Case Compendium 2011

Bar Operations Commission 2011
Research Committee Head: Domingo Subject Heads: Political Brias, Labor Lalwani,
Civil Jaucian & Coralde, Taxation Bongalos & Ayo, Mercantile/Commercial Suarez & Exconde, Criminal Domingo & Dasigan, Remedial Mendoza-Obumani & Niofranco, Legal Ethics - Lalwani
POLITICAL LAW
(Police power; taxation versus regulation) Chevron Philippines, Inc. vs. Bases Conversion Development Authority and Clark Development Corp G.R. 173863, September 15, 2010 The petitioner is a domestic corporation which has been supplying feul to Nanox Phils, a locator inside the Clark Special Economic Zone (CSEZ) since 2001. The Board of Director of respondent issued and approved Policy Guidelines on the movement of petroleum fuel to and from CSEZ. Due to the policy mentioned, the respondent informed the petitioner that a royalty fee shall be assessed on its deliveries to Nanox Phils. The petitioner questioned the imposition of royalty fee, because according to them COC has no power to impose the said fees on the basis of purely income generating functions and such imposition is for revenue generating purposes would amount to a tax. While, the respondents argue on the contrary. It is their position that the regulation is a valid exercise of police power, since it is aimed at promoting the general welfare of the public. Issue/Held: Whether or not the royalty fee can be considered as tax which the respondent has no power to impose. No. Ratio: The questioned royalty fee was imposed primarily for the regulatory purposes and not for the generation of income or profit. Therefore, it cannot be considered as tax. In distinguishing tax and regulation as a form of police power, the determining factor is the purpose of the implemented measure. If the purpose is primarily to raise revenue, then it will be deemed a tax even though the measure results in some form of regulation. In the case at bar, the policy guidelines issued by the respondent was primarily for regulatory purposes, which is to ensure safety, security and good condition of the petroleum fuel within the CSEZ. Therefore, the same is deemed a regulation and an exercise of police power of the State, even though incidentally, revenue is generated. (Administrative cases; preliminary investigation; due process) Winston F. Garcia vs Mario I. Molina and Alberto M. Velasco G.R. No. 157383, August 10, 2010 Facts: Two consolidated petitions were filed by Winston F. Garcia against the respondents. Both of them received memoranda charging them with grave misconduct. Molina having 1) directly and continuously helping some alleged disgruntled employees to conduct concerted protest actions and/or illegal assemblies against the management and the GSIS President and General Manager; 2) leading the concerted protest activities held in the morning of May 22, 2002 during office hours within the GSIS compound; and 3) 1 Facts:

continuously performing said activities despite warning from his immediate superiors. Velasco was accused of performing acts in violation of the Rules on Office Decorum for leaving his office without informing his supervisor of his whereabouts; and gross insubordination for persistently disregarding petitioners instructions that Velasco should report to the petitioners office. Petitioner ordered the preventive suspension of respondents for ninety (90) days without pay, effective immediately. Respondents denied the charges against them. Consequently respondents filed with the Civil Service Commission (CSC) an Urgent Petition to Lift Preventive Suspension Order. CSC failed to resolve the said motion. Issue/Held: Whether or not the respondents were denied of due process having no preliminary investigation conducted in an administrative proceeding. Yes. Ratio: The word shall indicates that it is mandatory for the disciplining authority to conduct a preliminary investigation or at least respondent should be given the opportunity to comment and explain his side. This is done prior to the issuance of the formal charge and the comment required therein is different from the answer that may later be filed by respondents. Contrary to petitioners claim, no exception is provided for in the CSC Rules. Not even an indictment in flagranti as claimed by petitioner. Where there is a violation of basic constitutional rights, courts are ousted from their jurisdiction. 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. The elements of on due process in administrative proceedings are: 1) The right to actual or constructive notice to the institution of proceedings which may affect a respondent's legal rights; (2) a real opportunity to be heard personally or with the assistance of counsel, to present witnesses and evidence in one's favor, and to defend one's rights; (3) a tribunal vested with competent jurisdiction and so constituted as to afford a person charged administratively a reasonable guarantee of honesty as well as impartiality; and (4) a finding by said tribunal which is supported by substantial evidence submitted for consideration during the hearing or contained in the records or made known to the parties affected. (Right to information; duty to disclose) Teofisto Guingona, Jr, et al vs Commission on Elections G.R. 191846, May 6, 2010 Facts: Petitioners through a special civil action for mandamus seek to compel Comelec to explain fully the details of its preparations for the May 10, 2010 elections. The former invoke their Constitutional right to suffrage and information. However, respondent Comelec contends that the petitioners have no legal standing to file the said special civil action for having no valid cause of action against it and there is no proof that the latter had requested the release of public documents sought to be disclosed.

Issue/ Held: Whether or not the Commision has to explain and disclose the details of the preparations for the said election. Yes. Ratio: The petition is anchored on the peoples right to information on matters of public concern, thus any citizen is clothed with personality to institute the special civil action for mandamus. Section 7, Article III of the 1987 Constitution enshrines the peoples right to information and accesss to official records, documents and papers pertaining to official acts and transactions of the State and Section 28 and Article of the same expresses the state policy of full public disclosure of all its transactions involving public interest. The duty to disclose the information of public concern and to afford access to public records cannot be discretionary on the part of the Commission. Otherwise, the enjoyment of the constitutional right may be rendered nugatory by any whimsical exercise of agency discretion. (Operative fact doctrine) Leagues of Cities of the Philippines vs Commission on Elections GR Nos. 176951, 177499 and 178056, August 24, 2010 Facts: The Supreme Court en banc, by a majority vote, struck down 16 Cityhood Laws for violating Section 10, Article X of the Constitution. Such Cityhood Laws were pending bills when RA 9009 increasing the income requirement for the creation of cities amended Section 450 of the Local Government Code. Such laws did not comply with the income requirement for the creation of cities as provided in the Local Government Code as amended by RA 9009. Petitioners invoked the Operative Fact Doctrine. They argued that since such Cityhood Laws were pending at the time of the passage of RA 9009, the latter need not apply. Issue/Held: Whether or not the operative fact doctrine applies. No. Ratio: The petitioners cannot invoke the Operative Fact Doctrine which provided that 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. This is because the doctrine, as a rule of equity, 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. In the instant case, the Cityhood Laws were unconstitutional because they violate Section 10, Article 10 of the Constitution. However, the effects of its implementation prior to the declaration of nullity such as the payments of salaries and supplies by the "new cities" or their issuance of licenses or execution of contracts may be recognized as valid and effective.

(Administrative remedies; exhaustion) Public Hearing Committee of the Laguna Lake Development Authority, et al vs. SM Prime Holdings, Inc G.R. 170599, September 22, 2010 Facts: The petition arose from an inspection conducted by the Pollution Control Division of petitioner LLDA of the wastewater collected from respondent's SM City Manila. The results of the laboratory tests showed that the sample collected from the said facility failed to conform with the effluent standards for inland water. Consequently, LLDA issued to respondent several orders to pay the corresponding fine. Respondent then filed a petition for certiorari with the CA praying for the nullification of such orders. The CA granted the petition. Petitioners contend that the respondent should have first resorted to the DENR rather than the CA, in conformity with the doctrine of exhaustion of administrative remedies. Issue/Held: WON there was a violation of the doctrine of exhaustion of administrative remedies. Yes. Ratio: There was a violation of such doctrine which provides that if resort to a remedy within the administrative machinery can still be made by giving the administrative officer concerned every opportunity to decide on a matter that comes within his or her jurisdiction, then such remedy should be exhausted first before the court's judicial power can be sought. In the instant case, since the matters raised by respondent involve factual issues, thus, not purely legal, then the orders of LLDA should have been brought first before the DENR which has administrative supervision of the LLDA. (Certificate of candidacy; residency requirement) Abraham Kahlil Mitra vs Commission on Elections, et al G.R. 191938, July 2, 2010 Facts: Public respondent Comelec with other private respondents filed a motion for reconsideration on the decision of Supreme Court granting the petition of Abraham Mitra to annul the cancelled certificate of candidacy of him due to alleged failure to comply on residency requirement and his deliberate misrepresentation thereof. The petitioner was then a gubernatorial candidate of Palawan, where his domicile was Puerto Princesa City but he transferred the same to Aborlan, Palawan for him to be qualified for the said post. The Commission contends that the new residence or domicile as intended by the petitioner cannot be considered a home or residence for lack of qualities thereof. It was devoid of any indication of petitioners personality, details inherent in every home and located in a factory area. It is also contended that the petitioner made a deliberate misrepresentation in the COC by stating that his residence is Aborlan, Palawan instead of Puerto Princesa City.

Issues/Held: 1) Whether or not the new residence of the petitioner is qualified as required by law for election purposes. Yes. 2) Whether or not the petitioner deliberately misrepresented his residence. No. Ratio: 1) For a dwelling to be qualified as a residence, the person therein must be permanently intends to return and to remain. The inclination to decorate the place or the lack of it is immaterial. 2) To successfully effect a change of domicile or residence (the same in Political Law), one must demonstrate: a) actual removal or change of domicile; b) a bona fide intention abandoning the former place of residence and establishing a new one; and c) definite acts which corresponds with the purpose. In the case at bar, the petitioner undertook incremental moves to his new domicile as evidenced by the following: aa) his expressed intent to transfer to a residence outside Puerto Princesa City to make him eligible for a provincial position; bb) his preparatory moves starting in early 2008; cc) the transfer of registration as a voter in March 2009; dd) his initial transfer through a leased dwelling in Albano, Palawan; ee) the purchase of lot for his permanent home at the same municipality; and ff) the construction of a house on the said lot which is adjacent to the premises he was leasing pending the completion of his house. (Warrantless search; warrantless arrest) People of the Philippines vs Belen Mariacos GR 188611, June 16, 2010 Facts: Accused-appellant was arrested and found guilty by the trial court and appellate court to be in violation of RA 9165 or Comprehensive Dangerous Drugs Act of 2002. Prior to her conviction, she was arrested and the bags, which to be found containing dried marijuana, were searched without warrant while on board a passenger jeep. She contends that the arrest and the search upon her were illegal for lack of warrant and permission from her as afforded by Section 2, Article III of the 1987 Constitution against illegal arrest and searches and seizures. Therefore, the apprehension against her is illegal and the evidence found against her is inadmissible. Issues/ Held: 1. Whether or not the warrantless arrest against the accused-appellant is illegal. No. 2. Whether or not the search against the accused-appellant is illegal. No.

Ratio:
1. The search of a moving vehicle is one of the doctrinally accepted exceptions to the Constitutional mandate as provided for in Section 2, Article III of the 1987 Constitution. The mobility of motor vehicle makes it possible for the vehicle to move out of the locality or jurisdiction in which the warrant must be sought. In the case at bar, the apprehending officer cannot be expected to secure a search warrant in order to check the contents of the accused-appellants bags. Otherwise, the search warrant would have been no use because the motor vehicle had already left the locality. 2. Section 5 of Rule 113 of the Revised Rules on Criminal Procedure provides for a peace officer or a private person to make a lawful arrest without a warrant. In the case at bar, the accused-appellant was lawfully arrested when she has been in possession of the marijuana. Therefore, she is actually committing the offense and thus subject to lawful warrantless arrest. Moreover, given that the search was valid, appellants arrest based on the search is also valid. (Double jeopardy; elements; exception) People of the Philippines vs. Dante Tan G.R. 167526, July 26, 2010 Facts: Two informations were filed against the accused-appellant. It was stated that the accused was the owner of 84,030,000 and 75,000,000 Best World Resources Shares, a registered security which has been organized pursuant to sections 4 & 8 of the Revised Securities Act, which beneficial ownership constitutes 18.6 % of the outstanding shares of the company, way above the 10% required by law. Said accused failed to file with the Securities and Exchange Commission and the Philippine Stock Exchange a sworn statement of the amount of all BWRC Shares after 10 days of becoming an official owner. Respondent pleaded not guilty of the said charges and filed a demurrer to evidence which the trial court granted. A petition for certiorari was filed by the petitioner before the CA, and the same dismissed the said petition on the grounds that it would cause double jeopardy against the respondent. Hence, this appeal. Issue/Held: Whether or not the Court of Appeals erred in precluding the prosecution of the cases against the accused. Ratio: A grant of a demurrer to evidence operates as an acquittal and is thus, final and cannot be appealed except on the instance that a trial court has acted with grave abuse of discretion. The elements of double jeopardy are: (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. In the case at bar, the elements are present. (1) The Informations filed against the respondent weresufficient in form and substance to sustain a conviction; (2) the RTC had jurisdiction over the said criminal cases; (3) respondent was arraigned and entered a plea of not guilty; and (4) the RTC dismissed criminal cases nos. 119831 and 119832 on a demurrer to evidence on the ground of insufficiency of evidence which amounts to an acquittal from which no appeal can be had. (Search warrant; requirements for validity) People vs. Estela Tuan GR 176066, August 11, 2010 Facts: Accused-appellant upon appeal to the Supreme Court, was charged and convicted in the trial court of illegal possession of marijuana, violating The Dangerous Drugs Act of 1972, as amended. She contends that the items allegedly seized from her house are inadmissible as evidence because the search warrant issued for her house was invalid for failing to comply with the Constitutional and statutory requirements. The said warrant failed to particularly describe the place to be searched because the house was a two-storey building composed of several rooms. Issue/ Held: Whether or not the search warrant issued against the accused-appellants residence is invalid. No. Ratio: For a search warrant to be valid, the following requirements must concur: 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 complaint 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. In the case at bar, the address and description of the place to be searched in the search warrant was specific enough. There was only one house located at the stated address, which was accusedappellants residence, consisting of a structure with two storey floors and composed of several rooms.

(Warrantless arrest) People of the Philippines vs Michael Sembrano y Castro GR No. 185848, August 16, 2010 Facts: The accused-appellant was arrested and found guilty by the trial court and appellate court in violation of Republic Act 9165 or the Comprehensive Dangerous Drugs Act of 2002 particularly in selling and possessing illegal drugs. He was in broad daylight, in the course of a buy-bust operation and after a follow-up search on the accused they found 3 sachets of illegal drugs or shabu. The accused alleged that he was illegally arrested and searched. Therefore the evidence that was adduced during the buy-bust operation was inadmissible. Issue/ Held: Whether or not the warrantless arrest and search are valid. Yes. Ratio: The warrantless arrest and warrantless search and seizure conducted on the person of accusedappellant were allowed under the circumstances. He was properly arrested and searched during the buybust operation. He was arrested during an entrapment operation where he was caught in flagrante delicto selling shabu. 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. (Judicial review; justiciable controversy; moot case) Atty. Evillo C. Pormento vs Joseph Erap Ejercito Estrada and Commissions on Elections G.R. No. 191988, August 31, 2010 Facts: Private respondent was elected President of the Republic of the Philippines in the May 11, 1998 elections. He sought the presidency again in the May 10, 2010 elections. The petitioner opposed private respondents candidacy and filed a petition for disqualification. However, his petition was denied by public respondent COMELEC. Petitioner filed the instant petition for certiorari. However, under the Rules of Court, the filing of such petition would not stay the execution of the judgment, final order or resolution of the COMELEC that is sought to be reviewed. Hence, private respondent was able to participate as a candidate. However, he lost. Issue/Held: Whether or not there exists an actual case or controversy ripe for judicial review. No. Ratio: Since the issue on the proper interpretation of the phrase "any reelection" 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. 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 this Court in this case that will benefit any of the parties herein. 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. When a case is moot, it becomes non-justiciable. The Court may only adjudicate actual, ongoing controversies. The same 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. 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. Assuming an actual case or controversy existed prior to the proclamation of a President who has been duly elected in the May 10, 2010 elections, the same is no longer true today. Following the results of that elections, 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. (Eminent domain; voluntary agreement by landowner) Republic of the Philippines vs Primo Mendoza and Maria Lucero G.R. No. 185091, August 8, 2010 Paninsingin Primary School (PPS) is a public school operated by petitioner government. PPS has been using a portion of land registered in the name of the respondents. The same caused some of its lots to be consolidated and subdivided into four lots, where the lot 4 was in favor of the City Government of Lipa. As a result of the subdivision, the Register of Deeds partially cancelled its former title and issued a new in favor of some private persons, including the respondents. No new title was issued in favor of the City Government. The respondents thereafter filed an action for ejectment against the Government for its failure to acquire ownership of a privately owned property that is had long used as a school site and demand for payment of just compensation thereof. The Government contends that the Mendozas had relinquished to it their right over the school lot as evidenced by the consolidation and subdivision plan. And, the property had long been tax-declared in the name of the City Government and PPS built significant, permanent improvements on the same. On the other hand, Mendozas contend that although PPS sought permission from them to use the property as a school site, they never relinquished their right to it. They allowed PPS to occupy the property since they had no need for it at that time. Thus, it has remained registered in their name under the original title. Issue/Held: Whether or not the respondents were entitled to evict the Republic from the subject property that it had used for public school. No. Facts:

Ratio: Where the owner 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. The 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 oh is right to gain back possession. In the case at bar, the Mendozas agreed to transfer ownership of the land to the government. Consequently, the Republic should be deemed entitled to possession pending the Mendozas formal transfer of ownership to it upon payment of just compensation. (Immunity from suit) Shell Philippines Exploration B.V. vs. Efren Jalos, et al. G. R. No. 179918, September 8, 2010 Facts: The subject of this action is the service contract entered into by Shell Philippines Exploration B.V. with the Republic of the Philippines. Said contract stipulated that Shell Philippines shall conduct an exploration and extraction of petroleum in the Camago-Malampaya area, Palawan. Thereafter, Shell constructed and installed a pipeline from its production platform in Malampaya to its processing plant in Batangas. Said pipeline runs thru the fishing grounds of Brgy. Bansud in Oriental Mindoro. Subsequently, Efren Jalos and other fishermen from Bansud filed a complaint for damages in the regional trial court. Said complaint alleged that said pipeline adversely affected the livelihood of the subsistence fishermen. Since the pipelines construction caused stress to marine life; fish decline and considerable reduction in the fishermens income ensued. Shell Philippines moved for the dismissal of the complaint. Shell alleged that it cannot be sued pursuant to the doctrine of state immunity without the States consent. It served mainly as an agent of the Philippine government for the development of gas reserves. Issue/ Held: Whether or not the suit is against the State and is barred under the doctrine of state immunity. No. The doctrine of state immunity is not applicable in the case at bar. Shell is not an agent of the Philippine government, but a provider of services, technology and financing for the Malampaya Natural Gas Project. It is not immune from suit and may be sued for claims even without the States consent. Notably, the Philippine government itself recognized that Shell could be sued in relation to the project as shown in the contract. An agent is a person who binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. The essence of an agency is the agents ability to represent his principal and bring about business relations between the latter and third persons. An agents ultimate undertaking is to execute juridical acts that would create, modify or extinguish relations between his principal and third persons. It is this power to affect the principals contractual relations with third persons that differentiates the agent from a service contractor. Shells primary obligation under the contract is not to represent the Philippine government for the purpose of transacting business with third persons. Rather, its contractual commitment is to develop and Ratio:
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manage petroleum operations on behalf of the State.
LABOR LAW
(Constructive Dismissal) Pasig Cylinder Manufacturing Corp. vs. Danilo Rollo, et al. G.R. No. 173631, September 8, 2010 Petitioners Pasig Cylinder Manufacturing Corporation and A.G. & E Allied Services are cylinder gas tank manufacturers and repairers commonly operated by their officers, petitioners Manuel Estevanez, Sr. and Virgilio Geronimo, Sr. (Geronimo). Respondents sued petitioners before the National Labor Relations Commission (NLRC) for constructive dismissal and payment of employment benefits and damages, alleging that they were employees of petitioners and have been arbitrarily denied regular work since December 1999 and, in May 2000, were altogether refused entry to their workplace. Respondents also claimed underpayment of wages and non-payment of 13th month pay, service incentive leave pay, and holiday pay. Petitioners denied respondents' claims, contending that the loss of a major client constrained them to reduce the volume of work and shorten respondents' workweek to three days. Respondents reacted adversely to the downscaling and refused to follow shift assignments, disrupting what remains of petitioners' business. As a compromise, petitioners offered respondents their separation benefits equivalent to a portion of their total years of service but the latter rejected the offer. Issue: Whether or not the respondents are liable for constructive dismissal. Ruling: Yes. Petitioners are liable for constructive dismissal for placing respondents on shifts of a few days per month and in eventually denying them workplace access, rendering respondents employment impossible, unreasonable or unlikely, leaving them no choice but to quit. The petitioners rested their case on the defense of respondents abandonment of work. For this cause to prosper, petitioners should have proved (1) that the failure to report for work was without justifiable reason, and (2) respondents intention to sever the employer-employee relationship as shown by some overt acts. However, petitioners failed to rebut the respondents claim that they were denied entry to their work area and the respondents act of filing a case for illegal dismissal belies the intention to abandon work. (Retrenchment; validity) Shimizu Philippines Contractors, Inc. vs. Virgilio P. Callanta G.R. No. 165923, September 29, 2010 Facts: Petitioner, in a memorandum, terminated respondent due to lack of any vacancy in other projects and the need to re-align the companys personnel requirements brought about by the imperatives of Facts:
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maximum financial commitments. Respondent then filed an illegal dismissal complaint against petitioner assailing his dismissal as without any valid cause. Petitioner advanced that respondents services was terminated in accordance with a valid retrenchment program being implemented by the company due to financial crisis that plague the construction industry. Respondent claimed that petitioner failed to comply with the requirements called for by law before implementing a retrenchment program thereby rendering it legally infirmed. First, it did not comply with the provision of the Labor Code mandating the service of notice of retrenchment. He pointed out that the notice sent to him never mentioned retrenchment but only project completion as the cause of termination. Also, the notice sent to the Department of Labor and Employment (DOLE) did not conform to the 30-day prior notice requirement. Second, petitioner failed to use fair and reasonable criteria in determining which employees shall be retrenched or retained. As shown in the termination report submitted to DOLE, he was the only one dismissed out of 333 employees. Worse, junior and inexperienced employees were appointed/assigned in his stead to new projects thus also ignoring seniority in hiring and firing employees. Issue: Whether or not there was valid substantial compliance for a valid retrenchment. Ruling: Yes. As an authorized cause for separation from service under Article 283 of the Labor Code, retrenchment is a valid exercise of management prerogative subject to the strict requirements set by jurisprudence: (1) The retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer; (2) The employer served written notice both to the employees and to the DOLE at least one month prior to the intended date of retrenchment; (3) The employer pays the retrenched employees separation pay equivalent to one month pay or at least month pay for every year of service, whichever is higher; (4) The employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees right to security of tenure; and (5) The employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers. Petitioner implemented its retrenchment program in good faith because it undertook several measures in cutting down its costs: withdrawing privileges of its executives and expatriates; limiting the grant of additional monetary benefits to managerial employees and cutting down expenses; selling of company vehicles; and infusing fresh capital into the company. Petitioner was able to prove that it incurred substantial business losses, it offered to pay respondent his separation pay, the retrenchment scheme was arrived at in good faith, and lastly, the criteria or standard used in selecting the employees to be retrenched was work efficiency which passed the test of fairness and reasonableness.
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(Dismissal; abandonment) Elpidio Calipay vs. National Labor Relations Commission, et al. G.R. No. 166411, August 3, 2010 Facts: In a complaint for illegal dismissal, unfair labor practice and money claims filed by petitioner Elpedio Calipay, respondents interposed the defense of abandonment. They argued that petitioner went on absence without leave (Awol) from Nov. 2, 1998 up to Nov. 17, 1998. In his complaint, petitioner did not ask for reinstatement but only separation pay. Issue: Whether or not there is abandonment of work by the petitioner. Ruling: Yes. 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. (Dismissal; probationary employment) Carlos De Castro vs. Liberty Broadcasting Network, Inc. and Edgardo Quigue G.R. No. 165153. August 25, 2010 Facts: Petitioner Carlos C. de Castro worked as a chief building administrator at Liberty Broadcasting Network, Inc. (LBNI). On May 31, 1996, LBNI dismissed de Castro on the grounds of serious misconduct, fraud, and willful breach of the trust reposed in him as a managerial employee. Aggrieved, de Castro filed a complaint for illegal dismissal against LBNI with the National Labor Relations Commission (NLRC), praying for reinstatement, payment of backwages, damages, and attorney's fees. He maintained that he could not have committed the alleged acts considering that he was new in the company. Moreover, the accusations were belatedly filed as the imputed acts happened in 1995. Issue: Whether or not petitioner is entitled to the relief prayed for. Ruling: Yes. 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.
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(Management prerogative; transfer of employees) Pharmacia and Upjohn, Inc., et al. vs. Ricardo P. Albayda, Jr. G.R. No. 172724, August 23, 2010 Facts: Respondent Ricardo Albayda, Jr. was a district sales manager of petitioner Pharmacia and Upjhon, Inc. assigned in the Western Visayas area. Petitioner reassigned him to the Northern Mindanao area. Respondent refused the reassignment reasoning that he will be dislocated from his family in Bacolod City; his wife runs an established business there; his 11-year old daughter is studying there; and his two-year old son is under his and his wifes direct care. For failure of respondent to report to his new assignment, he was dismissed from the service. Issue: Whether or not the dismissal is justified. Ruling: Yes. The very nature of a sales man is that it is mobile and ambulant. On this point, it bears to stress that respondent signed two documents signifying his assent to be assigned anywhere in the Philippines. This court has long stated that the objection to the transfer being grounded solely upon the personal inconvenience or hardship that will be caused to the employee by reason of the transfer is not a valid reason to disobey an order of transfer. Such being the case, respondent cannot adamantly refuse to abide by the order of transfer without exposing himself to the risk of being dismissed. Hence, his dismissal was for just cause in accordance with Article 282(a) of the Labor Code. (Liability of Corporate Officer) Wensha Spa Center, Inc. and/or Xu Zhi Jie vs. Loreta T. Yung G.R. No. 185122, August 16, 2010 Facts: Petitioner Wensha Spa Center Inc. (Wensha) is a sauna bath and massage services business. Xu Zhi Jie (Xu) is its president. In a case for illegal dismissal filed by Loreta Yung (Loreta) against petitioner, the Court of Appeals found for the former and held Xu jointly and severally liable with Wensha to pay the award to Loreta. Issue: Whether or not Petitioner Xu Zhi Jie is solidarily liable with Wensha. Ruling: No. The Court finds merit in the argument of petitioner Xu that the CA erred in ruling that he is solidarily liable with Wensha. 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
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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. In the subject decision, the CA concluded that petitioner Xu and Wensha are jointly and severally liable to Loreta. We have read the decision in its entirety but simply failed to come across any finding of bad faith or malice on the part of Xu. There is, therefore, no justification for such a ruling. To sustain such a finding, there should be an evidence on record that an officer or director acted maliciously or in bad faith in terminating the services of an employee. Moreover, the finding or indication that the dismissal was effected with malice or bad faith should be stated in the decision itself. (Strike; validity of strike) Phimco Industries, Inc. vs. Phimco Industries Labor Association (PILA), et. al. G.R. No. 170830, August 11, 2010 Facts: Petitioner PHIMCO Industries, Inc. (PHIMCO) is a corporation engaged in the production of matches. Respondent Phimco Industries Labor Association (PILA) is a duly authorized bargaining representative of PHIMCO. In a negotiation for renewal of collective bargaining agreement, the parties disagreed on salary increases and benefits. PILA then staged a strike. The Court of Appeals (CA) affirmed the decision of the National Labor Relations Commission (NLRC) finding that PILA conducted a peaceful moving picket and that PHIMCOs evidence failed to show that the picket constituted an illegal blockade or that it obstructed the points of entry to and exit from the company premises. Issue: Whether or not the strike is valid. Ruling: No. Despite the validity of the purpose of a strike and the unions compliance with the procedural requirements, a strike may still 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. (Employee benefits; 13th month pay; definition of basic salary; company policy or practice) Central Azucarera De Tarlac vs. Central Azucarera De Tarlac Labor Union-NLU G.R. No. 188949, July 26, 2010 Facts: Petitioner is a domestic corporation engaged in the business of sugar manufacturing, while respondent is a legitimate labor organization which serves as the exclusive bargaining representative of petitioner's rank-and-file employees.
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In compliance with Presidential Decree (P.D.) No. 851, petitioner granted its employees the mandatory thirteenth (13th) - month pay since 1975. The formula used by petitioner in computing the 13thmonth pay was: Total Basic Annual Salary divided by twelve (12). Included in petitioner's computation of the Total Basic Annual Salary were the following: basic monthly salary; first eight (8) hours overtime pay on Sunday and legal/special holiday; night premium pay; and vacation and sick leaves for each year. Throughout the years, petitioner used this computation until 2006 when petitioner gave the employees their 13th-month pay based on the employee's total earnings during the year divided by 12. Respondent objected to this computation. It averred that petitioner did not adhere to the usual computation of the 13th-month pay. It claimed that the divisor should have been eight (8) instead of 12, because the employees worked for only 8 months in 2006. It likewise asserted that petitioner did not observe the company practice of giving its employees the guaranteed amount equivalent to their one month pay, in instances where the computed 13th-month pay was less than their basic monthly pay. On the other hand, petitioner explained that the change in the computation of the 13th-month pay was intended to rectify an error in the computation, particularly the concept of basic pay which should have included only the basic monthly pay of the employees. Issue: Did the defense of the petitioner prosper? Ruling: No. The term basic salary of an employee for the purpose of computing the thirteenth-month 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-of-living allowances. However, these salary-related benefits should be included as part of the basic salary in the computation of the thirteenth-month pay if, by individual or collective agreement, company practice or policy, the same are treated as part of the basic salary of the employees. 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. (Constructive dismissal; off-detailing; resignation; notice requirement) Elsa S. Malig-on v. Equitable General Services Inc. G.R. No. 185269, June 29, 2010 Facts: Petitioner Elsa Malig-on was hired on March 4, 1996 as janitress of respondent Equitable General Services, Inc. On Feb. 15, 2002, her immediate supervisor told her the company would be assigning her to another client but never did despite constant follow-ups. Eight months later or on Oct. 5, 2002, respondent told Malig-on that she had to a file a resignation letter before it would reassign her. She complied but respondent reneged on its undertaking. Consequently, Malig-on filed a complaint for illegal dismissal against respondent.
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Issue: Whether or not the petitioner was illegally dismissed. Ruling: Yes. The company evidently placed Malig-on on floating status after being relieved as janitress in a clients workplace. But, as the court has repeatedly ruled, such act of off-detailing Malig-on was not the equivalent of dismissal so long as her floating status did not continue beyond a reasonable time. But, when it ran up to more than six months, the company may be considered to have constructively dismissed her from work, that is, as of Aug. 16, 2002. Thus, her purported resignation on Oct. 15, 2002 could not have been legally possible. The company of course claims that it gave Malig-on notices on Aug. 23, 2002 and Sept. 2, 2002, asking her to explain her failure to report for work and informing her that the company would treat such failure as lack of interest in it, respectively. But these notices cannot possibly take the place of the notices required by law. They came more than six months after the company placed her on floating status and, consequently, the company gave her those notices after it had constructively dismissed her from work. (Death Benefits)
Interorient Maritime Enterprises, Inc. et al. v. Leonora S. Remo G.R. No. 181112, June 29, 2010
This case stems from the claim for death benefits filed by respondent Leonora S. Remo (respondent), surviving spouse of Lutero Remo (Lutero), against petitioners Interorient Maritime Enterprises, Inc. (Interorient), Interorient Enterprises, Inc., and Liberia and Dorothea Shipping Co., Ltd. (petitioners). Respondent alleged that Lutero was repeatedly contracted and deployed by Interorient for employment on board various vessels of its principals; that prior to his last employment contract, he underwent a pre-employment medical examination (PEME) and was declared fit to work; while on board the vessel, Lutero experienced severe abdominal and chest pains, fainting spells and difficulty in breathing and eventually was diagnosed with Chronic Atrial Fibrillation, Cardiomegaly, Essential Hypertension, and Schistosomiasis; that he died at the age of 47 of hypertensive cardio-vascular disease, leaving behind respondent and their three (3) children; that from the time of his discharge from the vessel, Lutero did not receive any sickness benefit or medical assistance from petitioners; and that respondent is entitled to death compensation as the death of her husband was due to an illness contracted during the latter's employment, as well as sickness benefit, moral and exemplary damages, and attorneys fees. Petitioners denied liability and averred that respondent was not entitled to her claims because Lutero died after the expiration of the term of the contract; that Lutero failed to disclose his preexisting illness at the time of his engagement; and that, following his repatriation, he acknowledged his preexisting illness. Issue: Whether or not the respondent is entitled to death benefits under the POEA Standard Employment Contract. Ruling: Yes.
Facts:
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Petitioners cannot deny liability for the subject death by claiming that the seafarers death occurred beyond the term of his employment and worsely, that there has been misrepresentation on the part of the seafarer. For, as employer, the petitioners had all the opportunity to pre-qualify, thoroughly screen and choose their applicants to determine if they are medically, psychologically and mentally fit for employment. That the seafarer here was subjected to the required pre-qualification standards before he was admitted as Cook-Steward, it thus has to be safely presumed that the late Remo was in a good state of health when he boarded the vessel. (Illegal Dismissal. 13th-month pay. Employer-employee relationship) Romeo Basay, et al. vs. Hacienda Consolation, et al. G.R. No. 175532, April 19, 2010 Respondents hired petitioners Romeo Basay (Basay) in 1967 and Julian Literal (Literal) in 1984, as tractor operators, and petitioner Julian Abueva (Abueva) in 1989, as laborer, in the hacienda devoted for sugar cane plantation. On August 29, 2001, petitioners filed a complaint for illegal dismissal with monetary claims against respondents. They alleged that sometime in July 2001, respondents verbally informed them to stop working. Thereafter, they were not given work assignments despite their status as regular employees. They alleged that their termination was done in violation of their right to substantive and procedural due process. Petitioners also claimed violation of Minimum Wage Law and non-payment of overtime pay, premium pay for holiday and rest day, five days service incentive leave pay, separation pay and 13th month pay. They also prayed for damages and attorney's fees. Respondents denied petitioners' allegations. As regards Abueva, respondents averred that he is not an employee but a mere contractor in the hacienda. According to respondents, Abueva hired other men to perform weeding jobs and even entered into contract with neighboring haciendas for similar jobs. Respondents alleged that Abueva's name does not appear in the payroll, thus indicating that he is not an employee. As such, there can be no dismissal to speak of, much less an illegal dismissal. With regard to petitioners Literal and Basay, respondents admitted that both are regular employees, each receiving P130.00 per day's work as evidenced by a Master Voucher. However, respondents denied having illegally dismissed them and asserted that they abandoned their jobs. Respondents alleged that Literal was facing charges of misconduct, insubordination, damaging and taking advantage of hacienda property, and unauthorized cultivation of a portion of the hacienda. Literal was ordered to explain; instead of complying, Literal did not anymore report for work. Instead, he filed a complaint for illegal dismissal. Respondents asserted that they sent a representative to convince petitioners to return but to no avail. Respondents maintained that they have been religiously giving 13th month pay to their employees as evidenced by a voucher corresponding to year 2000. Issue: Whether or not the petitioners were illegally dismissed and are entitled to their money claims. Ruling: There was no illegal dismissal because, aside from mere allegations, no evidence was proffered by the petitioners that they were dismissed from employment. The records are bereft of any indication that petitioners were prevented from returning to work or otherwise deprived of any work assignment by Facts:
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respondents. It is incumbent upon the employees that they should first establish by competent evidence the fact of their dismissal from employment. The one who alleges a fact has the burden of proving it and the proof should be clear, positive and convincing. In this case, As for Basay and Literal, the NLRCs award of proportionate 13th month pay is proper. For an employee who has been separated from service before the time for payment of the 13th month pay, he is entitled to this monetary benefit in proportion to the length of time he worked during the year, reckoned from the time he started working during the calendar year up to the time of his separation. In the case at bar, respondents were able to adduce evidence that the benefit was given to the employees only for the years 1998, 1999, and 2000. As for Abueva, in filing a complaint for illegal dismissal, it is incumbent upon him to prove the relationship by substantial evidence. In other words, Abuevas allegations did not establish that his relationship with respondents had the attributes of an employer-employee relationship based on the fourfold test. Abueva was not able to discharge the burden of proving the existence of an employer-employee relationship. Moreover, Abueva was not able to refute respondents assertion that he hires other men to perform weeding job in the hacienda and that he is not exclusively working for respondents. (Independent Contractors. CBA; coverage) Farley Fulache, et al. vs. ABS-CBN Broadcasting Corporation G.R. No. 183810, January 21, 2010 Petitioners, who were drivers, cameramen, editors, PA/Teleprompter Operator-Editing and VTR man, filed two separate complaints for regularization, unfair labor practice and several money claims (regularization case) against ABS-CBN Broadcasting Corporation-Cebu (ABS-CBN). Petitioners alleged that ABS-CBN and the ABS-CBN Rank-and-File Employees Union (Union) executed a collective bargaining agreement (CBA); they only became aware of the CBA when they obtained copies of the agreement; they learned that they had been excluded from its coverage as ABS-CBN considered them temporary and not regular employees, in violation of the Labor Code. They claimed they had already rendered more than a year of service in the company and, therefore, should have been recognized as regular employees entitled to security of tenure and to the privileges and benefits enjoyed by regular employees. On the other hand, ABS-CBN explained the nature of the petitioners employment within the framework of its operations. It claimed that instead of salaries, ABS-CBN pointed out that talents are paid a pre-arranged consideration called "talent fee" taken from the budget of a particular program and subject to a ten percent (10%) withholding tax. Talents do not undergo probation. Their services are engaged for a specific program or production, or a segment thereof. Their contracts are terminated once the program, production or segment is completed. ABS-CBN further claimed that to cope with fluctuating business conditions, it contracts on a case-to-case basis the services of persons who possess the necessary talent, skills, training, expertise or qualifications to meet the requirements of its programs and productions. These contracted persons are called "talents" and are considered independent contractors who offer their services to broadcasting companies. ABS-CBN alleged that the petitioners services were contracted on various dates by its Cebu station as independent contractors/off camera talents, and they were not entitled to regularization in these capacities. Issue: Whether or not the petitioners are independent contractors. Facts:
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Ruling: No. Complainants in these cases are regular employees of respondent ABS-CBN and not INDEPENDENT CONTRACTORS and thus henceforth they are entitled to the benefits and privileges attached to regular status of their employment. As regular employees, petitioners fall within the coverage of the bargaining unit and are therefore entitled to CBA benefits as a matter of law and contract. Under the terms of the CBA, petitioners are members of the appropriate bargaining unit because they are regular rank-and-file employees and do not belong to any of the excluded categories. Most importantly, the labor arbiters decision of January 17, 2002 affirmed all the way to the CA ruled against the companys submission that they are independent contractors. Thus, as regular rank-and-file employees, they fall within the CBA coverage. And, under the CBAs express terms, they are entitled to its benefits.
CIVIL LAW
(Agency; sale of land by an unauthorized agent) ALCANTARA & RUBI vs. BRIGIDA L. NIDO GR No. 165133, April 19, 2010 Facts: Petitioners purchased on installment a 200-square meter portion of Revelens (respondents daughter) lot from respondent, Brigida Nido who was verbally authorized to sell the land. After paying P17,500, petitioners defaulted on their installment payments. Respondent, acting as administrator and attorney in fact of Revelen, the owner of the land, filed a complaint for recovery of possession. ISSUE: Whether or not the contract entered into by the respondent, in representation of her daughter, is void in view of the fact that the respondent's authority was only made orally. RULING: The sale of lot by the respondent who did not have a written authority from Revelen is void. Article 1874 of the Civil Code explicitly requires a written authority before an agent can sell an immovable property. A special power of attorney is necessary to enter into any contract by which the ownership of an immovable is transmitted or acquired for a valuable consideration. Without an authority in writing, respondent cannot validly sell the lot to petitioners. (Civil Law; Marriage; Psychological incapacity) Camacho-Reyes vs. Reyes GR No. 185286, August 18, 2010 A petition for review on certiorari attacking the decision of the Court of Appeals reversing the decision of the Regional Trial Court of Quezon City nullifying the marriage between the petitioner Camacho and respondent Reyes on the ground of psychological incapacity.
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Facts: Petitioner and respondent were campus sweethearts. The formers love to the latter did not change even when she discovered that respondent was cutting classes and taking up marijuana. He did not even finish college. By the time they married each other, all living expenses were shouldered by respondents parents, and they were living with the respondents parents. When their first child was born, financial difficulties started to come in. To prod respondent into assuming more responsibility, petitioner suggested that they live separately from her in-laws. However, the new living arrangement engendered further financial difficulty. Petitioner was a single-income earner, and the business ventures of the respondent all floundered. The couple became so estranged from each other that the respondent remained unconcerned and inattentive, not only to the petitioner but also to their children. To make things worse, petitioner was able to confirm that respondent was having an extra-marital affair. Issue: Whether or not the respondent is psychologically incapacitated to fulfill the essential marital obligations under Article 36 of the Family Code. Ruling: Yes, there existed psychological incapacity. The marriage between the petitioner and the respondent was nullified. Psychological incapacity was shown by respondents 1.) sporadic financial support; 2.) extra-marital affairs; 3.) substance abuse; and 4.) failed business attempts. The high court found that the marriage between the parties from its inception had this congenital infirmity which pertains to the inability of the parties to effectively function emotionally, intellectually and socially towards each other in relation to their essential duties to mutually observe love, fidelity and respect as well as to mutually render help and support as mandated by Article 68 of the Family Code. Such finding was anchored by the unanimous findings of three psychology experts: petitioner manifested inadequacies along her affective sphere that made her less responsive to the emotional needs of her husband, while the respondent manifested strong sense of Inadequacy along masculine strivings and narcissistic features that renders him psychologically incapacitated to perform the duties and responsibilities of marriage. The Supreme Court further ruled that such psychological incapacity, as stated by psychology experts, is permanent, incurable, and stable over time, and mere recommendation of one psychology expert that the incapacity is curable does not automatically imply curability. Therefore, the case has the gravity, juridical antecedence, and incurability the three requirements of nullifying marriage based on psychological incapacity. (Donation mortis causa vs donation inter vivos) Del Rosario vs. Ferrer, et. al. GR No. 187056, September 20, 2010 The case is about a petition questioning the judgment of the Court of Appeals reversing the decision of the Regional Trial Court of Manila, which ruled that the donation in question, although identified by the donors as mortis causa, is really a donation inter vivos. Facts: A donation mortis causa was executed by spouses Gonzales in favor of their two children and the petitioner, their granddaughter from their predeceased son. It was stipulated in the deed that such donation mortis causa shall be irrevocable and shall be respected by the surviving spouse. The document had no attestation clause and was witnessed by only two persons. However, four months later, when the donor-
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wife had already died, the donor-husband executed a deed of assignment of his rights and interests in subject property to his daughter. Issue: Whether the spouses donation was a donation mortis causa, as it was denominated, or a donation inter vivos. Ruling: It was a donation inter vivos. The petition was granted and the decision of the Court of Appeals was set aside. The Supreme Court held that if a donation by its terms is inter vivos, this character should not be altered by the fact that the donor styles it as mortis causa. Citing the case Austria-Magat v. Court of Appeals, the high court further ruled that the term irrevocably is a distinctive standard that identifies the document as a donation inter vivos; whereas, in donation mortis causa, the transfer should be revocable by the transferor at will. (Partnership; existence of a partnership) HEIRS OF LIM vs. LIM JULIET VILLA LIM GR No. 172690, March 3, 2010 Jose, together with Jimmy Yu and Norberto Uy, formed a partnership to engage in the trucking business. Upon Joses death, his heirs continued the business with Elfredo, one of his sons, managing the same. When the latter died, petitioners claiming to be co-owners of the properties, required the respondent to render an accounting of all income, profits and rentals received from the estate of Elfredo. Respondent refused claiming that Elfredo himself is a partner of Norberto and Jimmy and that, consequently, all properties involved in this case are conjugal partnership properties. Issue: Whether or not Elfredo was a partner in the trucking business Ruling: Elfredo was one of the partners in the trucking business. The extent of his control, administration and management of the partnership and its business, the fact that its properties were placed in his name, and that he was not paid salary or other compensation by the partners, are indicative of the fact that Elfledo was a partner and a controlling one at that. (Civil Law; Property; Equitable mortgage; Right of redemption) Heirs of Reyes vs. Reyes, et. al. GR No. 158377, August 13, 2010 This case is a petition before the Supreme Court assailing the decision rendered by the Court of Appeals and the Regional Trial Court of Bulacan declaring that the contract between the parties was a sale a retro. Facts: A case for quieting of title was initiated when the petitioners failed to repurchase and vacate the land Facts:
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they inherited which they sold a retro (period to redeem was extended from the original period) to the respondents. Petitioners, using Article 1602 of the Civil Code as basis, argued that the Deed of Sale a retro was in reality an equitable mortgage sale since they retained ownership of the property, they paid the taxes, and not all of the co-owners agreed to the sale. The respondents insisted that the sale was a retro sale, and that the co-owners who dissented from the sale actually had no succession right since their predecessor (one of the children of the original owner-spouses) predeceased her parents. Issue: Whether the contract between the heirs of Reyes and the respondents is a pacto a retro sale or an equitable mortgage. Ruling: It is an equitable mortgage. The Supreme Court reversed the decision of the lower courts. There existed the following conditions provided by the law governing equitable mortgages disguised as sale contracts, to wit: 1.) the vendor remained in possession as lessee or otherwise; and 2.) the vendor agreed to pay the taxes on the thing sold. Those conditions were enough to declare the contract in question as equitable mortgage. The Supreme Court held that the existence of any of the five 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. Also, the same provision also provides that a contract is presumed to be an equitable mortgage if, upon or after the expiration of the right to repurchase, another instrument extending the period of redemption or granting a new period is executed. (Marriage; governing law, depends on when celebrated; impact on who can file for petition of nullity) ISIDRO ABLAZA VS RP GR No. 158298, August 11, 2010 Facts: Petitioner filed a petition for the declaration of absolute nullity of marriage contracted between his late brother Cresencio Ablaza and Leonila Honato alleging that the same was celebrated without a valid marriage license. He insisted that his being the surviving brother of Cresencio entitled him to one-half of the real properties acquired by the latter , thereby making him a real party in interest. Issue: Whether or not the petitioner is a real party in interest in the action to seek the declaration of nullity of the marriage of his deceased brother Ruling: 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 Administrative Matter (A.M.) No. 02-11-10-SC had absolutely no application to the petitioner. 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
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under the conditions stated in Article 1001 and Article 1003 of the Civil Code. (Civil law; Property; Acquisitive prescription) LAMSIS, et. al. vs. DONG-E GR. No. 173021, October 20, 2010 The case is about the petition for review assailing the decision of the Court of Appeals and the Regional Trial Court of Benguet declaring respondent as the rightful owner of the land in question. Facts: Respondent, owner of the lot in question, tolerated the petitioners in possessing portions of such land. However, the latter began to expand their occupation on the lot in question and selling portions thereof. This prompted respondent to file a complaint for recovery of ownership, possession, reconveyance, and damages against the petitioners. Petitioners, on the other hand, denied respondents claims of ownership and possession, arguing that they were the ones in possession of the land in question publicly, peacefully, exclusively, openly, and in the concept of owners for thirty years, which gave them ownership over the subject land by the operation of acquisitive prescription. Issue: Whether or not petitioners were able to acquire the lot in question through acquisitive prescription. Ruling: No, they did not acquire it through acquisitive prescription. By dismissing the petition, the Supreme Court ruled that petitioners did not possess the lot in question in the concept of an owner since acts of possessory character executed due to license or by mere tolerance of the owner is inadequate for it to give rise to acquisitive prescription. Acquisitive prescription may give rise if there is repudiation (an exception to possession in the concept of an owner for acquisitive prescription to give rise) communicated by the owner to the other party. However, petitioners were not able to prove any act of repudiation on the part of respondent sufficient for the reckoning of the acquisitive prescription. (Family Relations; child support; filiation) NEPOMUCENO vs. LOPEZ GR No. 181258, March 18, 2010 Facts: Respondent filed a complaint for recognition and support against petitioner claiming to have been begotten out of an extramarital affair of petitioner with Araceli; that petitioner refused to affix his signature on her Certificate of Birth; and that, by a handwritten note dated August 7, 1999, petitioner nevertheless obligated himself to give her financial support in the amount of P1,500 on the 15th and 30th days of each month beginning August 15, 1999. Issue: Is petitioners handwritten undertaking to provide financial support to respondent enough to establish latter's claim of filiation?
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Ruling: No, it does not in any way serve as proof of filiation. The handwriiten note does not contain whatsoever any statement about Archbencel's filiation to petitioner. It is,therefore, not within the ambit of Article 172(2) vis--vis Article 175 of the Family Code which admits as competent evidence of illegitimate filiation an admission of filiation in a private handwritten instrument signed by the parent concerned. (Succession; settlement of the estate) PASCO vs. HEIRS OF FILOMENA DE GUZMAN GR No. 165554, July 26, 2010 Facts: Petitioners obtained a loan amounting to 140,000 from Filomena de Guzman. Upon the latters death, her heirs sought to collect from the petititoners but to no avail. Thus , the collection case filed before the Municipal trial court. Filomenas heirs authorized respondent Cresencia De Guzman Principe to act as their attorney-infact through a Special Power of Attorney (SPA) dated April 6, 1999. The SPA authorized Cresencia to represent them in all matters concerning the estate of the deceased and to file cases for collection of accounts due the deceased or her estate. The parties entered into a compromise agreement but petitioners later moved to have the same set aside alleging that the agreement was written in a language not written by them and that Cresencia had no authority to represent her co-heirs because Filomenas estate had a personality of its own. Issue: Whether or not Cresencia was authorized under the SPA to enter into the Compromise Agreement in behalf of her co-heirs. Ruling: Cresencia was authorized to enter into the Compromise agreement. Her co-heirs executed a special power of attorney designating her as the attorney-in fact and empowering her to file cases for collection of all the accounts due to Filomena or her estate. In entering into the subject compromise agreement, she is then just doing her duty. While it is true that the estate has a separate personality of its own, her heirs have certainly an interest in the preservation of the estate and the recovery of its properties for the rights to the succession are transmitted from the moment of the death of the decedent. (Civil law; Sales; Buyer in good or bad faith) PUDADERA vs. MAGALLANES GR No. 170073, October 18, 2010 This is a petition for review on certiorari seeking to reverse and set aside the Court of Appeals decision and the Regional Trial Court of Iloilo City declaring respondent as the rightful owner of the property in question. Facts: A certain Lazaro sold a portion of her property to respondent. Upon full payment, respondent fenced
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the lot and constructed a nipa hut. However, Lazaro refused to turn over the mother title to the respondent; thus, preventing her from titling in her name the subdivided portion thereof. Such partition was resold to petitioner. Respondent pursued her claims against the new owners. The trial court held that respondent was the first in possession of the subject lot by virtue of the sale between Lazaro and respondent, and that petitioner bought the subject with an existence of a notice that someone else was already in possession of the subject lot, therefore, they were buyers in bad faith. Issue: Who between the parties is the rightful owner of the disputed property? Ruling: The respondent was declared by the Supreme Court as the rightful owner of the disputed property. Article 1544 of the Civil Code provides that if a real thing was sold to several vendees, the one that first registered it to the Registry of Deeds in good faith shall be the rightful owner of a thing, and should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession. It was held that in order for the second buyer to displace the first buyer, it must be shown that 1.) the former acted in good faith from the time of acquisition until title is transferred to him by registration or failing registration; and 2.) there was continuing good faith and innocence or lack of knowledge of the first sale until his contract ripens into full ownership through prior registration. The court further ruled that a buyer in good faith buys the property without notice that some other person has a right to or interest in such property and pays its fair price before he has notice of the adverse claims and interest of another person in the same property. In the case at bar, petitioners should have been aware of respondents prior physical possession and claim of ownership over the subject lot when they visited the lot on several occasions prior to the sale thereof plus the fact that respondent constructed a fence and small hut on the subject. (Conjugal Partnership; sole administration) SIOCHI vs. GOZON, et. al. GR No. 169900/169997, March 18, 2010 Facts: Subject property is a 30,000 sq.m. parcel of land registered in the name of Alfredo Gozon married to Elvira Gozon. While a legal separation case filed by Elvira was pending, Alfredo sold the property to Mario Siochi who paid 5 million earnest money and thereafter took possession of the property. A decree of legal separation was rendered by the court which declared the dissolution and liquidation of the conjugal partnership of gains. As regards the subject property, the Court held that the same is deemed conjugal. Alfredo then executed a Deed of Donation over the property in favor of their daughter, Winifred Gozon . After which, he,by virtue of a Special Power of Attorney executed in his favor by Winifred, sold the property to Inter-Dimensional Realty, Inc. (IDRI). Issue: Whether or not the contracts (sale and donation) entered into by Alfredo are valid. Ruling: The sale of the subject land by defendant Alfredo Gozon to plaintiff-appellant Siochi is declared null and void because the conveyance was done without the consent of defendant-appellee Elvira Gozon.
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In this case, Alfredo was the sole administrator of the property because Elvira, with whom Alfredo was separated in fact, was unable to participate in the administration of the conjugal property. However, as sole administrator of the property, Alfredo still cannot sell the property without the written consent of Elvira or the authority of the court. Without such consent or authority, the sale is void. The absence of the consent of one of the spouse renders the entire sale void, including the portion of the conjugal property pertaining to the spouse who contracted the sale. Even if the other spouse actively participated in negotiating for the sale of the property, that other spouses written consent to the sale is still required by law for its validity. The Agreement entered into by Alfredo and Mario was without the written consent of Elvira. Thus, the Agreement is entirely void. As regards Marios contention that the Agreement is a continuing offer which may be perfected by Elviras acceptance before the offer is withdrawn, the fact that the property was subsequently donated by Alfredo to Winifred and then sold to IDRI clearly indicates that the offer was already withdrawn. Under Article 125 of the Family Code, a conjugal property cannot be donated by one spouse without the consent of the other spouse. Hence, the donation made by Alfredo to Winifred is also void. (Civil law; Contracts; Novation) St. James College of Paranaque & Torres vs. Equitable PCI Bank GR No. 179441, August 9, 2010 The case is a petition before the Supreme Court to review the decision of the Court of Appeals reversing the issuance of the writ of preliminary injunction by the Regional Trial Court of Pasig City against the respondent from foreclosing the petitioners mortgaged land. Facts: Petitioners owed P25 million to the respondent secured by a real estate mortgage (REM). When petitioners had defaulted in the payment of the loan, with total unpaid obligation stood at P18,300,000, petitioners proposed that their loan be converted into a long term loan payable in 10 equal annual installments. Respondent counter-proposed a restructuring package with a soft payment scheme for the outstanding loan balance with interest. Petitioners agreed, and chose to pay by equal annual amortizations of P6,100,000 payable every month of May. Petitioners still failed to pay. They, however, paid the partial debt due when respondent sent to them a demand letter, the latter reminding them that such receipt was without prejudice to the latters right and claims arising from the fact that the loan was overdue. They failed to pay the remaining balance. When their security was about to be foreclosed, the petitioners opposed on the ground that the acceptance of the respondent of the partial payment novated the terms of payment of the P18,300,000 secured loan and, therefore, the full amount was still not due. Issue: Whether or not there was novation. Ruling: There was no novation. The Supreme Court junked the petition and ruled that the parties did not unequivocally declare, let alone agree, that the obligation had been modified as to the terms of payment by the partial payments of the obligation, thus the petitioners failed to establish the presence of all the requisites for a valid novation, to wit: previous valid obligation, agreement between the parties, extinguishment of the obligation, and a valid new contract. The high court further ruled that their failure to discharge the burden of proving that there was novation gave rise to the fact that there was no novation since it cannot be presumed (novatio non praesumitur). A circumstance which arises from a purported
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modification in the terms and conditions of the obligation, according to the high court, must be clear and express. (Contract; reciprocal obligations; remedy of rescission) TONGSON vs. EMERGENCY PAWNSHOP BULA, Inc. & NAPALA GR No. 167874, January 15, 2010 Facts: Napala purchased a parcel of land from the spouses Tongson paying P200,000 in cash and issuing a postdated check for the balance of P2,800,000. Upon presentation, the check was dishonored for being drawn against insufficient funds. Petitioners filed a complaint for the annulment of the contract. Issue: Whether or not the contract of sale can be rescinded on the basis of Napalas fraudulent representation of sufficient funds to pay for the property. Ruling: Rescission is proper and justified. Spouses Tongson as sellers had already performed their obligation of executing the deed of sale which resulted in the cancellation of their title in favor of the buyer. Respondents as the buyers, on the other hand, failed to perform their correlative obligation of paying the full amount of the contract price, committing a substantial breach of their reciprocal obligations entitling the spouses Tongson to the rescission of the sales contract. (Civil law; Marriage; annulment; psychological incapacity) TORING vs. TORING & REPUBLIC OF THE PHILIPPINES GR No. 165321, August 3, 2010 This is an appeal assailing the decision of the Court of Appeals reversing the judgment of the Regional Trial Court of Quezon City nullifying the marriage between petitioner (Ricardo) and private respondent (Teresita) on the ground of psychological incapacity. Facts: Petitioner sought to annul his marriage with private respondent twenty years after the wedding claiming psychological incapacity on the part of the latter, alleging that she was an adulteress and a squanderer. A psychologist testified that it was private respondents Narcissistic Personality Disorder that rendered her psychologically incapacitated to fulfill her essential marital obligations, though she admitted that she did not personally observe and examine the latter. The Office of the Solicitor General opposed, saying that the psychological evaluation conducted on petitioner and the parties son only revealed a vague and general conclusion on these parties personality traits but not on private respondents psychological makeup, thus failing to adduce evidence to show the gravity, juridical antecedence, or incurability of the psychological incapacity as well as its root cause. Issue: Whether or not the marriage between the parties should be annulled on the ground of psychological
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incapacity. Ruling: No, the marriage should not be annulled. Citing Santos v. Court of Appeals, et al., the Supreme Court ruled that in order to annul marriage, psychological incapacity must be characterized by (a) gravity, (b) juridical antecedence, and (c) incurability. The burden of proving those lies with the petitioner. Sad to say, the high court was not impressed by the evidences presented by the petitioner because all of them were solely based on petitioners statements. Although the law does not require that the allegedly incapacitated spouse be personally examined by a psychologist, the court held that it is still essential to show 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. Such evidence may come from the testimonies of other persons intimately related to them and not necessarily from the parties themselves. Furthermore, petitioners characterizations of his wife were not sufficient to constitute psychological incapacity under Article 36 of the Family Code.
TAXATION
(Court of Tax Appeals; raising new issues on appeal; general rule) CIR vs. Eastern Telecommunication Phils., Inc., G.R.No.163835, July 7, 2010 GR No. 184823, October 6, 2010 FACTS: Eastern, a domestic corporation, is allowed under its franchise to install, operate, and maintain telecommunications system throughout the Philippines. Eastern purchased imported equipment, machineries, and spare parts necessary in carrying out its business which were subjected to a 10% VAT by the Bureau of Customs. Eastern filed with the CIR a written application for refund or credit of unapplied input taxes it paid on the imported equipment during the taxable years 1995 and 1996 relying on RA 7617 which allows Eastern to pay 3% of its gross receipts in lieu of all taxes on this franchise or earnings. To toll the running of the two-year prescriptive period, Eastern filed an appeal with the CTA without waiting for the decision of the CIR. CTA found that Eastern has a valid claim for the refund or credit of the unapplied input taxes which was also affirmed by the CA. CIR contends that Section 104(a) of the Tax Code on apportionment of tax credit should apply. The CIR further asserts that Eastern was not able to prove that it was engaged in purely VAT taxable transactions and that the unapplied input taxes it claims as refund were directly attributable to transactions subject to VAT; and therefore RA 7617 provisions should not apply. ISSUE: Whether or not the rule in Section 104(a) of the Tax Code on the apportionment of tax credits can be applied in appreciating Easterns claim for tax refund. RULING: CIRs petition was meritorious. Easterns VAT returns reporting income from exempt sales are matters of record that the tax court should have considered. In VAT-exempt sales, the taxpayer/seller shall not bill any output tax on his sales to his customer and, corollary, is not allowed any credit or refund of the input taxes he paid on his purchases. The mere declaration of exempt sales in the VAT returns, whether based on Section 103 of the Tax Code or some other special law, should have prompted the CA to apply Section 104(a) of the Tax 29

Code to Easterns claim. Statues granting tax exemptions are strictly construed against the person or entity claiming the exemption. The taxpayer is charged with the burden of proving that he has complied with and satisfied all the statutory and administrative requirements to be entitled to the tax refund. The Supreme Court also emphasized the prohibition in raising new issues on appeal which will not apply in the case since the question of applicability of Section 104(a) of the Tax Code was already raised but the tax court did not rule on it. (National Internal Revenue Code; Appeal; Right to appeal) CIR vs. Fort Bonifacio Devt Corp. G.R.No.167606, August 11, 2010 FACTS When the CTA granted FBDCs petition for BIR to refund or issue a Tax Credit Certificate, the CIR filed for two petitions for extension of time to file petition for review. The CA, acting on the first motion for extension, issued a Resolution dismissing the petition for non-payment of docket and other legal fees. Notably, it was FBDC, and not CIR, that was designated as petitioner in the latters Motion for Extension of Time to File Petition for Review. FBDC is not exempt from the payment of docket and other legal fees. The FBDC now argued that the original petition for review could no longer be amended as the same was filed past the deadline as prayed for in the second motion for extension. ISSUE Whether or not the CA deprived the government of its right to due process when it dismissed the case on pure technicality. RULING Government was not deprived of its right to due process. The right to appeal is not a natural right. It 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. The failure to timely perfect an appeal cannot simply be dismissed as a mere technicality, for it is jurisdictional. It raises a jurisdictional problem as it deprives the appellate court of jurisdiction over the appeal. The failure to file the notice of appeal within the reglementary period is akin to failure to pay the appeal fee within the prescribed period. In both cases, the appeal is not perfected in due time. Petitioner, as well, did not present any circumstances that would justify the relaxation of said rule. (Assessment; prescriptive period. Prescriptive period for assessment; exceptions) CIR vs. Kudos Metal Corp. G.R.No.178087, May 5, 2010 FACTS CIR contends that the governments right to assess taxes is not barred by prescription as there are two waivers executed by respondent which effectively tolled or extended the period within which the assessment can be made. Respondent maintains that prescription had set in due to the invalidity of the waivers. The CTA cancelled the assessment notices of the CIR to the respondent for the invalidity of the
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waivers because of the following infirmities: (1) the waivers were executed without the notarized written authority of the Assistant Commissioner to sign the waiver in behalf of petitioner; (2) the waivers failed to indicate the date of acceptance; (3) the fact of receipt by the petitioner of its file copy was not indicated in the original copies of the waivers. Consequently, the assessments were issued by the BIR beyond the prescriptive period. ISSUE Whether or not governments right to assess unpaid taxes of respondent prescribed. RULING Governments right has prescribed. The waivers executed by respondents accountant did not extend the period within which the assessment can be made. An assessment notice issued after the three-year prescriptive period is no longer valid and effective. Exceptions however are mentioned under Section 222 of the NIRC which provides that the period to assess and collect taxes may only be extended upon a written agreement between the CIR and the taxpayer executed before the expiration of the three-year period. Also, there is no showing that respondent made any request to persuade the BIR to postpone the issuance of the assessments. The doctrine of estoppels must be sparingly applied and it cannot give validity to an act that is prohibited by law or one that is against public policy. (Excise Tax; principle that company should be taxed only on main business not applicable) Lepanto Consolidated Mining Co. vs. Hon. Mauricio Ambanloc G.R.No.180639, June 29, 2010 FACTS The national government issued to petitioner a mining lease contract which granted Lepanto the right to extract and use for its purposes all mineral deposits within the boundary lines of its mining claim. Under its contract, it did not have to get a permit to extract and use sand and gravel from within the mining claim for its operational and infrastructure needs as advised by the MBG of the DENR. Respondent, the provincial treasurer of Benguet, however sent a demand letter to Lepanto asking it to pay the province for the sand and gravel tax, for the quarry materials that it extracted from its mining site from 1997 to 2000. The RTC and the CTA ruled that Lepanto was liable for the amount assessed with interest at the rate of 2% per month and shall not exceed 36 months from the time the tax should have been paid. Lepanto claims that the tax on sand and gravel applied only to commercial extractions based on the principle that when a company is taxed on its main business, it is no longer taxable for engaging in an activity that is but a part, incidental to, and necessary to such main business. ISSUE Whether or not Lepanto is liable for the tax imposed by the Province of Benguet on the sand and gravel that it extracted from within the area of its mining claim and used exclusively in its mining operation. RULING Lepanto is liable.
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Section 138 of the Local Government Code authorized provinces to impose a tax on the extraction of sand and gravel from public lands. Without distinguishing between personal and commercial uses, then the tax should be deemed to cover extractions for both purposes. The incidental activity could not be treated as a business separate and distinct from the main business of the taxpayer. Here the tax is an excise tax imposed on the privilege of extracting sand and gravel. And it is settled that provincial governments can levy excise taxes on quarry resources independently from the national government. (Employees' Trust Fund; no estoppel in favor of BIR) Miguel Ossorio Pension Foundation, Inc. vs. CA and CIR G.R.No.162175, June 28, 2010 FACTS Petitioner, a non-stock and non-profit corporation, was organized for the purpose of holding title to and administering the employees trust or retirement funds established for the benefit of the employees of Victoria Milling Co., Inc. (VMC). Petitioner, as trustee, claims that the income earned by the Employees Trust Fund is tax exempt under Section 53(b) of the Tax Code. Upon the request of VMC, petitioner invested part of the Employees Trust Fund to purchase a lot. Petitioner, as trustee and also co-owner, purchased 49.59% of the lot using funds of the Employees Trust Fund. Since petitioner needed funds to pay the retirement and pension benefits of VMC employees, it sold and negotiated its share in the lot to the Metrobank. Petitioner now asserts that the Employees Trust Funds 49.59% share in the income tax was erroneously paid and should be refunded. The BIR however contends that under Section 26 of the Tax Code, petitioner is not exempt from tax on its income from the sale of real property. The BIR found that the registered owner was VMC and not the petitioner. ISSUE Whether or not petitioner is entitled to tax exemption for its share in the proceeds from the sale of the said lot. RULINGS Petitioner is entitled to tax exemption. Article 1452 of the Civil Code expressly authorizes a person to purchase a property with his own money and to take conveyance in the name of another. The BIR has no option but to recognize such legal trust as well as the beneficial ownership of the real owners because the trust is created by force of law. The fact that the title is registered solely in the name of one person is not conclusive that he alone owns the property. The Supreme Court further ruled that a TCT does not foreclose the possibility that the property may be co-owned by persons not named in the certificate, or that it may be held in trust for another person by the registered owner.
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(Value added tax; refund of unutilized input value added tax; start of prescriptive period) Commissioner of Internal Revenue vs. Aichi Forging Company, Inc. G.R. No. 184823, October 6, 2010 Facts: Company A is a domestic corporation engaged in the manufacturing, producing, and processing of steel and its by-products. It is registered with the Bureau of Internal Revenue (BIR) as a Value-Added Tax (VAT) entity and its products, close impression die steel forgings and tool and dies, are registered with the Board of Investments (BOI) as a pioneer status. On September 30, 2004, Company A filed a claim for refund/credit of input VATwith the petitioner Commissioner of Internal Revenue (CIR). It alleged that for the period July 1, 2002 to September 30, 2002, it generated and recorded zero-rated sales in the amount of P131,791,399.00, which was paid pursuant to Section 106(A) (2) (a) (1), (2) and (3) of the National Internal Revenue Code of 1997 (NIRC); that for the said period, it incurred and paid input VAT amounting to P3,912,088.14 from purchases and importation attributable to its zero-rated sales; and that in its application for refund/credit filed with the DOF One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center, it only claimed the amount of P3,891,123.82. However, the petitioner denied the claim because the refund was filed beyond the two year period. Issue: Whether respondents judicial and administrative claims for tax refund/credit were filed within the two-year prescriptive period provided in Sections 112(A) and 229 of the NIRC. Ruling: The Court held that in computing the two-year prescriptive period for claiming refund/credit of unutilized input VAT Section 112 of the NIRC is the pertinent provision for the refund/credit of input VAT. Thus, the two-year period should be reckoned from the close of the taxable quarter when the sales were made. Hence the administrative claim was timely filed, the two-year period to file a claim for tax refund/credit for the period July 1, 2002 to September 30, 2002 expired on September 30, 2004. However, the judicial claim with CTA is premature for having been filed in violation of Section 112(D) of the NIRC. The CIR has 120 days, from the date of the submission of the complete documents in support of the application within which to grant or deny the claim. In this case, the administrative and the judicial claims were simultaneously iled on September 30, 2004. Obviously, respondent did not wait for the decision of the CIR or the lapse of the 120-day period. (National Internal Revenue Code; internal air carriers; Gross Philippine Billings; regular income tax) United Airlines, Inc. vs. CIR G.R. No. 178788, September 29, 2010 Facts: Petitioner United Airlines, Inc. is a foreign corporation engeged to operate passenger and cargo flights originating in the Philippines. Upon cessation of its passenger flights in and out of the Philippines beginning February 21, 1998, petitioner appointed a sales agent in the Philippines -- Aerotel Ltd. Corp., an independent general sales agent acting as such for several international airline companies. Petitioner continued operating cargo flights from the Philippines until January 31, 2001.On April 12, 2002, petitioner filed with respondent Commissioner a claim for income tax refund for the total amount of P15,916,680.69 pertaining to income taxes paid on gross passenger and cargo revenues for the taxable years 1999 to 2001, which included the amount of P5,028,813.23 allegedly representing income taxes paid in 1999 on passenger revenue from tickets sold in the Philippines, the uplifts of which did not originate in the Philippines. Consequently, the CTAs First Division ruled that no excess or erroneously paid tax may be
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refunded to petitioner because the income tax on GPB under Section 28(A)(3)(a) of the NIRC applies as well to gross revenue from carriage of cargoes originating from the Philippines. It agreed that petitioner cannot be taxed on its 1999 passenger revenue from flights originating outside the Philippines. However, in reporting a cargo revenue of P740.33 million in 1999, it was found that petitioner deducted two (2) items from its gross cargo revenue of P2.84 billion: P141.79 million as commission and P1.98 billion as other incentives of its agent. Issue: Whether the petitioner is entitled to a refund of the amount of P5,028,813.23 it paid as income tax on its passenger revenues in 1999. Ruling: The court ruled that United Airlines can no longer refund. The subject of claim for tax refund is the tax paid on passenger revenue for taxable year 1999 at the time when petitioner was still operating cargo flights originating from the Philippines although it had ceased passenger flight operations. The CTA found that petitioner had underpaid its GPB tax for 1999 because petitioner had made deductions from its gross cargo revenues in the income tax return it filed for the taxable year 1999, the amount of underpayment even greater than the refund sought for erroneously paid GPB tax on passenger revenues for the same taxable period. Hence, petitioner is not entitled to a tax refund. Further, the tax refunds, like tax exemptions, are construed strictly against the taxpayer and liberally in favor of the taxing authority. In any event, petitioner has not discharged its burden of proof in establishing the factual basis for its claim for a refund. (Income Tax; irrevocability of option to carry over of excess income tax credits; prospective application) CIR vs. McGeorge Food Industry, Inc. G.R. No. 174157, October 20, 2010 Facts: Respondent McGeorge Food Industries, Inc. (respondent) filed with the Bureau of Internal Revenue (BIR) its final adjustment income tax return for the calendar year ending 31 December 1997. The return indicated a tax liability of P5,393,988 against a total payment of P10,130,176 for the first three quarters. On 15 April 1999, respondent filed its final adjustment return for the calendar year ending 31 December 1998, indicating a tax liability of P5,799,056. Instead of applying to this amount its unused tax credit carried over from 1997 (P4,736,188), as it was supposed to do, respondent merely deducted from its tax liability the taxes withheld at source for 1998 (P217,179) and paid the balance of P5,581,877. On 14 April 2000, respondent simultaneously filed with the BIR and the Court of Tax Appeals (CTA) a claim for refund of its overpayment in 1997 of P4,736,188. Petitioner Commissioner of Internal Revenue (petitioner) opposed the suit at the CTA, alleging that the action preempted his own resolution of respondents parallel claim for refund, and, at any rate, respondent has to prove its entitlement to refund. Issue: Whether respondent is entitled to a tax refund for overpayment in 1997 after it opted, but failed, to credit such to its tax liability in 1998. Ruling: The court ruled that respondent is not entitled to a refund under Section 76 of the 1997 NIRC, the law in effect at the time respondent made known to the BIR its preference to carry over and apply its overpayment in 1997 to its tax liability in 1998. In lieu of refund, respondents overpayment should be applied to its tax liability for the taxable years following 1998 until it is fully credited.
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(Tax refund; relation between taxpayer and withholding agent; proper party in interest) CIR vs. Smart Communication, Inc. G.R. No. 179045-46 August 25, 2010 Facts: Respondent Smart Communications, Inc. is a corporation organized and existing under Philippine law. It is an enterprise duly registered with the Board of Investments. On May 25, 2001, respondent entered into three Agreements for Programming and Consultancy Services with Prism Transactive (M) Sdn. Bhd. (Prism), a nonresident corporation duly organized and existing under the laws of Malaysia. Under the agreements, Prism was to provide programming and consultancy services for the installation of the Service Download Manager (SDM) and the Channel Manager (CM), and for the installation and implementation of Smart Money and Mobile Banking Service SIM Applications (SIM Applications) and Private Text Platform (SIM Application). On June 25, 2001, Prism billed respondent in the amount of US$547,822.45. Thinking that these payments constitute royalties, respondent withheld the amount of US$136,955.61 or P7,008,840.43, representing the 25% royalty tax under the RP-Malaysia Tax Treaty. On September 25, 2001, respondent filed its Monthly Remittance Return of Final Income Taxes Withheld (BIR Form No. 1601-F) for the month of August 2001. On September 24, 2003, or within the two-year period to claim a refund, respondent filed with the Bureau of Internal Revenue (BIR), through the International Tax Affairs Division (ITAD), an administrative claim for refund of the amount of P7,008,840.43. Issue: Whether or not the respondent has the right to file the claim for refund. Ruling: The court held pursuant to Secs. 204 and 229 of the NIRC, the person entitled to claim a tax refund is the taxpayer. However, in case the taxpayer does not file a claim for refund, the withholding agent may file the claim.In this connection, it is however significant to add that 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 his 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. (Court of Tax Appeals; issues not raised. CTA; judicial admissions. VAT) Toshiba Information Equipment, Inc. vs. CIR G.R. No. 157594 March 9, 2010 Facts: Toshiba is a domestic corporation principally engaged in the business of manufacturing and exporting of electric machinery, equipment systems, accessories, parts, components, materials and goods of all kinds, including those relating to office automation and information technology and all types of computer hardware and software. It is registered with Regional District Office No. 57 of the Bureau of Internal Revenue (BIR) in San Pedro, Laguna, as a VAT-taxpayer. In its VAT returns for the first and second quarters of 1997, filed on April 14, 1997 and July 21, 1997, respectively, Toshiba declared input VAT payments on its domestic purchases of taxable goods and services in the aggregate sum of P3,875,139.65, with no zero-rated sales. Toshiba subsequently submitted to the BIR on July 23, 1997 its amended VAT returns for the first and second quarters of 1997, reporting the same amount of input VAT payments but, this time, with zero-rated sales totaling P7,494,677,000.00.
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On March 30, 1999, Toshiba filed with the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center of the Department of Finance (DOF One-Stop Shop) two separate applications for tax credit/refund of its unutilized input VAT payments for the first half of 1997 in the total amount of P3,685,446.73. On March 31, 1999, Toshiba likewise filed with the CTA a Petition for Review to toll the running of the two-year prescriptive period under Section 230 of the Tax Code of 1977. However, The CIR opposed the alleged tax refund. Issue: Whether or not failure to adequately raise in issue during the trial in the court of tax appeals is deemed waived. Ruling: The Court held that Upon the failure of the CIR to timely plead and prove before the CTA the defenses or objections that Toshiba was VAT-exempt under Section 24 of Republic Act No. 7916, and that its export sales were VAT-exempt transactions under Section 103(q) of the Tax Code of 1977, as amended, the CIR is deemed to have waived the same. The CIR did not argue straight away in his Answer in CTA Case No. 5762 that Toshiba had no right to the credit/refund of its input VAT payments because the latter was VAT-exempt and its export sales were VAT-exempt transactions. The Pre-Trial Brief of the CIR was equally bereft of such allegations or arguments. The CIR passed up the opportunity to prove the supposed VAT-exemptions of Toshiba and its export sales when the CIR chose not to present any evidence at all during the trial before the CTA. He missed another opportunity to present the said issues before the CTA when he waived the submission of a Memorandum. The CIR had waited until the CTA already rendered its Decision dated October 16, 2000 in CTA Case No. 5762, which granted the claim for credit/refund of Toshiba, before asserting in his Motion for Reconsideration that Toshiba was VAT-exempt and its export sales were VAT-exempt transactions. Further ruled, the CIR cannot escape the binding effect of his judicial admissions. The Court disagrees with the Court of Appeals when it ruled in its Decision dated August 29, 2002 that the CIR could not be bound by his admissions in the Joint Stipulation because (1) the said admissions were made through palpable mistake which, if countenanced, would result in falsehood, unfairness and injustice; and (2) the State could not be put in estoppel by the mistakes of its officials or agents. This ruling of the Court of Appeals is rooted in its conclusion that a palpable mistake had been committed by the CIR in the signing of the Joint Stipulation. However, this Court finds no evidence of the commission of a mistake, much more, of a palpable one.

MERCANTILE/COMMERCIAL LAW
(Mark; likelihood of confusion; ownership) BERRIS AGRICULTURAL VS NORVY ABYADANG G.R. NO. 183404, October 13, 2010 FACTS: On January 16, 2004, respondent Norvy A. Abyadang (Abyadang), proprietor of NS Northern Organic Fertilizer, filed with the Intellectual Property Office (IPO) a trademark application for the mark "NS D-10 PLUS" for use in connection with Fungicide (Class 5) with active ingredient 80% Mancozeb. The application was given due course and was published in the IPO e-Gazette for opposition on July 28, 2005. Petitioner Berris Agricultural Co., Inc (Berris) filed with IPO Bureau of Legal Affairs a Verified Notice of 36

Opposition against Abyadangs application because it was alleged that NS D-10 PLUS is similar and/or confusingly similar to formers registered trademark D_10 80 WP, also used for Fungicide (Class 5) with active ingredient 80% Mancozeb. After an exchange of pleadings, on April 28, 2006, Director Estrellita Beltran-Abelardo of the IPO-BLA issued Decision No. 2006-24 which ruled that Respondent-Applicants mark NS D-10 PLUS is confusingly similar to the Opposers mark and as such the opposition is sustained. Abyadang filed a motion for reconsideration but was denied by the IPO-BLA. Aggrieved, Abyadang filed an appeal with the Office of the Director General, Intellectual Property Philippines (IPPDG). With the filing of the parties respective memoranda, Director General Adrian S. Cristobal, Jr. of the IPPDG affirmed the appealed decision of IPO-BLA. Undeterred, Abyadang filed a petition for review before the Court of Appeals. The CA reversed the IPPDG decision and held that Abyadangs mark is not confusingly similar with Berris. Berris filed a Motion for Reconsideration but was denied by the CA for lack of merit. Hence this petition. ISSUE: Whether or not respondents mark is confusingly similar with Berris.
RULING: Yes. Abyadangs mark is confusingly similar with Berris and therefore its trademark application should be denied. Berris was able to establish that it was using its mark since June 20, 2002, even before it filed for its registration with the IPO on November 29, 2002. Berris then is a prior user and prior registrant therefore the owner of the mark D-10 80 WP As such, Berris has in favor the rights conferred by Section 147 of R.A. 8293 which provides that The owner of a registered mark shall have the exclusive right to prevent all third parties not having the owners consent from using in the course of trade identical or similar signs or containers for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion. In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed. (Merger; effect on epmployment and seniority rights. Merger; mandatory absorption of employees of corporation) BANK OF THE PHILIPPINE ISLANDS VS BPI EMPLOYEES UNION DAVAO CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK G.R. No. 164301, August 10, 2010 On March 23, 2000, the Bangko Sentral ng Pilipinas approved the Articles of Merger between Bank of the Philippine Islands (BPI) and Far East Bank and Trust Company (FEBTC). Such Article of Merger was approved by the Securities and Exchange Commission on April 7, 2000. As the surviving corporation, BPI absorbed all the assets and liabilities of FEBTC. FEBTCs employees were also hired by petitioner as its own employees. The respondent is the exclusive bargaining agent of BPIs rank and file employees in Davao City. Prior to the effectivity of merger, respondent Union invited said FEBTC employees to a meeting regarding the Union Shop Clause. After the meeting, some of the former FEBTC employees joined the union while others refused. Later, however, some of those who initially joined retracted their membership. Respondent sent notices to the former FEBTC employees who were hesitant and called them to a hearing FACTS:
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but they refused. Upon their refusal, the Unions president requested BPI to implement the Union Shop Clause of the CBA and to terminate their employment pursuant thereto. Respondent Union informed petitioner of its decision to refer the issue of the implementation of the Union Shop Clause of the CBA to the Grievance Committee. However, it remained unresolved so it was subsequently submitted for voluntary arbitration by the parties. The arbitrator ruled that FEBTC employees are not covered by the Union on the ground that they were not new employees who were hired and subsequently regularized which was required by the provisions of the Union. They were rather said to be absorbed employees due to the merger. Respondent filed a Motion for Reconsideration but it was denied. Dissatisfied, respondent appealed the decision to the Court of Appeals which reversed and set aside the decision of the arbitrator. Hence, this petition. ISSUE: CBA. RULING: The former FEBTC employees should be covered by the Union Shop Clause of the CBA. Petitioner argues that the term "new employees" in the Union Shop Clause of the CBA is qualified by the phrases "who may hereafter be regularly employed" and "after they become regular employees, therefore FEBTC employees are not coverable since they cannot be considered as regular employees. Such argument was held to be untenable. CBA is silent as to how one becomes a "regular employee" of the BPI for the first time. There is nothing in the said provision which requires that a "new" regular employee first undergo a temporary or probationary status before being deemed as such under the union shop clause of the CBA. The FEBTC employees are considered employees of the BPI due to the merger with the FEBTC. (Corporation; dissolution) METROPOLITAN BANK & TRUST COMPANY, INC. (as successor-in-interest of the banking operations of Global Business Bank, Inc. formerly known as PHILIPPINE BANKING CORPORATION) VS THE BOARD OF TRUSTEES OF RIVERSIDE MILLS CORPORATION PROVIDENT AND RETIREMENT FUND G.R. No. 176959, September 8, 2010 On November 1, 1973, RMC established a Provident and Retirement Plan (Plan) for its regular employees. Under the Plan, RMC and its employees shall each contribute 2% of the employees current basic monthly salary, with RMCs contribution to increase by 1% every five (5) years up to a maximum of 5%. The contributions shall form part of the provident fund (the Fund) which shall be held, invested and distributed by the Commercial Bank and Trust Company. It was stated in Paragraph 13 of the Plan that no action shall operate to permit any part of the assets of the Fund to be used for, or diverted to purposes other than for the exclusive benefit of the members of the Plan and their beneficiaries. In no event shall any part of the assets of the Fund revert to [RMC] before all liabilities of the Plan have been satisfied.On October 15, 1979, the Board of Trustees of RMCPRF entered into an Investment Management Agreement with Philbank (now, petitioner Metropolitan Bank and Trust Company). Pursuant to the Agreement, FACTS: Whether or not the former FEBTC employees should be covered by the Union Shop Clause of the
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petitioner shall act as an agent of the Board and shall hold, manage, invest and reinvest the Fund in Trust Account No. 1797 in its behalf. In 1984, RMC ceased business operations. Nonetheless, petitioner continued to render investment services to respondent Board. In a letter dated September 27, 1995, petitioner informed respondent Board that Philbanks Board of Directors had decided to apply the remaining trust assets held by it in the name of RMCPRF against part of the outstanding obligations of RMC. Subsequently, respondent RMC Unpaid Employees Association, Inc. (Association), representing the terminated employees of RMC, learned of Trust Account No. 1797. Through counsel, they demanded payment of their share in a letter dated February 4, 1997. When such demand went unheeded, the Association, along with the individual members of RMCPRF, filed a complaint for accounting against the Board and its officers. During the trial, the Board passed a Resolution n court declaring that the fund belongs exclusively to the employees of RMC. On June 237, 2002, the RTC rendered a decision in favor of the respondents which declared invalid the reversion and application of the proceeds of the Fund to the outstanding obligation of RMC to petitioner bank. On appeal, the CA affirmed the trial court. Hence, this petition. ISSUE: Whether or not the proceeds of the RMCPRF may be applied to satisfy RMCs debt to Philbank.
RULING: The proceeds of the RMCPRF cannot be applied to satisfy RMCs debt to Philbank. RMCPRF is an employees benefit plan. Employees trusts or benefit are intended to provide economic assistance to employees upon the occurrence of certain contingencies, particularly odl age retirement, death, sickness or disability. They are independent and additional sources of protection for the working group and established for their exclusive benefit and for no other purpose. While the Plan provides for a reversion of the Fund to RMC, this cannot be done until all the liabilities of the Plan have been paid. (Dishonor; acceptance as resulting in novation; liability of accommodation indorser) ANAMER SALAZAR VS J.Y. BROTHERS MARKETING CORPORATION G.R. No. 171998, October 20, 2010 J.Y. Brothers Marketing (J.Y. Bros., for short) is a corporation engaged in the business of selling sugar, rice and other commodities. On October 15, 1996, Anamer Salazar, a freelance sales agent, was approached by Isagani Calleja and Jess Kallos, if she knew a supplier of rice. Answering in the positive, Salazar accompanied the two to J.Y. Bros. As a consequence, Salazar with Calleja and Kallos procured from J. Y. Bros. 300 cavans of rice worthP214,000.00. As payment, Salazar negotiated and indorsed to J.Y. Bros. Prudential Bank Check No. 067481 dated October 15, 1996 issued by Nena Jaucian Timario in the amount of P214,000.00 with the assurance that the check is good as cash. On that assurance, J.Y. Bros. parted with 300 cavans of rice to Salazar. However, upon presentment, the check was dishonored due to "closed account." Informed of the dishonor of the check, Calleja, Kallos and Salazar delivered to J.Y. Bros. a replacement cross Solid Bank Check No. PA365704 dated October 29, 1996 again issued by Nena Jaucian Timario in the amount ofP214,000.00 but which, just the same, bounced due to insufficient funds. Salazar failed to settle the amount due J.Y. Bros., the latter charged the former with the crime of estafa. However, FACTS:
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Salazar was acquitted of the crime charged but held liable for the value of the 300 bags of rice. He filed a motion for reconsideration on the civil aspect and was granted by the court nullifying the previous decision. The Regional Trial Court of Legazpi City then proceeded with the trial on the civil aspect of the criminal case. The RTC found that the Prudential Bank check drawn by Timario for the amount of P214,000.00 was payable to the order of respondent, and such check was a negotiable order instrument; that petitioner was not the payee appearing in the check, but respondent who had not endorsed the check, much less delivered it to petitioner. the substitution of a non-negotiable Solid Bank check for a negotiable Prudential Bank check was an essential change which had the effect of discharging from the obligation whoever may be the endorser of the negotiable check. The RTC concluded that the absence of negotiability rendered nugatory the obligation arising from the technical act of indorsing a check and, thus, had the effect of novation; and that the ultimate effect of such substitution was to extinguish the obligation arising from the issuance of the Prudential Bank check. ISSUE: Whether or not there was novation that will extinguish the obligation.
RULING: There was no novation that took place. Novation is done by the substitution or change of the obligation by a subsequent one which extinguishes the first, either by changing the object or principal conditions, or by substituting the person of the debtor, or by subrogating a third person in the rights of the creditor. In this case, respondents acceptance of the Solid Bank check, which replaced the dishonored Prudential Bank check, did not result to novation as there was no express agreement to establish that petitioner was already discharged from his liability to pay respondent the amount of P214,000.00 as payment for the 300 bags of rice. As we said, novation is never presumed, there must be an express intention to novate. In fact, when the Solid Bank check was delivered to respondent, the same was also indorsed by petitioner which shows petitioners recognition of the existing obligation to respondent to pay P214,000.00 subject of the replaced Prudential Bank check. Moreover, respondents acceptance of the Solid Bank check did not result to any incompatibility, since the two checks Prudential and Solid Bank checks were precisely for the purpose of paying the amount of P214,000.00,i.e., the credit obtained from the purchase of the 300 bags of rice from respondent. Indeed, there was no substantial change in the object or principal condition of the obligation of petitioner as the indorser of the check to pay the amount of P214,000.00. It would appear that respondent accepted the Solid Bank check to give petitioner the chance to pay her obligation. (Corporation; liability of corporate officers) SHS PERFORATED MATERIALS INC., WINFRIED HARTMANNSHENN and HINRICH JOHANN SCHUMACHER VS. MANUEL F. DIAZ G.R. No. 185814, October 13, 2010 FACTS: Petitioner SHS Perforated Materials Inc. is a start up corporation organized and existing under the law of the Philippines. Hartmannshenn and Schumacher are president and treasurer of the said corporation respectively. Respondent Diaz was hired by petitioner SHS as a manager for Business Development on probationary status from July 18, 2005 to January 18, 2006. During respondents employment,
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Hartmannshenn was often abroad, his instructions to respondent were either sent by electronic mail or relayed through telephone or mobile phone. Then they held meetings when petitioner is in the Philippines. During meetings with the respondent, hartmannshenn expressed his dissatisfaction over respondents poor performance. In the electronic mail messages, respondent acknowledged his poor performance and offered to resign from the company. Respondent denied sending such messages. On November 18, 2005 Hartmannshenn arrived in the Philippines from Germany and notified the respondent of his arrival but the latter claimed that he never receive the messages. On November 29, 2005 Hartmannshenn instructed Taguiang not to release respondents salary. Petitioner learned about the withholding of his salary. On November 30, 2005, respondent served on SHS a demand letter and a resignation letter. Hartmannshenn accepted his resignation but informed him that his salary would be released upon explanation of his failure to report to work. On. December 9, 2005, respondent filed a complaint against petitioner for illegal dismissal and the Labor Arbiter rendered his decision finding complainant as having been constructively and illegally dismissed. On appeal, the NLRC reversed the LAs decision. NLRC explained that the withholding of respondents salary was a valid exercise of management prerogative. The CA reversed NLRC ruling and held that withholding of respondents salary was not a valid exercise of management prerogative. Hence, this petition. ISSUE: Whether or not respondent Manuel Diaz was constructively dismissed.
RULING: Yes, Manuel Diaz was constructively dismissed. The withholding of respondents salary was not proper and the court refuted plaintiffs contention that such withholding was an exercise of management prerogative. Although Management prerogative refers to the right of employer to regulate all aspects of employment, it cannot be understood to include the right to temporarily withhold salary/wages without salary/wages without the consent of the employee. To sanction such such an interpretation would be contrary to Article 116 of the Labor Code which prohibits withholding of wages and kickbacks. The Court agrees with the LA and CA that respondent was forced to resign and was, thus, constructively dismissed. There is constructive dismissal if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it would foreclose any choice by him except to forego his continued employment. What made it unlikely for respondent to continue working for SHS was the unlawful withholding of salary. (Bank; same day crediting) BPI VS. REYNALD SUAREZ GR No. 167750, March 15, 2010 FACTS: Suarez has an account with BPI. Aware of the banking systems 3-day check clearing policy, Suarez instructed his secretary, Petronila Garaygay, to confirm from BPI whether the face value of the RCBC check was already credited to his account that same day of 16 June 1997. According to Garaygay, BPI allegedly confirmed the same-day crediting of the RCBC check. Relying on this confirmation Suarez issued on the same day 5 checks of different amounts totalling 19, 129, 100 for the purchase of the tagaytay properties.
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While Suarez was in the US, he was informed by Garaygay that the 5 checks he issued were all dishonoured by BPI due to insufficiency of funds, and that his current account had been debited a total of 57,200 as penalty for the dishonour. Hence, Suarez filed action for damages against BPI for mistakenly charging him for DAIF (drawn against insufficient funds) instead of DAUD (drawn against uncollected deposit). ISSUE: WON BPI is liable to pay Suarez moral and exemplary damages, attorneys fee, and cost of litigation. Suarez failed to establish that his claimed injury was proximately caused by the erroneous marking of DAIF on the checks. There is no basis also for the award of actual damages. BPI was justified in debiting the penalty charges against Suarez account pursuant to the rules of the Philippine clearing House Corp. The court set aside the RTC decision and CA Resolution and deletes the award of all damages and fees. SC only awards respondent Reynald Suarez nominal damages. (Tradename; infringement; test) COFEE PARTNERS, INC. VS. SAN FRANCISCO COFEE & ROASTERY, INC GR No. 169504, March 3, 2010 FACTS: Petitioner Coffee Partners, Inc. engaged in business of establishing and maintaining coffee shops in the country, registered its trademarks SAN FRANCISCO COFFEE with SEC in January 2001. Respondent engaged in the wholesale and retail sale of coffee. It registered with the SEC in May 1995. It registered the business name SAN FRANCISCO COFFEE & ROASTERY,INC. with DTI in June 1995. Respondent formed a joint venture company with Boyd Coffee USA under the company name of Boyd Coffee Company Philippines, Inc. BCCPI engaged in the processing, roasting, and wholesale selling of coffee. Respondent later embarked on a project on a study of setting up a coffee cart in malls & other commercial establishment. However, it discovered that the petitioner is about to open a coffee shop under the name SAN FRANCISCO COFFEE in Libis, QC. Respondent sent a letter to the petitioner demanding that the latter stop in using the name SAN FRANCISCO COFFE which caused confusion in the minds of the public as it bore similar name and it also engaged in the business of selling coffee. Respondent also filed a complaint to the Bureau of Legal AffairsIntellectual Property Office for infringement and/or unfair competition with claims for damages. ISSUE: Whether petitioners use of the trademark SAN FRANCISCO COFFEE constitutes infringement of respondents trade name SAN FRANCISCO COFFEE & ROASTERY,INC. even if the trade name is not registered with the Intellectual Property Office. RULING: In Prosource International, Inc. vs. Horphag Research Management SA, SC ruled that a trademark being infringed is registered in the IPO; however, in infringement of trade name, the same need not be registered. All that is required is that the trade name is previously used in trade or commerce in the Philippines. HELD:
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Applying the 2 test developed by the court in determining similarity and likelihood of confusion, petitioners trademark is a clear infringement of respondents trade name. The descriptive words SAN FRANCISCO COFFEE are precisely the dominant features of the respondent trade name. The likelihood of confusion is higher in such case like this where the business of one corp. Is the same or is substantially the same as that of another corporation. Respondent has acquired an exclusive right to the use of the trade name SAN FRANCISCO COFFE & ROASTERY, INC. since the registration of the business name in the DTI in 1995. (Shares; proposed sale by stockholder not holding stock certificate. Shares; preemptive rights. Stock certificate; issuance) MAKATI SPORTS CLUB, INC. vs. CECILE H. CHENG, MC FOODS, INC. and RAMON SABARRE, GR No. 178523, June 16, 2010 FACTS: On October 20, 1994, plaintiff's Board of Directors adopted a resolution (Exhibit 7) authorizing the sale of 19 unissued shares at a floor price of P400,000 and P450,000 per share for Class A and B, respectively. Defendant Cheng was a Treasurer and Director of plaintiff in 1985. On July 7, 1995, Hodreal expressed his interest to buy a share, for this purpose he sent the letter, and requested that his name be included in the waiting list. sometime in November 1995, McFoods expressed interest in acquiring a share of the plaintiff, and one was acquired with the payment to the plaintiff by McFoods of P1,800,000. On Dec 15, 1995, Deed of Absolute Sale executed by the plaintiff and McFoods Stock Certificate No. A 2243 was issued to McFoods on January 5, 1996. On December 27, 1995, McFoods sent a letter to the plaintiff giving advise (sic) of its offer to resell the share. On November 24, 1995, Hodreal paid McFoodsP1,400,000. Another payment of P1,400,000 was made by Hodreal to McFoods on December 27, 1995, to complete the purchase price of P2,800,000. On February 7, 1996, plaintiff was advised of the sale by McFoods to Hodreal of the share evidenced by Certificate No. 2243 forP2.8 Million. Upon request, a new certificate was issued. In 1997, an investigation was conducted and the committee held that there is prima facie evidence to show that defendant Cheng profited from the transaction because of her knowledge. ISSUE: HELD: NO. On December 27, 1995, when Mc Foods offered for sale one Class "A" share of stock to MSCI for the price ofP2,800,000.00 for the latter to exercise its pre-emptive right as required by Section 30(e) of MSCI's Amended By-Laws, it legally had the right to do so since it was already an owner of a Class "A" share by virtue of its payment on November 28, 1995, and the Deed of Absolute Share dated December 15, 1995, notwithstanding the fact that the stock certificate was issued only on January 5, 1996. A certificate of stock is the paper representative or tangible evidence of the stock itself and of the various interests therein. The certificate is not a stock in the corporation but is merely evidence of the holder's interest and status in the corporation, his ownership of the share represented thereby. It is not in law the WON Mc Foods violated Section 30(e) of MSCI's Amended By-Laws on its pre-emptive rights.
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equivalent of such ownership. It expresses the contract between the corporation and the stockholder, but is not essential to the existence of a share of stock or the nature of the relation of shareholder to the corporation Therefore, Mc Foods properly complied with the requirement of Section 30(e) of the Amended ByLaws on MSCI's pre-emptive rights. Without doubt, MSCI failed to repurchase Mc Foods' Class "A" share within the thirty (30) day pre-emptive period as provided by the Amended By-Laws. It was only on January 29, 1996, or 32 days after December 28, 1995, when MSCI received Mc Foods' letter of offer to sell the share, that Mc Foods and Hodreal executed the Deed of Absolute Sale over the said share of stock. While Hodreal had the right to demand the immediate execution of the Deed of Absolute Sale after his full payment of Mc Foods' Class "A" share, he did not do so. Perhaps, he wanted to wait for Mc Foods to first comply with the pre-emptive requirement as set forth in the Amended By-Laws. Neither can MSCI argue that Mc Foods was not yet a registered owner of the share of stock when the latter offered it for resale, in order to void the transfer from Mc Foods to Hodreal. The corporation's obligation to register is ministerial upon the buyer's acquisition of ownership of the share of stock. The corporation, either by its board, its bylaws, or the act of its officers, cannot create restrictions in stock transfers. (Corporation; corporate veil) PRISMA CONSTRUCTION & DEVELOPMENT CORPORATION and ROGELIO S. PANTALEON vs. ARTHUR F. MENCHAVEZ GR No. 160545, March 9, 2010 FACTS: On December 8, 1993, Pantaleon, the President and Chairman of the Board of PRISMA, obtained a P1,000,000.00 loan from the respondent, with a monthly interest of P40,000.00 payable for six months, or a total obligation ofP1,240,000.00 to be paid within six (6) months. To secure the payment of the loan, Pantaleon issued a promissory note Pantaleon signed the promissory note in his personal capacity,and as duly authorized by the Board of Directors of PRISMA. The petitioners failed to completely pay the loan within the stipulated six (6)-month period.As of January 4, 1997, the petitioners had already paid a total of P1,108,772.00. However, the respondent found that the petitioners still had an outstanding balance of P1,364,151.00 as of January 4, 1997, to which it applied a 4% monthly interest. Thus, on August 28, 1997, the respondent filed a complaint for sum of money with the RTC to enforce the unpaid balance, plus 4% monthly interest, P30,000.00 in attorneys fees, P1,000.00 per court appearance and costs of suit. ISSUE: HELD: Applying the provision of Article 1956 of the Civil Code , we find that the interest of P40,000.00 per month corresponds only to the six (6)-month period of the loan, or from January 8, 1994 to June 8, 1994, as agreed upon by the parties in the promissory note. Thereafter, the interest on the loan should be at the legal interest rate of 12% per annum. 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. Whether the parties agreed to the 4% monthly interest on the loan.
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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." The doctrine of piercing the corporate veil applies only in three (3) basic instances, namely: a) when the separate and distinct corporate personality defeats public convenience, as when the corporate fiction is used as a vehicle for the evasion of an existing obligation; b) in fraud cases, or when the corporate entity is used to justify a wrong, protect a fraud, or defend a crime; or c) is used in alter ego cases, i.e., where a corporation is essentially a farce, since it is a mere alter ego or business conduit of a person, or where the corporation is so organized and controlled and its affairs so conducted as to make it merely an instrumentality, agency, conduit or adjunct of another corporation. In the absence of malice, bad faith, or a specific provision of law making a corporate officer liable, such corporate officer cannot be made personally liable for corporate liabilities. In the present case, we see no competent and convincing evidence of any wrongful, fraudulent or unlawful act on the part of PRISMA to justify piercing its corporate veil. While Pantaleon denied personal liability in his Answer, he made himself accountable in the promissory note "in his personal capacity and as authorized by the Board Resolution" of PRISMA. With this statement of personal liability and in the absence of any representation on the part of PRISMA that the obligation is all its own because of its separate corporate identity, we see no occasion to consider piercing the corporate veil as material to the case. (Trademark; right to file action for infringement. Trademark; unfair competition) SUPERIOR COMMERCIAL ENTERPRISES, INC. vs. KUNNAN ENTERPRISES LTD. AND SPORTS CONCEPT & DISTRIBUTOR, INC. GR No. 169974, April 20, 2010 FACTS: On October 1, 1982, KUNNAN appointed SUPERIOR as its exclusive distributor in the Philippines under a Distributorship Agreement. The said agreement specified that KUNNAN will retain the ownership of KENNEX PRODUCTS. The parties agreed to have 10 year contract of distributorship from 23 May 1980, the date of the registration of patent. On December 3, 1991, upon the termination of its distributorship agreement with SUPERIOR, KUNNAN appointed SPORTS CONCEPT as its new distributor. Subsequently, KUNNAN also caused the publication of a Notice and Warning in the Manila Bulletin's January 29, 1993 issue, stating that (1) it is the owner of the disputed trademarks; (2) it terminated its Distributorship Agreement with SUPERIOR; and (3) it appointed SPORTS CONCEPT as its exclusive distributor. This notice prompted SUPERIOR to file its Complaint for Infringement of Trademark and Unfair Competition with Preliminary Injunction against KUNNAN. ISSUE: WON SUPERIORs action is correct. HELD: NO. Petitioners action is not proper because he has no trademark or trade name that was infringed. Under the Trademark Law, only the owner of the trademark, trade name or service mark used to
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distinguish his goods, business or service from the goods, business or service of others is entitled to register the same. An exclusive distributor does not acquire any proprietary interest in the principal's trademark and cannot register it in his own name unless it is has been validly assigned to him. Petitioner (Superior) failed to established ownership of the disputed trademarks. The appellate found that KUNNAN presented sufficient evidence to rebut SUPERIOR's presumption of ownership over the trademarks. KUNNAN established that SUPERIOR, far from being the rightful owner of the disputed trademarks, was merely KUNNAN's exclusive distributor. This conclusion was based on three pieces of evidence that clearly established that SUPERIOR had no proprietary interest over the disputed trademarks. **To establish trademark infringement, the following elements must be proven: (1) the validity of plaintiff's mark; (2) the plaintiff's ownership of the mark; and (3) the use of the mark or its colorable imitation by the alleged infringer results in "likelihood of confusion." (Carriage of Goods by Sea; liability of carrier. Freight forwarder; bill of lading. Freight forwarder; definition. Freight forwarder; liability) UNSWORTH TRANSPORT INTERNATIONAL VS. CA AND PIONEER INSURANCE GR No. 166250, July 26, 2010 FACTS: Sylvex Purchasing Corp. Delivered to UTI a shipment of 27 drums of various raw materials for pharmaceutical manufacturing. UTI issued Bill of Lading covering the aforesaid shipment. The subject shipment was insured with private respondent Pioneer Insurance and Surety Corp. in favor of Unilab against all risk. The shipment was loaded in a sealed 1x40 container van, boarded on ALPs vessel M/V Pres Jackson, Voyage 42 and transhipped to ALPs M/V Pres Taft for delivery to petitioner in favour of the Consignee United Laboratories, Inc. On Sept. 30, 1992, the shipment arrived at the port of Manila. On Oct. 6, 1992, petitioner received the said shipment in its warehouse after it stamped the Permit to Deliver Imported Goods procured by the Champs Customs Brokerage. 3 days thereafter, Oceanica Cargo Marine Surveyors Corp. conducted a stripping survey of the shipment located in petitioners warehouse and found out that: 1 steel drum STC Vit. B Complex Extract has cut/hole on side, with approximate spilling of 1%, while the other goods where found in good order. On Oct. 15, 1992, the arrastre Jardine Davies Transport Service, Inc. issued Gate Pass which stated that 22 drums of Raw Materials for Pharmaceutical Mfg. Were loaded on a truck. The materials were noted to be complete and in good order in the gate pass. When the shipment arrived at Unilabs warehouse, it was immediately surveyed by an independent surveyor and found out some loss. On Oct. 23 and 28, 1992 the same independent surveyor conducted final inspection surveys whish yielded the same result. Consequently, Unilabs quality control representatives rejected one paper bag containing droed yeast and 1 steel drum containing Vit. B Complex as unfit for the intended purpose. By virtue of the loss and Subrogation Receipt issued by Unilab in favour of private respondent, the latter filed a complaint for Damages against APL & UTI. RTC and CA ruled in favour of the plaintiff Pioneer and Surety Corp. Hence, this petition. ISSUE: Whether or not UTI is liable as freight forwarder.
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HELD: Petitioner admitted that it is a freight forwarder, and therefore assumes the responsibility of a carrier, which actually executes the transport, even though the forwarder does not carry the merchandise itself. It is undisputed that UTI issued a Bill of Lading in favour of Unilab. Pursuant thereto, petitioner undertook to transport, ship and deliver the 27 drums of raw materials for pharmaceutical manufacturing to the consignee. Undoubtedly, petitioner (UTI) is liable as a common carrier. However, this court affirms the applicability of the Package Limitation Rule under the CDGSA, contrary to the RTC and CA findings. It is to be noted that the Civil Code does not limit the liability of the common carrier to a fixed amount per package. In all matters not regulated by the Civil Code, the rights and obligations of common carriers are governed by the Code of Commerce and special laws. Thus, the COGSA supplements the Civil Code by establishing a provision limiting the carrier's liability in the absence of a shipper's declaration of a higher value in the bill of lading.
CRIMINAL LAW
(Anti Graft; causing undue injury) ANUNCIO C. BUSTILLO vs. SANDIGANBAYAN, PEOPLE OF THE PHILIPPINES, ALFREDO S. LIM as Secretary of the Department of Interior and Local Government (DILG), and JEAN MARY PASCUA GR No. 160718, May 12, 2010 FACTS: On September 6, 1991, in Bunawan, Agusan del Sur, Philippines, accused ANUNCIO C. BUSTILLO, a public officer, being then the Municipal Mayor of Bunawan, Agusan del Sur, committed the crime of Falsification of Official Documents under Article 171 of the Revised Penal Code. In relation to, while in the performance and taking advantage of his official functions, and conspiring and confederating with accused ROWENA G. BUSTILLO, his daughter, did willfully make it appear in official documents that municipal funds totalling THIRTY THOUSAND PESOS (P30,000.00) were expended for the purchase of lumber from Estigoy Lumber when, in fact, as both accused well knew, said lumber were actually purchased from Rowena Woodcraft, owned by accused Rowena G. Bustillo. The accused were charged of falsifying three vouchers in which the name of the original payee was erased and replaced with "Estigoy Lumber." Rowena Bustillo received the payments covered by the vouchers. In 1995, the Office of the Special Prosecutor ("OSP") charged petitioner in the Sandiganbayan with Falsification of Official Documents under Article 171 of the Revised Penal Code ("RPC") in Criminal Case No. 23076. ISSUES: Whether the Information filed against the accused is valid; and Whether petitioners suspension from office pendente lite finds basis in Section 13 of RA 3019. RULINGS: The first contention is futile. The Sandiganbayan already settled the question of the Informations validity when it denied the motion of the accused to quash the same. That ruling had long become final. Thus, petitioner can no longer resurrect this issue. At any rate, the allegation of intent to gain, the party 47

benefited or prejudiced by the falsification, or tarnishing of a documents integrity, is not essential to maintain a charge for falsification of official documents. Such charge stands if the facts alleged in the Information fall under any of the modes of committing falsification under Article 171 of the RPC. The second contention has no merit.Section 13 provides: Suspension and loss of benefits. Any incumbent public officer against whom any criminal prosecution under a valid information under this Act or under Title 7, Book II of the Revised Penal Code or for any offense involving fraud upon government or public funds or property whether as a simple or as a complex offense and in whatever stage of execution and mode of participation, is pending in court, shall be suspended from office. Should he be convicted by final judgment, he shall lose all retirement or gratuity benefits under any law, but if he is acquitted, he shall be entitled to reinstatement and to the salaries and benefits which he failed to receive during suspension, unless in the meantime administrative proceedings have been filed against him. Suspension from office is mandatory whenever a valid Information charges an incumbent public officer with (1) violation of RA 3019; (2) violation of Title 7, Book II of the RPC; (3) any offense involving fraud upon government; or (4) any offense involving fraud upon public funds or property. While petitioner correctly contends that the charge filed against him and his co-accused does not fall under Title 7, Book II but under Title 4, Book II of the RPC, it nevertheless involves "fraud upon government or public funds or property." Petition is dismissed. (Estafa; elements. Estafa; misappropriation; misappropriation presumed) DULCE PAMINTUAN VS. PEOPLE GR No. 172820, June 23, 2010 Facts: On or about February 16, 1996 at Batangas City, the above-named accused, after having received in trust and on commission from one Jeremias Victoria a diamond ring worth SEVEN HUNDRED SIXTY FIVE THOUSAND (P765,000.00) PESOS with the understanding and agreement that the same shall be sold by her on cash basis at a price not less than its value and that the overprice, if any, shall be her commission and the proceeds of the sale shall be remitted to Jeremias Victoria immediately upon sale thereof, and if unsold, said diamond ring will be returned to Jeremias Victoria within a period of three (3) days from the date of receipt. . At the time she received the ring, the petitioner signed a document entitled Katibayan, authorizing the sale of the ring under the following express conditions but said accused, far from complying with her obligation to return the unsold diamond ring, with grave abuse of confidence, with intent to defraud, did then and there willfully, unlawfully and feloniously convert and misappropriate the same to her own personal use and benefit and despite demands made upon her to return the said jewelry, she failed and refused to do so, to the damage and prejudice of Jeremias Victoria in the aforementioned amount of P765,000.00. The petitioner testified in her behalf and admitted that she received the diamond ring from Jeremias in exchange for seven (7) pieces of jewelry valued at P350,000.00 that she also then delivered to Jeremias for cleaning and eventual sale. The petitioner likewise stated that the delivery of the seven pieces of jewelry was evidenced by a receipt that Jeremias signed, and that she subsequently tried to return the diamond ring but he refused to accept it. Although the petitioner acknowledged signing the Katibayan, she claimed that Jeremias entrusted the diamond ring to her before he left for abroad, and that she only heard from him again after the criminal case had been filed against her. The petitioner likewise claimed that she
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tried to return the diamond ring during the preliminary investigation of the case, but Jeremias refused to accept it. As sur-rebuttal evidence, the petitioner presented a Deed of Real Estate Mortgage dated August 25, 2003 (mortgage deed), executed by Danilo Pamintuan, the petitioners husband. According to the terms of the mortgage deed, Danilo admitted that Jeremias had entrusted the diamond ring to him on February 16, 1996, not to the petitioner, and that the mortgage deed was constituted in consideration of Danilos promise to return the diamond ring to Jeremias. The RTC found the petitioner guilty beyond reasonable doubt of estafa. The petitioner appealed to the CA. The CA agreed with the RTC that the petitioner was guilty beyond reasonable doubt of estafa and thus dismissed the petitioners appeal. Issues: 1. Whether the CA correctly disregarded the effect of the mortgage deed on her criminal liability; and 2. Whether the elements of the crime of estafa under Article 315, paragraph 1(b) of the Revised Penal Code, as amended, were duly proven beyond reasonable doubt. Rulings: SC find the petition unmeritorious. The issues raised by the petitioner are essentially encapsulated by the second issue outlined above i.e., whether the crime of estafa has been sufficiently established; the first issue relating to the mortgage deed is a matter of defense that should be considered in resolving the second issue. In this case, the petitioner asserts that the prosecution failed to sufficiently prove the first and second elements of the crime. The petitioner also asserts that these elements were negated by her testimony and by the mortgage deed that showed she received the diamond ring as owner, and not as an agent. The petitioner argues that she could not have misappropriated or converted the diamond ring precisely because she was its owner. Viewed in their totality, SC hold that the prosecution presented proof beyond reasonable doubt of the petitioners guilt, and both the RTC and the CA did not err in their conclusions. The prosecution evidence was clear and categorical, and systematically established every element of the crime; the defense evidence, on the other hand, glaringly suffered from contradictions, changes of theories, and deficiencies that placed its merit in great doubt. Petition denied. (Perjury; elements) ERIBERTO MANGSAKAY VS. PEOPLE GR No. 164443, June 18, 2010 Facts: Petitioner Eriberto Masangkay (Eriberto), his common-law wife Magdalena Ricaros (Magdalena), Cesar Masangkay (Cesar) and his wife Elizabeth Masangkay (Elizabeth), and Eric Dullano were the incorporators and directors of Megatel Factors, Inc. (MFI) which was incorporated in June 1990. On December 29, 1993 Eriberto filed with the Securities and Exchange Commission (SEC) a Petition for the Involuntary Dissolution of MFI for violation of Section 6 of Presidential Decree (PD) No. 902-
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A. The named respondents were MFI, Cesar and Elizabeth. The said petition was made under oath before a notary public, and alleged among others: At or around September 1, 1993, respondent Elizabeth A. Masangkay prepared or caused to be prepared a Secretarys Certificate which states: That at a special meeting of the Board of Directors of the said corporation held at its principal office on December 5, 1992, the following resolution by unanimous votes of the directors present at said meeting and constituting a quorum was approved and adopted: RESOLVED, as it is hereby resolved that Lot No. 2069-A-2 situated at Bo. Canlalay, Bian, Laguna containing an area of 3,014 square meters covered by Transfer Certificate of Title No. T-210746 be exchanged with 3,700 shares of stock of the corporation worth or valued at P370,000.00 by way of a "Deed of Exchange with Cancellation of Usufruct". xxxx Said secretarys certificate is absolutely fictitious and simulated because the alleged meeting of the Board of Directors held on December 5, 1992 did not actually materialize. xxxx Using the said falsified and spurious document, x x x respondents executed another fictitious document known as the "Deed of Exchange with Cancellation of Usufruct". The contract purporting to be a transfer of 3,700 shares of stock of MFI in return for a piece of a land (Lot No. 2064-A-2) located at Canlalay, Bian, Laguna and owned by minor child Gilberto Ricaros Masangkay is void under Article 1409 of the NCC. Claiming that Eriberto lied under oath when he said that there was no meeting of the Board held on December 5, 1992 and that the Deed of Exchange with Cancellation of Usufruct is a fictitious instrument, the respondent in the SEC case, Cesar, filed a complaint for perjury against Eriberto before the Office of the Provincial Prosecutor of Rizal. Eriberto raised the defense of primary jurisdiction. He argued that what is involved is primarily an intra-corporate controversy; hence, jurisdiction lies with the SEC pursuant to Section 6 of PD 902-A, as amended by PD No. 1758. He also insisted that there was a prejudicial question because the truth of the allegations contained in his petition for involuntary dissolution has yet to be determined by the SEC. These defenses were sustained by the assistant provincial prosecutor and the complaint for perjury was dismissed for lack of merit. On October 18, 2000, the MeTC rendered a judgment holding that the prosecution was able to prove that the December 5, 1992 meeting actually took place and that petitioner attended the same as evidenced by his signature in the minutes thereof. As for Eribertos statement that the Deed of Exchange was "fictitious," the MeTC held that his participation in the approval and execution of the document, as well as his avowals before the guardianship court regarding the proposed exchange all militate against his previous statement. Petitioner was thus found guilty as charged and sentenced to imprisonment of two months of arresto mayor minimum and medium, as minimum, to one year and one day of arresto mayor maximum and prison correccional minimum, as maximum. The RTC and CA affirmed the decisions. Issue: Whether the prosecution was able to prove the accuseds guilt beyond reasonable doubt.
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Ruling: SC ruled that the prosecution failed to prove the crime of perjury beyond reasonable doubt. For perjury to exist, (1) there must be a sworn statement that is required by law; (2) it must be made under oath before a competent officer; (3) the statement contains a deliberate assertion of falsehood; and (4) the false declaration is with regard to a material matter. The presence of the first two elements is not disputed by the petitioner and they are indeed present in the instant case. The sworn statements which contained the alleged falsehoods in this case were submitted in support of the petition for involuntary dissolution, as required by Sections 105 and 121 of the Corporation Code. The petition was also verified by the petitioner before a notary publican officer duly authorized by law to administer oaths. This verification was done in compliance with Section 121 of the Corporation Code. It is the elements of deliberate falsehood and materiality of the false statements to the petition for involuntary dissolution which are contested. On the element of materiality, a material matter is the main fact which is the subject of the inquiry or any fact or circumstance which tends to prove that fact, or any fact or circumstance which tends to corroborate or strengthen the testimony relative to the subject of inquiry, or which legitimately affects the credit of any witness who testifies. The prosecution, however, failed to prove the element of deliberate falsehood. The prosecution has the burden of proving beyond reasonable doubt the falsehood of petitioners statement that the December 5, 1992 meeting "did not actually materialize." In other words, the prosecution has to establish that the said meeting in fact took place, i.e., that the directors were actually and physically present in one place at the same time and conferred with each other. (Dangerous Drugs Act; malum prohibitum) PEOPLE VS. BELEN MARIACOS GR. No 188611, June 16, 2010 Facts: On or about the 27th day of October, 2005, in the Municipality of San Gabriel, Province of La Union, Philippines, the above-named accused, did then and there willfully, unlawfully and feloniously transport, deliver 7,030.3 grams of dried marijuana fruiting tops without the necessary permit or authority from the proper government agency or office. When arraigned on December 13, 2005, accused-appellant pleaded not guilty. She testified that on October 27, 2005, at around 7:00 in the morning, accused-appellant, together with Lani Herbacio, was inside a passenger jeepney bound for the poblacion. While the jeepney was still at the terminal waiting for passengers, one Bennie Lao-ang ("Lao-ang"), her neighbor, requested her to carry a few bags which had been loaded on top of the jeepney. At first, accused-appellant refused, but she was persuaded later when she was told that she would only be carrying the bags. When they reached the poblacion, Lao-ang handed accused-appellant and her companion, Lani Herbacio, the bags, and then Laoang suddenly ran away. A few moments later, PO2 Pallayoc was upon them, arresting them. Without explanation, they were brought to the police station. When they were at the police station, Lani Herbacio disappeared. It was also at the police station that accused-appellant discovered the true contents of the bags which she was asked to carry. She maintained that she was not the owner of the bags and that she did not know what were contained in the bags. She claimed that her right against an unreasonable search
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was flagrantly violated by Police Officer (PO)2 Pallayoc when the latter searched the bag, assuming it was hers, without a search warrant and with no permission from her. She averred that PO2 Pallayocs purpose for apprehending her was to verify if the bag she was carrying was the same one he had illegally searched earlier. Moreover, appellant contended that there was no probable cause for her arrest. The RTC held her guilty of violating Article II, Section 5 of Republic Act (R.A.) No. 9165, or the Comprehensive Dangerous Drugs Act of 2002. CA affirmed the decision. Hence, this appeal. Issue: Held: Both the trial court and the CA anchored their respective decisions on the fact that the search was conducted on a moving vehicle to justify the validity of the search. Indeed, the search of a moving vehicle is one of the doctrinally accepted exceptions to the Constitutional mandate that no search or seizure shall be made except by virtue of a warrant issued by a judge after personally determining the existence of probable cause. A search warrant may readily be obtained when the search is made in a store, dwelling house or other immobile structure. But it is impracticable to obtain a warrant when the search is conducted on a mobile ship, on an aircraft, or in other motor vehicles since they can quickly be moved out of the locality or jurisdiction where the warrant must be sought. The appeal is dismissed. (Murder; complex crime) PEOPLE VS. MITSUEL ELARCOSA GR No. 186539, June 29, 2010 Facts: In the evening of September 27, 1992, Jorge, Segundina, Jose and Rosemarie, all surnamed dela Cruz, heard some persons calling out to them from outside their house, which is located in Barangay Amotay, Binalbagan, Negros Occidental. Since the voices of these persons were not familiar to them, they did not open their door immediately, and instead, they waited for a few minutes in order to observe and recognize these persons first. It was only when one of them identified himself as Mitsuel L. Elarcosa (Elarcosa), an acquaintance of the family, that Segundina lighted the lamps, while Jose opened the door. Elarcosa and his companion, accused-appellant Orias, then entered the house and requested that supper be prepared for them as they were roving. Both Elarcosa and accused-appellant Orias were Citizen Armed Forces Geographical Unit (CAFGU) members. Segundina and Rosemarie immediately went to the kitchen to prepare food, while Jose and Jorge stayed in the living room with Elarcosa and accusedappellant Orias. Since the rice was not cooked yet, Rosemarie first served a plate of suman to Elarcosa and accused-appellant Orias, who were then engaged in a conversation with her father, Jorge, and her brother, Jose. She heard accused-appellant Orias asked her brother why the latter did not attend the dance at Sitio Nalibog. Her brother replied that he was tired. Suddenly thereafter, Elarcosa and accused-appellant Orias stood up and fired their guns at Jose and Jorge. Segundina, who was busy preparing supper in the kitchen, ran towards the living room and embraced her son, Jose, who was already lying on the floor. Elarcosa and accused-appellant Orias then Whether or not there is a probable cause in the warrantless arrest.
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immediately searched the wooden chest containing clothes, money in the amount of forty thousand pesos (PhP 40,000) intended for the forthcoming wedding of Jose in October, and a registration certificate of large cattle. During this time, Rosemarie escaped through the kitchen and hid in the shrubs, which was about six (6) extended arms length from their house. She heard her mother crying loudly, and after a series of gunshots, silence ensued. After trial, the RTC of Himamaylan, Negros Occidental convicted Elarcosa and accused-appellant Orias, but acquitted Antonio David, Jr. One of the accused, Antonio David, Jr. was acquitted on the ground of reasonable doubt. The trial court justified this by stating that based on the affidavit and testimony of Rosemarie, only Elarcosa and accused-appellant Orias were positively identified. There was no mention that Antonio David, Jr. was indeed present during the incident. accused-appellant Orias contends that the decision of the RTC is erroneous because of the incredibility of the testimony of the prosecutions star witness, Rosemarie dela Cruz, and because of the physical impossibility for accused-appellant to be present at the place of the crime at the time the same was committed. The CA affirmed the decision. Issue: Whether or not the accused was guilty of the crime charged. Held: We sustain accused-appellants conviction. In his Brief, accused-appellant Orias contends that the testimony of Rosemarie is incredible as her recollection of the incident is uncertain and is insufficient to support a finding of guilt against accused-appellant Orias.We do not agree. As found by both the RTC and the CA, the detailed testimony of Rosemarie is clear, consistent and convincing. The assessment of the credibility of a witness is best left to the sound discretion of the trial court. Accused-appellant Orias can only be convicted of three (3) counts of murder, and not of robbery with homicide. Robbery must be proved conclusively as the killing itself. Accused-appellant Jerry B. Orias is found guilty beyond reasonable doubt of three (3) counts of murder and is hereby sentenced to suffer the penalty of reclusion perpetua for each count. (Murder; self-defense)
PEOPLE VS. RYAN LALONGISIP GR No. 188331, June 16, 2010
Facts: reads:
Appellant was charged with the crime of Murder in an Information dated March 9, 2006 which That on or about the 8th day of March, 2006 at around 12:30 P.M. in Barangay Manguiring, Municipality of Calabanga, Province of Camarines Sur, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, with intent to kill, with treachery while armed with a kitchen knife measuring (10 ) inches long from the handle to the tip of its blade did then and there willfully, unlawfully and feloniously stab Romeo Copo, hitting the latter at the back portion of his body thereby causing his instantaneous death. The victim was not in position to repeal (sic) the suddenness of attack nor defend himself to the damage and prejudice of his heirs in such amount as may be determined by the Honorable Court.
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During the arraignment on March 21, 2006, appellant entered a plea of "not guilty." Thereafter, trial on the merits ensued. In the course of the trial, two varying versions arose. On March 8, 2006, the accused-appellant, with the victim Romeo Copo, Victor de Villa, Cesar Andal Jr., Enog [B]ahay, Cesar Andal Sr., certain persons named Badong, Erning, Kuya Canor and some other men were having a drinking spree at the house of Conrado Andal Jr. at Zone 5, Barangay Manguiring, Calabanga, Camarines Sur. It was the first death anniversary of Conrado Andal Jr.s father. They all occupied a table beside Conrados house. Around 12:00 noon, the group was invited to lunch. Romeo Copo then stood up and while he turned his back at the table and moved himself towards the kitchen, the accused-appellant also stood up and suddenly stabbed Romeo at the back. The accused-appellant tried to stab Romeo again but was not able to do so because the handle of the knife used in stabbing was already broken. After he was stabbed, Romeo tried to run towards the kitchen but fell by the kitchen door. Conrado and his cousin brought Romeo to the hospital. Meanwhile, the accused-appellant went to Barangay Tanod Jose [Peneno] to ask the latter to accompany him as he would like to surrender to police authorities. SPO1 Carlito Capricho testified that he was the investigator on duty on March 8, 2008. Upon learning of the incident, their Desk Officer, SPO4 Conrado Cantorne, dispatched him and SPO2 Talle to make a follow up investigation and to conduct a hot pursuit of the suspect. During the crime scene investigation, Liza Andal turned over to him the kitchen knife used by the accused-appellant to stab Romeo. SPO1 Capricho then returned to their police station where he learned that the accused-appellant had already surrendered. The defense maintains a different version of the incident. According to the accused-appellant, he was at the residence of his compadre Conrado Andal on March 8, 2006. He was there because he was asked to cook food for the first death anniversary of Conrado Andals father. He finished cooking around 7:00 oclock in the morning. Thereafter, they started a drinking spree together with other men, including the victim Romeo Copo. Around noontime, while they were still having their drinking spree, the accused-appellant noticed a knife on the table which they used in cooking. Romeo Copo allegedly got hold of the said knife and the accused-appellant grabbed the same from Romeo because the latters family was angry at him for reasons he does not know. He and Romeo grappled for the possession of the knife for about ten minutes. When he was able to grab the knife from Romeo, he was in front of Romeo and he accidentally hit the latters back. This happened because Romeo allegedly turned his back when he was trying to transfer to another place. The accused-appellant swayed his hand because the knife was about to fall and that was the time that he accidentally hit the victim. The accused-appellant admitted that before March 8, 2006, he and Romeo Copo had a misunderstanding regarding a cockfight that they had. He likewise admitted that he had to take hold of a knife to defend himself because Romeo might stab him [considering] the existing previous disagreement between their families. RTC found appellant guilty beyond reasonable doubt of the crime of Murder and sentenced him to suffer the penalty of reclusion perpetua and to pay the heirs of Romeo damages. CA affirmed with modification on the damages. Issue: Whether appellant's guilt has been proven beyond reasonable doubt. Ruling: SC dismissed the appeal. First. SC discard appellant's claim of self-defense.
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When self-defense is invoked by an accused charged with murder or homicide, he necessarily owns up to the killing but intends to evade criminal liability by proving that the killing was justified. Hence, it becomes incumbent upon the accused to prove by clear and convincing evidence the three (3) elements of self-defense, namely: (1) unlawful aggression on the part of the victim; (2) reasonable necessity of the means employed to prevent or repel the aggression; and (3) lack of sufficient provocation on the part of the person defending himself. Of these elements, the accused must, initially, prove unlawful aggression, because without it, there can be no selfdefense, either complete or incomplete. Second. There was treachery in the killing of Romeo. The events narrated by the prosecution eyewitnesses point to the fact that Romeo could not have been aware that he would be attacked by appellant. There was no opportunity for him to defend himself, since appellant, suddenly and without provocation, stabbed the victim at the back as they were about to partake of their lunch. The essence of treachery is the unexpected and sudden attack on the victim which renders the latter unable and unprepared to defend himself by reason of the suddenness and severity of the attack. This criterion applies whether the attack is frontal or from behind. The decision was affirmed. (RA 7610; Anti-Child Abuse Law) People of the Philippines vs Edwin Dalipe G.R No. 187154 April 23, 2010 This is an appeal from the August 29, 2008 Decision of the Court of Appeals affirming with modification the Decision of the Regional Trial Court which found the accused, Edwin Dalipe guilty beyond reasonable doubt of having committed three (3) counts of statutory rape and two (2) counts of acts of lasciviousness against his stepdaughter. The victim accused Edwin Dalipe, of willfully and feloniously touching, holding, fondling the breasts and inserting his finger inside the private parts of AAA, a victim of child abuse, against her will or consent. AAA was raped by appellant for the first time on May 19, 1992 in their house located in Quezon City. After the incident, she told her grandmother what Edwin had done to her. She also told her mother but she did not believe AAA. AAA was raped for the second time by appellant on the second Friday of July 1992. The accused kept on repeating the said acts until August 1995 where AAA told her classmate, Karen Sangalang about what had happened to her and in turn, told their teachers about it. Her teachers thus took AAA to the DSWD office and, later on, to the NBI office, where she executed a statement, dated August 3, 1995, regarding the rapes and acts of lasciviousness committed by appellant against her. The accused denied the accusation stating that AAA was only enticed by her lola to file the said case as a result of their existing animosity with each other. He also said that he was not there at that time as attested by his friend Baltazar Sabanal. The lower court found the defendant guilty beyond reasonable doubt. The CA affirmed the decision with some modifications on the penalty imposed. Issue: Whether or not the accused is guilty beyond reasonable doubt of the charges against him. Facts:
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Ruling: The Supreme Court affirmed the decision of the CA with certain modifications with regards to the penalties imposed. Sec. 5(b) of R.A. No. 7610. Section 5(b), Article III of R.A. No. 7610, defines and penalizes acts of lasciviousness committed against a child as follows: Section 5. Child Prostitution and Other Sexual Abuse. Children, whether male or female, who for money, profit, or any other consideration or due to the coercion or influence of any adult, syndicate or group, indulge in sexual intercourse or lascivious conduct, are deemed to be children exploited in prostitution and other sexual abuse. The essential elements of this provision are: 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. 3. The child whether male or female, is below 18 years of age. (Arson; objective of arson; distinguished from homicide/murder) People of the Philippines vs. Ferdinand Baluntong G.R. No. 182061, March 15, 2010 Facts: Ferdinand Baluntong set on fire, the house of Celerina Solangon, causing the complete destruction of the said house and the death of Celerina Solangon and Alvin Savarez, and inflicting serious physical injuries on Joshua Savarez, thereby performing all the acts of execution which would produce the crime of murder as a consequence but which, nevertheless do not produce it by reason of causes independent of the will of the perpetrator. The Trial Court found accused guilty beyond reasonable doubt of the complex crime of double murder and frustrated murder. He is sentenced to suffer the supreme penalty of death. The Court of Appeals affirmed the decision of the trial court but in light of the passage of R.A. 9346, it reduced the sentence from death to reclusion perpetua. Issue: Were the courts correct in charging the accused the complex crime of double murder and frustrated murder? Ruling: The Court of Appeals Decision is reversed and set aside, and a new one is rendered finding appellant, Ferdinand T. Baluntong, GUILTY beyond reasonable doubt of Simple Arson under Sec. 3(2) of P.D. No. 1613 and is sentenced to suffer the penalty of reclusion perpetua with no eligibility for parole and other civil damages modified. In determining the offense committed by appellant, People v. Malngan teaches: In cases where both burning and death occur, in order to determine what crime/crimes was/were perpetrated whether arson, murder or arson and homicide/murder, it is de rigueur to ascertain the main objective of the malefactor: (a) if the main objective is the burning of the building or edifice, but death results by reason or on the occasion of arson, the crime is simply arson, and the resulting homicide is absorbed; (b) if, on the other hand, the main objective is to kill a particular person who may be in a building or edifice, when fire is resorted to as the means to accomplish such goal the crime committed is murder only; lastly,
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(c) if the objective is, likewise, to kill a particular person, and in fact the offender has already done so, but fire is resorted to as a means to cover up the killing, then there are two separate and distinct crimes committed homicide/murder and arson. The Court finds that there is no showing that appellants main objective was to kill Celerina and her housemates and that the fire was resorted to as the means to accomplish the goal. Absent any concrete basis then to hold that the house was set on fire to kill the occupants, appellant cannot be held liable for double murder with frustrated murder. Celerina was outside the house at the time it was set on fire. She merely entered the burning house to save her grandsons. (Rape; voluntary surrender) People of the Philippines vs. Herminigildo Salle Sobusa G.R. No. 181083, January 21, 2010 Facts: This is an automatic review of the July 27, 2007 CA decision which affirmed with modifications the decision of the RTC of Iloilo City convicting beyond reasonable doubt accused-appellant Herminigildo Salle Sobusa of qualified rape defined and penalized under Articles 266-A and 266-B of the Revised Penal Code, as amended. Sometime, a few days before the Holy Week of the year 2000, in the Municipality of San Miguel, Iloilo, the accused, with lust and lewd design, by means of force and intimidation, willfully, and feloniously did lie and succeed in having carnal knowledge of [AAA], his step-daughter, a minor, ten (10) years of age, against her will and consent. Sometime before April 17, 2000, at about a quarter of nine in the evening while she was sleeping, she was awakened when she felt that somebody was mashing her whole body. When she woke up, she saw her stepfather (Sobusa), as the one mashing her whole body. She proceeded to allegedly rape the victim. Upon inquiry by her Tita Bebing, she told her about the incident but her Tita told her just to keep quiet. In May 2000, however, she also told her two friends about the incident that happened to her and her friends advised her to tell everything to her [aunt DDD] which the complainant did. Thereafter, they reported the incident to the barangay captain and the latter also reported the same to the Municipal Hall and a warrant was issued for the arrest of the accused. He vehemently denied having raped [AAA] because being employed as Security Guard of the PNB, Iloilo Branch, his duty was always during night time, from 3:00 oclock in the afternoon to 11:00 oclock in the evening or from 11:00 oclock in the evening until 7:00 oclock the following morning. In the months of March and April 2000, according to him, he was on night shift duty everyday, and he also had Daily Time Records showing the schedule of his duties as security guard. The trial court rendered judgment finding accused-appellant guilty beyond reasonable doubt of the crime charged. The CA affirmed the lower court's decision. Issue: Whether or not the accused is guilty beyond reasonable doubt. Ruling: The SC affirmed the decision of the CA. There are three settled principles in reviewing evidence on rape cases: (1) an accusation for rape can be made with facility, it is difficult to prove but more difficult for the accused, though innocent, to
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disprove; (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. Accused-appellants attempt to mitigate his culpability by claiming that he voluntarily surrendered to the police immediately after being informed of the charges against him is futile. Jurisprudence requires that a surrender, to be voluntary, must be spontaneous and must clearly indicate the intent of the accused to submit himself unconditionally to the authorities either because he acknowledges his guilt or he wishes to save the authorities the trouble and expense incidental to his search and capture. The following requisites should likewise be present: (1) the offender had not been actually arrested; (2) the offender surrendered himself to a person in authority or to the latters agent; (3) the surrender was voluntary; and (4) there is no pending warrant of arrest or information filed.In this case, the accused-appellant surrendered only after having been informed of the charge of rape against him or about two months from the commission of the alleged crime. (Dangerous Drugs; chain of custody) People vs Norman Sitco and Raymundo Bagtas G.R No. 178202, May 14, 2010 Facts: This is an appeal from the October 19, 2006 Decision of the CA which affirmed the Decision of the RTC, in Malabon, for violation of Sections 15 and 16 of Republic Act No. (RA) 6425 or The Dangerous Drugs Act of 1972. Raymundo Bagtas and Norman Sitco was found guilty of drug pushing and sentenced to reclusion perpetua.Bagtas was also found guilty of illegal possession of drugs and was sentenced to two months and one day of arresto mayor. Sitco was found guilty by the RTC but his conviction was overturned by the CA. P03 Alex Buan testified for the prosecution and told his version of the events. Senior Inspector Gatlet ordered a buy-bust operation against the accused-appellants who were allegedly selling illegal drugs on Espina St. in Navotas, Metro Manila. On May 11, 1998, the team went to the target place and one of the informants, Buan pretended to buy shabu from Bagtas and company. Bagtas said he does not enough supply of shabu but he said, there will be a person who will deliver more shabu. It turned out that it was Sitco who will be delivering the supply of shabu. The team then proceeded to arrest the suspects. The seized items were examined and were found positive for shabu and marijuana. Buan explained during his testimony that the boodle money placed in-between the genuine marked money the buy-bust team used was unavailable as it had been confiscated by a policeman named Barlin when he himself (Buan) was arrested for violating Sec. 27 of the Dangerous Drugs Act. Bagtas however claimed that the charges against him and Sitco were branded as fabrications. He alleged that Buan and other policemen entered his house armed with weapons but they did not show any papers to justify their entry. They were told to lie down while the police search. The police failed to find illegal drugs. Bagtas alleged that they were being extorted by the police and since they were unable to pay, the police manufactured evidence. The RTC convicted Bagtas and Sitco solely on the basis of the testimony of Buan. On October 19, 2006, the CA acquitted Sitco of illegal possession of drugs but affirmed his conviction of the other offenses charged.
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Issue: WHETHER THE COURT OF APPEALS ERRED IN AFFIRMING ACCUSED-APPELLANTS CONVICTION ON THE BASIS OF AN UNRELIABLE WITNESS. The chain of custody requirement is necessary in order to remove doubts as to the identity of the evidence, by monitoring and tracking custody of the seized drugs from the accused until they reach the court. The procedure and statutory safeguards prescribed for compliance by drug enforcement agencies have not been followed in this case. Failure to comply with the aforequoted Sec. 21(1) of RA 9165 implies a concomitant failure on the part of the prosecution to establish the identity of the seized illegal items as part of the corpus delicti. Although the nonpresentation of some of the witnesses who can attest to an unbroken chain of custody of evidence may, in some instances, be excused, there should be a justifying factor for the prosecution to dispense with their testimonies. The saving mechanism provided by Sec. 21(a), Article II of the Implementing Rules and Regulations of RA 9165 ensures that not every case of non-compliance will permanently prejudice the prosecutions case. The saving mechanism applies when the prosecution recognizes and explains the lapse or lapses in the prescribed procedures. In this case, the prosecution did not even acknowledge and discuss the reasons for the missing links in the chain. Taken with the uncorroborated testimony of the policemen involved in the buy-bust operation, these lapses create a reasonable doubt as to guilt of the accused. (Anti-graft law; section 3(e); when private individuals included) Engr. Ricardo L. Santillano vs. People of the Philippines G.R. Nos. 175045-46, March 3, 2010 Facts: This is an appeal from the October 13, 2006 Decision of the Sandiganbayan finding petitioner Ricardo Santillano guilty of three counts of violation of Section 3(e) of Republic Act No. (RA) 3019 or the Anti-Graft and Corrupt Practices Act. On or about the period September 23, 1991 to March 4, 1993, in San Jose, Surigao del Norte, accused Ruben B. Ecleo, Jr., Arsenia N. Orejas and Anadelia N. Navarra, all public officers being then the Municipal Mayor, Municipal Treasurer and Municipal Planning and Development Coordinator and designated Municipal Engineer, while in the discharge of their official duties and functions, in conspiracy with accused Ricardo L, Santillano, proprietor of PBMA Builders, caused the approval and release of funds in the total amount of P4,008,005.00 as payment to accused Ricardo L. Santillano for the construction of a public market, despite the fact that the project accomplishment was only equivalent to P3,563,247.83 thereby giving unwarranted benefits to Ricardo L. Santillano. On or about the period June 21, 1993 to July 22, 1993 they again caused the approval and release of funds in the total amount of P3,949,664.00 as payment to accused Ricardo L. Santillano for the construction of a municipal building, despite the fact that the contract price was only P3,684,575.00. On or about the year 1994 they again caused the approval and release of funds in the total amount of P300,000.00 for the repair and rehabilitation of a building owned by the PBMA Womens League, a private organization, thereby giving unwarranted benefits to the PBMA Womens League. The Sandiganbayan found the 3 accused guilty of the charges against them. The appellants filed a petition under Rule 45 of the Rules of Court. Ruling:
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Issue: WHETHER OR NOT THE DECISION OF THE SANDIGANBAYAN IS CONTRARY TO LAW BECAUSE PETITIONER-ACCUSED ENGR. RICARDO L. SANTILLANO IS A PRIVATE PERSON AND NOT A PUBLIC OFFICER. Ruling: Santillano claims that the Sandiganbayan added an element to the crime charged. The Sandiganbayan allegedly added the phrase "or a private person charged in conspiracy with the public officer" to the law in order to have a legal basis in holding him liable. The assertion completely lacks merit. The relevant provision of RA 3019 states: Section 3. Corrupt practices of public officers.In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful: (e) Causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits in the discharge of his official administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence. While the provision does not contain a reference to private individuals, it must be read in conjunction with the following sections also of RA 3019: Section 4. Prohibition on private individuals.(b) It shall be unlawful for any person knowingly to induce or cause any public official to commit any of the offenses defined in Section 3 hereof. Clearly, the law punishes not only public officers who commit prohibited acts enumerated under Sec. 3, but also those who induce or cause the public official to commit those offenses. This is supported by Sec. 9, which includes private persons as liable for violations under Secs. 3, 4, 5, and 6. (Malversation of Public Funds) VIOLETABAHILIDADVSPEOPLEOFTHEPHILIPPINES G.R.No.185195,March17,2010 Facts: Acting on a complaint filed by a Concerned Citizen of Sarangani Province with the Office of the Ombudsman-Mindanao against Mary Ann Gadian, Amelia Carmela Zoleta, both assigned to the Office of the Vice-Governor, and a certain Sheryll Desiree Tangan, from the Office of the Sangguniang Panlalawigan, for their alleged participation in the scheme of giving fictitious grants and donations using funds of the provincial government, a special audit was conducted in Sarangani province. The Special Audit Team, created for the purpose, conducted its investigation from June 1 to July 31, 2003. Included in the list of alleged fictitious associations that benefited from the financial assistance given to certain NonGovernmental Organizations (NGOs), Peoples Organizations (POs), and Local Governmental Units (LGUs) was Women in Progress (WIP), which received a check in the amount of P20,000.00, issued in the name of herein petitioner Bahilidad, as the Treasurer thereof. Based on its findings, the Special Audit Team recommended the filing of charges of malversation through falsification of public documents against the officials involved. Issue: Is petitioner guilty of malversation of public funds? Ruling: NO.
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In the instant case, petitioner was found guilty of conspiring with Zoleta and other public officials in the commission of the crime of malversation of Public Funds through Falsification of Public Documents. The trial court relied on the dictum that the act of one is the act of all. It is necessary that a conspirator should have performed some overt act as a direct or indirect contribution to the execution of the crime committed. The overt act may consist of active participation in the actual commission of the crime itself, or it may consist of moral assistance to his co-conspirators by being present at the commission of the crime or by exerting moral ascendancy over the other co-conspirators. Hence, the mere presence of an accused at the discussion of a conspiracy, even approval of it, without any active participation in the same, is not enough for purposes of conviction. In the instant case, we find petitioners participation in the crime not adequately proven with moral certainty. Undeniably, petitioner, as a private individual, had no hand in the preparation, processing or disbursement of the check issued in her name. A cursory look at the disbursement voucher (No. 101-200201-822) reveals the following signatures: signature of Board Member Teodorico Diaz certifying that the cash advance is necessary, lawful and incurred under his direct supervision; signature of Provincial Accountant Camanay certifying to the completeness and propriety of the supporting documents and to the liquidation of previous cash advances; signature of Moises Magallona, Jr. over the name of Provincial Treasurer Cesar M. Cagang certifying that cash is available; signature of Constantino, with the initials of Zoleta adjacent to his name, certifying that the disbursement is approved for payment, and with petitioners signature as the payee. The Sandiganbayan faulted petitioner for immediately encashing the check, insisting that she should have deposited the check first. Such insistence is unacceptable. It defies logic. The check was issued in petitioners name and, as payee, she had the authority to encash it. All told, there is reasonable doubt as to petitioners guilt. Where there is reasonable doubt, an accused must be acquitted even though his innocence may not have been fully established. When guilt is not proven with moral certainty, exoneration must be granted as a matter of right.
REMEDIAL LAW
(Writ of Amparo; nature of remedy) IN THE MATTER OF THE PETITION FOR THE WRIT OF AMPARO AND THE WRIT OF HABEAS DATA IN FAVOR OF MELISSA C. ROXAS, MELISSA C. ROXAS vs. GLORIA MACAPAGAL-ARROYO G.R. No. 189155, September 7, 2010 Facts: Petitioner is an American citizen of Filipino descent. While in the United States, petitioner enrolled in an exposure program to the Philippines with the group Bagong Alyansang Makabayan-United States of America (BAYAN-USA). On May 19, 2009, some 15 men abducted her and her companions. She was tortured and made to suffer and linked to the communist group. She alleged that the group was the Special Operations Group, as she had heard from one among the men. When she was finally released, she was continuously contacted by one of the abductors. In view of this, a petition for a writ of amparo filed against the President, the Chief of the Armed Forces of the Philippines (AFP), and the Chief of the Philippine National Police (PNP), among others invoking the doctrine of command responsibility. The petition was originally filed with the Supreme Court, which referred the case to the Court of Appeals. The Court of
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Appeals eventually dropped the President as a respondent (based on presidential immunity from suit during her term) Issue: Can a military commander be held liable for the criminal acts of his subordinates? Ruling: It must be stated at the outset that the use by the petitioner of the doctrine of command responsibility as the justification in impleading the public respondents in her amparo petition, is legally inaccurate, if not incorrect. The doctrine of command responsibility is a rule of substantive law that establishes liability and, by this account, cannot be a proper legal basis to implead a party-respondent in an amparo petition. The writ of amparo is a protective remedy aimed at providing judicial relief consisting of the appropriate remedial measures and directives that may be crafted by the court, in order to address specific violations or threats of violation of the constitutional rights to life, liberty or security. While the principal objective of its proceedings is the initial determination of whether an enforced disappearance, extralegal killing or threats thereof had transpiredthe writ does not, by so doing, fix liability for such disappearance, killing or threats, whether that may be criminal, civil or administrative under the applicable substantive law. (Evidence; dying declaration; requisites) PEOPLE OF THE PHILIPPINES vs. ROMEO LABAGALA y ABIGONIA, et.al. G.R. No. 184603, August 2, 2010 The Lagabalas were charged of robbery with homicide of a certain Estrelita Fonte. Although they both denied being guilty of the crime accused of them by the trial court. The prosecution presented the dying testimony of the victim through her son that two men robbed her money in the store. While the accused contend that their guilt was not proven beyond reasonable doubt by the evidences, considering that that a dying testimony is weak evidence. Issue: WON the accused are guilty of robbery and homicide. Ruling: Yes. In this case, the accused-appellants were found guilty based on circumstantial evidence leading to the conclusion that they in fact committed the crime. To justify conviction based on circumstantial evidence, the following requisites must be attendant: (a) there must be more than one circumstance to convict; (b) the facts on which the inference of guilt is based must be proved; and (c) the combination of all the circumstances is such as to produce a conviction beyond reasonable doubt. As a rule, a dying declaration is hearsay and is inadmissible as evidence. In order that a dying declaration may be admissible as evidence, four requisites must concur, namely: (1) that the declaration must concern the cause and surrounding circumstances of the declarants death; (2) that at the time the declaration was made, the declarant was under a consciousness of an impending death; (3) that the declarant is competent as a witness; and (4) that the declaration is offered in a criminal case for homicide, murder or parricide, in which the declarant is a victim. All the above requisites are present in this case. At Facts:
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the time she narrated how the malefactors robbed and stabbed her, Estrelita was conscious and lying on the lap of her son, with gaping wounds on her chest. (Acquittal; remedy) PEOPLE VS. HON. ENRIQUE C. ASIS G.R. NO. 173089, AUGUST 25, 2010 Facts: In a case where the accused were charged with frustrated murder, the trial court held that there was only serious physical injuries in view of the gunshots lacking in treachery and premeditation, in this particular case. One of the accused was acquitted. The other accused who were found guilty of the latter mentioned crimes appealed on certiorari before the CA. But the CA dismissed the petition outright for lack of jurisdiction Issue: WON the remedy of petition for certiorari under Rule 65 is a property remedy in case of acquittal. Ruling: Yes. A Rule 65 petition for certiorari, not appeal, is the remedy to question a verdict of acquittal whether at the trial court or at the appellate level. Our jurisdiction adheres to the finality-of-acquittal doctrine, that is, a judgment of acquittal is final and unappealable. Like any other rule, however, the above said rule is not absolute. By way of exception, a judgment of acquittal in a criminal case may be assailed in a petition for certiorari under Rule 65 of the Rules of Court upon a clear showing by the petitioner that the lower court, in acquitting the accused, committed not merely reversible errors of judgment but also grave abuse of discretion amounting to lack or excess of jurisdiction or a denial of due process, thus rendering the assailed judgment void. In this petition, the OSG claims that Abordos acquittal in Criminal Case No. N-2213 was improper. Since appeal could not be taken without violating Abordos constitutionally guaranteed right against double jeopardy, the OSG was correct in pursuing its cause via a petition for certiorari under Rule 65 before the appellate court. (Evidence; credibility of witness; alibi) PEOPLE OF THE PHILIPPINES VS. ROGELIO ASIS Y LACSON, G.R. NO. 179935, APRIL 19, 2010 Facts: Accused was charged of 2 counts of rape of his minor daughter. He denied the charges and claimed that he was not in the place where the alleged crime was committed because he was working as a carpenter in Quezon City and the alleged rape was in Camarines Norte. This claim however was not corroborated by any other evidence or testimony. Issue: WON an alibi is sufficient to deny criminal liability as in this case.
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Ruling: The Supreme Court held that a denial, if unsubstantiated by clear and convincing evidence, is negative and self-serving evidence, which deserves no weight in law and cannot be given greater evidentiary value over the testimonies of credible witnesses who testify on affirmative matters. In the instant case, accuseds denial does not deserve any consideration given his (accused) positive identification by the victim as her lecherous attacker. (Extrajudicial foreclosure of mortgage; writ of possession) PLANTERS DEVELOPMENT BANK vs. JAMES NG and ANTHONY NG G.R. No. 187556, May 5, 2010 Facts: The Ngs obtained a loan from Planters Devt Bank in the amount of P25,000,000.00 secured by a mortgage of two parcels of land. As the respondents failed to settle their loan obligation, the petitioner instituted extrajudicial foreclosure of the mortgage. There was proper notice of Auction Sale and the same was published in a newspaper of general circulation. The highest bidder at the auction sale was Planters Bank to which was issued a Certificate of Sale that was registered with the Register of Deeds of Quezon City. As respondents failed to redeem the mortgage within one year, petitioner filed on June 26, 2001, an ex-parte petition for the issuance of a writ of possession. In the meantime, the Ngs instituted an action for Annulment of Certificate of Sale, Promissory Note and Deed of Mortgage at RTC QC which subsequently issued a writ of preliminary injunction restraining Planters from consolidating its title to the properties and committing any act of dispossession that would defeat respondents right of ownership. Respondents contend that there were jurisdictional infirmities consisting in the fact that the requirement of posting the notices of the sale for not less that twenty (20) days in at least three (3) public places in the city where the property is situated was not complied with; that the notice of auction sale did not mention with preciseness and particularity the kind of improvement on the mortgaged property, which consist of a three-storey building; that the bank (petitioner herein) and the Notary Public colluded to deprive the prospective bidders interested in the properties from participating in the public auction sale since they were deprived of knowing the real status of the subject properties; that the mortgaged properties were auctioned for a price grossly disproportionate and morally shocking as compared to the real value of the same properties; that the petitioner also violated the provisions of Supreme Court Administrative Order No. 3, governing the procedure of extrajudicial foreclosure. Issue: WON the failure to redeem the mortgage within the reglementary period entitles the highest bidder/purchaser possession as a matter of right, so that a petition for a writ of possession is ministerial on the part of the judge before whom the same is applied for. Ruling: Yes. It is settled that questions regarding the validity of a mortgage or its foreclosure as well as the sale of the property covered by the mortgage cannot be raised as ground to deny the issuance of a writ of possession. Any such questions must be determined in a subsequent proceeding as in fact, herein respondents commenced an action for Annulment of Certificate of Sale, Promissory Note and Deed of Mortgage. Section 33 of Rule 39 of the Rules of Court provides:
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SEC. 33. Deed and possession to be given at expiration of redemption period; by whom executed or given. If no redemption be made within one (1) year from the date of the registration of the certificate of sale, the purchaser is entitled to a conveyance and possession of the property; x x x Upon the expiration of the right of redemption, the purchaser or redemptioner shall be substituted to and acquire all the rights, title, interest and claim of the judgment obligor to the property as of the time of the levy. Since respondents failed to redeem the mortgage within the reglementary period, entitlement to the writ of possession becomes a matter of right and the issuance thereof is merely a ministerial function. The judge to whom an application for a writ of possession is filed need not look into the validity of the mortgage or the manner of its foreclosure. Until the foreclosure sale is annulled, the issuance of the writ of possession is ministerial. The defaulting mortgagor is not without any expedient remedy, however. For under Section 8 of Act 3135, as amended by Act 4118, it can file with the court which issues the writ of possession a petition for cancellation of the writ within 30 days after the purchaser-mortgagee was given possession. (Contempt; indirect contempt) SUBIC BAY METROPOLITAN AUTHORITY vs. MERLINO E. RODRIGUEZ and WIRA INTERNATIONAL TRADING CORP. G.R. No. 160270, April 23, 2010 Facts: On 29 September 2001, a cargo shipment described as "agricultural product" and valued at US$6,000 arrived at the Port of Subic, Subic Bay Freeport Zone. On the basis of its declared value, the shipment was assessed customs duties and taxes totaling P57,101 which were paid by respondent WIRA, the shipments consignee. Upon examination, it was found that there was misshipment. But despite that, the respondents agreed to an upgrade and paid duties and taxes due based on the upgrade. BOC released certification to the effect that the goods were for release. Despite the above certification/letter, petitioner SBMA, through Seaport Department General Manager Augusto Canlas, refused to allow the release of the rice shipment. Issue: WON SBMAs refusal to release the rice shipment proper and is not subject the punishment of contempt. Ruling: Section 3 of Rule 71 of the Revised Rules of Civil Procedure includes, among the grounds for filing a case for indirect contempt, the following: Section 3. Indirect contempt to be punished after charge and hearing. After charge in writing has been filed, and an opportunity given to the accused to be heard by himself or counsel, a person guilty of any of the following acts may be punished for contempt: xxx (b) Disobedience of or resistance to a lawful writ, process, order, judgment or command of a court, or injunction granted by a court or judge, x x x
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(c) Any abuse of or any unlawful interference with the process or proceedings of a court not constituting direct contempt under Section 1 of this rule; (d) Any improper conduct tending, directly or indirectly, to impede, obstruct or degrade the administration of justice; xxx When the TRO issued by the RTC was served upon the SBMA officers on 13 June 2002, there was already an existing warrant of seizure and detention (dated 22 May 2002) issued by the BOC against the subject rice shipment. Thus, as far as the SBMA officers were concerned, exclusive jurisdiction over the subject shipment remained with the BOC, and the RTC had no jurisdiction over cases involving said shipment. Consequently, the SBMA officers refused to comply with the TRO issued by the RTC. Considering the foregoing circumstances, we believe that the SBMA officers may be considered to have acted in good faith when they refused to follow the TRO issued by the RTC. The SBMA officers' refusal to follow the court order was not contumacious but due to the honest belief that jurisdiction over the subject shipment remained with the BOC because of the existing warrant of seizure and detention against said shipment. Accordingly, these SBMA officers should not be held accountable for their acts which were done in good faith and not without legal basis. Thus, we hold that the RTC Order dated 21 November 2002 which found the SBMA officers guilty of indirect contempt for not complying with the RTC's TRO should be invalidated. (Information; filing)
Filemon A. Verzano, Jr. vs. Francis Vitor D. Paro G.R. No. 171643, August 8, 2010
Filemon A. Verzano, Jr., former District Manager of Wyeth in Panay and Negros, was dismissed from service upon an administrative complaint filed by some individuals including the respondents Paro and Florencio who were territory managers under the supervision of petitioner. Verzano filed for illegal dismissal with the NLRC. Upon the answer filed by the respondents, the former also filed criminal complaints for perjury etc. The City Prosecutor dismissed the complaints finding no probable cause. The Regional Prosecutor however reversed it upon appeal of the petitioner. The respondents appealed to CA on certiorari assailing the reversal by the Regional Prosecutor. The CA granted the petition. On appeal, petitioner argues that the filing of the informations in the MTCC had already removed the cases from the power and authority of the prosecution to dismiss the same in accordance with the doctrine laid down in Crespo v. Mogul (Crespo). Issue: WON the Regional Prosecutor committed grave abuse of discretion in reversing the findings of the City Prosecutor. Ruling: In dismissing the petition, the Supreme Court, by citing Ledesma v. Court of Appeals (Ledesma), ruled that Crespo does not foreclose an appeal made of the resolution of a prosecutor in the determination of probable cause notwithstanding that informations had already been filed in court. In Marcelo vs. Court of Appeals, the Supreme Court clarified that Crespo did not foreclose the power or
Facts:
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authority of the secretary of justice to review resolutions of his subordinates in criminal cases. The Supreme Court recognized that in Crespo, the action of the investigating fiscal or prosecutor in the preliminary investigation is subject to the approval of the provincial or city fiscal or chief state prosecutor. Thereafter, it may be appealed to the secretary of justice. The justice secretarys power of review may still be availed of despite the filing of an information in court. (Habeas Corpus; restrictive custody of policeman by PNP is not the detention or restraint contemplated by habeas corpus) Nurhida Juhuri Ampatuan vs Judge Virgilio Macaraig, RTC Manila, et. Al. G.R. 182497, June 29, 2010 This is a Petition for Certiorari under Rule 65 assailing the Order of the Regional Trial Court (RTC) of Manila, which denied the petition for Habeas Corpus filed by the Petitioner in behalf of her husband Police Officer 1 Basser B. Ampatuan (PO1 Ampatuan). Facts: Petitioner alleged that her husband PO1 Basser Ampatuan is being illegally detained by the respondents for allegedly killing two COMELEC officials. Petitioners husband was charged for grave misconduct and was eventually placed under restrictive custody of the Regional Director, NCRPO. Consequently, City Prosecutor of Manila recommended that the case against PO1 Ampatuan be set for further investigation and that the latter be released from custody unless he is being held for other charges/legal grounds. Armed with recommendation, Petitioner filed a Petition for the Issuance of a Writ of Habeas Corpus before the RTC of Manila which was dismissed. Issue: WON the respondent court abused its discretion in dismissing the petition for writ of habeas corpus. Held: The Court dismissed the petition. In the case of Manalo v. Calderon, where this Court held that a petition for habeas corpus will be given due course only if it shows that petitioner is being detained or restrained of his liberty unlawfully, but a restrictive custody and monitoring of movements or whereabouts of police officers under investigation by their superiors is not a form of illegal detention or restraint of liberty. Restrictive custody is, at best, nominal restraint which is beyond the ambit of habeas corpus. It is neither actual nor effective restraint that would call for the grant of the remedy prayed for. It is a permissible precautionary measure to assure the PNP authorities that the police officers concerned are always accounted for. Since the basis of PO1 Ampatuans restrictive custody is the administrative case filed against him, his remedy is within such administrative process. (Motion to dismiss; order of denial interlocutory. Pleadings; certification of non-forum shopping. Procedural rules; liberal application) Roberto Benedicto, et. Al. vs Court of Appeals, et. Al. G.R. 141508, May 5, 2010 This is a Petition for Review on certiorari under Rule 45 seeking to set aside the Decision and Resolution of the Court of Appeals.
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Facts: Petitioner, as President and concurrent Chairman of both Traders Royal Bank and National Sugar Trading Corporation (NASUTRA), was charged by respondents with fraud and bad faith, not only in refusing to furnish them accurate data on NASUTRAs export sugar sales, but, more importantly, in underreporting and under-declaring the true prices of the shipments. Respondents, thus, prayed for a refund of their shares in the undervalued shipments. Petitioner filed a Motion to Dismiss, arguing therein that respondents had violated the rule on forum shopping. The RTC granted petitioners motion to dismiss. The RTC held that respondents were guilty of forum shopping for failure to report in their original anti-forum shopping certification notwithstanding that the similar action had been withdrawn by them. The RTC ruled that even if the Pasig Case had been withdrawn, the same had already been commenced. Respondents appealed the RTC Order to the CA. The CA rendered a Decision reversing the assailed RTC Order. Hence, this petition. Issue: WON the respondents are guilty of forum shopping. Held: The Court denied the petition. In Roxas vs. Court of Appeals, this Court had on occasion ruled that when a complaint is dismissed without prejudice at the instance of the plaintiff, pursuant to Section 1, Rule 17 of the 1997 Rules of Civil Procedure, there is no need to state in the certificate of non-forum shopping in a subsequent re-filed complaint the fact of the prior filing and dismissal of the former complaint. This Court has relaxed the rigid application of the rules to afford the parties the opportunity to fully ventilate their cases on the merits. This is in line with the time-honored principle that cases should be decided only after giving all parties the chance to argue their causes and defenses. It is a settled rule that an Order denying a motion to dismiss is merely interlocutory and, therefore, not appealable, nor can it be subject of a petition for review on certiorari. Such order may only be reviewed in the ordinary course of law by an appeal from the judgment after trial. The ordinary procedure to be followed in that event is to file an answer, go to trial, and if the decision is adverse, reiterate the issue on appeal from the final judgment. (Certiorari; not a substitute for lost appeal. Certiorari; not available to correct errors of judgment) Artistic Ceramica, Inc. vs Ciudad del Carmen Homeowners Association G.R. 167583-84, June 16, 2010 This is a petition for certiorari, under Rule 65 of the Rules of Court, seeking to set aside the Decision and Resolution of the Court of Appeals (CA). Facts: Petitioners are corporations engaged in the manufacture of ceramics. Petitioners manufacturing plants are located near the area occupied by respondents. Consequently, respondents filed complaints against petitioners contending that the activities of petitioners were both safety and fire hazards to their communities. Eventually, Closure Orders and Ceaseand-Desist Orders were issued against the operations of petitioners. The parties entered into Drainage Memorandum of Agreement and Memorandum of Agreement to settle the issues amicably.
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Respondents filed a complaint with the Arbitration Committee for failure of the petitioners to comply with the terms of the agreement. The Arbitration Committee rendered a Decision ordering the petitioners to comply with the undertakings in the agreements. Respondents filed a motion for reconsideration which was denied. Petitioners and respondents separately filed a petition for review before the CA. Petitioners filed a Motion to Consolidate the Two Petitions for Review, which was subsequently granted by the CA. The CA rendered a Decision and resolution in favor of the respondents and denied the motion for reconsideration of the petitioners. Hence, this petition. Issue: WON the petitioners special civil action for certiorari is the proper remedy. Held: Petition is dismissed. As a rule, the remedy from a judgment or final order of the CA is appeal via petition for review under Rule 45 of the Rules of Court. In Mercado v. Court of Appeals, the Court explained that a special civil action under Rule 65 is an independent action based on the specific ground therein provided and, as a general rule, cannot be availed of as a substitute for the lost remedy of an ordinary appeal, including that to be taken under Rule 45. One of the requisites of certiorari is that there be no available appeal or any plain, speedy and adequate remedy. Where an appeal is available, certiorari will not prosper, even if the ground therefore is grave abuse of discretion. Accordingly, when a party adopts an improper remedy, his petition may be dismissed outright. Pertinent, therefore, to a resolution of the case at bar is a determination of whether or not an appeal or any plain, speedy and adequate remedy was still available to petitioners, the absence of which would warrant petitioners decision to seek refuge under Rule 65 of the Rules of Court. While petitioners would insist that the CA committed grave abuse of discretion, this Court is of the opinion, however, that the assailed Decision and Resolution of the CA, granting the forfeiture of the performance bond among others, amount to nothing more than errors of judgment, correctible by appeal. Under prevailing procedural rules and jurisprudence, errors of judgment are not proper subjects of a special civil action for certiorari. (Mandamus; any citizen can be a real party in interest where petition anchored on people's right to information on matters of public concern. Mandamus; available to compel disclosure of information on matters of public concern) Teofisto Guingona, Jr., et. Al. vs COMELEC G.R. 191846, May 6, 2010 This special civil action for mandamus compelling respondent Commission on Elections (Comelec) to explain fully the complete details of its preparations for the 10 May 2010 elections, in view of the unraveling of alarming events of late. Facts: The petitioners cited various media reports as regards the preparation for 10 May 2010 election such as overpriced ballot secrecy folders, failed product of indelible ink, wrong supply of ultra violet ink, malfunctioning of PCOS machines. In light of the foregoing alarming developments, petitioners filed a special civil action for mandamus and pray that the Court order respondent Comelec to explain the
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complete details of its preparations for the impending election. Respondent Comelec contends petitioners have no legal standing to file the present special civil action for mandamus. Issue: WON petitioners are real party-in-interest and mandamus is the proper remedy. The Court granted the petition in part. If the petition is anchored on the peoples right to information on matters of public concern, any citizen can be the real party in interest. The requirement of personal interest is satisfied by the mere fact that the petitioner is a citizen, and therefore, part of the general public which possesses the right. It is not enough, however, that the information petitioners seek in a writ of mandamus is a matter of public concern. For mandamus to lie in a given case, the information must not be among the species exempted by law from the operation of the constitutional guarantee. In this case, respondent Comelec failed to cite any provision of law exempting the information sought by petitioners from the coverage of the governments constitutional duty to disclose fully information of public concern. Petitioners prayer to compel Comelec to explain fully its preparations for the coming 10 May 2010 elections finds overwhelming support in the Constitution, specifically under Section 7 of Article III and Section 28 of Article II on the peoples right to information and the States corresponding duty of full public disclosure of all transactions involving public interest. (Appeals; fresh period rule in Neypes v Court of appeals not applicable to administrative appeal from DENR regional office to DENR Secretary) Julieta Panolino vs Josephine Tajala G.R. no. 183616, June 29, 2010 This is a petition for review on certiorari assailing the Resolution of the Court of Appeals dismissing the petition on certiorari on the ground that petitioner failed to exhaust administrative remedies. Facts: DENR Regional Executive Director denied the application of petitioner for a free patent over a parcel of land. Petitioner filed a notice of appeal before the Regional Director stating that she was appealing the decision and order to the Office of the DENR Secretary. However, the Regional Director denied the notice contending that it was filed beyond the reglementary period pursuant to DENR Administrative Order No. 87, series 1990. The petitioner filed a Motion for Reconsideration invoking the ruling in Neypes vs. Court of Appeals arguing that she still had 15 days period from receipt of order denying her motion for reconsideration of the Regional Directors decision. Her motion was denied thus elevated the matter before the Court of Appeals via certiorari. The Court of appeals dismissed the same for failure to exhaust administrative remedies. Issue: WON fresh period rule applies to the present case. Held: As reflected in the decision in Neypes, the fresh period rule shall apply to Rule 40 (appeals from the Municipal Trial Courts to the Regional Trial Courts); Rule 41 (appeals from the Regional Trial Courts to Held:
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the Court of Appeals or Supreme Court); Rule 42 (appeals from the Regional Trial Courts to the Court of Appeals); Rule 43 (appeals from quasi-judicial agencies to the Court of Appeals); and Rule 45 (appeals by certiorari to the Supreme Court). Petitioners present case is administrative in nature involving an appeal from the decision or order of the DENR regional office to the DENR Secretary. Such appeal is indeed governed by Section 1 of Administrative Order No. 87, Series of 1990. As earlier quoted, Section 1 clearly provides that if the motion for reconsideration is denied, the movant shall perfect his appeal during the remainder of the period of appeal, reckoned from receipt of the resolution of denial; whereas if the decision is reversed, the adverse party has a fresh 15-day period to perfect his appeal. Rule 41, Section 3 of the Rules of Court, as clarified in Neypes, being inconsistent with Section 1 of Administrative Order No. 87, Series of 1990, it may not apply to the case of petitioner whose motion for reconsideration was denied. The assailed issuances of the Court of Appeals are AFFIRMED, not on the ground advanced therein but on the ground reflected in the foregoing discussion. (Annulment of judgment; direct recourse to this remedy not allowed if other appropriate remedies are available. Annulment of judgment; extrinsic fraud) Sps. Oscar and Dolores Arcenas vs Queen City Devt Bank and CA G.R. 166819, June 19,2010 This is a petition for review on certiorari assailing the Resolution of the Court of Appeals which dismissed petitioner's petition for annulment of order, as well as its Resolution which denied petitioner's motion for reconsideration. Facts: The petitioners filed with the RTC an Action for Declaratory Relief against respondent in a contract of lease. Consequently, petitioners filed with RTC, another case against respondent bank, this time for breach of the same contract of lease. On the date set for the continuation of the pre-trial conference only respondent bank's counsel was present thus, the RTC declared the petitioners non-suited. Thus, respondent bank presented evidence on its counterclaim, rested its case and submitted the same for decision. On the same day, the RTC issued an Order submitting the case for decision. Petitioners filed a Manifestation with Motion alleging that honest mistake and excusable negligence were grounds for lifting an order of non-suit. Respondent bank filed an Opposition to such Manifestation and Motion. Petitioners filed with the CA a Petition for annulment of order under Rule 47 seeking to annul the Order of non-suit issued by the RTC on the ground of extrinsic fraud. CA dismissed the petition on the ground that petitioners failed to avail of the appropriate remedies without sufficient justification before resorting to the petition for annulment of order. Issue: WON petition for annulment of judgment is the proper remedy. Held: The Court denied the petition. Section 1, Rule 47 provides that it does not allow a direct recourse to a petition for annulment of judgment if other appropriate remedies are available, such as a petition for new trial, appeal or a petition for relief. If petitioner fails to avail of these remedies without sufficient
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justification, she cannot resort to the action for annulment of judgment under Rule 47, for otherwise, she would benefit from her inaction or negligence. Section 2, Rule 47 clearly states that extrinsic fraud shall not be a valid ground for annulment of order if it was availed of, or could have been availed of, in a motion for new trial or petition for relief. Thus, extrinsic fraud is effectively barred if it could have been raised as a ground in an available remedial measure. There was indeed a failure to show that petitioner could not have availed of the ordinary and appropriate remedies under the Rules.
LEGAL ETHICS
Attorney; negligence. Respondent Atty. Elayda failed to inform his clients, petitioners herein, of the dates of hearing and the adverse decision against them, which eventually became final and executory as no appeal was filed therefrom, to the prejudice of his clients. A lawyer is duty bound to uphold and safeguard the interests of his clients. He should be conscientious, competent and diligent in handling his clients cases. Atty. Elayda should give adequate attention, care, and time to all the cases he is handling. As the petitioners counsel, Atty. Elayda is expected to monitor the progress of said spouses case and is obligated to exert all efforts to present every remedy or defense authorized by law to protect the cause espoused by the petitioners. Respondent is guilty of gross negligence. Spouses Virgilio and Angelina Aranda vs. Atty. Emmanuel F. Elayda, A.C. No. 7907. December 15, 2010 Court personnel; dishonesty. Respondent Genabe, a court staff, continued to render service despite her 30-day suspension and has quarrelsome deportment. Respondent is guilty of conduct prejudicial to the best interest of the service and conduct unbecoming of a court employee. The conduct and behavior of everyone connected with the dispensation of justice, from the presiding judge to the lowliest clerk must be characterized with propriety and decorum. Also, every official and employee of an agency involved in the administration of justice, like the Court of Appeals, from the Presiding Justice to the most junior clerk, should be circumscribed with the heavy burden of responsibility. Atty. Jonna M. Escabarte, et al. vs. Ms. Loida Marcelina J. Genabe / Ms. Loida Marcelina J. Genabe vs. Judge Bonifacio Sanz Maceda, et al., A.M. No. P-09-2602, December 1, 2010. Government lawyers; prohibition against private practice. As a rule, government lawyers are not allowed to engage in the private practice of their profession during their incumbency. By way of exception, a government lawyer can engage in the practice of his or her profession under the following conditions: first, the private practice is authorized by the Constitution or by the law; and second, the practice will not conflict or tend to conflict with his or her official functions. The last paragraph of Section 7 of RA 6713 provides an exception to the exception. In case of lawyers separated from the government service who are covered under subparagraph (b) (2) of Section 7 of R.A. No. 6713, a one-year prohibition is imposed to practice law in connection with any matter before the office he used to be with. Rule 6.03 of the Code of Professional Responsibility echoes this restriction and prohibits lawyers, after leaving the government service, to accept engagement or employment in connection with any matter in which he had intervened while in the said service. The keyword in Rule 6.03 of the Code of Professional Responsibility is the term intervene which we previously interpreted to include an act of a person who has 72

the power to influence the proceedings. Otherwise stated, to fall within the ambit of Rule 6.03 of the Code of Professional Responsibility, the respondent must have accepted engagement or employment in a matter which, by virtue of his public office, he had previously exercised power to influence the outcome of the proceedings. As the records show, no evidence exists showing that the respondent previously interfered with the sales application covering Manuels land when the former was still a member of the Committee on Awards. The complainant, too, failed to sufficiently establish that the respondent was engaged in the practice of law. At face value, the legal service rendered by the respondent was limited only in the preparation of a single document and private practice of law contemplates a succession of acts of the same nature habitually or customarily holding ones self to the public as a lawyer. Jovito S. Olazo vs. Justice Dante O. Tinga (Ret.), A.M. No. 10-5-7-SC. December 7, 2010. Judge; undue delay in rendering decision. Respondent Judge Asdala violated the 90-day reglementary period for rendering decisions. Respondent judge is guilty of undue delay in rendering a decision. Section 15, Article VIII of the Constitution requires judges to decide all cases within three (3) months from the date of submission. This Constitutional policy is reiterated in Rule 1.02, Canon 1 of the Code of Judicial Conduct which states that a judge should administer justice impartially and without delay; and Rule 3.05, Canon 3 of the same Code provides that a judge shall dispose of the courts business promptly and decide cases within the required periods. The 90-day period is mandatory. Failure to decide cases within the reglementary period constitutes a ground for administrative liability except when there are valid reasons for the delay. The raison detre behind the rule on mandatory compliance with the constitutionally prescribed periods is that the honor and integrity of the judiciary is measured not only by the fairness and correctness of the decisions rendered, but also by the efficiency with which disputes are resolved. Thus, judges must perform their official duties with utmost diligence if public confidence in the judiciary is to be preserved. There is no excuse for mediocrity in the performance of judicial functions. The position of judge exacts nothing less than faithful observance of the law and the Constitution in the discharge of official duties. Carmen Edao vs. G. Asdala, A.M. No. RTJ-06-2007. December 6, 2010. Plagiarism. The passing off of the work of another as ones own is an indispensable element of plagiarism. Whether or not the footnote is sufficiently detailed, so as to satisfy the footnoting standards of counsel for petitioners is not an ethical matter but one concerning clarity of writing. The statement See Tams, Enforcing Obligations Erga Omnes in International Law (2005) in the Vinuya decision is an attribution no matter if Tams thought that it gave him somewhat less credit than he deserved. Such attribution altogether negates the idea that Justice Del Castillo passed off the challenged passages as his own. The Vinuya decision lifted passages from Criddle-Descents article. Criddle-Descents footnotes were carried into the Vinuya decisions own footnotes but no attributions were made to the two authors. One of Justice Del Castillos researchers, a court-employed attorney, explained how she accidentally deleted the attributions, originally planted in the beginning drafts of her report to him. She said that she did her research electronically. In the course of editing and cleaning up her draft, the researcher accidentally deleted the attributions. Given the operational properties of the Microsoft program in use by the Court, the accidental decapitation of attributions to sources of research materials is not remote. The Microsoft Word program does not have a function that raises an alarm when original materials are cut up or pruned.
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Petitioners theory that intent is not material in committing plagiarism since all that a writer has to do, to avoid the charge, is to enclose lifted portions with quotation marks and acknowledge the sources from which these were taken, ignores the fact that plagiarism is essentially a form of fraud where intent to deceive is inherent. Plagiarism presupposes intent and a deliberate, conscious effort to steal anothers work and pass it off as ones own. The subject passages were reproduced in the Vinuya decision without placing them in quotation marks. But such passages consisted of common definitions and terms, abridged history of certain principles of law, and similar frequently repeated phrases that, in the world of legal literature, already belong to the public realm. The judge is not expected to produce original scholarship in every respect. Since the attributions to Criddle-Descent and Ellis were accidentally deleted, it is impossible for any person reading the decision to connect the same to the works of those authors as to conclude that in writing the decision Justice Del Castillo twisted their intended messages. And the lifted passages provided mere background facts that established the state of international law at various stages of its development. These are neutral data that could support conflicting theories regarding whether or not the judiciary has the power today to order the Executive Department to sue another country or whether the duty to prosecute violators of international crimes has attained the status of jus cogens. On occasions judges and justices have mistakenly cited the wrong sources, failed to use quotation marks, inadvertently omitted necessary information from footnotes or endnotes. But these do not, in every case, amount to misconduct. Only errors that are tainted with fraud, corruption, or malice are subject of disciplinary action. The Justices researcher was competent in the field of assignment given her. She finished law from a leading law school, graduated third in her class, served as Editor-in Chief of her schools Law Journal, and placed fourth in the bar examinations when she took it. She earned a masters degree in International Law and Human Rights from a prestigious university in the United States under the Global-Hauser program. Justice Del Castillo did not exercise bad judgment in assigning the research work in the Vinuya case to her. In the matter of the charge of plagiarism, A.M. No. 10-7-17-SC, October 12, 2010. Statement of UP Professors. While the statement was meant to reflect the educators opinion on the allegations of plagiarism against Justice Del Castillo, they treated such allegation not only as an established fact, but a truth. They expressed dissatisfaction over Justice Del Castillos explanation on how he cited the primary sources of the quoted portions and yet arrived at a contrary conclusion to those of the authors of the articles supposedly plagiarized. The statement bore certain remarks which raise concern for the Court. The first paragraph concludes with a reference to the decision in Vinuya v. Executive Secretary as a reprehensible act of dishonesty and misrepresentation by the Highest Court of the land. The authors also not only assumed that Justice Del Castillo committed plagiarism, they went further by directly accusing the Court of perpetrating extraordinary injustice by dismissing the petition of the comfort women in Vinuya v. Executive Secretary. They further attempt to educate this Court on how to go about the review of the case. The insult to the members of the Court was aggravated by imputations of deliberately delaying the resolution of the said case, its dismissal on the basis of polluted sources, the Courts alleged indifference to the cause of petitioners, as well as the supposed alarming lack of concern of the members of the Court for even the most basic values of decency and respect. The publication of a statement by the faculty of the UP College of Law regarding the allegations of plagiarism and misrepresentation in the Supreme Court was totally unnecessary, uncalled for and a rash act of misplaced vigilance. Of public knowledge is the ongoing investigation precisely to determine the
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truth of such allegations. More importantly, the motion for reconsideration of the decision alleged to contain plagiarized materials is still pending before the Court. We made it clear in the case of In re Kelly that any publication, pending a suit, reflecting upon the court, the jury, the parties, the officers of the court, the counsel with reference to the suit, or tending to influence the decision of the controversy, is contempt of court and is punishable. The UP Law faculty would fan the flames and invite resentment against a resolution that would not reverse the Vinuya decision. This runs contrary to their obligation as law professors and officers of the Court to be the first to uphold the dignity and authority of this Court, to which they owe fidelity according to the oath they have taken as attorneys, and not to promote distrust in the administration of justice. Re: Letter of the UP Law Faculty entitled Restoring Integrity: A Statement by the Faculty of the University of the Philippines College of Law on the Allegations of Plagiarism and Misrepresentation in the Supreme Court, A.M. No. 10-10-4-SC. October 19, 2010. Attorney; mistake binding on client. Considering the initial 15-day extension granted by the CA and the injunction under Sec. 4, Rule 43 of the 1997 Rules of Civil Procedure against further extensions except for the most compelling reason, it was clearly inexcusable for petitioner to expediently plead its counsels heavy workload as ground for seeking an additional extension of 10 days within which to file its petition for review. To our mind, petitioner would do well to remember that, rather than the low gate to which parties are unreasonably required to stoop, procedural rules are designed for the orderly conduct of proceedings and expeditious settlement of cases in the courts of law. Like all rules, they are required to be followed and utter disregard of the same cannot be expediently rationalized by harping on the policy of liberal construction which was never intended as an unfettered license to disregard the letter of the law or, for that matter, a convenient excuse to substitute substantial compliance for regular adherence thereto. When it comes to compliance with time rules, the Court cannot afford inexcusable delay. J. Tiosejo Investment Corporation vs.. Sps. Benjamin and Eleanor Ang, G.R. No. 174149, September 8, 2010. Attorney; notarization of falsified deed, We cannot overemphasize the important role a notary public performs. In Gonzales v. Ramos, we stressed that notarization is not an empty, meaningless routinary act but one invested with substantive public interest. The notarization by a notary public converts a private document into a public document, making it admissible in evidence without further proof of its authenticity. A notarized document is, by law, entitled to full faith and credit upon its face. It is for this reason that a notary public must observe with utmost care the basic requirements in the performance of his duties; otherwise, the publics confidence in the integrity of a notarized document would be undermined. The records undeniably show the gross negligence exhibited by the respondent in discharging his duties as a notary public. He failed to ascertain the identities of the affiants before him and failed to comply with the most basic function that a notary public must do, i.e., to require the parties presentation of their residence certificates or any other document to prove their identities. Given the respondents admission in his pleading that the donors were already dead when he notarized the Deed of Donation, we have no doubt that he failed in his duty to ascertain the identities of the persons who appeared before him as donors in the Deed of Donation. Under the circumstances, we find that the respondent should be made liable not only as a notary public but also as a lawyer. He not only violated the Notarial Law (Public Act No. 2103), but also Canon 1 and Rule 1.01 of the Code of Professional Responsibility. Luzviminda R. Lustestica vs. Atty. Sergio E. Bernabe, A.C. No. 6258. August 24, 2010.
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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. Attorney; representation within bounds of the law. Canon 19 of the Code provides that a lawyer shall represent his client with zeal within the bounds of the law. For this reason, Rule 15.07 of the Code requires a lawyer to impress upon his client compliance with the law and principles of fairness. A lawyer must employ only fair and honest means to attain the lawful objectives of his client. It is his duty to counsel his clients to use peaceful and lawful methods in seeking justice and refrain from doing an intentional wrong to their adversaries. Rural Bank of Calape, Inc. (RBCI), Bohol vs. Atty. James Benedict Florido, A.C. No. 5736, June 18, 2010. Attorneys fees; quantum meruit. The principle of quantum meruit (as much as he deserves) may be a basis for determining the reasonable amount of attorneys fees. Quantum meruit is a device to prevent undue enrichment based on the equitable postulate that it is unjust for a person to retain benefit without paying for it. It is applicable even if there was a formal written contract for attorneys fees as long as the agreed fee was found by the court to be unconscionable. In fixing a reasonable compensation for the services rendered by a lawyer on the basis of quantum meruit, factors such as the time spent, and extent of services rendered; novelty and difficulty of the questions involved; importance of the subject matter; skill demanded; probability of losing other employment as a result of acceptance of the proffered case; customary charges for similar services; amount involved in the controversy and the benefits resulting to the client; certainty of compensation; character of employment; and professional standing of the lawyer, may be considered [Orocio v. Anguluan, G.R. Nos. 179892-93, January 30, 2009]. Indubitably entwined with a lawyers duty to charge only reasonable fee is the power of the Court to reduce the amount of attorneys fees if the same is excessive and unconscionable in relation to Sec. 24, Rule 138 of the Rules. Attorneys fees are unconscionable if they affront ones sense of justice, decency or unreasonableness. Verily, the determination of the amount of reasonable attorneys fees requires the presentation of evidence and a full-blown trial. It would be only after due hearing and evaluation of the evidence presented by the parties that the trial court can render judgment as to the propriety of the amount to be awarded. Hicoblino M. Catly (Deceased), Substituted by his wife, Lourdes A. Catly vs. William Navarro, et al., G.R. No. 167239, May 5, 2010. Judges; gross inefficiency. Article VIII, Section 15(1) of the 1987 Constitution mandates lower court judges to decide a case within the reglementary period of 90 days. The Code of Judicial Conduct under Rule 3.05 of Canon 3 likewise enunciates that judges should administer justice without delay and directs
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every judge to dispose of the courts business promptly within the period prescribed by law. Rules prescribing the time within which certain acts must be done are indispensable to prevent needless delays in the orderly and speedy disposition of cases. Thus, the 90-day period is mandatory. Judges are enjoined to decide cases with dispatch. Any delay, no matter how short, in the disposition of cases undermines the peoples faith and confidence in the judiciary. It also deprives the parties of their right to the speedy disposition of their cases. Failure to decide a case within the reglementary period is not excusable and constitutes gross inefficiency warranting the imposition of administrative sanctions on the defaulting judge. The inefficiency of Judge Andoy is evident in his failure to decide 139 cases within the mandatory reglementary period for no apparent reason. Some of these cases have been submitted for resolution as early as 1997. Judge Andoy, upon finding himself unable to comply with the 90-day period, could have asked the Court for a reasonable period of extension to dispose of the cases. The Court, mindful of the heavy caseload of judges, generally grants such requests for extension. Yet, Judge Andoy also failed to make such a request. Re: Cases submitted for decision before Hon. Teresito A. Andoy, former Judge, Municipal Trial Court, Cainta, Rizal, A.M. No. 09-9-163-MTC. May 6, 2010. Judges; gross ignorance of the law. While a judge may not be held liable for gross ignorance of the law for every erroneous order that he renders, it is also axiomatic that when the legal principle involved is sufficiently basic, lack of conversance with it constitutes gross ignorance of the law. Indeed, even though a judge may not always be subjected to disciplinary action for every erroneous order or decision he renders, that relative immunity is not a license to be negligent or abusive and arbitrary in performing his adjudicatory prerogatives. It does not mean that a judge need not observe propriety, discreetness and due care in the performance of his official functions. This is because if judges wantonly misuse the powers vested on them by the law, there will not only be confusion in the administration of justice but also oppressive disregard of the basic requirements of due process. The rule is very explicit as to when admission to bail is discretionary on the part of the respondent Judge. In offenses punishable by reclusion perpetua or death, the accused has no right to bail when the evidence of guilt is strong. Thus, as the accused in Criminal Case No. 3620-01 had been sentenced to reclusion perpetua, the bail should have been cancelled, instead of increasing it as respondent Judge did. Clearly, in the instant case, the act of Mangotara in increasing the bail bond of the accused instead of canceling it is not a mere deficiency in prudence, discretion and judgment on the part of respondent Judge, but a patent disregard of well-known rules. When an error is so gross and patent, such error produces an inference of bad faith, making the judge liable for gross ignorance of the law. It is a pressing responsibility of judges to keep abreast with the law and changes therein, as well as with the latest decisions of the Supreme Court. One cannot seek refuge in a mere cursory acquaintance with the statute and procedural rules. Ignorance of the law, which everyone is bound to know, excuses no one not even judges. Hadja Sohurah Dipatuan vs. Presiding Judge Mamindiara P. Mangotara, A.M. No. RTJ-092190, April 23, 2010. Court personnel; duty to deposit funds; belated compliance cannot erase liability. Atty. Caballeros belated turnover of cash deposited with her is inexcusable and will not exonerate her from liability. Clerks of Court are presumed to know their duty to immediately deposit with the authorized government
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depositories the various funds they receive, for they are not supposed to keep funds in their personal possession. Even undue delay in the remittances of the amounts that they collect at the very least constitutes misfeasance. Although Atty. Caballero subsequently deposited her other cash accountabilities with respect to the Fiduciary Fund, she was nevertheless liable for failing to immediately deposit the said collections into the courts funds. Her belated remittance will not free her from punishment. Even restitution of the whole amount cannot erase her administrative liability. More so, in the instant case, she failed to fully comply with all the Courts directives. Clearly, her failure to deposit the said amount upon collection was prejudicial to the court, which did not earn interest income on the said amount or was not able to otherwise use the said funds. Office of the Court Administrator vs. Jocelyn G. Caballero, Clerk of Court, Regional Trial Court, Kidapawan, North Cotabato, A.M. No. P-05-2064, March 2, 2010. Court personnel; administrative complaint; effect of resignation. Respondent Nuez has filed his resignation on September 5, 2008, which was subsequently accepted by the Court, subject to the usual clearance requirements and without prejudice to the continuation of the proceedings in the instant administrative case. Nonetheless, the fact of his resignation and our approval thereof does not render moot the complaint against him. Our jurisdiction over him is not lost by the mere fact that he resigned during the pendency of the case. To deprive the Court of authority to pronounce his innocence or guilt of the charges is undoubtedly fraught with injustices and pregnant with dreadful and dangerous implications. What would prevent a corrupt and unscrupulous government employee from committing abuses and other condemnable acts knowing fully well that he would soon be beyond the pale of the law and immune to all administrative penalties? Resignation should be used neither as an escape nor as an easy way out to evade administrative liability by court personnel facing administrative sanction. If only for reasons of public policy, the Court must assert and maintain its jurisdiction over members of the judiciary and other officials under its supervision and control for acts performed in office which are inimical to the service and prejudicial to the interests of litigants and the general public. If innocent, respondent official merits vindication of his name and integrity as he leaves the government which he served well and faithfully; if guilty, he deserves to receive the corresponding censure and a penalty proper and imposable under the situation. Judge Delia P. Noel-Bertulfo, Municipal Trial Court, Palompon, Leyte vs. Fyndee P. Nuez, Court Aide, Municipal Trial Court, Palompon, Leyte, A.M. No. P-10-2758, February 2, 2010. Court personnel; conduct prejudicial to best interest of service. Sheriffs are officers of the court who serve and execute writs addressed to them by the court, and who prepare and submit returns on their proceedings. As officers of the court, they must discharge their duties with great care and diligence. They have to perform faithfully and accurately what is incumbent upon them and show at all times a high degree of professionalism in the performance of their duties. Despite being exposed to hazards that come with the implementation of the judgment, sheriffs must perform their duties by the book. When the judgment obligee is not present at the time the judgment obligor makes the payment, the sheriff is authorized to receive it. However, the money received must be remitted to the clerk of court within the same day or, if not practicable, deposited in a fiduciary account with the nearest government depository bank. Evidently, sheriffs are not permitted to retain the money in their possession beyond the day when the payment was made or to deliver the money collected directly to the judgment obligee. Good faith on the part of respondent, or lack of it, in proceeding to properly execute his mandate would be of no moment, for he is chargeable with the knowledge that being an officer of the court tasked
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thereto, it behooves him to make due compliance. As implementing officers of the court, sheriffs should set the example by faithfully observing and not brazenly disregarding the Rules of Court. Incredibly, respondent even blatantly admitted that he followed the same procedure in some of the other writs of execution that he enforced. Domingo Pea, Jr. vs. Achilles Andrew V. Ragalado II, etc., A.M. No. P-10-2772, February 16, 2010. Lawyers; disbarment case; unavailability of procedural defenses. Laws dealing with double jeopardy or with procedure such as the verification of pleadings and prejudicial questions, or in this case, prescription of offenses or the filing of affidavits of desistance by the complainant do not apply in the determination of a lawyers qualifications and fitness for membership in the Bar. First, admission to the practice of law is a component of the administration of justice and is a matter of public interest because it involves service to the public. The admission qualifications are also qualifications for the continued enjoyment of the privilege to practice law. Second, lack of qualifications or the violation of the standards for the practice of law, like criminal cases, is a matter of public concern that the State may inquire into through the Court. In this sense, the complainant in a disbarment case is not a direct party whose interest in the outcome of the charge is wholly his or her own; effectively, his or her participation is that of a witness who brought the matter to the attention of the Court. Maelotisea S. Garrido vs. Atty. Angel E. Garrido and Romana P. Valencia, A.C. No. 6593, February 4, 2010. Lawyers; negligence. Rule 18.03, Canon 18 of the Code of Professional Responsibility provides for the rule on negligence and states: Rule 18.03 A lawyer shall not neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable. The Court has consistently held, in construing this Rule, that the mere failure of the lawyer to perform the obligations due to the client is considered per se a violation. The circumstance that the client was also at fault does not exonerate a lawyer from liability for his negligence in handling a case. All court rulings drive home the fiduciary nature of a lawyers duty to his client once an engagement for legal services is accepted. A lawyer so engaged to represent a client bears the responsibility of protecting the latters interest with utmost diligence. The lawyer bears the duty to serve his client with competence and diligence, and to exert his best efforts to protect, within the bounds of the law, the interest of his or her client. Accordingly, competence, not only in the knowledge of law, but also in the management of the cases by giving these cases appropriate attention and due preparation, is expected from a lawyer. In addition to the above finding of negligence, the Court also finds Atty. Macalalad guilty of violating Rule 16.01 of the Code of Professional Responsibility which requires a lawyer to account for all the money received from the client. In this case, Atty. Macalalad did not immediately account for and promptly return the money he received from Atty. Solidon even after he failed to render any legal service within the contracted time of the engagement. Atty. Elmer C. Solidon vs. Atty. Ramil E. Macalalad, A.C. No. 8158, February 24, 2010.
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FEATURED CASE
ANTONIO LEJANO VS. PEOPLE OF THE PHILIPPINES (G.R. NO. 176389, 14 DECEMBER 2010); HUBERT JEFFREY P. WEBB ET AL VS. PEOPLE OF THE PHILIPPINES (G.R. NO. 176864, 14 DECEMBER 2010) Facts: Estrellita Vizconde and her daughters were found dead inside their house. After investigating the crime, police arrested a group, some of them confessed to the crime. However, they were released by virtue of an order of the trial court on the ground that they were framed up. Four years later, Jessica Alfaro came to the NBI and informed them of what she allegedly knew about the killings. She pointed the accused, with a police officer as an accessory to the crime. Alfaro was a stool pigeon of the NBI. She was very instrumental to the resolution of several high-profile cases, and because of her talent she was given special treatment by the Bureau. When she became unproductive for months, the men were always teasing her about it and she was piqued. According to Alfaro, she and the eight accused were at Alabang to buy Shabu. They drove to the Vizconde residence. She was the one who talked to Carmela. The latter told the former that she had to leave the house and requested to return before midnight and she would leave the kitchen door unlocked. Alfaro trailed Carmela and saw her dropped off a man whom Alfaro believed was Carmelas boyfriend. When she told this to Webb, her description of the latters mood changed afterwards. After using a cocaine, Webb said, Pipilahan natin siya (referring to Carmela) at ako ang mauuna, in which another accused replied ako ang susunod. When they entered the Vizconde residence, Alfaro went back outside to smoke. When she came back indoors, she saw Webb on top of Carmela while she lay with her back on the floor. According to her, two bloodied bodies lay on the bed. Carmela was gagged, moaning, and in tears while Webb raped her, his bare buttocks exposed. At around 2:00 in the morning, the accused police officer arrived and was ordered by Webb to clean the place. The RTC of Paraaque tried all the accused except the two who were still at large. Alfaro was the prosecutions main witness with others corroborating with her testimony: a medico-legal officer who autopsied the bodies of the victims, the security guard of the victims subdivision, the former laundrywoman of the Webbs household who claimed that she washed Webbs bloodstained clothes, police officers former girlfriend, and Lauro Vizconde. There was one point in the case that a certain Michael Rodriguez, mistakenly identified as Miguel Rodriguez (one of the accused), was arrested. When Alfaro saw Michael, she went berserk and exclaimed How can I forget your face. We just saw each other in a disco one month ago and you told me then that you will kill me. As it turned out, he was not Miguel. The defenses defenses were alibis, with Webbs being the strongest since he claimed that he was in the United States with testamentary as well as documentary evidence backing up his claim. The defense also established Alfaros dark character in order to attack the veracity of her testimonies. A conviction was rendered, with a note from the court that Alfaros testimony was categorical, straightforward, spontaneous, frank, and undamaged by the cross examination by the defense despite discrepancies between Alfaros April 28 and May 22 affidavits. Alfaros justifications with regard to her conflicting affidavits were the following: 1. she was just trying to protect her former boyfriend (one of the accused) and her relative (also one of the accused); 2. she was not assisted by an attorney; 3. that she did not trust the authorities who helped her with her affidavit; and 4. she felt unsure if she would get the support and security she needed once she disclosed all about the Vizconde killings.
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The case reached the Court of Appeals and then the Supreme Court. On April 20, 2010, Webb requested to submit for DNA analysis the semen specimen taken from Carmelas cadaver, which specimen was then believed still under the safekeeping of the NBI. However, the NBI informed the Court that it no longer has custody of the specimen, the same having been turned over to the trial court. The trial record shows, however, that the specimen was not among the object evidence that the prosecution offered in evidence in the case. This prompted the accused to file a motion to acquit on the ground that the prosecutions failure to preserve such vital evidence has resulted in the denial of his right to due process, citing Brady vs. Maryland (373 U.S. 83). Issue: Whether or not Webb, et. al. are guilty of rape with homicide. Ruling: No, they are not guilty. The Supreme Court acquitted the accused on the ground of reasonable doubt. The following points were used in the majority decision: Webb is NOT entitled to acquittal for the failure of the State to produce the semen specimen; Alfaro might be lying about the Vizconde case; lack of corroboration in the prosecutions testimonies; and Webbs alibi is strong, impeaching Alfaros testimony and has an effect to the alibis of other accused. 1. Webb is not entitled to acquittal due to loss of DNA evidence. Brady vs. Maryland has already been superseded by Arizona vs. Youngblood (488 U.S. 51), which held that due process does not require the State to preserve the semen specimen although it might be useful to the accused unless the latter is able to show bad faith on the part of the prosecution or the police. 2. It is possible that she was egged to do this because, based on the testimony of Atty. Sacaguing, she told the latter that she knew someone who knew something about the Vizconde case. When she failed to present this person, she told him that she might as well assume the role of her informant. It is possible that Alfaro had been lying about this. The Supreme Court found her testimonies contradicting. Her story either lacks sense or suffers from inherent inconsistencies. The following were her inconsistencies: 1.) she said the accused all agreed to gang rape Carmela, but when they got to the Vizconde residence, only Webb, Lejano, Ventura, and Alfaro entered the house; and 2.) she admitted that she just knew Webb during that night, so how would she agree to act as his messenger to Carmela. Furthermore, the arrest of the first group of the accused (released because they were framed up by the police) shows how crime investigators could make a confession ring true by matching some of its details with the physical evidence at the crime scene. 3. There was lack of corroboration with other testimonies. The security guard who allegedly saw the accused could not describe the vehicles that they used. Another security guard also alleged the presence of Webb in the country when the latter entered the subdivision, but he failed to log it in his logbook. With regard to the testimony of a laundrywoman, the other Webb helpers testified that it was not the duty of the former to collect laundry. She proved to have a selective photographic memory since she could not distinctly remember, four years later, what one of the Webb boys did and at what time. Another contradiction that damaged Alfaros testimony was that of Lauro Vizconde. The latter testified that Carmela told her that she rejected a suitor who is a son of a politician. Alfaro, on the other hand, testified that Carmela and Webb had an on-going relation.
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4. Webbs alibi is strong. The travel agency that booked his plane ticket to the United States testified that he did use his ticket. The US Immigration also testified in favor of Webb. Webb was able to present the logbook of his task while working in a pest control company, his paycheck, his company ID, and other employment papers. The Supreme Court ruled that if an accused is really innocent, he can have no other defense but denial and alibi. The only reason why the trial court and the Court of Appeals believed Alfaro is that the alibi was not able to destroy her positive identification. Personal identification, according to the court, must have two requirements: 1.) it must come from a credible witness, who can be trusted to tell the truth; and 2.) the witness story of what she personally saw must be believable, not inherently contrived. As already discussed above, the Supreme Court found Alfaros testimony failed to meet those criteria. With regard to the fate of other accused, the evidence against them must necessarily fail due to the doubt of guilt introduced in the case through Webbs successful denial. In our criminal justice system, says the court, what is important is, not whether the court entertains doubts about the innocence of the accused since an open mind is willing to explore all possibilities, but whether it entertains a reasonable, lingering doubt as to his guilt.
Legibus sumptis desinentibus legibus naturae utendum est.

When laws imposed by the State fail, we must use the laws of nature.
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