1

July 2005 is exempt from VAT.

Provided that every three (3) years
thereafter, the aforesaid threshold
amounts shall be adjusted to its pre-
sent value using the Consumer Price
Index, as published by the national
Statistics Office (NSO); Provided,
further, that such adjustment shall be
published through revenue regula-
tions to be issued not later than 31
March of each year;

If two or more adjacent residential
lots are sold or disposed in favor of
one buyer, for the purpose of utiliz-
ing the lots as one residential lot, the
sale shall be exempt from VAT only
if the aggregate value of the lots do
not exceed P1,919,500.00. Adjacent
residential lots, although covered by
separate titles and/or separate tax
declarations, when sold or disposed
to one and the same buyer, whether
covered by one or separate Deed of
Conveyance, shall be presumed as a
sale of one residential lot.


REVENUE REGULATIONS
NO. 16-2011

Issued in 28 October 2011, the
regulation increases the amount of
threshold amount for sale of resi-
dential lot, lease of residential unit
and sale or lease of goods or prop-
erties or performance of services
covered by Section 109 (P), (Q),
and (V) of the Tax Code of 1997, as
amended thereby amending certain
provisions of Revenue Regulations
No. 16-2005, as amended, other-
wise known as Consolidated Value
-Added tax (VAT) Regulations of
2005.
The adjusted threshold amounts,
rounded off to the nearest hundreds,
are as follows:
Sale of residential lot with gross selling
price exceeding P1,919,500.00, resi-
dential house and lot or other residen-
tial dwellings with gross selling price
exceeding P3,199,200.00, where the
instrument of sale (whether the instru-
ment is nominated as a deed of absolute
sale, deed of conditional sale or other-
wise) is executed on or after 1 Novem-
ber 2005, shall be subject to 10% out-
put VAT, and starting 1 February 2006,
to 12% output VAT.

Sale or lease of goods or properties or
the performance of services of non-
VAT registered persons, other than the
transactions mentioned in paragraph
(A) to (U) of Section 109(1) of the Tax
Code, the gross annual sales and/or
receipts of which does not exceed the
amount of P1,919,500.00, is subject to
Percentage Tax.

Sale of residential lot valued at
P1,919,500.00 and below, or house and
lot and other residential dwellings val-
ued at P3,199,200.00 and below, where
the instrument of sale/transfer/
disposition was executed on or after 1
I ns i de t hi s
i s s ue:
BIR Issuanc-
es
2
Jurisprudence 5
JLs Corner 12




LCA LINES
D E C E M B E R 2 0 1 1 V o l u m e I I I I s s u e N o . 1 0
Serving your purpose, realizing your dreams...
BIR ISSUANCES
Sec-
tion
Amount
in Pesos
(2005)
Adjusted
threshold
amounts
109
(P)
1,500,00
0.00
1,919,500.00
109
(P)
2,500,00
0.00
3,199,200.00
109
(Q)
10,000.0
0
12,800.00
109
(V)
1,500,00
0.00
1,919,500.00
2

V o l u m e I I I I s s u e N o . 1 0 D E C E M B E R 2 0 1 1
Lease of residential units with a monthly
rental per unit not exceeding P12,800.00,
regardless of the amount of aggregate rent-
als received by the lessor during the year is
also exempt from VAT; provided, every
three (3) years thereafter, the amount shall
be adjusted to its present value using the
Consumer price Index, as published by the
NSO; Provided, further, that such adjust-
ment shall be published through revenue
regulations to be issued not later than 31
March every year.

The foregoing, notwithstanding, lease of
residential units where the monthly rental
per unit exceeds P12,800.00 but the aggre-
gate of such rentals of the lessor during the
year do not exceed P1,919,500.00 shall
likewise be exempt from VAT, however,
the same shall be subjected to 3% Percent-
age tax.

In cases where a lessor has several residen-
tial units for lease, some are leased out for
a monthly rental per unit not exceeding
p12,800.00 while others are leased out for
more than P12,800.00 per unit, his tax lia-
bility will be as follows:

-The gross receipts from rentals not ex-
ceeding P12,800.00 per month per unit
shall be exempt from VAT regardless of
the aggregate annual gross receipts.
-The gross receipts from rentals exceeding
P12,800.00 per month per unit shall be
subject to VAT if the aggregate annual
gross receipts from said units only (not
including the gross receipts from units
leased for not more than P12,800.00) ex-
ceeds P1,919,500.00. Otherwise, the gross
receipts will be subject to the 3% tax im-
posed under Section 116 of the Tax Code.

Sale or lease of goods or properties or the
performance of services other than the
transactions mentioned in the preceding
paragraphs, the gross annual sales and/or
receipts do not exceed the amount of
P1,919,500.00 is exempt from Vat; Provid-
ed, every 3 years thereafter, the amount
shall be adjusted to its present value using
the Consumer Price Index, as published by
the NSO; Provided, further, that such ad-
justment shall be published through reve-
nue regulations to be issued not later than
31 March every year;

For purposes of threshold of
P1,919,500.00, the husband and wife shall
be considered separate taxpayers. However,
the aggregation rule for each taxpayer shall
apply. For instance, of a professional,
aside from the practice of profession, also
derives revenue from other lines of busi-
ness which are otherwise subject to VAT,
the same shall be combined for purposes of
determining whether the threshold has been
exceeded. Thus, the VAT-exempt sales
shall not be including the threshold.

These regulations shall take effect starting
1 January 2012.




REVENUE REGULATIONS
NO. 18-2011

Issued on 21 November 2011, the regula-
tion provides for the penalties for the
violation of the requirement that Output
Tax on the sale of goods and services
should be separately indicated in the sales
invoice or official receipt.

All VAT-registered taxpayers who are
required under Section 237 of the 1997
Tax Code, as amended, to issue sales or
commercial invoices or official receipts
should separately bill the VAT corre-
sponding thereto. The amount of the tax
shall be shown as a separate item in the
invoice or receipt.

Failure or refusal to comply with the said
requirement, shall, upon conviction, for
each act or omission, be punished by a
fine not less than P1,000.00 but not more
than P50,000.00 and suffer imprisonment
of not less than two (2) years but not
more than four (4) years.

REVENUE REGULATIONS
NO. 19-2011

Issued on 9 December 2011, the regula-
tion prescribes the new Income Tax
forms that will be used for Income Tax
filing covering and starting with Calendar
Year 2011, modifying Revenue Memo-
randum Circular 57-2011.
3

V o l u m e I I I I s s u e N o . 1 0 D E C E M B E R 2 0 1 1

All taxpayers required to file their Income
Tax Returns under Section 51 (A)(1) of the
Tax Code and those not required to file
under Section 51(A)(2) but who neverthe-
less opt to do so, covering and starting with
calendar year 2011due for filing on or
before 15 April 2012 , should use the fol-
lowing revised forms:

-BIR Form 1700 version November 2011
(Annual Income Tax Return for Individuals
Earning Purely Compensation);
-BIR Form 1701 version November 2011
(Annual Income Tax Return for Self-
Employed Individuals, Estates and Trusts);
and
-BIR Form 1702 version November 2011
(Annual Income Tax Return for Corpora-
tions, Partnerships and other Non-
individual Taxpayers)

All juridical entities following fiscal year
of reporting are likewise required to use the
new BIR Form 1702 starting with those
covered under the fiscal year ending 31
January 2012.

These regulations shall take effect covering
income earned for taxable year ending
2011.


REVENUE MEMORANDUM ORDER
NO. 43-2011

Issued on 7 December 2011, amends Sec-
tion IV. A.1.a. of Revenue Memorandum
Order (RMO) 25-2011, relative to the poli-
cies, guidelines and procedures in the issu-
ance of the certifications and the ac-
ceptance/encoding/posting/remittance of
Certification Fees and the corresponding
Documentary Stamp Taxes collected by
designated /authorized Revenue Collection
Officers, Collection Agents and Special
Revenue Collecting Officers.

Said section is amended to read as follows:

A. The Revenue District Office/Chief,
LTDO shall:

Use the assigned BIR TIN indicated
in the attached list (Annex A) in
remitting and encoding collections
of certification fees and sales of
loose documentary stamps. (NOTE:
The LTDOs shall no longer secure
for a TIN since all large taxpayers
registered in the LTDOs are en-
rolled in the eFPS and pay certifica-
tion fees through eFPS facility as
mentioned in Section III. Item 4 of
RMO 25-2011;


REVENUE MEMORANDUM ORDER
NO. 46-2011

Issued on 22 December 2011, prescribes
the policies, guidelines and procedures in
the filing of confidential information, in-
vestigation of cases arising therefrom and
processing of claims for reward, in relation
to the implementation of Revenue Regula-
tions (RR) 16-2010.

If during the conduct of investigation by
the Special Investigation Division (SID)
of confidential information filed files in
the respective Revenue Region, it is de-
termined that the denounced taxpayers
estimated tax liability exceeds
P1,000,000.00, the SID through the Re-
gional Director, shall submit a progress
report on the case being investigated to
the Deputy Commissioner for Legal and
Inspection Group, who may re-assign the
same to the National Investigation Divi-
sion, for further investigation, if warrant-
ed under the circumstances.

For claims for reward on cases investigat-
ed by the SID, the recommendation for
approval /denial of the reward, which is
forwarded by the Regional Director to the
Deputy Commissioner for Legal and
Inspection Group, may be forwarded by
the latter to the Assistant Commissioner
for Enforcement Service, for further eval-
uation and review.

The confidential information filed prior
to the effectivity of RR 16-2010, and
claim for informers reward relevant
thereto, shall be processed by the Law
Division pursuant to the provisions of
Revenue Administrative Order No. 11-
2009.

REVENUE MEMORANDUM CIR-
CULAR NO. 57-2011

4

V o l u m e I I I I s s u e N o . 1 0 D E C E M B E R 2 0 1 1
Issued on 25 November 2011 further
amends BIR Form Nos. 1700, 1701 and
1702, previously amended under Revenue
Memorandum Circular (RMC) 40-2011.
The amendment consists mainly in making
the disclosure of Supplemental Information
under BIR Form Nos. 1700 and 1701 op-
tional on the part of the taxpayer for in-
come tax filing covering and starting with
calendar year 2011, due for filing on or
before 15 April 2012, and renaming of BIR
Form No. 1702 as a November 2011 ver-
sion.

Individual tax filers using Forms No. 1700
and 1701 are advised that for Income Tax
filing covering and starting with calendar
year 2012, the disclosures required under
the Supplemental Information portion of
the said forms will be mandatory. Thus,
taxpayers are advised to demand from their
payors and properly document their BIR
Form No. 2307 and other pieces of evi-
dence for final taxes withheld. Likewise,
said taxpayers should properly receipt and
book their tax-exempt income.
5

V o l u m e I I I I s s u e N o . 1 0 D E C E M B E R 2 0 1 1

LINA CALILAP-ASMERON,
vs.
DEVELOPMENT BANK OF THE
PHILIPPINES, PABLO CRUZ, TRINI-
DAD CABANTOG, ENI S.P. ATIENZA
and EMERENCIANA CABANTOG
G.R. No. 157330 23 November 2011



FACTS: Lina CalilapAsmeron (Asmeron)
and her brother Celedonio Calilap (Calilap)
constituted a real estate mortgage over two
parcels of land to secure the performance of
their loan obligation with Development
Bank of the Philippines (DBP). With the
principal obligation being ultimately un-
paid, DBP foreclosed the mortgage. The
mortgaged parcels of land were then sold to
DBP as the highest bidder. The one-year
redemption period expired on September 1,
1981.

In August 1982, Asmeron negotiated with
DBP to buy back one of the property by
offering P15,000.00 as downpayment. Her
offer was rejected by an executive officer
of DBPs Acquired Assets Department,
who required her to pay the full purchase
price of P55,500.00 for the property within
ten days. She returned to DBP with the
amount, only to be told that DBP would not
sell back only one lot. Being made to be-
lieve that one of the lots would be released
after paying two amortizations for the oth-
er, Asmeron signed the deed of conditional
sale covering both lots for the total consid-
eration of P157,000.00. When she later on
requested the release of one of the proper-
ties after paying two quarterly amortiza-
tions, DBP did not approve the release. She
continued paying the amortizations until
she had paid P40,000.00 in all, at which
point she sought again the release of the
other property. DBP still denied her re-
quest, warning that it would rescind the
contract should her remaining amortiza-
tions be still not paid. On August 1985,
DBP rescinded the deed of conditional sale
over her objections.

On November 25, 1987, DBP sold one of
the the lots to Pablo Cruz (Cruz) via a deed
of absolute sale. Asmeron consequently
filed a complaint for the rescission of the
sale to Cruz. Notwithstanding their
knowledge of her pending suit against
Cruz, Emerenciana Cabantog (Cabantog)
and Eni S.P. Atienza (Atienza) still bought
the property from Cruz.

The Regional Trial Court (RTC) rendered
its decision dismissing the case. The Court
of Appeals (CA) affirmed the same.

ISSUE: Whether or not DBP validly exer-
cised its right to rescind the deed of condi-
tional sale upon the petitioners default

RULING: DBP validly exercised its right
to rescind the deed of conditional sale upon
Asmerons default.

The issue of whether or not DBP validly
exercised the right to rescind is a factual
one that the RTC and the CA already
passed upon and determined. The Court,
which is not a trier of facts, adopts their
findings, and sustains the exercise by DBP
of its right to rescind following the peti-
tioners failure to pay her six monthly
amortizations, and after her being given
due notice of the notarial rescission. As a
consequence of the valid rescission, DBP
had the legal right to thereafter sell the
property to a person other than Asmeron,
like Cruz. In turn, Cruz could validly sell
the property to Cabantog and Trinidad,
which he did.

Article 1191 of the Civil Code did not pro-
hibit the parties from entering into an
agreement whereby a violation of the terms
of the contract would result to its cancella-
JURISPRUDENCE
6

V o l u m e I I I I s s u e N o . 1 0 D E C E M B E R 2 0 1 1
tion. In Pangilinan v. Court of Appeals, the
Court upheld the vendors right in a contract
to sell to extrajudicially cancel the contract
upon failure of the vendee to pay the install-
ments and even to retain the sums already
paid, holding:

[Article 1191 of the Civil Code]
makes it available to the injured party
alternative remedies such as the power
to rescind or enforce fulfillment of the
contract, with damages in either case if
the obligor does not comply with what
is incumbent upon him. There is
nothing in this law which prohibits
the parties from entering into an
agreement that a violation of the
terms of the contract would cause its
cancellation even without court in-
tervention. The rationale for the
foregoing is that in contracts provid-
ing for automatic revocation, judi-
cial intervention is necessary not for
purposes of obtaining a judicial
declaration rescinding a contract
already deemed rescinded by virtue
of an agreement providing for re-
scission even without judicial inter-
vention, but in order to determine
whether or not the rescission was
proper. Where such propriety is
sustained, the decision of the court
will be merely declaratory of the
revocation, but it is not itself the
revocatory act. Moreover, the ven-
dors right in contracts to sell with
reserved title to extrajudicially can-
cel the sale upon failure of the ven-
dee to pay the stipulated install-
ments and retain the sums and in-
stallments already received has long
been recognized by the well-
established doctrine of 39 years
standing. The validity of the stipula-
tion in the contract providing for
automatic rescission upon non-
payment cannot be doubted. It is in
the nature of an agreement granting
a party the right to rescind a con-
tract unilaterally in case ofbreach
without need of going to
court. Thus, rescission under Arti-
cle 1191 was inevitable due to peti-
tioners failure to pay the stipulated
price within the original period
fixed in the agreement.

NIA JEWELRY MANUFACTURING
OF METAL ARTS, INC. (otherwise
known as NIA MANUFACTURING
AND METAL ARTS, INC.) and
ELISEA B. ABELLA
vs.
MADELINE C. MONTECILLO and
LIZA M. TRINIDAD
G.R. No. 188169 28 November 2011


FACTS: Madeline Montecillo (Madeline)
and Liza Trinidad (Liza), were first em-
ployed as goldsmiths by Nia Jewelry
Manufacturing of Metal Arts, Inc. (Nia
Jewelry) in 1996 and 1994, respectively.
Madeline's weekly rate was P1,500.00
while Liza's was P2,500.00. Elisea Abella
(Elisea) is Nia Jewelry's president and
general manager.

There were incidents of theft involving
goldsmiths in Nia Jewelry's employ. Con-
sequently, Nia Jewelry imposed a policy
for goldsmiths requiring them to post cash
bonds or deposits in varying amounts but in
no case exceeding 15% of the latter's sala-
ries per week. The deposits were intended
to answer for any loss or damage which
Nia Jewelry may sustain by reason of the
goldsmiths' fault or negligence in handling
the gold entrusted to them. The deposits
shall be returned upon completion of the
goldsmiths' work and after an accounting of
the gold received.

Nia Jewelry alleged that the goldsmiths
were given the option not to post deposits,
but to sign authorizations allowing the
former to deduct from the latter's salaries
amounts not exceeding 15% of their take
home pay should it be found that they lost
the gold entrusted to them. Madeline and
Liza claims otherwise and claimed that
they were constructively dismissed by
Nia Jewelry as their continued employ-
ments were made dependent on their read-
iness to post the required deposits.

Thus, Madeline and Liza filed against
Nia Jewelry complaints for illegal dis-
missal and for the award of separation
pay.
The Labor Arbiter (LA) dismissed Made-
line and Lizas complaints for lack of
merit which was affirmed on appeal by
the National Labor Relations Commission
(NLRC)

Madeline and Liza filed a Petition
for Certiorari before the Court of Ap-
peals which reversed the findings of the
LA and NLRC.

ISSUE: Whether or not Madeline and
Liza were constructively dismissed.

RULING: Madeline and Liza were not
constructively dismissed.

7

D E C E M B E R 2 0 1 1 V o l u m e I I I I s s u e N o . 1 0

Constructive dismissal occurs when there is
cessation of work because continued em-
ployment is rendered impossible, unreason-
able or unlikely; when there is a demotion
in rank or diminution in pay or both; or
when a clear discrimination, insensibility,
or disdain by an employer becomes
unbearable to the employee.

In the case at bar, Nia Jewelry did not
whimsically or arbitrarily impose the poli-
cy to post cash bonds or make deductions
from the workers' salaries. As attested to by
Madeline and Lizas fellow goldsmiths in
their Joint Affidavit, the workers were
convened and informed of the reason be-
hind the implementation of the new policy.
Instead of airing their concerns, Madeline
and Liza just promptly stopped reporting
for work.

Further, the imposition of the new policy
cannot be viewed as an act tantamount to
discrimination, insensibility or disdain
against Madeline and Liza. For one, the
policy was intended to be implemented
upon all the goldsmiths in Nia Jewelry's
employ and not solely upon Madeline and
Liza. Besides, as stressed by Nia Jewelry,
the new policy was intended to merely curb
the incidences of gold theft in the work
place. The new policy can hardly be said to
be disdainful or insensible to the workers
as to render their continued employment
unreasonable, unlikely or impossible.


VICTOR R. REYES,
substituted by his heirs, CLARIBEL G.
REYES,
CLARISSA G. REYES,
and CZARINA G. REYES

vs.

COURT OF APPEALS, CIVIL SER-
VICE COMMISSION,
HON. JOSE L. ATIENZA, JR.,
in his capacity as City Mayor ofManila,
SENEN D. TOMADA,
and HERNANDO B. GARCIA
G.R. No. 167002 12 December 2011


FACTS: Forty-six (46) days before the 11
May 1998 elections, then Mayor Alfredo
Lim (Lim) of the City
of Manila appointed Senen Tomada
(Tomada) as City Government Assistant
Department Head III (Assistant City Asses-
sor, or subject position). On the same
date, Tomadas appointment, which was
indicated as Transfer with Promotion,
was submitted to the Civil Service Com-
mission Field Office (or CSCFO)
in Manila for consideration and approval.

Pending action on Tomadas appointment,
however, Mayor Jose L. Atienza, Jr. (or
Mayor Atienza) assumed Lims position
and appointed Hernando Garcia (or
Garcia) to the subject position.

Tomadas appointment was later on can-
celled pending approval from the CSC of
the said appointment.

The CSC later issued a resolution approv-
ing the promotional appointment of Toma-
da.


Mayor Atienza filed a petition for reconsid-
eration which was, however, dismissed by
the CSC.

Garcia filed the instant petition for certiora-
ri and quo warranto, with an application for
temporary restraining order and/or prelimi-
nary injunction, ascribing grave abuse of
discretion on the CSC for recalling his
appointment.

The Court of Appeals (CA) rendered the
assailed decision granting the petition of
Garcia and upholding his appointment over
the claims of Tomada to the position.


ISSUE: Whether or not the CA was cor-
rect in upholding the validity of the ap-
pointment of Garcia.


RULING: The CA committed no reversi-
ble error in granting the petition of Garcia
and upholding the appointment of Garcia as
Assistant City Assessor of the City
of Manila.

As Tomadas appointment or transfer ap-
peared to have been made during a prohibi-
tive period, it was questioned on the ground
that it was violative of Section 261(g) of
the Omnibus Election Code. Said section
8

V o l u m e I I I I s s u e N o . 1 0 D E C E M B E R 2 0 1 1
prohibits any transfer or detail whatever of
any officer or employee in the civil service
including public school teachers, within the
election period except upon prior approval
of the Commission. In this regard, the
CSC, through Office Memorandum (OM)
No. 11, Series of 1998, issued the follow-
ing guideline:


The transfer or detail of officers and
employees in the civil service, in-
cluding public school teachers pursu-
ant to Section 261(h) of the Omnibus
Election Code for the period begin-
ning January 11, 1998 (Sunday)
to June 10, 1998 (Wednesday), or
120 days before election and 30 days
after election, is hereby prohibit-
ed. The phrase transfer or detail
shall be construed in general terms.
Thus any movement of officer or
employee in the civil service, in-
cluding public school teachers,
from one agency is prohibited and
is considered an election of-
fense. [Emphasis supplied]


Another reason why the CA granted Garci-
as petition was Tomadas lack of standing
to appeal the disapproval of her appoint-
ment to the CSC. It cited the case
of Mathay, Jr. v. Civil Service Commission
where it was ruled that only the appointing
officer may ask for reconsideration of ac-
tions taken by the CSC on appointments.
Thus, the CA stated that CSC should have
refrained from acting on Tomadas request
for reconsideration, the same not having
been endorsed by Mayor Atienza, the in-
cumbent mayor of Manila and the appoint-
ing authority at the time of the disapproval
of her appointment.

Moreover, as Garcia qualified, assumed
office and became at that moment a gov-
ernment employee or part of the civil ser-
vice, he then began to enjoy the constitu-
tional protection that No officer or em-
ployee in the civil service shall be removed
or suspended except for cause provided by
law. He acquired a legal right to the of-
fice which is protected not only by statute
but also by the Constitution. Therefore, he
could only be removed for cause, after
notice and hearing, consistent with the
requirements of due process.


PHILIPPINE AMUSEMENT AND
GAMING CORPORATION
vs.
COURT OF APPEALS and MIA
MANAHAN
G.R. No. 185668 13 December 2011

FACTS: Mia Manahan (Manahan) was a
Treasury Officer of Philippine Amusement
and Gaming Corporation (PAGCOR) as-
signed in Casino Filipino-Manila Pavilion
(CF-Pavilion). Among her functions as
Treasury Officer was the handling of fund
transfer requests received by CF-Pavilion
and the supervision of the office's Vault-in-
Charge and Senior Cashier.

In April 2004, Manahan received from the
fax machine of CF-Pavilion's SVIP-
Treasury a document that appeared to be a
Request for Fund Transfer coming from
Casino Filipino-Laoag (CF-Laoag). The
request was for P4,200,000.00 to be re-
leased by CF-Pavilion to Arnulfo Fuenta-
bella or David Fuentabella (Fuentabella).

About 30 minutes from Manahan's receipt
of the fax document, a person who repre-
sented himself to be David Fuentabella
claimed from CF-Pavilion the amount
of P4,200,000.00. Said David Fuentabel-
la showed valid identification cards to
prove his identity, duly accepted by Mana-
han, who as the Treasury Officer then on
duty, also approved the release of the mon-
ey and chips to Fuentabella. P2,000,000.00
was released in cash, and P2,200,000.00
was released in the form of chips.

The following day, the Treasury Officer of
CF-Pavilion then on duty, Jennifer Bagtas
(Bagtas), informed CF-Laoag through
phone that the fund transfer
for P4,200,000.00 had already been paid by
CF-Pavilion to Mr. Fuentabella. However,
CF-Laoag denied that such fund transfer
had been made by CF-Laoag to CF-
9

D E C E M B E R 2 0 1 1 V o l u m e I I I I s s u e N o . 1 0
Pavilion. Manahan was informed that no
fund transfer for P4,200,000.00 in favor of
Fuentabella was made.

Manahan was preventively suspended
pending the investigation of the case for
Serious Procedural Deviation/Gross Negli-
gence.

Manahan was consequently dismissed from
service. She filed a Motion for Reconsider-
ation of the PAGCOR Board of Directors
(BOD) decision but the same was denied
for lack of merit.
Feeling aggrieved, Manahan appealed from
the PAGCOR's rulings to the Civil Service
Commission (CSC) which granted her
appeal after a finding of violation of Mana-
han's right to due process.

PAGCOR's Motion for Reconsidera-
tion was denied by the CSC prompting
PAGCOR to file with the Court of Appeals
a Petition for Review which later on af-
firmed in toto the Resolutions of the CSC.

ISSUE: Whether or not the requirements
of due process for a valid dismissal from
government service has been complied
with.

RULING: The requirements of due pro-
cess for a valid dismissal from government
service have not been complied with.
A reference should be made to CSC Reso-
lution No. 99-1936, being the law applica-
ble to formal charges in the civil service
prior to the imposition of administrative
sanctions. The requirements under Section
16 thereof are clear, as it provides:

Section 16. Formal Charge. After a
finding of a prima facie case, the
disciplining authority shall formally
charge the person complained of. The
formal charge shall contain a specifi-
cation of charge(s), a brief statement
of material or relevant facts, accom-
panied by certified true copies of the
documentary evidence, if any, sworn
statements covering the testimony of
witnesses, a directive to answer the
charge(s) in writing under oath in not
less than seventy-two (72) hours from
receipt thereof, an advice for the
respondent to indicate in his answer
whether or not he elects a formal
investigation of the charge(s) and a
notice that he is entitled to be assisted
by a counsel of his choice.

If the respondent has submitted his
comment and counter-affidavits dur-
ing the preliminary investigation, he
shall be given the opportunity to
submit additional evidence.

The disciplining authority shall not
entertain requests for clarification,
bills of particulars or motions to dis-
miss which are obviously designed to
delay the administrative proceedings.
If any of these pleadings are inter-
posed by the respondent, the same
shall be considered as an answer and
shall be evaluated as such.

Evidently, the PAGCOR failed to substan-
tially comply with the requisite formal
charge, as well as with the other require-
ments under CSC Resolution No. 99-1936
concerning the procedure for the conduct of
an administrative investigation. What
PAGCOR claims to be the formal charge it
issued in compliance with the CSC rules
was the memorandum addressed to Mana-
han under the subject Preventive Suspen-
sion, which was issued by CF-Pavilion's
Senior Branch Manager only.

There is no reason to deviate from the CA's
finding that a Senior Branch Manager is
not among the company's disciplining au-
thority, he or she being merely charged
with the duty, among others, to recom-
mend disciplinary sanctions for violations
of house rules and company policies and
procedures.

Manahans was not allowed to be assisted
by counsel during the scheduled meeting
with the CIU when the latter was to ask her
questions and take her statement. This
stance of PAGCOR was in clear disregard
of the Manahan's rights protected under the
cited Section 16 of CSC Resolution No. 99-
1936. While due process in an agency in-
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V o l u m e I I I I s s u e N o . 1 0 D E C E M B E R 2 0 1 1
vestigation may be limited as compared to
due process in criminal proceedings, where
however a statute specifically provides for
a procedure and grants particular rights to a
party under investigation such as in the
investigations of persons covered by the
Civil Service Rules, these rights shall not
be utterly disregarded, especially so when
invoked by the party under investigation, as
was Manahan, because these rights already
form part of a procedural due process.


GOODLAND COMPANY, INC.
vs.
ABRAHAM CO and CHRISTINE
CHAN
G.R. No. 196685 14 December 2011




FACTS: Goodland Company, Inc.
(Goodland), a corporation duly organized
and existing in accordance with Philippine
laws, is the registered owner of a parcel of
land located at Pasong Tamo, Makati City
(Makati property).

Goodland and Smartnet Philippines, Inc.
(Smartnet), likewise a duly organized and
registered corporation, are part of the Guy
Group of Companies, owned and controlled
by the family of Mr. Gilbert Guy (Mr.
Guy).

Sometime in 2000, Goodland allowed the
use of its Makati property, by way of ac-
commodation, as security to the loan facili-
ty of Smartnet with Asia United Bank
(AUB). Mr. Guy, Goodlands Vice Presi-
dent, was allegedly made to sign a Real
Estate Mortgage (REM) document in
blank. Upon signing the REM, Mr. Guy
delivered the same to AUB together with
the original owners copy of the TCT cov-
ering the Makati property.

About two (2) years thereafter, Goodland
found out that the REM signed in blank by
Mr. Guy has been allegedly completed and
annotated at the back of the title of the
Makati property by Abraham Co (Co) and
Christine Chan (Chan), the President and
Vice President of AUG respectively.
During trial, the Metropolitan Trial Court
(MeTC) granted the Demurrer to Evidence
of Co and Chan stating that Goodland was
unable to present competent evidence that
the Real Estate Mortgage was indeed falsi-
fied.

Goodland filed a Motion for Reconsidera-
tion but the same was denied.

Goodland filed a petition under Rule 65 of
the Rules of Civil Procedure before the
Regional Trial Court (RTC). However, the
same was denied.

The Court of Appeals (CA) later affirmed
the RTCs resolution declaring that the
appeal is bereft of merit.

ISSUE: Whether or not there is a grave
abuse of discretion on the part of the CA
which would warrant the reversal of its
decision

RULING: There is no grave abuse of dis-
cretion on the part of the CA which would
warrant the reversal of its decision.

It is settled that a judgment of acquittal
cannot be recalled or withdrawn by another
order reconsidering the dismissal of the
case, nor can it be modified except to elimi-
nate something which is civil or adminis-
trative in nature. One exception to the rule
is when the prosecution is denied due pro-
cess of law. Another exception is when the
trial court commits grave abuse of discre-
tion in dismissing a criminal case by grant-
ing the accuseds demurrer to evidence. If
there is grave abuse of discretion, granting
Goodlands prayer is not tantamount to
putting Co and Chan in double jeopardy.
In a long line of cases of the Supreme
Court (SC), grave abuse of discretion is
defined as:

An act of a court or tribunal may only
be considered as committed in grave
abuse of discretion when the same
was performed in a capricious or
whimsical exercise of judgment
which is equivalent to lack of juris-
diction. The abuse of discretion must
be so patent and gross as to amount
to an evasion of positive duty or to a
virtual refusal to perform a duty en-
joined by law, or to act at all in con-
templation of law, as where the pow-
er is exercised in an arbitrary and
despotic manner by reason of passion
and personal hostility.


The CA made its decision after its careful
examination of the records of the case. The
CA found that Guy signed the subject Real
Estate Mortgage and was authorized by the
Board of Directors to do so, and none of
Goodlands witnesses have personal
11

D E C E M B E R 2 0 1 1 V o l u m e I I I I s s u e N o . 1 0
knowledge of the circumstances of the
discussions between Guy and Asia United
Bank. Goodland, however, failed to prove
that (1) the subject Real Estate Mortgage
was in blank at the time it was submitted to
Asia United Bank; (2) Co and Chan filled-
in the blanks in the Real Estate Mortgage;
and (3) Guy did not appear before the nota-
ry public. It was with reason, therefore, that
the CA declared that the evidence for
Goodland failed miserably in meeting the
quantum of proof required in criminal cases
to overturn the constitutional presumption
of innocence. Grave abuse of discretion
may not be attributed to a court simply
because of its alleged misappreciation of
evidence.




12

D E C E M B E R 2 0 1 1 V o l u m e I I I I s s u e N o . 1 0

WHAT IS THE DIFFERENCE BETWEEN A GOOD
LAWYER AND A GREAT LAWYER?

A good lawyer knows the law.
A great lawyer knows the judge.




JLs Corner
Volume III Issue No. 10
December 2011
LAGUNDI CARONAN AND ASSOCI ATES
GOOD LAWYER vs. GREAT LAWYER