standing calls for more than just a generalized grievance. The term interest means a material interest, an interest in issue affected by the governmental action, as distinguished from mere interest in the question involved, or a mere incidental interest. Unless a persons constitutional rights are adversely affected by a statute or governmental action, he has no legal standing to challenge the same. In this case, petitioner challenges the constitutionality of Section 2.6 of the Distribution Services and Open Access Rules (DSOAR) of the Energy Regulatory Commission, which obligates residential end-users to advance the cost of extending power distribution lines and installing additional facilities. However, petitioners members consist of developers, brokers, appraisers, contractors, manufacturers, suppliers, engineers, architects, and other persons or entities engaged in the housing and real estate business. It does not question the challenged DSOAR provision as a residential end-user, and it cannot do so because the challenged provision refers only to the rights and obligations of distribution utilities and residential end-users; neither the petitioner nor its members are residential end-users. Thus, neither the petitioner nor its members can claim any injury, as residential end-users, arising from Section 2.6 of the DSOAR; neither can they cite any benefit accruing to them as residential end-users that would result from the invalidation of the assailed provision. Chamber of Real Estate and Builders Association, Inc. Vs. Energy Regulatory Commission, et al. G.R. No. 174697, July 8, 2010. Waiver of locus standi rule. The Court can waive the procedural rule on standing in cases that raise issues of transcendental importance. Following are the guidelines in determining whether or not a matter is of transcendental importance: (1) the character of the funds or other assets
involved in the case; (2) the presence of a clear case of disregard of a constitutional or statutory prohibition by the public respondent agency or instrumentality of the government; and (3) the lack of any other party with a more direct and specific interest in the questions being raised. In this case, the three determinants are absent. Public funds are not involved. The allegations of constitutional and statutory violations of the public respondent agency are unsubstantiated by facts and are mere challenges on the wisdom of the rules. Parties with a more direct and specific interest in the questions being raised the residential end-users undoubtedly exist and are not included as parties to the petition. Chamber of Real Estate and Builders Association, Inc. Vs. Energy Regulatory Commission, et al. G.R. No. 174697, July 8, 2010. Civil Code Agency; doctrine of apparent authority. The doctrine of apparent authority in respect of government contracts, has been restated to mean that the government is NOT bound by unauthorized acts of its agents, even though within the apparent scope of their authority. Under the law on agency, however, apparent authority is defined as the power to affect the legal relations of another person by transactions with third persons arising from the others manifestations to such third person such that the liability of the principal for the acts and contracts of his agent extends to those which are within the apparent scope of the authority conferred on him, although no actual authority to do such acts or to make such contracts has been conferred. Apparent authority, or what is sometimes referred to as the holding out theory, or doctrine of ostensible agency, imposes liability, not as the result of the reality of a contractual relationship, but rather because of the actions of a principal or an employer in somehow misleading the public into believing that the relationship or the authority exists. The existence of apparent authority may be ascertained through (1) the general manner in
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which the corporation holds out an officer or agent as having the power to act or, in other words, the apparent authority to act in general, with which it clothes him; or (2) the acquiescence in his acts of a particular nature, with actual or constructive knowledge thereof, whether within or beyond the scope of his ordinary powers. It requires presentation of evidence of similar act(s) executed either in its favor or in favor of other parties. Easily discernible from the foregoing is that apparent authority is determined only by the acts of the principal and not by the acts of the agent. The principal is, therefore, not responsible where the agents own conduct and statements have created the apparent authority. In this case, not a single act of respondent, acting through its Board of Directors, was cited as having clothed its general manager with apparent authority to execute the contract with it. Sargasso Construction & Development Corporation / Pick & Shovel, Inc./Atlantic Erectors, Inc./ Joint Venture vs. Philippine Ports Authority, G.R. No. 170530, July 5, 2010. Agency; doctrine of apparent authority. Under the doctrine of apparent authority, acts and contracts of the agent, as are within the apparent scope of the authority conferred on him, although no actual authority to do such acts or to make such contracts has been conferred, bind the principal. The principals liability, however, is limited only to third persons who have been led reasonably to believe by the conduct of the principal that such actual authority exists, although none was given. In other words, apparent authority is determined only by the acts of the principal and not by the acts of the agent. There can be no apparent authority of an agent without acts or conduct on the part of the principal; such acts or conduct must have been known and relied upon in good faith as a result of the exercise of reasonable prudence by a third party as claimant, and such acts or conduct must have produced a change of position to the third partys detriment.
In the present case, the decision of the trial court was utterly silent on the manner by which the bank, as supposed principal, has clothed or held out its branch manager as having the power to enter into an agreement, as claimed by petitioners. Further, we would be unduly stretching the doctrine of apparent authority were we to consider the power to undo or nullify solemn agreements validly entered into as within the doctrines ambit. Although a branch manager, within his field and as to third persons, is the general agent and is in general charge of the corporation, with apparent authority commensurate with the ordinary business entrusted him and the usual course and conduct thereof, yet the power to modify or nullify corporate contracts remains generally in the board of directors. Being a mere branch manager alone is insufficient to support the conclusion that Mondigo has been clothed with apparent authority to verbally alter terms of written contracts, especially when viewed against the telling circumstances of this case. It is a settled rule that persons dealing with an agent are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of the agents authority, and in case either is controverted, the burden of proof is upon them to establish it. As parties to the mortgage contract, the petitioners are expected to abide by its terms. The subsequent purported agreement is of no moment, and cannot prejudice PCRB, as it is beyond Mondigos actual or apparent authority, as above discussed. Violeta Tudtud Banate, et al. vs. Philippine Countryside Rural Bank (Liloan, Cebu), Inc. and Teofilo Soon, Jr., G.R. No. 163825, July 13, 2010. Common carrier; liability. Undoubtedly, UTI is liable as a common carrier. Common carriers, as a general rule, are presumed to have been at fault or negligent if the goods they transported deteriorated or got lost or destroyed. That is, unless they prove that they exercised extraordinary diligence in transporting the goods. In order to avoid responsibility for any loss or damage, therefore, they have the burden of proving that they observed such
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diligence. Mere proof of delivery of the goods in good order to a common carrier and of their arrival in bad order at their destination constitutes a prima facie case of fault or negligence against the carrier. If no adequate explanation is given as to how the deterioration, loss, or destruction of the goods happened, the transporter shall be held responsible. Unsworth Transportation International (Phils.), Inc. vs. Court of Appeals and Pioneer Insurance and Surety Corporation, G.R. No. 166250, July 26, 2010 Contracts; elements; stages. Every contract has the following essential elements: (i) consent, (ii) object certain and (iii) cause. Consent has been defined as the concurrence of the wills of the contracting parties with respect to the object and cause which shall constitute the contract. In general, contracts undergo three distinct stages, to wit: negotiation, perfection or birth, and consummation. Negotiation begins from the time the prospective contracting parties manifest their interest in the contract and ends at the moment of their agreement. Perfection or birth of the contract takes place when the parties agree upon the essential elements of the contract, i.e., consent, object and price. Consummation occurs when the parties fulfill or perform the terms agreed upon in the contract, culminating in the extinguishment thereof. The birth or the perfection of the contract, which is the crux of the present controversy, refers to that moment in the life of a contract when there is finally a concurrence of the wills of the contracting parties with respect to the object and the cause of the contract. Sargasso Construction & Development Corporation / Pick & Shovel, Inc./Atlantic Erectors, Inc./ Joint Venture vs. Philippine Ports Authority, G.R. No. 170530, July 5, 2010. Contracts; government contracts; when perfected. A government or public contract has been defined as a contract entered into by state officers acting on behalf of the state, and in which the entire people of the state are directly interested. It relates wholly to matter of public concern, and affects private
rights only so far as the statute confers such rights when its provisions are carried out by the officer to whom it is confided to perform. A government contract is essentially similar to a private contract contemplated under the Civil Code. The legal requisites of consent of the contracting parties, an object certain which is the subject matter, and cause or consideration of the obligation must likewise concur. Otherwise, there is no government contract to speak of. On the matter of entering into negotiated contracts by government-owned and controlled corporations, the provisions of existing laws are crystal clear in requiring the governing boards approval thereof. Petitioner neither disputes nor admits the application of the foregoing statutory provisions but insists, nonetheless, that the Notice of Award itself already embodies a perfected contract having passed the negotiation stage] despite the clear absence thereon of a condition requiring the prior approval of respondents higher authority. Petitioners argument is untenable. Contracts to which the government is a party are generally subject to the same laws and regulations which govern the validity and sufficiency of contracts between private individuals. A government contract, however, is perfected only upon approval by a competent authority, where such approval is required. Sargasso Construction & Development Corporation / Pick & Shovel, Inc./Atlantic Erectors, Inc./ Joint Venture vs. Philippine Ports Authority, G.R. No. 170530, July 5, 2010. Contracts; insufficient consideration. The Supreme Court upheld the finding of the Court of Appeals that there was insufficient of consideration, and that while inadequacy of price does not invalidate a contract, the said rule is not without an exception. As provided in the Civil Code:

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Art. 1355. Except in cases specified by law, lesion or inadequacy of cause shall not invalidate a contract, unless there has been fraud, mistake or undue influence. The Court of Appeals was clear as to its main reason for invalidating the contracts in question there was fraud. The inadequacy of price was merely one of the circumstances upon which the Court of Appeals was able to find the existence of fraud and was not the main cause for the invalidation of the subject contracts. For the readers information, heres a portion of the decision showing the circumstances which led the court to determine there was inadequacy of consideration: It must be noted that the property in question, subject of the Contract to Sell for the sum of P441,032.00, is a land with a contained area of, more or less, One Thousand Nine Hundred and One (1,901) sq. m. with a two-storey residential building located in Pasay City. In claiming that the said price of the property is not inadequate, petitioners stated that the payment of Elmer Tan to pre-terminate Hayaris obligation amounting to Three Million One Hundred Thirty-Four Thousand Nine Hundred TwentyOne Pesos (P3,134,921.00) as part of the consideration paid for the property should be included. However, as correctly argued by respondent Sierra Grande, the amortizations paid by Elmer Tan to Manphil was for a loan incurred by Hayari and not by respondent Sierra Grande; thus, any payment of the amortizations on the loan of Hayari cannot be considered as part of the consideration for the sale of the land owned by respondent Sierra Grande. It is then safe to declare that respondent Sierra Grande did not benefit from the loan or from its pre-termination. Moreover, the records are bereft of any evidence to support the claim of petitioners that the sum of money paid by Elmer Tan, on behalf of Hayari, was part of the consideration for the same property. What only appears is that the only consideration paid for the sale of the Roberts property was the sum contained in the Contract to Sell, which was P441,032.00 which, considering the size and location of the property, is inadequate. What
prompted Elmer Tan to pay the total amount of P3,134,921.00 cannot be gleaned from the records, except that it was for the loan incurred by Hayari, which is an independent juridical entity, separate and distinct from Sierra Grande. Hence, the Court of Appeals did not commit any error in declaring that there was an insufficiency of consideration or price as the same is shown on the very face of the Contract to Sell. Golden Apple Realty & Development Corporation and Rosvibon Realty Corporation vs. Sierra Grande Realty Corporation, Manphil Investment Corporation, Renan V. Santos and Patricio Mamaril, G.R. No. 119857, July 28, 2010. Contracts; invalidation on ground of notarial infirmity. Petitioners claim that, since the representatives of the corporations which executed the Deed of Absolute Sale appeared before the Notary Public, the acknowledgment was complied with, even if they admitted that the representatives did not present their residence certificates nor indicate the number, date and place of issue of the same residence certificates in the acknowledgment. As shown in the records and in the testimony of the notary, the requirement of the presentation of the residence certificate was missing. Golden Apple Realty & Development Corporation and Rosvibon Realty Corporation vs. Sierra Grande Realty Corporation, Manphil Investment Corporation, Renan V. Santos and Patricio Mamaril, G.R. No. 119857, July 28, 2010. Contracts; meaning of badges of fraud; ordinary meaning versus Article 1602 meaning. Petitioners claim that the Court of Appeals misused the term badges of fraud in reaching its decision. According to them, Article 1602, upon which the term badges of fraud refers to, is not applicable, because the said article refers to a sale with a right to repurchase, whereas the subject invalidated contracts were absolute sales. They cited a case where this Court pronounced that, badges of fraud is a circumstance in Article 1602 of the Civil Code, which, if present in any given transaction, gives rise to the presumption that it is not a sale but an equitable mortgage. Thus, according to petitioners, the CA confused Article 1602 (1) with that of Article 1470, because both articles deal with sale in general and have
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inadequacy of price as subject matter. Either way, they argue, the inadequacy of the price does not result in the cancellation or invalidation of contracts. However, a close reading of the Court of Appeals decision would reveal that the said court used the phrase badges of fraud to refer to certain fraudulent acts that attended the execution of the Contract to Sell and the Deeds of Absolute Sale which would eventually tend to prove that the same transactions were indeed suspicious as the said contracts were antedated, simulated and fraudulent. As used by the Court of Appeals, the phrase did not refer to any particular provision of a law. Hence, the general and ordinary meaning of the phrase prevails. In the same manner, this Court, in numerous cases concerning various subjects, has used the same phrase in its rulings referring to the said phrases general and ordinary meaning. Golden Apple Realty & Development Corporation and Rosvibon Realty Corporation vs. Sierra Grande Realty Corporation, Manphil Investment Corporation, Renan V. Santos and Patricio Mamaril, G.R. No. 119857, July 28, 2010. Contracts; payment of debt by a third party. Petitioners invocation of Article 1236 of the Civil Code does not help them. They cannot deny their indebtedness to respondent on the basis of said article since the payment advanced by respondent on petitioners behalf redounded to their benefit and petitioner never objected to it when she came to learn of it. It is thus immaterial that petitioner was unaware of respondents action for the law ultimately allows recovery to the extent that the debtors-petitioners were benefited. Spouses Divina C. Publico and Jose T. Publico vs. Teresa Bautista, G.R. No. 174096, July 20, 2010 Contracts; rescission; reciprocal obligations. The right to rescind a contract arises once the other party defaults in the performance of his obligation. In determining when default occurs, Article 1191 should be taken in conjunction with Article 1169 of the same law.
In reciprocal obligations, as in a contract of sale, the general rule is that the fulfillment of the parties respective obligations should be simultaneous. Hence, no demand is generally necessary because, once a party fulfills his obligation and the other party does not fulfill his, the latter automatically incurs in delay. But when different dates for performance of the obligations are fixed, the default for each obligation must be determined by the rules given in the first paragraph of Article 1169, that is, the other party would incur in delay only from the moment the other party demands fulfillment of the formers obligation. Thus, even in reciprocal obligations, if the period for the fulfillment of the obligation is fixed, demand upon the obligee is still necessary before the obligor can be considered in default and before a cause of action for rescission will accrue. Solar Harvest Incorporated vs. Davao Corrugated Carton Corporation, G.R. No. 176686, July 26, 2010. Damages; actual. Actual damages puts the claimant in the position in which he had been before he was injured. The award thereof must be based on the evidence presented, not on the personal knowledge of the court; and certainly not on flimsy, remote, speculative and non-substantial proof. Under the Civil Code, one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. Adrian Wilson International Associates, Inc. vs. TMX Philippines, Inc., G.R. No. 162608, July 26, 2010. Contracts; rescission; no right to restitution. This case is a little weird. Petitioners borrowed money from a bank (they contracted several loans) and mortgaged various properties. They asked the bank manager to approve the sale of the property and to release the lien on that property in exchange for payment of one of the loans. The bank manager agreed even though he had no authority to do so and even though the property that was sold actually secured other loans that were still unpaid. The buyer of the land gave the petitioners the purchase price and the petitioners used that to pay off the one loan. Later the bank refused to have the lien on the title of the
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relevant property cancelled so the petitioners sued. The court held that there could be no novation because the bank manager had no authority to agree to the new terms. The petitioners then argued that if that were the case, the money paid to the bank should be returned. They asked that the agreement with the bank manager be rescinded. I would think that the first response to this was there was no agreement (the supposedly new one with the bank manager) to rescind. But the bank title to the subject properties to the buyer, only to enable the latter to obtain a transfer of title in her own name. The Supreme Court then said: countered saying that the clear agreement of the parties was for the full payment of the subject loan, and in return, the bank would deliver the We agree with PCRB. Even if we were to assume that the purported agreement has been sufficiently established, since it is not binding on the bank for lack of authority of PCRBs branch manager, then the prayer for restitution of the amount paid would have no legal basis. I think it would have been clearer if the decision simply stated that the petitioners could not ask for rescission because there was nothing to rescind and whether or not the agreement with the bank manager was properly established, there is no legal basis for restitution. The buyer had no claim against the bank because it paid the check to the petitioners. Meanwhile, the petitioners who had paid the money to the bank could not ask the money back because it was applied to the loan that unquestionably existed. In this regard, the court said that Article 2154 of the Civil Code which reads [I]f something is received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises, has no application. Violeta Tudtud Banate, et al. vs. Philippine Countryside Rural Bank (Liloan, Cebu), Inc. and Teofilo Soon, Jr., G.R. No. 163825, July 13, 2010. Damages; actual. For one to be entitled to actual damages, it is necessary to prove the actual amount of loss with a reasonable degree of certainty, premised upon competent proof and the best evidence obtainable by the injured party. Actual damages are such compensation or damages for an
injury that will put the injured party in the position in which he had been before he was injured. They pertain to such injuries or losses that are actually sustained and susceptible of measurement. To justify an award of actual damages, there must be competent proof of the actual amount of loss. Credence can be given only to claims which are duly supported by receipts. OMC Carriers, Inc. and Jerry Aalucas y Pitalino vs. Spouses Roberto C. Nabua and Rosario T. Nabua, G.R. No. 148974, July 2, 2010. Damages; attorneys fees. The rule on the award of attorneys fees is that there must be a justification for the same. In the absence of a statement why attorneys fees were awarded, the same should be disallowed. OMC Carriers, Inc. and Jerry Aalucas y Pitalino vs. Spouses Roberto C. Nabua and Rosario T. Nabua, G.R. No. 148974, July 2, 2010. Damages; causal connection. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable shall be those that are the natural and probable consequences of the breach of the obligation. In this case, the trial court and the Court of appeals held AWIA liable for the cost of 11 shoring columns. The Supreme Court also found that AWIA had breached its duty of contract administration. It noted that had the effects on the marginal strength of the concrete been promptly disclosed to TMX, the cracks and deflections could have been rectified by the contractor before it was issued its final certification of payment and the owner could have been spared from further expenses. There is a causal connection between AWIAs negligence and the expenses incurred by TMX. The latter was compelled to shutdown the plant during the workdays in December to repair the roof. In the process, it incurred expenses for the repairs, including the salaries of its workers who were put on forced leave, for which it can ask for reimbursement as actual damages. Adrian Wilson International Associates, Inc. vs. TMX Philippines, Inc., G.R. No. 162608, July 26, 2010.

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Damages; compensatory damages. In the case at bar, respondents only testified to the fact that the victim, Reggie Nabua, was a freshman taking up Industrial Engineering at the Technological Institute of the Philippines in Cubao. There was no evidence of good academic record, extra-curricular activities, and varied interests presented in court. Hence, the Court of Appeals was correct when it deleted the award of compensatory damages amounting to P2,000,000.00, as the same is without any basis. OMC Carriers, Inc. and Jerry Aalucas y Pitalino vs. Spouses Roberto C. Nabua and Rosario T. Nabua, G.R. No. 148974, July 2, 2010. Damages; death indemnity. Death indemnity has been fixed by jurisprudence at P50,000.00. OMC Carriers, Inc. and Jerry Aalucas y Pitalino vs. Spouses Roberto C. Nabua and Rosario T. Nabua, G.R. No. 148974, July 2, 2010. Damages; diligence; standard of care of banks. While it is conceded that petitioner had the right to offset the unpaid interests due it against the deposits of respondent, the issue of whether it acted judiciously is an entirely different matter. As business affected with public interest, and because of the nature of their functions, banks are under obligation to treat the accounts of their depositors with meticulous care, always having in mind the fiduciary nature of their relationship. This whole incident would have been avoided had petitioner adhered to the standard of diligence expected of one engaged in the banking business. Metropolitan Bank and Trust Company vs. Larry Marias, G.R. No. 179105, July 26, 2010. Damages; moral. It must be stressed that moral damages are not intended to enrich a plaintiff at the expense of the defendant. They are awarded to allow the plaintiff to obtain means, diversion or amusements that will serve to alleviate the moral suffering he/she has undergone due to the defendants culpable action and must, perforce, be proportional to the suffering inflicted. Thus, given the circumstances of the case at bar, an award of P50,000.00 as moral damages is proper. OMC Carriers, Inc. and Jerry
Aalucas y Pitalino vs. Spouses Roberto C. Nabua and Rosario T. Nabua, G.R. No. 148974, July 2, 2010. Damages; moral; exemplary; attorneys fees. Article 2217 of the Civil Code defines what are included in moral damages while Article 2219 enumerates the cases where they may be recovered. Moral damages are in the category of an award designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer. The person claiming moral damages must prove the existence of bad faith by clear and convincing evidence for the law always presumes good faith. It is not enough that one merely suffered sleepless nights, mental anguish, serious anxiety as the result of the actuations of the other party. Invariably such action must be shown to have been willfully done in bad faith or with ill motive. (But see Metropolitan Bank and Trust Company vs. Larry Marias, G.R. No. 179105, July 26, 2010.) In the same fashion, to warrant the award of exemplary damages, the wrongful act must be accompanied by bad faith, and an award of damages would be allowed only if the guilty party acted in wanton, fraudulent, reckless or malevolent manner. As regards attorneys fees, the law is clear that in the absence of stipulation, attorneys fees may be recovered as actual or compensatory damages under any of the circumstances provided for in Article 2208 of the Civil Code. Having ruled that Jose committed fraud in obtaining title to the disputed property then he should be liable for both moral and exemplary damages. Likewise, since petitioners were compelled to litigate to protect their rights and having proved that Jose acted in bad faith, attorneys fees should likewise be awarded. Spouses Federico Valenzuela and Luz BuenaValenzuela Vs. Spouses Jose Mano , Jr. and Rosanna Reyes-Mano, G.R. No. 172611, July 9, 2010. Damages; moral damages need not be attended by bad faith; exemplary damages; attorneys fees. A depositor has the right to recover reasonable moral damages even if the banks negligence may not have been attended
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with malice and bad faith, if the former suffered mental anguish, serious anxiety, embarrassment and humiliation. Moral damages are not meant to enrich a complainant at the expense of defendant. It is only intended to alleviate the moral suffering she has undergone. The award of exemplary damages is justified, on the other hand, when the acts of the bank are attended by malice, bad faith or gross negligence. The award of reasonable attorneys fees is proper where exemplary damages are awarded. It is proper where depositors are compelled to litigate to protect their interest. Metropolitan Bank and Trust Company vs. Larry Marias, G.R. No. 179105, July 26, 2010. Damages; negligence; degree of care; motor vehicle vs. bicycle. Read this because it establishes a greater degree of care on a motorist when he encounters a bicycle. The instant case involved a collision between a taxicab and a bicycle which resulted in serious physical injuries to the bicycle rider, Albayda. It is a rule in negligence suits that the plaintiff has the burden of proving by a preponderance of evidence the motorists breach in his duty of care owed to the plaintiff, that the motorist was negligent in failing to exercise the diligence required to avoid injury to the plaintiff, and that such negligence was the proximate cause of the injury suffered. Article 2176 of the Civil Code provides that whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no preexisting contractual relation between the parties, is called a quasi-delict. In this regard, the question of the motorists negligence is a question of fact. It was proven by a preponderance of evidence that Completo failed to exercise reasonable diligence in driving the taxicab because he was overspeeding at the time he hit the bicycle ridden by Albayda. Such negligence was the sole and proximate cause of the serious physical injuries sustained by Albayda. Completo did not slow down even when he approached the intersection of 8th and 11th Streets of VAB. It was also proven that Albayda
had the right of way, considering that he reached the intersection ahead of Completo. The bicycle occupies a legal position that is at least equal to that of other vehicles lawfully on the highway, and it is fortified by the fact that usually more will be required of a motorist than a bicyclist in discharging his duty of care to the other because of the physical advantages the automobile has over the bicycle. At the slow speed of ten miles per hour, a bicyclist travels almost fifteen feet per second, while a car traveling at only twenty-five miles per hour covers almost thirty-seven feet per second, and split-second action may be insufficient to avoid an accident. It is obvious that a motor vehicle poses a greater danger of harm to a bicyclist than vice versa. Accordingly, while the duty of using reasonable care falls alike on a motorist and a bicyclist, due to the inherent differences in the two vehicles, more care is required from the motorist to fully discharge the duty than from the bicyclist. Simply stated, the physical advantages that the motor vehicle has over the bicycle make it more dangerous to the bicyclist than vice versa. The Heirs of Redentor Completo and Elpidio Abiad vs. Sgt. Amando C. Albayda, Jr., G.R. No. 172200, July 6, 2010. Damages; temperate. While the amount of actual damages was not duly established with certainty, the Court recognizes the fact that, indeed, Albayda incurred a considerable amount for the necessary and reasonable medical expenses, loss of salary and wages, loss of capacity to earn increased wages, cost of occupational therapy, and harm from conditions caused by prolonged immobilization. Temperate damages, more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty. Temperate damages must be reasonable under the circumstances. The Heirs of
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Redentor Completo and Elpidio Abiad vs. Sgt. Amando C. Albayda, Jr., G.R. No. 172200, July 6, 2010. Damages; vicarious liability; employers degree of diligence. Under Article 2180 of the Civil Code, the obligation imposed by Article 2176 is demandable not only for ones own acts or omissions, but also for those persons for whom one is responsible. Employers shall be liable for the damages caused by their employees, but the employers responsibility shall cease upon proof that they observed all the diligence of a good father of the family in the selection and supervision of their employees. When an injury is caused by the negligence of an employee, a legal presumption instantly arises that the employer was negligent. This presumption may be rebutted only by a clear showing on the part of the employer that he exercised the diligence of a good father of a family in the selection and supervision of his employee. If the employer successfully overcomes the legal presumption of negligence, he is relieved of liability. In other words, the burden of proof is on the employer. The responsibility of two or more persons who are liable for quasi-delict is solidary. The civil liability of the employer for the negligent acts of his employee is also primary and direct, owing to his own negligence in selecting and supervising his employee. The civil liability of the employer attaches even if the employer is not inside the vehicle at the time of the collision. In the selection of prospective employees, employers are required to examine them as to their qualifications, experience, and service records. On the other hand, with respect to the supervision of employees, employers should formulate standard operating procedures, monitor their implementation, and impose disciplinary measures for breaches thereof. To establish these factors in a trial involving the issue of vicarious liability, employers must submit concrete proof, including documentary evidence.
The Heirs of Redentor Completo and Elpidio Abiad vs. Sgt. Amando C. Albayda, Jr., G.R. No. 172200, July 6, 2010. Damages; vicarious liability; employers degree of diligence. It is clear that the employer of a negligent employee is liable for the damages caused by the latter. When an injury is caused by the negligence of an employee, there instantly arises a presumption of the law that there was negligence on the part of the employer, either in the selection of his employee or in the supervision over him after such selection. However, the presumption may be overcome by a clear showing on the part of the employer that he has exercised the care and diligence of a good father of a family in the selection and supervision of his employee. In other words, the burden of proof is on the employer. Thus, petitioners must prove two things: first, that they had exercised due diligence in the selection of petitioner Aalucas, and second, that after hiring Aalucas, petitioners had exercised due diligence in supervising him. OMC Carriers, Inc. and Jerry Aalucas y Pitalino vs. Spouses Roberto C. Nabua and Rosario T. Nabua, G.R. No. 148974, July 2, 2010. Deed of restriction; binding effect. In this case the Supreme Court enjoined the owners of property in Ayala Alabang Village from operating a grade school and high school on the property, in light of a deed of restrictions on the use (annotated on the title), allowing only the operation of a preparatory school. This was in spite of the issuance of a municipal ordinance classifying the area as institutional. Here the owners cited previous Supreme Court cases where reclassification made by government trumped deeds of restriction imposed by the land developer, on the ground that they were valid exercises of police power. However, in this case, the court refused to apply those rulings, stating that in those cases, the conditions of the area that had been reclassified truly reflected the new use being permitted by the local government. Thus, in one case involving Ortigas & Co., the Supreme Court took judicial notice of the fact that the area covered by the restriction requiring residential use only, was already in a
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commercial sector with a great deal of traffic in the vicinity. Thus, since it is now unprofitable, nay a hazard to the health and comfort, to use Lots Nos. 5 and 6 for strictly residential purposes, defendants-appellees should be permitted, on the strength of the resolution promulgated under the police power of the municipality, to use the same for commercial purposes. But in the case of Ayala Alabang, the court noted that the area surrounding the school was still largely surrounded by residential lots and remained purely residential. Furthermore, the local government, in explaining the reason why it had reclassified the area as institutional stated that it was simply adopting the classification used in a zoning map purportedly submitted by the land developer itself. In other words, the municipality was not asserting any interest or zoning purpose contrary to that of the subdivision developer in declaring the subject property as institutional. The Learning Child, Inc. and Sps. Felipe and Mary Anne Alfonso Vs. Ayala Alabang Village Association, Spouses Ernest and Alma Arzaga, et al./Jose Marie V. Aquino, minor and represented by his parents Dr. Errol Aquino and Atty. Marilyn Aquino, et al. Vs. Ayala Alabang Village Association, Spouses Ernesto and Alma Arzaga, et al./Ayala Alabang Village Association, Spouses Ernesto and Alma Arzaga, et al. Vs.Municipality of Muntinlupa, et al., G.R. No. 134269/G.R. No. 134440/G.R. No. 144518, July 7, 2010. Estoppel. Estoppel by deed is a bar which precludes one party from asserting as against the other party and his privies any right or title in derogation of the deed, or from denying the truth of any material facts asserted in it. Estoppel has been characterized as harsh or odious, and not favored in law. When misapplied, estoppel becomes a most effective weapon to establish an injustice, inasmuch as it shuts a mans mouth from speaking the truth and debars the truth in a particular case. Estoppel cannot be sustained by mere argument or doubtful inference; it must be clearly proved in all its essential elements by clear, convincing and satisfactory evidence. The Learning Child, Inc. and Sps. Felipe and Mary Anne Alfonso Vs. Ayala Alabang Village Association, Spouses Ernest and Alma Arzaga, et al./Jose Marie V. Aquino, minor and represented by his parents Dr.
Errol Aquino and Atty. Marilyn Aquino, et al. Vs. Ayala Alabang Village Association, Spouses Ernesto and Alma Arzaga, et al./Ayala Alabang Village Association, Spouses Ernesto and Alma Arzaga, et al. Vs.Municipality of Muntinlupa, et al., G.R. No. 134269/G.R. No. 134440/G.R. No. 144518, July 7, 2010. Family home; how to constitute; levy and execution. The general rule is that 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. The case of Kelley, Jr. v. Planters Products, Inc. lays down the rules relative to the levy on execution over the family home, viz: (i) a family home is generally exempt from execution provided it was duly constituted as such; (ii) there must be proof that the alleged family home was constituted jointly by the husband and wife or by an unmarried head of a family; (iii) it must be the house where they and their family actually reside and the lot on which it is situated, (iv) the family home must be part of the properties of the absolute community or the conjugal partnership, or of the exclusive properties of either spouse with the latters consent, or on the property of the unmarried head of the family; and (v) the actual value of the family home shall not exceed, at the time of its constitution, the amount of P300,000 in urban areas and P200,000 in rural areas. With regard to the need for constituting a residence as a family home in order for the property to be exempt from execution, distinction must be made as to what law applies based on when it was constituted and what requirements must be complied with by the judgment debtor or his successors claiming such privilege. Hence, two sets of rules are applicable.

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If the family home was constructed before the effectivity of the Family Code or before August 3, 1988, then it must have been constituted either judicially or extra-judicially as provided under Articles 225, 229-231 and 233 of the Civil Code. Judicial constitution of the family home requires the filing of a verified petition before the courts and the registration of the courts order with the Registry of Deeds of the area where the property is located. Meanwhile, extrajudicial constitution is governed by Articles 240 to 242 of the Civil Code and involves the execution of a public instrument which must also be registered with the Registry of Property. Failure to comply with either one of these two modes of constitution will bar a judgment debtor from availing of the privilege. On the other hand, for family homes constructed after the effectivity of the Family Code on August 3, 1988, there is no need to constitute extrajudicially or judicially. All family homes constructed after the effectivity of the Family Code (August 3, 1988) are constituted as such by operation of law. All existing family residences as of August 3, 1988 are considered family homes and are prospectively entitled to the benefits accorded to a family home under the Family Code. The exemption is effective from the time it was constituted and lasts as long as any of its beneficiaries under Article 154 actually resides therein. Moreover, the family home should belong to the absolute community or conjugal partnership, or if exclusively by one spouse, its constitution must have been with consent of the other, and its value must not exceed certain amounts depending upon the area where it is located. Further, the debts incurred for which the exemption does not apply as provided under Article 155 for which the family home is made answerable must have been incurred after August 3, 1988. In both cases, whether under the Civil Code or the Family Code, it is not sufficient that the person claiming exemption merely alleges that such property is a family home. This claim for exemption must be set up and proved.
In the present case, since petitioners claim that the family home was constituted prior to August 3, 1988, or as early as 1944, they must comply with the procedure mandated by the Civil Code. There being absolutely no proof that the Pandacan property was judicially or extra-judicially constituted as the Ramos family home, the laws protective mantle cannot be availed of by petitioners. Parenthetically, the records show that the sheriff exhausted all means to execute the judgment but failed because Ramos bank accounts were already closed while other properties in his or the companys name had already been transferred, and the only property left was the Pandacan property. Juanita Trinidad Ramos, et al. vs. Danilo Pangilinan et al., G.R. No. 185920, July 20, 2010. Implied trust. Petitioners submission that respondents merely hold the title to the properties in trust for their predecessor Pedro is without merit. Pedro failed to prove by clear and convincing evidence that the spouses Rosauro and Angelina managed, through fraud, to have the real properties subject of this case registered in their name. In the absence of fraud, no implied trust was established between Pedro and the spouses Rosauro and Angelina under Article 1456 of the New Civil Code. Heirs Pedro De Guzman vs. Angelina Perona and Heirs of Rosauro De Guzman, Bataan Development Bank and Republic Planters Bank, G.R. No. 152266, July 2, 2010. Interest; legal rate; when interest begins to run and on what is base. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extra-judicially (Article 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the
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quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit. Since this case before us involves an obligation not arising from a loan or forbearance of money, the applicable interest rate is 6% per annum. The legal interest rate of 6% shall be computed from 4 October 1999, the date the letter of demand was presumably received by the defendant. And in accordance with these rules, the rate of 12% per annum shall be charged on the total amount outstanding, from the time the judgment becomes final and executory until its satisfaction. Benny Y. Hung vs. BPI Card Finance Corp., G.R. No. 182398, July 20, 2010. Interest; unconscionable rate. It is true that parties to a loan agreement have a wide latitude to stipulate on any interest rate in view of Central Bank Circular No. 905, series of 1982, which suspended the Usury Law ceiling on interest rate effective January 1, 1983. However, interest rates, whenever unconscionable, may be equitably reduced or even invalidated. In several cases, this Court had declared as null and void stipulations on interest and charges that were found excessive, iniquitous and unconscionable. Stipulations authorizing the imposition of iniquitous or unconscionable interest are contrary to morals, if not against the law. Under Article 1409 of the Civil Code, these contracts are inexistent and void from the beginning. They cannot be ratified nor the right to set up their illegality as a defense be waived. The nullity of the stipulation on the usurious interest does not, however, affect the lenders right to recover the principal of the loan. Nor would it
affect the terms of the real estate mortgage. The right to foreclose the mortgage remains with the creditors, and said right can be exercised upon the failure of the debtors to pay the debt due. The debt due is to be considered without the stipulation of the excessive interest. A legal interest of 12% per annum will be added in place of the excessive interest formerly imposed. The nullification by the CA of the interest rate and the penalty charge and the consequent imposition of an interest rate of 12% and penalty charge of 1% per month cannot, therefore, be considered a reversible error. Asian Cathay Finance and Leasing Corporation vs. Spouses Cesario Gravador and Norma De Vera and Spouses Emma Concepcion G. Dumigpi and Federico L. Dumigpi, G.R. No. 186550, July 5, 2010. Interest; unconscionable rate. Although the petition is unmeritorious, we find the 5% monthly interest rate stipulated in Clause 4 of the Compromise Agreement to be iniquitous and unconscionable. Accordingly, the legal interest of 12% per annum must be imposed in lieu of the excessive interest stipulated in the agreement. In several cases, we have ruled that stipulations authorizing iniquitous or unconscionable interests are contrary to morals, if not against the law. In Medel v. Court of Appeals, we annulled a stipulated 5.5% per month or 66% per annum interest on a P500,000.00 loan and a 6% per month or 72% per annum interest on a P60,000.00 loan, respectively, for being excessive, iniquitous, unconscionable and exorbitant. In Ruiz v. Court of Appeals, we declared a 3% monthly interest imposed on four separate loans to be excessive. In both cases, the interest rates were reduced to 12% per annum. In this case, the 5% monthly interest rate, or 60% per annum, compounded monthly, stipulated in the Kasulatan is even higher than the 3% monthly interest rate imposed in the Ruiz case. Thus, we similarly hold the 5% monthly interest to be excessive, iniquitous, unconscionable and exorbitant, contrary to morals, and the law. It is therefore void ab initio for being violative of Article 1306 of the Civil Code. Lazaro Pasco and Lauro Pasco
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vs. Heirs of Filomena De Guzman, represented by Cresencia De Guzman, G.R. No. 165554, July 26, 2010. Interest; unconscionable rate. Aside from the payment of the principal obligation of P1,936,800.00, the parties agreed that respondent pay interest at the rate of 25% from February 17, 1997 until fully paid. Such rate, however, is excessive and thus, void. Since the stipulation on the interest rate is void, it is as if there was no express contract thereon. To be sure, courts may reduce the interest rate as reason and equity demand. In this case, 12% interest is reasonable. Pentacapital Investment Corporation vs. Makilito Mahinay/Pentacapital Investment Corporation Vs. Mikilito Mahinay, G.R. No. 171736, July 5, 2010 Interest; Usury Law; need for parties to agree on the rate. The Usury Law had been rendered legally ineffective by Resolution No. 224 dated 3 December 1982 of the Monetary Board of the Central Bank, and later by Central Bank Circular No. 905 which took effect on 1 January 1983. These circulars removed the ceiling on interest rates for secured and unsecured loans regardless of maturity. The effect of these circulars is to allow the parties to agree on any interest that may be charged on a loan. The virtual repeal of the Usury Law is within the range of judicial notice which courts are bound to take into account. Although interest rates are no longer subject to a ceiling, the lender still does not have an unbridled license to impose increased interest rates. The lender and the borrower should agree on the imposed rate, and such imposed rate should be in writing. The stipulations on interest rate repricing in the promissory notes are valid because (1) the parties mutually agreed on said stipulations; (2) repricing takes effect only upon Solidbanks written notice to Permanent of the new interest rate; and (3) Permanent has the option to prepay its loan if Permanent and Solidbank do not agree on the new interest rate. The phrases irrevocably authorize, at any time and adjustment of the interest rate shall be effective from the date indicated in the written notice
sent to us by the bank, or if no date is indicated, from the time the notice was sent, emphasize that Permanent should receive a written notice from Solidbank as a condition for the adjustment of the interest rates. In order that obligations arising from contracts may have the force of law between the parties, there must be a mutuality between the parties based on their essential equality. A contract containing a condition which makes its fulfillment dependent exclusively upon the uncontrolled will of one of the contracting parties is void. There was no showing that either Solidbank or Permanent coerced each other to enter into the loan agreements. The terms of the Omnibus Line Agreement and the promissory notes were mutually and freely agreed upon by the parties. Solidbank Corporation vs. Permanent Homes, Inc., G.R. No. 171925, July 23, 2010 Laches. Laches is the failure of or neglect for an unreasonable and unexplained length of time to do that which by exercising due diligence, could or should have been done earlier, or to assert a right within reasonable time, warranting a presumption that the party entitled thereto has either abandoned it or declined to assert it. Amelia B. Hebron vs. Franco L. Loyola, et al., G.R. No. 168960, July 5, 2010. Lease; lessee in good faith versus builder in good faith; award of damages. In a case where the lessee made improvements to the leased premises in good faith, the applicable law is not the Civil Code provisions on builder in good faith, because those provisions contemplate a situation where the builder believes himself to be the real owner of the property. Tenants cannot be said to be builders in good faith as they have no pretension to be owners of the property. It is Article 1678 of the Civil Code which should apply. In this case, the lessees removed only the improvements they introduced without destroying the principal building, after the lessors refused to pay them the reasonable value of the improvements. When the lessees
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demanded reimbursement, the lessors should have offered to pay the lessees Mores one-half of the value of the improvements. Since the lessors failed to make such offer, the lessees had the right to remove the improvements, and the lessors were not entitled to any moral damages. Alida Mores vs. Shirley M. Yu-Go, Ma. Victoria Yu-Lim and Ma. Estrella M. Yu, G.R. No. 172292, July 23, 2010. Legal subrogation. The present case exemplifies the circumstance contemplated under paragraph 2, of Article 1302 of the Civil Code which provides: It is presumed that there is legal subrogation: (1) When a creditor pays another creditor who is preferred, even without the debtors knowledge; (2) When a third person, not interested in the obligation, pays with the express or tacit approval of the debtor; (3) When, even without the knowledge of the debtor, a person interested in the fulfillment of the obligation pays, without prejudice to the effects of confusion as to the latters share. Metrobank was a third party to the Central Bank-RBG agreement, had no interest except as a conduit, and was not legally answerable for the IBRD loans. Despite this, it was Metrobanks demand deposit account, instead of RBGs, which the Central Bank proceeded against, on the assumption perhaps that this was the most convenient means of recovering the cancelled loans. That Metrobanks payment was involuntarily made does not change the reality that it was Metrobank which effectively answered for RBGs obligations.
Was there express or tacit approval by RBG of the payment enforced against Metrobank? After Metrobank received the Central Banks debit advices in November 1978, it (Metrobank) accordingly debited the amounts it could from RBGs special savings account without any objection from RBG. RBGs President and Manager, Dr. Aquiles Abellar, even wrote Metrobank, on August 14, 1979, with proposals regarding possible means of settling the amounts debited by Central Bank from Metrobanks demand deposit account. These instances are all indicative of RBGs approval of Metrobanks payment of the IBRD loans. That RBGs tacit approval came after payment had been made does not completely negate the legal subrogation that had taken place. Article 1303 of the Civil Code states that subrogation transfers to the person subrogated the credit with all the rights thereto appertaining, either against the debtor or against third persons. As the entity against which the collection was enforced, Metrobank was subrogated to the rights of Central Bank and has a cause of action to recover from RBG the amounts it paid to the Central Bank, plus 14% per annum interest. Metropolitan Bank and Trust Company vs. Rural Bank of Gerona, Inc., G.R. No. 159097, July 5, 2010. Loan; promissory note: elements. To ascertain whether or not respondent is bound by the promissory notes, it must be established that all the elements of a contract of loan are present. Like any other contract, a contract of loan is subject to the rules governing the requisites and validity of contracts in general. It is elementary in this jurisdiction that what determines the validity of a contract, in general, is the presence of the following elements: (1) consent of the contracting parties; (2) object certain which is the subject matter of the contract; and (3) cause of the obligation which is established. Under Article 1354 of the Civil Code, it is presumed that consideration exists and is lawful unless the debtor proves the contrary. Moreover, under Section 3, Rule 131 of the Rules of Court, the following are disputable
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presumptions: (1) private transactions have been fair and regular; (2) the ordinary course of business has been followed; and (3) there was sufficient consideration for a contract. Pentacapital Investment Corporation vs. Makilito Mahinay/Pentacapital Investment Corporation Vs. Mikilito Mahinay, G.R. No. 171736, July 5, 2010 Mortgage; blanket or dragnet clause. Before we resolve the issues directly posed, we first dwell on the determination of the nature of the crosscollateral stipulation in the mortgage contract. As a general rule, a mortgage liability is usually limited to the amount mentioned in the contract. However, the amounts named as consideration in a contract of mortgage do not limit the amount for which the mortgage may stand as security if, from the four corners of the instrument, the intent to secure future and other indebtedness can be gathered. This stipulation is valid and binding between the parties and is known as the blanket mortgage clause (also known as the dragnet clause). In the present case, the mortgage contract indisputably provides that the subject properties serve as security, not only for the payment of the subject loan, but also for such other loans or advances already obtained, or still to be obtained. The cross-collateral stipulation in the mortgage contract between the parties is thus simply a variety of a dragnet clause. After agreeing to such stipulation, the petitioners cannot insist that the subject properties be released from mortgage since the security covers not only the subject loan but the two other loans as well. Violeta Tudtud Banate, et al. vs. Philippine Countryside Rural Bank (Liloan, Cebu), Inc. and Teofilo Soon, Jr., G.R. No. 163825, July 13, 2010. Mortgage; writ of possession. The right of the purchaser to the possession of the foreclosed property becomes absolute upon the expiration of the redemption period. The basis of this right to possession is the purchasers ownership of the property. After the consolidation of title in the buyers name for failure of the mortgagor to redeem, the writ of possession
becomes a matter of right and its issuance to a purchaser in an extrajudicial foreclosure is merely a ministerial function. In this case, petitioners failed to redeem the subject property within one year from the date of registration of the certificate of sale. Hence, respondent consolidated ownership over the subject property and TCT No. 162999 was issued in the name of respondent. Thereafter, respondent filed an Ex-Parte Petition for Issuance of a Writ of Possession over the subject property, and it was ministerial upon the RTC of Paraaque City, Branch 257 to issue the writ of possession in favor of respondent. Hence, it is clear that the RTC of Paraaque City, Branch 257 did not gravely abuse its discretion in issuing the writ of possession, considering that it was the ministerial duty of the RTC to issue the writ of possession in favor of respondent, who had consolidated ownership over the subject property after the redemption period expired. Spouses Edmundo and Lourdes Sarrosa vs. Willy O. Dizon, G.R. No. 183027, July 26, 2010. Novation. Novation, in its broad concept, may either be extinctive or modificatory. It is extinctive when an old obligation is terminated by the creation of a new obligation that takes the place of the former; it is merely modificatory when the old obligation subsists to the extent that it remains compatible with the amendatory agreement. An extinctive novation results either by changing the object or principal conditions (objective or real), or by substituting the person of the debtor or subrogating a third person in the rights of the creditor (subjective or personal). Under this mode, novation would have dual functions one to extinguish an existing obligation, the other to substitute a new one in its place requiring a conflux of four essential requisites: (1) a previous valid obligation; (2) an agreement of all parties concerned to a new contract; (3) the extinguishment of the old obligation; and (4) the birth of a valid new obligation. The second requisite is lacking in this case. Novation presupposes not only the extinguishment or modification of an existing obligation but, more
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importantly, the creation of a valid new obligation. For the consequent creation of a new contractual obligation, consent of both parties is, thus, required. As a general rule, no form of words or writing is necessary to give effect to a novation. Nevertheless, where either or both parties involved are juridical entities, proof that the second contract was executed by persons with the proper authority to bind their respective principals is necessary. Violeta Tudtud Banate, et al. vs. Philippine Countryside Rural Bank (Liloan, Cebu), Inc. and Teofilo Soon, Jr., G.R. No. 163825, July 13, 2010. Prescription; real actions. A real action is one where the plaintiff seeks the recovery of real property or, as indicated in what is now Rule 4, Section 1 of the Rules of Court, a real action is an action affecting title to or recovery of possession of real property. An action for quieting of title to real property, such as Civil Case No. 4452, is indubitably a real action. Article 1141 of the Civil Code plainly provides that real actions over immovables prescribe after thirty years. Doa Demetria died in 1974, transferring by succession, her title to the two parcels of land to her only heir, Vidal. Teofilo, through Atty. Cabildo, filed a petition for reconstitution of the certificates of title covering said properties in 1978. This is the first palpable display of Teofilos adverse claim to the same properties, supposedly, also as Doa Demetrias only heir. When Vidal and AZIMUTH instituted Civil Case No. 4452 in 1998, only 20 years had passed, and the prescriptive period for filing an action for quieting of title had not yet prescribed. Nevertheless, the Court notes that Article 1411 of the Civil Code also clearly states that the 30-year prescriptive period for real actions over immovables is without prejudice to what is established for the acquisition of ownership and other real rights by prescription. Thus, the Court must also look into the acquisitive prescription periods of ownership and other real rights.
Acquisitive prescription of dominion and real rights may be ordinary or extraordinary. Ordinary acquisitive prescription requires possession of things in good faith and with just title for the time fixed by law. In the case of ownership and other real rights over immovable property, they are acquired by ordinary prescription through possession of 10 years. LANDTRADE cannot insist on the application of the 10-year ordinary acquisitive prescription period since it cannot be considered a possessor in good faith. The good faith of the possessor consists in the reasonable belief that the person from whom he received the thing was the owner thereof, and could transmit his ownership. Since the ordinary acquisitive prescription period of 10 years does not apply to LANDTRADE, then the Court turns its attention to the extraordinary acquisitive prescription period of 30 years set by Article 1137 of the Civil Code, which provides that ownership and other real rights over immovables also prescribe through uninterrupted adverse possession thereof for thirty years, without need of title or of good faith. LANDTRADE adversely possessed the subject properties no earlier than 1996, when it bought the same from Teofilo, and Civil Case No. 4452 was already instituted two years later in 1998. LANDTRADE cannot tack its adverse possession of the two parcels of land to that of Teofilo considering that there is no proof that the latter, who is already residing in the U.S.A., adversely possessed the properties at all. Republic of the Philippines Vs. Hon. Mamindiara P. Mangotara, in his capacity as Presiding Judge of the Regional Trial Court, Branch 1, Iligan City, Lanao del Norte, and Maria Cristina Fertilizer Corporation, and the Philippines National Bank/Land Trade Realty Corporation Vs. National Power Corporation and National Transmission Corporation (Transco)/National Power Corporation Vs. Hon. Court of Appeals (Special Twenty-Third Division, Cagayan de Oro City) and Land Trade Realty Corporation/National Transmission Corporation Vs. Hon. Court of Appeals (Special Twenty-Third Division, Cagayan de Oro City) and Land Trade Realty Corporation, G.R. No.
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170375/G.R. No. 170505/G.R. Nos. 173355-56/G.R. No. 173401/G.R. Nos. 173563-64/G.R. No. 178779/G.R. No. 178894.,July 7, 2010 Property; land included in title by mistake. Settled is the rule that a person, whose certificate of title included by mistake or oversight the land owned by another, does not become the owner of such land by virtue of the certificate alone. The Torrens System is intended to guarantee the integrity and conclusiveness of the certificate of registration but is not intended to perpetrate fraud against the real owner of the land. The certificate of title cannot be used to protect a usurper from the true owner. Spouses Federico Valenzuela and Luz Buena-Valenzuela Vs. Spouses Jose Mano , Jr. and Rosanna Reyes-Mano, G.R. No. 172611, July 9, 2010. Property; ability of mother to dispose of property of minor children. The minor children of Conrado inherited by representation in the properties of their grandparents Remigia and Januario. These children, not their mother Victorina, were the co-owners of the inherited properties. Victorina had no authority or had acted beyond her powers in conveying, if she did indeed convey, to the petitioners mother the undivided share of her minor children in the property involved in this case. The powers given to her by the laws as the natural guardian covers only matters of administration and cannot include the power of disposition. She should have first secured the permission of the court before she alienated that portion of the property in question belonging to her minor children. In a number of cases, where the guardians, mothers or grandmothers, did not seek court approval of the sale of properties of their wards, minor children, the Court declared the sales void. Amelia B. Hebron vs. Franco L. Loyola, et al., G.R. No. 168960, July 5, 2010. Succession; settlement of the estate. It is true that Filomenas estate has a different juridical personality than that of the heirs. Nonetheless, her heirs certainly have an interest in the preservation of the estate and the recovery of its properties, for at the moment of Filomenas death, the heirs start to
own the property, subject to the decedents liabilities. In this connection, Article 777 of the Civil Code states that [t]he rights to the succession are transmitted from the moment of the death of the decedent. Unfortunately, the records before us do not show the status of the proceedings for the settlement of the estate of Filomena, if any. But to allow the release of the funds directly to the heirs would amount to a distribution of the estate; which distribution and delivery should be made only after, not before, the payment of all debts, charges, expenses, and taxes of the estate have been paid. We thus decree that respondent Cresencia should deposit the amounts received from the petitioners with the MTC of Bocaue, Bulacan and in turn, the MTC of Bocaue, Bulacan should hold in abeyance the release of the amounts to Filomenas heirs until after a showing that the proper procedure for the settlement of Filomenas estate has been followed. Lazaro Pasco and Lauro Pasco vs. Heirs of Filomena De Guzman, represented by Cresencia De Guzman, G.R. No. 165554, July 26, 2010. Unjust enrichment. The principle of unjust enrichment cannot be validly invoked by a party who, through his own act or omission, took the risk of being denied payment for additional costs by not giving the other party prior notice of such costs and/or by not securing their written consent thereto, as required by law and their contract. Elpidio S. Uy, doing business under the name and style of Edison Development & Construction vs. Public Estates Authority, G.R. Nos. 147925-26, July 7, 2010. Waiver; validity; with respect to right of redemption. Settled is the rule that for a waiver to be valid and effective, it must, in the first place, be couched in clear and unequivocal terms which will leave no doubt as to the intention of a party to give up a right or benefit which legally pertains to him. Additionally, the intention to waive a right or an advantage must be shown clearly and convincingly. Unfortunately, ACFLC failed to convince us that respondents waived their right of redemption voluntarily.
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In fine, when the redemptioner chooses to exercise his right of redemption, it is the policy of the law to aid rather than to defeat his right. Thus, we affirm the CA in nullifying the waiver of the right of redemption provided in the real estate mortgage. Asian Cathay Finance and Leasing Corporation vs. Spouses Cesario Gravador and Norma De Vera and Spouses Emma Concepcion G. Dumigpi and Federico L. Dumigpi, G.R. No. 186550, July 5, 2010. Special Laws Late registration of birth; everything you always wanted to know about it! [Digesters Note: I think this case makes a nice summary of the topic so Im going to give you most of the case.] Presidential Decree No. 651, otherwise known as An Act Requiring the Registration of Births and Deaths in the Philippines which Occurred from 1 January 1974 and Thereafter, provides: Sec. 1. Registration of births. All babies born in hospitals, maternity clinics, private homes, or elsewhere within the period starting from January 1, 1974 up to the date when this decree becomes effective, irrespective of the nationality, race, culture, religion or belief of their parents, whether the mother is a permanent resident or transient in the Philippines, and whose births have not yet been registered must be reported for registration in the office of the local civil registrar of the place of birth by the physician, nurse, midwife, hilot, or hospital or clinic administrator who attended the birth or in default thereof, by either parent or a responsible member of the family or a relative, or any person who has knowledge of the birth of the individual child. The report referred to above shall be accompanied with an affidavit describing the circumstances surrounding the delayed registration. (Emphasis supplied)
Sec. 2. Period of registration of births. The registration of the birth of babies referred to in the preceding section must be done within sixty (60) days from the date of effectivity of this decree without fine or fee of any kind. Babies born after the effectivity of this decree must be registered in the office of the local civil registrar of the place of birth within thirty (30) days after birth, by the attending physician, nurse, midwife, hilot or hospitals or clinic administrator or, in default of the same, by either parent or a responsible member of the family or any person who has knowledge of the birth. The parents or the responsible member of the family and the attendant at birth or the hospital or clinic administrator referred to above shall be jointly liable in case they fail to register the new born child. If there was no attendant at birth, or if the child was not born in a hospital or maternity clinic, then the parents or the responsible member of the family alone shall be primarily liable in case of failure to register the new born child. (Emphasis supplied) Presidential Decree No. 766 amended P.D. No. 651 by extending the period of registration up to 31 December 1975. P.D. No. 651, as amended, provided for special registration within a specified period to address the problem of under-registration of births as well as deaths. It allowed, without fine or fee of any kind, the late registration of births and deaths occurring within the period starting from 1 January 1974 up to the date when the decree became effective. Since Reynaldo was born on 30 October 1948, the late registration of his birth is outside of the coverage of P.D. No. 651, as amended. The late registration of Reynaldos birth falls under Act No. 3753, otherwise known as the Civil Registry Law, which took effect on 27 February 1931. As a general law, Act No. 3753 applies to the registration of all births, not otherwise covered by P.D. No. 651, as amended, occurring from 27 February 1931 onwards. Considering that the late registration of
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Reynaldos birth took place in 1985, National Census Statistics Office (NCSO) Administrative Order No. 1, Series of 1983 governs the implementation of Act No. 3753 in this case. Under NCSO A.O. No. 1-83, the birth of a child shall be registered in the office of the local civil registrar within 30 days from the time of birth. Any report of birth made beyond the reglementary period is considered delayed. The local civil registrar, upon receiving an application for delayed registration of birth, is required to publicly post for at least ten days a notice of the pending application for delayed registration. If after ten days no one opposes the registration and the local civil registrar is convinced beyond doubt that the birth should be registered, he should register the same. Reynaldos certificate of live birth, as a duly registered public document, is presumed to have gone through the process prescribed by law for late registration of birth. It was only on 8 March 1995, after the lapse of ten long years from the approval on 11 February 1985 of the application for delayed registration of Reynaldos birth, that Nieves registered her opposition. She should have done so within the ten-day period prescribed by law. Records show that no less than Nieves herself informed the local civil registrar of the birth of Reynaldo. At the time of her application for delayed registration of birth, Nieves claimed that Reynaldo was her son. Between the facts stated in a duly registered public document and the flipflopping statements of Nieves, we are more inclined to stand by the former. Applications for delayed registration of birth go through a rigorous process. The books making up the civil register are considered public documents and are prima facie evidence of the truth of the facts stated there. As a public document, a registered certificate of live birth enjoys the presumption of validity. It is not for Reynaldo to prove the facts stated in his certificate of live birth, but for petitioners who are assailing the certificate to prove its alleged falsity. Petitioners miserably failed to do so. Thus, the trial court and the Court of Appeals correctly denied for lack of
merit the petition to cancel the late registration of Reynaldos birth. Nieves Estares Baldos, substituted by Francisco Baldos and Martin Baldos vs. Court of Appeals and Reynaldo Pillazar a.k.a. Reynaldo Estares Baldos, G.R. No. 170645, July 9, 2010. Property registration; requirements. An application for registration of title must, under Section 14(1), P.D. 1529, meet three requirements: a) that the property is alienable and disposable land of the public domain; b) that the applicants by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of the land; and c) that such possession is under a bona fide claim of ownership since June 12, 1945 or earlier. Under the Regalian doctrine, all lands of the public domain belong to the State and the latter is the source of any asserted right to ownership in land. Thus, the State presumably owns all lands not otherwise appearing to be clearly within private ownership. To overcome such presumption, incontrovertible evidence must be shown by the applicant that the land subject of registration is alienable and disposable. Respecting the third requirement, the applicant bears the burden of proving the status of the land. In this connection, the Court has held that he must present a certificate of land classification status issued by the Community Environment and Natural Resources Office (CENRO) or the Provincial Environment and Natural Resources Office (PENRO) of the DENR. He must also prove that the DENR Secretary had approved the land classification and released the land as alienable and disposable, and that it is within the approved area per verification through survey by the CENRO or PENRO. Further, the applicant must present a copy of the original classification approved by the DENR Secretary and certified as true copy by the legal custodian of the official records. These facts must be established by the applicant to prove that the land is alienable and
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disposable. Republic of the Philippines vs. Rosila Roche, G.R. No. 175846, July 6, 2010. Property registration; who may apply. As the law now stands, a mere showing of possession and occupation for 30 years or more is not sufficient. Therefore, since the effectivity of P.D. 1073 on January 25, 1977, it must now be shown that possession and occupation of the piece of land by the applicant, by himself or through his predecessors-in-interest, started on June 12, 1945 or earlier. This provision is in total conformity with Section 14 (1) of P.D. 1529. Thus, pursuant to the aforequoted provisions of law, applicants for registration of title must prove: (1) that the subject land forms part of the disposable and alienable lands of the public domain, and (2) that they have been in open, continuous, exclusive and notorious possession and occupation of the same under a bona fide claim of ownership since June 12, 1945, or earlier. Republic of the Philippines vs. Hanover Worldwide Trading Corporation, G.R. No. 172102, July 2, 2010. Property registration; Torrens System; inclusion of property in title by error or fraud. See entry for Spouses Federico Valenzuela and Luz BuenaValenzuela Vs. Spouses Jose Mano , Jr. and Rosanna Reyes-Mano, G.R. No. 172611, July 9, 2010. Public Land Act. The matter and duration of the petitioners and their predecessors possession are relevant in view of the petitioners contention that they acquired ownership of Lot 1873 through prescription, i.e., the lapse of the requisite 30-year period provided in Article 1137 of the Civil Code. Article 1137 states: Article 1137. Ownership and other real rights over immovables also prescribe through uninterrupted adverse possession thereof for thirty years, without need of title or of good faith.
The petitioners reliance on Article 1137 of the Civil Code is not entirely accurate. The petitioners alleged that Lot 1873 is an alienable and disposable land of the public domain. However, acquisition of ownership over alienable public lands is governed, not by the general provisions on prescription in the Civil Code, but more particularly, by Commonwealth Act No. 141 (CA 141) or the Public Land Act. Article 1137 of the Civil Code authorizes acquisition by prescription only of private lands, not of public lands even though these may have been decreed as alienable and disposable. Alienable and disposable lands of the public domain may be acquired by private persons, not by virtue of prescription but, through adverse possession, upon compliance with the requirements of Section 48(b) of CA 141. Thus, it is not the mere lapse of time that vests title over the land to the claimant; it is also necessary that the land be an alienable and disposable land of the public domain and that the claimant be in open, continuous, exclusive, and notorious possession of the land. Listed down, the acquisition through adverse possession of public lands requires the following: 1. the land applied for must be an alienable and disposable public land; and 2. the claimants, by themselves or through their predecessors-in-interest, have been in open, continuous, exclusive, and notorious possession and occupation of the land since June 12, 1945 or earlier. Heirs of Spouses Crispulo Ferrer and Engracia Puhawan, et al. vs. National Power Corporation, et al., G.R. No. 190384, July 5, 2010. Tenancy relationship. Tenancy relationship is a juridical tie which arises between a landowner and a tenant once they agree, expressly or impliedly, to undertake jointly the cultivation of a land belonging to the landowner, as
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a result of which relationship the tenant acquires the right to continue working on and cultivating the land. The existence of a tenancy relationship cannot be presumed and allegations that one is a tenant do not automatically give rise to security of tenure. For tenancy relationship to exist, the following essential requisites must be present: (1) the parties are the landowner and the tenant; (2) the subject matter is agricultural land; (3) there is consent between the parties; (4) the purpose is agricultural production; (5) there is personal cultivation by the tenant; and, (6) there is sharing of the harvests between the parties. All the requisites must concur in order to establish the existence of tenancy relationship, and the absence of one or more requisites is fatal. Vicente Adriano vs. Alice M. Tanco, et al., G.R. No. 168164. July 5, 2010. CRIMINAL LAW 1. Revised Penal Code
executed made it impossible for the victim to respond or defend himself. He just had no opportunity to repel the sudden attack, rendering him completely helpless. Accused, moreover, used a firearm to easily neutralize the victim, which was undeniably a swift and effective way to achieve his purpose. Lastly, but significantly, the accused aimed for the face of the victim ensuring that the bullet would penetrate it and damage his brain. These acts are distinctly indicative of the treacherous means employed by the accused to guarantee the consummation of his criminal plan. Thus, as treachery attended the killing of Loreto Cruz, such circumstance qualified the killing as murder, punishable under paragraph 1 of Article 248 of the Revised Penal Code. People of the Philippines vs. Pedro Ortiz, Jr. y Lopez, G.R. No. 188704, July 7, 2010. Attempted homicide; civil liability; temperate damages. The Supreme Court modified the decision of the Court of Appeals with respect to the petitioners civil liability for being erroneous and contrary to prevailing jurisprudence. The Court of Appeals ordered actual damages to be paid in the amount of P3,858.50. In People v. Andres, the Supreme Court held that if the actual damages, proven by receipts during the trial, amount to less than P25,000.00, the victim shall be entitled to temperate damages in the amount of P25,000.00 in lieu of actual damages. The award of temperate damages is based on Article 2224 of the New Civil Code which states that temperate or moderate damages may be recovered when the court finds that some pecuniary loss was suffered but its amount cannot be proven with certainty. In this case, the victim is entitled to the award of P25,000.00 as temperate damages considering that the amount of actual damages is only P3,858.50. Actual damages should no longer be awarded. Giovani Serrano y Cervantes vs. People of the Philippines, G.R. No. 175023, July 5, 2010. Attempted homicide; civil liability; moral damages. The Supreme Court found that the victim is entitled to moral damages in the amount of P10,000.00 in accordance with settled jurisprudence. Under Article 2219, paragraph 1 of the New Civil Code, the victim is entitled to moral damages
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Aggravating circumstance; treachery. In the killing of victims in this case, the trial court was correct in appreciating the aggravating circumstance of treachery. There is treachery when the attack is so sudden and unexpected that the victim had no opportunity either to avert the attack or to defend himself. Indeed, nothing can be more sudden and unexpected than when a father stabs to death his two young daughters while they were sound asleep and totally defenseless. People of the Philippines vs. Calonge y Verana, G.R. No. 182793, July 5, 2010. Aggravating circumstance; treachery. The Court held that treachery can still be appreciated even though the victim was forewarned of the danger to his life because what is decisive is that the attack was executed in a manner that the victim was rendered defenseless and unable to retaliate. Although the victim knew that the accused held a grudge against him, he never had any inkling that he would actually be attacked that night. The way it was
in a criminal offense resulting in physical injuries. Giovani Serrano y Cervantes vs. People of the Philippines, G.R. No. 175023, July 5, 2010. Attempted homicide; penalty. Article 51 of the Revised Penal Code, as amended, provides that the imposable penalty for an attempted crime shall be lower by two degrees than that prescribed by law for the consummated felony. Thus, under Article 249, the crime of homicide is punished by reclusion temporal. Applying Article 61 (Rules of graduating penalties) and Article 71 (Graduated scales), two (2) degrees lower of reclusion temporal is prision correccional which has a duration of six (6) months and one (1) day to six (6) years. Under the Indeterminate Sentence Law, the maximum term of the indeterminate sentence shall be taken, in view of the attending circumstances that could be properly imposed under the rules of the Revised Penal Code, and the minimum term shall be within the range of the penalty next lower to that prescribed by the Revised Penal Code. Thus, the maximum term of the indeterminate sentence shall be taken within the range of prision correccional, depending on the modifying circumstances. In turn, the minimum term of the indeterminate penalty to be imposed shall be taken from the penalty one degree lower of prision correccional, that is arresto mayor with a duration of one (1) month and one (1) day to six (6) months. In the absence of any modifying circumstance, the maximum term of the indeterminate penalty shall be taken from the medium period of prision correccional or two (2) years and four (4) months and one (1) day to four (4) years and two (2) months. The minimum term shall be taken within the range of arresto mayor. The Supreme Court affirmed the penalty imposed by the Court of Appeal against the petitioner of six (6) months of arresto mayor, as minimum term of the indeterminate penalty, to four (4) years and two (2) months of prision correccional, as maximum term of the indeterminate penalty. Giovani Serrano y Cervantes vs. People of the Philippines, G.R. No. 175023, July 5, 2010. Direct Assault; elements. Direct assault is defined and penalized under Article 148 of the Revised Penal Code. It is an offense against public order
that may be committed in two ways: first, by any person or persons who, without a public uprising, shall employ force or intimidation for the attainment of any of the purposes enumerated in defining the crimes of rebellion and sedition; and second, by any person or persons who, without a public uprising, shall attack, employ force, or seriously intimidate or resist any person in authority or any of his agents, while engaged in the performance of official duties, or on occasion of such performance. The instant case falls under the second mode, which is the more common form of assault. Its elements are: 1. That the offender (a) makes an attack, (b) employs force, (c) makes a serious intimidation, or (d) makes a serious resistance; 2. That the person assaulted is a person in authority or his agent; 3. That at the time of the assault the person in authority or his agent (a) is engaged in the actual performance of official duties, or [b] that he is assaulted by reason of the past performance of official duties; 4. That the offender knows that the one he is assaulting is a person in authority or his agent in the exercise of his duties; and 5. That there is no public uprising. Lydia Gelig vs. People of the Philippines, G.R. No. 173150, July 28, 2010. Estafa through falsification of public documents. Petitioners are private individuals who presented the alleged will to the probate court and made it appear that Alegria signed the alleged will disposing of her rights and interest in the real properties, as well as all of her personal properties to petitioners when in fact petitioners knew that Alegria never signed such alleged will as her signatures therein were forged. Petitioners argued that they already had in their possession the personal properties of Alegria which included the pieces of jewelry by virtue of an alleged general power of attorney executed by Alegria in their favor. However, such agency between Alegria and petitioners was terminated upon Alegrias death; thus, they had no basis for taking possession and custody of Alegrias properties after her death. However, by virtue of the falsified will which petitioners presented for probate, and by which petitioners became co-administrators of the estate of the Figueras couple, and had gained possession of the jewelry, they were not able to account for the same when ordered to do so
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by the probate court. The crime committed was estafa through falsification of public document. Felizardo S. Obando and Juan S. Obando vs. People of the Philippine, G.R. No. 138696. July 7, 2010. Frustrated and attempted homicide distinguished. Under Article 6 of the Revised Penal Code, a felony is frustrated when the offender performs all the acts of execution which would produce the felony as a consequence but which, nevertheless, do not produce it by reason of causes independent of the will of the perpetrator. There is an attempt when the offender commences the commission of a felony directly by overt acts, and does not perform all the acts of execution which should produce the felony by reason of some cause or accident other than his own spontaneous desistance. In Palaganas v. People, the Supreme Court made the following distinctions between frustrated and attempted felony as follows: (a) In frustrated felony, the offender has performed all the acts of execution which should produce the felony as a consequence; whereas in attempted felony, the offender merely commences the commission of a felony directly by overt acts and does not perform all the acts of execution; (b) In frustrated felony, the reason for the non-accomplishment of the crime is some cause independent of the will of the perpetrator; on the other hand, in attempted felony, the reason for the non-fulfillment of the crime is a cause or accident other than the offenders own spontaneous desistance. Giovani Serrano y Cervantes vs. People of the Philippines, G.R. No. 175023, July 5, 2010. Frustrated and attempted homicide distinguished. The crucial point to consider is the nature of the wound inflicted which must be supported by independent proof showing that the wound inflicted was sufficient to cause the victims death without timely medical intervention. In this case, from all accounts, although the stab wound of the victim could have been fatal since the victim testified that he saw his intestines showed, no exact evidence exists to prove the gravity of the wound; hence, the Supreme Court did not consider the stab wound as sufficient to cause death. Giovani Serrano y Cervantes vs. People of the Philippines, G.R. No. 175023, July 5, 2010.
Homicide and serious physical injuries distinguished. The assailants intent to kill is the main element that distinguishes the crime of physical injuries from the crime of homicide. The crime can only be homicide if the intent to kill is proven. Intent to kill is a state of mind that the courts can discern only through external manifestations, i.e., acts and conduct of the accused at the time of the assault and immediately thereafter. In Rivera v. People, the Supreme Court considered the following factors to determine the presence of an intent to kill: (1) the means used by the malefactors; (2) the nature, location, and number of wounds sustained by the victim; (3) the conduct of the malefactors before, at the time, or immediately after the killing of the victim; and (4) the circumstances under which the crime was committed and the motives of the accused. The Supreme Court also considered the motive and the words uttered by the offender at the time he inflicted injuries on the victim as additional determinative factors. Giovani Serrano y Cervantes vs. People of the Philippines, G.R. No. 175023, July 5, 2010. Homicide and serious physical injuries distinguished. The records show that the petitioner used a knife in his assault. The petitioner stabbed the victim in the abdomen while the latter was held by Gener and Orieta. Immediately after the stabbing, the petitioner, Gener and Orieta beat and stoned the victim until he fell into a creek. It was only then that the petitioner, Gener and Orieta left. The Supreme Court considered in this regard that the stabbing occurred at around 9:30 p.m. with only the petitioner, Gener, Orieta, and the victim as the only persons left in the area. The Court of Appeals aptly observed that a reasonable inference can be made that the victim was left for dead when he fell into the creek. Under these circumstances, we are convinced that the petitioner, in stabbing, beating and stoning the victim, intended to kill him. Thus, the crime committed cannot be merely serious physical injuries. Giovani Serrano y Cervantes vs. People of the Philippines, G.R. No. 175023, July 5, 2010.

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Kidnapping; deprivation of liberty. The essence of kidnapping is the actual deprivation of the victims liberty, coupled with indubitable proof of the intent of the accused to effect such deprivation. People of the Philippines vs. Antonio Siongco y Dela Cruz, et al, G.R. No. 186472, July 5, 2010 Kidnapping; elements. The following are the elements that must be established by the prosecution to obtain a conviction for kidnapping: (a) the offender is a private individual; (b) he kidnaps or detains another, or in any manner deprives the latter of his liberty; (c) the act of detention or kidnapping must be illegal; and (d) in the commission of the offense, any of the following circumstances is present: (1) the kidnapping or detention lasts for more than three days; (2) it is committed by simulating public authority; (3) any serious physical injuries are inflicted upon the person kidnapped or detained, or threats to kill him are made; or (4) the person kidnapped or detained, is a minor, a female, or a public officer. If the victim is a minor, or is kidnapped or detained for the purpose of extorting ransom, the duration of detention becomes immaterial. People of the Philippines vs. Antonio Siongco y Dela Cruz, et al., G.R. No. 186472, July 5, 2010. Kidnapping; penalty. The penalty for kidnapping for the purpose of extorting ransom from the victim or any other person under Article 267 of the Revised Penal Code is death. However, Republic Act No. 9346 has banned the imposition of death penalty and reduced all death sentences to reclusion perpetua without eligibility for parole. People of the Philippines vs. Antonio Siongco y Dela Cruz, et al., G.R. No. 186472, July 5, 2010. Murder; damages. The award of civil indemnity is proper in this case. It requires no proof other than the fact of death as a result of the crime and proof of the accuseds responsibility therefor. Although jurisprudence fixed the civil indemnity at P50,000.00 only, the Supreme Court upheld the award of P300,000.00 as civil indemnity since the parties had stipulated such amount in the event of a judgment of conviction. The award of P50,000.00 as moral damages is proper here. Moral damages are awarded
in view of the violent death of a victim. There is no need for any allegation or proof of the emotional sufferings of the victims heirs. Likewise, the award of exemplary damages is warranted when the commission of the offense is attended by an aggravating circumstance, whether ordinary or qualifying, as in this case. Accordingly, the Supreme Court awarded exemplary damages in the amount of P30,000.00 to the heirs of the victim. People of the Philippines vs. Albert Teoso y Lopez alias Paking and Edgardo Cocotan alias Paot, G.R. No. 188975, July 5, 2010. Parricide; elements. Parricide is committed when: (1) a person is killed; (2) the deceased is killed by the accused; (3) the deceased is the father, mother, or child, whether legitimate or illegitimate, or a legitimate other ascendant or other descendant, or the legitimate spouse of accused. The key element in parricide is the relationship of the offender with the victim. People of the Philippines vs. Calonge y Verana, G.R. No. 182793, July 5, 2010. Parricide; penalty. Under Article 246 of the Revised Penal Code, as amended by Section 5 of Republic Act No. 7659, the penalty for parricide is composed of two (2) indivisible penalties, namely, reclusion perpetua to death. People of the Philippines vs. Calonge y Verana, G.R. No. 182793, July 5, 2010 Rape. Article 266-A of the Revised Penal Code provides among others that a crime of rape is committed by a man who has carnal knowledge of a woman through force, threat or intimidation. People of the Philippines vs. Adriano Leonardo y Dantes, G.R. No. 181036, July 6, 2010 Rape; damages. In line with recent jurisprudence regarding damages in rape cases, the civil indemnity in this case must be increased from P50,000.00 to P75,000.00 and the moral damages from P50,000.00 to P75,000.00. People of the Philippines vs. Ermilito Alegre y Lamoste, G.R. No. 184812, July 6, 2010.
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Rape; damages. The Supreme Court affirmed the awards of P50,000.00 as civil indemnity and P50,000.00 as moral damages given by the lower courts to AAA for each count of rape. Civil indemnity, which is actually in the nature of actual or compensatory damages, is mandatory upon the finding of the fact of rape. Moral damages in rape cases should be awarded without need of showing that the victim suffered trauma of mental, physical, and psychological sufferings constituting the basis thereof. These are too obvious to still require their recital at the trial by the victim since we even assume and acknowledge such agony as a gauge of her credibility. People of the Philippines vs. Adriano Leonardo y Dantes, G.R. No. 181036, July 6, 2010. Rape; damages. The Supreme Court modified the amount of moral and exemplary damages, P30,000.00 and P20,000.00, respectively, awarded by the Court of Appeals to the rape victim. Consistent with prevailing jurisprudence, the Supreme Court increased the grant of moral damages to P50,000.00 and the award of exemplary damages to P30,000.00. People of the Philippines vs. Jessie Dacallos y Modina, G.R. No. 189807, July 5, 2010. Rape; damages. The Supreme Court modified the trial courts award of damages finding the accused-appellant civilly liable in the amount of P50,000.00 as moral damages and P50,000.00 as civil indemnity for each of the counts of consummated rape and P30,000.00 as civil indemnity and moral damages at P25,000.00 for each count of attempted rape. People of the Philippines vs. Romeo Republo, G.R. No. 172962, July 8, 2010. Rape; elements. To secure a conviction for the crime of rape, the following elements must be proved: (a) that the accused had carnal knowledge of a woman; (b) that said act was accomplished under any of the following circumstances [i] through force, threat or intimidation; [ii] when the offended party is deprived of reason or is otherwise unconscious; [iii] by means of fraudulent machination or grave abuse of authority; or [iv] when
the offended party is under twelve (12) years of age or is demented, even though none of the circumstances mentioned above be present. People of the Philippines vs. Basilio Cadap, G.R. No. 190633, July 5, 2010. Rape; evidence. The absence of bruises and contusions on the victims body does not negate the commission of rape. It is not necessary that the victim should bear marks of physical violence sustained by reason of the persistence of the sexual attacker, nor is the exertion of irresistible force by the culprit an indispensable element of the offense. Thus, for rape to be committed, it is not necessary that there be marks of physical violence present on the victims body. People of the Philippines vs. Rommel Belo y De Leon, G.R. No. 187075, July 5, 2010. Rape; evidence. Corollarily, the fact that the accused did not possess any bread knife when he was apprehended a few moments after the commission of the alleged crime does not negate the existence of force and intimidation. The non-presentation of the weapon used in the commission of rape is not essential to the conviction of the accused. It is settled that the nonpresentation of the weapon used in the commission of rape is not essential to the conviction of the accused. People of the Philippines vs. Rommel Belo y De Leon, G.R. No. 187075, July 5, 2010. Rape; evidence. The testimony of the rape victim that the accused was armed with a deadly weapon when he committed the crime is sufficient to establish that fact for so long as the victim is credible. It must be stressed that in rape, it is usually only the victim who can attest to its occurrence and that is why courts subject the testimony of the alleged victims to strict scrutiny before relying on it for the conviction of the accused. In the present case, complainant positively described how the accused, armed with a knife, threatened and raped his victim. Absent any showing that certain facts of substance and significance have been plainly overlooked or that the trial courts findings are clearly arbitrary, the conclusions reached by the trial court must be respected and the judgment rendered should be affirmed.
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People of the Philippines vs. Rommel Belo y De Leon, G.R. No. 187075, July 5, 2010. Rape; mental retardate. Accused assails his conviction alleging that appellate court erred in admitting evidence and basing its decision on AAAs mental retardation, a fact which should be but was not alleged in the informations. Under Art. 266-A(d), sexual intercourse with one who is intellectually weak to the extent that she is incapable of giving consent to the carnal act already constitutes rape, without requiring proof that the accused used force or intimidation in committing the act, for as long as that the fact of carnal knowledge and mental retardation is alleged in the information and proven during trial. However, in the case at bar, it should be noted that appellant was charged with rape through force and intimidation. Thus, contrary to appellants claims, an allegation in the information of the victims mental retardation was not necessary. People of the Philippines vs. Arturo Paler, G.R. No. 186411, July 5, 2010. Rape; minority. The assertion of the accused that the minority of AAA was not established because the prosecution failed to present her birth certificate in evidence deserves scant consideration. The informations specifically alleged that AAA was a minor, i.e., barely 14 years old on July 14, 1999 and September 1999, when she was raped by her own father. The accused himself, with the assistance of counsel, categorically admitted during pretrial that AAA was his daughter and that she was only 14 years old on July 14, 1999 and in September 1999. These stipulations are binding because they are judicial admissions within the contemplation of Section 4, Rule 129 of the Revised Rules of Court. The stipulation of facts signed by the parties, that is, the accused, his counsel and the prosecutor, in a criminal case is recognized as a declaration constituting judicial admission and is binding upon the parties. The stipulated facts stated in the pre-trial order amount to an admission by the accused and a waiver of his right to present evidence to the contrary. Although the right to present evidence is guaranteed by the Constitution, such right may be waived expressly or
impliedly. Thus, the rule that no proof need be offered as to any facts admitted during a pre-trial hearing applies. People of the Philippines vs. Ricardo Bodoso y Bolor, G.R. No. 188129, July 5, 2010. Rape; minority. In this regard, the Supreme Court is also guided by the ground rules laid down in the case of People v. Pruna, in appreciating the age, either as an element of the crime or as a qualifying circumstance. Thus: (1) The best evidence to prove the age of the offended party is an original or certified true copy of the certificate of live birth of such party; (2) In the absence of a certificate of live birth, similar authentic documents such as baptismal certificate and school records which show the date of birth of the victim would suffice to prove age; (3) If the certificate of live birth or authentic document is shown to have been lost or destroyed or otherwise unavailable, the testimony, if clear and credible, of the victims mother or a member of the family either by affinity or consanguinity who is qualified to testify on matters respecting pedigree such as the exact age or date of birth of the offended party pursuant to Section 40, Rule 130 of the Rules on Evidence shall be sufficient under the following circumstances: (i) If the victim is alleged to be below 3 years of age and what is sought to be proved is that she is less than 7 years old; (ii) If the victim is alleged to be below 7 years of age and what is sought to be proved is that she is less than 12 years old; (iii) If the victim is alleged to be below 12 years of age and what is sought to be proved is that she is less than 18 years old; (iv) In the absence of a certificate of live birth, authentic document or the testimony of the victims mother or relatives concerning the victims age, the complainants testimony will suffice provided that it is expressly and clearly admitted by the accused; (v) it is the prosecution that has the burden of proving the age of the offended party. People of the Philippines vs. Ricardo Bodoso y Bolor, G.R. No. 188129, July 5, 2010. Rape; minority. The failure of the accused to object to the testimonial evidence regarding age shall not be taken against him. People of the Philippines vs. Ricardo Bodoso y Bolor, G.R. No. 188129, July 5, 2010.
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Rape; penalty. The Supreme Court modified the penalty imposed by the Court of Appeals in this case since it failed to state that the reduction of the penalty of rape from death to reclusion perpetua is without eligibility for parole as held in the case of People v. Antonio Ortiz. Thus, finding the accused guilty of two (2) counts of rape committed against his daughter, AAA, the Supreme Court sentenced the accused, in each count, to suffer the penalty of reclusion perpetua, without eligibility for parole. People of the Philippines vs. Ricardo Bodoso y Bolor, G.R. No. 188129, July 5, 2010. Rape; penalty. Under paragraph 1 of Article 266-B of the Revised Penal Code, the crime of simple rape is punishable by reclusion perpetua. People of the Philippines vs. Basilio Cadap, G.R. No. 190633, July 5, 2010. Rape; use of deadly weapon. The use of a deadly weapon in this rape case was a fact specifically averred in the information and proved during the trial. This qualifies the rape the accused has committed. Article 266-B of the Revised Penal Code provides that the penalty for rape committed with the use of a deadly weapon should be reclusion perpetua to death. But in view of the enactment of Republic Act 9346 which prohibits the imposition of the death penalty, the penalty of reclusion perpetua without eligibility for parole as provided by Act 4103 should instead be imposed. People of the Philippines vs. Ermilito Alegre y Lamoste, G.R. No. 184812, July 6, 2010. Statutory rape; elements. The acts were committed by accused in April of 1997, before RA 8353, the Anti-Rape Law of 1997, took effect on October 22, 1997 and amended the provisions of the Revised Penal Code on the crime of rape. Thus, Article 335(3) of the Revised Penal Code defining how statutory rape is committed is the applicable law. It must be remembered that under the law and prevailing jurisprudence, the gravamen of the offense of statutory rape as provided under Article 335 of the Revised Penal Code is the carnal knowledge of a woman below twelve years old. The only elements of statutory rape are: (1) that the offender had carnal knowledge
of a woman; and (2) the such woman is under twelve (12) years of age. Since the very act of sexual intercourse was established, in fact admitted by accused-appellant and the age of AAA was established before the RTC to be 11 years, the acts of accused-appellant fall squarely under Art. 335 of the Revised Penal Code. People of the Philippines vs. Roberto Garbida, G.R. No. 188569, July 13, 2010. Theft; penalty. The Supreme Court discarded the testimony of the private complainant that the value of the magwheels and the other items stolen was more or less P27,000.00 for being a mere sweeping assessment uncorroborated by any other evidence. It was pointed out that the two (2) magwheels which were found in the possession of the accused were pegged at P17,000.00 without any conclusive or definite proof relative to the value of these magwheels other than the testimony of private complainant. Thus, the Court fixed the value of the magwheels at P12,000.00 following the guidelines in Francisco v. People. Applying Article 309 (2) of the Revised Penal Code and the Indeterminate Sentence Law, petitioner and his coaccused, were sentenced to suffer the indeterminate penalty ranging from six (6) months and one (1) day of prision correccional, as minimum, to four (4) years and two (2) months and one (1) day also of prision correccional, as maximum. Luis Chito Buensoceso Lozano vs.. Poeple of the Philippines, G.R. No. 165582, July 9, 2010. 2. Special Laws
Acts of lasciviousness on a child; penalty. For acts of lasciviousness performed on a child under Section 5(b), Article III of Republic Act No. 7610, the penalty prescribed is reclusion temporal in its medium period to reclusion perpetua. Notwithstanding that Republic Act No. 7610 is a special law, the appellant may enjoy the benefits of the Indeterminate Sentence Law. Applying the Indeterminate Sentence Law, the appellant shall be entitled to a minimum term to be taken within the range of the penalty next lower to that prescribed by Republic Act No. 7610. The
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penalty next lower in degree is prision mayor medium to reclusion temporal minimum, the range of which is from 8 years and 1 day to 14 years and 8 months. On the other hand, the maximum term of the penalty should be taken from the penalty prescribed under Section 5(b), Article III of Republic Act No. 7610, which is reclusion temporal in its medium period to reclusion perpetua, the range of which is from 14 years, 8 months and 1 day to reclusion perpetua. The minimum, medium and maximum term of the same is as follows: minimum 14 years, 8 months and 1 day to 17 years and 4 months; medium 17 years, 4 months and 1 day to 20 years; and maximum reclusion perpetua. People of the Philippines vs. Adriano Leonardo y Dantes, G.R. No. 181036, July 6, 2010 Batas Pambansa Bilang 22; elements. To reiterate the elements of a violation of Batas Pambansa Bilang 22, violation thereof exists where: (1) a person makes or draws and issues a check to apply on account or for value; (2) the person who makes or draws and issues the check knows at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the full payment of the check upon its presentment; and (3) the check is subsequently dishonored by the drawee bank for insufficiency of funds or credit, or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment. Eumelia R. Mitra vs. People of the Philippines and Felicisimo S. Tarcelo, G.R. No. 191404, July 5, 2010. Dangerous Drugs Act; Illegal Sale of Dangerous Drugs. What determines if there was, indeed, a sale of dangerous drugs in a buy-bust operation is proof of the concurrence of all the elements of the offense, to wit: (1) the identity of the buyer and the seller, the object, and the consideration; and (2) the delivery of the thing sold and the payment therefor, which the prosecution has satisfactorily established. The prosecution satisfactorily proved the illegal sale of dangerous drugs and presented in court the evidence of corpus delicti. People of the Philippines vs. Sonny Padua y Reyes, G.R. No. 174097, July 21, 2010.
Dangerous Drugs Act; Illegal Sale of Dangerous Drugs. Anent the failure of the prosecution to present the testimony of the informant, it is wellsettled that the testimony of an informant in drug-pushing cases is not essential for conviction and may be dispensed with if the poseur-buyer testified on the same. Informants are almost always never presented in court because of the need to preserve their invaluable service to the police. Further, not all people who came into contact with the seized drugs are required to testify in court. There is nothing in Republic Act No. 9165 or in any rule implementing the same that imposes such requirement. As long as the chain of custody of the seized drug was clearly established not to have been broken and that the prosecution did not fail to identify properly the drugs seized, it is not indispensable that each and every person who came into possession of the drugs should take the witness stand. People of the Philippines vs. Sonny Padua y Reyes, G.R. No. 174097, July 21, 2010. Dangerous Drugs Act; illegal sale of shabu; elements. For the successful prosecution of the illegal sale of shabu, the following elements must be established: (1) the identity of the buyer and the seller, the object of the sale, and the consideration; and (2) the delivery of the thing sold and its payment. What is material is the proof that the transaction or sale actually took place, coupled with the presentation in court of the corpus delicti as evidence. All these requisites were met by the prosecution in this case. People of the Philippines vs. Alioding Sultan, G.R. No. 187737, July 5, 2010. Dangerous Drugs Act; illegal sale of drugs; elements. In a prosecution for illegal sale of dangerous drugs, the following elements must be proven: (1) that the transaction or sale took place; (2) that the corpus delicti or the illicit drug was presented as evidence; and (3) that the buyer and seller were identified. The presence of these elements is sufficient to support the trial courts finding of appellants guilt. What is material is the proof that the transaction or sale actually took place, coupled with the presentation in court of the prohibited or regulated drug. The delivery of the contraband to
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the poseur-buyer and the receipt of the marked money consummate the buy-bust transaction between the entrapping officers and the accused. The presentation in court of the corpus delicti the body or substance of the crime establishes the fact that a crime has actually been committed. People of the Philippines vs. Christopher De Mesa and Emmanuel Gonzales,G.R. No. 188570. July 6, 2010 Dangerous Drugs Act; illegal sale of drugs; elements. The burden of the prosecution in a crime for illegal sale of dangerous drugs is to prove (1) the identities of the buyer and the seller; (2) the sale of dangerous drugs; and (3) the existence of the corpus delicti or the illicit drug as evidence. People of the Philippines vs. Noel Catentay, G.R. No. 183101, July 6, 2010. Dangerous Drugs Act; chain of custody; requirements. Section 21 of R.A. No. 9165 states: Sec. 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered Dangerous Drugs, Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals, Instruments/Paraphernalia and/or Laboratory Equipment. The PDEA shall take charge and have custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursors and essential chemicals, as well as instruments/paraphernalia and/or laboratory equipment so confiscated, seized and/or surrendered, for proper disposition in the following manner: (1) The apprehending team having initial custody and control of the drugs shall, immediately after seizure and confiscation, physically inventory and photograph the same in the presence of the accused or the person/s from whom such items were confiscated and/or seized, or his/her representative or counsel, a representative from the media and the Department of Justice (DOJ), and any elected public official who shall be required to sign the copies of the inventory and be given a copy thereof. On the other hand, the Implementing Rules and Regulations (IRR) of R.A. No. 9165 states: SECTION 21. Custody and Disposition of Confiscated, Seized and/or Surrendered Dangerous Drugs, Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment. The PDEA shall take charge and have custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursors and essential chemicals, as well as instruments/paraphernalia and/or laboratory equipment so confiscated, seized and/or surrendered, for proper disposition in the following manner: (a) The apprehending officer/team having initial custody and control of the drugs shall, immediately after seizure and confiscation, physically inventory and photograph the same in the presence of the accused or the person/s from whom such items were confiscated and/or seized, or his/her representative or counsel, a representative from the media and the Department of Justice (DOJ), and any elected public official who shall be required to sign the copies of the inventory and be given a copy thereof: Provided, that the physical inventory and photograph shall be conducted at the place where the search warrant is served; or at the nearest police station or at the nearest office of the apprehending officer/team, whichever is practicable, in case of warrantless seizures; Provided, further, that noncompliance with these requirements under justifiable grounds, as long as the integrity and the evidentiary value of the seized items are properly preserved by the apprehending officer/team, shall not render void and invalid such seizures of and custody over said items. People of the Philippines vs. Christopher De Mesa and Emmanuel Gonzales,G.R. No. 188570. July 6, 2010 Sexual abuse; elements. The prosecution in this case has proved the essential elements of sexual abuse under Section 5(b), Article III of Republic Act No. 7610. The elements of sexual abuse under the above provision are as follows: (1) the accused commits the act of sexual intercourse or lascivious conduct; (2) the said act is performed with a child exploited in prostitution or subjected to other sexual abuse; and (3) the child, whether male or female, is below 18 years of age. People of the Philippines vs. Adriano Leonardo y Dantes, G.R. No. 181036, July 6, 2010. CRIMINAL PROCEDURE
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Appeal; judgment of acquittal. Section 1 of Rule 122 allows any party to appeal from a judgment or final order, unless the right of the accused against double jeopardy will be violated. It is axiomatic that an appeal in criminal cases throws the whole case wide open for review by an appellate court. As a consequence, an appeal by the prosecution from a judgment of acquittal necessarily places the accused in double jeopardy. However, the rule barring an appeal from a judgment of acquittal is, not absolute. The following are the recognized exceptions thereto: (i) when the prosecution is denied due process of law; and (ii) when the trial court commits grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing a criminal case by granting the accused demurrer to evidence. People of the Philippines vs. Sandiganbayan (First Division), Victorino A. Basco, Romeo S. David and Rogelio L. Luis, G.R. No. 164577, July 5, 2010. Corpus delicti; handling. Section 21 of Republic Act No. 9165 was originally envisioned by the legislature to serve as a protection for the accused from malicious imputations of guilt by abusive police officers. The illegal drugs being the corpus delicti, it is essential for the prosecution to prove and show to the court beyond reasonable doubt that the illegal drugs presented to the trial court as evidence of the crime are indeed the illegal drugs seized from the accused. Section 21, paragraph No. 1, prescribes the method by which law enforcement agents/personnel are to go about in handling the corpus delicti at the time of seizure in order to ensure full protection to the accused. It reads: SEC. 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered Dangerous Drugs, Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals, Instruments/ Paraphernalia and/or Laboratory Equipment. The PDEA shall take charge and have custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursors and essential chemicals, as well as instruments/paraphernalia and/or laboratory equipment so confiscated, seized and/or surrendered, for proper disposition in the following manner: (1) The apprehending team having initial custody and control of the drugs shall, immediately after seizure and confiscation, physically inventory and
photograph the same in the presence of the accused or the person/s from whom such items were confiscated and/or seized, or his/her representative or counsel, a representative from the media and the Department of Justice (DOJ), and any elected public official who shall be required to sign the copies of the inventory and be given a copy thereof. However, Section 21 was not meant to thwart the legitimate efforts of law enforcement agents. Slight infractions or nominal deviations by the police from the prescribed method of handling the corpus delicti should not exculpate an otherwise guilty defendant. In fact, the Implementing Rules and Regulations of Rep. Act No. 9165 adequately reflects the desire of the law to excuse from the rigid tenor of Section 21 situations wherein slight infractions in methodology are present but the integrity and identity of the specimen remains intact. It reads in part: Provided, further, that non-compliance with these requirements under justifiable grounds, as long as the integrity and the evidentiary value of the seized items are properly preserved by the apprehending officer/team, shall not render void and invalid such seizures of and custody over said items. In this case, the failure of the apprehending officer to immediately after seizure and confiscation, physically inventory and photograph the prohibited drugs in the presence of the accused as required by Section 21 can be considered as a slight infraction that does not automatically render the seized items inadmissible. There is a justifiable reason for such failure in this case as was explained by the police officer during his cross-examination. People of the Philippines vs. Alioding Sultan, G.R. No. 187737, July 5, 2010. Defense; alibi. As consistently enunciated by the Supreme Court, the established doctrine is that, for the defense of alibi to prosper, the accused must prove not only that he was at some other place at the time of the commission of the crime, but also that it was physically impossible for him to be at the locus delicti or within its immediate vicinity. Based on the findings of the trial court, accused-appellants failed to demonstrate satisfactorily that it was physically impossible for them to be at the scene of the crime at the time it was committed. Weak as it is, alibi becomes weaker
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in the face of the positive identification made by the prosecution witnesses as in this case. People of the Philippines vs. Roberto Asis and Julius Pearanda, G.R. No. 177573, July 7, 2010. Evidence; alibi. The Supreme Court considered the defenses of denial and alibi put up by the accused, but found them relatively weak and insufficient to overcome the positive and categorical identification of the accused as perpetrators. The rule is that the defense of denial, when unsubstantiated by clear and convincing evidence, is negative and self-serving and merits no weight in law and cannot be given greater evidentiary value than the testimony of credible witnesses who testified on affirmative matters. People of the Philippines vs. Albert Teoso y Lopez alias Paking and Edgardo Cocotan alias Paot, G.R. No. 188975, July 5, 2010. Evidence; alibi. The evidence presented in this case by the defense consisted mainly of bare denials and alibi. As the Supreme Court has oft pronounced, both denial and alibi are inherently weak defenses which cannot prevail over the positive and credible testimony of the prosecution witness that the accused committed the crime. For the defense of alibi to prosper, it is not sufficient that appellant prove that he was somewhere else when the crime was committed, he must also show that it was physically impossible for him to be at the locus criminis or its immediate vicinity when the crime was perpetrated. Further, the defense of alibi may not prosper if it is established mainly by the accused themselves and their relatives like in this case and not by credible persons. People of the Philippines vs. Adriano Leonardo y Dantes, G.R. No. 181036, July 6, 2010. Evidence; child testimony. Testimonies of child-victims are almost always given full weight and credit, since when a woman, more so if she is a minor, says that she has been raped, she says in effect all that is necessary to show that rape has been committed. Youth and immaturity are generally badges of truth and sincerity. The fact that EMA freely went with the accused to the house of the latter after she went down from the guava tree
should not be taken to mean that her account of the events is incredible. It must be noted that EMA was merely (9) years of age when the rape transpired. By her own admission, EMA did not even understand what accused-appellant said when he instructed her to have sexual intercourse with him. Considering the age of the complainant, the Court found it improbable for a girl of her age to fabricate a charge so traumatic to herself and her family had she not been truly subjected to the painful experience of sexual abuse. Moreover, she was steadfast in relating her ordeal and nightmarish experience at the hands of the accused under rigid crossexamination. People of the Philippines vs. Marcos Quiros y Sembrano, G.R. No. 188600, July 13, 2010 Evidence; circumstantial evidence. Circumstantial evidence suffices to convict an accused only if the circumstances proved constitute an unbroken chain which leads to one fair and reasonable conclusion that points to the accused, to the exclusion of all others as the guilty person; the circumstances proved must be consistent with each other, consistent with the hypothesis that the accused is guilty, and at the same time inconsistent with any other hypothesis except that of guilty. People of the Philippines vs. Reynaldo Bayon y Ramos, G.R. No. 168627, July 2, 2010. Evidence; circumstantial evidence. In this case, the court found that the pieces of circumstantial evidence relied upon were insufficient to convict appellant of the crime of qualified theft. In the first circumstance, appellant was not the only stay-in helper of Atty. Limoso, as the latter testified that he had two housemaids. Although Atty. Limoso testified that only appellant, as his masseur, had access to his room, this is doubtful, considering the Filipino lifestyle, in which a household helper is normally tasked to clean the room of his/her employer. Further, in the second circumstance, the disappearance of appellants clothes from Atty. Limosos house after the discovery of the loss of the aforementioned valuables cannot be construed as flight by the appellant since appellant was talking with the guards in the compound where Atty. Limosos residence was located when
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he was arrested by the police. Notably, the prosecution failed to establish the element of unlawful taking by appellant and this warranted an acquittal. People of the Philippines vs. Reynaldo Bayon y Ramos, G.R. No. 168627, July 2, 2010. Evidence; circumstantial evidence. The oft-repeated rule has been that circumstantial evidence is adequate for conviction if there is more than one circumstance, the facts from which the inferences are derived have been proven and the combination of all circumstances is such as to produce a conviction beyond reasonable doubt. While no general rule can be laid down as to the quantity of circumstantial evidence which will suffice in a given case, all the circumstances proved must be consistent with each other, consistent with the hypothesis that the accused is guilty, and at the same time inconsistent with the hypothesis that he is innocent, and with every other rational hypothesis except that of guilt. The circumstances proved should constitute an unbroken chain which leads to only one fair and reasonable conclusion that the accused, to the exclusion of all others, is the guilty person. People of the Philippines vs. Calonge y Verana, G.R. No. 182793, July 5, 2010. Evidence; conflicting testimonies. Accused insists that the testimonies of the prosecutions eyewitnesses, Alfredo and Allan, were somewhat contradictory, and should not be given credence. Alfredo said that Dela Cruz and Benoza, aided by Baylon, immobilized Yrigan by holding and pulling away his hands from either side so appellant Rollan and the other accused could freely attack him with a long bladed weapon. Allan said, on the other hand, that appellant Rollan and Benabesi were the ones who held Yrigans hands while the others attacked him with a bolo and a knife. Rejecting the accuseds argument, the Court ruled that both testimonies show that the assailants acted in conspiracy with each other as evidenced by their concerted action in surrounding Yrigan and attacking him simultaneously, with some holding and pulling at his hands so he could not use them to defend himself and return the attack, and the others stabbing
and slashing at him with weapons. Since the accused had not presented evidence of ill-motive on the part of the witnesses to testify falsely against him, their (witnesses) testimonies can be believed. People of the Philippines vs. Gerardo Rollan y Rey, G.R. No. 175835, July 13, 2010. Evidence; credibility of rape victim. Failure of a victim to immediately report the rape does not necessarily weaken the case against the accused. The charge of rape is rendered doubtful only if the delay was unreasonable and unexplained. In this case, AAA did not report what her father did to her because she was terribly afraid that he would harm her. This is a normal reaction by minors to hide the truth because they are easily intimidated by threats on their person and other members of the family. Besides, the trauma to a young girls mind of the realization that her own father, who is supposed to be her natural protector, has sexually violated her, cannot be underestimated. When she was cross-examined, AAA replied that she could not even tell her own siblings of her plight because they were all afraid of their father. The only time she felt safe was after they had moved out of their fathers house. Thus, the one year delay in the reporting of AAAs harrowing experience in the hands of her father does not vitiate the integrity of her testimony. People of the Philippines vs. Rogelio Alarcon, G.R. No. 177219, July 9, 2010. Evidence; credibility of witness. It is a fundamental rule that the trial courts factual findings, especially its assessment of the credibility of witnesses, are accorded great weight and respect and binding upon the Supreme Court, particularly when affirmed by the Court of Appeals. The Supreme Court has repeatedly recognized that the trial court is in the best position to assess the credibility of witnesses and their testimonies because of its unique position of having observed that elusive and incommunicable evidence of the witnesses deportment on the stand while testifying, which opportunity is denied to the appellate courts. Only the trial judge can observe the furtive glance, blush of conscious shame, hesitation, flippant or sneering tone, calmness, sigh, or the scant or full realization of an oath.
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These are significant factors in evaluating the sincerity of witnesses, in the process of unearthing the truth. The appellate courts will generally not disturb such findings unless it plainly overlooked certain facts of substance and value that, if considered, might affect the result of the case. In this case, none of these circumstances are present. People of the Philippines vs. Adriano Leonardo y Dantes, G.R. No. 181036, July 6, 2010. Evidence; credibility of witness. Credible witness and credible testimony are the two essential elements for the determination of the weight of a particular testimony. This principle could not ring any truer where the prosecution relies mainly on the testimony of the complainant, corroborated by the medico-legal findings of a physician. Be that as it may, the accused may be convicted on the basis of the lone, uncorroborated testimony of the rape victim provided that her testimony is clear, convincing and otherwise consistent with human nature. People of the Philippines vs. Adriano Leonardo y Dantes, G.R. No. 181036, July 6, 2010. Evidence; credibility of witness. The Supreme Court agreed with the findings of the trial court that it is unbelievable that AAA would file complaints for two counts of rape and one count of attempted rape just to exact revenge for the time accused-appellant allegedly kicked her. The Supreme Court is convinced even less that BBB (victims mother) would persuade her daughter to lie about such rape incidents because of her quarrel with accused-appellant. The Supreme Court consistently held that: Not a few accused in rape cases have attributed the charges brought against them to family feuds, resentment, or revenge. But such alleged motives have never swayed the Court from lending full credence to the testimony of a complainant who remained steadfast throughout her direct and cross-examinations, especially a minor as in this case. Further, we simply cannot believe that a lass of tender age would concoct a tale of defloration, allow the examination of her private parts, and undergo the expense, trouble, inconvenience, not to mention the trauma, of a public
trial, unless she was in fact raped. People of the Philippines vs. Romeo Republo, G.R. No. 172962, July 8, 2010 Evidence; credibility of witness. No young and decent Filipina would publicly admit that she was ravished and her honor tainted unless such was true, for it would be instinctive for her to protect her honor. People of the Philippines vs. Romeo Republo, G.R. No. 172962, July 8, 2010 Evidence; Credibility of witness. In the review of rape cases, the Supreme Court is almost invariably guided by the following principles: (1) an accusation for rape can be made with facility; it is difficult to prove but more difficult for the person accused, though innocent, to disprove it; (2) in view of the intrinsic nature of the crime of rape where only two persons are usually involved, the testimony of the complainant must be scrutinized with extreme caution; and (3) the evidence for the prosecution must stand or fall on its own merits and cannot be allowed to draw strength from the weakness of the evidence for the defense. Equally settled is the rule that assessment of credibility of witnesses is a function that is best discharged by the trial judge whose conclusions thereon are accorded much weight and respect, and will not be disturbed on appeal unless a material or substantial fact has been overlooked or misappreciated which if properly taken into account could alter the outcome of the case. Both the Regional Trial Court and the Court of Appeals found the testimony of AAA credible, truthful and straightforward as against a mere denial proffered by the accused. Moreover, the lower courts did not accept accuseds theory that AAA harbored serious anger and resentment toward him because he allegedly mauled her mother, causing the latter to become insane. People of the Philippines vs. Jessie Dacallos y Modina, G.R. No. 189807, July 5, 2010. Evidence; inconsistency in testimony. The Supreme Court has examined the inconsistencies in the testimonies of the prosecution witnesses but found them too inconsequential to adversely affect their overall integrity. Such minor inconsistencies in the narration of a witness do not detract from
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its essential credibility as long as it is in its entirety coherent and intrinsically believable. Inaccuracies may in fact suggest that the witness is telling the truth and has not been rehearsed as it is not to be expected that he will be able to remember every single detail of an incident with perfect or total recall. People of the Philippines vs. Albert Teoso y Lopez alias Paking and Edgardo Cocotan alias Paot, G.R. No. 188975, July 5, 2010. Evidence; non-identification of the drugs. As a method of authenticating evidence, the chain of custody rule requires that the admission of an exhibit be preceded by evidence sufficient to support a finding that the matter in question is what the proponent claims it to be. It would include testimony about every link in the chain, from the moment the item was picked up to the time it is offered into evidence, in such a way that every person who touched the exhibit would describe how and from whom it was received, where it was and what happened to it while in the witnesses possession, the condition in which it was received and the condition in which it was delivered to the next link in the chain. These witnesses would then describe the precautions taken to ensure that there had been no change in the condition of the item and no opportunity for someone not in the chain to have possession of the same. People of the Philippines vs. Rose Nandi y Sali, G.R. No. 188905, July 13, 2010. Evidence; non-identification of the drugs. A closer look at the records of the case reveals that the prosecution failed to show that there was compliance with the inventory requirements of R.A. No. 9165. When the poseur-buyer, PO1 Cecil Collado, took the witness stand, he failed to describe with particulars how the seized shabu was handled and marked after its confiscation. Moreover, the prosecution failed to prove beyond reasonable doubt that the subject substance was the very same object taken from the accused. These lapses warrants the acquittal of the accused. People of the Philippines vs. Rose Nandi y Sali, G.R. No. 188905, July 13, 2010.
Evidence; positive identification. The Regional Trial Court and Court of Appeals conclusions on the petitioners positive identification are supported by ample evidence. The Supreme Court considered in this regard the following pieces of evidence of the prosecution: (1) the manner of attack which was done frontally and at close range, thus allowing the victim to see his assailant; (2) the lighting conditions at the scene of the stabbing, provided by two Meralco posts; the scene was also illuminated by white, fluorescent type light coming from a steel manufacturing shop; and (3) that the victim and the petitioner knew each other also allowed the victim to readily identify the petitioner as his assailant. Giovani Serrano y Cervantes vs. People of the Philippines, G.R. No. 175023, July 5, 2010. Evidence; positive identification. The victims credibility is further strengthened by his lack of improper motive to falsely accuse the petitioner of the crime. Human experience tells us that it is unnatural for a victim to accuse someone other than his actual attacker; in the normal course of things, the victim would have the earnest desire to bring the guilty person to justice, and no other. We consider, too, that the victim consistently and positively, in and out of court, identified the petitioner as his assailant. The victim testified that the petitioner was a neighbor who lived just a few houses away from his house. Based on these considerations, the Supreme Court found the victims identification of the petitioner as his assailant to be positive and conclusive. Giovani Serrano y Cervantes vs. People of the Philippines, G.R. No. 175023, July 5, 2010. Evidence; self-serving. The phrase self-serving evidence is a concept which has a well-defined judicial meaning. The common objection known as self-serving is not correct because almost all testimonies are selfserving. The proper basis for objection is hearsay. Self-serving statements are those made by a party out of court advocating his own interest; they do not include a partys testimony as a witness in court. Self-serving statements are inadmissible because the adverse party is not given the opportunity for cross-examination, and their admission would encourage
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fabrication of testimony. This cannot be said of a partys testimony in court made under oath, with full opportunity on the part of the opposing party for cross-examination. People of the Philippines vs. Mary Lou Omictin y Singco, G.R. No. 188130, July 26, 2010 Evidence; testimony. By the distinctive nature of rape cases, conviction thereon usually rests solely on the basis of the testimony of the victim, provided that such testimony is credible, natural, convincing and consistent with human nature and the normal course of things. Accordingly, the Supreme Court has consistently adhered to the following guiding principles in the review of rape cases, to wit: (1) an accusation for rape can be made with facility; while the accusation is difficult to prove, it is even more difficult for the accused, though innocent, to disprove; (2) considering that, in the nature of things, only two persons are usually involved in the crime of rape, the testimony of the complainant must be scrutinized with extreme caution; and (3) the evidence for the prosecution must stand or fall on its own merits, and cannot be allowed to draw strength from the weakness of the evidence for the defense. Complementing the foregoing principles is the rule that the credibility of the victim is always the single most important issue in prosecution for rape; that in passing upon the credibility of witnesses, the highest degree of respect must be afforded to the findings of the trial court. People of the Philippines vs. Basilio Cadap, G.R. No. 190633, July 5, 2010. Ombudsman; preliminary investigation. The Romualdezes point out that the Office of the Ombudsman should not have conducted an investigation of their case since its authority to investigate ill-gotten or unexplained wealth cases pertained only to wealth amassed after February 25, 1986 and not before that date. Accordingly, since the Romualdezes acquired the allegedly ill-gotten wealth involved in their case as early as 1970, then the Ombudsman had no authority to conduct the investigation that it did. But, as the Sandiganbayan correctly pointed out, the Ombudsman has, under its general investigatory powers, the authority to investigate forfeiture cases
where the alleged ill-gotten wealth had been amassed before February 25, 1986. The Supreme Court ruled that the exercise of the Ombudsmans correlative power to initiate the proper action for the recovery of ill-gotten and/or unexplained wealth is restricted only to cases for the recovery of illgotten and/or unexplained wealth which were amassed after February 25, 1986. However, the Ombudsman has the authority to investigate cases for the forfeiture or recovery of such ill-gotten and/or unexplained wealth amassed even before the aforementioned date pursuant to the Ombudsmans general investigatory power under Section 15(1) of Republic Act No. 6770. Alfredo T. Romualdez vs. The Honorable Sandiganbayan (Third Division) and the Republic of the Philippines, G.R. No. 161602, July 13, 2010. Rules of Procedure, liberal application. Petitioners former counsel erroneously appealed her conviction to the Court of Appeals instead of the Sandiganbayan. Petitioner pleaded that Section 2 of Rule 50 of the Rules of Court which mandated the dismissal of cases erroneously appealed to the Court of Appeals be relaxed and the Court of Appeals be directed to forward the records of the case to the Sandiganbayan. The Supreme Court in granting petitioners prayer held that since the appeal involved a criminal case, and the possibility of a person being deprived of liberty due to a procedural lapse a relaxation of the Rules was warranted for rules of procedure must be viewed as tools to facilitate the attainment of justice, such that any rigid and strict application thereof which results in technicalities tending to frustrate substantial justice must always be avoided. Cenita M. Cariaga vs. People of the Philippines, G.R. No. 180010, July 30, 2010. Search Warrant; buy-bust operation. A buy-bust operation is an event where a warrantless arrest is justified under Rule 113, Sec. 5(a) of the Rules of Court. When carried out with due regard for constitutional and legal safeguards, the buy-bust operation is a judicially sanctioned method of apprehending those involved in illegal drug activities. It is a valid form of
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entrapment, as the idea to commit a crime comes not from the police officers but from the accused himself. The accused is caught in the act and must be apprehended on the spot. People of the Philippines vs. Elizabeth Marcelino y Reyes, G.R. No. 189278, July 26, 2010. Search Warrant; buy-bust operation. From the very nature of a buy-bust operation, the absence of a warrant does not make the arrest illegal. The illegal drug seized is not the fruit of the poisonous tree as the defense allege. The seizure made by the buy-bust team falls under a search incidental to a lawful arrest under Rule 126, Sec. 13 of the Rules of Court. Since the buy-bust operation was established as legitimate, it follows that the search was also valid, and a warrant was likewise not needed to conduct it. People of the Philippines vs. Elizabeth Marcelino y Reyes, G.R. No. 189278, July 26, 2010. Warrant of Arrest; Probable Cause. Respondents questioned the alleged lack of personal determination of probable cause by Judge Navidad in issuing the warrants for their arrest. The determination of probable cause for purposes of issuing the warrant of arrest is made by the judge. The duty of the judge to determine probable cause to issue a warrant of arrest is mandated by Article III, Section 2 of the Philippine Constitution. This constitutional provision does not mandatorily require the judge to personally examine the complainant and her witnesses. Instead, he may opt to personally evaluate the report and supporting documents submitted by the prosecutor or he may disregard the prosecutors report and require the submission of supporting affidavits of witnesses. People of the Philippines vs. Joseph Jojo V. Gray, Francis B. Greay, and Court of Appeals-Cebu City, Eighteenth Division, G.R. No. 180109, July 26, 2010. Warrant of Arrest; Probable Cause. What the law requires as personal determination on the part of a judge is that he should not rely solely on the report of the investigating prosecutor. This means that the judge should consider not only the report of the investigating prosecutor but also the
affidavit and the documentary evidence of the parties, the counter-affidavit of the accused and his witnesses, as well as the transcript of stenographic notes taken during the preliminary investigation, if any, submitted to the court by the investigating prosecutor upon the filing of the Information. Contrary to respondents claim, the language of the Order clearly showed that the judge made his own personal determination of the existence of probable cause by examining not only the prosecutors report but also his supporting evidence, consisting mainly of the sworn statements of the prosecutions witnesses. People of the Philippines vs. Joseph Jojo V. Gray, Francis B. Gray and Court of Appeals-Cebu City, Eighteenth Division, G.R. No. 180109, July 26, 2010. Warrantless Arrest; objections. Petitioners claim that his warrantless arrest is illegal lacks merit. However, nowhere in the records can it be found in which petitioner interposed objections to the irregularity of his arrest prior to his arraignment. It has been consistently ruled that an accused is estopped from assailing any irregularity of his arrest if he fails to raise this issue or to move for the quashal of the information against him on this ground before arraignment. Any objection involving a warrant of arrest or the procedure by which the court acquired jurisdiction over the person of the accused must be made before he enters his plea; otherwise, the objection is deemed waived. Salvador Valdez Rebellion vs. People of the Philippines, G.R. No. 175700. July 5, 2010. Warrantless Arrest; objections. In this case, petitioner was duly arraigned, entered a negative plea and actively participated during the trial. Thus, he is deemed to have waived any perceived defect in his arrest and effectively submitted himself to the jurisdiction of the court trying his case. At any rate, the illegal arrest of an accused is not a sufficient cause for setting aside a valid judgment rendered upon a sufficient complaint after a trial free from error. It will not even negate the validity of the conviction of the accused. Salvador Valdez Rebellion vs. People of the Philippines, G.R. No. 175700. July 5, 2010.
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Withdrawal of Information. It bears emphasizing that when the trial court grants a motion of the public prosecutor to withdraw the Information in compliance with the directive of the Secretary of Justice, or to deny the said motion, it does so not out of compliance to or defiance of the directive of the Secretary of Justice, but in sound and faithful exercise of its judicial prerogative. The trial court is the best and sole judge on what to do with the case before it. The prior determination of probable cause by the trial court does not in any way bar a contrary finding upon reassessment of the evidence presented before it. In this case, the Supreme Court agreed with the reasons of the trial for granting the motion for the withdrawal of the Information. Antonio B. Ramos (deceased), substituted by his surviving heirs, namely Ma. Margarita A. Ramos, Antonio A. Ramos, Ma. Regina Ramos De Dios, Jose Vicente A. Ramos, Ma. Pomona Ramos Ko Teh and Oscar Emerito A. Ramos vs. People of the Philippines and Rogerio H. Escobal, G.R. No. 171565, July 13, 2010. The Bureau of Internal Revenue recently issued Revenue Regulations No. 07-10 (the Regulations), which implement Republic Act No. 9994, otherwise known as the Expanded Senior Citizens Act of 2010. The major provisions of the Regulations include the following: A. Income tax and other taxes
Under the Regulations, the Senior Citizen can avail of income tax exemption only upon compliance with certain requirements. These are: 1. the Senior Citizen must first be qualified as such by the Commissioner of Internal Revenue or his duly authorized representative (i.e., the Revenue District Officer (RDO)) having jurisdiction over the place where the Senior Citizen resides), by submitting a certified true copy of his Senior Citizen Identification Card (OSCA ID) issued by the OSCA of the city or municipality where he resides; 2. the Senior Citizen must file a Sworn Statement on or before January 31 of every year that his annual taxable income for the previous year does not exceed the poverty level as determined by the NEDA thru the NSCB; and 3. if qualified, his name shall be recorded by the RDO in the Master List of Tax-Exempt Senior Citizens for that particular year, which the RDO is mandatorily required to keep. A Senior Citizen who is a compensation income earner deriving from only one employer an annual taxable income exceeding the poverty level or the amount determined by the NEDA thru the NSCB on a particular year, but whose income had been subjected to the withholding tax on compensation, shall, although not exempt from income tax, be entitled to the substituted filing of income tax return under Revenue Regulations No. 2-98, as amended. Note that the income tax exemption does not extend to all types of income. Under section 8 of the Regulations, the Senior Citizen can still be held liable for the following taxes on income: 1. The 20% final withholding tax on interest income from any currency bank deposit, yield and other monetary benefit from deposit substitutes,
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In general, Senior Citizens must file income tax returns and pay income tax. However, the Senior Citizen is exempt from paying income tax if his returnable income is in the nature of compensation income and he qualifies as a minimum wage earner under RA No. 9504. The Senior Citizen is also exempt from income tax if the aggregate amount of gross income earned by the Senior Citizen during the taxable year does not exceed the amount of his personal exemptions (basic and additional).
trust fund and similar arrangements; royalties (except on books, as well as other literary works and musical compositions, which shall be imposed a final withholding tax of 10%); prizes (except prizes amounting to P10,000 or less which shall be subject to income tax at the rates prescribed under Sec. 24(A) of the Tax Code, and other winnings (except Philippine Charity Sweepstakes and Lotto winnings) (Sec. 24(B)(1), Tax Code); 2. The 7.5% final withholding tax on interest income from a depository bank under the expanded foreign currency deposit system (Sec. 24(B)(1), Tax Code); 3. If the Senior Citizen will pre-terminate his 5-year long-term deposit or investment in the form of savings, common or individual trust funds, deposit substitutes, investment management accounts and other investments evidenced by certificates in such form prescribed by the Bangko Sentral ng Pilipinas before the fifth year, he shall be subject to the final withholding tax imposed on the entire income depending on the holding period of the deposit or investment. If held for a period of: 4. Four years to less than five years 5% Three years to less than four years 12%; and Less than three years 20% The 10% final withholding tax
b. On the share of an individual in the distributable net income after tax of a partnership (except a general professional partnership) of which he is a partner; or c. On the share of an individual in the net income after tax of an association, a joint account, or a joint venture or consortium taxable as a corporation of which he is a member or a co-venturer (Sec. 24(B)(2), Tax Code). 5. Capital gains tax from sales of shares of stock not traded in the stock exchange (Sec. 24(C), Tax Code); and 6. The 6% final withholding tax on presumed capital gains from sale of real property, classified as capital asset, except capital gains presumed to have been realized from the sale or disposition of principal residence (Sec. 24(D), Tax Code). A Senior Citizen remains liable for other internal revenue taxes. The Regulations provide: SEC. 9. Liability for Other Internal Revenue Taxes. A Senior Citizen shall also be subject to the following internal revenue taxes, among others, imposed under the Tax Code: 1. Value Added Tax (VAT) or other Percentages Taxes, as the case may be. If he is self-employed or engaged in business or practice of profession, and his gross annual sales and/or receipts exceeds P1,500,000 or such amount to which this may be adjusted pursuant to Sec. 109(1)(V) of the Tax Code, he shall be subject to VAT. Otherwise, he shall be subject to the 3% percentage tax;
a. On cash and/or property dividends actually or constructively received from a domestic corporation or from a joint stock company, insurance or mutual fund company and a regional operating headquarters of a multinational company; or

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2. Donors Tax All donations made by a Senior Citizen during any calendar year, unless exempt under a specific provision of law, shall be subject to the donors tax imposed under Title III of the Tax Code; 3. Estate Tax In the event of death, the estate of the Senior Citizen may also be subject to the estate tax following the rules enunciated under Title III of the Tax Code and its implementing Regulations; 4. 5. B. Excise tax on certain goods; Documentary stamp tax. Discounts to senior citizens
1. on the purchase of medicines, including the purchase of influenza and pnuemococcal vaccines, and such other essential medical supplies, accessories and equipment to be determined by the Department of Health (DOH). Under the Regulations, the grant of discount shall be subject to guidelines that will be issued by the Bureau of Food and Drugs, Department of Health in coordination with the Philippine Health Insurance Corporation. The Regulations define medicine as referring to both prescription and nonprescription medicines, and articles approved by the BFAD-DOH, which are intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease in man; but do not include food and devices or their components, parts, or accessories. 2. on the professional fees of attending physician/s in all private hospitals, medical facilities, outpatient clinics and home health care services; 3. on the professional fees of licensed professional health providing home health care services as endorsed by private hospitals or employed through home health care employment agencies; 4. on medical and dental services, diagnostic and laboratory fees in all private hospitals, medical facilities, outpatient clinics, and home health care services, in accordance with the rules and regulations to be issued by the DOH, in coordination with the Philippine Health Insurance Corporation (PhilHealth); The Regulations define: (1) medical services as hospital services, professional services of physicians and other health care professionals and diagnostic and laboratory tests that are necessary for the diagnosis or
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The Regulations reiterate the expanded coverage of goods and services subject to the 20% discount granted to Senior Citizens. In order to avail of the 20% discount, the Senior Citizen may present any of the following: 1. an identification card issued by the Office of the Senior Citizen Affairs (OSCA) of the place where the senior citizen resides: Provided, That the identification card issued by the particular OSCA shall be honored nationwide; 2. the passport of the Senior Citizen concerned; or
3. other documents that establish that the Senior Citizen is a citizen of the Republic and is at least sixty (60) years of age. In the purchase of goods and services which are on promotional discount, the senior citizen can avail of the promotional discount or the 20% discount, whichever is higher. The 20% discount applies to the following:
treatment of an illness or injury; (2) dental services as oral examination, cleaning, permanent and temporary filling extractions and gum treatments, restoration, replacement or repositioning of teeth, or alteration of the alveolar or periodontium process of the maxilla and the mandible that are necessary for the diagnosis or treatment of an illness or injury and (3) home health care service as health or supportive care provided to the Senior Citizen patient at home by licensed health care professionals to include but not limited to, physicians, nurses, midwives, physical therapists and caregivers. 5. in actual fare for land transportation travel in public utility buses (PUBs), public utility jeepneys (PUJs), taxis, Asian utility vehicles (AUVs), shuttle services and public railways, including Light Rail Transit (LRT), Mass Rail Transit (MRT), and Philippine National Railways (PNR); 6. in actual transportation fare for domestic air transport services and sea shipping vessels and the like, based on the actual fare and advanced booking; 7. on the utilization of services in hotels and similar lodging establishments, restaurants and recreation centers; The Regulations define the terms hotel/hostels, lodging establishments, restraurants, and recreation centers. 8. on admission fees charged by theaters, cinema houses and concert halls, circuses, leisure and amusement; and 9. on funeral and burial services for the death of senior citizens; The beneficiary or any person who shall shoulder the funeral and burial expenses of the deceased Senior Citizen shall claim the discount, such as
casket, embalmment, cremation cost and other related services for the Senior Citizen upon payment and presentation of his death certificate. C. Special discount on public utilities The Regulations reiterate the requirement imposed under the Act that the monthly utilization of water and electricity by the Senior Citizen supplied by public utilities will be subject to a five percent (5%) discount upon concurrence of the following: 1. the individual meters for the said utilities are registered in the name of the Senior Citizen residing therein; 2. the monthly consumption does not exceed one hundred kilowatt hours (100kwh) of electricity and thirty cubic meters (30 m3) of water; and 3. the privilege is granted per household regardless of the number of Senior Citizens residing therein. Here are selected July 2010 rulings of the Supreme Court of the Philippines on legal and judicial ethics: Attorney; attorneys fees. The issue of the reasonable legal fees due to respondent still needs to be resolved in a trial on the merits with the following integral sub-issues: (1) the reasonableness of the 10% contingent fee given that the recovery of Tiwis share [in unpaid realty taxes] was not solely attributable to the legal services rendered by respondent, (2) the nature, extent of legal work, and significance of the cases allegedly handled by respondent which reasonably contributed, directly or indirectly, to the recovery of Tiwis share, and (3) the relative benefit derived by Tiwi from the services rendered by respondent. The amount of reasonable attorneys fees finally determined by the trial court should be without legal interest in line with well-settled jurisprudence. Municipality of Tiwi, represented by
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Hon. Mayor Jaime C. Villanueva and Sangguniang Bayan of Tiwi Vs. Antonio B. Betito, G.R. No. 171873, July 9, 2010. Attorney; engagement of private counsel by GOCC. In Phividec Industrial Authority v. Capitol Steel Corporation, we listed three (3) indispensable conditions before a GOCC can hire a private lawyer: (1) private counsel can only be hired in exceptional cases; (2) the GOCC must first secure the written conformity and acquiescence of the Solicitor General or the Government Corporate Counsel, as the case may be; and (3) the written concurrence of the COA must also be secured. Failure to comply with all three conditions would constitute appearance without authority. A lawyer appearing after his authority as counsel had expired is also appearance without authority. Rey Vargas, et al. vs. Atty. Michael Ignes, et al., A.C. No. 8096, July 5, 2010. Attorney; engagement of private counsel by LGU. Pursuant to this provision [Section 444(b)(1)(vi) of the LGC], the municipal mayor is required to secure the prior authorization of the Sangguniang Bayan before entering into a contract on behalf of the municipality. In the instant case, the Sangguniang Bayan of Tiwi unanimously passed Resolution No. 15-92 authorizing Mayor Corral to hire a lawyer of her choice to represent the interest of Tiwi in the execution of this Courts Decision in National Power Corporation v. Province of Albay. The above-quoted authority necessarily carried with it the power to negotiate, execute and sign on behalf of Tiwi the Contract of Legal Services. Municipality of Tiwi, represented by Hon. Mayor Jaime C. Villanueva and Sangguniang Bayan of Tiwi Vs. Antonio B. Betito, G.R. No. 171873, July 9, 2010. Attorney; gross misconduct. In Lao v. Medel, we held that the deliberate failure to pay just debts and the issuance of worthless checks constitute gross misconduct for which a lawyer may be sanctioned with one-year suspension from the practice of law. However, in this case, we deem it reasonable to affirm the sanction imposed by the IBP-CBD, i.e., Atty.
Valerio was ordered suspended from the practice of law for two (2) years, because, aside from issuing worthless checks and failing to pay her debts, she has also shown wanton disregard of the IBPs and Court Orders in the course of the proceedings. A-1 Financial Services, Inc. vs. Atty. Laarni N. Valerio, A.C. No. 8390, July 2, 2010. Attorney; violation of attorney-client relationship. We find no merit in petitioners assertion that Atty. Binamira gravely breached and abused the rule on privileged communication under the Rules of Court and the Code of Professional Responsibility of Lawyers when he represented [respondent] Helen in the present case. Notably, this issue was never raised before the labor tribunals and was raised for the first time only on appeal. Moreover, records show that although petitioners previously employed Atty. Binamira to manage several businesses, there is no showing that they likewise engaged his professional services as a lawyer. Likewise, at the time the instant complaint was filed, Atty. Binamira was no longer under the employ of petitioners. Lambert Pawnbrokers and Jewelry Corporation and Lambert Lim vs. Helen Binamira, G.R. No. 170464. July 12, 2010. Court personnel; immoral conduct. Employees of the judiciary are subject to a higher standard than most other civil servants. Immorality has been defined to include not only sexual matters but also conduct inconsistent with rectitude, or indicative of corruption, indecency, depravity, and dissoluteness; or is willful, flagrant or shameless conduct showing moral indifference to opinions of respectable members of the community, and an inconsiderate attitude toward good order and public welfare. There is no doubt that engaging in sexual relations with a married man is not only a violation of the moral standards expected of employees of the judiciary but is also a desecration of the sanctity of the institution of marriage which this Court abhors and is, thus, punishable. Julie Ann C. Dela Cruz vs. Selima B. Omaga, A.M. No. P-08-2590, July 5, 2010.

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Judge; abuse of authority. In issuing the Direct Contempt Order without legal basis, Judge Francisco is more appropriately guilty of the administrative offense of grave abuse of authority, rather than gross ignorance of the law and incompetence. Olivia Laurel Vs. Judge Pablo B. Francisco/Judge Pablo B. Francisco Vs. Olivia Laurel/Judge Pablo B. Francisco Vs. Olivia Laurel/Judge Pablo B. Francisco Vs. Gerardo P. Hernandez, et al./Judge Pablo B. Francisco Vs. Nicanor B. Alfonso, et al./Judge Pablo B. Francisco Vs. Caridad D. Cuevillas/Judge Pablo B. Francisco Vs. Hermina S. Javier, et al./Judge Pablo B. Francisco Vs. Atty. Rowena A. Malabanan-Galeon, et al./Judge Pablo B. Francisco Vs. Atty. Rowena A. Malabanan-Galeon//Judge Pablo B. Francisco Vs. Atty. Rowena A. Malabanan-Galeon, et al./Joel O. Arellano and Arnel M. Magat Vs. Judge Pablo B. Francisco, A.M. No. RTJ-06-1992/A.M. No. P-102745/A.M. No. RTJ-00-1992/A.M. No. P-10-2746/A.M. No. P-102747/A.M. No. P-10-2748/A.M. No. P-10-2749/A.M. No. P-10-2750/A.M. No. P-102751/A.M. No. P-03-1706/A.M. No. RTJ-10-2214, July 6, 2010. Judge; bias and partiality. Established is the norm that judges should not only be impartial but should also appear impartial. Judges must not only render just, correct and impartial decisions, but must do so in a manner free from any suspicion as to their fairness, impartiality and integrity. This reminder applies even more to lower court judges like herein respondent because they are judicial front-liners who have direct contact with litigants. Atty. Jose A. Bernas vs. Judge Julia A. Reyes, Metropolitan Trial Court, Branch 69, Pasig City, A.M. No. MTJ-09-1728, July 21, 2010. Judge; gross ignorance of the law. To be held liable for gross ignorance of the law, the judge must be shown to have committed an error that was gross or patent, deliberate or malicious. Also administratively liable for gross ignorance of the law is a judge who shown to have been motivated by bad faith, fraud, dishonesty or corruption ignored, contradicted or failed to apply settled law and jurisprudence. As a matter of public policy though, the acts of a judge in his official capacity are not subject to
disciplinary action, even though such acts are erroneous. Good faith and absence of malice, corrupt motives or improper considerations are sufficient defenses in which a judge charged with ignorance of the law can find refuge. Rolando E. Marcos vs. Judge Ofelia T. Pinto, A.M. No. RTJ09-2180, July 26, 2010. Judge; gross ignorance of the law. A patent disregard of simple, elementary and well-known rules constitutes gross ignorance of the law. We find that the respondent judges error does not rise to the level of gross ignorance of the law that is defined by jurisprudence. We take judicial notice of the fact that at the time he issued the Writ of Amparo on January 23, 2008, the Rule on the Writ of Amparo has been effective for barely three months. At that time, the respondent judge cannot be said to have been fully educated and informed on the novel aspects of the Writ of Amparo. More importantly, for full liability to attach for ignorance of the law, the assailed order, decision or actuation of the judge in the performance of official duties must not only be found to be erroneous; it must be established that he was motivated by bad faith, dishonesty, hatred or some other similar motive. Ruben Salcedo vs. Judge Gil Bollozos, A.M. No. RTJ-10-2236, July 5, 2010. Judge; simple misconduct. The Judges act of solemnizing the marriage of accuseds son in the residence of the accused speaks for itself. It is improper and highly unethical for a judge to actively participate in such social affairs, considering that the accused is a party in a case pending before her own sala. In pending or prospective litigations before them, judges should be scrupulously careful to avoid anything that may tend to awaken the suspicion that their personal, social or sundry relations could influence their objectivity. Considering the above findings, it is apparent that respondent judges actuations constitute simple misconduct. Rolando E. Marcos vs. Judge Ofelia T. Pinto, A.M. No. RTJ-09-2180, July 26, 2010.

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How to determine the nationality of a corporation (part 2)

Posted on August 25, 2010 by Hector M. de Leon Jr The July 26 post describes two tests for the determining the nationality of a corporation: the control test and the grandfather rule. Which one applies? As discussed below, the control test is the primary test for determining the nationality of a corporation; however, a recent decision of the SEC raises the question of whether the SEC is now abandoning the control test in favor of the grandfather rule. The control test as the primary test As a rule, the control test applies. The primacy of the control test over the grandfather rule can be traced to DOJ Opinion No. 19, s. 1989 (the 1989 DOJ Ruling), which states: . . . the Grandfather Rule, which was evolved and applied by the SEC in several cases, will not apply in cases where the 60-40 Filipino-alien equity ownership in a particular natural resource corporation is not in doubt. (underscoring supplied) In other words, according to the Department of Justice, the control test generally applies, with the grandfather rule applicable only when the 60-40 Filipino-alien equity ownership is in doubt. On the basis of the 1989 DOJ Ruling, the SEC issued several opinions doing away with the grandfather rule. For example, in a May 30, 1990 opinion, the SEC stated:
. . . the Commission En Banc, on the basis of the Opinion of the Department of Justice No. 18., S. 1989 dated January 19, 9189 voted and decided to do away with the strict application/computation of the so called grandfather rule. . . and instead applied the so-called control test method for determining corporate nationality. (underscoring supplied)(see also SEC Opinion dated August 6, 1991; SEC Opinion dated October 14, 1991) Around two years after the issuance of the 1989 DOJ Ruling, Congress enacted the Foreign Investments Act of 1991 (FIA), which expressly embodied the control test. Section 3(a) of the FIA (as amended by Republic Act No. 8179) provides: . . . the term Philippine national shall mean a citizen of the Philippines; or a domestic partnership or association wholly owned by citizens of the Philippines; or a corporation organized under the laws of the Philippines of which at least sixty percent (60%) of the capital stock outstanding and entitled to vote is owned and held by citizens of the Philippines; or a corporation organized abroad and registered as doing business in the Philippines under the Corporation Code of which one hundred percent (100%) of the capital stock outstanding and entitled to vote is wholly owned by Filipinos or a trustee of funds for pension or other employee retirement or separation benefits, where the trustee is a Philippine national and at least sixty percent (60%) of the fund will accrue to the benefit of Philippine nationals: Provided, That where a corporation and its nonFilipino stockholders own stocks in a Securities and Exchange Commission (SEC) registered enterprise, at least sixty percent (60%) of the capital stock outstanding and entitled to vote of each of both corporations must be owned and held by citizens of the Philippines and at least sixty percent (60%) of the members of the Board of Directors, in order that the corporation shall be considered a Philippine national. (underscoring supplied)

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Similarly, Section 1(a) of the rules and regulations implementing the FIA expressly provides for the application of the control test: Philippine national shall mean a citizen of the Philippines or a domestic partnership or association wholly owned by the citizens of the Philippines; or a corporation organized under the laws of the Philippines of which at least sixty percent (60%) of the capital stock outstanding and entitled to vote is owned and held by citizens of the Philippines; or a corporation organized abroad and registered as doing business in the Philippines under the Corporation Code of which 100% of the capital stock outstanding and entitled to vote is wholly owned by Filipinos or a trustee of funds for pension or other employee retirement or separation benefits, where the trustee is a Philippine national and at least sixty percent (60%) of the fund will accrue to the benefits of the Philippine nationals; Provided, that where a corporation and its non-Filipino stockholders own stocks in Securities and Exchange Commission (SEC) registered enterprise, at least sixty percent (60%) of the capital stock outstanding and entitled to vote of each of both corporations must be owned and held by citizens of the Philippines and at least sixty percent (60%) of the members of the Board of Directors of each of both corporation must be citizens of the Philippines, in order that the corporation shall be considered a Philippine national. The control test shall be applied for this purpose. (underscoring supplied) While the control test was enshrined in the FIA and its implementing rules, the SEC continues to apply the grandfather rule when the Filipino equity ownership is in doubt (as provided in the 1989 DOJ Ruling). For example, in SEC-OGC Opinion No. 22-07 dated December 7, 2007, the SEC stated: . . . when there is doubt as to the actual extent of Filipino equity in the investee corporation, the Commission is not precluded from using the Grandfather Rule.
My former professor at the UP College of Law, Prof. Raul Palabrica, makes a great summary of the SEC position in his Philippine Daily Inquirer column: . . . this should not be taken to mean that the grandfather rule is already history. In an inverse way, the SEC pointed out that the grandfather rule will not apply in cases where the 60-40 Filipino equity ownership is not in doubt. The rule therefore is: While the control test shall be used as standard to determine the nationality of corporations, the grandfather rule will be applied if there are questions about compliance with Filipino ownership requirements. (see Raul Palabrica, Nationality Ownership Rule, Philippine Daily Inquirer, October 19, 2007) Based on the FIA and its implementing rules and regulations (which embody the control test), my personal view is that the control test should be the test used in determining the nationality of a corporation. While the 1989 DOJ opinion made reference to the application of the grandfather rule when the 60-40 equity ownership interest is in doubt, the 1989 DOJ opinion was issued prior to the enactment of the FIA. Also, I believe that if there is doubt as to the 60-40 Filipino-alien equity ownership interest in the investing corporation that has a 60% equity in a corporation engaged in a partly nationalized activity, what should be applied is the Anti-Dummy Law (in conjunction with the control test), not the grandfather rule. Thus, if 60% of the shares of the investing corporation is held by Filipinos as dummies for foreigners, that 60% equity in the investing corporation will not be deemed held by Philippine nationals. Applying the control test, the investee corporation will not also be a Philippine national. A return to the grandfather rule?

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It is noteworthy that a recent SEC case raises the issue of whether the SEC is now going back to the grandfather rule as the primary test for determining the nationality of a corporation. In Redmont Consolidated Mines Corporation vs. McArthur Mining Corporation, SEC En Banc Case No. 09-09-177 dated March 25, 2010, the SEC applied the grandfather rule because the foreign investor provided practically all the funds of the Philippine mining companies; as such, the SEC concluded that the 60-40 Filipino alien equity ownership was in doubt and therefore the grandfather rule should be applied. However, the SEC did not stop there the SEC made statements that seem to indicate a return to the grandfather rule. The SEC said: The avowed purpose of the Constitution is to place in the hands of Filipinos the exploitation of our natural resources. Necessarily, therefore, the Rule interpreting the constitutional provision should not diminish that right through the legal fiction of corporate ownership and control. But the constitutional provision, as interpreted and practiced via the 1967 SEC Rules, has favored foreigners contrary to the command of the Constitution. Hence, the Grandfather Rule must be applied to accurately determine the actual participation, both direct and indirect, of foreigners in a corporation engaged in a nationalized activity or business. Compliance with the constitutional limitation(s) on engaging in nationalized activities must be determined by ascertaining if 60% of the investing corporations outstanding capital stock is owned by Filipino citizens, or as interpreted, by natural or individual Filipino citizens. If such investing corporation is in turn owned to some extent by another investing corporation, the same process must be observed. One must not stop until the citizenships of the individual or natural stockholders of layer after layer of investing corporations have been established, the very essence of the Grandfather Rule.
Lastly, it was the intent of the framers of the 1987 Constitution to adopt the Grandfather Rule. While the constitutional deliberations certainly made reference to the grandfather rule, there is nothing in the Constitution that ultimately embodied the grandfather rule. In the absence of any provision in the Constitution embodying the grandfather rule, I believe that Congress can adopt a law (in this case the FIA) embodying the control test. Hopefully, the statements made by the SEC in Redmont do not signal a return to the grandfather rule. A change in the rules of the game will have a tremendous adverse impact on investor confidence in the Philippines. One final note. Redmont involved mining companies that require 60% Filipino ownership because these mining companies apparently applied for a Mineral Production Sharing Agreement (which can be granted to Philippine nationals only). In Redmont, the SEC appears to have reached the conclusion that the 60-40 Filipino-alien equity ownership was in doubt because the foreign investor provided practically all the funds of the Philippine mining companies. My own view is that the fact that the foreign investor may have contributed a big chunk of the corporate funds should not, by itself, put the 60-40 Filipino-alien equity ownership in doubt. The important consideration is whether the Filipino stockholders legally and beneficially own and control 60% of the shares in the relevant company (and do not otherwise act as dummies for the foreigners). If the foreigner wishes to provide greater financial support for the mining project, that should be fine for as long as Filipinos remain the legal and beneficial owner of 60% of the shares in the mining company (or in a layered structure, the investing company). We should not deprive Filipinos of the ability to enter into contracts with foreigners whereby foreigners provide greater funding to projects that remain under Filipino control.

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Here are selected July 2010 rulings of the Supreme Court of the Philippines on labor law and procedure: Labor Law Assumption of jurisdiction by Secretary of Labor; authority to decide on legality of dismissals arising from strike. The assumption of jurisdiction powers granted to the Labor Secretary under Article 263(g) is not limited to the grounds cited in the notice of strike or lockout that may have preceded the strike or lockout; nor is it limited to the incidents of the strike or lockout that in the meanwhile may have taken place. 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 gave rise to or which arose out of the strike or lockout, including cases over which the labor arbiter has exclusive jurisdiction. In the present case, what the Labor Secretary refused to rule upon was the dismissal from employment of employees who violated the return to work order and participated in illegal acts during a strike. This was an issue that arose from the strike and was, in fact, submitted to the Labor Secretary, through the unions motion for the issuance of an order for immediate reinstatement of the dismissed officers and the companys opposition to the motion. The dismissal issue was properly brought before the Labor Secretary and he was mistaken in ruling that the matter is legally within the exclusive jurisdiction of the labor arbiter to decide. Bagong Pagkakaisa ng Manggagawa ng Triumph International, et al. vs. Secretary of Department of Labor and Employment, et al./Triumph International (phils.), Inc. vs. Bagong Pagkakaisa ng Manggagawa ng Triumph International, et al., G.R. No. 167401, July 5, 2010. Bargaining deadlock; award; findings of Secretary of Labor. Unless there is a clear showing of grave abuse of discretion, the Court cannot, and will not, interfere with the expertise of the Secretary of Labor. The award granted by
the Labor Secretary in resolving the bargaining deadlock, drawn as they were from a close examination of the submissions of the parties, do not indicate any legal error, much less any grave abuse of discretion, and should not be disturbed. Bagong Pagkakaisa ng Manggagawa ng Triumph International, et al. vs. Secretary of Department of Labor and Employment, et al./Triumph International (phils.), Inc. vs. Bagong Pagkakaisa ng Manggagawa ng Triumph International, et al., G.R. No. 167401, July 5, 2010. Dismissal of employees; just cause. Theft committed by an employee is a valid reason for his dismissal by the employer. Although as a rule this Court leans over backwards to help workers and employees continue with their employment or to mitigate the penalties imposed on them, acts of dishonesty in the handling of company property, petitioners income in this case, are a different matter. Maribago Bluewater Beach Resort, Inc. vs. Nito Dual, G.R. No. 180660, July 20, 2010. Dismissal of employees; requirements. The validity of an employees dismissal from service hinges on the satisfaction of the two substantive requirements for a lawful termination. These are, first, whether the employee was accorded due process the basic components of which are the opportunity to be heard and to defend himself. This is the procedural aspect. And second, whether the dismissal is for any of the causes provided in the Labor Code of the Philippines. This constitutes the substantive aspect. Erector Advertising Sign Group, Inc. and Arch Jimy C. Amoroto vs. Expedito Cloma, G.R. No. 167218, July 2, 2010. Dismissal of employees; procedural due process. Furnishing the employee with a suspension order prior to his notice of termination does not satisfy the requirement of a first notice. It implies that the employer has already decided, for the reasons stated therein, to suspend the employee from work in the company, and the wording of the order in the present case gives no indication that the employee is being given an opportunity to submit his
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defense or explanation. Erector Advertising Sign Group, Inc. and Arch Jimy C. Amoroto vs. Expedito Cloma, G.R. No. 167218, July 2, 2010. Dismissal of employees; procedural due process. In order to validly dismiss an employee, he must be accorded both substantive and procedural due process by the employer. Procedural due process requires that the employee be given a notice of the charge against him, an ample opportunity to be heard, and a notice of termination. Even if the aforesaid procedure is conducted after the filing of the illegal dismissal case, the legality of the dismissal, as to its procedural aspect, will be upheld provided that the employer is able to show that compliance with these requirements was not a mere afterthought. New Puerto Commercial and Richard Lim vs. Rodel Lopez and Felix Gavan, G.R. No. 169999, July 26, 2010. Employee benefits; 13th month pay; definition of basic salary. The term basic salary of an employee for the purpose of computing the thirteenthmonth pay was interpreted to include all remuneration or earnings paid by the employer for services rendered, but does not include allowances and monetary benefits which are not integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night differential and holiday pay, and cost-ofliving allowances. However, these salary-related benefits should be included as part of the basic salary in the computation of the thirteenthmonth pay if, by individual or collective agreement, company practice or policy, the same are treated as part of the basic salary of the employees. Central Azucarera De Tarlac vs. Central Azucarera De Tarlac Labor Union-NLU, G.R. No. 188949, July 26, 2010 Employee benefits; 13th month pay; company policy or practice. The practice of petitioner in giving 13th-month pay based on the employees gross annual earnings which included the basic monthly salary, premium pay for work on rest days and special holidays, night shift differential pay and holiday pay continued for almost thirty (30) years and has ripened into
a company policy or practice which cannot be unilaterally withdrawn. The petitioner cannot claim that the practice arose from an erroneous application of the law since no doubtful or difficult question of law is involved in this case. The guidelines set by the law are not difficult to decipher. Central Azucarera De Tarlac vs. Central Azucarera De Tarlac Labor Union-NLU, G.R. No. 188949, July 26, 2010 Employee benefits; death benefits. For the death of a seafarer to be compensable under the 1996 POEA Standard Employment Contract, the death must occur during the term of his contract of employment. In this case, the seaman died 2 years after he was repatriated to the Philippines due to medical reasons, hence the claimants are not entitled to receive death benefits under the contract. The decedents heirs claimed that the death should be compensable since the nature of his work as a seaman triggered the illnesses that eventually led to his death. However, the Court noted that though the immediate cause of the seamans death was pneumonia, the underlying cause of death was advanced HIV (AIDS). Since the claimants failed to prove that the decedent acquired HIV during his 2-month employment aboard the respondents vessel, their claim for death benefits was denied. Lydia Escarcha vs. Leonis Navigation Co., Inc., et al., G.R. No. 182740, July 5, 2010. Employees; government agency. The Armed Forces of the Philippines Commissary and Exchange Services (AFPCES) is a government agency performing proprietary functions. By clear implication of law, all AFPCES personnel should therefore be classified as government employees and any complaint for illegal dismissal involving such employees should be filed with the CSC and not the NLRC. Such fact cannot be negated by the failure of AFPCES to follow appropriate civil service rules in the hiring, appointment, discipline and dismissal of employees. Neither can it be denied by the fact that AFPCES chose to enroll its employees in the SSS instead of the GSIS. Such considerations cannot be used against the CSC to deprive it of its jurisdiction. Hence, the Labor Arbiters decision in the
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illegal dismissal case filed by AFPCES employees is a total nullity for having been rendered without jurisdiction. Magdalena Hidalgo, et al. vs. Republic of the Philippines, G.R. No. 179793, July 5, 2010. Employer-employee relationship; evidence. Any doubt arising from the evaluation of evidence as between the employer and the employee must be resolved in favor of the latter. It is settled jurisprudence that the burden of proving payment of monetary claims rests on the employer. It was entirely within the companys power to present personnel files, payrolls, remittances, and other similar documents which would have proven payment of respondents money claims as these documents should necessarily be in its possession; hence, failure to present such evidence must be taken against it. Dansart Security Force & Allied Services Company and Danilo A. Sarte vs. Ms. Jean O. Bagoy, G.R. No. 168495, July 2, 2010. Government agencies; reorganization. A reorganization is valid provided it is done in good faith. As a general rule, the test of good faith lies in whether the purpose of the reorganization is for economy or to make the bureaucracy more efficient. Removal from office as a result of reorganization must, thus, pass the test of good faith. A demotion in office is tantamount to removal if no cause is shown for it. Consequently, before a demotion may be effected pursuant to a reorganization, the observance of the rules on bona fide abolition of public office is essential. Virginia D. Bautista vs. Civil Service Commission and Devt. Bank of the Philippines, G.R. No. 185215, July 22, 2010. Government agencies; reorganization; personal liability of local official. The RTC of Cadiz declared void a resolution that reorganized the city government and effectively purged the city government of Cadiz of all employees who opposed the mayor politically or disagreed with him in his policies. The RTC ordered the payment of moral damages to the workers, but it was not clear if the payment was to be made by the city government
or by Mayor Valera, in his personal capacity. The Court held that Varela is personally liable to pay moral damages. Settled is the principle that a public official may be liable in his personal capacity for whatever damage he may have caused by his act done with malice and in bad faith or beyond the scope of his authority or jurisdiction. In the complaint, the employees stated that, due to the illegal acts of the Defendant, Plaintiffs suffered mental torture and anguish, sleepless nights, wounded feelings, besmirched reputation and social humiliation. The State can never be the author of illegal acts. The complaint merely identified Varela as the mayor of Cadiz City. It did not categorically state that Varela was being sued in his official capacity. The identification and mention of Varela as the mayor of Cadiz City did not automatically transform the action into one against Varela in his official capacity. The allegations in the complaint determine the nature of the cause of action. Eduardo Valera vs. Ma. Daisy Revalez, G.R. No. 171705, July 29, 2010. Illegal dismissal; burden of proof; filing of complaint not sufficient to disprove abandonment. In illegal dismissal cases, the employer bears the burden of proving that the termination was for a valid or authorized cause. However, before the employer is asked to prove that the dismissal was legal, the employee must first establish by substantial evidence the fact of his dismissal from service. Logically, if there is no dismissal, then there can be no question as to its legality or illegality. Under normal circumstances, an employees act of filing an illegal dismissal complaint against his employer is inconsistent with abandonment. However, the courts should not use that one act to conclude that an employee was constructively dismissed when substantial evidence proves otherwise. In this case, substantial evidence proves that Pulgar was not constructively dismissed, and that he had abandoned his duties in order to avoid an investigation being conducted by his employer. Philippine Rural Reconstruction vs. Virgilio Pulgar, G.R. No. 169227. July 5, 2010.
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Illegal dismissal; misrepresentation of cause is an act of bad faith. The complainant, Rio Remo, was dismissed from service on the ground of retrenchment. However, the records show that Sentinel hired a replacement soon after Remos dismissal, proving that Sentinels financial distress was not as serious as it claimed, and that retrenchment was not the real reason for Remos dismissal. Sentinel concealed its true intention and committed misrepresentation when it claimed that Remos dismissal was due to serious financial losses. This act of misrepresentation is an act of active bad faith that fatally tainted Remos dismissal and rendered it illegal. Sentinel Integrated Services, Inc. vs. Rio Jose Remo, G.R. No. 188223, July 5, 2010. Illegal dismissal; relief available to employee. An illegally dismissed employee is entitled to reinstatement without loss of seniority rights and other privileges and to full backwages, inclusive of allowances, and to her other benefits or their monetary equivalent, computed from the time the compensation was withheld up to the time of actual reinstatement. Where reinstatement is no longer feasible, separation pay equivalent to at least one month salary or one month salary for every year of service, whichever is higher, a fraction of at least six months being considered as one whole year, should be awarded to respondent. An award for moral and exemplary damages cannot be justified unless the employer had acted in bad faith. The award of moral and exemplary damages cannot be justified solely upon the premise that the employer dismissed his employee without authorized cause and due process. Lambert Pawnbrokers and Jewelry corporation and Lambert Lim vs. Helen Binamira, G.R. No. 170464. July 12, 2010. Labor-only contracting. Despite the fact that the service contracts contain stipulations which are earmarks of independent contractorship, they do not make it legally so. The language of a contract is neither determinative nor conclusive of the relationship between the parties. The parties cannot dictate, by a declaration in a contract, the character of the contractors business as a labor-only contractor or a legitimate job contractor, which should be determined by the criteria set by statute. Here, a closer look at
AMPCOs actual status and participation regarding the employment of the complainants clearly belie the contents of the written service contract. San Miguel Corporation vs. Vicente Semillan, et al., G.R. No. 164257, July 5, 2010. Labor-only contracting; evidence. A Certificate of Registration as an Independent Contractor is not conclusive evidence of such status. In distinguishing between permissible job contracting and prohibited laboronly contracting, the totality of the facts and the surrounding circumstances of the case are to be considered. San Miguel Corporation vs. Vicente Semillan, et al., G.R. No. 164257, July 5, 2010. Liability of officers for illegal dismissal. Corporate officers are only solidarily liable with the corporation for the illegal termination of services of employees if they acted with malice or bad faith. In Philippine American Life and General Insurance v. Gramaje, bad faith is defined as a state of mind affirmatively operating with furtive design or with some motive of self-interest or ill will or for ulterior purpose. It implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity. The lack of authorized or just cause to terminate ones employment and the failure to observe due process do not ipso facto mean that the corporate officer acted with malice or bad faith. There must be independent proof of malice or bad faith which is lacking in the present case. Lambert Pawnbrokers and Jewelry corporation and Lambert Lim vs. Helen Binamira, G.R. No. 170464. July 12, 2010. Preventive suspension. Preventive suspension is justified where the employees continued employment poses a serious and imminent threat to the life or property of the employer or of the employees co-workers. Without this kind of threat, preventive suspension is not proper. Jose P. Artificio vs. National Labor Relations Commission, RP Guardians Security Agency, Inc. Juan Victor K. Laurilla, Alberto Aguirre, and Antonio A. Andres, G.R. No. 172988, July 26, 2010
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Public employees; demotion. There is demotion when an employee is appointed to a position that results in a diminution in duties, responsibilities, status or rank which may or may not involve a reduction in salary. Where an employee is appointed to a position with the same duties and responsibilities with a rank and salary higher than those he enjoyed in his previous position, there is no demotion and the appointment is valid. Virginia D. Bautista vs. Civil Service Commission and Devt. Bank of the Philippines, G.R. No. 185215, July 22, 2010. Public employees; downgrading of employees. The summary reallocation of Gos position to a lower degree resulting in the corresponding downgrading of his salary infringed the policy of non-diminution of pay which the Court recognized and applied in Philippine Ports Authority v. Commission on Audit, as well as in the subsequent sister cases involving benefits of government employees. Running through the gamut of these cases is the holding that the affected government employees shall continue to receive benefits they were enjoying as incumbents upon the effectivity of RA 6758. Relevant to the critical issue at hand is Sec. 15 (b) of PD 985 which, as amended by Sec. 13 (a) of RA 6758, pertinently reads: Sec. 13. Pay Reduction If an employee is moved from a higher to a lower class, he shall not suffer a reduction in salary: Provided, That such movement is not the result of a disciplinary action or voluntary demotion. Gonzalo S. Go, Jr. vs. CA and Office of the President, G.R. No. 172027. July 29, 2010 Redundancy; definition; requisites. Redundancy exists when the service capability of the workforce is in excess of what is reasonably needed to meet the demands of the enterprise. A redundant position is one rendered superfluous by any number of factors, such as over hiring of workers, decreased volume of business, dropping of a particular product line previously manufactured by the company, or phasing out of a service activity previously undertaken by the business. Under these conditions, the employer has no legal obligation to keep in its payroll more employees than are necessary for the operation of its business.
For a valid implementation of a redundancy program, the employer must comply with the following requisites: (1) written notice served on both the employees and the DOLE at least one month prior to the intended date of termination of employment; (2) payment of separation pay equivalent to at least one month pay for every year of service; (3) good faith in abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished. Lambert Pawnbrokers and Jewelry corporation and Lambert Lim vs. Helen Binamira, G.R. No. 170464. July 12, 2010. Retirement; retirement age. The retirement age is primarily determined by the existing agreement or employment contract. Absent such an agreement, the retirement age under Article 287 of the Labor Code will apply. Amelia R. Obusan vs. Philippine National Bank, G.R. No. 181178, July 26, 2010. Retirement; retirement plan. Retirement plans allowing employers to retire employees who have not yet reached the compulsory retirement age of 65 years are not per se repugnant to the constitutional guaranty of security of tenure. By its express language, the Labor Code permits employers and employees to fix the applicable retirement age at 60 years or below, provided that the employees retirement benefits under any CBA and other agreements shall not be less than those provided by law. Amelia R. Obusan vs. Philippine National Bank, G.R. No. 181178, July 26, 2010. Retrenchment; definition; requisites. Retrenchment is the termination of employment initiated by the employer through no fault of and without prejudice to the employees. It is resorted to during periods of business recession, industrial depression, seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant to a new production program, or automation. It is a management prerogative resorted to avoid or minimize business losses.

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To effect a valid retrenchment, the following elements must be present: (1) the retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious and real, or only if expected, are reasonably imminent as perceived objectively and in good faith by the employer; (2) the employer serves written notice both to the employee/s concerned and the DOLE at least one month before the intended date of retrenchment; (3) the employer pays the retrenched employee separation pay in an amount prescribed by law; (4) the employer exercises its prerogative to retrench in good faith; and (5) the employer uses fair and reasonable criteria in ascertaining who would be retrenched or retained. Lambert Pawnbrokers and Jewelry corporation and Lambert Lim vs. Helen Binamira, G.R. No. 170464. July 12, 2010 Retrenchment; decrease in income is not business loss. A sharp drop in income from P1million to only P665,000.00 is not the kind of business losses contemplated by the Labor Code that would justify a valid retrenchment. A mere decline in gross income cannot in any manner be considered as serious business losses. It should be substantial, sustained and real. Lambert Pawnbrokers and Jewelry corporation and Lambert Lim vs. Helen Binamira, G.R. No. 170464. July 12, 2010. Separation pay; as equitable relief. Having determined that the imposition of preventive suspension was proper and that the complainant was not illegally dismissed, the Court found no basis to grant backwages. However, given the attendant circumstances of the case that complainant had been working with the company for a period of sixteen (16) years without any previous derogatory record the Court held that the ends of social and compassionate justice would be served if the employee is given some equitable relief in the form of separation pay. Jose P. Artificio vs. National Labor Relations Commission, RP Guardians Security Agency, Inc. Juan victor K. Laurilla, Alberto Aguirre, and Antonio A. Andres, G.R. No. 172988, July 26, 2010
LABOR PROCEDURE Jurisdiction; intra-union disputes. Section 226 of the Labor Code clearly provides that the BLR and the Regional Directors of DOLE have concurrent jurisdiction over inter-union and intra-union disputes. Such disputes include the conduct or nullification of election of union and workers association officers. There is, thus, no doubt as to the BLRs jurisdiction over the instant dispute involving member-unions of a federation arising from disagreement over the provisions of the federations constitution and by-laws. Atty. Allan S. Montao vs. Atty Ernesto C. Verceles, G.R. No. 168583, July 26, 2010. Labor tribunal; factual finding. As a rule, a petition for certiorari under Rule 65 is valid only when the question involved is an error of jurisdiction, or when there is grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the court or tribunals exercising quasi-judicial functions. Hence, courts exercising certiorari jurisdiction should refrain from reviewing factual assessments of the respondent court or agency. Occasionally, however, they are constrained to wade into factual matters when the evidence on record does not support those factual findings; or when too much is concluded, inferred or deduced from the bare or incomplete facts appearing on record. The CA rightfully reviewed the correctness of the labor tribunals factual findings not only because of the foregoing inadequacies, but also because the NLRC and the Labor Arbiter came up with conflicting findings. Lambert Pawnbrokers and Jewelry corporation and Lambert Lim vs. Helen Binamira, G.R. No. 170464. July 12, 2010. Money claims; effect of failure to include in prayer for relief. The rule is well-settled that points of law, theories, issues and arguments not adequately brought to the attention of the trial court need not be, and
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ordinarily will not be considered by a reviewing court as they cannot be raised for the first time on appeal because this would be offensive to the basic rules of fair play, justice and due process. Though there is nothing on record which would show that the amount of P207,693 has been returned to PRRM, a perusal of the pleadings show that PRRM failed to include the return of such amount in its prayer for relief. Hence, the Labor Arbiter cannot act on the same. A prayer for a monetary award should have been raised at the earliest opportunity before the Labor Arbiter. Philippine Rural Reconstruction vs. Virgilio Pulgar, G.R. No. 169227. July 5, 2010. NLRC Rules of Procedure; certificate of non-forum shopping. The filing of a certificate of non-forum shopping is mandatory in initiatory pleadings; non-compliance with the required certification is fatal. The filing of the same is not waived by the other partys failure to immediately assert the defect, and neither is it cured by its belated submission on the ground that the party was not in any way guilty of actual forum shopping. In cases where the Court tolerated the deficiency, special circumstances or compelling reasons made the strict application unjustified. In this case, however, the petitioners offered no valid justification for their failure to comply with the Circular. Mandaue Galleon Trade, Inc., et al. vs. Bienvenido Isidto, et al., G.R. No. 181051, July 5, 2010. Rule 45; when review of facts allowed. As a rule, a petition for review under Rule 45 of the Rules of Court must raise only questions of law. However, the rule has exceptions such as when the findings of the Labor Arbiter, NLRC and Court of Appeals vary, as in this case. Maribago Bluewater Beach Resort, Inc. vs. Nito Dual, G.R. No. 180660, July 20, 2010. Here are selected August 2010 rulings of the Supreme Court of the Philippines on commercial law:
Corporation; liability of directors and officers. Elementary is the rule that a corporation is invested by law with a personality separate and distinct from those of the persons composing it and from that of any other legal entity to which it may be related. Mere ownership by a single stockholder or 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. In labor cases, corporate directors and officers may be held solidarily liable with the corporation for the termination of employment only if done with malice or in bad faith. Bad faith does not connote bad judgment or negligence; it imports a dishonest purpose or some moral obliquity and conscious doing of wrong; it means breach of a known duty through some motive or interest or ill will; it partakes of the nature of fraud. Wensha Spa Center, inc. and/or Xu Zhi Jie vs. Loreta T. Yung, G.R. No. 185122, August 16, 2010. Crossed check; effect. A check is a bill of exchange drawn on a bank payable on demand. There are different kinds of checks. In this case, crossed checks are the subject of the controversy. A crossed check is one where two parallel lines are drawn across its face or across the corner thereof. It may be crossed generally or specially. A check is crossed specially when the name of a particular banker or a company is written between the parallel lines drawn. It is crossed generally when only the words and company are written or nothing is written at all between the parallel lines, as in this case. It may be issued so that presentment can be made only by a bank. In order to preserve the credit worthiness of checks, jurisprudence has pronounced that crossing of a check has the following effects: (a) the check may not be encashed but only deposited in the bank; (b) the check may be negotiated only once to one who has an account with a bank; and (c) the
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act of crossing the check serves as warning to the holder that the check has been issued for a definite purpose so that he must inquire if he has received the check pursuant to that purpose, otherwise, he is not a holder in due course. The Court has taken judicial cognizance of the practice that a check with two parallel lines in the upper left hand corner means that it could only be deposited and not converted into cash. The effect of crossing a check, thus, relates to the mode of payment, meaning that the drawer had intended the check for deposit only by the rightful person, i.e., the payee named therein. The crossing of a check is a warning that the check should be deposited only in the account of the payee. Thus, it is the duty of the collecting bank to ascertain that the check be deposited to the payees account only. Vicente Go vs. Metropolitan Bank and Trust Co., G.R. No. 168842, August 11, 2010. Crossed check; liability of bank for lack of indorsement. Respondent bank was negligent in permitting the deposit and encashment of the crossed checks without the proper indorsement. An indorsement is necessary for the proper negotiation of checks specially if the payee named therein or holder thereof is not the one depositing or encashing it. Knowing fully well that the subject checks were crossed, that the payee was not the holder and that the checks contained no indorsement, respondent bank should have taken reasonable steps in order to determine the validity of the representations made by Chua. Respondent bank was amiss in its duty as an agent of the payee. Prudence dictates that respondent bank should not have merely relied on the assurances given by Chua. Negligence was committed by respondent bank in accepting for deposit the crossed checks without indorsement and in not verifying the authenticity of the negotiation of the checks. The law imposes a duty of extraordinary diligence on the collecting bank to scrutinize checks deposited with it, for the purpose of determining their genuineness and regularity. As a business
affected with public interest and because of the nature of its functions, the banks are under obligation to treat the accounts of its depositors with meticulous care, always having in mind the fiduciary nature of the relationship. The fact that this arrangement had been practiced for three years without Mr. Go/Hope Pharmacy raising any objection does not detract from the duty of the bank to exercise extraordinary diligence. Thus, the Decision of the RTC, as affirmed by the CA, holding respondent bank liable for moral damages is sufficient to remind it of its responsibility to exercise extraordinary diligence in the course of its business which is imbued with public interest. Vicente Go vs. Metropolitan Bank and Trust Co., G.R. No. 168842, August 11, 2010. Directors; per diem. Under section 30 of the Corporation Code, the directors of a corporation shall not receive any compensation for being members of the board of directors, except for reasonable per diems. The two instances where the directors are to be entitled to compensation shall be when it is fixed by the corporations by-laws or when the stockholders, representing at least a majority of the outstanding capital stock, vote to grant the same at a regular or special stockholders meeting, subject to the qualification that, in any of the two situations, the total yearly compensation of directors, as such directors, shall in no case exceed ten (10%) percent of the net income before income tax of the corporation during the preceding year. Gabriel C. Singson, et al. vs. Commission on Audit, G.R. No. 159355, August 9, 2010. Financial institutions; negligence. The petitioner, being a banking institution, had the direct obligation to supervise very closely the employees handling its depositors accounts, and should always be mindful of the fiduciary nature of its relationship with the depositors. Such relationship required it and its employees to record accurately everysingle transaction, and as promptly as possible, considering that the depositors accounts should always reflect the amounts of money the depositors could dispose of as they saw fit, confident that, as a bank, it would deliver the
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amounts to whomever they directed. If it fell short of that obligation, it should bear the responsibility for the consequences to the depositors, who, like the respondent, suffered particular embarrassment and disturbed peace of mind from the negligence in the handling of the accounts. Citytrust Banking Corporation vs. Carlos Romulo N. Cruz, G.R. No. 157049, August 11, 2010. Merger; effect on employment and seniority rights. Although not binding on this Court, American jurisprudence on the consequences of voluntary mergers on the right to employment and seniority rights is persuasive and illuminating. We quote the following pertinent discussion from the American Law Reports: Several cases have involved the situation where as a result of mergers, consolidations, or shutdowns, one group of employees, who had accumulated seniority at one plant or for one employer, finds that their jobs have been discontinued except to the extent that they are offered employment at the place or by the employer where the work is to be carried on in the future. Such cases have involved the question whether such transferring employees should be entitled to carry with them their accumulated seniority or whether they are to be compelled to start over at the bottom of the seniority list in the new job. It has been recognized in some cases that the accumulated seniority does not survive and cannot be transferred to the new job. In Carver v Brien (1942) 315 Ill App 643, 43 NE2d 597, the shop work of three formerly separate railroad corporations, which had previously operated separate facilities, was consolidated in the shops of one of the roads. Displaced employees of the other two roads were given preference for the new jobs created in the shops of the railroad which took over the work. A controversy arose between the employees as to whether the displaced employees were entitled to carry with them to the new jobs the seniority rights they had accumulated with their prior employers, that is,
whether the rosters of the three corporations, for seniority purposes, should be dovetailed or whether the transferring employees should go to the bottom of the roster of their new employer. Labor representatives of the various systems involved attempted to work out an agreement which, in effect, preserved the seniority status obtained in the prior employment on other roads, and the action was for specific performance of this agreement against a demurring group of the original employees of the railroad which was operating the consolidated shops. The relief sought was denied, the court saying that, absent some specific contract provision otherwise, seniority rights were ordinarily limited to the employment in which they were earned, and concluding that the contract for which specific performance was sought was not such a completed and binding agreement as would support such equitable relief, since the railroad, whose concurrence in the arrangements made was essential to their effectuation, was not a party to the agreement. Where the provisions of a labor contract provided that in the event that a trucker absorbed the business of another private contractor or common carrier, or was a party to a mergerof lines, the seniority of the employees absorbed or affected thereby should be determined by mutual agreement between the trucker and the unions involved, it was held in Moore v International Brotherhood of Teamsters, etc. (1962, Ky) 356 SW2d 241, that the trucker was not required to absorb the affected employees as well as the business, the court saying that they could find no such meaning in the above clause, stating that it dealt only with seniority, and not with initial employment. Unless and until the absorbing company agreed to take the employees of the company whose business was being absorbed, no seniority problem was created, said the court, hence the provision of the contract could have no application. Furthermore, said the court, it did not require that the absorbing company take these employees, but only that if it did take them the question of seniority between the old and new employees would be worked out by agreement or else be submitted to the grievance procedure. (Emphasis ours.)
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Indeed, from the tenor of local and foreign authorities, in voluntary mergers, absorption of the dissolved corporations employees or the recognition of the absorbed employees service with their previous employer may be demanded from the surviving corporation if required by provision of law or contract. The dissent of Justice Arturo D. Brion tries to make a distinction as to the terms and conditions of employment of the absorbed employees in the case of a corporate merger or consolidation which will, in effect, take away from corporate management the prerogative to make purely business decisions on the hiring of employees or will give it an excuse not to apply the CBA in force to the prejudice of its own employees and their recognized collective bargaining agent. In this regard, we disagree with Justice Brion. Justice Brion takes the position that because the surviving corporation continues the personality of the dissolved corporation and acquires all the latters rights and obligations, it is duty-bound to absorb the dissolved corporations employees, even in the absence of a stipulation in the plan of merger. He proposes that this interpretation would provide the necessary protection to labor as it spares workers from being left in legal limbo. However, there are instances where an employer can validly discontinue or terminate the employment of an employee without violating his right to security of tenure. Among others, in case of redundancy, for example, superfluous employees may be terminated and such termination would be authorized under Article 283 of the Labor Code. Moreover, assuming for the sake of argument that there is an obligation to hire or absorb all employees of the non-surviving corporation, there is still no basis to conclude that the terms and conditions of employment under a valid collective bargaining agreement in force in the surviving corporation should not be made to apply to the absorbed employees. Bank of the Philippine Islands vs. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, G.R. No. 164301, August 18, 2010.
Merger; mandatory absorption of employees of corporation. The lack of a provision in the plan of merger regarding the transfer of employment contracts to the surviving corporation could have very well been deliberate on the part of the parties to the merger, in order to grant the surviving corporation the freedom to choose who among the dissolved corporations employees to retain, in accordance with the surviving corporations business needs. If terminations, for instance due to redundancy or laborsaving devices or to prevent losses, are done in good faith, they would be valid. The surviving corporation too is duty-bound to protect the rights of its own employees who may be affected by the merger in terms of seniority and other conditions of their employment due to the merger. Thus, we are not convinced that in the absence of a stipulation in the merger plan the surviving corporation was compelled, or may be judicially compelled, to absorb all employees under the same terms and conditions obtaining in the dissolved corporation as the surviving corporation should also take into consideration the state of its business and its obligations to its own employees, and to their certified collective bargaining agent or labor union. Even assuming we accept Justice Brions theory that in a merger situation the surviving corporation should be compelled to absorb the dissolved corporations employees as a legal consequence of the merger and as a social justice consideration, it bears to emphasize his dissent also recognizes that the employee may choose to end his employment at any time by voluntarily resigning. For the employee to be absorbed by BPI, it requires the employees implied or express consent. It is because of this human element in employment contracts and the personal, consensual nature thereof that we cannot agree that, in a merger situation, employment contracts are automatically transferable from one entity to another in the same manner that a contract pertaining to purely proprietary rights such as a promissory note or a deed of sale of property is perfectly and automatically transferable to the surviving corporation. Bank of the Philippine Islands vs. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, G.R. No. 164301, August 18, 2010.
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Trademark; rights. A trademark is any distinctive word, name, symbol, emblem, sign, or device, or any combination thereof, adopted and used by a manufacturer or merchant on his goods to identify and distinguish them from those manufactured, sold, or dealt by others. Inarguably, it is an intellectual property deserving protection by law. In trademark controversies, each case must be scrutinized according to its peculiar circumstances, such that jurisprudential precedents should only be made to apply if they are specifically in point. As Myra correctly posits, as a registered trademark owner, it has the right under Section 147 of R.A. No. 8293 to prevent third parties from using a trademark, or similar signs or containers for goods or services, without its consent, identical or similar to its registered trademark, where such use would result in a likelihood of confusion. Dermaline, Inc. vs. Myra Phamaceuticals, Inc., G.R. No. 190065, August 16, 2010. Trademark; infringement. Among the elements of trademark infringement, the element of likelihood of confusion is the gravamen of trademark infringement. There are two types of confusion in trademark infringement: confusion of goods and confusion of business. In Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft, the Court distinguished the two types of confusion: Callman notes two types of confusion. The first is the confusion of goods in which event the ordinarily prudent purchaser would be induced to purchase one product in the belief that he was purchasing the other. In which case, defendants goods are then bought as the plaintiffs, and the poorer quality of the former reflects adversely on the plaintiffs reputation. The other is theconfusion of business: Here though the goods of the parties are different, the defendants product is such as might reasonably be assumed to originate with the plaintiff, and the public would then be deceived either into that belief or into the belief that there is some
connection between the plaintiff and defendant which, in fact, does not exist. There are two tests to determine likelihood of confusion: the dominancy test and holistic test. The dominancy test focuses on the similarity of the main, prevalent or essential features of the competing trademarks that might cause confusion. Infringement takes place when the competing trademark contains the essential features of another. Imitation or an effort to imitate is unnecessary. The question is whether the use of the marks is likely to cause confusion or deceive purchasers. The holistic test considers the entirety of the marks, including labels and packaging, in determining confusing similarity. The focus is not only on the predominant words but also on the other features appearing on the labels. In cases involving trademark infringement, no set of rules can be deduced. Each case must be decided on its own merits. Jurisprudential precedents must be studied in the light of the facts of each particular case. In the light of the facts of the present case, the Court holds that the dominancy test is applicable. Soceite Des Produits Nestle, S.A. vs. Martin T. Dy, Jr., G.R. No. 172276, August 8, 2010. Trademark; infringement. In determining likelihood of confusion, case law has developed two (2) tests, the Dominancy Test and the Holistic or Totality Test. The Dominancy Test focuses on the similarity of the prevalent features of the competing trademarks that might cause confusion or deception. It is applied when the trademark sought to be registered contains the main, essential and dominant features of the earlier registered trademark, and confusion or deception is likely to result. Duplication or imitation is not
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even required; neither is it necessary that the label of the applied mark for registration should suggest an effort to imitate. The important issue is whether the use of the marks involved would likely cause confusion or mistake in the mind of or deceive the ordinary purchaser, or one who is accustomed to buy, and therefore to some extent familiar with, the goods in question. Given greater consideration are the aural and visual impressions created by the marks in the public mind, giving little weight to factors like prices, quality, sales outlets, and market segments. The test of dominancy is now explicitly incorporated into law in Section 155.1 of R.A. No. 8293. On the other hand, the Holistic Test entails a consideration of the entirety of the marks as applied to the products, including labels and packaging, in determining confusing similarity. The scrutinizing eye of the observer must focus not only on the predominant words but also on the other features appearing in both labels so that a conclusion may be drawn as to whether one is confusingly similar to the other. Relative to the question on confusion of marks and trade names, jurisprudence has noted two (2) types of confusion, viz: (1) confusion of goods (product confusion), where the ordinarily prudent purchaser would be induced to purchase one product in the belief that he was purchasing the other; and (2) confusion of business (source or origin confusion), where, although the goods of the parties are different, the product, the mark of which registration is applied for by one party, is such as might reasonably be assumed to originate with the registrant of an earlier product, and the public would then be deceived either into that belief or into the belief that there is some connection between the two parties, though inexistent. Dermaline, Inc. vs. Myra Phamaceuticals, Inc., G.R. No. 190065, August 16, 2010.
The governments Public-Private-Partnership (PPP) program has made the headlines again in recent weeks. The administration has publicly stated that its PPP program is attracting much interest from local conglomerates and foreign investors. A PPP project menu is reportedly being prepared and will be released in October 2010. But which laws are relevant in the context of Philippine PPPs? There is no single law or set of regulations which establishes a legal framework for Philippine PPPs. The applicable law and regulations depend on the specific context of the project. The common thread that runs through all of them, however, is that subject only to a few narrow exceptions, the government may not enter into a PPP contract without public bidding. Here are some of the Philippine laws and regulations that relevant in a PPP context:
In the News: What are PPPs? (part 2)

Posted on September 3, 2010 by Philbert E. Varona
Executive Order No. 423 (2005) This executive order attempts to consolidate the approval procedures for all government contracts. Under this issuance, except for contracts which by specific provision of law must be approved by the President, the head of a government entity has full authority to enter into contracts on behalf of such entity. (A private developer should also check if the charter of such entity authorizes the contract, however.) If the exceptions to public bidding are believed to apply, prior clearance must be obtained from the National Economic and Development Authority (NEDA) and the Government Procurement Policy Board unless the exempt contract involves an amount below P500 million, in which case, a certification under oath by the head of the procuring entity is sufficient. EO 423 also provides that certain contracts which require Presidential approval must first be approved by the NEDA.
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The BOT Law (Republic Act No. 6957, as amended by Republic Act No. 7718) This statute and its implementing regulations apply to all private sector infrastructure or development projects, i.e., projects that are normally financed and operated by the government but which will be wholly or partly financed, constructed and operated by the private sector under any of the contractual arrangements recognized by the BOT Law and its regulations. The recognized contractual arrangements include (but are not limited to) build-operate-and-transfer, build-lease-and-transfer and rehabilitation-operate-and-transfer arrangements. Generally, the private developer assumes the burden of developing and operating the project (with some support from the government). At the end of an agreed cooperation period, the project assets are transferred to the government. If the BOT project is being entered into with a local government unit as the counterparty, the requirements of the Local Government Code (Republic Act No. 7160, as amended), particularly section 302 thereof, must also be observed. There is also a separate set of regulations applicable to information and communication technology projects sought to be implemented under the BOT Law. The Government Procurement Reform Act (Republic Act No. 9184) or GPRA This statute does not focus on promoting PPPs or infrastructure projects, but aims to ensure transparency and prevent corruption in all areas of government procurement. Nevertheless, the GPRA contains provisions that apply to the procurement of infrastructure projects in general. Hence, if for various reasons, the government and the private developer decide to implement or finance their PPP through a structure that does not fall among the specific contractual arrangements envisioned by the BOT Law, the requirements and procedures set out in the GPRA (and not the BOT Law) will have to be complied with.
NEDA Guidelines and Procedures for Entering into Joint Venture Agreements between Government and Private Entities (2008) These guidelines were issued to encourage the pooling of resources between the government (except local government units) and the private sector, whereby the parties share risks to jointly undertake an investment activity. The guidelines envision structures under which ownership of the investment activity will eventually be transferred to the private sector under competitive market conditions. The guidelines authorize both corporate joint ventures (where the parties form and jointly own a separate joint venture company) and contractual joint ventures (where the parties perform their respective roles under contract, without forming a joint venture company). There are also specific statutes applicable to projects involving a partnership with the government for the exploitation, development or utilization of natural resources. These include the Mining Act (Republic Act No. 7942 [1995]) for minerals in general, the Oil Exploration and Development Act (Presidential Decree No. 87 [1972], as amended) for petroleum, crude oil, and natural gas, Presidential Decree No. 1442 (1978), as amended, for geothermal resources, and Executive Order No. 462 (1997), as amended by Executive Order No. 232 (2000), for ocean, solar and wind power. The Renewable Energy Act (Republic Act No. 9513 [2009]) also provides incentives for renewable energy projects. Private parties must also consider the implications of Executive Order No. 398 (2005), Revenue Regulations No. 3-2005 and Revenue Memorandum Circular No. 16-05, which impose the rather stringent requirement that before a party may enter into any contract with the government, it must first submit copies of its latest income and business tax returns, together with a tax clearance issued by the Bureau of Internal Revenue, confirming that such
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party has no outstanding final assessment notice or delinquent tax accounts. These issuances also require that government contracts must contain a stipulation that a failure by the private party to make timely payment of its taxes shall entitle the government to withhold payment on the contract. The foregoing are only some of the laws and regulations that regularly crop up in the context of PPPs. There is a bit of an overlap among several of these laws, and sometimes it is not entirely clear where one law ends and another law begins. At the end of the day, however, the fundamental issue is how to best balance the objective of encouraging cooperation between the government and the private sector in developing infrastructure and other projects with the need to ensure good governance and oversight. Hopefully the new administration will be successful in its attempts to drum up activity in the PPP sector. The following are selected decisions promulgated by the High Court in August 2010 where at least one Justice felt compelled to express his or her dissent from the decision penned by the ponente. 1. [Union] Shop Talk (Leonardo-De Castro vs. Brion and Carpio)
At the time of the merger, the BPI Employees Union-Davao Chapter (the Union) constituted the exclusive bargaining agent of BPIs rank and file employees in Davao City. Their existing collective bargaining agreement (CBA) with BPI included a Union Shop clause which read as follows: Article II: x x x
Section 2. Union Shop New employees falling within the bargaining unit as defined in Article I of this Agreement, who may hereafter be regularly employed by the Bank shall, within thirty (30) days after they become regular employees, join the Union as a condition of their continued employment. It is understood that membership in good standing in the Union is a condition of their continued employment with the Bank. Once the FEBTC-BPI merger took effect, the Union required BPI to implement the Union Shop Clause and compel the former FEBTC employees to join the Union. BPI took the position that the former FEBTC employees were not covered by the Union Security Clause on the ground that the former FEBTC employees were not new employees who were hired and subsequently regularized, but were absorbed employees by operation of law because the former employees of FEBTC can be considered assets and liabilities of the absorbed corporation. While the Voluntary Arbitrator sided with BPI, the Court of Appeals reversed the Voluntary Arbitrators decision. The Court of Appeals held that while there is indeed a distinction between absorbed employees and new employees, such distinction applied only with respect to recognition of the past service of the absorbed employees with their former employer, FEBTC. However, for purposes of applying the Union Shop Clause, they should be deemed to be new employees as otherwise, inequities would arise.
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Apart from the wide-spread paranoia about a possible Y2K global computer cataclysm, one other significant development occurring around the start of the twenty-first century was the merger of two giant banking institutions Far East Bank and Trust Company (FEBTC) and Bank of the Philippine Islands (BPI)with BPI being the surviving entity. One of several legal issues spawned by that merger was the subject matter of Republic of the Philippines vs. Bank of the Philippine Islands penned by Justice Teresita J. Leonardo-De Castro.
Justice Leonardo-De Castro upheld the position of the Court of Appeals that the Union Shop Clause should be made applicable to the former FEBTC employees that were now BPI employees. The ponente reminded the litigants of the principles behind, and the validity of, union security clause (of which a union shop clause is one) and likewise pointed out that there is nothing in the CBA that speaks about how one becomes a regular BPI employee for purposes of the Union Shop Clause. Moreover, Justice Leonardo-De Castro added, there is nothing in the Corporation Law and the merger agreement mandating the automatic employment of the employees of the absorbed corporation as regular employees by the surviving corporation in the merger. Contrary to the assertion of BPI, the former employees of FEBTC are not assets and liabilities of FEBTC which are required to be absorbed by BPI by operation of law and it is against public policy to declare the former FEBTC employees as forming part of the assets or liabilities of FEBTC that were transferred and absorbed by BPI in the Articles of Merger. In fact, noted Justice Leonardo-De Castro, the Corporation Code does not also mandate the absorption of the employees of the non-surviving corporation by the surviving corporation in the case of a merger. Unlike chattel, employees may not be unilaterally transferred as employment is a personal consensual contract and absorption by BPI of a former FEBTC employee without the consent of the employee is in violation of an individuals freedom to contract. Reiterating that it an inequity would arise if the former FEBTC employees were not made subject of the Union Shop Clause (there being nothing in the Labor Code and other applicable laws or the CBA provision at issue that requires that a new employee has to be of probationary or non-regular status at the beginning of the employment relationship.), the ponente stresses that a union security clause in a CBA should be interpreted to give meaning and effect to its purpose, which is to afford protection to the
certified bargaining agent and ensure that the employer is dealing with a union that represents the interests of the legally mandated percentage of the members of the bargaining unit. In his dissent, among other things, Justice Antonio T. Carpio took exception to the majority decisions ruling regarding the effect of a merger with respect to the absorption by the surviving corporation of the employees of the non-surviving entity. In Justice Carpios view, based on the Corporation Code, [u]pon merger, BPI, as the surviving entity, absorbs FEBTC and continues the combined business of the two banks. BPI assumes the legal personality of FEBTC, and automatically acquires FEBTCs rights, privileges and powers, as well as its liabilities and obligations. Among the obligations and liabilities that BPI assumes is the obligation of FEBTC to continue the employment of the latters employees. He observed that under the CBA, the BPI employees required to acquire or maintain union membership as a condition for their continued employment are (1) the union members at the time of the effectivity of the CBA and (2) the new employees who were hired during the effectivity of the CBA. Non-union BPI employees at the time of the effectivity of the CBA were not, and are still not, required to join the Union. The former employees of FEBTC should not be treated in the same way as new employees for purposes of the Union Shop Clause. At the time new employees are hired by BPI, they knew that they were required to join the Union within 30 days from regularization as a condition for continued employment with BPI. This is not the case with the absorbed employees who, upon the merger, are immediately regularized and made permanent employees of BPI; they are immediately given the same permanent status as old employees of BPI. Therefore, In the same way that an existing non-union BPI employee is given the constitutional right to choose whether or not to join the Union, an
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absorbed employee should be equally given the same right. And this right must be conferred to the absorbed employee upon the effectivity of the merger between FEBTC and BPI. Justice Arturo D. Brion observed that the majority decision appears to consider only the purely labor law aspect of the case in determining the relationships among BPI, FEBTC and the absorbed employees. However, he believed that [m]ore than anything else, however, the issues before us are rooted in the corporate merger that took place; thus, the first priority in resolving the issues before us should be to consider and analyze the nature and consequences of the BPI-FEBTC mergeressentially a matter under the Corporation Code. On the basis of this analysis, the application of labor law can follow. He pointed out that under Section 76 of the Corporation Code, in a merger or consolidation, no liquidation of the assets of the dissolved corporations takes place, and the surviving or consolidated corporation assumes ipso jure the liabilities of the dissolved corporations, regardless of whether the creditors consented to the merger or consolidation. In a total merger, the merged corporation transfers everything figuratively speaking, its body and soul to the surviving corporation. This was what happened in the BPI-FEBTC merger. Included among those that the surviving corporation takes over are the obligations of the non-surviving corporation under the employment contracts it entered into with its employees. In the BPI-FEBTC situation, these employment contracts are part of the obligations that the merging parties have to account and make provisions for under the Constitution and the Corporation Code; in the absence of any clear agreement, these employment contracts subsist, subject to the right of the employees to reject them as they cannot be compelled to render service but can only be made to answer in damages if the rejection constitutes a breach.
Accordingly, Justice Brion likewise took the position that the absorbed FEBTC employees are not new employees as contemplated in the Union Shop Clause. What is clearly a requirement for the application of the Union Shop Clause is the grant of regular status, or, to those recently given regular employment and who, by necessary implication, were hired as non-regular employees and were thereafter accorded regular status. In contrast with the non-regular employees that the CBA clearly referred to, absorbed FEBTC employees did not undergo the process of waiting for the grant of regular status; their regular employment simply continued from FEBTC to BPI without any break because BPI only succeeded to the role of FEBTC as employer in a merger, where the same employment was maintained and only the employers personality changed. (Bank of the Philippine Islands vs. BPI Employees Union-Davao ChapterFederation of Unions in BPI Unibank; G.R. No. 164301. August 18, 2010. See dissenting opinion of Carpio, J here and dissenting opinion of Brion, J here.) (authors note: This author is pretty much convinced that in a merger, the employees of the non-surviving corporation do become employees of the surviving entity without interruption even as the employees retain the right to resign from that employment and the employer retains the right to terminate the employees to the extent permitted by law. Thus, on this legal point, he would side with the dissenters. This author is curious as to what ripple legal effects there might be within the labor/management community on account of the pronouncementor at least thats how it appears to this authorthat in a merger of two corporations, employees of the nonsurviving entity are not automatically absorbed into the surviving corporation.) 2. Local Government Unit Criteria (Carpio vs. Velasco)
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The decision of the Supreme Court in League of Cities of the Philippines, et al. vs. Commission on Elections, et al. issued in August 21, 2010 followed a series of prior rulings by the Supreme Court on the same subject matter. On 18 November 2008, a majority vote of the Supreme Court en banc struck down 16 Cityhood Laws for violating Section 10, Article X of the 1987 Constitution and the equal protection clause. On March 31 2009, the Supreme Court En Banc, again by a majority vote, denied the respondents first motion for reconsideration. On April 28, 2009, the Supreme Court En Banc, by a split vote, denied the respondents second motion for reconsideration and accordingly, at least according to the ponente of the majority decision, Justice Antonio T. Carpio, the November 18, 2008 decision became final and executory and was recorded, in due course, in the Book of Entries of Judgments on May 21, 2009. After the finality of the November 18, 2008 decision, however, the Court En Banc reversed the November 18, 2008 decision by upholding the constitutionality of the Cityhood Laws in a decision issued on December 21, 2009, prompting the filing of motions to reconsider and annul that December 21, 2009 decision. In this ruling, the majority ruled to set aside the December 21, 2009 decision and reinstate the November 18, 2008 decision declaring the Cityhood Laws to be unconstitutional. The majority decision ruled that the Cityhood Laws, which consisted of a series of legislative enactments that essentially exempted certain municipalities from the generally applicable income requirements set out in the Local Government Code, as amended, were unconstitutional because they violated Section 10, Article X of the Constitution which states:
No province, city, municipality, or barangay shall be created, divided, merged, abolished or its boundary substantially altered, except in accordance with the criteria established in the local government code and subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected. According to Justice Carpio, per the Constitution, the creation of local government units must follow the criteria established only in the Local Government Code and not in any other law. Since the Cityhood Laws are laws different from the Local Government Code, then the Cityhood Laws are unconstitutional for having adopted criteria that is not set out in the Local Government Code. On this point, Justice Presbitero Velasco, the sole dissenter, took the view that the word code in Section 10, Article X of the Constitution refers to a law Congress enacts in line with its plenary power to create local political subdivisions. He noted that the December 21, 2009 Decision explained that the only conceivable reason why the Constitution employs the clause in accordance with the criteria established in the local government code is to lay stress that it is Congress alone, and no other, which can define, prescribe and impose the criteria. Thus, the imposition may be effected either in a consolidated set of laws or a single-subject enactment. And provided the imperatives of the equal protection clause are not transgressed, an exemption from the imposition may be allowed, just like the Cityhood Laws each of which contained exemption from the income requirement set out in the amendatory legislation to the Local Government Code. Said Justice Velasco, It cannot be emphasized enough that if Congress has the plenary power to create political units, it surely can exercise the lesser power of requiring a menu of criteria and standards for their creation. As it is, the amendatory RA 9009 increasing the codified income requirement from Php20 million to Php100 million is really no different from the
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enactment of any of the Cityhood Law exempting the unit covered thereby from the codified standards. (League of Cities of the Phil. rep by LCP National President Jerry P. Trenas, et al. vs. COMELEC, et al.; G.R. No. 176951/G.R. No. 177499/G.R. No. 178056. August 24, 2010. See dissenting opinion here.) (authors note: First of all, the author notes that the decision involved a disposition of arguments in addition to that which is described above. However, the author believes a lucid summary of those other arguments necessitates an examination of the earlier decisions and resolutions of the Supreme Court on the same subject matter, which unfortunately this authors deadline (and his day job) will not permit him to do. On the contrasting constitutional views expressed by Justices Carpio and Velasco, although this author confesses to not having read the previous related decisions, the feel in this authors gut points towards favoring the dissent. It seems slightly strange that pieces of legislation passed by Congress are struck down as unconstitutional for a defect which could otherwise be easily addressed by Congress themselves either by the fashioning the same as amendments to the Local Government Code or passing a statute expressly amending the Local Government Code to achieve their desired purposeit would have taken the same number of affirmative votes to pass those as the Cityhood Laws themselves. In fact, this author wonders why Congress just didnt do so.) Here are selected August 2010 rulings of the Supreme Court of the Philippines on civil law: Civil Code Contract; novation; requirements; novation cannot be presumed. As a civil law concept, novation is the extinguishment of an obligation by the substitution or change of the obligation by a subsequent one which
terminates it, either by changing its objects or principal conditions, or by substituting a new debtor in place of the old one, or by subrogating a third person to the rights of the creditor. Novation may be extinctive or modificatory. It is extinctive when an old obligation is terminated by the creation of a new one that takes the place of the former; it is merely modificatory when the old obligation subsists to the extent that it remains compatible with the amendatory agreement. Novation may either be express, when the new obligation declares in unequivocal terms that the old obligation is extinguished, or implied, when the new obligation is on every point incompatible with the old one. The test of incompatibility lies on whether the two obligations can stand together, each one with its own independent existence. For novation, as a mode of extinguishing or modifying an obligation, to apply, the following requisites must concur: 1) 2) 3) 4) There must be a previous valid obligation. The parties concerned must agree to a new contract. The old contract must be extinguished. There must be a valid new contract.
Novatio non praesumitur, or novation is never presumed, is a well-settled principle. Consequently, that which arises from a purported modification in the terms and conditions of the obligation must be clear and express. On petitioners thus rests the onus of showing clearly and unequivocally that novation has indeed taken place. It has often been said that the minds that agree to contract can agree to novate. And the agreement or consent to novate may well be inferred from the acts of a creditor, since volition may as well be expressed by deeds as
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by words. In the instant case, however, the acts of EPCIB before, simultaneously to, and after its acceptance of payments from petitioners argue against the idea of its having acceded or acquiesced to petitioners request for a change of the terms of payments of the secured loan. Far from it. Thus, a novation through an alleged implied consent by EPCIB, as proffered and argued by petitioners, cannot be given imprimatur by the Court. St. James College of Paraaque; Jaime T. Torres, represented by his legal representative, James Kenley M. Torres; and Myrna M. Torres vs. Equitable PCI Bank, G.R. No. 179441, August 9, 2010. Contracts; rescission. Under Article 1191 of the Civil Code, the aggrieved party has a choice between specific performance and rescission with damages in either case. However, we have ruled that if specific performance becomes impractical or impossible, the court may order rescission with damages to the injured party. After the lapse of more than 30 years, it is now impossible to implement the loan agreement as it was written, considering the absence of evidence as to the rising costs of construction, as well as the obvious changes in market conditions on the viability of the operations of the hotel. We deem it equitable and practicable to rescind the obligation of DBP to deliver the balance of the loan proceeds to Maceda. In exchange, we order DBP to pay Maceda the value of Macedas cash equity of P6,153,398.05 by way of actual damages, plus the applicable interest rate. The present ruling comes within the purview of Macedas and DBPs prayers for other reliefs, just or equitable under the premises. Bonifacio Sanz Maceda, Jr. vs. DBO / DBP Vs. Bonifacio Sanz Maceda, Jr., G.R. No. 174979 & G.R. No. 175010, August 11, 2010. Contracts; rescission. ALC undertook in the agreement to accomplish 43.91% of the reduced project by the end of December 1998. The agreements threshold was, therefore, 39.52%. But ALC was only able to accomplish 30.80% which was only 70.14% of the schedule, well below the 90% progress required by Clause 10. And even if delay due to bad weather
could be factored in, ALC would still fall below the 90% target. On this score alone rescission was still justified. The 90% progress is a requirement imposed by the parties to the agreement. As a contractual obligation, this supersedes the threshold imposed by law. Since the parties entered into the agreement primarily due to initial delays in the project, the timetable instituted in it became an integral part of the agreement, an assurance that the project would be completed on time. ALCs failure to keep up with the rate of progress as contractually mandated is a substantial and fundamental breach which would defeat the very purpose of the agreement. Thus, the DPWH was entitled to terminate the project and expel ALC from it. ALC industries, Inc. vs. Department of Public Works and Highways, G.R. No. 173219-20, August 11, 2010. Damages; moral damages; compensatory damages; attorneys fees. Take note of this case for its input on attorneys fees. Considering that petitioners acted in good faith in building their house on the subject property of the respondent-spouses, there is no basis for the award of moral damages to respondent-spouses. Likewise, the Court deletes the award to Vergon of compensatory damages and attorneys fees for the litigation expenses Vergon had incurred as such amounts were not specifically prayed for in its Answer to petitioners third-party complaint. Under Article 2208 of the Civil Code, attorneys fees and expenses of litigation are recoverable only in the concept of actual damages, not as moral damages nor judicial costs. Hence, such must be specifically prayed foras was not done in this caseand may not be deemed incorporated within a general prayer for such other relief and remedy as this court may deem just and equitable. It must also be noted that aside from the following, the body of the trial courts decision was devoid of any statement regarding attorneys fees. In Scott Consultants & Resource Development Corporation, Inc. v. Court of Appeals, we reiterated that attorneys fees are not to be awarded every time a party wins a suit. The power of the court to award attorneys fees under Article 2208 of the Civil Code demands factual, legal, and equitable justification; its basis cannot be left to
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speculation or conjecture. Where granted, the court must explicitly state in the body of the decision, and not only in the dispositive portion thereof, the legal reason for the award of attorneys fees. Luciano Briones and Nelly Briones vs. Jose Macabagdal, Fe D. Macabagdal and Vergon Realty Investments Corporation, G.R. No. 150666, August 3, 2010. Damages; standard of diligence of a bank; moral damages; no need for bad faith; exemplary damages; attorneys fees. Unquestionably, the petitioner, being a banking institution, had the direct obligation to supervise very closely the employees handling its depositors accounts, and should always be mindful of the fiduciary nature of its relationship with the depositors. Such relationship required it and its employees to record accurately every single transaction, and as promptly as possible, considering that the depositors accounts should always reflect the amounts of money the depositors could dispose of as they saw fit, confident that, as a bank, it would deliver the amounts to whomever they directed. If it fell short of that obligation, it should bear the responsibility for the consequences to the depositors, who, like the respondent, suffered particular embarrassment and disturbed peace of mind from the negligence in the handling of the accounts. In several decisions of the Court, the banks, defendants therein, were made liable for negligence, even without sufficient proof of malice or bad faith on their part, and the Court awarded moral damages of P100,000.00 each time to the suing depositors in proper consideration of their reputation and their social standing. The respondent should be similarly awarded for the damage to his reputation as an architect and businessman. As for the award of exemplary damages and attorneys fees, it is never overemphasized that the public always relies on a banks profession of diligence and meticulousness in rendering irreproachable service. Its failure to exercise diligence and meticulousness warranted its liability for exemplary damages and for reasonable attorneys fees. Citytrust Banking
Corporation vs. Carlos Romulo N. Cruz, G.R. No. 157049, August 11, 2010. Equitable mortgage; right of redemption. The existence of any one of the conditions enumerated under Article 1602 of the Civil Code, not a concurrence of all or of a majority thereof, suffices to give rise to the presumption that the contract is an equitable mortgage. The provisions of the Civil Code governing equitable mortgages disguised as sale contracts are primarily designed to curtail the evils brought about by contracts of sale with right to repurchase, particularly the circumvention of the usury law and pactum commissorium. Courts have taken judicial notice of the well-known fact that contracts of sale with right to repurchase have been frequently resorted to in order to conceal the true nature of a contract, that is, a loan secured by a mortgage. It is a reality that grave financial distress renders persons hard-pressed to meet even their basic needs or to respond to an emergency, leaving no choice to them but to sign deeds of absolute sale of property or deeds of sale with pacto de retro if only to obtain the much-needed loan from unscrupulous money lenders. This reality precisely explains why the pertinent provision of the Civil Code includes a peculiar rule concerning the period of redemption, to wit: Art. 1602. The contract shall be presumed to be an equitable mortgage, in any of the following cases: xxx (3)When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed; xxx
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Ostensibly, the law allows a new period of redemption to be agreed upon or granted even after the expiration of the equitable mortgagors right to repurchase, and treats such extension as one of the indicators that the true agreement between the parties is an equitable mortgage, not a sale with right to repurchase. Heirs of Jose Reyes, jr. namely; Magdalena C. Reyes, et al. vs. Amanda S. Reyes, et al., G.R. No. 158377, August 13, 2010. Legal interest. In accordance with our ruling in Sta. Lucia Realty and Development v. Spouses Buenaventura, the applicable interest rate on the P6,153,398.05 to be paid by DBP to Maceda is 6% per annum, to be reckoned from the time of the filing of the complaint on 15 October 1984, because the case at bar involves a breach of obligation and not a loan or forbearance of money. We guide ourselves with the rules of thumb established in Eastern Shipping Lines, Inc. v. Court of Appeals. 1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code. 2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which
time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case be on the amount finally adjudged. 3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit. Pursuant to these rules, the interest rate of 12% per annum shall apply from the finality of judgment until the total amount awarded is fully paid. Bonifacio Sanz Maceda, Jr. vs. DBO / DBP Vs. Bonifacio Sanz Maceda, Jr., G.R. No. 174979 & G.R. No. 175010, August 11, 2010. Marriage; annulment; psychological incapacity. This case reiterates the previous rulings of Santos and Molina, and presents another example of the Supreme Courts not being too taken with the testimony of the psychiatrist or therapist retained to prove the psychological incapacity of one of the parties. Lawyers representing a spouse in a potential annulment case should study the issues which have been raised by the court in respect of such testimonies. In this case, the Supreme Court observed that what should not be lost in reading and applying its established rulings is the intent of the law to confine the application of Article 36 of the Family Code to the most serious cases of personality disorders these are the disorders that result in the utter insensitivity or inability of the afflicted party to give meaning and significance to the marriage he or she contracted. Furthermore, the psychological illness and its root cause must have been there from the inception of the marriage. From these requirements arise the concept that Article 36 of the Family Code does not really dissolve a marriage; it simply recognizes that there never was any marriage in the first place because the affliction already then existing was so grave and permanent as to
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deprive the afflicted party of awareness of the duties and responsibilities of the matrimonial bond he or she was to assume or had assumed. In this regard, the court noted that mere difficulty, refusal, or neglect in the performance of marital obligations or ill will on the part of the spouse is different from incapacity rooted on some debilitating psychological condition or illness, and in this case ruled that the following is not a reason to set aside the marital bonds (although if you or I were at the receiving end, we would probably beg to disagree): - Failure to manage the familys finances resulting in the loss of the house and lot intended to be their family residence? According to the Supreme Court: this merely constituted difficulty, refusal or neglect, during the marriage, in the handling of funds intended for the familys financial support. - Infidelity? According to the Supreme Court: for sexual infidelity to constitute as psychological incapacity, the respondents unfaithfulness must be established as a manifestation of a disordered personality, completely preventing the respondent from discharging the essential obligations of the marital state; there must be proof of a natal or supervening disabling factor that effectively incapacitated spouse from complying with the obligation to be faithful to his or her spouse. Here are what may be considered guidelines on the kind of evidence or testimony that should be presented, based on this case: (i) In So v. Valera, the Court considered the psychologists testimony and conclusions to be insufficiently in-depth and comprehensive to warrant the finding of respondents psychological incapacity because the facts, on which the conclusions were based, were all derived from the petitioners statements whose bias in favor of his cause cannot be discounted.
(ii) In another case, Padilla-Rumbaua v. Rumbaua, the Court declared that while the various tests administered on the petitioner-wife could have been used as a fair gauge to assess her own psychological condition, this same statement could not be made with respect to the respondent-husbands psychological condition. Conclusions and generalizations about a spouses psychological condition, based solely on information fed by the other spouse, are not any different in kind from admitting hearsay evidence as proof of the truthfulness of the content of such evidence. (iii) To be sure, the law does not require that the allegedly incapacitated spouse be personally examined by a physician or by a psychologist as a condition sine qua non for the declaration of nullity of marriage under Article 36 of the Family Code. This recognition, however, does not signify that the evidence should be any less than the evidence that an Article 36 case, by its nature, requires. (iv) It is still essential although from sources other than the respondent spouse to show his or her personality profile, or its approximation, at the time of marriage; the root cause of the inability to appreciate the essential obligations of marriage; and the gravity, permanence and incurability of the condition. Other than from the spouses, such evidence can come from persons intimately related to them, such as relatives, close friends or even family doctors or lawyers who could testify on the allegedly incapacitated spouses condition at or about the time of marriage, or to subsequent occurring events that trace their roots to the incapacity already present at the time of marriage. (In the present case, the only other party outside of the spouses who was ever asked to give statements for purposes of the spouses psychological evaluation was the spouses eldest son who would not have been very reliable as a witness in an Article 36 case because he could not have been there when the spouses were married and could not have been expected to know what was happening between his parents until long after his birth.)
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(v) The Supreme Court did not consider isolated instances of the spouses fighting over the foreclosure of their house, the husbands alleged womanizing, and their differences in religion, as indicative of any basic psychological disorder existing at the time of marriage. For one, these points of dispute are not uncommon in a marriage and relate essentially to the usual roots of marital problems finances, fidelity and religion. (vi) If a psychologists testimony will be submitted, the psychological evaluation should fully explain the details i.e., the what, how, when, where and since when of the spouses alleged personality disorder. It should also explain the incapacitating nature of the disorder, how it related to the essential marital obligations that the spouse failed to assume, and how grave and incurable it was. Ricardo P. Toring vs. Teresita M. Toring and Republic of the Philippines, G.R. No. 165321, August 3, 2010. Marriage; annulment; psychological incapacity; Court agrees to annul! Finally, finally, finally, the Supreme Court upholds a petition to have a marriage annulled on the ground of psychological incapacity of the husband. Practitioners can try to compare this with the Toring case (also digested in the edition), to see where the parties went wrong in that case, and went right in this one. Here, testimonies of two clinical psychologists and a psychiatrist had been presented to show the incapacity of the husband. The Court of Appeals in reversing the RTC decision to annul the marriage, rejected, wholesale, the testimonies of Doctors Magno and Villegas for being hearsay since they never personally examined and interviewed the respondent. The Supreme Court disagreed with the CA observing that the lack of personal examination and interview of the respondent, or any other person diagnosed with personality disorder, does not per se invalidate the testimonies of the doctors. Neither do their findings automatically constitute hearsay that would result in their exclusion as evidence. For one,
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 and genuinely witnessed mainly by the other. In this case, the experts testified on their individual assessment of the present state of the parties marriage from the perception of one of the parties, herein petitioner. Certainly, petitioner, during their marriage, had occasion to interact with, and experience, respondents pattern of behavior which she could then validly relay to the clinical psychologists and the psychiatrist. For another, the clinical psychologists and psychiatrists assessment were not based solely on the narration or personal interview of the petitioner. Other informants such as respondents own son, siblings and in-laws, and sister-in-law (sister of petitioner), testified on their own observations of respondents behavior and interactions with them, spanning the period of time they knew him. These were also used as the basis of the doctors assessments. The court went on to cite the recent case of Lim v. Sta. Cruz-Lim, citing The Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition (DSM IV), which sets out the general diagnostic criteria for personality disorders. Please check this or that case to get the guidelines. Within their acknowledged field of expertise, doctors can diagnose the psychological make up of a person based on a number of factors culled from various sources. A person afflicted with a personality disorder will not necessarily have personal knowledge thereof. In this case, considering that a personality disorder is manifested in a pattern of behavior, self-diagnosis by the respondent consisting only in his bare denial of the doctors separate diagnoses, does not necessarily evoke credence and cannot trump the clinical findings of experts. The Supreme Court also rejected the CAs view that because one of the psychologists had recommended therapy, she believe the illness was
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curable. A recommendation for therapy does not automatically imply curability. In general, recommendations for therapy are given by clinical psychologists, or even psychiatrists, to manage behavior. In Kaplan and Saddocks textbook entitled Synopsis of Psychiatry, treatment, ranging from psychotherapy to pharmacotherapy, for all the listed kinds of personality disorders are recommended. In short, the recommendation that respondent should undergo therapy does not necessarily negate the finding that respondents psychological incapacity is incurable. Moreover, the psycholigist in question, during her testimony, categorically declared that respondent is psychologically incapacitated to perform the essential marital obligations. As aptly stated by Justice Romero in her separate opinion in the ubiquitously cited case of Republic v. Court of Appeals & Molina: [T]he professional opinion of a psychological expert became increasingly important in such cases. Data about the persons entire life, both before and after the ceremony, were presented to these experts and they were asked to give professional opinions about a partys mental capacity at the time of the wedding. These opinions were rarely challenged and tended to be accepted as decisive evidence of lack of valid consent. [Because] of advances made in psychology during the past decades. There was now the expertise to provide the all-important connecting link between a marriage breakdown and premarital causes. At this point, the Supreme Court noted how it had, on many, many occasions essentially pshawed at the testimonies of various therapists and psychiatrists: It is true that a clinical psychologists or psychiatrists diagnoses that a person has personality disorder is not automatically believed by the courts in cases of declaration of nullity of marriages. Indeed, a clinical psychologists or psychiatrists finding of a personality disorder does not exclude a finding that a marriage is valid and subsisting, and not beset by one of the parties or both parties psychological incapacity. On more than one occasion, we have rejected an experts
opinion concerning the supposed psychological incapacity of a party In the case at bar, however, even without the experts conclusions, the factual antecedents (narrative of events) alleged in the petition and established during trial, all point to the inevitable conclusion that respondent is psychologically incapacitated to perform the essential marital obligations. Article 68 of the Family Code provides: Art. 68. The husband and wife are obliged to live together, observe mutual love, respect and fidelity, and render mutual help and support. In this connection, it is well to note that persons with antisocial personality disorder exhibit the following clinical features: Patients with antisocial personality disorder can often seem to be normal and even charming and ingratiating. Their histories, however, reveal many areas of disordered life functioning. Lying, truancy, running away from home, thefts, fights, substance abuse, and illegal activities are typical experiences that patients report as beginning in childhood. x x x Their own explanations of their antisocial behavior make it seem mindless, but their mental content reveals the complete absence of delusions and other signs of irrational thinking. In fact, they frequently have a heightened sense of reality testing and often impress observers as having good verbal intelligence. x x x Those with this disorder do not tell the truth and cannot be trusted to carry out any task or adhere to any conventional standard of morality. x x x A notable finding is a lack of remorse for these actions; that is, they appear to lack a conscience. In the instant case, respondents pattern of behavior manifests an inability, nay, a psychological incapacity to perform the essential marital obligations
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as shown by his: (1) sporadic financial support; (2) extra-marital affairs; (3) substance abuse; (4) failed business attempts; (5) unpaid money obligations; (6) inability to keep a job that is not connected with the family businesses; and (7) criminal charges of estafa. In fine, given the factual milieu of the present case and in light of the foregoing disquisition, we find ample basis to conclude that respondent was psychologically incapacitated to perform the essential marital obligations at the time of his marriage to the petitioner. Ma. Socorro Camacho-Reyes vs. Ramon Reyes, G.R. No. 185286, August 18, 2010. Marriage; governing law, depends on when celebrated; impact on who can file for petition of nullity. A valid marriage is essential in order to create the relation of husband and wife and to give rise to the mutual rights, duties, and liabilities arising out of such relation. The law prescribes the requisites of a valid marriage. Hence, the validity of a marriage is tested according to the law in force at the time the marriage is contracted. As a general rule, the nature of the marriage already celebrated cannot be changed by a subsequent amendment of the governing law. To illustrate, a marriage between a stepbrother and a stepsister was void under the Civil Code, but is not anymore prohibited under the Family Code; yet, the intervening effectivity of the Family Code does not affect the void nature of a marriage between a stepbrother and a stepsister solemnized under the regime of the Civil Code. The Civil Code marriage remains void, considering that the validity of a marriage is governed by the law in force at the time of the marriage ceremony. Before anything more, the Court has to clarify the impact to the issue posed herein of Administrative Matter (A.M.) No. 02-11-10-SC (Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages), which took effect on March 15, 2003. Section 2, paragraph (a), of A.M. No. 02-11-10-SC explicitly provides the limitation that a petition for declaration of absolute nullity of void marriage
may be filed solely by the husband or wife. Such limitation demarcates a line to distinguish between marriages covered by the Family Code and those solemnized under the regime of the Civil Code. Specifically, A.M. No. 02-11-10-SC extends only to marriages covered by the Family Code, which took effect on August 3, 1988, but, being a procedural rule that is prospective in application, is confined only to proceedings commenced after March 15, 2003. Based on Carlos v. Sandoval, the following actions for declaration of absolute nullity of a marriage are excepted from the limitation, to wit: 1. Those commenced before March 15, 2003, the effectivity date of A.M. No. 02-11-10-SC; and 2. Those filed vis--vis marriages celebrated during the effectivity of the Civil Code and, those celebrated under the regime of the Family Code prior to March 15, 2003. Considering that the marriage between Cresenciano and Leonila was contracted on December 26, 1949, the applicable law was the old Civil Code, the law in effect at the time of the celebration of the marriage. Hence, the rule on the exclusivity of the parties to the marriage as having the right to initiate the action for declaration of nullity of the marriage under A.M. No. 02-11-10-SC had absolutely no application to the petitioner. The old and new Civil Codes contain no provision on who can file a petition to declare the nullity of a marriage, and when. Accordingly, in Nial v. Bayadog, the children were allowed to file after the death of their father a petition for the declaration of the nullity of their fathers marriage to their stepmother contracted on December 11, 1986 due to lack of a marriage license.
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It is clarified, however, that the absence of a provision in the old and new Civil Codes cannot be construed as giving a license to just any person to bring an action to declare the absolute nullity of a marriage. According to Carlos v. Sandoval, the plaintiff must still be the party who stands to be benefited by the suit, or the party entitled to the avails of the suit, for it is basic in procedural law that every action must be prosecuted and defended in the name of the real party in interest. Thus, only the party who can demonstrate a proper interest can file the action. Interest within the meaning of the rule means material interest, or an interest in issue to be affected by the decree or judgment of the case, as distinguished from mere curiosity about the question involved or a mere incidental interest. One having no material interest to protect cannot invoke the jurisdiction of the court as plaintiff in an action. When the plaintiff is not the real party in interest, the case is dismissible on the ground of lack of cause of action. Here, the petitioner alleged himself to be the late Cresencianos brother and surviving heir. Assuming that the petitioner was as he claimed himself to be, then he has a material interest in the estate of Cresenciano that will be adversely affected by any judgment in the suit. Indeed, a brother like the petitioner, albeit not a compulsory heir under the laws of succession, has the right to succeed to the estate of a deceased brother under the conditions stated in Article 1001 and Article 1003 of the Civil Code. Isidro Ablaza vs. Republic of the Philippines, G.R. No. 158298, August 11, 2010. Ownership; co-ownership; 20-year limitation. It is clear from Basilios will that he intended the house and lot in Manila to be transferred in petitioners names for administration purposes only, and that the property be owned by the heirs in common, thus: e) Ang lupat bahay sa Lunsod ng Maynila na nasasaysay sa itaas na 2(c) ay ililipat at ilalagay sa pangalan nila Ma. Pilar at Clemente hindi bilang pamana ko sa kanila kundi upang pamahalaan at pangalagaan lamang nila at nang ang sinoman sa aking mga anak sampu ng apo at kaapuapuhan
ko sa habang panahon ay may tutuluyan kung magnanais na mag-aral sa Maynila o kalapit na mga lunsod sa medaling salita, ang bahay at lupang itoy walang magmamay-ari bagkus ay gagamitin habang panahon ng sinomang magnanais sa aking kaapuapuhan na tumuklas ng karunungan sa paaralan sa Maynila at katabing mga lunsod x x x x (emphasis and underscoring supplied) But the condition set by the decedent on the propertys indivisibility is subject to a statutory limitation. On this point, the Court agrees with the ruling of the appellate court, viz: For this Court to sustain without qualification, [petitioners]s contention, is to go against the provisions of law, particularly Articles 494, 870, and 1083 of the Civil Code, which provide that the prohibition to divide a property in a co-ownership can only last for twenty (20) years x x x x xxxx x x x x Although the Civil Code is silent as to the effect of the indivision of a property for more than twenty years, it would be contrary to public policy to sanction co-ownership beyond the period expressly mandated by the Civil Code x x x x In Re: Petition for probate of last will and testament of Basilio Santiago, et al. Vs/ Zoilo S. Santiago, et al., G.R. No. 179859, August 9, 2010. Ownership; prescription; requirement of possession; compromise agreement does not constitute possession. Prescription, as a mode of acquiring ownership and other real rights over immovable property, is concerned with lapse of time in the manner and under conditions laid down by law, namely, that the possession should be in the concept of an owner, public, peaceful, uninterrupted, and adverse. The party who asserts
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ownership by adverse possession must prove the presence of the essential elements of acquisitive prescription. Acquisitive prescription of real rights may be ordinary or extraordinary. Ordinary acquisitive prescription requires possession in good faith and with just title for ten years. In extraordinary prescription, ownership and other real rights over immovable property are acquired through uninterrupted adverse possession for thirty years without need of title or of good faith. Possession in good faith consists in the reasonable belief that the person from whom the thing is received has been the owner thereof, and could transmit his ownership. There is just title when the adverse claimant came into possession of the property through one of the modes recognized by law for the acquisition of ownership or other real rights, but the grantor was not the owner or could not transmit any right. The Supreme Court found that the Court of Appeals mistakenly relied upon a compromise agreement to conclude that the respondents were possessors in good faith and with just title who acquired the property through ordinary acquisitive prescription. The main purpose of a compromise agreement is to put an end to litigation because of the uncertainty that may arise from it. Reciprocal concessions are the very heart and life of every compromise agreement. By the nature of a compromise agreement, it brings the parties to agree to something that neither of them may actually want, but for the peace it will bring them without a protracted litigation. Thus, no right can arise from the compromise agreement because the parties executed the same only to buy peace and to write finis to the controversy; it did not create or transmit ownership rights over the subject property. In executing the compromise agreement, the parties, in effect, merely reverted to their situation before the earlier civil case was filed. Neither can the respondents benefit from the contract of sale of the subject property to support their claim of possession in good faith and with just
title. In the vintage case [Digesters Note: Use of word vintage to describe a case, the ponentes, not mine] of Leung Yee v. F.L. Strong Machinery Co. and Williamson, the court had noted that [O]ne who purchases real estate with knowledge of a defect or lack of title in his vendor cannot claim that he has acquired title thereto in good faith as against the true owner of the land or of an interest therein; and the same rule must be applied to one who has knowledge of facts which should have put him upon such inquiry and investigation as might be necessary to acquaint him with the defects in the title of his vendor. Good faith, or the want of it, can be ascertained only from the acts of the one claiming it, as it is a condition of mind that can only be judged by actual or fancied token or signs. In the present case, no dispute exists that Roberto, without Nicomedesas knowledge or participation, bought the subject property on September 16, 1977 or during the pendency of Civil Case No. B-565. Roberto, therefore, had actual knowledge that Belachos claim to ownership of the subject property, as Gavinos purported heir, was disputed because he (Roberto) and Nicomedesa were the defendants in Civil Case No. B-565. Roberto even admitted that he bought the subject property from Belacho to avoid any trouble. He, thus, cannot claim that he acted in good faith under the belief that there was no defect or dispute in the title of the vendor, Belacho. Not being a possessor in good faith and with just title, the ten-year period required for ordinary acquisitive prescription cannot apply in Robertos favor. Even the thirty-year period under extraordinary acquisitive prescription has not been met because of the respondents claim to have been in possession, in the concept of owner, of the subject property for only twenty-four years, from the time the subject property was tax declared in 1974 to the time of the filing of the complaint in 1998. Rosario P. Tan vs. Artemio G. Ramirez, et al., G.R. No. 158929, August 3, 2010.

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Ownership; prescription; element of possession; in an equitable mortgage. Did respondents acquire the mortgaged property through prescription? It is true that the respondent Alejandro became a co-owner of the property by right of representation upon the death of his father, Jose Sr. As a co-owner, however, his possession was like that of a trustee and was not regarded as adverse to his co-owners but in fact beneficial to all of them. Yet, the respondents except to the general rule, asserting that Alejandro, having earlier repudiated the co-ownership, acquired ownership of the property through prescription. The Court cannot accept the respondents posture. In order that a co-owners possession may be deemed adverse to that of the cestui que trust or the other co-owners, the following elements must concur: 1. The co-owner has performed unequivocal acts of repudiation of the co-ownership amounting to an ouster of the cestui que trust or the other coowners; 2. Such positive acts of repudiation have been made known to the cestui que trust or the other co-owners; 3. 4. The evidence on the repudiation is clear and conclusive; and His possession is open, continuous, exclusive, and notorious.
name for taxation purposes and paying the land taxes did not constitute an unequivocal act of repudiation amounting to an ouster of the other coowner and could not constitute adverse possession as basis for title by prescription. Moreover, according to Blatero v. Intermediate Appellate Court, if a sale a retro is construed as an equitable mortgage, then the execution of an affidavit of consolidation by the purported buyer to consolidate ownership of the parcel of land is of no consequence and the constructive possession of the parcel of land will not ripen into ownership, because only possession acquired and enjoyed in the concept of owner can serve as title for acquiring dominion. In fine, the respondents did not present proof showing that Alejandro had effectively repudiated the co-ownership. Their bare claim that Alejandro had made oral demands to vacate to his co-owners was self-serving and insufficient. Alejandros execution of the affidavit of consolidation of ownership on August 21, 1970 and his subsequent execution on October 17, 1970 of the joint affidavit were really equivocal and ambivalent acts that did not manifest his desire to repudiate the co-ownership. The only unequivocal act of repudiation was done by the respondents when they filed the instant action for quieting of title on September 28, 1994, nearly a year after Alejandros death on September 2, 1993. However, their possession could not ripen into ownership considering that their act of repudiation was not coupled with their exclusive possession of the property. Heirs of Jose Reyes, jr. namely; Magdalena C. Reyes, et al. vs. Amanda S. Reyes, et al., G.R. No. 158377, August 13, 2010. Prescription; revival of judgment. An action for revival of judgment is governed by Article 1144 (3), Article 1152 of the Civil Code and Section 6, Rule 39 of the Rules of Court. Article 1144(3) provides: Art. 1144. The following actions must be brought within ten years from the time the right of action accrues:
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The concurrence of the foregoing elements was not established herein. For one, Alejandro did not have adverse and exclusive possession of the property, as, in fact, the other co-owners had continued to possess it, with Alejandro and his heirs occupying only a portion of it. Neither did the cancellation of the previous tax declarations in the name of Leoncia, the previous co-owner, and the issuance of a new one in Alejandros name, and Alejandros payment of the realty taxes constitute repudiation of the coownership. The sole fact of a co-owner declaring the land in question in his
xxxx (3) Upon a judgment while Article 1152 of the Civil Code states that [T] he period for prescription of actions to demand the fulfillment of obligations declared by a judgment commences from the time the judgment became final. In this regard, Section 6, Rule 39 of the Rules of Court provides that [A] final and executory judgment or order may be executed on motion within five (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. The revived judgment may also be enforced by motion within five (5) years from the date of its entry and thereafter by action before it is barred by the statute of limitations. (emphasis supplied) The rules are clear. Once a judgment becomes final and executory, the prevailing party can have it executed as a matter of right by mere motion within five years from the date of entry of judgment. If the prevailing party fails to have the decision enforced by a motion after the lapse of five years, the said judgment is reduced to a right of action which must be enforced by the institution of a complaint in a regular court within ten years from the time the judgment becomes final. Petitioner Villeza, however, wants this Court to agree with him that the abeyance granted to him by the lower court tolled the running of the prescriptive period. He even cited cases allowing exceptions to the general rule. The cited cases are, in fact, not applicable to him. The records reveal that it was petitioner Villeza, the prevailing party himself, who moved to defer the execution of judgment. The losing party never had any hand in the delay of its execution. Neither did the parties have any agreement on that matter. After the lapse of five years from the finality of judgment, petitioner Villeza should have instead filed a complaint for its revival in accordance with Section 6, Rule 39 of the Rules of Court. He, however,
filed a motion to execute the same which was a wrong course of action. On the 11th year, he finally sought its revival but he requested the aid of the courts too late. The Court has pronounced in a plethora of cases that it is revolting to the conscience to allow someone to further avert the satisfaction of an obligation because of sheer literal adherence to technicality; that although strict compliance with the rules of procedure is desired, liberal interpretation is warranted in cases where a strict enforcement of the rules will not serve the ends of justice; and that it is a better rule that courts, under the principle of equity, will not be guided or bound strictly by the statute of limitations or the doctrine of laches when to do so, manifest wrong or injustice would result. These cases, though, remain exceptions to the general rule. The purpose of the law in prescribing time limitations for enforcing judgment by action is precisely to prevent the winning parties from sleeping on their rights. The Court cannot just set aside the statute of limitations into oblivion every time someone cries for equity and justice. Indeed, if eternal vigilance is the price of safety, one cannot sleep on ones right for more than a 10th of a century and expect it to be preserved in pristine purity. Ernesto Villeza vs. German Management and Services, Inc., et al., G.R. No. 182937, August 8, 2010. Property; builder in good faith. Article 527 of the Civil Code presumes good faith, and since no proof exists to show that the mistake was done by petitioners in bad faith, the latter should be presumed to have built the house in good faith. When a person builds in good faith on the land of another, Article 448 of the Civil Code governs. This article covers cases in which the builders, sowers or planters believe themselves to be owners of the land or, at least, to have a claim of title thereto. The builder in good faith can compel the landowner to make a choice between appropriating the building by paying the proper indemnity or obliging the builder to pay the price of the land.
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The choice belongs to the owner of the land, a rule that accords with the principle of accession, i.e., that the accessory follows the principal and not the other way around. However, even as the option lies with the landowner, the grant to him, nevertheless, is preclusive. He must choose one. He cannot, for instance, compel the owner of the building to remove the building from the land without first exercising either option. It is only if the owner chooses to sell his land, and the builder or planter fails to purchase it where its value is not more than the value of the improvements, that the owner may remove the improvements from the land. The owner is entitled to such remotion only when, after having chosen to sell his land, the other party fails to pay for the same. Moreover, petitioners have the right to be indemnified for the necessary and useful expenses they may have made on the subject property as provided in Articles 546 and 548 of the Civil Code. Consequently, the respondentspouses have the option to appropriate the house on the subject land after payment to petitioners of the appropriate indemnity or to oblige petitioners to pay the price of the land, unless its value is considerably more than the value of the structures, in which case petitioners shall pay reasonable rent. Luciano Briones and Nelly Briones vs. Jose Macabagdal, Fe D. Macabagdal and Vergon Realty Investments Corporation, G.R. No. 150666, August 3, 2010. Sale; contract to sell versus contract of sale. Regarding the right to cancel the contract for non-payment of an installment, there is need to initially determine if what the parties had was a contract of sale or a contract to sell. In a contract of sale, the title to the property passes to the buyer upon the delivery of the thing sold. In a contract to sell, on the other hand, the ownership is, by agreement, retained by the seller and is not to pass to the vendee until full payment of the purchase price. In the contract of sale, the buyers non-payment of the price is a negative resolutory condition; in the contract to sell, the buyers full payment of the price is a positive suspensive condition to the coming into effect of the agreement. In the first
case, the seller has lost and cannot recover the ownership of the property unless he takes action to set aside the contract of sale. In the second case, the title simply remains in the seller if the buyer does not comply with the condition precedent of making payment at the time specified in the contract. Here, it is quite evident that the contract involved was one of a contract to sell since the Atienzas, as sellers, were to retain title of ownership to the land until respondent Espidol, the buyer, has paid the agreed price. Admittedly, Espidol was unable to pay the second installment of P1,750,000.00 that fell due in December 2002. That payment was a positive suspensive condition failure of which was not regarded a breach in the sense that there can be no rescission of an obligation (to turn over title) that did not yet exist since the suspensive condition had not taken place. Since the suspensive condition did not arise, the parties stood as if the conditional obligation had never existed. It should be noted that the condition is not a pure, suspensive one. Although the Atienzas had no obligation as yet to turn over title pending the occurrence of the suspensive condition, it was implicit that they were under immediate obligation not to sell the land to another in the meantime. But when Espidol failed to pay within the period provided in their agreement, the Atienzas were relieved of any obligation to hold the property in reserve for him. The ruling of the lower courts that, despite the default in payment, the Atienzas remained bound to this day to sell the property to Espidol once he is able to raise the money and pay is quite unjustified. Sps. Paulino Atienza and Rufina Atienza vs. Domingo P. Espidol, G.R. No. 180665, August 11, 2010. Sale; innocent purchaser. A person is considered an innocent purchaser in good faith when he buys the property of another, without notice that some other person has a right or an interest in such property, and pays a full price
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for the same at the time of such purchase, or before he has notice of the claims or interest of some other person in the property. Whether petitioners were in good faith when they bought the property from the Samson heirs is a question of fact that will not be disturbed in a petition for review under Rule 45 of the Rules of Court, save for meritorious exceptions. None of these exceptions is present, however, in the case at bar. There is thus no compelling reason to overturn the factual findings of the trial court, which was affirmed by the Court of Appeals, respecting petitioners notice of respondents possession. As reflected earlier, Palma, a relative of petitioner Cesaria, acknowledged via two documents having been allowed by Josefa, respondents mother, to occupy the land. His testimony, therefore, that he sought the permission of the Samson heirs, and not from Josefa, must give way to documentary evidence. In another vein, as noted above, petitioners live in the vicinity of the land which was fenced and planted to fruit bearing trees. As such, they were put on notice that the land was possessed by someone. Where the land subject of sale is in possession of a person other than the vendor, prudence dictates that the vendee should go beyond the certificate of title. Absent such investigation, good faith cannot be presumed. Spouses Braulio Navarro and Cesaria Sindao vs. Perla Rico Go, G.R. No. 187288. August 9, 2010 Sale; notice of cancellation for action to declare contract non-existent. Notice of cancellation by notarial act need not be given before the contract between the Atienzas and respondent Espidol may be validly declared nonexistent. R.A. 6552 which mandated the giving of such notice does not apply to this case. The cancellation envisioned in that law pertains to extrajudicial cancellation or one done outside of court, which is not the mode availed of here. The Atienzas came to court to seek the declaration of its obligation under the contract to sell cancelled. Thus, the absence of that
notice does not bar the filing of their action. Sps. Paulino Atienza and Rufina Atienza vs. Domingo P. Espidol, G.R. No. 180665, August 11, 2010. Sale; void contract. A void contract is equivalent to nothing; it produces no civil effect. It does not create, modify, or extinguish a juridical relation. Parties to a void agreement cannot expect the aid of the law; the courts leave them as they are, because they are deemed in pari delicto or in equal fault. To this rule, however, there are exceptions that permit the return of that which may have been given under a void contract. One of the exceptions is found in Article 1412 of the Civil Code, which states: Art. 1412. If the act in which the unlawful or forbidden cause consists does not constitute a criminal offense, the following rules shall be observed: (1) When the fault is on the part of both contracting parties, neither may recover what he has given by virtue of the contract, or demand the performance of the others undertaking; (2) When only one of the contracting parties is at fault, he cannot recover what he has given by reason of the contract, or ask for the fulfillment of what has been promised him. The other, who is not at fault, may demand the return of what he has given without any obligation to comply with his promise. Respondent was well aware that as mere grantee of the subject stall, he cannot sell it without the consent of the City Government of Marawi. Yet, he sold the same to petitioners. The records, however, are bereft of any allegation and proof that petitioners had actual knowledge of the status of respondents ownership of the subject stall. Petitioners can, therefore, recover the amount they had given under the contract. In Cavite Development Bank v. Spouses Lim, and Castillo, et al. v. Abalayan, we held that in case of a void sale, the seller has no right whatsoever to keep the
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money paid by virtue thereof, and should refund it, with interest at the legal rate, computed from the date of filing of the complaint until fully paid. Hadja Fatima Gaguil Magoyag, joined by her husband, Hadjihasan Madlawi Magoyag vs. Hadji Abubacar Maruhom, G.R. No. 179743, August 2, 2010. Succession; compulsory heirs. A decedents compulsory heirs in whose favor the law reserves a part of the decedents estate are exclusively the persons enumerated in Article 887 of the Civil Code. Spouses Nicanor Tumbokon, et al. vs. Apolonia G. Legaspi adn Paulina S. De Magtanum, G.R. No. 153736, August 12, 2010. Special Laws Family Code; family home; exemption from foreclosure. We note that the claim of exemption under Article 153 of the Family Code, thereby raising issue on the mortgaged condominium unit being a family home and not corporate property, is entirely inconsistent with the clear contractual agreement of the REM. Assuming arguendo that the mortgaged condominium unit constitutes respondents family home, the same will not exempt it from foreclosure as Article 155 (3) of the same Code allows the execution or forced sale of a family home for debts secured by mortgages on the premises before or after such constitution. Equitable PCI Bank, Inc. vs. OJ-Mark Trading, Inc. and Spouses Oscar and Evangeline Martinez, G.R. No. 165950, August 11, 2010. Land Reform; Presidential Decree No. 27; RA 3844; relinquishment of rights is void. In this case, the Supreme Court preserved ownership rights of petitioners over parcels of land that had been transferred to them pursuant to their tenancy and the application of land reform laws. The son of the previous owner, however, sought to dispossess them on the ground that the petitioners had unlawfully converted the land into a fish farm and had subleased the property. The court confirmed that there was no evidence with
respect to the alleged sub-lease. As to the conversion of the land into a fish farm, the court observed that the conversion of the subject landholding under the 1980 Kasunduan is not the conversion of landholding that is contemplated by Section 36 of the law. Alarcon v. Court of Appeals defined conversion as the act of changing the current use of a piece of agricultural land into some other use as approved by the DAR. More to the point is that for conversion to avail as a ground for dispossession, the opening paragraph of Section 36 implies the necessity of prior court proceedings in which the issue of conversion has been determined and a final order issued directing dispossession upon that ground. In the case at bar, however, respondent does not profess that at any time there had been such proceedings or that there was such court order. Neither does he assert that Lot No. 38and Lot Nos. 37 and 39 for that matterhad undergone conversion with authority from the DAR. The court also noted that even on the hypothesis that petitioners, as alleged, voluntarily relinquished their rights over Lot Nos. 37, 38 and 39 and surrendered the same to respondent, the transaction would still be void because it is by all means prohibited by law. Our law on agrarian reform is a legislated promise to emancipate poor farm families from the bondage of the soil. P.D. No. 27 was promulgated in the exact same spirit, with mechanisms which hope to forestall a reversion to the antiquated and inequitable feudal system of land ownership. It aims to ensure the continued possession, cultivation and enjoyment by the beneficiary of the land that he tills which would certainly not be possible where the former owner is allowed to reacquire the land at any time following the award in contravention of the governments objective to emancipate tenant-farmers from the bondage of the soil. In order to ensure the tenant-farmers continued enjoyment and possession of the property, the explicit terms of P.D. No. 27 prohibit the transfer by the tenant of the ownership, rights or possession of a landholding to other persons, or the surrender of the same to the former landowner. In other words, a tenant-farmer may not transfer his ownership or possession of, or his rights to the property, except only in
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favor of the government or by hereditary succession in favor of his successors. Any other transfer of the land grant is a violation of this proscription and is, therefore, null and void. Emilia Micking Vda. De Coronel, et al. Vs. Miguel Tanjangco, Jr., G.R. No. 170693, August 8, 2010 Land Reform Law; Presidential Decree No. 27; restriction on sale of land; exceptions. The Atienzas title shows on its face that the government granted title to them on January 9, 1990 by virtue of P.D. 27. This law explicitly prohibits any form of transfer of the land granted under it except to the government or by hereditary succession to the successors of the farmer beneficiary. Upon the enactment of Executive Order 228 in 1987, however, the restriction ceased to be absolute. Land reform beneficiaries were allowed to transfer ownership of their lands provided that their amortizations with the Land Bank of the Philippines (Land Bank) have been paid in full. In this case, the Atienzas title categorically states that they have fully complied with the requirements for the final grant of title under P.D. 27. This means that they have completed payment of their amortization with Land Bank. Consequently, they could already legally transfer their title to another. Sps. Paulino Atienza and Rufina Atienza vs. Domingo P. Espidol, G.R. No. 180665, August 11, 2010. Property Registration Decree; levy on execution versus subsequent registration of sale. The Supreme Court in this case ruled on the issue of whether or not a levy on execution is superior to the subsequent registration of a deed of sale. It held that a prior registration of a lien creates a preference even though the sale of the land to petitioner took place before the judgment of the trial court in favor of a party and the issuance of the writ of execution over the property in question. Failure to register the sale with the Register of Deeds negated any priority which the buyer may have acquired by virtue of the earlier sale. Elementary is the rule that it is the act of registration which gives validity to transfer or liens created upon land registered under the Torrens System. This is clear in Section 51 and Section 52 of Presidential Decree No. 1529, also known as the Property
Registration Decree. Considering that the sale was not registered earlier, the right of petitioner over the land became subordinate and subject to the preference created over the earlier annotated levy in favor of Swift. The levy of execution registered and annotated on September 1, 1998 takes precedence over the sale of the land to petitioner on February 16, 1997, despite the subsequent registration on September 14, 1998 of the prior sale. Such preference in favor of the levy on execution retroacts to the date of levy for to hold otherwise will render the preference nugatory and meaningless. The Supreme Court had made a similar ruling in Valdevieso v. Damalerio. Jay Hidalgo Uy vs. Spouses Francisco Medina and Natividad Medina, et al., G.R. No. 172541, August 8, 2010. Property Registration Decree; possession of land; impact of tax declarations and tax payments. In an original registration of title under Section 14(1)] P.D. No. 1529, the applicant for registration must be able to establish by evidence that he and his predecessor-in-interest have exercised acts of dominion over the lot under a bona fide claim of ownership since June 12, 1945 or earlier. He must prove that for at least 30 years, he and his predecessor have been in open, continuous, exclusive and notorious possession and occupation of the land. From the records, it is clear that respondents possession through their predecessor-in-interest dates back to as early as 1937. In that year, the subject property had already been declared for taxation by Zenaidas father, Sergio, jointly with a certain Toribia Miranda (Toribia). Yet, it also can be safely inferred that Sergio and Toribia had declared the land for taxation even earlier because the 1937 tax declaration shows that it offsets a previous tax number. The property was again declared in 1979, 1985 and 1994 by Sergio, Toribia and by Romualdo. Certainly, respondents could have produced more proof of this kind had it not been for the fact that, as certified by the Office of the Rizal Provincial Assessor, the relevant portions of the tax records on file with it had been
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burned when the assessors office was razed by fire in 1997. Of equal relevance is the fact that with these tax assessments, there came next tax payments. Respondents receipts for tax expenditures on Lot Nos. 4 and 5 between 1977 and 2001 are likewise fleshed out in the records and in these documents, Sergio, Toribia and Romualdo are the named owners of the property with Zenaida being identified as the one who delivered the payment in the 1994 receipts. The foregoing evidentiary matters and muniments clearly show that Zenaidas testimony in this respect is no less believable. And the unbroken chain of positive acts exercised by respondents predecessors, as demonstrated by these pieces of evidence, yields no other conclusion than that as early as 1937, they had already demonstrated an unmistakable claim to the property. Not only do they show that they had excluded all others in their claim but also, that such claim is in all good faith. Land registration proceedings are governed by the rule that while tax declarations and realty tax payment are not conclusive evidence of ownership, nevertheless, they are a good indication of possession in the concept of owner. These documents constitute at least proof that the holder has a claim of title over the property, for no one in his right mind would be paying taxes for a property that is not in his actual or at least constructive possession. The voluntary declaration of a piece of property for taxation purposes manifests not only ones sincere and honest desire to obtain title to the property. It also announces his adverse claim against the state and all other parties who may be in conflict with his interest. More importantly, it signifies an unfeigned intention to contribute to government revenuesan act that strengthens ones bona fide claim of acquisition of ownership. Indeed, that respondents herein have been in possession of the land in the concept of owneropen, continuous, peaceful and without interference and opposition from the government or from any private individualitself makes their right thereto unquestionably settled and, hence, deserving of
protection under the law. Republic of the Philippines vs. Zenaida Guinto, in her own behalf and as Attorney-in-fact of Ma. Aurora Guinto-Comiso, et al., G.R. No. 175578, August 11, 2010. Property Registration Decree; title indefeasible under Torren System; right to eject cannot be barred by laches. OCT No. P-3030 was declared valid by the trial court, and respondents do not question the titles validity. Under the Torrens System of registration, an OCT becomes indefeasible and incontrovertible one year after its final decree. It is a fundamental principle in land registration that the certificate of title serves as evidence of an indefeasible and incontrovertible title to a property in favor of the person whose name appears therein. The trial courts ruling that petitioner had a long and unexplained inaction in asserting his claim over the subject property, and hence, is barred by laches from recovering his property, is without basis. Petitioner has a valid title over his property (i.e., the land covered by OCT P-3030). As a registered owner, petitioner has a right to eject any person illegally occupying his property. This right is imprescriptible and can never be barred by laches. Gaudencio Labrador represented by Lulu Labrador Uson as Attorney-in-Fact vs. Spouses Ildefonso Perlas and Pacencia Perlas, et al., G.R. No. 173900, August 8, 2010. Property Registration Decree; title indefeasible under Torrens System; tax declaration. A decree of registration is conclusive upon all persons, including the Government of the Republic and all its branches, whether or not mentioned by name in the application for registration or its notice. Indeed, title to the land, once registered, is imprescriptible. No one may acquire it from the registered owner by adverse, open, and notorious possession. Thus, to a registered owner under the Torrens system, the right to recover possession of the registered property is equally imprescriptible since possession is a mere consequence of ownership. Here, the existence and genuineness of the Mendozas title over the property has not been disputed. That the City Government of Lipa tax-declared the property and
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its improvements in its name cannot defeat the Mendozas title. The Supreme Court has allowed tax declarations to stand as proof of ownership only in the absence of a certificate of title. Otherwise, they have little evidentiary weight as proof of ownership. Republic of the Philippines vs. Primo Mendoza and Maria Lucero, G.R. No. 185091, August 8, 2010. Here are selected August 2010 rulings of the Supreme Court of the Philippines on tax law: National Internal Revenue Code Appeal; right to appeal. The right to appeal is not a natural right and is also not 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. One who seeks to avail of the right to appeal must comply with the requirements for the Rules of Court and failure to do so often leads to the loss of the right to appeal. The failure to timely perfect an appeal is not a mere technicality for it is jurisdictional. The claim that the government would suffer loss of substantial amount if not allowed to recover the tax refund in the amount of more than fifteen million pesos has been caused by petitioners own doing or undoing. While the Court understands petitioners counsels predicament of being burdened with a heavy case load, it cannot always rule in favor of the government. In this case, the dismissal of the petition for review and denial of the amended petition for review were premised on: (1) the late filing of the original petition for review by the petitioner; (2) the absence of a motion of reconsideration of the January 29, 2002 resolution (which dismissed the petition for review); and (3) lack of authority of the legal officer of the Bureau of Internal Revenue Region 8, Makati City, to pursue the case on behalf of the petitioner Commissioner of Internal Revenue. Commissioner of Internal Revenue vs Fort Bonifacio Development Corporation, G.R. No. 167606, August 11, 2010.
Tax refund; relation between taxpayer and withholding agent; proper partyin-interest. A parent-subsidiary relation between the taxpayer and the withholding agent is a factor that increases the withholding agents legal interest to file a claim for refund but is not required for the withholding agent to have the right to file claim for refund. A withholding agent has a legal right to file a claim for refund for two reasons: (1) he is considered a taxpayer under the National Internal Revenue Code as he is personally liable for the withholding tax as well as for deficiency assessments, surcharges, and penalties, should the amount of the tax withheld be finally found to be less than the amount that should have been withheld under the law; (2) as an agent of the taxpayer, his authority to file the necessary income tax return and to remit the tax withheld to the government impliedly includes the authority to file a claim for refund and to bring an action for recovery of such claim. Commissioner of Internal Revenue vs Smart Communication, Inc., G.R. No. 179045-46, August 25, 2010. Tax refund; obligation of withholding agent to the taxpayer. While the withholding agent has the right to recover the taxes erroneously or illegally collected, he nevertheless has the obligation to remit the same to the principal taxpayer. As an agent of the taxpayer, it is the withholding agents duty to return what he has recovered; otherwise, he would be unjustly enriching himself at the expense of the principal taxpayer from whom the taxes were withheld, and from whom he derives his legal right to file a claim for refund. Commissioner of Internal Revenue vs Smart Communication, Inc., G.R. No. 179045-46, August 25, 2010. Value-added tax; requirements for refund or issuance of unutilized input tax credit. A taxpayer engaged in zero-rated transactions may apply for tax refund or issuance of tax credit certificate for unutilized input value-added tax (VAT) subject to the following requirements: (1) the taxpayer is engaged in sales which are zero-rated or effectively zero-rated; (2) the taxpayer is VAT-registered; (3) the claim is filed within two years after the close of the taxable quarter when such sales were made; (4) the creditable
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input tax due or paid is attributable to such sales, except the transitional input tax, to the extent that such input tax has not been applied against the output tax; and in case of zero-rated sales under Section 106 (A)(2)(a) (1) and (2), Section 106 (B) and Section 108 (B) (1) and (2) of the National Internal Revenue Code (Tax Code), the acceptable foreign currency exchange proceeds thereof have been duly accounted for in accordance with Bangko Sentral ng Pilipinas rules and regulations. AT & T Communications Services Philippines, Inc. vs Commissioner of Internal Revenue, G.R. No. 182364, August 3, 2010. Value-added tax; official receipts and sales invoices. Section 113 of the Tax Code does not create a distinction between a sales invoice and an official receipt. Section 113 states that a VAT-registered person shall, for every sale, issue an invoice or receipt. Moreover, section 100 of the Tax Code provides that any input tax evidenced by a VAT invoice or official receipt issued in accordance with section 113 shall be creditable against the output tax. Thus, to determine the validity of petitioners claim as to unutilized input VAT, an invoice would suffice provided that the requirements under sections 113 and 237 of the Tax Code are met. AT & T Communications Services Philippines, Inc. vs Commissioner of Internal Revenue, G.R. No. 182364, August 3, 2010. Value-added tax; proof to substantiate claim for refund. Sales invoices are recognized commercial documents to facilitate trade or credit transactions. They are proofs that a business transaction has been concluded and therefore should not be considered bereft of probative value. Only the preponderance of evidence threshold as applied in ordinary civil action is needed to substantiate a claim for tax refund proper. AT & T Communications Services Philippines, Inc. vs Commissioner of Internal Revenue, G.R. No. 182364, August 3, 2010. Local Government Code
Local Government Code and Presidential Decree No. 464; right of redemption. Section 79 of Presidential Decree No. (PD) 464 provides for a one-year redemption period for properties foreclosed due to tax delinquency reckoned from the date of the registration of the sale of the property. Section 261 of the Local Government Code (LGC) provides, on the other hand, that the one-year period is reckoned from the date of sale. Section 534, or the repealing clause of the LGC, expressly repealed PD 464. Thus, as regards redemption of tax delinquent properties sold at public auction, section 261 of the LGC is applicable and the owner of the delinquent real property or person having interest therein, or his representative, has the right to redeem the property within one year from the date of sale upon payment of the delinquent tax and other fees. City Mayor, City Treasurer, City Assessor, all of Quezon City and Alvin Emerson S. Yu vs Rizal Commercial Banking Corporation, G.R. No. 171033, August 3, 2010. Local Government Code; Quezon City Revenue Code of 1993; general law and special law; right of redemption. The Quezon City, pursuant to the taxing power vested on local government units by the Constitution and the Local Government Code enacted the Quezon City Revenue Code of 1993 which provided, among other things, in its section 14 (a) paragraph 7 that the right of redemption may be exercised within one year from the date of the annotation of the sale of the property at the proper registry. The LGC is general law while the Quezon City Revenue Code of 1993 is a special law, having emanated only from the LGC and with limited territorial application in Quezon City only. The general law and the special law should be read together and harmonized, if possible, with a view to giving effect to both. To harmonize the provisions of the two laws and to maintain the policy of the law to aid rather than to defeat the owners right to redeem his property, section 14(a) paragraph 7 of the Quezon City Revenue Code of 1993 as defining the phrase one (1) year from the date of sale appearing in section 261 of the LGC to mean one (1) year from the date of the annotation of the sale of the property at the proper registry. City Mayor, City Treasurer,
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City Assessor, all of Quezon City and Alvin Emerson S. Yu vs Rizal Commercial Banking Corporation, G.R. No. 171033, August 3, 2010. Tax Treaty Philippines-Malaysia Tax Treaty; royalties and business profits. Payments for the use of programs where the recipient has proprietary rights is considered royalties under the Philippine-Malaysia tax treaty. Payments for programs where the proprietary rights belong to the payor are considered business profits under the said treaty and, where the recipient has no permanent establishment in the Philippines, are not subject to Philippine income tax. Commissioner of Internal Revenue vs Smart Communication, Inc., G.R. No. 179045-46, August 25, 2010. Here are selected August 2010 rulings of the Supreme Court of the Philippines on political law: Constitutional Law Civil Service Commission; jurisdiction. The civil service encompasses all branches and agencies of the Government, including government-owned or controlled corporations with original charters, like the Government Service Insurance System (GSIS), or those created by special law. Thus, GSIS employees are part of the civil service system and are subject to the law and to the circulars, rules and regulations issued by the Civil Service Commission (CSC) on discipline, attendance and general terms and conditions of employment. The CSC has jurisdiction to hear and decide disciplinary cases against erring employees. Winston F. Garcia vs. Mario I. Molina, et al./Winston F. Garcia vs. Mario I. Molina, et al., G.R. No. 157383/G.R. No. 174137, August 18, 2010. Double compensation. Section 8, Article IX-B of the Constitution provides that no elective or appointive public officer or employee shall receive
additional, double or indirect compensation, unless specifically authorized by law, nor accept without the consent of the Congress, any present emolument, office or title of any kind from any foreign government. Pensions and gratuities shall not be considered as additional, double or indirect compensation. This provision, however, does not apply to the present case as there was no double compensation to the petitioners. The questioned resolutions of the Monetary Board are valid corporate acts of petitioners that became the bases for granting them additional monthly representation and transportation allowance (RATA), as members of the Board of Directors of Philippine International Convention Center Inc. (PICCI), a government corporation whose sole stockholder is the Bangko Sentral ng Pilipinas (BSP). RATA is distinct from salary as a form of compensation. Unlike salary which is paid for services rendered, RATA is a form of allowance intended to defray expenses deemed unavoidable in the discharge of office. Hence, RATA is paid only to certain officials who, by the nature of their offices, incur representation and transportation expenses. Indeed, aside from the RATA that they have been receiving from the BSP, the grant of RATA to each of the petitioners for every board meeting they attended, in their capacity as members of the Board of Directors of PICCI, in addition to their per diem, does not violate the constitutional proscription against double compensation. Gabriel C. Singson, et al. vs. Commission on Audit, G.R. No. 159355, August 9, 2010. Eminent domain; voluntary agreement by landowner. Where the landowner agrees voluntarily to the taking of his property by the government for public use, he thereby waives his right to the institution of a formal expropriation proceeding covering such property. Failure for a long time of the owner to question the lack of expropriation proceedings covering a property that the government had taken constitutes a waiver of his right to gain back possession. The landowners remedy in such case is an action for the payment of just compensation, not ejectment. Here, the Court of Appeals erred in ordering the eviction of petitioner from the property that it has held as government school site for more than 50 years. The evidence on
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record shows that the respondents intended to cede the property to the City Government of Lipa permanently. In fact, they allowed the city to declare the property in its name for tax purposes. And when they sought to have the bigger lot subdivided, the respondents earmarked a specific portion for the City Government of Lipa. Under the circumstances, it may be assumed that the respondents had agreed to transfer ownership of the land to the government, whether to the City Government of Lipa or to the Republic of the Philippines, but the parties never formalized and documented such transfer. Consequently, petitioner should be deemed entitled to possession pending the respondents formal transfer of ownership to it upon payment of just compensation. Republic of the Philippines vs. Primo Mendoza and Maria Lucero, G.R. No. 185091, August 8, 2010. Equal protection clause. There is no substantial distinction between municipalities with pending cityhood bills in Congress and municipalities that did not have similar pending bills for purposes of the income requirement for converting a municipality into a city under Republic Act No. 9009. The pendency of such a bill does not affect or determine the level of income of a municipality. Municipalities with pending cityhood bills in Congress might even have lower annual income than municipalities that did not have pending cityhood bills. Thus, the classification criterion mere pendency of a cityhood bill in Congress is not rationally related to the purpose of RA 9009, which is to prevent fiscally non-viable municipalities from converting into cities. Moreover, the fact of pendency of a cityhood bill in Congress limits the exemption (from the income requirement) to a specific condition existing at the time of passage of RA 9009. That specific condition will never happen again. This violates the requirement that a valid classification must not be limited to existing conditions only. Also, the exemption provision in the Cityhood Laws gives the 16 respondent municipalities a unique advantage based on an arbitrary date the filing of their cityhood bills before the end of the 11th Congress as against all other municipalities that may want to convert into cities after the effectiveness of RA 9009. Lastly, limiting the exemption only to the 16
municipalities violates the Constitutional requirement that the classification must apply to all those who are similarly situated. Municipalities with the same income as the 16 respondent municipalities cannot convert into cities, while those 16 municipalities can. Clearly, as worded, the exemption found in the Cityhood Laws would be unconstitutional for violation of the equal protection clause. League of Cities of the Philippines represented by LCP National President Jerry P. Trenas, et al. vs. Commission on Elections, et al. G.R. No. 176951/G.R. No. 177499/G.R. No. 178056, August 24, 2010. Judicial review; justiciable controversy; moot case. Private respondent was not elected President in the May 10, 2010 election. Since the issue on the proper interpretation of the phrase any reelection in Section 4, Article VII of the Constitution will be premised on a persons second (whether immediate or not) election as President, there is no case or controversy to be resolved in this case. No live conflict of legal rights exists. There is in this case no definite, concrete, real or substantial controversy that touches on the legal relations of parties having adverse legal interests. No specific relief may conclusively be decreed upon by the Court in this case that will benefit any of the parties. As such, one of the essential requisites for the exercise of the power of judicial review, the existence of an actual case or controversy, is sorely lacking in this case. As a rule, the Court may only adjudicate actual, ongoing controversies. It is not empowered to decide moot questions or abstract propositions, or to declare principles or rules of law which cannot affect the result as to the thing in issue in the case before it. When a case is moot, it becomes non-justiciable. An action is considered moot when it no longer presents a justiciable controversy because the issues involved have become academic or dead or when the matter in dispute has already been resolved and hence, one is not entitled to judicial intervention unless the issue is likely to be raised again between the parties. There is nothing for the Court to resolve as the determination thereof has been overtaken by subsequent events. Assuming an actual case or controversy existed prior to the proclamation of a President who has been duly elected in the May 10, 2010 election, the same is no longer true today.
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Following the results of that election, private respondent was not elected President for the second time. Thus, any discussion of his reelection will simply be hypothetical and speculative. It will serve no useful or practical purpose. Atty. Evillo C. Pormento vs. Joseph Erap Ejercito Estrada and Commission on Elections. G.R. No. 191988. August 31, 2010. Operative fact doctrine. Under the operative fact doctrine, the law is recognized as unconstitutional but the effects of the unconstitutional law, prior to its declaration of nullity, may be left undisturbed as a matter of equity and fair play. However, in this case, the minoritys novel theory, invoking the operative fact doctrine, is that the enactment of the Cityhood Laws and the functioning of the 16 municipalities as new cities with new sets of officials and employees operate to constitutionalize the unconstitutional Cityhood Laws. This novel theory misapplies the operative fact doctrine and sets a gravely dangerous precedent. Under the minoritys view, an unconstitutional law, if already implemented prior to its declaration of unconstitutionality by the Court, can no longer be revoked and its implementation must be continued despite being unconstitutional. This view will open the floodgates to the wanton enactment of unconstitutional laws and a mad rush for their immediate implementation before the Court can declare them unconstitutional. This view is an open invitation to serially violate the Constitution, and be quick about it, lest the violation be stopped by the Court. The operative fact doctrine is a rule of equity. As such, it must be applied as an exception to the general rule that an unconstitutional law produces no effects. It can never be invoked to validate as constitutional an unconstitutional act. The operative fact doctrine never validates or constitutionalizes an unconstitutional law. The unconstitutional law remains unconstitutional, but its effects, prior to its judicial declaration of nullity, may be left undisturbed as a matter of equity and fair play. The doctrine affects or modifies only the effects of the unconstitutional law, not the unconstitutional law itself. Applying the doctrine to this case, the
Cityhood Laws remain unconstitutional because they violate Section 10, Article X of the Constitution. However, the effects of the implementation of the Cityhood Laws prior to the declaration of their nullity, such as the payment of salaries and supplies by the concerned local government units or their issuance of licenses or execution of contracts, may be recognized as valid and effective. League of Cities of the Philippines represented by LCP National President Jerry P. Trenas, et al. vs. Commission on Elections, et al. G.R. No. 176951/G.R. No. 177499/G.R. No. 178056, August 24, 2010. Search warrant; requirements for validity. The validity of the issuance of a search warrant rests upon the following factors: (1) it must be issued upon probable cause; (2) the probable cause must be determined by the judge himself and not by the applicant or any other person; (3) in the determination of probable cause, the judge must examine, under oath or affirmation, the complainant and such witnesses as the latter may produce; and (4) the warrant issued must particularly describe the place to be searched and persons or things to be seized. On the first requisite, a magistrates determination of probable cause for the issuance of a search warrant is paid great deference by a reviewing court, as long as there was substantial basis for that determination. Substantial basis means that the questions of the examining judge brought out such facts and circumstances as would lead a reasonably discreet and prudent man to believe that an offense has been committed, and the objects in connection with the offense sought to be seized are in the place sought to be searched. On the last requirement, a description of the place to be searched is sufficient if the officer serving the warrant can, with reasonable effort, ascertain and identify the place intended and distinguish it from other places in the community. A designation or description that points out the place to be searched to the exclusion of all others, and on inquiry unerringly leads the peace officers to it, satisfies the constitutional requirement of definiteness. People of the Philippines vs. Estela Tuan y Baludda. G.R. No. 176066, August 11, 2010.
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Warrantless arrest. Appellant was arrested during an entrapment operation where he was caught in flagrante delicto selling shabu. When an arrest is made during an entrapment operation, it is not required that a warrant be secured in line with Rule 113, Section 5(a) of the Revised Rules of Court, which provides that a peace officer or a private person may, without a warrant, arrest a person when, in his presence, the person to be arrested has committed, is actually committing, or is attempting to commit an offense. A buy-bust operation is a form of entrapment which in recent years has been accepted as a valid and effective mode of apprehending drug pushers. If carried out with due regard for constitutional and legal safeguards, a buybust operation, such as the one involving appellant, deserves judicial sanction. Consequently, the warrantless arrest and warrantless search and seizure conducted on the person of appellant were allowed under the circumstances. The search, incident to his lawful arrest, needed no warrant to sustain its validity. Thus, there is no doubt that the sachets of shabu recovered during the legitimate buy-bust operation are admissible and were properly admitted in evidence against him. People of the Philippines vs. Michael Sembrano y Castro. G.R. No. 185848, August 16, 2010. Administrative Law Administrative agencies; findings. Findings of fact of administrative agencies and quasi-judicial bodies, like the Department of Agrarian Reform Adjudication Board, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded respect. In this case, there is no ground to disturb the DARABs findings, which affirmed those of the Provincial Agrarian Reform Adjudication Board after due hearing and appreciation of the evidence submitted by both parties. Heirs of Jose M. Cervantes, et al. vs. Jesus G. Miranda. G.R. No. 183352, August 9, 2010. Administrative cases; preliminary investigation; due process. Section 45 of the Government Service Insurance System Act of 1997 gives the President
and General Manager of GSIS the authority and responsibility to remove, suspend or otherwise discipline GSIS personnel for cause. However, this power is not without limitations for it must be exercised in accordance with civil service rules. While the Uniform Rules on Administrative Cases in the Civil Service (Civil Service Rules) do not specifically provide that a formal charge issued against a government employee without the requisite preliminary investigation is null and void, it is required that, upon receipt of a complaint which is sufficient in form and substance, the disciplining authority shall require the person complained of to submit a counteraffidavit or comment under oath within three days from receipt. The use of the word shall quite obviously indicates that it is mandatory for the disciplining authority to conduct a preliminary investigation or at least give the respondent the opportunity to comment and explain his side. This must be done prior to the issuance of the formal charge, and the comment required is different from the answer that may later be filed by respondents. Contrary to petitioners claim, no exception is provided for in the Civil Service Rules, not even an indictment in flagranti as claimed by petitioner. The above rules apply even if the complainant is the disciplining authority himself, as in this case. To comply with such requirement, petitioner could have issued a memorandum requiring respondents to explain why no disciplinary action should be taken against them instead of immediately issuing formal charges. With respondents comments, petitioner should have properly evaluated both sides of the controversy before making a conclusion that there was a prima facie case against respondents, leading to the issuance of the questioned formal charges. It is noteworthy that the very acts subject of the administrative cases stemmed from an event that took place the day before the formal charges were issued. It appears, therefore, that the formal charges were issued after the sole determination by the petitioner as the disciplining authority that there was a prima facie case against respondents. To condone this would give the disciplining authority an unrestricted power to judge by himself the nature of the act complained of as well as the gravity of the charges. Thus, respondents here were denied
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due process of law. Not even the fact that the charges against them are serious and evidence of their guilt is in the opinion of their superior strong can compensate for the procedural shortcut taken by petitioner. The filing by petitioner of formal charges against the respondents without complying with the mandated preliminary investigation or at least giving the respondents the opportunity to comment violated their right to due process. Accordingly, the formal charges are void ab initio and may be assailed directly or indirectly at anytime. Winston F. Garcia vs. Mario I. Molina, et al./Winston F. Garcia vs. Mario I. Molina, et al. .G.R. No. 157383/G.R. No. 174137, August 18, 2010. Administrative cases; decision rendered without due process. The cardinal precept is that where there is a violation of basic constitutional rights, courts are ousted from their jurisdiction. The violation of a partys right to due process raises a serious jurisdictional issue which cannot be glossed over or disregarded at will. Where the denial of the fundamental right to due process is apparent, a decision rendered in disregard of that right is void for lack of jurisdiction. This rule is equally true in quasi-judicial and administrative proceedings, for the constitutional guarantee that no man shall be deprived of life, liberty, or property without due process is unqualified by the type of proceedings (whether judicial or administrative) where he stands to lose the same. Although administrative procedural rules are less stringent and often applied more liberally, administrative proceedings are not exempt from basic and fundamental procedural principles, such as the right to due process in investigations and hearings. Winston F. Garcia vs. Mario I. Molina, et al./Winston F. Garcia vs. Mario I. Molina, et al., G.R. No. 157383/G.R. No. 174137, August 18, 2010. Administrative cases; quantum of evidence. In administrative cases, the requisite proof is substantial evidence, i.e., the amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. In this case, substantial evidence consisted of the uniform findings of the Department of Environment and Natural Resources, the Deputy
Ombudsman for Luzon and the Court of Appeals that petitioner connived with his co-defendants to destroy the improvements introduced by respondent on the subject property so they could construct their own cottages thereon. Josephil C. Bien vs. Pedro B. Bo, G.R. No. 179333, August 3, 2010. Public officers; statement of assets and liabilities. Even an asset that was acquired through chattel mortgage must be declared and included in the Sworn Statement of Assets and Liabilities (SSAL). The law requires that the SSAL be accomplished truthfully and in detail without distinction as to how the property was acquired. Respondent, therefore, cannot escape liability by arguing that the ownership of the vehicle has not yet passed to him on the basis that it was acquired only on installment basis. The requirement to file the SSAL not later than the first 15 days of April at the close of every calendar year must not be treated as a simple and trivial routine, but as an obligation that is part and parcel of every civil servants duty to the people. It serves as the basis of the government and the people in monitoring the income and lifestyle of officials and employees in the government in compliance with the Constitutional policy to eradicate corruption, promote transparency in government, and ensure that all government employees and officials lead just and modest lives. It is for this reason that the SSAL must be sworn to and is made accessible to the public, subject to reasonable administrative regulations. Hon. Waldo Q. Flores, et al. vs. Atty. Antonio F. Montemayor. G.R. No. 170146, August 25, 2010. Local Government Abuse of authority. Addressing the argument of petitioner, a barangay official, that there was no abuse of authority because the incident complained of occurred in another barangay over which he has no authority and jurisdiction, the Supreme Court affirmed the ruling of the Court of Appeals that petitioner is liable for abuse of authority on the basis that he
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participated in the unlawful act as a higher authority that gave a semblance of legality over that act and influenced the actions of his co-defendants. Here, petitioner was president of the organization of barangay officials in his municipality and sat as ex-officio member of the Sangguniang Bayan, which has power to review barangay ordinances and authority to discipline barangay officials. His co-defendants were officials in the barangay where the incident occurred. Josephil C. Bien vs. Pedro B. Bo, G.R. No. 179333, August 3, 2010. Creation of local government unit. The Constitution states that the creation of local government units must follow the criteria established in the Local Government Code and not in any other law. There is only one Local Government Code. The Constitution requires Congress to stipulate in the Local Government Code all the criteria necessary for the creation of a city, including the conversion of a municipality into a city. Congress cannot write such criteria in any other law. The clear intent of the Constitution is to insure that the creation of cities and other political units must follow the same uniform, non-discriminatory criteria found solely in the Local Government Code. Any derogation or deviation from the criteria prescribed in the Local Government Code violates Section 10, Article X of the Constitution. Republic Act No. 9009 amended Section 450 of the Local Government Code to increase the income requirement from Php20 million to Php100 million for the creation of a city. This law took effect on 30 June 2001. Hence, from that moment the Local Government Code required that any municipality desiring to become a city must satisfy the Php100 million income requirement. Section 450 of the Local Government Code, as amended by RA 9009, does not contain any exemption from this income requirement. In enacting RA 9009, Congress did not grant any exemption to respondent municipalities, even though their cityhood bills were pending in Congress when Congress passed RA 9009. The laws converting these municipalities into cities, all enacted after the RA 9009 became effective,
explicitly exempt respondent municipalities from the increased income requirement in Section 450 of the Local Government Code, as amended by RA 9009. Such exemption clearly violates Section 10, Article X of the Constitution and is thus patently unconstitutional. To be valid, such exemption must be written in the Local Government Code and not in any other law. League of Cities of the Philippines represented by LCP National President Jerry P. Trenas, et al. vs. Commission on Elections, et al. G.R. No. 176951/G.R. No. 177499/G.R. No. 178056, August 24, 2010. Special Laws Agrarian reform; deposit of provisional compensation. The amount of provisional compensation that the Land Bank of the Philippines (LBP) is required to deposit in the name of the landowner if the latter rejects the offer of compensation of the Department of Agrarian Reform (DAR) under Section 16 of Republic Act No. 6657 should be the LBPs initial valuation of the land and not, as respondent argues, the sum awarded by DARs adjudication bodies as compensation in a summary administrative proceeding. The deposit of such provisional compensation must be made even before the summary administrative proceeding commences, or at least simultaneously with it, once the landowner rejects the initial valuation of the LBP. Such deposit results from the landowners rejection of the DAR offer (based on the LBPs initial valuation). Both the conduct of summary administrative proceeding and deposit of provisional compensation follow as a consequence of the landowners rejection. Land Bank of the Philippines vs. Heir of Trinidad S. Vda. De Arieta. G.R. No. 161834, August 11, 2010. Agrarian reform; just compensation. Section 17 of Republic Act No. 6657 is the principal basis for computing just compensation, and the factors set forth therein have been translated into a formula outlined in DAR Administrative Order No. 5, series of 1998 (DAR AO 5). While the determination of just compensation is essentially a judicial function vested
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in the Regional Trial Court acting as a Special Agrarian Court, a judge cannot abuse his discretion by not taking into full consideration the factors specifically identified by law and its implementing rules. Special Agrarian Courts are not at liberty to disregard the formula laid down in DAR AO 5, because unless an administrative order is declared invalid, courts have no option but to apply it. Courts cannot ignore, without violating the agrarian reform law, the formula provided by the Department of Agrarian Reform (DAR) for determining just compensation. In this case, the court adopted a different formula in determining the land value by considering the average between the findings of DAR using the formula laid down in Executive Order No. 228 and the market value of the property as stated in the tax declaration. This is obviously a departure from the mandate of the law and DAR AO 5. Land Bank of the Philippines vs. Rizalina Gustilo Barrido, et al., G.R. No. 183688, August 18, 2010. Agrarian reform; sale of land. Petitioners title shows on its face that the government granted title to them on January 9, 1990, by virtue of Presidential Decree No. 27. This law explicitly prohibits any form of transfer of the land granted under it except to the government or by hereditary succession to the successors of the farmer beneficiary. Upon the enactment of Executive Order No. 228 in 1987, however, the restriction ceased to be absolute. Land reform beneficiaries were allowed to transfer ownership of their lands provided that their amortizations with the Land Bank of the Philippines have been paid in full. In this case, petitioners title categorically states that they have fully complied with the requirements for the final grant of title under PD 27. This means that they have completed payment of their amortizations with Land Bank. Consequently, they could already legally transfer their title to another. Heirs of Paulino Atienza vs. Domingo P. Espidol, G.R. No. 180665, August 11, 2010. Agricultural land; conversion. Conversion of the subject landholding under the 1980 Kasunduan is not the conversion of landholding that is contemplated by Section 36 of Republic Act No. 3844, which governs the
dispossession of an agricultural lessee and the termination of his rights to enjoy and possess the landholding. Conversion here has been defined as the act of changing the current use of a piece of agricultural land into some other use as approved by the Department of Agrarian Reform. More to the point is that for conversion to avail as a ground for dispossession, Section 36 implies the necessity of prior court proceedings in which the issue of conversion has been determined and a final order issued directing dispossession upon that ground. In this case, however, respondent does not profess that there had been at any tine such proceedings or that there was such court order. Neither does he assert that the lot in question had undergone conversion with authority from the Department of Agrarian Reform. Emilia Micking Vda. De Coronel, et al. Vs. Miguel Tanjangco, Jr., G.R. No. 170693, August 8, 2010. Presidential Anti-Graft Commission; powers. The Court rejected respondents contention that he was deprived of his right to due process when the Presidential Anti-Graft Commission (PAGC) proceeded to investigate him on the basis of an anonymous complaint in the absence of any documents supporting the complainants assertions. Section 4(c) of Executive Order No. 12 states that the PAGC has the power to give due course to anonymous complaints against presidential appointees if there appears on the face of the complaint or based on the supporting documents attached to the anonymous complaint a probable cause to engender a belief that the allegations may be true. The use of the conjunctive word or in the said provision is determinative since it empowers the PAGC to exercise discretion in giving due course to anonymous complaints. Because of the said provision, an anonymous complaint may be given due course even if the same is without supporting documents, so long as it appears from the face of the complaint that there is probable cause. Hon. Waldo Q. Flores, et al. vs. Atty. Antonio F. Montemayor. G.R. No. 170146, August 25, 2010. Water districts; government-owned and controlled corporations. A local water district is a government-owned and controlled corporation with
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special charter since it is created pursuant to a special law, Presidential Decree No. 198 (1973). PD 198 constitutes the special charter by virtue of which local water districts exist. Unlike private corporations that derive their legal existence and power from the Corporation Code, water districts derive their legal existence and power from P.D. No. 198. Section 6 of the decree in fact provides that water districts shall exercise the powers, rights and privileges given to private corporations under existing laws, in addition to the powers granted in, and subject to such restrictions imposed under this Act. Therefore, water districts would not have corporate powers without PD 198. Engr. Ranulfo C. Feliciano vs. Hon. Cornelio C. Gison. G.R. No. 165641, August 25, 2010. Here are selected August 2010 rulings of the Supreme Court of the Philippines on labor law and procedure: Labor Law Dismissal; abandonment. Time and again, the Supreme Court has held that abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal, more so if the same is accompanied by a prayer for reinstatement. In the present case, however, petitioner filed his complaint more than one year after his alleged termination from employment. Moreover, petitioner did not ask for reinstatement in the complaint form, which he personally filled up and filed with the NLRC. The prayer for reinstatement is made only in the Position Paper that was later prepared by his counsel. This is an indication that petitioner never had the intention or desire to return to his job. Elpidio Calipay vs. National Labor Relations Commission, et al., G.R. No. 166411, August 3, 2010. Dismissal; burden of proof. In termination cases, the employer has the burden of proving, by substantial evidence that the dismissal is for just cause. If the employer fails to discharge the burden of proof, the dismissal is deemed illegal. In the present case, BCPI failed to discharge its burden
when it failed to present any evidence of the alleged fistfight, aside from a single statement, which was refuted by statements made by other witnesses and was found to be incredible by both the Labor Arbiter and the NLRC. Alex Gurango vs. Best Chemicals and Plastic, Inc., et al., G.R. No. 174593, August 25, 2010. Dismissal; burden of proof. The law mandates that the burden of proving the validity of the termination of employment rests with the employer. Failure to discharge this evidentiary burden would necessarily mean that the dismissal was not justified and, therefore, illegal. Unsubstantiated suspicions, accusations, and conclusions of employers do not provide for legal justification for dismissing employees. In case of doubt, such cases should be resolved in favor of labor, pursuant to the social justice policy of labor laws and the Constitution. Century Canning Corporation, Ricardo T. Po, Jr., et al. vs. Vicente Randy R. Ramil, G.R. No. 171630, August 8, 2010. Dismissal; due process. In termination proceedings of employees, procedural due process consists of the twin requirements of notice and hearing. The employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the second informs the employee of the employers decision to dismiss him. The requirement of a hearing is complied with as long as there was an opportunity to be heard, and not necessarily that an actual hearing was conducted. Pharmacia and Upjohn, Inc., et al. vs. Ricardo P. Albayda, Jr., G.R. No. 172724, August 23, 2010. Dismissal; due process. The Labor Code recognizes the right to due process of all workers, without distinction as to the cause of their termination, even if the cause was their supposed involvement in strike-related violence. In the present case, PHIMCO sent a letter to the affected union members/officers, directing them to explain within 24 hours why they should not be dismissed for the illegal acts they committed during the
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strike; three days later, the union members/officers were informed of their dismissal from employment. We do not find this company procedure to be sufficient compliance with due process. It does not appear from the evidence that the union officers were specifically informed of the charges against them. Also, the short interval of time between the first and second notice shows that a mere token recognition of the due process requirements was made, indicating the companys intent to dismiss the union members involved, without any meaningful resort to the guarantees accorded them by law. PHIMCO Industries, Inc. vs. PHIMCO Industries Labor Association (PILA), et al., G.R. No. 170830, August 11, 2010. Dismissal; employees past infractions. A previous offense may be used as valid justification for dismissal from work only if the past infractions are related to the subsequent offense upon which the basis of termination is decreed. The respondents previous incidents of tardiness in reporting for work were entirely separate and distinct from his latest alleged infraction of forgery. Hence, the same could no longer be utilized as an added justification for his dismissal. Besides, respondent had already been sanctioned for his prior infractions. To consider these offenses as justification for his dismissal would be penalizing respondent twice for the same offense. Century Canning Corporation, Ricardo T. Po, Jr., et al. vs. Vicente Randy R. Ramil, G.R. No. 171630, August 8, 2010. Dismissal; feng shui; breach of trust and confidence. The Court finds that the complainants allegations are more credible and that she was dismissed from her employment because the Feng Shui master found that complainants Chinese Zodiac Sign was a mismatch to that of respondents. This is not a just and valid cause for an employees dismissal. In contrast, respondents pleadings and evidence suffer from several inconsistencies and the affidavits presented by respondents only pertain to petty matters that are not sufficient to support respondents alleged loss of trust and confidence. To be a valid cause for termination of employment,
the act or acts constituting breach of trust must have been done intentionally, knowingly, and purposely; and they must be founded on clearly established facts. Wensha Spa Center, inc. and/or Xu Zhi Jie ,vs. Loreta T. Yung, G.R. No. 185122, August 16, 2010. Dismissal; gross negligence and loss of confidence. Gross negligence connotes want of care in the performance of ones duties. Petitioners failure on 3 separate occasions to require clients to sign the requisite documents constituted gross negligence. Furthermore, it has been held that if the employees are cashiers, managers, supervisors, salesmen or other personnel occupying positions of responsibility, the employers loss of trust and confidence in said employees may justify the termination of their employment. As the Banks Personal Banking Manager, petitioners failure to comply with basic banking policies and procedures were inimical to the interests of the bank, making his dismissal based on loss of confidence justified. Jesus E. Dycoco, Jr.vs. Equitable PCI Bank (now Banco de Oro), Rene Bunaventura and Siles Samalea, G.R. No. 188271, August 16, 2010. Dismissal; loss of trust and confidence. Employers are allowed a wider latitude of discretion in terminating the services of employees who perform functions which by their nature require the employers full trust and confidence and the mere existence of basis for believing that the employee has breached the trust of the employer is sufficient. However, this does not mean that the said basis may be arbitrary and unfounded. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established. It must rest on substantial grounds and not on the employers arbitrariness, whim, caprice or suspicion; otherwise, the employee would eternally remain at the mercy of the employer. Century Canning Corporation, Ricardo T. Po, Jr., et al. vs. Vicente Randy R. Ramil, G.R. No. 171630, August 8, 2010.

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Dismissal; probationary employment. Though the acts charged against de Castro took place when he was still under probationary employment, the records show that de Castro was dismissed on the ninth month of his employment with LBNI. By then, he was already a regular employee by operation of law. As a regular employee, de Castro was entitled to security of tenure and his illegal dismissal from LBNI justified the awards of separation pay, backwages, and damages Carlos De Castro vs. Liberty Broadcasting Network, Inc. and Edgardo Quigue, G.R. No. 165153. August 25, 2010. Dismissal; project employees; damages. Prior or advance notice of termination is not part of procedural due process if the termination of a project employee is brought about by the completion of the contract or phase thereof. This is because completion of the work or project automatically terminates the employment, in which case, the employer is, under the law, only obliged to render a report to the DOLE. Therefore, failing to give project employees advance notice of their termination is not a violation of procedural due process and cannot be the basis for the payment of nominal damages. D.M. Consunji, Inc. vs. Antonio Gobres, et al., G.R. No. 169170, August 8, 2010. Dismissal; separation pay and backwages. The awards of separation pay and backwages are not mutually exclusive and both may be given to the respondent. The normal consequences of a finding that an employee has been illegally dismissed are, firstly, that the employee becomes entitled to reinstatement to his former position without loss of seniority rights and, secondly, the payment of backwages corresponding to the period from his illegal dismissal up to actual reinstatement. These are two separate and distinct remedies granted to the employee and the inappropriateness or nonavailability of one does not carry with it the inappropriateness or nonavailability of the other. Under the doctrine of strained relations, the payment of separation pay has been considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. The
grant of separation pay is a proper substitute only for reinstatement; it cannot be an adequate substitute for both reinstatement and backwages. Century Canning Corporation, Ricardo T. Po, Jr., et al. vs. Vicente Randy R. Ramil, G.R. No. 171630, August 8, 2010. Dismissal; serious misconduct. Misconduct is defined as the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. For serious misconduct to justify dismissal under the law, (a) it must be serious, (b) must relate to the performance of the employees duties; and (c) must show that the employee has become unfit to continue working for the employer. It is noteworthy that prior to this incident, there had been several cases of theft and vandalism involving both respondent companys property and personal belongings of other employees. In order to address this issue of losses, respondent company issued two memoranda implementing an intensive inspection procedure and reminding all employees that those who will be caught stealing and performing acts of vandalism will be dealt with in accordance with the companys Code of Conduct. Despite these reminders, complainant took the packing tape and was caught during the routine inspection. All these circumstances point to the conclusion that it was not just an error of judgment, but a deliberate act of theft of company property. Nagkakaisang Lakas ng Manggagawa sa Keihin (NLMKOLALIA-KMU) and Helen Valenzuela vs. Keihin Philippines Corporation, G.R. No. 171115, August 9, 2010. Dismissal; union security. In terminating the employment of an employee by enforcing the union security clause, the employer needs to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the employee from the union. These requisites constitute just cause
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for terminating an employee based on the union security provision of the CBA. The petitioner failed to satisfy the third requirement since nothing in the records would show that respondents failed to maintain their membership in good standing in the union. Significantly, petitioners act of dismissing respondents stemmed from the latters act of signing an authorization letter to file a petition for certification election as they signed it outside the freedom period. The mere signing of an authorization letter before the freedom period is not sufficient ground to terminate the employment of respondents inasmuch as the petition itself was actually filed during the freedom period. The court emphasizes anew that the employer is bound to exercise caution in terminating the services of his employees especially so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement. Picop Resources Incorporated (PRI) vs. Anacleto L. Taeca, et al., G.R. No. 160828, August 9, 2010. Dimissal; use of illegal drugs. The law is clear that drug tests shall be performed only by authorized drug testing centers. In this case, Sulpicio Lines failed to prove that S.M. Lazo Clinic is an accredited drug testing center nor did it deny the complainants allegation that S.M. Lazo Clinic was not accredited. Also, only a screening test was conducted to determine if the complainant was guilty of using illegal drugs. Sulpicio Lines did not confirm the positive result of the screening test with a confirmatory test as required by R.A. 9165. Hence, Sulpicio Lines failed to indubitably prove that Nacague was guilty of using illegal drugs and failed to clearly show that it had a valid and legal cause for terminating Nacagues employment. When the alleged valid cause for the termination of employment is not clearly proven, as in this case, the law considers the matter a case of illegal dismissal. Jeffrey Nacague vs. Sulpicio Lines, Inc., G.R. No. 172589, August 8, 2010.
Dismissal; validity. The company did not adduce any evidence to prove that Siazars dismissal had been for a just or authorized cause, as in fact it had been its consistent stand that it did not terminate him and that he quit on his own. But given the findings of the Court that the company had indeed dismissed Siazar and that such dismissal has remained unexplained, there can be no other conclusion but that the dismissal was illegal. Agricultural and Industrial Supplies Corporation, et al. vs. Jueber P. Siazar, et al., G.R. No. 177970, August 25, 2010. Due process; decision rendered without due process. The violation of a partys right to due process raises a serious jurisdictional issue that cannot be glossed over or disregarded at will. Where the denial of the fundamental right to due process is apparent, a decision rendered in disregard of that right is void for lack of jurisdiction. This rule is equally true in quasijudicial and administrative proceedings, for the constitutional guarantee that no man shall be deprived of life, liberty, or property without due process is unqualified by the type of proceedings (whether judicial or administrative) where he stands to lose the same. Winston F. Garcia vs. Mario I. Molina, et al./Winston F. Garcia Vs. Mario I. Molina, et al., G.R. No. 157383/G.R. No. 174137, August 10, 2010. Employee; evaluation and promotion. The fact that employees were reclassified from Job Grade Level 1 to Job Grade Level 2 as a result of a job evaluation program does not automatically entail a promotion or grant them an increase in salary. Of primordial consideration is not the nomenclature or title given to the employee, but the nature of his functions. What transpired in this case was only a promotion in nomenclature. The employees continued to occupy the same positions they were occupying prior to the job evaluation. Moreover, their job titles remained the same and they were not given additional duties and responsibilities. SCA Hygiene Products Corporation Employees Association-FFW vs. SCA Hygiene Products Corporation, G.R. No. 182877, August 9, 2010.
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Employee; security of tenure. A workers security of tenure is guaranteed by the Constitution and the Labor Code. Under the security of tenure guarantee, a worker can only be terminated from his employment for cause and after due process. For a valid termination by the employer: (1) the dismissal must be for a valid cause as provided in Article 282, or for any of the authorized causes under Articles 283 and 284 of the Labor Code; and (2) the employee must be afforded an opportunity to be heard and to defend himself. A just and valid cause for an employees dismissal must be supported by substantial evidence, and before the employee can be dismissed, he must be given proper notice of such cause/s and an adequate opportunity to be heard. In the process, the employer bears the burden of proving that the dismissal of an employee was for a valid cause. Its failure to discharge this burden renders the dismissal unjustified and, therefore, illegal. Wensha Spa Center, Inc. and/or Xu Zhi Jie vs. Loreta T. Yung, G.R. No. 185122, August 16, 2010. Employee benefit; time of death. The death should be deemed compensable under the ECC since Henry was on his way back to Manila in order to be on time and be ready for work the next day when his accidental death occurred. He should already be deemed en route to the performance of his duty at the time of the accident. It should be noted that Henrys superior allowed him to travel to La Union to visit his ailing mother on the condition that that he return the next day. Under these facts, Henry was in the course of complying with his superiors order when he met his fatal accident. To be sure, he was not in an actual firefighting or accident situation when he died, but returning to work as instructed by his superior is no less equivalent to compensable performance of duty under Section 1, Rule III of the ECC Rules. Government Service Insurance System vs. Felicitas Zarate, as substituted by her heirs, namely Melanie Zarate, et al., G.R. No. 170847, August 3, 2010. Illegal dismissal; effect of rehabilitation proceedings. The existence of the Stay Order which would generally authorize the suspension of judicial
proceedings could not have affected the Courts action on the present case due to the petitioners failure to raise the pendency of the rehabilitation proceedings in its memorandum to the Court. At any rate, a stay order simply suspends all actions for claims against a corporation undergoing rehabilitation; it does not work to oust a court of its jurisdiction over a case properly filed before it. Thus, the Courts ruling on the principal issue of the case stands. Nevertheless, with LBNIs manifestation that it is still undergoing rehabilitation, the Court resolves to suspend the execution of our Decision until the termination of the rehabilitation proceedings. Carlos De Castro vs. Liberty Broadcasting Network, Inc. and Edgardo Quigue, G.R. No. 165153. August 25, 2010. Job contracting. In permissible job contracting, the 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 to be performed or completed within or outside the premises of the principal. The test is whether the independent contractor has contracted to do the work according to his own methods and without being subject to the principals control except only as to the results, he has substantial capital, and he has assured the contractual employees entitlement to all labor and occupational safety and health standards, free exercise of the right to selforganization, security of tenure, and social and welfare benefits. Spic n Span Services Corp. vs. Gloria Paje, et al., G.R. No. 174084, August 25, 2010. Management prerogative; transfer of employees. Jurisprudence recognizes the exercise of management prerogative to transfer or assign employees from one office or area of operation to another, provided there is no demotion in rank or diminution of salary, benefits, and other privileges, and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. To determine the validity of the transfer of employees, the employer must
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show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the employer fail to overcome this burden of proof, the employees transfer shall be tantamount to constructive dismissal. Pharmacia and Upjohn, Inc., et al. vs. Ricardo P. Albayda, Jr., G.R. No. 172724, August 23, 2010. Merger; employee terms and conditions. That BPI is the same entity as FEBTC after the merger is but a legal fiction intended as a tool to adjudicate rights and obligations between and among the merged corporations and the persons that deal with them. Although in a merger it is as if there is no change in the personality of the employer, there is in reality a change in the situation of the employee. Once an FEBTC employee is absorbed, there are presumably changes in his condition of employment even if his previous tenure and salary rate is recognized by BPI. It is reasonable to assume that BPI would have different rules and regulations and company practices than FEBTC and it is incumbent upon the former FEBTC employees to obey these new. Not the least of these changes is the fact that prior to the merger FEBTC employees were employees of an unorganized establishment and after the merger they became employees of a unionized company that had an existing CBA with the certified union. Thus, although in a sense BPI is continuing FEBTCs employment of these absorbed employees, BPIs employment of these absorbed employees will not be under exactly the same terms and conditions as stated in the latters employment contracts with FEBTC. Bank of the Philippine Islands vs. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, G.R. No. 164301, August 10, 2010. Reinstatement of employee; doctrine of strained relations. Under the doctrine of strained relations, the payment of separation pay has been considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. On the one hand, such payment liberates the employee from what could be a highly oppressive work environment.
On the other, the payment releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust. Wensha Spa Center, Inc. and/or Xu Zhi Jie vs. Loreta T. Yung, G.R. No. 185122, August 16, 2010. Retirement pay; applicability to employees on commission basis. Even if the petitioner as bus conductor was paid on commission basis, he falls within the coverage of R.A. 7641 and its implementing rules. Thus, his retirement pay should include the cash equivalent of 5-days SIL and 1/12 of 13th month pay. The NLRCs reliance on the case of R & E Transport, Inc. as a basis for ruling that bus conductors are not covered by the law on SIL and 13th month pay is erroneous since that involved a taxi driver who was paid according to the boundary system. There is a difference between drivers paid under the boundary system and conductors who are paid on commission basis. In practice, taxi drivers do not receive fixed wages and retain only those sums in excess of the boundary or fee they pay to the owners or operators of the vehicles. Conductors, on the other hand, are paid a certain percentage of the bus earnings for the day. Rodolfo J. Serrano vs. Severino Santos Transit and/or Severino Santos, G.R. No. 187698, August 9, 2010. Separation pay. In those instances where an employee has been validly dismissed for causes other than serious misconduct or those reflecting on his moral character, separation pay may still be granted after giving considerable weight to his long years of employment. In this case, equity considerations dictate that respondents tenure be computed from 1978, the year when respondent started working for Upjohn, and not only from 1996, when the merger of Pharmacia and Upjohn took place. Pharmacia and Upjohn, Inc., et al. vs. Ricardo p. Albayda, Jr., G.R. No. 172724, August 23, 2010. Strike; validity of strike. Despite the validity of the purpose of a strike and the unions compliance with the procedural requirements, a strike may still
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be held illegal where the means employed are illegal. While the strike had not been marred by actual violence and patent intimidation, the picketing that respondent PILA officers and members undertook as part of their strike activities effectively blocked the free ingress to and egress from PHIMCOs premises, thus preventing non-striking employees and company vehicles from entering the PHIMCO compound. In this manner, the picketers violated Article 264(e) of the Labor Code and tainted the strike with illegality. PHIMCO Industries, Inc. vs. PHIMCO Industries Labor Association (PILA), et al., G.R. No. 170830, August 11, 2010. Union; eligibility of confidential employees to join. Confidential employees are defined as those who (1) assist or act in a confidential capacity, (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations. The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee that is, the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. In the present case, there is no showing that the secretaries/clerks and checkers assisted or acted in a confidential capacity to managerial employees and obtained confidential information relating to labor relations policies. And even assuming that they had exposure to internal business operations of the company, as respondent claims, this is not per se ground for their exclusion in the bargaining unit of the rank-andfile employees. Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery vs. Asia Brewery, Inc., G.R. No. 162025, August 3, 2010. Union; liability for invalid strike. The effects of illegal strikes, outlined in Article 264 of the Labor Code, make a distinction between participating workers and union officers. The services of an ordinary striking worker cannot be terminated for mere participation in an illegal strike; proof must be adduced showing that he or she committed illegal acts during the strike. The services of a participating union officer, on the other hand, may be terminated, not only when he actually commits an illegal act during a strike,
but also if he knowingly participates in an illegal strike. PHIMCO Industries, Inc. vs. PHIMCO Industries Labor Association (PILA), et al., G.R. No. 170830, August 11, 2010. Union shop; effect of merger. All employees in the bargaining unit covered by a Union Shop Clause in their CBA with management are subject to its terms. However, under law and jurisprudence, the following kinds of employees are exempted from its coverage, namely, (1) employees who at the time the union shop agreement takes effect are bona fide members of a religious organization which prohibits its members from joining labor unions on religious grounds; (2) employees already in the service and already members of a union other than the majority at the time the union shop agreement took effect; (3) confidential employees who are excluded from the rank and file bargaining unit; and (4) employees excluded from the union shop by express terms of the agreement. In the absence of any of these recognized exceptions, there is no basis to conclude that the terms and conditions of employment under a valid CBA in force in the surviving corporation should not be made to apply to the absorbed employees. Bank of the Philippine Islands vs. BPI Employees Union-Davao ChapterFederation of Unions in BPI Unibank, G.R. No. 164301, August 10, 2010. Labor Procedure CSC; rules for dismissal. The filing of formal charges against the respondents without complying with the mandated preliminary investigation or at least giving the respondents the opportunity to comment violated the latters right to due process. These rules on due process apply even in cases where the complainant is the disciplining officer himself, as in this case. The fact that the charges against the respondents are serious or that the evidence of their guilt is strong cannot compensate for the procedural shortcut undertaken by petitioner. Winston F. Garcia vs. Mario I. Molina, et al./Winston F. Garcia Vs. Mario I. Molina, et al., G.R. No. 157383/G.R. No. 174137, August 10, 2010.
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Labor case; due process; reevaluation. A reevaluation is a process by which a person or office (in this case the DOLE secretary) revisits its own initial pronouncement and makes another assessment of its findings. In simple terms, to reevaluate is to take another look at a previous matter in issue. From a procedural standpoint, a reevaluation is a continuation of the original case and not a new proceeding. The evidence, financial reports and other documents submitted by the parties in the course of the original proceeding are to be visited and reviewed again. A reevaluation does not necessitate the introduction of new materials for review nor does it require a full hearing for new arguments. Hence, failure to order the presentation of new evidence in the reevaluation of an Order is not a violation of due process. NASECO Guards Association PEMA vs. National Service Corporation, G.R. No. 165442, August 25, 2010. Labor case; non-lawyer as representative. The respondents in this case were represented by a non-lawyer who never showed any proof of his authority to represent the respondents. Petitioner argued that the respondents representative had no personality to appear before the Labor Arbiter or the NLRC, and his representation for the respondents should produce no legal effect. The Court affirmed the ruling of the CA that the cited technical infirmity cannot defeat the respondents preferred right to security of tenure, without prejudice to whatever action may be taken against the representative, if he had indeed been engaged in the unauthorized practice of law. Spic n Span Services Corp. vs. Gloria Paje, et al., G.R. No. 174084, August 25, 2010. NLRC; factual findings. Findings of fact of the NLRC, affirming those of the LA, are entitled to great weight and will not be disturbed if they are supported by substantial evidence. The CA had overstepped its legal mandate by reversing the findings of fact of the LA and the NLRC as it appears that both decisions were based on substantial evidence. There is no proof of arbitrariness or abuse of discretion in the process by which each body arrived at its own conclusions. Thus, the CA should have deferred to
such specialized agencies that are considered experts in matters within their jurisdictions. Pharmacia and Upjohn, Inc., et al. vs. Ricardo P. Albayda, Jr., G.R. No. 172724, August 23, 2010. NLRC; review of decisions. The power of the Court of Appeals to review NLRC decisions via Rule 65 or Petition for Certiorari has been settled as early as in our decision in St. Martin Funeral Home v. National Labor Relations Commission. This Court held that the proper vehicle for such review was a Special Civil Action for Certiorari under Rule 65 of the Rules of Court, and that this action should be filed in the Court of Appeals in strict observance of the doctrine of the hierarchy of courts. Moreover, it is already settled that under Sec. 9 of B.P. 129, as amended, the Court of Appeals pursuant to the exercise of its original jurisdiction over Petitions for Certiorari is specifically given the power to pass upon the evidence, if and when necessary, to resolve factual issues. Picop Resources Incorporated (PRI) vs. Anacleto L. Taeca, et al., G.R. No. 160828, August 9, 2010. Pleading verification. The lack of a verification in a pleading is only a formal defect, not a jurisdictional defect, and is not necessarily fatal to a case. The primary reason for requiring a verification is simply to ensure that the allegations in the pleading are done in good faith, are true and correct, and are not mere speculations. As previously explained in Torres v. Specialized Packaging Development Corporation, where only two of the 25 real parties-in-interest signed the verification, the verification by the two could be sufficient assurance that the allegations in the petition were made in good faith, are true and correct, and are not speculative. Spic n Span Services Corp. vs. Gloria Paje, et al., G.R. No. 174084, August 25, 2010. Procedural rules; strict application. Procedural rules setting the period for perfecting an appeal or filing a petition for review are generally inviolable. It is doctrinally entrenched that an appeal is not a constitutional right, but a mere statutory privilege. Hence, parties who seek to avail themselves of
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such privilege must comply with the statutes or rules allowing it. Furthermore, the perfection of an appeal in the manner and within the period permitted by law is not only mandatory, but also jurisdictional. Failure to perfect the appeal renders the judgment of the court final and executory. Just as a losing party has the privilege to file an appeal within the prescribed period, so does the winner also have the correlative right to enjoy the finality of the decision. Elpidio Calipay vs. National Labor Relations Commission, et al., G.R. No. 166411, August 3, 2010. Real party in interest; dismissed employee. It is clear that the petitioners failed to include the name of the dismissed employee in the caption and body of its petition for certiorari and, instead, only indicated the name of the labor union as the party acting on behalf of such dismissed employee. Hence, the Court of Appeals rightly dismissed the petition for not having been filed by an indispensable party in interest. (The Court still proceeded to discuss the substantive issues and merits of the case despite affirming the dismissal of the case based on procedural grounds.) Nagkakaisang Lakas ng Manggagawa sa Keihin (NLMK-OLALIA-KMU) and Helen Valenzuela vs. Keihin Philippines Corporation, G.R. No. 171115, August 9, 2010. Rule 45; review of factual findings. As a general rule, only questions of law may be raised in petitions for certiorari under Rule 45 of the Rules of Court. However, there are recognized exceptions to the rule. Among the exceptions are when the findings of fact are conflicting and when the findings are conclusions without citation of specific evidence on which they are based. In the present case, the findings of fact of the Court of Appeals conflict with the findings of fact of the NLRC and the Labor Arbiter. Also, the finding of the Court of Appeals that Gurango engaged in a fistfight is a conclusion without citation of specific evidence on which it is based. Alex Gurango vs. Best Chemicals and Plastic, Inc., et al., G.R. No. 174593, August 25, 2010.

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2012 Supreme Court Decisions On Political Law

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