JENNICA GYRL G.

DELFIN
POLITICAL LAW

1. Nelson Lai vs. People of the Philippines

G. R. No. 17599, July 1, 2015
BERSAMIN, J.:

FACTS:

The accused assails the affirmance of his conviction for homicide through the assailed decision promulgated
on May 27, 2005 by the Court of Appeals (CA). The conviction had been handed down by Judge Fernando
R. Elumba of the Regional Trial Court, Branch 42, in Bacolod City (RTC). The accused alleging that he was
deprived of due process when this case was decided by the Honorable Presiding Judge who acted as the
public prosecutor in this case before he was appointed to the bench.

ISSUE: Whether Lai was denied of due process because of the non-disqualification of Judge Elumba?

RULING: Yes. It is not disputed that the constitutional right to due process of law cannot be denied to any
accused. The Constitution has expressly ordained that "no person shall be deprived of life, liberty or property
without due process of law." An essential part of the right is to be afforded a just and fair trial before his
conviction for any crime. Any violation of the right cannot be condoned, for the impartiality of the judge
who sits on and hears a case, and decides it is an indispensable requisite of procedural due process.

The Court has repeatedly and consistently demanded 'the cold neutrality of an impartial judge' as the
indispensable imperative of due process. To bolster that requirement, it has been held that the judge must not
only be impartial but must also appear to be impartial as an added assurance to the parties that his decision
will be just.

In support to this, Section 1 of Rule 137 contemplates two kinds of self-disqualification. The first paragraph
enumerates the instances when the judge is prohibited and disqualified from sitting on and deciding a case.
The prohibition is compulsory simply because the judge is conclusively presumed to be incapable of
impartiality. The second paragraph speaks of voluntary inhibition; whether or not the judge can sit in and try
the case is left to his discretion, depending on the existence of just and valid reasons not included in the first
paragraph, but in exercising the discretion, he must rely only on his conscience. In relation to this, Section
5, Canon 3 of the New Code of Judicial Conduct for the Philippine Judiciary, which pertinently demands the
disqualification of a judge who has previously served as a lawyer of any of the parties.

As such, the mere appearance of his name as the public prosecutor in the records of the case sufficed to
disqualify Judge Elumba from sitting on and deciding the case. Having represented the State in the
prosecution of the petitioner, he could not sincerely claim neutrality or impartiality as the trial judge who
would continue to hear the case. Hence, he should have removed himself from being the trial judge in the
case.

Judge Elumba's prior participation as the public prosecutor was passive, or that he entered his appearance as
the public prosecutor long after the Prosecution had rested its case against the petitioner did not really matter.
The evil sought to be prevented by the rules on disqualification had no relation whatsoever with the judge's
degree of participation in the case before becoming the judge.

Under the circumstances, Judge Elumba, despite his protestations to the contrary, could not be expected to
render impartial, independent and objective judgment on the criminal case of the petitioner. His non-
disqualification resulted in the denial of the petitioner's right to due process as the accused.

2. Maria Carolina Araullo et al vs. Benigno Simeon Aquino III et al

G.R. No. 209287, February 3, 2015 BERSAMIN, J.:

FACTS:

On September 25, 2013, in a privilege speech delivered by Sen. Jinggoy Ejercito Estrada delivered in the
Senate of the Philippines he divulged that some Senators, including himself, had been allotted an additional
P50 Million each as incentive for voting in favor of the impeachment of Chief Justice Renato C. Corona.
According to Secretary Jinggoy Estrada the DAP does not only realign funds within the Executive. He said
that some non-Executive projects were also funded; to name a few: Php1.5B for the CPLA (Cordillera
Peoples Liberation Army), Php1.8B for the MNLF (Moro National Liberation Front), P700M for the
Quezon Province, P50-P100M for certain Senators each, P10B for Relocation Projects, etc. As an answer to
Sen. Estrada's revelation, Secretary Florencio
Abad of the DBM issued a public statement entitled Abad: Releases to Senators Part of Spending
Acceleration Program explaining that the funds released to the Senators had been part of the Disbursement
Acceleration Program, a program designed by the Department of Budget and Management to ramp up
spending to accelerate economic expansion. DBM Secretary said that such releases were made as their
response to the letters of request for funding given by the Senators; and that it was not the first time that
releases from the DAP had been made. According to the DBM Secretary, DAP had already been instituted
in 2011 to ramp up spending after sluggish disbursements had caused the growth of the gross domestic
product (GDP) to slow down.

This revelation prompted Maria Carolina Araullo, Chairperson of the Bagong Alyansang Makabayan, and
several other concerned citizens to file various petitions with the Supreme Court questioning the validity of
the DAP. They contended that DAP is unconstitutional because it violates the constitutional rule which
provides that no money shall be paid out of the Treasury except in pursuance of an appropriation made by
law.DBM Secretary refuted her statement and argued that the DAP is based on certain laws particularly the
General Appropriations Act (GAA) (savings and augmentation provisions thereof), Sec. 25(5), Art. VI of the
Constitution (power of the President to augment), Secs. 38 and 49 of Executive Order 292 (power of the
President to suspend expenditures and authority to use savings, respectively). DBM Secretary also explained
that when he assumed office in the middle of 2010, President Aquino made efficiency and transparency in
government spending a significant focus of his Administration. Such focus unfortunately decelerated
government project implementation and payment schedules even if it resulted in an improved fiscal deficit
of 0.5% in the gross domestic product (GDP) from January to July of 2011. Based on the observations of the
World Bank, the Philippines' economic growth could be reduced, and potential growth could be weakened
should the Government continue with its under spending and fail to address the large deficiencies in
infrastructure.

The DBM Secretary contended that the DAP was to be implemented and funded by declaring savings coming
from the various departments and agencies derived from pooling unobligated allotments and withdrawing
unreleased appropriations; (2) releasing unprogrammed funds; and (3) applying the savings and
unprogrammed funds to augment existing P APs or to support other priority PAPs. The Government, by
spending on public infrastructure, would signify its commitment of ensuring profitability for prospective
investors. The PAPs funded under the DAP were chosen for this reason based on their: (1) multiplier impact
on the economy and infrastructure development; (2) beneficial effect on the poor; and (3) translation into
disbursements.

ISSUE: Whether or not the DAP violates the principle no money shall be paid out of the Treasury except
in pursuance of an appropriation made by law (Sec. 29(1), Art. VI, Constitution). 2. Whether or not the
DAP realignments/transfers are constitutional. 3. Whether or not the Doctrine of Operative Fact is applicable.

RULING: There must be an existing item, project or activity, purpose or object of expenditure with an
appropriation to which savings may be transferred for the purpose of augmentation. Accordingly, so long as
there is an item in the GAA for which Congress had set aside a specified amount of public fund, savings may
be transferred thereto for augmentation purposes. This interpretation is consistent not only with the
Constitution and the GAAs, but also with the degree of flexibility allowed to the Executive during budget
execution in responding to unforeseeable contingencies. Nonetheless, this modified interpretation does not
take away the caveat that only DAP projects found in the appropriate GAAs may be the subject of
augmentation by legally accumulated savings. Whether or not the 116 DAP-funded projects had
appropriation cover and were validly augmented require factual determination that is not within the scope of
the present consolidated petitions under Rule 65.
In the decision, the Court has held that the requirement under the relevant GAAs should be construed in light
of the purpose for which the unprogrammed funds were denominated as standby appropriations. Hence,
revenue targets should be considered as a whole, not individually; otherwise, we would be dealing with
artificial revenue surpluses. We have even cautioned that the release of unprogrammed funds based on the
respondents position could be unsound fiscal management for disregarding the budget plan and fostering
budget deficits, contrary to the Governments surplus budget policy. There must be consistent monitoring as
a component of the budget accountability phase of every agencys performance in terms of the agencys
budget utilization as provided in Book VI, Chapter 6, Section 51 and Section 52 of the Administrative Code
of 1987. Pursuant to the foregoing, the Department of Budget and Management (DBM) and the Commission
on Audit (COA) require agencies under various joint circulars to submit budget and financial accountability
reports (BFAR) on a regular basis, one of which is the Quarterly Report of Income or Quarterly Report of
Revenue and Other Receipts. On the other hand, as Justice Carpio points out in his Separate Opinion, the
Development Budget Coordination Committee (DBCC) sets quarterly revenue targets for a specific fiscal
year. Since information on both actual revenue collections and targets are made available every quarter, or
at such time as the DBM may prescribe, actual revenue surplus may be determined accordingly and releases
from the unprogrammed fund may take place even prior to the end of the fiscal year.

The authors, proponents and implementors of the DAP, being public officers, further enjoy the presumption
of regularity in the performance of their functions. This presumption is necessary because they are clothed
with some part of the sovereignty of the State, and because they act in the interest of the public as required
by law. However, the presumption may be disputed.

As a general rule, the nullification of an unconstitutional law or act carries with it the illegality of its effects.
However, in cases where nullification of the effects will result in inequity and injustice, the operative fact
doctrine may apply. In so ruling, the Court has essentially recognized the impact on the beneficiaries and the
country as a whole if its ruling would pave the way for the nullification of the P144.378 Billions58 worth of
infrastructure projects, social and economic services funded through the DAP. Bearing in mind the disastrous
impact of nullifying these projects by virtue alone of the invalidation of certain acts and practices under the
DAP, the Court has upheld the efficacy of such DAP-funded projects by applying the operative fact doctrine.
For this reason, we cannot sustain the Motion for Partial Reconsideration of the petitioners in G.R. No.
209442.

3. Arsenio Agustin vs. Commission on Elections and Salvador Pillos

G.R. No. 207105, November 10, 2015
BERSAMIN, J.:

FACTS:

Petitioner was naturalized as a citizen of the United States of America (USA). On October 5, 2012, he filed
his certificate of candidacy (CoC) for the position of Mayor of the Municipality of Marcos, Ilocos Norte to
be contested in the May 13, 2013 local elections. As the official candidate of the Nacionalista Party, he
declared in his CoC that he was eligible for the office he was seeking to be elected to; that he was a natural
born Filipino citizen; and that he had been a resident of the Municipality of Marcos, Ilocos Norte for 25
years. Respondent Salvador S. Pillos, a rival mayoralty candidate, filed in the COMELEC a Petition To Deny
Due Course and/or to Cancel the Certificate of Candidacy of Arsenio A. Agustin alleging that the petitioner
had made a material misrepresentation in his CoC by stating that he had been a resident of the Municipality
of Marcos for 25 years despite having registered as a voter therein only on May 31, 2012.

ISSUE: Whether or not petitioner is eligible as a candidate for the position of Mayor of the Municipality of
Marcos, Ilocos Norte

RULING: We note that the petitioners citizenship came to the fore because he himself asserted his
Philippine citizenship in his answer to Pillos petition to cancel his CoC in order to bolster his allegation of
compliance with the oneyear residency requirement. As such, he could not credibly complain about being
denied due process, especially considering that he had been able to file an opposition to Pillos motion for
reconsideration. It is worthy to state that the observance of due process in administrative proceedings does
not always require or involve a trialtype proceeding, for the demand of due process is also met whenever a
person, being notified, is afforded the opportunity to explain or defend himself. Also, due process is satisfied
by giving the opportunity to seek the reconsideration of the action or ruling complained of. The rule is the
same in election cases.

A valid CoC arises upon the timely filing of a persons declaration of his intention to run for public office
and his affirmation that he possesses the eligibility for the position he seeks to assume. The valid CoC renders
the person making the declaration a valid or official candidate. There are two remedies available under
existing laws to prevent a candidate from running in an electoral race. One is by petition for disqualification,
and the other by petition to deny due course to or to cancel his certificate of candidacy.
The denial of due course to or the cancellation of the CoC under Section 78 of the Omnibus Election Code
involves a finding not only that a person lacked a qualification for the office he is vying for but also that such
he made a material representation in the CoC that was false. The Court has stressed in Mitra v. Commission
on Elections, 622 SCRA 744 (2010), that in addition to materiality there must be a deliberate attempt to
mislead, misinform, or hide a fact that would otherwise render the candidate ineligible.

The petitioner took his Oath of Allegiance on March 9, 2012 and executed his Affidavit of Renunciation on
October 2, 2012. By his Oath of Allegiance and his renunciation of his USA citizenship, he reverted to the
status of an exclusively Filipino citizen. On October 5, 2012, the date he filed his CoC he was, therefore,
exclusively a Filipino citizen, rendering him eligible to run for public office. His CoC was valid for all intents
and purposes of the election laws because he did not make therein any material misrepresentation of his
eligibility to run as Mayor of the Municipality of Marcos, Ilocos Norte.

We uphold the declaration by the COMELEC En Banc that the petitioner was ineligible to run and be voted
for as Mayor of the Municipality of Marcos, Ilocos Norte. It is not disputed that on October 6, 2012, after
having renounced his USA citizenship and having already filed his CoC, he travelled abroad using his USA
passport, thereby representing himself as a citizen of the USA. He continued using his USA passport in his
repudiated his oath of renunciation on October 6, 2012, the first time he used his USA passport after
renouncing his USA citizenship on October 2, 2012. Consequently, he could be considered an exclusively
Filipino citizen only for the four days from October 2, 2012 until October 6, 2012. The petitioners continued
exercise of his rights as a citizen of the USA through using his USA passport after the renunciation of his
USA citizenship reverted him to his earlier status as a dual citizen. Such reversion disqualified him from
being elected to public office in the Philippines pursuant to Section 40(d) of the Local Government Code.

4. Valentino Legaspi vs. City of Cebu, T.C. Sayson

G.R. No. 159110, December 10, 2013
BERSAMIN, J.:

FACTS:

On January 27, 1997 the Sangguniang Panlungsod of the City of Cebu enacted Ordinance No. 1664 to
authorize the traffic enforcers of Cebu City to immobilize any motor vehicle violating the parking restrictions
and prohibitions defined in Ordinance No. 801 (Traffic Code of Cebu City). On July 29, 1997, Atty.
Bienvenido Jaban (Jaban, Sr.) and his son Atty. Bienvenido Douglas Luke Bradbury Jaban (Jaban, Jr.)
brought suit in the RTC in Cebu City against the City of Cebu, then represented by Hon. Alvin Garcia, its
City Mayor, the Sangguniang Panlungsod of Cebu City and its Presiding Officer, Hon. Renato V. Osmea,
and the chairman and operatives or officers of the City Traffic Operations Management (CITOM), seeking
the declaration of Ordinance No. 1644 as unconstitutional for being in violation of due process and for being
contrary to law, and damages.

ISSUE: Whether Ordinance No. 1664 was enacted within the ambit of the legislative powers of the City of
Cebu

RULING: Yes. In City of Manila v. Laguio, Jr., the Court restates the tests of a valid ordinance thusly: The
tests of a valid ordinance are well established. A long line of decisions has held that for an ordinance to be
valid, it must not only be within the corporate powers of the local government unit to enact and must be
passed according to the procedure prescribed by law, it must also conform to the following substantive
requirements: (1) must not contravene the Constitution or any statute; (2) must not be unfair or oppressive;
(3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general
and consistent with public policy; and (6) must not be unreasonable. As jurisprudence indicates, the tests are
divided into the formal (i.e., whether the ordinance was enacted within the corporate powers of the LGU,
and whether it was passed in accordance with the procedure prescribed by law), and the substantive (i.e.,
involving inherent merit, like the conformity of the ordinance with the limitations under the Constitution and
the statutes, as well as with the requirements of fairness and reason, and its consistency with public policy).

Compliance of Ordinance No. 1664 with the formal requirements

Indeed, with no issues being hereby raised against the formalities attendant to the enactment of Ordinance
No. 1664, we presume its full compliance with the test in that regard. Congress enacted the LGC as the
implementing law for the delegation to the various LGUs of the States great powers, namely: the police
power, the power of eminent domain, and the power of taxation. The LGC was fashioned to delineate the
specific parameters and limitations to be complied with by each LGU in the exercise of these delegated
powers with the view of making each LGU a fully functioning subdivision of the State subject to the
constitutional and statutory limitations. In particular, police power is regarded as the most essential, insistent
and the least limitable of powers, extending as it does to all the great public needs. It is unquestionably
the power vested in the legislature by the constitution, to make, ordain and establish all manner of
wholesome and reasonable laws, statutes and ordinances, either with penalties or without, not repugnant to
the constitution, as they shall judge to be for the good and welfare of the commonwealth, and of the subject
of the same.

In point is the exercise by the LGU of the City of Cebu of delegated police power. The foregoing delegation
reflected the desire of Congress to leave to the cities themselves the task of confronting the problem of traffic
congestions associated with development and progress because they were directly familiar with the situations
in their respective jurisdictions. Indeed, the LGUs would be in the best position to craft their traffic codes
because of their familiarity with the conditions peculiar to their communities. With the broad latitude in this
regard allowed to the LGUs of the cities, their traffic regulations must be held valid and effective unless they
infringed the constitutional limitations and statutory safeguards.

Compliance of Ordinance No. 1664 with the substantive requirements

The first substantive requirement for a valid ordinance is the adherence to the constitutional guaranty of due
process of law. The guaranty is embedded in Article III, Section 1 of the Constitution. Even under strict
scrutiny review, Ordinance No. 1664 met the substantive tests of validity and constitutionality by its
conformity with the limitations under the Constitution and the statutes, as well as with the requirements of
fairness and reason, and its consistency with public policy. To us, the terms encroachment and obstacles used
in Section 458 of the LGC, supra, were broad enough to include illegally parked vehicles or whatever else
obstructed the streets, alleys and sidewalks, which were precisely the subject of Ordinance No. 1664 in
avowedly aiming to ensure a smooth flow of vehicular traffic in all the streets in the City of Cebu at all
times (Section 1).

Firstly, Ordinance No. 1664 was far from oppressive and arbitrary. Any driver or vehicle owner whose
vehicle was immobilized by clamping could protest such action of a traffic enforcer or PNP personnel
enforcing the ordinance. Section 3 of Ordinance No. 1664, supra, textually afforded an administrative escape
in the form of permitting the release of the immobilized vehicle upon a protest directly made to the Chairman
of CITOM; or to the Chairman of the Committee on Police, Fire and Penology of the City of Cebu; or to
Asst. City Prosecutor Felipe Belcia officials named in the ordinance itself. The release could be ordered
by any of such officials even without the payment of the stipulated fine. That none of the petitioners, albeit
lawyers all, resorted to such recourse did not diminish the fairness and reasonableness of the escape clause
written in the ordinance. Secondly, the immobilization of a vehicle by clamping pursuant to the ordinance
was not necessary if the driver or vehicle owner was around at the time of the apprehension for illegal parking
or obstruction. In that situation, the enforcer would simply either require the driver to move the vehicle or
issue a traffic citation should the latter persist in his violation. The clamping would happen only to prevent
the transgressor from using the vehicle itself to escape the due sanctions. And, lastly, the towing away of the
immobilized vehicle was not equivalent to a summary impounding, but designed to prevent the immobilized
vehicle from obstructing traffic in the vicinity of the apprehension and thereby ensure the smooth flow of
traffic. The owner of the towed vehicle would not be deprived of his property.

5. Alleged Loss of Various Boxes of Copy Paper During their Transfer from the Property
Division, Office of Administrative Services (OAS), to the Various Rooms of the Philippine Judicial
Academy
A.M. No. 2008-23-SC, September 30, 2014
BERSAMIN, J.:

FACTS:
On October 23, 2008, Bocs Trading Co., Inc. delivered 1,300 reams of short copy paper and 1,100 reams of
long copy paper to the Supreme Court intended for the Philippine Judicial Academy. As instructed by
Administrative Officer Recio, the delivery was initially accepted by Orcullo, the Property Custodian of the
PHILJA, because Supply Officer Isidro Austria and Store Keeper IV Ordoez, both of the Property and
Supply Section were then not around. When Orcullo left for his lunch break, Ordoez took over. The rest of
the deliveries were unloaded from the delivery truck at the Centennial Building of the Court upon the
instruction of Ordoez.
With the help of Judicial Staff Employee II Carmona, Ordoez then initiated the transfer of the copy paper
to the stockroom and the Reproduction Room of the Office of the Court Administrator in the Supreme Court
Multipurpose Building located in the SC New Building. In the afternoon of October 23, 2008, Orcullo
informed Administrative Officer Recio that 400 reams of short copy paper and 40 reams of long copy paper
were missing Atty. Rodel O. Hernandez formally reported the missing boxes of copy paper belonging to the
PHILJA to PHILJA Vice Chancellor Justice Justo P. Torres, Jr. The Office of Administrative Services (OAS)
directed Austria, Ordoez, Glor and Carmona to submit their respective comments, and to show cause why
they should not be held administratively liable for grave misconduct, and/or conduct prejudicial to the best
interest of the service.

In his comment, Ordoez reiterated his denial of any knowledge of the loss of the 30 boxes of long copy
paper from the OCA stockroom, but admitted that he had initiated the transfer upon the instructions of
Administrative Officer Recio. On his part, Austria conceded that he had used the 50 reams of papers to pay
for the copy paper he had borrowed from one Mr. Roy of the Jimmy Roy Trading, a supplier of toners,
inks, and sometimes copy paper. He denied that the copy paper was payment for his personal loan,
maintaining that he had only borrowed the copy paper in order to avoid delays for an upcoming PHILJA
training.

After conducting the investigation, the OAS concluded that Ordoez had failed to exercise the required
diligence in the performance of his task in overseeing the delivery of the copy paper by not seeing to the safe
storage of the copy paper, and by not properly endorsing the copy paper to his office or to the security guard
assigned in the area where he had left the reams of copy paper. The OAS found that Austria and Glor had
committed perjury by giving false statements, as borne out by the incongruence of their initial narration of
facts and their subsequent statements blaming each other as the perpetrator of the theft of the copy paper;
that it was clear that their act of taking the copy paper without authority constituted theft; that they were
liable for serious dishonesty considering that their acts were attended by certain circumstances that rendered
their offense serious.

As to Carmona, the OAS observed that he was still responsible for securing the trip ticket as a driver even if
he had been requested to help Ordoez.

The OAS ultimately recommended as follows:

I. For having been found guilty of Gross Dishonesty, Grave Misconduct and Conduct Prejudicial to
the Best Interest of the Service, Mesrs. Isidro T. Austria and Eusebio M.
Glor, be meted with the penalty of DISMISSAL from the service with forfeiture of benefits except accrued
leave credits;

II. For having been found guilty of Gross Neglect of Duty, Mr. Lenin Mario M. Ordoez, be meted the
penalty of DISMISSAL from the service with forfeiture of benefits except accrued leave credits;

III. Mesrs. Austria, Glor and Ordoez, be directed to restitute to the Court the copy papers stolen; and

IV. For driving without a trip ticket to the PHILJA Reproduction Room, Mr. Elizalde S. Carmona, be
WARNED that a repetition of similar acts in the future shall be dealt with more severely.

Meanwhile, Ordoez resigned from the PHILJA, citing the approval of his familys visa application for
immigrant status in Canada as the reason for his resignation. On June 23, 2009, the Court En Banc approved
his resignation subject to the usual clearance requirements. The Third Division directed the consolidation of
A.M. No. 2014-025-Ret. with A.M. No. 2008-23-SC. The En Banc accepted the consolidation.

ISSUE: Whether or not the findings and recommendations of the OAS should be upheld.

RULING: Yes. There is grave misconduct when the elements of corruption, clear intent to violate the law,
or flagrant disregard of established rule are present. Dishonesty is defined as a disposition to lie, cheat,
deceive or defraud; untrustworthiness; lack of integrity; lack of honesty, probity or integrity in principle;
lack of fairness and straightforwardness. Both gross misconduct and dishonesty are grave offenses that are
punishable by dismissal even for the first offense. Conduct prejudicial to the best interest of the service is
also classified as a grave offense under Section 22(t) of the Omnibus Rules Implementing Book V of
Executive Order No. 292 and other pertinent Civil Service laws. The Civil Service laws and rules contain no
description of what specific acts constitute the grave offense of conduct prejudicial to the best interest of the
service. However, jurisprudence has been instructive, with the Court having considered the following acts or
omissions as constitutive of conduct prejudicial to the best interest of the service, namely: (a)
misappropriation of public funds; (b) abandonment of office; (c) failure to report back to work without prior
notice; (d) failure to keep public records and property safe; (e) making false entries in public documents; and
(f) falsification of court orders.

For making false statements, committing perjury and stealing the copy paper, Austria and Glor are guilty of
grave misconduct, gross dishonesty, and conduct prejudicial to the best interest of the service. Their dismissal
from the service is the proper penalty, with forfeiture of retirement benefits, except accrued leave credits,
and perpetual disqualification from re-employment in the Government.

On August 17, 2012 and during the pendency of A.M. No. 2008-23-SC, Austria turned 65 years old and was
deemed compulsorily retired from the service. He applied for retirement benefits under Republic Act No.
8291 (The Government Service Insurance Act of 1997), and his application was docketed as A.M. No. 2014-
025-Ret. The fact that Austria meanwhile reached the compulsory retirement age did not render A.M. No.
2008-23-SC moot, let alone release him from whatever liability he had incurred while in the active service.
The jurisdiction acquired by the Court continues despite his compulsory retirement. Indeed, the Court retains
its jurisdiction to declare a respondent either innocent or guilty of the charge even in the extreme case of the
respondents supervening death. Where a respondent is found guilty of a grave offense but the penalty of
dismissal is no longer possible because of his compulsory retirement, the Court has nevertheless imposed the
just and appropriate disciplinary measures and sanctions by decreeing the forfeiture of all benefits to which
he may be entitled, except accrued leave credits, with prejudice to re-employment in any branch or
instrumentality of the Government, including GOCCs, and by imposing a fine to be deducted from the
retirement benefits.

Austria is now being held guilty of the grave offenses of gross dishonesty and grave misconduct, (either of
which is punishable by dismissal for the first offense), as well as of conduct prejudicial to the best interest
of the service, but since the penalty of dismissal could no longer be imposed on him, the Court forfeits all
benefits to which he could be entitled, except accrued leave credits, with prejudice to re-employment in any
branch or instrumentality of the Government, including Government-owned and Government-controlled
corporations, and fines him in the amount equivalent to his salary for his last six (6) months in the service to
be deducted from whatever accrued leave benefits remained for him. Hence, his request in A.M. No. 2014-
025-Ret. for the release of his compulsory retirement benefits under R.A. No. 8291 is denied.

Ordoez is guilty of gross neglect of duty. Even if he did not have a direct hand in the theft of the copy paper,
his negligence facilitated the theft. Had he been diligent in performing his tasks and responsibilities as a
Storekeeper IV, Austria and Glor would not have managed to take out the reams of copy paper out of the
stockroom, of which he was then in charge. Indeed, he so admitted this during the investigation. Neglect of
duty is the failure to give ones attention to a task expected of him. Gross neglect is such neglect that, from
the gravity of the case or the frequency of instances, becomes so serious in its character as to endanger or
threaten the public welfare. Those responsible for such act or omission cannot escape the disciplinary power
of this Court. The imposable penalty for gross neglect of duty is dismissal from the service.

Ordoez resigned effective May 4, 2009, purportedly to migrate to Canada. His resignation would not
extricate him from the consequences of his gross neglect of duty, because the Court has not allowed
resignation to be an escape or an easy way out to evade administrative liability or administrative sanction.
Ordoez remains administratively liable, but his resignation prevents his dismissal from the service. A fine
can be imposed, instead, and its amount is subject to the sound discretion of the Court. The fine shall be
deducted from any accrued leave credits, with the respondent being personally liable for any deficiency that
should be directly payable to this Court. He is further declared disqualified from any future government
service.

The recommended sanction for Cardona is warning. Such sanction is sufficient considering that Ordoez
merely solicited the help of Cardona in transferring the reams of copy paper from the OCA stockroom to the
Repro Room in the SC New Building. We emphasize that all court employees, being public servants in the
Judiciary, must always act with a high degree of professionalism and responsibility. To maintain the peoples
respect and faith in the Judiciary, they should be upright, fair and honest. They should avoid any act or
conduct that tends to diminish public trust and confidence in the courts
LABOR LAW

1. Pentagon International Shipping Services, Inc. vs. Court of Appeals

G.R. No. 169158, July 1, 2015
BERSAMIN, J.:

FACTS:
Pentagon International Shipping Services, Inc. was a private manning agency licensed by the Philippine
Overseas Employment Administration (POEA) to engage in the recruitment of seafarers to service the
crewing and personnel management needs of shipping companies accredited to it. Respondent JDA Inter-
Phil was similarly engaged in the recruitment of seafarers. Pentagon hired respondents Madrio and Rubiano
as chief officer and second engineer, respectively, in behalf of its foreign principal, Baleen Marine, a
corporation based in Singapore. When their 10-month contract expired, they were repatriated to the
Philippines. Alleging non-payment and underpayment of wages, and claiming damages and attorneys fees,
they separately brought claims against Pentagon and the owners and managers of Baleen Marine on January
13, 2000 and January 31, 2000, stating that Pentagon and Baleen Marine had reduced their monthly gross
salary by 20% without the prior approval by the POEA; and that Pentagon and Baleen Marine had not paid
their salaries from November 1, 1998 until their repatriation on March 24, 1999. Pentagon denied liability,
countering that it had ceased to be the manning agency of Baleen Marine effective October 1, 1998; that on
June 25, 1998, its Executive Vice-President, Meynardo Bugia, Jr., had met with Baleen Marine in Singapore
to notify the latter that it had been meanwhile appointed by Neptank Bunkering Services Pte., Ltd. as its
exclusive local manning agency; that as one of the conditions of its appointment, it was to immediately
sever its manning contract with Baleen Marine; and that on October 9, 1998, Baleen Marine had appointed
JDA Inter-Phil as its new local agent for Baleen Marines vessels NP Trader No. 3 and NP Prima. On its
part, JDA Inter-Phil insisted that although it had applied with the POEA for the transfer and accreditation
of Baleen Marines vessels in its favor, it withdrew the application and did not execute an affidavit of
assumption and responsibility as required; that, consequently, Pentagon continued to be jointly and
severally liable with Baleen Marine for the money claims of Madrio and Rubiano. The Labor Arbiter ruled
in favor of Pentagon, declaring JDA InterPhil jointly and solidarily liable with Baleen Marine.
ISSUE: Whether there is a valid substitution of the manning agent from Pentagon to IDA Inter-Phil.?
RULING:
No. Rule I, Book III of the Rules and Regulations Governing Overseas Employment states the following:
Section 2. Requirements for Accreditation. An agency applying for the accreditation of its principals or
projects shall submit the following: x x x x
b. For a Manning Agency for its Principals
1. Authenticated special power of attorney and manning agreement;
2. Crew complement and wages;
3. List of vessels and their particulars; and
4. Other documents which the Administration may find necessary.
A local manning agency seeking accreditation of its foreign principal is mandated to submit the
requirements listed under Section 2. While the list is not exhaustive, the POEA identified the foremost
requisite to be the authenticated special power of attorney and manning agreement. The law clearly
mandates that the special power of attorney and manning agreement should be authenticated, save only
when the authorized officials of both the principal or hiring company and its local agent signed the
document in the presence of any member of the POEA Directorate or duly designated officers of the POEA.
The accreditation of a principal may be transferred to another agency provided that transfer shall not involve
any diminution of wages and benefits of workers. The transferee agency in these instances shall comply
with the requirements for accreditation and shall assume full and complete responsibility to all contractual
obligations of the principals to its workers originally recruited and processed by the former agency.
Prior to the transfer of accreditation, the Administration shall notify the previous agency and principal of
such application. The foregoing rules are clear to the effect that before a transfer of accreditation can be
effected, the transferee agency should likewise have to comply with the requirements for accreditation
contained in Section 2. The POEA can act on the transfer of accreditation only after all the requirements
shall have been submitted. In light of the foregoing, there was no effective transfer of agency from Pentagon
to JDA Inter-Phil. Even assuming arguendo that JDA Inter-Phil did not withdraw its application for
accreditation with the POEA, there was still no valid transfer of agency to speak of in the first place because
JDA Inter-Phil did not submit the required authenticated special power of attorney and manning agreement.
The minutes of the October 9, 1998 meeting could not, by any stretch of the imagination, supplant this
mandatory requirement.
Verily, the minutes of any meeting are simply the notes or written record of the meeting, which usually
describe what transpire during the meeting, identify the attendees, and present the statements and related
responses or resolutions of the issues discussed. Considering that the minutes of the meeting neither
contained in an unequivocal manner the important and distinct elements of a special power of attorney and
manning agreement, nor were the minutes duly authenticated as required under the law, Pentagon's
insistence upon an effective substitution must fail. To reiterate, the special power of attorney and manning
agreement were necessary for the validity or enforceability of the transfer of accreditation. Although the
Court does not preclude the possibility that, as Pentagon posits, JDA Inter-Phil had really agreed to the
transfer of accreditation, it remains that the agreement to do so did not ultimately come to fruition. It cannot
but hold that the agreement reached during the meeting was only a preliminary step in the transfer of
accreditation, and would not have standing in the POEA for the purpose intended.
It is relevant to observe that Pentagon cannot feign ignorance of Section 10, paragraph 2, of the Migrant
Workers' Act of 1995 to the effect that its liabilities would continue during the entire period or duration of
the employment contract, and would not be affected by any substitution, amendment or modification of the
contract made either locally or in a foreign country. The provisions of the POEA Rules and Regulations to
the effect that the manning agreement extends up to and until the expiration of the employment contracts
of the employees recruited and employed pursuant to the recruitment agreement are also clear enough. As
such, Pentagon is not exempt from its liabilities and responsibilities towards Madrio and Rubiano.

2. The Heritage Hotel Manila vs. Secretary of Labor and Employment et al

G.R. No. 172132, July 23, 2014
BERSAMIN, J.:

FACTS:
Respondent National Union of Workers in Hotel Restaurant and Allied Industries-Heritage Hotel Manila
Supervisors Chapter (NUWHRAIN-HHMSC) filed a petition for certification election, seeking to represent
all the supervisory employees of Heritage Hotel Manila. The petitioner filed its opposition, but the
opposition was deemed denied when Med-Arbiter Napoleon V. Fernando issued his order for the conduct
of the certification election. The petitioner appealed the order of Med-Arbiter Fernando, but the appeal was
also denied. A pre-election conference was then scheduled. On February 20, 1998, however, the pre-
election conference was suspended until further notice because of the repeated non-appearance of
NUWHRAIN-HHMSC. On January 29, 2000, NUWHRAIN-HHMSC moved for the conduct of the pre-
election conference. The petitioner filed a motion to dismiss on April 17, 2000, raising the prolonged lack
of interest of NUWHRAIN-HHMSC to pursue its petition for certification election.
On May 12, 2000, the petitioner filed a petition for the cancellation of NUWHRAIN-HHMSCs registration
as a labor union for failing to submit its annual financial reports and an updated list of members as required
by Article 238 and Article 239 of the Labor Code. The following day, however, the Department of Labor
and Employment (DOLE) issued a notice scheduling the certification elections on June 23, 2000.
Dissatisfied, the petitioner commenced in the CA on June 14, 2000 a special civil action for certiorari,
alleging that the DOLE gravely abused its discretion in not suspending the certification election proceedings
but the CA dismissed the petition for certiorari. The certification election proceeded as scheduled, and
NUWHRAIN-HHMSC obtained the majority vote of the bargaining unit. On January 26, 2001, Med-
Arbiter Tomas F. Falconitin issued an order, ruling that the petition for the cancellation of union registration
was not a bar to the holding of the certification election; hence, respondent employer/protestants protest
with motion to defer certification of results and winner is hereby dismissed for lack of merit. The petitioner
timely appealed to the DOLE Secretary. On August 21, 2002, then DOLE Secretary Sto. Tomas issued a
resolution denying the appeal. Upon denial of its motion for reconsideration, the petitioner elevated the
matter to the CA by petition for certiorari, but the petition was dismissed.

ISSUE: Whether or not the CA seriously erred when it disregard PROGRESSIVE DEVELOPMENT
CORPORATION PIZZA HUT V. LAGUESMA which held that it would be more prudent to suspend the
certification case until the issue of the illegality of registration of the union is finally resolved.

RULING: NO. Basic in the realm of labor union rights is that the certification election is the sole concern
of the workers, and the employer is deemed an intruder as far as the certification election is concerned.
Thus, the petitioner lacked the legal personality to assail the proceedings for the certification election, and
should stand aside as a mere bystander who could not oppose the petition, or even appeal the Med-Arbiters
orders relative to the conduct of the certification election.
The petitioners meddling in the conduct of the certification election among its employees unduly gave rise
to the suspicion that it intended to establish a company union. For that reason, the challenges it posed against
the certification election proceedings were rightly denied.
Under the long established rule, too, the filing of the petition for the cancellation of NUWHRAIN-
HHMSCs registration should not bar the conduct of the certification election.35 In that respect, only a final
order for the cancellation of the registration would have prevented NUWHRAIN-HHMSC from continuing
to enjoy all the rights conferred on it as a legitimate labor union, including the right to the petition for the
certification election. This rule is now enshrined in Article 238-A of the Labor Code, as amended by
Republic Act No. 9481.
Still, the petitioner assails the failure of NUWHRAIN-HHMSC to submit its periodic financial reports and
updated list of its members pursuant to Article 238 and Article 239 of the Labor Code.
We cannot ascribe abuse of discretion to the Regional Director and the DOLE Secretary in denying the
petition for cancellation of respondent's registration. The union members and, in fact, all the employees
belonging to the appropriate bargaining unit should not be deprived of a bargaining agent, merely because
of the negligence of the union officers who were responsible for the submission of the documents to the
BLR. Labor authorities should, indeed, act with circumspection in treating petitions for cancellation of
union registration, lest they be accused of interfering with union activities.
In resolving the petition, consideration must be taken of the fundamental rights guaranteed by Article XIII,
Section 3 of the Constitution, i.e., the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities. Thus, the cancellation of a certificate of registration is the
equivalent of snuffing out the life of a labor organization. For without such registration, it loses - as a rule
- its rights under the Labor Code.
The Labor Code's provisions on cancellation of union registration and on reportorial requirements have
been recently amended by Republic Act (R.A.) No. 9481, which lapsed into law on May 25, 2007 and
became effective on June 14, 2007. The amendment sought to strengthen the workers right to self-
organization and enhance the Philippines' compliance with its international obligations as embodied in the
International Labor Organization (ILO) Convention No. 87, pertaining to the non-dissolution of workers
organizations by administrative authority. Failure to comply with the above requirements shall not be a
ground for cancellation of union registration but shall subject the erring officers or members to suspension,
expulsion from membership, or any appropriate penalty. The ruling thereby wrote finis to the challenge
being posed by the petitioner against the illegitimacy of NUWHRAIN-HHMSC.
The remaining issue to be resolved is which among Toyota Motor, Dunlop Slazenger and Tagaytay
Highlands applied in resolving the dispute arising from the mixed membership in NUWHRAIN-
HHMSC.
We note that NUWHRAIN-HHMSC filed its petition for the certification election on October 11, 1995.
Conformably with Kawashima, the applicable law was the 1989 Amended Omnibus Rules, and the
prevailing rule was the pronouncement in Toyota Motor and Dunlop Slazenger to the effect that a labor
union of mixed membership was not possessed with the requisite personality to file a petition for the
certification election. Nonetheless, we still rule in favor of NUWHRAIN-HHMSC. Court was convinced
that the concerned labor unions were comprised by mixed rank-and-file and supervisory employees. In
Toyota Motor, the employer submitted the job descriptions of the concerned employees to prove that there
were supervisors in the petitioning union for rank-and-file employees. In Dunlop Slazenger, the Court
observed that the labor union of supervisors included employees occupying positions that apparently
belonged to the rank-and-file. In both Toyota Motor and Dunlop Slazenger, the employers were able to
adduce substantial evidence to prove the existence of the mixed membership. Based on the records herein,
however, the petitioner failed in that respect. To recall, it raised the issue of the mixed membership in its
comment on the list of members submitted by NUWHRAIN-HHMSC, and in its protest. In the comment,
it merely identified the positions that were either confidential or managerial, but did not present any
supporting evidence to prove or explain the identification. In the protest, it only enumerated the positions
that were allegedly confidential and managerial, and identified two employees that belonged to the rank-
and-file, but did not offer any description to show that the positions belonged to different employee groups.
Worth reiterating is that the actual functions of an employee, not his job designation, determined whether
the employee occupied a managerial, supervisory or rank-and-file position. As to confidential employees
who were excluded from the right to self-organization, they must (1) assist or act in a confidential capacity,
in regard (2) to persons who formulated, determined, and effectuated management policies in the field of
labor relations.43 In that regard, mere allegations sans substance would not be enough, most especially
because the constitutional right of workers to self-organization would be compromised.
At any rate, the members of NUWHRAIN-HHSMC had already spoken, and elected it as the bargaining
agent. As between the rigid application of Toyota Motors and Dunlop Slazenger, and the right of the
workers to self-organization, we prefer the latter. For us, the choice is clear and settled. What is important
is that there is an unmistakeable intent of the members of [the] union to exercise their right to organize. We
cannot impose rigorous restraints on such right if we are to give meaning to the protection to labor and
social justice clauses of the Constitution.

3. Crisanto Castro, Jr. vs. Ateneo de Naga University, Fr. Joel Tabora et al
G.R. No. 175293, July 23, 2014
BERSAMIN, J.:

FACTS:

The petitioner started his employment with respondent Ateneo de Naga University (University) in the first
semester of school year 1960-1961. At the time of his dismissal, he was a regular and full-time faculty
member of the Universitys Accountancy Department in the College of Commerce. Allegedly, he received
a letter from the University President, informing him that his contract (which was set to expire on May 31,
2000) would no longer be renewed. After several attempts to discuss the matter with Fr. Tabora in person,
and not having been given any teaching load or other assignments , he brought his complaint for illegal
dismissal.

Labor Arbiter Quiones ruled in favor of the petitioner. Aggrieved, the respondents appealed to the NLRC.
In his order dated October 10, 2002, LA Quiones directed respondents to exercise their option of whether
complainant is to be actually reinstated, or be reinstated in the payroll within ten (10) days from receipt of
this order. Failure to exercise such option within the period provided shall render complainants motion for
accrued salaries appropriate.

Dissatisfied, the petitioner filed a notice of partial appeal, but the notice was denied due course on June 30,
2003. The petitioner elevated the matter to the CA by petition for certiorari. In the interim, on June 26,
2004, the petitioner executed a receipt and quitclaim in favor of the University respecting his claim for the
benefits under the Plan.
Meanwhile, the NLRC rendered its decision affirming with modification the ruling of the LA on the
petitioners illegal dismissal case. On motion for reconsideration, the NLRC reversed its ruling on August
31, 2005 holding that the execution of the receipt and quitclaim respecting his benefits under the Plan
estopped the petitioner from pursuing other claims. The CA dismissed the petitioners petition for certiorari
on the ground of its having been rendered moot and academic by the aforecited August 31, 2005 decision
of the NLRC.Upon denial of his motion for reconsideration, the petitioner appeals.

ISSUES: Whether or not the petitioners claim for the payment of accrued salaries and benefits for the
period that he was not reinstated was rendered moot and academic by: his receipt of the retirement benefits and
execution of the corresponding receipt and quitclaim in favor of the respondents; and the dismissal of his
complaint for illegal dismissal by the NLRC.

RULING: Execution of the receipt and quitclaim was not a settlement of the petitioners claim for accrued
salaries. The text of the receipt and quitclaim was clear and straightforward, and it was to the effect that the
sum received by the petitioner represented full payment of benefits pursuant to the Employees
retirement plan. As such, both the NLRC and the CA should have easily seen that the quitclaim related
only to the settlement of the retirement benefits, which benefits could not be confused with the reliefs
related to the complaint for illegal dismissal.

Worthy to stress is that retirement is of a different species from the reliefs awarded to an illegally dismissed
employee. Retirement is a form of reward for an employees loyalty and service to the employer, and is
intended to help the employee enjoy the remaining years of his life, and to lessen the burden of worrying
about his financial support or upkeep. In contrast, the reliefs awarded to an illegally dismissed employee
are in recognition of the continuing employer-employee relationship that has been severed by the employer
without just or authorized cause, or without compliance with due process.

Claim for accrued benefits should be sustained despite dismissal of the petitioners complaint

Article 279 of the Labor Code, as amended, entitles an illegally dismissed employee to reinstatement.
Article 223 of the Labor Code requires the reinstatement to be immediately executory even pending appeal.
In Pioneer Texturizing Corporation v. National Labor Relations Commission, the Court has further
observed: The provision of Article 223 is clear that an award for reinstatement shall be immediately
executory even pending appeal and the posting of a bond by the employer shall not stay the execution for
reinstatement. The legislative intent is quite obvious, i.e., to make an award of reinstatement immediately
enforceable, even pending appeal. To require the application for and issuance of a wit of execution as
prerequisites for the execution of a reinstatement award would certainly betray and run counter to the very
object and intent of Article 223, i.e., the immediate execution of a reinstatement order. The reason is simple.
An application for a writ of execution and its issuance could be delayed for numerous reasons.

Furthermore, the rule is that all doubts in the interpretation and implementation of labor laws should be
resolved in favor of labor. In ruling that an order or award for reinstatement does not require a writ of
execution, the Court is simply adhering and giving meaning to this rule. Henceforth, we rule that an award
or order for reinstatement is self-executory.

The Court holds that the order of reinstatement of the petitioner was not rendered moot and academic. He
remained entitled to accrued salaries from notice of the LAs order of reinstatement until reversal thereof.
Considering that the respondents reinstated the petitioner only in November 2002, and that their inability
to reinstate him was without valid ground, they were liable to pay his salaries accruing from the time of the
decision of the LA (i.e., September 3, 2001) until his reinstatement in November 2002. It did not matter
that the respondents had yet to exercise their option to choose between actual or payroll reinstatement at
that point because the order of reinstatement was immediately executory.

4. National Wages and Productivity Commission and the Regional Tripartite Wages and
Productivity Board vs. Alliance of Progressive Labor and the Tunay na Nagkakaisang
Manggagawa sa Royal
G.R. No. 150326, March 12, 2014
BERSAMIN, J.:

FACTS:

In order to rationalize wages throughout the Philippines, Republic Act No. 6727 created the NWPC and the
RTWPBs of the different regions. Consequently, the RTWPBNCR issued Wage Order No. NCR07 on
October 14, 1999 imposing an increase of P25.50/day on the wages of all private sector workers and
employees in the NCR and pegging the minimum wage rate in the NCR at P223.50/day. However, Section
2 and Section 9 of Wage Order No. NCR07 exempted certain sectors and industries from its coverage.

Feeling aggrieved by their noncoverage by the wage adjustment, the Alliance of Progressive Labor and
the Tunay na Nagkakaisang Manggagawa sa Royal filed an appeal with the NWPC assailing Section 2(A)
and Section 9(2) of Wage Order No. NCR07. The NWPC upheld the validity of Section 2(A) and Section
9(2) of Wage Order No. NCR07. It observed that the RTWPBs power to determine exemptible categories
was adjunct to its wage fixing function conferred by Article 122(e) of the Labor Code, as amended by
Republic Act No. 6727; that such authority of the RTWPB was also recognized in NWPC Guidelines No.
01, Series of 1996. With regard to the excluded sectors provided for in Section 2(A) of Wage Order No.
NCR07, the NWPC took cognizance of the precarious situation in the Philippines in 1997 because of the
Asian economic turmoil that had prompted the RTWPBNCR to issue Wage Order No. NCR06.

Accordingly, the NWPC denied the appeal of APL and TNMR for its lack of merit.The APL and TNMR
assailed the decisions of the NWPC on certiorari in the CA which was granted by the latter, holding that
the powers and functions of the NWPC and RTWPBNCR as set forth in Republic Act No. 6727 did not
include the power to grant additional exemptions from the adjusted minimum wage.

ISSUES: Whether or not the RTWPBNCR had the authority to provide additional exemptions from the
minimum wage adjustments embodied in Wage Order No. NCR07.

RULING: YES. Indisputably, the NWPC had the authority to prescribe the rules and guidelines for the
determination of the minimum wage and productivity measures, and the RTWPBNCR had the power to
issue wage orders. Pursuant to its statutorily defined functions, the NWPC promulgated NWPC Guidelines
No. 00195 (Revised Rules of Procedure on Minimum Wage Fixing) to govern the proceedings in the
NWPC and the RTWPBs in the fixing of minimum wage rates by region, province and industry. Section 1
of Rule VIII of NWPC Guidelines No. 00195 recognized the power of the RTWPBs to issue exemptions
from the application of the wage orders subject to the guidelines issued by the NWPC.
I. Under the guidelines, the RTWPBs could issue exemptions from the application of the wage orders
as long as the exemptions complied with the rules of the NWPC. In its rules, the NWPC enumerated four
exemptible establishments, but the list was not exclusive. The RTWPBs had the authority to include in the
wage orders establishments that belonged to, or to exclude from the four enumerated exemptible categories.
If the exempted category was one of the listed ones, the RTWPB issuing the wage order must see to it that
the requisites stated in Section 3 and Section 4 of the NWPC Guidelines No. 01, Series of 1996 were
complied with before granting fully or partially the application of an establishment seeking to avail of the
exemption. On the other hand, if the exemption was outside of the four exemptible categories, like here,
the exemptible category should be: (1) in accord with the rationale for exemption; (2) reviewed/approved
by the NWPC; and (3) upon review, the RTWPB issuing the wage order must submit a strong and justifiable
reason or reasons for the inclusion of such category. It is the compliance with the second requisite that is at
issue here. The very fact that the validity of the assailed sections of Wage Order No. NCR07 had been
already passed upon and upheld by the NWPC meant that the NWPC had already given the wage order its
necessary legal imprimatur. Accordingly, the requisite approval or review was complied with.

In creating the RTWPBs, Congress intended to rationalize wages, firstly, by establishing full time boards
to police wages roundtheclock, and secondly, by giving the boards enough powers to achieve this
objective. In the nature of their functions, the RTWPBs investigate and study all the pertinent facts to
ascertain the conditions in their respective regions. Hence, they are logically vested with the competence to
determine the applicable minimum wages to be imposed as well as the industries and sectors to exempt
from the coverage of their wage orders.

Lastly, Wage Order No. NCR07 is presumed to be regularly issued in the absence of any strong showing
of grave abuse of discretion on the part of RTWPBNCR. The presumption of validity is made stronger by
the fact that its validity was upheld by the NWPC upon review.

5. Mega Magazine Inc. Jerry Tiu and Sarita Yap vs. Margaret Defensor
G.R. No. 162021, June 16, 2014
BERSAMIN, J.:

FACTS:

Petitioner Mega Magazine Publications, Inc. first employed the respondent as an Associate Publisher, and
later promoted her as a Group Publisher. In a memorandum dated February 25, 1999, the respondent
proposed to MMPIs Executive Vice-President Yap year-end commissions for herself and a special
incentive plan for the Sales Department. Yap made marginal notes of her counter-proposals on her copy of
the respondents memorandum crossing out proposed items 1 and 2(1. MMPI Total revenue at P28-P29
P5,000 each by year end;2. MMPI Total revenue at P30-P37 P7,000 each by year end), from the schedule
of the respondents commissions, and proposing instead that outright commissions be at 0.1% of P35-P38
million. The respondent sent another memorandum setting out the 1999 advertisement sales, target and
commissions, and proposing that the schedule of her outright commissions should start at .05% of P34.5
million total revenue, or P175,000.00; and further proposing that the special incentives be given when total
revenues reached P35-P38 million. On August 31, 1999, the respondent sent Yap a report on sales and sales
targets.

On October 1999, the respondent tendered her letter of resignation. Yap accepted the resignation. Before
leaving MMPI, the respondent sent Yap another report on the sales and advertising targets for 1999. Yap
responded with a formalization of her approval of the 1999 special incentive scheme proposed by the
respondent through her memorandum dated February 25, 1999, revising anew the schedule by starting
commissions at .05% of P35-P38 million gross advertising revenue (including barter), and the proposed
special incentives at P35-P38 million with P8,500.00 bonus.
The respondent replied to Yap, pointing out that her memorandum dated April 5, 1999 had been the result
of Yaps own comments on the special incentive scheme she had proposed, and that she had assumed that
Yap had been amenable to the proposal when she did not receive any further reaction from the latter. On
May 2000, the respondent filed a complaint for payment of bonus and incentive compensation with
damages. The Labor Arbiter (LA) dismissed the respondents complaint, ruling that the respondent had not
presented any evidence showing that MMPI had agreed or committed to the terms proposed in her
memorandum of April 5, 1999. The respondent appealed, but the NLRC denied the appeal for its lack of
merit.The respondent brought a special civil action for certiorari in the CA. the CA dismissed the
respondents petition for certiorari and upheld the resolutions of the NLRC. On motion for reconsideration,
however, the CA promulgated its assailed amended decision granting the motion for reconsideration and
giving due course to the respondents petition for certiorari; annulling the challenged resolutions of the
NLRC; and remanding the case to the NLRC for the reception of additional evidence. Hence, this appeal
by petition for review on certiorari.
ISSUES: Whether or not the respondent was entitled to the commissions and the incentive bonus being
claimed.
Whether or not a remand of the case to the NLRC for further reception of evidence is justified.

RULING: The appeal is partly meritorious. The grant of a bonus or special incentive, being a management
prerogative, is not a demandable and enforceable obligation, except when the bonus or special incentive is
made part of the wage, salary or compensation of the employee, or is promised by the employer and
expressly agreed upon by the parties. If the desired goal of production or actual work is not accomplished,
the bonus does not accrue. Due to the nature of the bonus or special incentive being a gratuity or act of
liberality on the part of the giver, the respondent could not validly insist on the schedule proposed in her
memorandum of April 5, 1999 considering that the grant of the bonus or special incentive remained a
management prerogative. However, the Court agrees with the CAs ruling that the petitioners had already
exercised the management prerogative to grant the bonus or special incentive. At no instance did Yap flatly
refuse or reject the respondents request for commissions and the bonus or incentive. This is plain from the
fact that Yap even bargained with the respondent on the schedule of the rates and the revenues on which
the bonus or incentive would be pegged.

Concerning the remand of the case to the NLRC for reception of additional evidence at the instance of the
respondent, we hold that the CA committed a reversible error. Although, as a rule, the submission to the
NLRC of additional evidence like documents and affidavits is not prohibited, so that the NLRC may
properly consider such evidence for the first time on appeal, the circumstances of the case did not justify
the application of the rule herein. The additional evidence the respondent has sought to be admitted (i.e.,
Tabingos affidavit executed on October 14, 2002) was already attached to the pleadings filed in the NLRC.
Confronted with the conflicting claims on MMPIs gross revenue realized in 1999, the question is which
evidence must be given more weight? The resolution of the question requires the re-examination and
calibration of evidence. Such re-examination and calibration, being of a factual nature, ordinarily lies
beyond the purview of the Courts authority in this appeal. Yet, because the documents are already before
the Court, we hereby treat the situation as an exception in order to resolve the question promptly and finally
instead of still remanding the case to the CA for the re- evaluation and calibration. We start by observing
that the degree of proof required in labor cases is not as stringent as in other types of cases. This liberal
approach affords to the employee every opportunity to level the playing field in which her employer is
pitted against her.

In labor cases, the rules on the degree of proof are enforced not as stringently as in other cases in order
to better serve the higher ends of justice. This lenity is intended to afford to the employee every
opportunity to level the playing field. Moreover, whenever the evidence presented by the employer and
that by the employee are in equipoise, the scales of justice must tilt in favor of the latter. Accordingly, the
Court concludes that the respondent was entitled to her 0.05% outright commissions and to the special
incentive bonus of P8, 500.00 based on MMPI having reached the minimum target of P35 million in gross
revenues as provided in Yaps memorandum of December 8, 1999.
CIVIL LAW

1. Asb Realty Corporation vs. Ortigas & Company Limited Partnership

G.R. No. 202947, December 9, 2015
BERSAMIN, J.:

FACTS:

Ortigas & Company Limited Partnership entered into a Deed of Sale with Amethyst Pearl Corporation
involving the parcel of land with an area of 1,012 square meters situated in Barrio Oranbo, Pasig City and
registered under Transfer Certificate of Title (TCT) No. 65118 of the Register of Deeds of Rizal4 for the
consideration of P2,024,000.00. Amethyst assigned the subject property to its sole stockholder, petitioner
ASB Realty Corporation (the petitioner), under a so-called Deed of Assignment in Liquidation in
consideration of 10,000 shares of the petitioners outstanding capital stock. Thus, the property was
transferred to the petitioner free from any liens or encumbrances except those duly annotated on TCT No.
PT-94175. The Register of Deeds of Rizal cancelled TCT No. PT-94175 and issued TCT No. PT-105797
in the name of the petitioner with the same encumbrances annotated on TCT No. PT-94175. Ortigas filed
its complaint for specific performance against the petitioner. For reliefs, Ortigas prayed for the
reconveyance of the subject property, or, alternatively, for the demolition of the structures and
improvements thereon, plus the payment of penalties, attorneys fees and costs of suit.

ISSUE: Whether or not Ortigas action for rescission would prosper

RULING: Ortigas action for rescission could not prosper The express terms of the Deed of Assignment
in Liquidation, indicate that Amethyst transferred to the petitioner only the tangible asset consisting of the
parcel of land covered by TCT No. PT-94175 registered in the name of Amethyst. By no means did
Amethyst assign the rights or duties it had assumed under the Deed of Sale. The petitioner thus became
vested with the ownership of the parcel of land free from any lien or encumbrance except those that are
duly annotated on the [title] from the time Amethyst executed the Deed of Assignment in Liquidation.
Ortigas apparently recognized without any reservation the issuance of the new certificate of title in the name
of Amethyst and the subsequent transfer by assignment from Amethyst to the petitioner that resulted in the
issuance of the new certificate of title under the name of the petitioner. As such, Ortigas was estopped from
assailing the petitioners acquisition and ownership of the property.

The application of estoppel was appropriate. The doctrine of estoppel was based on public policy, fair
dealing, good faith and justice, and its purpose was to forbid a party to speak against his own act or
omission, representation, or commitment to the injury of another to whom the act, omission, representation,
or commitment was directed and who reasonably relied thereon. The doctrine sprang from equitable
principles and the equities in the case, and was designed to aid the law in the administration of justice where
without its aid injustice would result. Estoppel has been applied by the Court wherever and whenever
special circumstances of the case so demanded.

Substitution of the petitioner in the place of Amethyst did not result in the novation of the Deed of Sale. To
start with, it does not appear from the records that the consent of Ortigas to the substitution had been
obtained despite its essentiality to the novation. Secondly, the petitioner did not expressly assume
Amethysts obligations under the Deed of Sale, whether through the Deed of Assignment in Liquidation or
another document. And, thirdly, the consent of the new obligor (i.e., the petitioner), which was as essential
to the novation as that of the obligee (i.e., Ortigas), was not obtained. Rescission under Article 1191 of the
Civil Code is proper if one of the parties to the contract commits a substantial breach of its provisions. It
abrogates the contract from its inception and requires the mutual restitution of the benefits received; hence,
it can be carried out only when the party who demands rescission can return whatever he may be obliged
to restore. Ortigas did not have a cause of action against the petitioner for the rescission of the Deed of Sale.

2. Megaworld Properties and Holdings Inc. et al vs. Majestic Finance and Investment Co.
G.R. No. 169694, December 9, 2015
BERSAMIN, J.:

FACTS:

Megaworld Properties and Holdings, Inc. (developer) entered into a Joint Venture Agreement (JVA) with
Majestic Finance and Investment Co., Inc. (owner) for the development of the residential subdivision
located in Brgy. Alingaro, General Trias, Cavite. According to the JV A, the development of the 215
hectares of land belonging to the owner (joint venture property) would be for the sole account of the
developer; and that upon completion of the development of the subdivision, the owner would compensate
the developer in the form of saleable residential subdivision lots.6 The JV A further provided that the
developer would advance all the costs for the relocation and resettlement of the occupants of the joint
venture property, subject to reimbursement by the owner; and that the developer would deposit the initial
amount of P10,000,000.00 to defray the expenses for the relocation and settlement, and the costs for
obtaining from the Government the exemptions and conversion permits, and the required clearances.

The developer and owner agreed, through the addendum to the JV A, to increase the initial deposit for the
settlement of claims and the relocation of the tenants from P10,000,000.00 to P160,000,000.00. The
developer, by deed of assignment, transferred, conveyed and assigned to Empire East Land Holdings, Inc.
(developer/assignee) all its rights and obligations under the JV A including the addendum. The owner filed
in the RTC a complaint for specific performance with damages against the developer, the
developer/assignee, and respondent Andrew Tan, who are now the petitioners herein. The complaint was
mainly based on the failure of the petitioners to comply with their obligations under the JV A.

ISSUE: whether either party of a joint venture agreement to develop property into a residential subdivision
has already performed its obligation as to entitle it to demand the performance of the other's reciprocal
obligation

RULING: The obligations of the parties under the JV A were unquestionably reciprocal. Reciprocal
obligations are those that arise from the same cause, and in which each party is a debtor and a creditor of
the other at the same time, such that the obligations of one are dependent upon the obligations of the other.
They are to be performed simultaneously, so that the performance by one is conditioned upon the
simultaneous fulfillment by the other. The determination of default on the part of either of the parties
depends on the terms of the JV A that clearly categorized the parties' several obligations.

In each activity, the obligation of each party was dependent upon the obligation of the other. Although their
obligations were to be performed simultaneously, the performance of an activity obligation was still
conditioned upon the fulfillment of the continuous obligation, and vice versa. Should either party cease to
perform a continuous obligation, the other's subsequent activity obligation would not accrue. Conversely,
if an activity obligation was not performed by either party, the continuous obligation of the other would
cease to take effect. The performance of the continuous obligation was subject to the resolutory condition
that the precedent obligation of the other party, whether continuous or activity, was fulfilled as it became
due. Otherwise, the continuous obligation would be extinguished.

According to Article 1184 of the Civil Code, the condition that some event happen at a determinate time
shall extinguish the obligation as soon as the time expires, or if it has become indubitable that the event will
not take place. Here, the common cause of the parties in entering into the joint venture was the development
of the joint venture property into the residential subdivision as to eventually profit therefrom. Consequently,
all of the obligations under the JVA were subject to the happening of the complete development of the joint
venture property, or if it would become indubitable that the completion would not take place, like when an
obligation, whether continuous or activity, was not performed. Should any of the obligations, whether
continuous or activity, be not performed, all the other remaining obligations would not ripen into
demandable obligations while those already performed would cease to take effect. This is because every
single obligation of each party under the JV A rested on the common cause of profiting from the developed
subdivision.

It appears that upon the execution of the JV A, the parties were performing their respective obligations until
disagreement arose between them that affected the subsequent performance of their accrued obligations.
Being reciprocal in nature, their respective obligations as the owner and the developer were dependent upon
the performance by the other of its obligations; hence, any claim of delay or non-performance against the
other could prosper only if the complaining party had faithfully complied with its own correlative
obligation.

3. Sps. Bernabe Mercader, Jr. and Lorna Mercader vs. Sps. Jesus Bardilas and Leticia Bardilas
G.R. No. 163157, June 27, 2016
BERSAMIN, J.:

FACTS:

The issue concerns the right of way between the owners of three parcels of land denominated as Lot No.
5808-F-l, Lot No. 5808-F-2-A and Lot 5808-F-2-B. The lots were portions of Lot No. 5808-F with an area
of 2,530 square meters, and registeted under Transfer Certificate of Title No. 78424 of the Registry of
Deeds in Cebu City in the name of "Arsenia Fernandez, of legal age, married to Simeon Cortes, both
Filipinos." Another subdivision lot derived from Lot No. 5808-F was Lot No. 5808-F-3. On May 11, 1992,
the Clarita Village Association erected a concrete perimeter fence to close the exit point of the right of way
of the Spouses Bardilas from Lot No. 5808-F-2-B to the existing road within Clarita Village. The closure
forced the Spouses Bardilas to use the second exit to Buhisan Road, which is from their Lot No. 5808-F-3.
Spouses Bardilas, through Atty. Alfredo J. Sipalay, informed the Spouses Mercader of the encroachment
by about 14 square meters of the latter's residential house and fence on the right of way. Spouses Mercader,
through Atty. Rolindo

Navarro, responded by insisting that as the owners of Lot No. 5808-F-2-A they were equally entitled to the
right of way; and that they were proposing to buy the equivalent portion of the right of way to which they
were entitled at a reasonable price. Spouses Bardilas rejected the claim of the Spouses Mercader that they
were entitled to the use of the right of way, and reiterated their demand for P30,000.00 as the fair market
value of the property. Finding the demand for payment of P30,000.00 by the Spouses Bardilas to be
unlawful, unwarranted and unfounded, the Spouses Mercader commenced on September 8, 1992 their
action for declaratory relief, injunction and damages against the Spouses Bardilas

ISSUE: Whether or not respondents are equally "entitled to the road-right-of-way being conferred upon
them by TITLE pursuant to Article 622 of the New Civil Code

RULING: Easement or servitude is a real right constituted on another's property, corporeal and immovable,
by virtue of which the owner of the same has to abstain from doing or to allow somebody else to do
something on his property for the benefit of another thing or person. It exists only when the servient and
dominant estates belong to two different owners. It gives the holder of the easement an incorporeal interest
on the land but grants no title thereto. Therefore, an acknowledgment of the easement is an admission that
the property belongs to another. It is settled that road right of way is a discontinuous apparent easement in
the context of Article 622 of the Civil Code, which provides that continuous non-apparent easements, and
discontinuous ones, whether apparent or not, may be acquired only by virtue of title. But the phrase with
existing Right of Way in the TCT is not one of the modes of acquisition of the easement by virtue of a title.
Acquisition by virtue of title, as used in Art. 622 of the Civil Code, refers to "the juridical act which gives
birth to the easement, such as law, donation, contract, and will of the testator."

What really defines a piece of land is not the area mentioned in its description, but the boundaries therein
laid down, as enclosing the land and indicating its limits. An encumbrance "subject to 3 meters wide right
of way" was annotated on TCT No. 107915, which covers Lot No. 5808-F2-B of the Spouses Bardilas. As
the owners of the servient estate, the Spouses Bardilas retained ownership of the road right of way even
assuming that said encumbrance was for the benefit of Lot No. 5808-F-2-A of the Spouses Mercader. The
latter could not claim to own even a portion of the road right of way because Article 630 of the Civil Code
expressly provides that "[t]he owner of the servient estate retains ownership of the portion on which the
easement is established, and may use the same in such manner as not to affect the exercise of the easement."
With the right of way rightfully belonging to them as the owners of the burdened property, the Spouses
Bardilas remained entitled to avail themselves of all the attributes of ownership under the Civil Code.

4. Republic of the Philippines vs. Apolonio Bautista Jr.

G.R. No. 166890, June 28, 2016
BERSAMIN, J.:

FACTS:

After acquiring Lot 17078 of Cad. 547-D, Subic Cadastre, located in Capisanan, Subic, Zambales from
Mario Jardin on February 15, 1971 and Cornelia Villanueva on May 25, 1973, Apolonio, Sr. had the
property declared for taxation purposes. He had been the sole and exclusive possessor and occupant from
the time of acquisition until his death, with no party questioning his possession and ownership, or staking
any adverse claim against him thereon. He died in 1987, and was succeeded by his children, namely:
respondent Apolonio, Jr. and his siblings. Apolonio, Sr.'s children executed an extra-judicial settlement of
their father's estate, whereby Apolonio, Jr. 's brothers and sisters waived their rights in his favor. Thus, the
property was declared for taxation purposes in Apolonio, Jr. 's name under Tax Declaration No. 014-0432A
of the Municipality of Subic, Zambales. There were no arrears in real estate taxes. The declared value was
P73,040.00. On October 21, 1996, Apolonio Jr. commenced LRC Case No. N-1210-96 in the MTC. He
later on testified that his father had been in actual possession since 1969, and had eventually acquired the
land from Jardin and Villanueva through the notarized Deeds of Absolute Sale dated February 15, 1971,
and May 25, 1973; and that his father had paid taxes on the land.

ISSUE: Whether or not Apolonio is entitled to the land

RULING: In its amendment of the Public Land Act that took effect on January 25, 1977, Presidential
Decree No. 1073 changed the length of the requisite possession from "thirty (30) years immediately
preceding the filing of the application" to possession "since June 12, 1945, or earlier. Apolonia, Jr. presented
only himself to establish the possession and ownership of his father, Apolonia, Sr., who was his immediate
predecessor-in-interest. He did not present as witnesses during the trial either of the transferors of Apolonia,
Sr. -that is, Mario Jardin or Cornelia Villanueva -to establish the requisite length of the possession of the
predecessors-in-interest of the applicant that would be tacked to his own. His personal incompetence to
attest to the possession of the property within the time required by law underscored the weakness of the
evidence on possession, particularly as it has not been denied that the applicant had arrived in the
Philippines only on November 28, 1987. Considering that the possession and occupation of the property in
question by Apolonia, Jr. and his predecessors-in-interest were not shown in the records to have been "since
June 12, 1945, or earlier," the application must be rejected. Only the title of those who had possessed and
occupied alienable and disposable lands of the public domain within the requisite period could be judicially
confirmed. Indeed, alienable public land held by a possessor, either personally or through his predecessors-
in-interest, openly, continuously and exclusively during the prescribed statutory period is converted to
private property by the mere lapse or completion of the period.

5. Mactan Cebu International Airport vs. Heirs of Gavina Ijordan

G.R. No. 173140, January 11, 2016
BERSAMIN, J.:

FACTS:

Julian Chizon (Julian) executed a Deed of Extrajudicial Settlement and Sale (Deed) covering Lot No. 4539
(subject lot) situated in Ibo, Municipality of Opon (now Lapu-Lapu City) in favor of the Civil Aeronautics
Administration (CAA), the predecessor-in-interest of petitioner Manila Cebu International Airport
Authority (MCIAA). Since then until the present, MCIAA remained in material, continuous, uninterrupted
and adverse possession of the subject lot through the CAA, later renamed the Bureau of Air Transportation
(BAT), and is presently known as the Air Transportation Office (ATO). The subject lot was transferred and
conveyed to MCIAA by virtue of Republic Act No. 6958. Respondents caused the judicial reconstitution
of the original certificate of title covering the subject lot (issued by virtue of Decree No. 531167).
Consequently, Original Certificate of Title (OCT) No. R0-2431 of the Register of Deeds of Cebu was
reconstituted for Lot No. 4539 in the names of the respondents' predecessors-in-interest. They asserted that
they had not sold their shares in the subject lot, and had not authorized Julian to sell their shares to MCIAA's
predecessor-in-interest.

ISSUE: Was the subject lot validly conveyed in its entirety to the petitioner

RULING: Both the CA and the RTC found the Deed and the Tax Declaration with which MCIAA would
buttress its right to the possession and ownership of the subject lot insufficient to substantiate the right of
MCIAA to the relief sought. CA and the RTC concluded that the Deed was void as far as the respondents'
shares in the subject lot were concerned, but valid as to Julian's share. Their conclusion was based on the
absence of the authority from his co-heirs in favor of Julian to convey their shares in the subject lot. We
have no reason to overturn the affirmance of the CA on the issue of the respondents' co-ownership with
Julian. Hence, the conveyance by Julian of the entire property pursuant to the Deed did not bind the
respondents for lack of their consent and authority in his favor. As such, the Deed had no legal effect as to
their shares in the property. Article 1317 of the Civil Code provides that no person could contract in the
name of another without being authorized by the latter, or unless he had by law a right to represent him; the
contract entered into in the name of another by one who has no authority or legal representation, or who
has acted beyond his powers, is unenforceable, unless it is ratified, expressly or impliedly, by the person on
whose behalf it has been executed, before it is revoked by the other contracting party. But the conveyance
by Julian through the Deed had full force and effect with respect to his share of 1/22 of the entire property
consisting of 546 square meters by virtue of its being a voluntary disposition of property on his part.

MCIAA's assertion of estoppel or ratification to bar the respondents' contrary claim of ownership of their
shares in the subject lot is bereft of substance. The doctrine of estoppel applied only to those who were
parties to the contract and their privies or successors-in-interest. Moreover, the respondents could not be
held to ratify the contract that was declared to be null and void with respect to their share, for there was
nothing for them to ratify. Verily, the Deed, being null and void, had no adverse effect on the rights of the
respondents in the subject lot.
TAXATION

1. Tridharma Marketing Corporation vs. Court of Tax Appeals

G.R. No. 215950, June 20, 201
BERSAMIN, J.:

FACTS:

Petitioner received a Preliminary Assessment Notice (PAN) from the Bureau of Internal Revenue (BIR)
assessing it with various deficiency taxes -income tax (IT), value-added tax (VAT), withholding tax on
compensation (WTC), expanded withholding tax (EWT) and documentary stamp tax (DST) -totalling
P4,640,394,039.97, inclusive surcharge and interest. A substantial portion of the deficiency income tax and
VAT arose from the complete disallowance by the BIR of the petitioner's purchases from Etheria Trading
in 2010 amounting to P4,942,937,053.82. The petitioner replied to the PAN. Petitioner received from the
BIR a Formal Letter of Demand assessing it with deficiency taxes for the taxable year ending December
31, 2010 amounting to P4,697,696,275.25, inclusive of surcharge and interest. It filed a protest against the
formal letter of demand. Respondent Commissioner of Internal Revenue (CIR) required the petitioner to
submit additional documents in support of its protest, and the petitioner complied. Petitioner received a
Final Decision on Disputed Assessment worth P4,473,228,667.87. petitioner filed with the CIR a protest
through a Request for Reconsideration. However, the CIR rendered a decision denying the request for
reconsideration.

ISSUE: Did the CTA in Division commit grave abuse of discretion in requiring the petitioner to file a
surety bond despite the supposedly patent illegality of the assessment that was beyond the petitioner's net
worth but equivalent to the deficiency assessment for IT and VAT?

RULING: CTA may order the suspension of the collection of taxes provided that the taxpayer either: (1)
deposits the amount claimed; or (2) files a surety bond for not more than double the amount. The surety
bond amounting to P4,467,391,881.76 imposed by the CTA was within the parameters delineated in Section
11 of R.A. 1125, as amended. The Court holds, however, that the CTA in Division gravely abused its
discretion under Section 11 because it fixed the amount of the bond at nearly five times the net worth of the
petitioner without conducting a preliminary hearing to ascertain whether there were grounds to suspend the
collection of the deficiency assessment on the ground that such collection would jeopardize the interests of
the taxpayer. Although the amount of P4,467,391,881.76 was itself the amount of the assessment, it
behoved the CTA in Division to consider other factors recognized by the law itself towards suspending the
collection of the assessment, like whether or not the assessment would jeopardize the interest of the
taxpayer, or whether the means adopted by the CIR in determining the liability of the taxpayer was legal
and valid. Simply prescribing such high amount of the bond like the initial 150% of the deficiency
assessment of P4,467,391,881.76 (or P6,701,087,822.64), or later on even reducing the amount of the bond
to equal the deficiency assessment would practically deny to the petitioner the meaningful opportunity to
contest the validity of the assessments, and would likely even impoverish it as to force it out of business.
Section 11 of R.A. 1125, as amended, indicates that the requirement of the bond as a condition precedent
to suspension of the collection applies only in cases where the processes by which the collection sought to
be made by means thereof are carried out in consonance with the law, not when the processes are in plain
violation of the law that they have to be suspended for jeopardizing the interests of the taxpayer. The Court
is not in the position to rule on the correctness of the deficiency assessment, which is a matter still pending
in the CTA. Conformably with the pronouncement in Pacquiao v. Court of Tax Appeals, First Division,
and the Commissioner of Internal Revenue, a ruling that has precedential value herein, the Court deems it
best to remand the matter involving the petitioner's plea against the correctness of the deficiency assessment
to the CTA for the conduct of a preliminary hearing in order to determine whether the required surety bond
should be dispensed with or reduced.

2. Coral Bay Nickel Corporation vs. Commissioner of Internal Revenue

G.R. No. 190506, June 13, 2016
BERSAMIN, J.:

FACTS:

The petitioner, a domestic corporation engaged in the manufacture of nickel and/or cobalt mixed sulphide,
is a VAT entity registered with the Bureau of Internal Revenue (BIR). It is also registered with the
Philippine Economic Zone Authority (PEZA) as an Ecozone Export Enterprise at the Rio Tuba Export
Processing Zone under PEZA Certificate of Registration. Petitioner filed its Amended VAT Return
declaring unutilized input tax from its domestic purchases of capital goods, other than capital goods and
services, for its third and fourth quarters of 2002 totalling P50,124,086.75. On June 14, 2004, it filed with
Revenue District Office No. 36 in Palawan its Application for Tax Credits/Refund (BIR Form 1914)
together with supporting documents. Due to the alleged inaction of the respondent, the petitioner elevated
its claim to the CTA on July 8, 2004 by petition for review, praying for the refund of the aforesaid input
VAT.

ISSUE: Was the petitioner, an entity located within an ECOZONE, entitled to the refund of its unutilized
input taxes incurred before it became a PEZA-registered entity?

RULING:

With the issuance of RMC 74-99, the distinction under the old rule was disregarded and the new circular
took into consideration the two important principles of the Philippine VAT system: the Cross Border
Doctrine and the Destination Principle. Section 8 of Republic Act No. 7916 mandates that PEZA shall
manage and operate the ECOZONE as a separate customs territory. The provision thereby establishes the
fiction that an ECOZONE is a foreign territory separate and distinct from the customs territory.
Accordingly, the sales made by suppliers from a customs territory to a purchaser located within an
ECOZONE will be considered as exportations. Following the Philippine VAT system's adherence to the
Cross Border Doctrine and Destination Principle, the VAT implications are that "no VAT shall be imposed
to form part of the cost of goods destined for consumption outside of the territorial border of the taxing
authority".

The petitioner's principal office was located in Barangay Rio Tuba, Bataraza, Palawan. Its plant site was
specifically located inside the Rio Tuba Export Processing Zone -a special economic zone (ECOZONE)
created by Proclamation No. 304, Series of 2002, in relation to Republic Act No. 7916. As such, the
purchases of goods and services by the petitioner that were destined for consumption within the ECOZONE
should be free of VAT; hence, no input VAT should then be paid on such purchases, rendering the petitioner
not entitled to claim a tax refund or credit. Verily, if the petitioner had paid the input VAT, the CTA was
correct in holding that the petitioner's proper recourse was not against the Government but against the seller
who had shifted to it the output VAT following RMC No. 42-03.
 3. Chevron Philippines Inc. vs. Commissioner of Internal Revenue G.R. No. 210836, September
1, 2015 BERSAMIN, J.:

FACTS:

Chevron sold and delivered petroleum products to CDC in the period from August 2007 to December 2007.
Chevron did not pass on to CDC the excise taxes paid on the importation of the petroleum products sold to
CDC in taxable year 2007; hence, on June 26, 2009, it filed an administrative claim for tax refund or
issuance of tax credit certificate in the amount of P6,542,400.00. Considering that respondent
Commissioner of Internal Revenue (CIR) did not act on the administrative claim for tax refund or tax credit,
Chevron elevated its claim to the CTA by petition for review on June 29, 2009. The case, docketed as CTA
Case No. 7939, was raffled to the CTAs First Division. The CTA First Division denied Chevrons judicial
claim for tax refund or tax credit.

ISSUE: whether Chevron was entitled to the tax refund or the tax credit for the excise taxes paid on the
importation of petroleum products that it had sold to CDC in 2007.

RULING: Under Section 12917 of the NIRC, as amended, excise taxes are imposed on two kinds of goods,
namely:

(a) goods manufactured or produced in the Philippines for domestic sales or consumption or for any
other disposition; and (b) things imported. Undoubtedly, the excise tax imposed under Section 129 of the
NIRC is a tax on property. With respect to imported things, Section 131 of the NIRC declares that excise
taxes on imported things shall be paid by the owner or importer to the Customs officers, conformably with
the regulations of the Department of Finance and before the release of such articles from the customs house,
unless the imported things are exempt from excise taxes and the person found to be in possession of the
same is other than those legally entitled to such tax exemption. For this purpose, the statutory taxpayer is
the importer of the things subject to excise tax.
Chevron, being the statutory taxpayer, paid the excise taxes on its importation of the petroleum products.
Pursuant to Section 135(c), supra, petroleum products sold to entities that are by law exempt from direct
and indirect taxes are exempt from excise tax. The phrase which are by law exempt from direct and indirect
taxes describes the entities to whom the petroleum products must be sold in order to render the exemption
operative. Section 135(c) should thus be construed as an exemption in favor of the petroleum products on
which the excise tax was levied in the first place. The exemption cannot be granted to the buyers that is,
the entities that are by law exempt from direct and indirect taxes because they are not under any legal
duty to pay the excise tax. Inasmuch as its liability for the payment of the excise taxes accrued immediately
upon importation and prior to the removal of the petroleum products from the customshouse, Chevron was
bound to pay, and actually paid such taxes. But the status of the petroleum products as exempt from the
excise taxes would be confirmed only upon their sale to CDC in 2007 (or, for that matter, to any of the
other entities or agencies listed in Section 135 of the NIRC). Before then, Chevron did not have any legal
basis to claim the tax refund or the tax credit as to the petroleum products. Payment of the excise taxes by
Chevron upon its importation of petroleum products was deemed illegal and erroneous upon the sale of the
petroleum products to CDC.

4. Commissioner of Customs vs. Oilink International Corporation

G.R. No. 161759, July 02, 2014
BERSAMIN, J.:
FACTS:

Union Refinery Corporation was established under the Corporation Code of the Philippines. In the course
of its business undertakings, URC imported oil products into the country. On January 11, 1996, Oilink was
incorporated, URC and Oilink having interlocking directors when Oilink started its business. In applying
for and in expediting the transfer of the operators name for the Customs Bonded Warehouse then operated
by URC, Esther Magleo, the Vice-President and General Manager of URC, sent a to manifest that URC
and Oilink had the same Board of Directors and that Oilink was 100% owned by URC.

Oscar Brillo, the District Collector of the Port of Manila, formally demanded that URC pay the taxes and
duties on its oil imports. On April 16, 1998, Brillo made another demand letter to URC.URC, through its
counsel, responded to the demands by seeking the landed computations of the assessments, and challenged
the inconsistencies of the demands.

Customs Commissioner Pedro C. Mendoza formally directed that URC pay the amount of P119,223,541.71
representing URCs special duties, VAT, and Excise Taxes that it had failed to pay. On December 23, 1998,
upon his assumption of office, Customs Commissioner Nelson Tan transmitted another demand letter to
URC affirming the assessment of P99,216,580.10 by Commissioner Mendoza. Magleo, in behalf of URC,
replied by letter to Commissioner Tans affirmance by denying liability, insisting instead that only
P28,933,079.20 should be paid by way of compromise.Commissioner Tan responded by rejecting Magleos
proposal.

On May 24, 1999, Manuel Co, URCs President, conveyed to Commissioner Tan URCs willingness to pay
only P94,216,580.10, of which the initial amount of P28,264,974.00 would be taken from the collectibles
of Oilink from the National Power Corporation, and the balance to be paid in monthly installments over a
period of three years to be secured with corresponding post-dated checks and its future available tax
credits.On July 2, 1999, Commissioner Tan made a final demand for the total liability of P138,060,200.49
upon URC and Oilink. Also on July 8, 1999, Oilink formally protested the assessment on the ground that it
was not the party liable for the assessed deficiency taxes.

Commissioner Tan communicated in writing the detailed computation of the tax liability, stressing that the
Bureau of Customs (BoC) would not issue any clearance to Oilink unless the amount of P138, 060,200.49
demanded as Oilinks tax liability be first paid. Thus, on July 30, 1999, Oilink appealed to the CTA. The
CTA rendered its decision declaring as null and void the assessment of the Commissioner of Customs.
Aggrieved, the Commissioner of Customs brought a petition for review in the CA.

On the issue of the jurisdiction of the CTA, the CA found that the petitioners submission is untenable. As
to whether or not the Commissioner of Customs could lawfully pierce the veil of corporate fiction in order
to treat Oilink as the mere alter ego of URC, the CA concurred with the CTA. Hence, this appeal, whereby
the Commissioner of Customs reiterates the raised in the CA.

ISSUES:

II. Whether or not the CTA gravely erred in holding that it had jurisdiction over the subject matter;

JJ. Whether or not the CTA gravely erred in holding that Oilink had a cause of action; and
KK. Whether or not the CTA gravely erred in holding that the Commissioner of Customs could not
pierce the veil of corporate fiction.

RULING: NO. Oilink had a valid cause of action.The Commissioner of Customs posits that Oilink did
not exhaust its administrative remedies under Section 2308 of the Tariff and Customs Code by paying the
assessment under protest.

The position of the Commissioner of Customs lacks merit. The CA correctly held that the principle of non-
exhaustion of administrative remedies was not an iron-clad rule because there were instances in which the
immediate resort to judicial action was proper. This was one such exceptional instance when the principle
did not apply. As the records indicate, the Commissioner of Customs already decided to deny the protest
by Oilink on July 12, 1999, and stressed then that the demand to pay was final. In that instance, the
exhaustion of administrative remedies would have been an exercise in futility because it was already the
Commissioner of Customs demanding the payment of the deficiency taxes and duties.

NO. There was no ground to pierce the veil of corporate existence. A corporation, upon coming into
existence, is invested by law with a personality separate and distinct from those of the persons composing
it as well as from any other legal entity to which it may be related. The separate and distinct personality of
the corporation is, however, a mere fiction established by law for convenience and to promote the ends of
justice. It may not be used or invoked for ends that subvert the policy and purpose behind its establishment,
or intended by law to which the corporation owes its being. This is true particularly when the fiction is used
to defeat public convenience, to justify wrong, to protect fraud, to defend crime, to confuse legitimate legal
or judicial issues, to perpetrate deception or otherwise to circumvent the law. In such instances, the veil of
corporate entity will be pierced or disregarded with reference to the particular transaction involved.

Indeed, the doctrine of piercing the corporate veil has no application here because the Commissioner of
Customs did not establish that Oilink had been set up to avoid the payment of taxes or duties, or for purposes
that would defeat public convenience, justify wrong, protect fraud, defend crime, confuse legitimate legal
or judicial issues, perpetrate deception or otherwise circumvent the law. It is also noteworthy that from the
outset the Commissioner of Customs sought to collect the deficiency taxes and duties from URC, and that
it was only on July 2, 1999 when the Commissioner of Customs sent the demand letter to both URC and
Oilink. That was revealing, because the failure of the Commissioner of Customs to pursue the remedies
against Oilink from the outset manifested that its belated pursuit of Oilink was only an afterthought.

5. Agriex Co. Ltd. Vs. Hon. Titus Villanueva

G.R. No. 158150, September 10, 2014
BERSAMIN, J.:

FACTS:

The petitioner, a foreign corporation whose principal office was in Bangkok, Thailand, entered into a
contract of sale with PT. Gloria Mitra Niagatama International of Surabaya, Indonesia for 180,000 bags of
Thai white rice. Later on, it entered into another contract of sale with R&C Agro Trade of Cebu City for
20,000 bags of Thai white rice. It chartered the vessel MV Hung Yen to transport the 200,000 bags of Thai
white rice to the Subic Free Port for transshipment to their designated consignees in the Fiji Islands and
Indonesia (for the 180,000 bags), and in Cebu City (for the 20,000 bags). The MV Hung Yen arrived at the
Subic Free Port on August 20, 2001 with the inward foreign manifest indicating the final destinations of
the shipment. However, the Sea Port Department of the Subic Bay Metropolitan Authority allowed the
vessel to berth only 22 days later, or on September 11, 2001. SBMA advised the vessel agent to secure from
the National Food Authority an amendment of the import permit issued in favor of R&C Agro Trade to
change the discharging port from the Port of Cebu to the Port of Subic.

Due to the delay in the berthing and unloading of the cargo from the vessel, the petitioner, through its agent
in Subic, applied for a vessel exit clearance to allow the MV Hung Yen to sail for the Labuan Free Port in
Malaysia which was granted by the Bureau of Customs. Despite the issuance of the clearance, the MV
Hung Yen did not set sail for the Labuan Free Port.

On September 10, 2001, the petitioner requested permission from the Bureau of Customs to unload the
entire shipment of 200,000 bags of Thai white rice because the MV Hung Yen must return to Vietnam.
Upon the recommendation of Atty. Enriquez and Atty. Heraldo, respondent Commissioner Villanueva
issued his 1st Indorsement directing respondent Collector of Customs Bibit to issue a Warrant of Seizure
and Detention (WSD) against the 20,000 bags of Thai white rice consigned to R&C Agro Trade.
Accordingly, Collector Bibit issued WSD No. 2001-13 against the 20,000 bags of Thai white rice consigned
to R&C Agro Trade notwithstanding that no bag of rice had yet been unloaded from the vessel. After the
unloading, transfer and storage of the rice shipment at SBMAs warehouse, Collector Bibit issued amended
WSDs to cover the MV Hung Yen and the remaining 180,000 bags of Thai white rice intended for
transshipment.

On October 4, 2001, the petitioner filed with the Bureau of Customs in the Port of Subic an Urgent Motion
to Quash Warrant of Seizure, inclusive of WSD No. 2001-13 and WSD No. 2001-13B.Collector Bibit
quashed WSD No. 2001-13A over the MV Hung Yen on the ground that the vessel was not chartered or
leased.

Pending hearing of the seizure proceedings vis--vis the rice shipments, Collector Bibit issued a Notice of
Sale setting therein the auction sale of the 200,000 bags of Thai white rice. The petitioner filed a
Manifestation and Urgent Motion for Reconsideration but Collector Bibit did not act on the motion.
Consequently, the petitioner instituted the petition for certiorari and prohibition in the CA on November
12, 2001 (with prayer for the issuance of a temporary restraining order and/or writ of injunction).
Accordingly, Commissioner Villanueva issued his memorandum dated directing Collector Bibit not to
proceed with the scheduled auction of the 180,000 bags of Thai white rice until further orders from his
office.
On November 22, 2001, the CA issued a temporary restraining order enjoining the respondents to desist
from holding the scheduled public auction. Meanwhile, on November 14, 2001, Collector Bibit denied the
motion for the quashal of the warrant of seizure issued against the rice shipments, and ordered their
forfeiture in favor of the Government. The petitioner appealed the November 14, 2001 ruling by Collector
Bibit to Commissioner Villanueva, the latter granted the motion for settlement and accordingly order the
release of the 20,000 bags of Thai rice to claimants.

On July 22, 2002, Commissioner Antonio M. Bernardo, who had meanwhile succeeded Commissioner
Villanueva, released the 2nd Indorsement directing the sale of the 180,000 bags of Thai white rice at public
auction. Eventually, the auction sale went on as scheduled, and the proceeds were deposited in the Land
Bank of the Philippines, Subic Branch, under Bureau of Customs Trust Fund II Account No. 1572100800.
On November 18, 2002, the CA rendered its assailed judgment denying the petition for certiorari and
prohibition. The petitioner moved for reconsideration, but the CA denied the motion. Hence, this petition
for review.

ISSUES: Whether or not the CA erred in not declaring the seizure proceedings null and void for lack of
jurisdiction over petitioners rice shipment.

RULING:

The Subic Special Economic Zone, or the Subic Bay Freeport, was established pursuant to Section 12 of
Republic Act No. 7227 (The Bases Conversion and Development Act of 1992), to be operated and managed
as a special customs territory. On the other hand, the Subic Bay Metropolitan Authority (SBMA) was
created under Section 13 of RA No. 7227 to serve as an operating and implementing arm of the Conversion
Authority within the SBF.

The petitioner claims that the Collector of Customs had no jurisdiction to issue WSD No. 2001-13B and
the Notice of Sale concerning the 180,000 bags of Thai white rice, which had entered the SBF only for
transshipment to other countries. It insists that the auction sale of the 180,000 bags was null and void for
failing to comply with Executive Order No. 272, which required presidential approval when the amount to
be generated from the sale was at least P50 Million. The Court declares that the Collector of Customs was
authorized to institute seizure proceedings and to issue WSDs in the Subic Bay Freeport, subject to the
review by the Commissioner of Customs. Accordingly, the proper remedy to question the order or
resolution of the Commissioner of Customs was an appeal to the CTA, not to the CA.

Although RA No. 7227 is silent as to the person or entity vested with the authority to seize and forfeit or
detain goods and articles entering the Subic Bay Freeport, the implementing rules and regulations (IRR) of
RA No. 7227 provides that customs officers may seize any article found during a Customs search upon
entering or leaving the SBF to be in violation of any provision of the customs laws for which a seizure is
authorized, and such seizure shall be disposed of according to the customs laws. Articles which are
prohibited or excluded from the SBF under the rules and regulations of the SBMA which are found by the
Customs officials during an audit, examination or check within the SBF may be seized by them and turned
over to the SBMA for disposition.

Customs Administrative Order No. 4-93 (CAO 4-93), also known as the Rules and Regulations for Customs
Operations in the Subic Special Economic and Freeport Zone, similarly provides; Any prohibited or
excluded articles found upon search, or through any examination, audit or check of articles in the Zone by
Customs may be seized by Customs for violations of Tariff and Customs Code of the Philippines as amended
and disposed of in accordance with law.

Under these statutory provisions, both the SBMA and the Bureau of Customs have the power to seize and
forfeit goods or articles entering the Subic Bay Freeport, except that SBMAs authority to seize and forfeit
goods or articles entering the Subic Bay Freeport has been limited only to cases involving violations of RA
No. 7227 or its IRR. There is no question therefore, that the authority of the Bureau of Customs is larger in
scope because it covers cases concerning violations of the customs laws.

The authority of the Bureau of Customs to seize and forfeit goods and articles entering the Subic Bay
Freeport does not contravene the nature of the Subic Bay Freeport as a separate customs authority. Indeed,
the investors can generally and freely engage in any kind of business as well as import into and export out
goods with minimum interference from the Government. In this case, an examination of the shipment by
the customs officials pursuant to Mission Order No. 06-2001 initially revealed no cause to hold the release
of the 180,000 bags of rice. However, further investigation led to the discovery that the consignees of the
180,000 bags of rice in Indonesia were non-existent, and the consignee in the Fiji Islands denied being
involved in the importation of rice.

The findings constituted sufficient probable cause, as required by Section 2535 of the Tariff and Customs
Code, that violations of the customs laws, particularly Section 102(k) and Section 2530, (a), (f) and (l), par.
3, 4, and 5 of the Tariff and Customs Code,had been committed. For that reason, the institution of the
seizure proceedings and the issuance of WSD No. 2001-13B by the Collector of Customs were well within
the jurisdiction of the Bureau of Customs.

It is well settled that the Collector of Customs has exclusive jurisdiction over seizure and forfeiture
proceedings, and regular courts cannot interfere with his exercise thereof or stifle or put it at naught. The
Collector of Customs sitting in seizure and forfeiture proceedings has exclusive jurisdiction to hear and
determine all questions touching on the seizure and forfeiture of dutiable goods. Regional trial courts are
devoid of any competence to pass upon the validity or regularity of seizure and forfeiture proceedings
conducted by the BOC and to enjoin or otherwise interfere with these proceedings. Regional trial courts are
precluded from assuming cognizance over such matters even through petitions for certiorari, prohibition
or mandamus.

Verily, the rule is that from the moment imported goods are actually in the possession or control of the
Customs authorities, even if no warrant for seizure or detention had previously been issued by the Collector
of Customs in connection with the seizure and forfeiture proceedings, the BOC acquires exclusive
jurisdiction over such imported goods for the purpose of enforcing the customs laws, subject to appeal to
the Court of Tax Appeals whose decisions are appealable to this Court.

The issuance of the October 18, 2001 Notice of Sale was merely an incident of the seizure proceedings
commenced by the Collector of Customs. Consequently, the correctness of its issuance was necessarily
subsumed to the determination of the propriety of the seizure proceedings, a matter that was within the
exclusive jurisdiction of the Bureau of Customs. In that context, the proper recourse of the petitioner from
the Consolidated Order of Commissioner Villanueva, which reviewed the November 14, 2001 action of
Collector Bibit, was an appeal in due course to the CTA, in accordance with Section 7(4) of RA No. 1125,
as amended, in relation to Section 2402 of the Tariff and Customs Code within 30 days after the receipt of
the order. Without the appeal having been timely filed in the CTA, the February 4, 2002 Consolidated Order
became final and executory.
MERCANTILE LAW
1. Terelay Investment and Development Corporation vs. Cecilia Teresita
G.R. No. 160924, August 5, 2015
BERSAMIN, J.:

FACTS:
Asserting her right as a stockholder, Cecilia Teresita Yulo wrote a letter addressed to Terelay Investment
and Development Corporation (TERELAY) requesting that she be allowed to examine its books and records
at the latters office on the 25th floor, Citibank Tower, Makati City. TERELAY denied the request for
inspection and instead demanded that she show proof that she was a bona fide stockholder. Cecilia Yulo
again sent another letter clarifying that her request for examination of the corporate records was for the
purpose of inquiring into the financial condition of TERELAY and the conduct of its affairs by the principal
officers. The following day, Cecilia Yulo received a faxed letter from TERELAYs counsel advising her
not to continue with the inspection in order to avoid trouble. Cecilia Yulo filed with the Securities and
Exchange Commission (SEC), a Petition for Issuance of a Writ of Mandamus with prayer for Damages
against TERELAY. In her petition, she prayed that judgment be rendered ordering TERELAY to allow her
to inspect its corporate records, books of account and other financial records.
ISSUE: Whether or not Cecilia Yulo is a stockholder and therefore, has the right to inspect the corporate
books and records
RULING: Yes. Cecilia Yulo has the right to be fully informed of TERELAY's corporate condition and the
manner its affairs are being managed.
TERELAY points out that Yulos name as incorporator, stockholder and director in the Articles of
Incorporation and Amendments were unsigned; that she did not pay for the five shares appearing in the
Amended Articles of Incorporation and General Information Sheet of TERELAY; that she did not subscribe
to the shares; that she has neither been in possession of nor seen the certificate of stock covering the five
shares of stock; that the donation of the five shares claimed by her was null and void for failure to comply
with the requisites of a donation under Art. 748 of the Civil Code; and that there was no acceptance of the
donation by her as donee. TERELAY further contends that Cecilia Yulo's purpose in inspecting the books
was to inquire into its financial condition and the conduct of its affairs by the principal officers which are
not sufficient and valid reasons. Therefore, the presumption of good faith cannot be accorded her.
It is well-settled that the ownership of shares of stock gives stockholders the right under the law to be
protected from possible mismanagement by its officers. This right is predicated upon self-preservation. The
records disclose that the corporate documents submitted, which include the Articles of Incorporation and
the Amended Articles of Incorporation, as well as the General Information Sheets and the Quarterly Reports
all bear the signatures of the proper parties and their authorized custodians. The signature of respondent
under the name Cecilia J. Yulo appears in the Articles of Incorporation of TERELAY. Likewise, her
signatures under the name Cecilia Y. Blancaflor appear in the Amended Articles of Incorporation where
she signed as Director and Corporate Secretary of TERELAY. The General Information Sheets from
December 31, 1977 up to February 20, 2002 all exhibited that she was recognized as director and corporate
secretary, and that she had subscribed to five (5) shares of stock. The quarterly reports do not show
otherwise.
Verily, respondent has presented enough evidence that she is a stockholder of TERELAY. The corporate
documents presented support her claim that she is a registered stockholder in TERELAY's stock and transfer
book thus giving her the right, under Section 74 par. 2 and Section 75 of the Philippine Corporation Law,
to inspect TERELAY's books, records, and financial statements. Further, a careful review of the records
would show that in the Preliminary Conference Order, dated May 16, 2000, of the SEC Hearing Officer,
both parties represented by their respective counsels, agreed on the fact that respondent was "registered as
a stockholder in petitioner's stock and transfer book subject to the qualifications in the Answer." The records
failed to disclose any objection by TERELAY. In any case, TERELAY did not adduce sufficient proof that
Cecilia Yulo was in bad faith or had an ulterior motive in demanding her right under the law.
The petitioner's submission that the respondent's "insignificant holding" of only .001% of the petitioner's
stockholding did not justify the granting of her application for inspection of the corporate books and records
is also unwarranted. The Corporation Code has granted to all stockholders the right to inspect the corporate
books and records, and in so doing has not required any specific amount of interest for the exercise of the
right to inspect. Ubi lex non distinguit nee nos distinguere debemos. When the law has made no distinction,
we ought not to recognize any distinction.
2. Interport Resources Corp. vs. Securities Specialist Inc and R.C. Lee Securities Inc.
G.R. No. 154069, June 6, 2016
BERSAMIN, J.:

FACTS:
In January 1977, Oceanic Oil & Mineral Resources, Inc. entered into a subscription agreement with R.C.
Lee, a domestic corporation engaged in the trading of stocks and other securities, covering 5,000,000 of its
shares with par value of P0.01 per share, for a total of P50,000.00. Thereupon, R.C. Lee paid 25% of the
subscription, leaving 75% unpaid. Consequently, Oceanic issued Subscription Agreements Nos. 1805,
1808, 1809, 1810, and 1811 to R.C. Lee. Oceanic merged with Interport, with the latter as the surviving
corporation. Interport was a publicly-listed domestic corporation whose shares of stocks were traded in the
stock exchange. Under the terms of the merger, each share of Oceanic was exchanged for a share of
lnterport. SSI, a domestic corporation registered as a dealer in securities, received in the ordinary course of
business Oceanic Subscription Agreements Nos. 1805, 1808 to 1811, all outstanding in the name of R.C.
Lee, and Oceanic official receipts showing that 25% of the subscriptions had been paid. The Oceanic
subscription agreements were duly delivered to SSI through stock assignments indorsed in blank by R.C.
Lee. Later on, R.C. Lee requested Interport for a list of subscription agreements and stock certificates issued
in the name of R.C. Lee and other individuals named in the request. Upon finding no record showing any
transfer or assignment of the Oceanic subscription agreements and stock certificates of Interport as
contained in the list, R.C. Lee paid its unpaid subscriptions and was accordingly issued stock certificates
corresponding thereto. SSI directly tendered payment to lnterport for the balance of the 5,000,000 shares
covered by the Oceanic subscription agreements, some of which were in the name of R.C. Lee and indorsed
in blank. Interport originally rejected the tender of payment for all unpaid subscriptions on the ground that
the Oceanic subscription agreements should have been previously converted to shares in lnterport.
ISSUE: Whether or not Interport was liable to deliver the Oceanic shares of stock, or the value thereof
RULING: Yes. The SEC correctly categorized the assignment of the subscription agreements as a form of
novation by substitution of a new debtor and which required the consent of or notice to the creditor. Under
the Civil Code, obligations may be modified by: (1) changing their object or principal conditions; or (2)
substituting the person of the debtor; or (3) subrogating a third person in the rights of the creditor. Novation,
which consists in substituting a new debtor in the place of the original one, may be made even without the
knowledge or against the will of the latter, but not without the consent of the creditor. In this case, the
change of debtor took place when R.C. Lee assigned the Oceanic shares under Subscription Agreement
Nos. 1805, and 1808 to 1811 to SSI so that the latter became obliged to settle the 75% unpaid balance on
the subscription. The SEC likewise did not err in appreciating the fact that Interport was duly notified of
the assignment when SSI tendered its payment for the 75% unpaid balance, and that it could not anymore
refuse to recognize the transfer of the subscription that SSI sufficiently established by documentary
evidence. The effect of the assignment of the subscription agreements to SSI was to extinguish the
obligation of R.C. Lee to Oceanic, now Interport, to settle the unpaid balance on the subscription. As a
result of the assignment, Interport was no longer obliged to accept any payment from R.C. Lee because the
latter had ceased to be privy to Subscription Agreements Nos. 1805, and 1808 to 1811 for having been
extinguished insofar as it was concerned. On the other hand, Interport was legally bound to accept SSI's
tender of payment for the 75% balance on the subscription price because SSI had become the new debtor
under Subscription Agreements Nos. 1805, and 1808 to 1811. As such, the issuance of the stock certificates
in the name of R.C. Lee had no legal basis in the absence of a contractual agreement between R. C. Lee and
Interport.
Under Section 63 of the Corporation Code, no transfer of shares of stock shall be valid, except as between
the parties, until the transfer is recorded in the books of the corporation so as to show the names of the
parties to the transaction, the date of the transfer, the number of the certificate or certificates and the number
of shares transferred. This statutory rule cannot be strictly applied herein, however, because lnterport had
unduly refused to recognize the assignment of the shares between R.C. Lee and SSL. Subscription
Agreements Nos. 1805, and 1808 to 1811 were now binding between Interport and SSI only, and only such
parties were expected to comply with the terms thereof.
3. Victorio Diaz vs. People of the Philippines and Levi Strauss
G.R. No. 180677, February 18, 2013
BERSAMIN, J.:

FACTS:
After receiving information that Diaz was selling counterfeit LEVIS 501 jeans in his tailoring shops in
Almanza and Talon, Las Pias City, Levis Philippines hired a private investigation group to verify the
information. Armed with the search warrants, NBI agents searched the tailoring shops of Diaz and seized
several fake LEVIS 501 jeans from them. Levis Philippines claimed that it did not authorize the making
and selling of the seized jeans; that each of the jeans were mere imitations of genuine LEVIS 501 jeans by
each of them bearing the registered trademarks, like the arcuate design, the tab, and the leather patch; and
that the seized jeans could be mistaken for original LEVIS 501 jeans due to the placement of the arcuate,
tab, and two-horse leather patch. Department of Justice filed two informations in the RTC of Las Pias
City, charging Diaz with violation of Section 155, in relation to Section 170, of Republic Act No. 8293,
also known as the Intellectual Property Code of the Philippines.
ISSUE: (1) Whether the CA properly dismissed the appeal of Diaz due to the late filing of his appellants
brief (2) Whether or not Diaz committed trademark infringement
RULING: (1) No (2) No. Under Section 7, Rule 44 of the Rules of Court, the appellant is required to file
the appellants brief in the CA within forty-five (45) days from receipt of the notice of the clerk that all
the evidence, oral and documentary, are attached to the record, seven (7) copies of his legibly typewritten,
mimeographed or printed brief, with proof of service of two (2) copies thereof upon the appellee. Section
1(e) of Rule 50 of the Rules of Court grants to the CA the discretion to dismiss an appeal either motu proprio
or on motion of the appellee should the appellant fail to serve and file the required number of copies of the
appellants brief within the time provided by the Rules of Court. The usage of the word may in Section 1(e)
of Rule 50 indicates that the dismissal of the appeal upon failure to file the appellants brief is not
mandatory, but discretionary. Verily, the failure to serve and file the required number of copies of the
appellants brief within the time provided by the Rules of Court does not have the immediate effect of
causing the outright dismissal of the appeal. Under the circumstances, the failure to file the appellants brief
on time rightly deserved the outright rejection of the appeal. The acts of his counsel bound Diaz like any
other client. It was, of course, only the counsel who was well aware that the Rules of Court fixed the periods
to file pleadings and equally significant papers like the appellants brief with the lofty objective of avoiding
delays in the administration of justice.
The elements of the offense of trademark infringement under the Intellectual Property Code are, therefore,
the following:
a. The trademark being infringed is registered in the Intellectual Property Office;
b. The trademark is reproduced, counterfeited, copied, or colorably imitated by the infringer;
c. The infringing mark is used in connection with the sale, offering for sale, or advertising of any
goods, business or services; or the infringing mark is applied to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be used upon or in connection with such goods,
business or services;
d. The use or application of the infringing mark is likely to cause confusion or mistake or to deceive
purchasers or others as to the goods or services themselves or as to the source or origin of such
goods or services or the identity of such business; and
e. The use or application of the infringing mark is without the consent of the trademark owner or the
assignee thereof.
As can be seen, the likelihood of confusion is the gravamen of the offense of trademark infringement. There
are two tests to determine likelihood of confusion, namely: the dominancy test, and the holistic test. The
dominancy test focuses on the similarity of the main, prevalent or essential features of the competing
trademarks that might cause confusion. Infringement takes place when the competing trademark contains
the essential features of another. Imitation or an effort to imitate is unnecessary. The question is whether
the use of the marks is likely to cause confusion or deceive purchasers. The holistic test considers the
entirety of the marks, including labels and packaging, in determining confusing similarity. The focus is not
only on the predominant words but also on the other features appearing on the labels.
The holistic test is applicable here considering that the herein criminal cases also involved trademark
infringement in relation to jeans products. Accordingly, the jeans trademarks of Levis Philippines and Diaz
must be considered as a whole in determining the likelihood of confusion between them. The maong pants
or jeans made and sold by Levis Philippines, which included LEVIS 501, were very popular in the
Philippines. The consuming public knew that the original LEVIS 501 jeans were under a foreign brand
and quite expensive. Such jeans could be purchased only in malls or boutiques as ready-to-wear items, and
were not available in tailoring shops like those of Diazs as well as not acquired on a made-to-order basis.
Under the circumstances, the consuming public could easily discern if the jeans were original or fake
LEVIS 501, or were manufactured by other brands of jeans. Confusion and deception were remote. Diaz
used the trademark LS JEANS TAILORING for the jeans he produced and sold in his tailoring shops.
His trademark was visually and aurally different from the trademark LEVI STRAUSS & CO appearing
on the patch of original jeans under the trademark LEVIS 501. The word LS could not be confused as a
derivative from LEVI STRAUSS by virtue of the LS being connected to the word TAILORING,
thereby openly suggesting that the jeans bearing the trademark LS JEANS TAILORING came or were
bought from the tailoring shops of Diaz, not from the malls or boutiques selling original LEVIS 501 jeans
to the consuming public. There were other remarkable differences between the two trademarks that the
consuming public would easily perceive. Moreover, based on the certificate issued by the Intellectual
Property Office, LS JEANS TAILORING was a registered trademark of Diaz. He had registered his
trademark prior to the filing of the present cases.21 The Intellectual Property Office would certainly not
have allowed the registration had Diazs trademark been confusingly similar with the registered trademark
for LEVIS 501 jeans.

4. Microsoft Corporation vs. Rolando Manansala

G.R. No. 166391, October 21, 2015
BERSAMIN, J.:

FACTS:
Petitioner is the copyright and trademark owner of all rights relating to all versions and editions of Microsoft
software (computer programs). Private Respondent-Rolando Manansala is doing business under the name
of DATAMAN TRADING COMPANY and/or COMIC ALLEY with business address at 3rd Floor,
University Mall Building, Taft Ave., Manila. Private Respondent Manansala, without authority from
petitioner, was engaged in distributing and selling Microsoft computer software programs. Mr. John
Benedict A. Sacriz, a private investigator accompanied by an agent from the National Bureau of
Investigation (NBI) was able to purchase six (6) CD-ROMs containing various computer programs
belonging to petitioner. Search Warrant was issued against the premises of the private respondent. The
search warrant was served on the private respondents premises and yielded several illegal copies of
Microsoft programs. Petitioner, through Atty. Teodoro Kalaw IV filed an Affidavit-Complaint in the DOJ
based on the results of the search and seizure operation conducted on private respondents premises.
ISSUE: Whether or not the mere selling of pirated computer software constituted copyright infringement.
RULING: Sec. 5 of PD 49 specifically defined copyright as an exclusive right in the following manner:
a. To print, reprint, publish, copy, distribute, multiply, sell and make photographs, photo-
engravings and pictorial illustrations of the works;
b. To make any translation or other version or extracts or arrangements or adaptations thereof;
to dramatize it if it be a non-dramatic work; to convert it into a non-dramatic work if it be a drama;
to complete or execute if it be a model or design;
c. To exhibit, perform, represent, produce, or reproduce, the work in any manner or by any
method whatever for profit or otherwise; it not reproduced in copies for sale, to sell any manuscript
or any record whatsoever thereof;
d. To make any other use or disposition of the work consistent with the laws of the land.
The gravamen of copyright infringement is not merely the authorized manufacturing of intellectual works
but rather the unauthorized performance of any of the acts covered by Sec. 5. Accordingly, the commission
of any of the acts mentioned in Sec. 5 of PD 49 without copyright owners consent constituted actionable
copyright infringement. Presidential Decree No. 49 thereby already acknowledged the existence of
computer programs as works or creations protected by copyright. To hold, as the CA incorrectly did, that
the legislative intent was to require that the computer programs be first photographed, photoengraved, or
pictorially illustrated as a condition for the commission of copyright infringement invites ridicule. Such
interpretation of Section 5(a) of Presidential Decree No. 49 defied logic and common sense because it
focused on terms like copy, multiply, and sell, but blatantly ignored terms like photographs,
photo-engravings, and pictorial illustrations.
In this case, the mere sale of the illicit copies of the software programs was enough by itself to show the
existence of probable cause for copyright infringement. There was no need for the petitioner to still prove
who copied, replicated or reproduced the software programs.

5. Capital Insurance and Surety Co. vs. Del Monte Motor Works
G.R. No. 159979, December 9, 2015
BERSAMIN, J. .

FACTS:
Respondent sued Vilfran Liner, Inc., Hilaria F. Villegas and Maura F. Villegas in the Regional Trial Court
in Quezon City (RTC) to recover the unpaid billings related to the fabrication and construction of 35
passenger bus bodies. It applied for the issuance of a writ of preliminary attachment. Branch 221 of the
RTC, to which the case was assigned, issued the writ of preliminary attachment, which the sheriff served
on the defendants, resulting in the levy of 10 buses and three parcels of land belonging to the defendants.
The sheriff also sent notices of garnishment of the defendants funds in the Quezon City branches of BPI
Family Bank, China. Bank, Asia Trust Bank, City Trust Bank, and Bank of the Philippine Island. The levy
and garnishment prompted defendant Maura F. Villegas to file an Extremely Urgent Motion 'to Discharge
Upon Filing of a Counterbond. On July 2, 1997, the RTC approved the counterbond and discharged the
writ of preliminary attachment. On January 15, 2002, the RTC rendered its decision in favor of the
respondent.
ISSUE: Are the securities deposited by1 the insurance company pursuant to I Section 203 of the Insurance
Code 1subject of levy by a creditor?
RULING: The petitioner cannot evade liability under the counterbond by hiding behind its own internal
rules. Although a prospective applicant seeking insurance coverage is expected to exercise prudence and
diligence in selecting the insurance provider, such responsibility does not require the prospective applicant
to know and be aware of the insurer's internal rules, policies and procedure adopted for the conduct of its
business. Considering that the petitioner has been a duly accredited bonding company, the officers who
signed the bonds were presumed to be acting within the scope of their authority in behalf of the company,
and the courts were not expected to verify the limits of the authority of the ,signatories of the bonds
submitted in the regular course of judicial business, in the same manner that the applicants for the bonds
were not expected to know the limits of the authority of the signatories. To insist otherwise is absurd. It is
reasonable to hold here, therefore, that as between the petitioner and the respondent, the one who employed
and gave character to the third person as its agent should be the one to bear the loss. That party was the
petitioner.
Likewise, the petitioner's argument that the counterbond was invalid because the counterbond was
unaccounted for and missing from its custody was implausible. The argument totally overlooks a simple
tenet that honesty, good faith, and fair dealing required it a's the insurer to communicate such an important
fact to the assured, or at least keep the latter updated on the relevant facts. A contrary view would place
every person seeking insurance at the insurer's mercy because the latter would simply claim so just to escape
liability, thus causing uncertainty to the public and defeating the very purpose for which the insurance was
contracted.
An insurer or bonding company like the petitioner that seeks to defeat a claim on the ground that the
counterbond was invalidly issued has the burden of proving such defense. However, the petitioner did not
discharge the burden herein. No less than the officers charged with the responsibility of making sure that
all forms and records of the petitioner were audited admitted that the missing counterbond as in fact a valid
pre-approved form of the Insurance Commission, so that the absence or lack of the signature of the president
did not render the bond i!\valid. Moreover, Laxa knew that as a matter of long practice both Ancheta and
Alub normally signed and approved the counterbonds, regardless' of the amounts thereof. She further I
knew of no rule that limited the authority of Ancheta and Alub to issue and I sign counterbonds only up to
P5,000,000.00.
CRIMINAL LAW
1. People of the Philippines vs. Edison Magbitang
G. R. No. 175592, June 14, 2016
BERSAMIN, J.:

FACTS:
Magbitang was charged with rape with homicide under the information filed by the Provincial Prosecutor
of Nueva Ecija. Seven-year old AAA asked permission from her mother, BBB, to go to a nearby store. BBB
allowed her daughter to leave the house, but the child did not return home. Later that evening, the child's
lifeless body was found by the riverbank. The lone witness to what had befallen AAA was 6year old CCC,
who recalled in court that he and AAA had been playing when Magbitang approached AAA; and that
Magbitang brought AAA to his house. CCC testified on re-direct examination that he had witnessed
Magbitang raping AAA (inasawa), as well as burning her face with a cigarette.

ISSUE: Whether or not CCCs testimony is sufficient to establish the accused guilt

RULING: Magbitang's contention that CCC, being a child of tender age, was not a competent witness
because his testimony was filled with inconsistencies and suffered from improbabilities was unfounded.
Under the Rules of Court, a child may be a competent witness, unless the trial court determines _upon
proper showing that the child's mental maturity is such as to render him incapable of perceiving the facts
respecting which he is to be examined and of relating the facts truthfully. The testimony of the child of
sound mind with the capacity to perceive and make known the perception can be believed in the absence
of any showing of an improper motive to testify. Once it is established that the child fully understands the
character and nature of an oath, the testimony is given full credence. In the case of CCC, the defense did
not persuasively discredit his worthiness and competence as a witness. As such, the Court considers the
reliance by the trial court on his recollection fully justified.

The evidence of guilt against him consisted in both direct and circumstantial evidence. The direct evidence
was supplied by CCC's testimony, while the circumstantial evidence corroborated CCC's testimony. Such
evidence, combined, unerringly pointed to Magbitang, and to no other, as the culprit.

2. Pedro Ladines vs. People of the Philippines

G.R. No. 167333, January 11, 2016
BERSAMIN, J.:

FACTS:

An information was filed in the RTC charging the petitioner and one Herman Licup with homicide. While
Prosecution witnesses Philip de Ramon and Mario Lasala, along with victim Erwin de Ramon (Erwin),
were watching the dance held during the June 12, 1993 Grand Alumni Homecoming of the Bulabog
Elementary School in Sorsogon, Sorsogon, the petitioner and Licup appeared and passed by them. The
petitioner suddenly and without warning approached and stabbed Erwin below the navel with a machete.
The petitioner then left after delivering the blow. At that juncture, Licup also mounted his attack against
Erwin but the latter evaded the blow by stepping back. Erwin pulled out the machete from his body and
wielded it against Licup, whom he hit in the chest. Licup pursued but could not catch up with Erwin because
they both eventually fell down. Erwin was rushed to the hospital where he succumbed. RTC pronounced
the petitioner guilty of the crime Homicide, defined and penalized under Article 249 of the Revised Penal
Code, sans any mitigating circumstances and applying the Indeterminate Sentence Law, accused Pedro
Ladines is hereby sentenced to suffer an imprisonment of from Ten (10) years and One (1) day of prision
mayor as minimum to 17 years and 4 months of reclusion temporal as maximum. Petitioner averred that
CA committed reversible error in affirming his conviction despite the admission of Licup immediately after
the incident that he had stabbed the victim; and that the res gestae statement of Licup constituted newly-
discovered evidence that created a reasonable doubt as to the petitioners guilt.

ISSUE: Whether or not the penalty was proper

RULING: The res gestae statement of Licup did not constitute newly-discovered evidence that created a
reasonable doubt as to the petitioners guilt. The concept of newly-discovered evidence is applicable only
when a litigant seeks a new trial or the re-opening of the case in the trial court. Seldom is the concept
appropriate on appeal, particularly one before the Court. The Court has issued guidelines designed to
balance the need of persons charged with crimes to afford to them the fullest opportunity to establish their
defenses, on the one hand, and the public interest in ensuring a smooth, efficient and fair administration of
criminal justice, on the other. The first guideline is to restrict the concept of newly-discovered evidence to
only such evidence that can satisfy the following requisites, namely: (1) the evidence was discovered after
trial; (2) such evidence could not have been discovered and produced at the trial even with the exercise of
reasonable diligence; (3) the evidence is material, not merely cumulative, corroborative, or impeaching;
and (4) the evidence is of such weight that it would probably change the judgment if admitted. We agree
with the State that the proposed evidence of the petitioner was not newly-discovered because the first two
requisites were not present.

Homicide is punished with reclusion temporal. Taking the absence of any modifying circumstances into
consideration, the RTC fixed the indeterminate penalty of 10 years and one day of prision mayor, as
minimum, to 17 years and four months of the medium period of reclusion temporal, as maximum. The CA
affirmed the penalty fixed by the RTC. We declare that the lower courts could not impose 17 years and four
months of the medium period of reclusion temporal, which was the ceiling of the medium period of
reclusion temporal, as the maximum of the indeterminate penalty without specifying the justification for so
imposing. They thereby ignored that although Article 64 of the Revised Penal Code, which has set the rules
for the application of penalties which contain three periods, requires under its first rule that the courts
should impose the penalty prescribed by law in the medium period should there be neither aggravating nor
mitigating circumstances, its seventh rule expressly demands that [w]ithin the limits of each period, the
courts shall determine the extent of the penalty according to the number and nature of the aggravating and
mitigating circumstances and the greater or lesser extent of the evil produced by the crime. By not
specifying the justification for imposing the ceiling of the period of the imposable penalty, the fixing of the
indeterminate sentence became arbitrary, or whimsical, or capricious. In the absence of the specification,
the maximum of the indeterminate sentence for the petitioner should be the lowest of the medium period of
reclusion temporal, which is 14 years, eight months and one day of reclusion temporal.
 3. People of the Philippines vs. Marissa Bayker
G.R. No. 170192, February 10, 2016
BERSAMIN, J.:

FACTS:

Office of the City Prosecutor of Makati filed in the Regional Trial Court (RTC) in Makati a complaint for
Illegal Recruitment and Estafa against the accused.

ISSUE: Did the CA correctly affirm the conviction of the accused-appellant for the crimes of illegal
recruitment in large scale and estafa? Whether or not double jeopardy would attach?

RULING: Illegal recruitment is committed by a person who: (a) undertakes any recruitment activity
defined under Article 13(b) or any prohibited practice enumerated under Article 34 and Article 38 of the
Labor Code; and (b) does not have a license or authority to lawfully engage in the recruitment and placement
of workers. It is committed in large scale when it is committed against three or more persons individually
or as a group. The CA properly affirmed the conviction of the accused-appellant by the RTC for illegal
recruitment committed in large scale because she had committed acts of recruitment against at least three
persons (namely: Canizares, Dahab, and Miparanum) despite her not having been duly licensed or
authorized by the Philippine Overseas Employment Administration (POEA) for that purpose. The accused-
appellant's insistence on her very limited participation in the recruitment of the complainants did not
advance or help her cause any because the State established her having personally promised foreign
employment either as hotel porters or seafarers to the complainants despite her having no license or
authority to recruit from the POEA. The records made it clear enough that her participation was anything
but limited, for she herself had accompanied them to their respective medical examinations at their own
expense. In addition, she herself brought them to GNB Marketing and introduced them to her co-accused.
The conviction of the accused-appellant for illegal recruitment committed in large scale did not preclude
her personal liability for estafa under Article 315(2)(a) of the Revised Penal Code on the ground of
subjecting her to double jeopardy. The elements of estafa as charged are, namely: ( 1) the accused defrauded
another by abuse of confidence or by means of deceit; and (2) the offended party, or a third party suffered
damage or prejudice capable of pecuniary estimation. In contrast, the crime of illegal recruitment committed
in large scale, as indicated earlier, requires different elements. Double jeopardy could not result from
prosecuting and convicting the accused-appellant for both crimes considering that they were entirely
distinct from each other not only from their being punished under different statutes but also from their
elements being different. The active representation by the accused-appellant of having the capacity to
deploy Miparanum abroad despite not having the authority or license to do so from the POEA constituted
deceit as the first element of estafa. Her representation induced the victim to part with his money, resulting
in damage that is the second element of the estafa.

4. Teofilo Giangan vs. People of the Philippines

G.R. No. 169385, August 26, 2015
BERSAMIN, J.:

FACTS:

In his capacity as the barangay chairman of Barangay Luyang in the Municipality of Carmen, Province of
Cebu at the time material to this case, Giangan, along with his co-accused Domail, a barangay councilor,
and Bontia, the head of the barangay tanods, were charged with the violation of Section 3 (e) of R. A. No.
3019. It appears that Aurelia Bernadas hired Delfin Buot to construct the wooden fence on her land; that
the accused removed the fence; that Buot first learned of the removal of the fence from the residents of
Barangay Luyang; that Buot further learned that Giangan and his co-accused removed the wooden fence;
that Buot first directly inquired from Giangan why the latter had destroyed the fence, but he harshly told
him to tell Bernadas to just file a case against him; that Buot then went home to call Bernadas about the
incident; and that Buot accompanied Bernadas and her spouse to confront Giangan, who reiterated his dare
for them to just file a case. Bernadas testified that she had caused the construction of the fence on her three
properties in Barangay Luyang because the fruits of the coconut trees growing on her properties were
frequently stolen, and also because the sand on the seashore within her properties was being excavated; that
she reported the theft to Giangan, who did not take any action on her complaint; that she spent a total of
P11,200.00 for labor and materials in the construction of the fence; that upon learning of the removal of the
fence, she visited Giangan to inquire, but the latter shouted at her: It is within my power as barangay
captain to destroy the fence, and Dont tell me what to do, you just file a case in court; that many
landowners put up fences on their properties in the area, but the fences were not removed; and that there
was no established road right of way on her properties ever since she could remember. RTC Danao City
rendered its judgment finding all of the accused guilty as charged

ISSUE: Whether or not the Sandiganbayan was correct in affirming the conviction of Giangan

RULING: In every prosecution for the violation of Section 3 (e) of R.A. No. 3019, the State must prove
the following essential elements, namely:
JJ. The accused is a public officer discharging administrative, judicial or official functions;

KK. He must have acted with manifest partiality, evident bad faith, or gross inexcusable negligence in
the discharge of his functions and;
LL. His action caused any undue injury to any party, including the Government, or gave any private
party unwarranted benefits, advantage or preference in the discharge of his functions.

The first element was present, for Giangan was indisputably a government official at the time of the alleged
commission of the offense charged. The second element enumerates the different modes by which means
the offense penalized in Section 3 (e) may be committed. "Partiality" is synonymous with "bias" which
"excites a disposition to see and report matters as they are wished for rather than as they are." "Bad faith
does not simply connote bad judgment or negligence; it imputes a dishonest purpose or some moral
obliquity and conscious doing of a wrong; it partakes of the nature of fraud." "Gross negligence has been
so defined as negligence characterized by the want of even slight care, acting or omitting to act in a situation
where there is a duty to act, not inadvertently but willfully and intentionally with a conscious indifference
to consequences in so far as other persons may be affected. Proof of the existence of any of these modes
in connection with the prohibited acts under Section 3 (e) should suffice to warrant conviction.

In this case, the Sandiganbayan erred in ruling that Giangan and his co-accused had acted with gross bad
faith and manifest impartiality when they removed the wooden posts of the fence of Bernadas. On the
contrary, their actuations evinced good faith. It was not at all disputed that access through the road had long
been permitted even by the owner and her predecessor. In that context, Giangan as the barangay chairman
acted upon the honest and sincere belief that he was then summarily abating the nuisance that a regular user
of the obstructed road had just reported to him. A further indication of the good faith of Giangan was the
turning over of the wooden posts to the police station, manifesting that the accused were acting within the
scope of their authority. .

The Sandiganbayan further erred in finding the presence of manifest partiality on the basis that there had
been other allegedly illegal constructions that the accused did not similarly remove in their capacities as
barangay officials. Bias should still not be imputed against them because they were acting on the complaint
against the inconvenience brought about by the obstruction erected on the access road. Manifest partiality
should be inferred only if there was a clear showing that there had been others who had been bothered by
the similar allegedly illegal constructions and had complained, but the accused, in their capacities as
barangay officials, did not deal with such complaint with the same alacrity. In light of the foregoing, the
guilt of Giangan was not established beyond reasonable doubt. Hence, he is entitled to acquittal.

5. Aurora Fransdilla vs. People of the Philippines

G.R. No. 197562, August 20, 2015
BERSAMIN, J.:

FACTS:

Aurora Engson Fransdilla (Fransdilla), the lone appellant, seeks to reverse the decision promulgated on
February 28, 2011,1 whereby the Court of Appeals (CA) affirmed her conviction and that of her co-accused
for robbery on the basis of conspiracy. At private complainants residence at No. 24, Mabait St., Teachers
Village, Quezon City, private complainant Lalaine Yreverre saw appellant Aurora Engson in front of their
gate. Upon noticing Aurora, Lalaine went to the gate and asked Aurora what is their purpose, as there were
four (4) of them. Aurora then inquired about Cynthia Yreverre, Lalaines sister. The latter replied that
Cynthia was in the Japanese Embassy and asked Aurora if there was any other person whom she wanted to
talk to. It was then that Aurora told Lalaine that she was from the Philippine Overseas Employment Agency
(POEA). It was upon said pretension that Lalaine offered herself to instead talk to her and allowed her to
enter their house. Later on, four men who are with Aurora went inside the house and announced that it was
a hold-up.

ISSUE: Whether or not conspiracy was proved

RULING: The State thus discharged its burden to produce before the trial court sufficient evidence against
all the accused, including Fransdilla, that would warrant a judgment of conviction. Fransdillas non-
presentation of her defense, despite her being directly incriminated by Lalaine, denied the Court her
explanation for her specific overt acts of complicity in the robbery and thus rendered the incriminating
evidence unrefuted. By this the Court simply means that Fransdilla did not discharge her burden of
evidence, which is the duty of a party to start and continue giving evidence at any stage of the trial until
he has established a prima facie case, or the like duty of the adverse party to meet and overthrow that prima
facie case thus established. Fransdilla was satisfactorily shown not to have been a mere passive
coconspirator, but an active one who had facilitated the access into the house by representing herself as an
employee of the POEA. In that respect, it is not always required to establish that two or more persons met
and explicitly entered into the agreement to commit the crime by laying down the details of how their
unlawful scheme or objective would be carried out. Conspiracy can also be deduced from the mode and
manner in which the offense is perpetrated, or can be inferred from the acts of the several accused evincing
their joint or common purpose and design, concerted action and community of interest. Once conspiracy is
established, the act of each conspirator is the act of all.
REMEDIAL LAW

1. Fernando Medical Enterprises Inc. vs. Wesleyan University Philippines

G.R. No. 207970, January 20, 2016
BERSAMIN, J.

FACTS:

The petitioner, a domestic corporation dealing with medical equipment and supplies, delivered to and
installed medical equipment and supplies at the respondents hospital.Tthe respondent paid only
P67,357,683.23 of its total obligation of P123,901,650.00, leaving unpaid the sum of P54,654,195.54.
However, on February 11, 2009, the petitioner and the respondent, respectively represented by Rafael P.
Fernando and Guillermo T. Maglaya, Sr., entered into an agreement, whereby the former agreed to reduce
its claim to only P50,400,000.00, and allowed the latter to pay the adjusted obligation on installment basis
within 36 months. Respondent notified the petitioner that its new administration had reviewed their
contracts and had found the contracts defective and rescissible due to economic prejudice or lesion; and
that it was consequently declining to recognize the February 11, 2009 agreement because of the lack of
approval by its Board of Trustees. Due to the respondents failure to pay as demanded, the petitioner filed
its complaint for sum of money in the RTC. The respondent moved to dismiss the complaint upon the
following grounds, namely: (a) lack of jurisdiction over the person of the defendant; (b) improper venue;
(c) litis pendentia; and (d) forum shopping, which was denied. Petitioner filed its Motion for Judgment
Based on the Pleadings, stating that the respondent had admitted the material allegations of its complaint
and thus did not tender any issue as to such allegations. The respondent opposed the Motion for Judgment
Based on the Pleadings, arguing that it had specifically denied the material allegations in the complaint.
RTC issued the order denying the Motion for Judgment Based on the Pleadings of the petitioner. CA
affirmed.

ISSUE: Did the CA commit reversible error in affirming the RTCs denial of the petitioners motion for
judgment on the pleadings?

RULING: The rule on judgment based on the pleadings is Section 1, Rule 34 of the Rules of Court. The
essential query in resolving a motion for judgment on the pleadings is whether or not there are issues of
fact generated by the pleadings. Whether issues of fact exist in a case or not depends on how the defending
partys answer has dealt with the ultimate facts alleged in the complaint. The defending partys answer
either admits or denies the allegations of ultimate facts in the complaint or other initiatory pleading. The
allegations of ultimate facts the answer admit, being undisputed, will not require evidence to establish the
truth of such facts, but the allegations of ultimate facts the answer properly denies, being disputed, will
require evidence. The answer admits the material allegations of ultimate facts of the adverse partys
pleadings not only when it expressly confesses the truth of such allegations but also when it omits to deal
with them at all. The controversion of the ultimate facts must only be by specific denial. Section 10, Rule
8 of the Rules of Court recognizes only three modes by which the denial in the answer raises an issue of
fact. The first is by the defending party specifying each material allegation of fact the truth of which he
does not admit and, whenever practicable, setting forth the substance of the matters upon which he relies
to support his denial. The second applies to the defending party who desires to deny only a part of an
averment, and the denial is done by the defending party specifying so much of the material allegation of
ultimate facts as is true and material and denying only the remainder. The third is done by the defending
party who is without knowledge or information sufficient to form a belief as to the truth of a material
averment made in the complaint by stating so in the answer. Any material averment in the complaint not so
specifically denied are deemed admitted except an averment of the amount of unliquidated damages.
In the case of a written instrument or document upon which an action or defense is based, which is also
known as the actionable document, the pleader of such document is required either to set forth the substance
of such instrument or document in the pleading, and to attach the original or a copy thereof to the pleading
as an exhibit, which shall then be deemed to be a part of the pleading, or to set forth a copy in the pleading.
The adverse party is deemed to admit the genuineness and due execution of the actionable document unless
he specifically denies them under oath, and sets forth what he claims to be the facts, but the requirement of
an oath does not apply when the adverse party does not appear to be a party to the instrument or when
compliance with an order for an inspection of the original instrument is refused.

In Civil Case No. 09-122116, the respondent expressly admitted paragraphs no. 2, 3, 4, 5, 9 and 10 of the
complaint. The admission related to the petitioners allegations on: (a) the four transactions for the delivery
and installation of various hospital equipment; (b) the total liability of the respondent; (c) the payments
made by the respondents; (d) the balance still due to the petitioner; and (e) the execution of the February
11, 2009 agreement. The complaint properly alleged the substance of the February 11, 2009 agreement, and
contained a copy thereof as an annex. Upon the express admission of the genuineness and due execution of
the February 11, 2009 agreement, judgment on the pleadings became proper.

The respondent denied paragraphs no. 6, 7 and 8 of the complaint for lack of knowledge or information
sufficient to form a belief as to the truth or falsity thereof, inasmuch as the alleged transactions were
undertaken during the term of office of the past officers of defendant Wesleyan University Philippines.
Was the manner of denial effective as a specific denial? No. It is settled that denials based on lack of
knowledge or information of matters clearly known to the pleader, or ought to be known to it, or could have
easily been known by it are insufficient, and constitute ineffective or sham denials. Lastly, we should
emphasize that in order to resolve the petitioners Motion for Judgment Based on the Pleadings, the trial
court could rely only on the answer of the respondent filed in Civil Case No. 09-122116. Under Section 1,
Rule 34 of the Rules of Court, the answer was the sole basis for ascertaining whether the complaints
material allegations were admitted or properly denied.

2. Tung Hui Chung and Tong Hong Chung vs. Shih Chi Huang
G.R. No. 170679, March 9, 2016
BERSAMIN, J.:

FACTS:

On September 6, 2001, the petitioners, both Australian citizens, filed in the Regional Trial Court (RTC),
Branch 49, in Manila an amended complaint6 to recover from the respondent a sum of money and damages
(with prayer for a writ of attachment). The suit, docketed as Civil Case No. 01-101260, involved the contract
to sell dated October 30, 2000, whereby the respondent, as the vendor, undertook to deliver to the
petitioners, as the vendees, shares of stock worth P10,606,266.00 in Island Information and Technology,
Inc. (the corporation), a publicly listed corporation. The petitioners alleged that under the provisions of the
contract to sell, the equivalent shares of stock in the corporation should be their value as of February 22,
2001, the date corresponding to the five-day period prior to the end of the fourth month after October 30,
2000, the date of the signing of the contract to sell; that according to the Philippine Stock Exchange, Inc.
(PSEI), the shares of the corporation, which stood at P0.05 for the open, high, low and closing prices on
February 22, 2001, had the equivalent of 177,925,320 shares of stock; and that the respondent failed to
deliver the shares of stock corresponding to the agreed amount on the date fixed by the contract. RTC issued
an amended order granting the petitioners application for the writ of preliminary attachment. Later on, the
parties filed their Joint Motion for Approval of a Compromise Agreement. The compromise agreement,
which was signed by the respondent and by Eduard Alcordo, as the attorney-in-fact of the petitioners, with
the assistance of their respective counsels, stipulating that the parties agreed to settle their respective claims
and counterclaims, and the respondent acknowledged therein his obligation, was filed and granted by the
Court. But the respondent did not pay the second installment despite demand. Instead, he filed in the CA a
petition for annulment of judgment thereby seeking to nullify the amended order granting the application
for the writ of attachment, and the order approving the compromise agreement.

ISSUE: Whether or not judicial compromise agreement could no longer be assailed through certiorari

RULING: Compromise agreement is a contract whereby the parties make reciprocal concessions to avoid
litigation or to put an end to one already commenced. It attains the authority and effect of res judicata upon
the parties upon its execution, and becomes immediately final and executory, unless rescinded by grounds
which vitiate consent. Once stamped with judicial imprimatur, it ceases to be a mere contract between the
parties, and becomes a judgment of the court, to be enforced through writ of execution. The CA did not
recognize that what it was asked to annul and set aside was no longer the compromise agreement of the
parties but already the judgment based on the compromise agreement. The failure to recognize led the CA
into granting the unprecedented relief of annulling the compromise agreement on the ground of fraud and
lack of consent. In so doing, the CA acted without jurisdiction. First of all, the action before the CA was a
special civil action for certiorari that had been brought on March 7, 2005, which was way beyond the period
of 60 days from the rendition of the judgment based on the compromise agreement on October 20, 2003.
With this stamp of judicial approval, the compromise agreement became more than a mere contract of the
parties. The judicially approved agreement was thereby turned into a final judgment, immutable and
unalterable, regardless of whether or not it rested on erroneous conclusions of fact and law, and regardless
of whether the change would be by the court that rendered it or the highest court of the land. If the ground
of the respondent to assail the judgment based on the compromise agreement was extrinsic fraud, his action
should be brought under Rule 47 of the Rules of Court. Under Section 2 of Rule 47, the original action for
annulment may be based only on extrinsic fraud or lack of jurisdiction, but extrinsic fraud, to be valid
ground, should not have been availed of, or could not have been availed of in a motion for new trial or
petition for relief. If the ground relied up is extrinsic fraud, the action must be filed within four years from
the discovery of the extrinsic fraud; if the ground is lack of jurisdiction, the action must be brought before
it is barred by laches or estoppels. Regardless of the ground for the action, the remedy under Rule 47 is to
be availed of only if the ordinary remedies of new trial, appeal, petition for relief or other appropriate
remedies are no longer available through no fault of the petitioner. Ostensibly, the respondent could have
availed himself of the petition for relief from judgment under Rule 38 of the Rules of Court. Hence, his
failure to resort to such remedy precluded him from availing himself of the remedy to annul the judgment
based on the compromise agreement.
 3. Andrew Fyfe et al vs. Philippine Airlines, Inc
G.R . NO. 160071, June 6, 2016
BERSAMIN, J.

FACTS:

In 1998, the respondent underwent rehabilitation proceedings in the Securities and Exchange Commission
(SEC), which issued an order dated July 1, 1998 decreeing, among others, the suspension of all claims for
payment against the respondent. To convince its creditors to approve the rehabilitation plan, the respondent
decided to hire technical advisers with recognized experience in the airline industry. This led the respondent
through its then Director Luis Juan K. Virata to consult with people in the industry, and in due course came
to meet Peter W. Foster, formerly of Cathay Pacific Airlines. Foster, along with Michael R. Scantlebury,
negotiated with the respondent on the details of a proposed technical services agreement. Foster and
Scantlebury subsequently organized Regent Star Services Ltd. (Regent Star) under the laws of the British
Virgin Islands. Petitioner and respondent entered into Technical Service Agreement (TSA) wherein under
its terms, penalties shall be payable by the terminating party. Respondent sent notice to petitioner
terminating the TSA for lack of confidence and wants to offset the penalty from its advance payment.
Petitioner denied the refund and claim for offset and proposed to submit the issue to arbitration pursuant to
their TSA. The Philippine Dispute Resolution Center, Inc. rendered judgment in favor to the petitioner.
Respondent filed an Application to Vacate Arbitral Award in RTC Makati in view of the SEC Order that
respondent is under a state of suspension of payment. The petitioner filed MTD on the ground that (a) lack
of jurisdiction over the persons of the petitioners due to the improper service of summons; (b) the
application did not state a cause of action; and (c) the application was an improper remedy because the
respondent should have filed an appeal in the CA pursuant to Rule 43 of the Rules of Court. RTC granted
the application to vacate arbitral award. Petitioner appealed to CA by notice of appeal. Respondent moved
to dismiss the appeal on the ground that Section 29 of arbitration law limited appeals to a review on
certiorari upon questions of law. CA rendered judgment in favor of respondent. Hence this appeal by the
petitioners.

ISSUE: whether or not the petition for review should be dismissed for containing a defective
verification/certification;
whether or not the CA erred in dismissing the appeal of the petitioners for being an inappropriate remedy.

RULING: There was sufficient compliance with the rule on verification and certification against forum
shopping. The SPAs individually signed by the petitioners vested in their counsel the authority, among
others, "to do and perform on my behalf any act and deed relating to the case, which it could legally do and
perform, including any appeals or further legal proceedings." The authority was sufficiently broad to
expressly and specially authorize their counsel, Atty. Ida Maureen V. Chao-Kho, to sign the
verification/certification on their behalf. The purpose of the verification is to ensure that the allegations
contained in the verified pleading are true and correct, and are not the product of the imagination or a matter
of speculation; and that the pleading is filed in good faith. This purpose was met by the
verification/certification made by Atty. Chao-Kho in behalf of the petitioners.

CA correctly dismissed the appeal of the petitioners because pursuant to Section 2, Rule 41 of the Rules of
Court an appeal of questions of law arising in the courts in the first instance is by petition for review on
certiorari under Rule 45. On February 4, 2004. Republic Act No. 9285 (Alternative Dispute Resolution Act
of 2004) was passed by Congress, and was approved by the President on April 2, 2004. Pursuant to Republic
Act No. 9285, the Court promulgated on September 1, 2009 in A.M. No. 07-11-08-SC the Special Rules of
Court on Alternative Dispute Resolution, which are now the present rules of procedure governing
arbitration. Among others, the Special Rules of Court on Alternative Dispute Resolution requires an appeal
by petition for review to the CA of the final order of the R TC confirming, vacating, correcting or modifying
a domestic arbitral award. Although the Special Rules of Court on Alternative Dispute Resolution provides
that the appropriate remedy from an order of the RTC vacating a domestic arbitral award is an appeal by
petition for review in the CA, not an ordinary appeal under Rule 41 of the Rules of Court, the Court cannot
set aside and reverse the assailed decision on that basis because the decision was in full accord with the law
or rule in force at the time of its promulgation.

4. Alejandra Arado Heirs vs. Anacleto Alcoran and Elenette Sunjaco

G .R. No. 163362, July 8, 2015
BERSAMIN, J.:

FACTS:

Raymundo Alcoran and Joaquina Arado were married and had a son named Nicolas Alcoran. In turn,
Nicolas married Florencia Limpahan, but their union had no offspring. During their marriage, however,
Nicolas had an extramarital affair with Francisca Sarita who gave birth to Anacleto who married Elenette.

Upon death, Joaquinas siblings filed in the RTC a complaint for recovery of property and damages against
Anacleto and Elenette.Eight of the subjects properties belonged to Raymundo and the last two had been the
paraphemal properties of Joaquina. It was contended by the petitioners that Anacleto was not entitled to be
Nicholas heir and Joaquinas heir as the will was void for not having been executed according to the
formalities of the law, and the same did not reflect the true intention of Joaquina and that they were the
rightful heirs to the properties. The defendants countered that Anacleto was expressly recognized by Nicolas
as the latter's son, a fact evidenced by the certificate of birth of Anacleto.

RTC dismissed the complaint and ruled that he was really the acknowledged illegitimate son of Nicolas. It
cited the certificate of birth of Anacleto, which proved that Nicolas had himself caused the registration of
Anacleto' s birth. It observed that the name of Nicolas appeared under the column "Remarks" in the register
of births, which was the space provided for the name of the informant. They failed to refute such entry and
became conclusive with respect to the facts contained therein. Further, baptismal certificate, a picture taken
during the wake of Nicolas showing the young Anacleto being carried by Joaquina, and also Nicolas' wife,
Florencia, his school records, and Joaquinas consent to marriage, and Joaquinas will bequeathing the
subject properties to Anacleto were sufficient basis. The CA affirmed the decision of RTC.

ISSUE: Whether the petitioners were able prove that Anacleto was not an acknowledged illegitimate son
of Nicolas

RULING:

The burden of proof to establish the averments of the complaint by preponderance of evidence pertained to
the petitioners as the plaintiffs. "Preponderance of evidence" is the weight, credit, and value of the aggregate
evidence on either side and is usually considered to be synonymous with the term "greater weight of the
evidence" or "greater weight of the credible evidence." Preponderance of evidence is a phrase which, in the
last analysis, means probability of the truth. It is evidence which is more convincing to the court as worthy
of belief than that which is offered in opposition thereto.

The petitioners did not discharge their burden of proof. The plaintiffs did not rebut the filiation of Anacleto
by contrary evidence.
The birth certificate of Anacleto appearing in the Register of Births of the Municipality of Bacong, Negros
Oriental showed that Nicolas had himself caused the registration of the birth of Anacleto. The showing was
by means of the name of Nicolas appearing in the column "Remarks", the space provided for the name of
the informant of the live birth to be registered. Considering that Nicolas, the putative father, had a direct
hand in the preparation of the birth certificate, reliance on the birth certificate of Anacleto as evidence of
his paternity was fully warranted.

However, Anacleto's baptismal certificate was of no consequence in determining his filiation. As it was
ruled that "while a baptismal certificate may be considered a public document, it can only serve as evidence
of the administration of the sacrament on the date specified but not the veracity of the entries with respect
to the child's paternity." Further, he weight accorded by the R TC and the CA to the picture depicting the
young Anacleto in the arms of Joaquina as she stood beside the coffin of the departed Nicolas was also
undeserved. At best, the picture merely manifested that it was Joaquina who had acknowledged her filiation
with Anacleto. The school records of Anacleto, which evinced that Joaquina was the guardian of Anacleto
in his grade school years, and the marriage contract between Anacleto and Elenette, which indicated that
Joaquina had given consent to Anacleto's marriage, did not have the evidentiary value accorded by the RTC
and the CA. Joaquina's apparent recognition of Anacleto mattered little, for the recognition "must be made
personally by the parent himself or herself, not by any brother, sister or relative; after all, the concept of
recognition speaks of a voluntary declaration by the parent, of if the parent refuses, by judicial authority, to
establish the paternity or maternity of children born outside wedlock."

The lack of probative value of the respondents' aforecited corroborative evidence notwithstanding, Anacleto
's recognition as Nicolas' illegitimate child remained beyond question in view of the showing that Nicolas
had personally and directly acknowledged Anacleto as his illegitimate son.

5. Saint Mary Crusade to Alleviate Poverty of Brethen Foundation Inc. vs. Hon. Teodoro Riel
G.R. No. 176508, January 12, 2015
BERSAMIN, J.:

FACTS:

Petitioner claimed in its petition for reconstitution that the original copy of OCT No. 1609 had been burnt
and lost in the fire that gutted the Quezon City Register of Deeds in the late 80s. Initially, respondent Judge
gave due course to the petition, but after the preliminary hearing, he dismissed the petition for reconstitution
through the first assailed order. Petitioner moved for reconsideration of the dismissal. RTC denied the
motion for reconsideration for lack of any cogent or justifiable ground to reconsider.

ISSUE: Whether or not the RTC gravely abused its discretion amounting to lack or excess of its jurisdiction
in dismissing its petition for reconstitution on the basis of the recommendation of the LRA and the
opposition of the Republic and the UP despite having initially given due course to the petition for
reconstitution.

RULING: No. The petition for certiorari and mandamus did not show how respondent Judge could have
been guilty of lacking or exceeding his jurisdiction, or could have gravely abused his discretion amounting
to lack or excess of jurisdiction.

Firstly, Under Section 12 of Republic Act No. 26, the law on the judicial reconstitution of a Torrens title,
the Regional Trial Court (as the successor of the Court of First Instance) had the original and exclusive
jurisdiction to act on the petition for judicial reconstitution of title. Hence, the RTC neither lacked nor
exceeded its authority in acting on and dismissing the petition. Nor did respondent Judge gravely abuse his
discretion amounting to lack or excess of jurisdiction considering that the petition for reconstitution
involved land already registered in the name of the UP, as confirmed by the LRA. Instead, it would have
been contrary to law had respondent Judge dealt with and granted the petition for judicial reconstitution of
title of the petitioner.
Secondly, the petitioner did not present the duplicate or certified copy of OCT No. 1609. Thereby, it
disobeyed Section 2 and Section 3 of Republic Act No. 26, the provisions that expressly listed the
acceptable bases for judicial reconstitution of an existing Torrens title.

Thirdly, the questioned orders of the RTC having finally disposed of the application for judicial
reconstitution, nothing more was left for the RTC to do in the case.
As of then, therefore, the correct recourse for the petitioner was to appeal to the Court of Appeals by notice
of appeal within 15 days from notice of the denial of its motion for reconsideration. By allowing the period
of appeal to elapse without taking action, it squandered its right to appeal. Its present resort to certiorari is
impermissible, for an extraordinary remedy like certiorari cannot be a substitute for a lost appeal.

Fourthly, the filing of the instant special civil action directly to the Supreme Court is in disregard of the
doctrine of hierarchy of courts. Although the Court has concurrent jurisdiction with the Court of Appeals
in issuing the writ of certiorari, direct resort is allowed only when there are special, extraordinary or
compelling reasons that justify the same. The Court enforces the observance of the hierarchy of courts in
order to free itself from unnecessary, frivolous and impertinent cases and thus afford time for it to deal with
the more fundamental and more essential tasks that the Constitution has assigned to it. There being no
special, important or compelling reason, the petitioner thereby violated the observance of the hierarchy of
courts, warranting the dismissal of the petition for certiorari.

Finally, the land covered by the petition for judicial reconstitution related to the same area that formed the
UP campus. The UPs registered ownership of the land comprising its campus has long been settled under
the law. Accordingly, the dismissal of the petition for judicial reconstitution by respondent Judge only
safeguarded the UPs registered ownership.
LEGAL ETHICS

1. Angelito Ramiscal and Mercedes Orzame vs. Atty. Edgar Orro

A.C. No. 10945, February 23, 2016
BERSAMIN, J.:
FACTS:

Complainants Spouses Angelito Ramiscal and Mercedes Orzame (Ramiscals) engaged the legal services of
respondent Atty. Edgar S. Orro to handle a case in which they were the defendants seeking the declaration
of the nullity of title to a parcel of land situated in the Province of Isabela. Upon receiving the P10,000.00
acceptance fee from them, the respondent handled the trial of the case until the Regional Trial Court (RTC)
decided it in their favor. As expected, the plaintiffs appealed to the Court of Appeals (CA), and they
ultimately filed their appellants brief. Upon receipt of the appellants brief, the respondent requested from
the complainants an additional amount of P30,000.00 for the preparation and submission of their appellees
brief in the CA. They obliged and paid him the amount requested. CA reversed the decision of the RTC.
The respondent did not inform the Ramiscals of the adverse decision of the CA which they only learned
about from their neighbors. They endeavored to communicate with the respondent but their efforts were
initially in vain. When they finally reached him, he asked an additional P7,000.00 from them as his fee in
filing a motion for reconsideration in their behalf, albeit telling them that such motion would already be
belated. Even so, they paid to him the amount sought. To their dismay, they later discovered that he did not
file the motion for reconsideration; hence, the decision attained finality, eventually resulting in the loss of
their property measuring 8.479 hectares with a probable worth of P3,391,600.00. Ramiscals brought this
administrative complaint against the respondent.

ISSUE: Whether or not the respondent competently and diligently discharge his duties as the lawyer of the
Ramiscals

RULING: Every lawyer, upon becoming a member of the Philippine Bar, solemnly takes the Lawyers
Oath, by which he vows, among others, that: I will delay no man for money or malice, and will conduct
myself as a lawyer according to the best of my knowledge and discretion, with all good fidelity as well to
the courts as to my clients. If he should violate the vow, he contravenes the Code of Professional
Responsibility, particularly its Canon 17, and Rules 18.03 and 18.04 of Canon 18. It is beyond debate,
therefore, that the relationship of the lawyer and the client becomes imbued with trust and confidence from
the moment that the lawyer-client relationship commences, with the lawyer being bound to serve his clients
with full competence, and to attend to their cause with utmost diligence, care and devotion. To accord with
this highly fiduciary relationship, the client expects the lawyer to be always mindful of the formers cause
and to be diligent in handling the formers legal affairs. As an essential part of their highly fiduciary
relationship, the client is entitled to the periodic and full updates from the lawyer on the developments of
the case. The lawyer who neglects to perform his obligations violates Rule 18.03 of Canon 18 of the Code
of Professional Responsibility. But he obviously failed to discharge his burdens to the best of his knowledge
and discretion and with all good fidelity to his clients. By voluntarily taking up their cause, he gave his
unqualified commitment to advance and defend their interest therein. Even if he could not thereby guarantee
to them the favorable outcome of the litigation, he reneged on his commitment nonetheless because he did
not file the motion for reconsideration in their behalf despite receiving from them the P7,000.00 he had
requested for that purpose. He further neglected to regularly update them on the status of the case,
particularly on the adverse result, thereby leaving them in the dark on the proceedings that were gradually
turning against their interest. Updating the clients could have prevented their substantial prejudice by
enabling them to engage another competent lawyer to handle their case. As it happened, his neglect in that
respect lost for them whatever legal remedies were then available. His various omissions manifested his
utter lack of professionalism towards them. We further underscore that the respondent owed it to himself
and to the entire Legal Profession of the Philippines to exhibit due respect towards the IBP as the national
organization of all the members of the Legal Profession.

2. The Christian Spiritists in the Philippines, Inc. vs. Atty. Daniel Mangallay
A.C. No. 10483, March 16, 2016
BERSAMIN, J.:

FACTS:

Pante avers that the CSP-PLC constructed its church building on the land located in JE 176 Pico, La
Trinidad, Benguet, which was owned by Maria Omiles who had bought it from Larry Ogas; that Omiles
and Pastor Elvis Maliked received the summons issued by the Municipal Trial Court (MTC) of La Trinidad,
Benguet requiring them to answer the complaint for unlawful detainer filed against them by the respondent;
that based on the allegations of the complaint, the respondent claimed ownership of the land where the
church of the CSP-PLC had been erected, attaching the copy of deed of absolute sale executed between him
and one Pedro Loy; that the MTC later on decided the case by declaring the respondent to have the better
right of possession. As earlier mentioned, the respondent sought and obtained the writ of execution from
the MTC after the defendants, including the complainant, reneged on the promise to voluntarily vacate and
surrender the premises in consideration of the respondents financial assistance of P300,000.00. The writ
of execution was issued and the writ of demolition. Sheriffs Joselito S. Tumbaga and John Marie O. Ocasla,
accompanied by the respondent and elements of the Philippine National Police, implemented the writ of
execution and writ of demolition. Pante now insists that the demolition was done without a demolition order
from the MTC; that the dismantled materials worth P462,236.00 were forcibly taken away by the
respondent, who had taken advantage of his legal knowledge to cause the premature demolition of the
structures sans the demolition order; that such taking away of the dismantled materials constituted robbery
and malicious mischief; and that his act warranted his disbarment.

ISSUE: Whether or not respondent must be disbarred.

RULING: No. Under the revisions of Rule 139-B, the administrative complaints against attorneys are
generally not dismissed outright but are instead referred for investigation, report and recommendation either
to the IBP, or the Office of the Bar Confidant (OBC), or any office of the Court or even a judge of a lower
court. Such referral ensures that the parties right to due process is respected as to matters that require
further inquiry and which cannot be resolved by the mere evaluation of the documents attached to the
pleadings. Consequently, whenever the referral is made by the Court, the IBP, the OBC or other authorized
office or individual must conduct the formal investigation of the administrative complaint, and this
investigation is a mandatory requirement that cannot be dispensed with except for valid and compelling
reasons because it serves the purpose of threshing out all the factual issues that no cursory evaluation of the
pleadings can determine. However, the referral to the IBP is not compulsory when the administrative case
can be decided on the basis of the pleadings filed with the Court, or when the referral to the IBP for the
conduct of formal investigation would be redundant or unnecessary, such as when the protraction of the
investigation equates to undue delay. Dismissal of the case may even be directed at the outset should the
Court find the complaint to be clearly wanting in merit. Indeed, the Rules of Court should not be read as
preventing the giving of speedy relief whenever such speedy relief is warranted. It is upon this that we
dispense with the need to refer the complaint against the respondent to the IBP for the conduct of the formal
investigation. The documents he submitted to substantiate his denial of professional wrongdoing are part
of the records of the trial court, and, as such, are sufficient to establish the unworthiness of the complaint
as well as his lawful entitlement to the demolition of the structures of the defendants in Civil Case No. R-
1256.

Specifically, the demolition was authorized by the order issued by the MTC on December 19, 2013. In the
execution of the final and executory decision in Civil Case No. R-1256, the sheriffs dutifully discharged
their functions. The presence of the respondent during the execution proceedings was by no means irregular
or improper, for he was the plaintiff in Civil Case No. R-1256. The complainant was then represented by
Pante and some other members of the congregation, who did not manifest any resistance or objection to
any irregularity in the conduct of the execution. After all, elements of the Philippine National Police were
also present to ensure the peaceful implementation of the writ of execution. Neither do we find anything
wrong, least of all criminal, in the act of the respondent of taking away the materials of the demolished
structures. The parties put an end to their dispute by the defendants, including the complainant and Pante,
opting to withdraw their notice of appeal and undertaking to voluntarily vacate and to peacefully turn over
the premises to the respondent by August 31, 2013 in exchange for the latters financial assistance.

3. Nenita Sanchez vs. Atty Romeo Aguilos

A.C. No. 10543, March 16, 2016
BERSAMIN, J.:

FACTS:

Complainant Nenita D. Sanchez has charged respondent with misconduct for the latter's refusal to return
the amount of P70,000.00 she had paid for his professional services despite his not having performed the
contemplated professional services. She avers that in March 2005, she sought the legal services of the
respondent to represent her in the annulment of her marriage with her estranged husband, Jovencio C.
Sanchez; that the respondent accepted the engagement, fixing his fee at P150,000.00, plus the appearance
fee of P5,000.00/hearing; that she then gave to him the initial amount of P90,000.00; that she had gone to
his residence in May 2005 to inquire on the developments in her case, but he told her that he would only
start working on the case upon her full payment of the acceptance fee; that she had only learned then that
what he had contemplated to file for her was a petition for legal separation, not one for the annulment of
her marriage; that he further told her that she would have to pay a higher acceptance fee for the annulment
of her marriage; that she subsequently withdrew the case from him, and requested the refund of the amounts
already paid, but he refused to do the same as he had already started working on the case; that she had sent
him a letter, through Atty. Isidro S.C. Martinez, to demand the return of her payment less whatever amount
corresponded to the legal services he had already performed; that the respondent did not heed her demand
letter despite his not having rendered any appreciable legal services to her; and that his constant refusal to
return the amounts prompted her to bring an administrative complaint against him in the Integrated Bar of
the Philippines.

ISSUE: Does quantum meruit attach when an attorney fails to accomplish tasks which he is naturally
expected to perform during his professional engagement?

RULING: Respondent misrepresented his professional competence and skill to the complainant. As the
foregoing findings reveal, he did not know the distinction between the grounds for legal separation and for
annulment of marriage. Such knowledge would have been basic and expected of him as a lawyer accepting
a professional engagement for either causes of action. His explanation that the client initially intended to
pursue the action for legal separation should be disbelieved. The case unquestionably contemplated by the
parties and for which his services was engaged, was no other than an action for annulment of the
complainants marriage with her husband with the intention of marrying her British fiance. They did not
contemplate legal separation at all, for legal separation would still render her incapacitated to re-marry.
That the respondent was insisting in his answer that he had prepared a petition for legal separation, and that
she had to pay more as attorneys fees if she desired to have the action for annulment was, therefore, beyond
comprehension other than to serve as a hallow afterthought to justify his claim for services rendered. As
such, the respondent failed to live up to the standards imposed on him as an attorney. He thus transgressed
Canon 18, and Rules 18.01, 18.02 and 18.03 of the Code of Professional Responsibility.

Every attorney is entitled to have and receive a just and reasonable compensation for services performed at
the special instance and request of his client. As long as the attorney is in good faith and honestly trying to
represent and serve the interests of the client, he should have a reasonable compensation for such services.
The attorneys fees shall be those stipulated in the retainers agreement between the client and the attorney,
which constitutes the law between the parties for as long as it is not contrary to law, good morals, good
customs, public policy or public order. In the absence of the written agreement, the lawyers compensation
shall be based on quantum meruit, which means as much as he deserved. The determination of attorneys
fees on the basis of quantum meruit is also authorized when the counsel, for justifiable cause, was not able
to finish the case to its conclusion. Moreover, quantum meruit becomes the basis of recovery of
compensation by the attorney where the circumstances of the engagement indicate that it will be contrary
to the parties expectation to deprive the attorney of all compensation.

The respondent should not have accepted the engagement because as it was later revealed, it was way above
his ability and competence to handle the case for annulment of marriage. As a consequence, he had no basis
to accept any amount as attorneys fees from the complainant. He did not even begin to perform the
contemplated task he undertook for the complainant because it was improbable that the agreement with her
was to bring the action for legal separation. His having supposedly prepared the petition for legal separation
instead of the petition for annulment of marriage was either his way of covering up for his incompetence,
or his means of charging her more. Either way did not entitle him to retain the amount he had already
received.

4. Ma. Cecilia Advincula vs. Atty. Leonardo Advincula

A.C. No. 9226, June 14, 2016
BERSAMIN, J.:

FACTS:

Dr. Advincula has averred that Atty. Advincula committed unlawful and immoral acts; that while Atty.
Advincula was still married to her, he had extra-marital sexual relations with Ma. Judith Ortiz Gonzaga;
that the extra-marital relations bore a child in the name of Ma. Alexandria Gonzaga Advincula; that Atty.
Advincula failed to give financial support to their own children, namely: Ma. Samantha Paulina, Ma.
Andrea Lana, and Jose Leandro, despite his having sufficient financial resources; that he admitted in the
affidavit of late registration of birth of Alexandria that he had contracted another marriage with Ms.
Gonzaga; that even should Atty. Advincula prove that his declaration in the affidavit of late registration of
birth was motivated by some reason other than the fact that he truly entered into a subsequent marriage with
Ms. Gonzaga, then making such a declaration was in itself still unlawful; that siring a child with a woman
other than his lawful wife was conduct way below the standards of morality required of every lawyer; that
contracting a subsequent marriage while the first marriage had not been dissolved was also an unlawful
conduct; that making a false declaration before a notary public was an unlawful conduct punishable under
the Revised Penal Code; and that the failure of Atty. Advincula to provide proper support to his children
showed his moral character to be below the standards set by law for every lawyer. Dr. Advincula prayed
that Atty. Advincula be disbarred.

ISSUE: Whether or not respondent must be disbarred.

RULING: No. The good moral conduct or character must be possessed by lawyers at the time of their
application for admission to the Bar, and must be maintained until retirement from the practice of law. It is
expected that every lawyer, being an officer of the Court, must not only be in fact of good moral character,
but must also be seen to be of good moral character and leading lives in accordance with the highest moral
standards of the community. More specifically, a member of the Bar and officer of the Court is required
not only to refrain from adulterous relationships or keeping mistresses but also to conduct himself as to
avoid scandalizing the public by creating the belief that he is flouting those moral standards. If the practice
of law is to remain an honorable profession and attain its basic ideals, whoever is enrolled in its ranks should
not only master its tenets and principles but should also, in their lives, accord continuing fidelity to them.
The requirement of good moral character is of much greater import, as far as the general public is concerned,
than the possession of legal learning.

Although his siring the child with a woman other than his legitimate wife constituted immorality, he
committed the immoral conduct when he was not yet a lawyer. The degree of his immoral conduct was not
as grave than if he had committed the immorality when already a member of the Philippine Bar. Even so,
he cannot escape administrative liability. Taking all the circumstances of this case into proper context, the
Court considers suspension from the practice of law for three months to be condign and appropriate.

Atty. Advincula manifested in his compliance dated February 26, 2013 that he had immediately accepted
the resolution of the IBP Board of Governors suspending him from the practice of law for two months as
final and executory; that he had then gone on leave from work in the NBI for two months starting in
November and lasting until the end of December, 2012; and that such leave from work involved refraining
from performing his duties as a Legal Officer of the NBI. A lawyer like him ought to know that it is only
the Court that wields the power to discipline lawyers. The IBP Board of Governors did not possess such
power, rendering its recommendation against him incapable of finality. It is the Court's final determination
of his liability as a lawyer that is the reckoning point for the service of sanctions and penalties. As such, his
supposed compliance with the recommended two-month suspension could not be satisfied by his going on
leave from his work at the NBI. Moreover, his being a government employee necessitates that his
suspension from the practice of law should include his suspension from office. A leave of absence will not
suffice. This is so considering that his position mandated him to be a member of the Philippine Bar in good
standing. The suspension from the practice of law will not be a penalty if it does not negate his continuance
in office for the period of the suspension. If the rule is different, this exercise of reprobation of an erring
lawyer by the Court is rendered inutile and becomes a mockery because he can continue to receive his
salaries and other benefits by simply going on leave for the duration of his suspension from the practice of
law.
 5. Jessie Campugan vs. Atty. Federico Tolentino Jr.
A.C. No. 8261, March 11, 2015
BERSAMIN, J.:

FACTS:

Atty. Victorio, Jr. had replaced Atty. Edgardo Abad as counsel of the complainants in a civil action they
brought to seek the annulment of Transfer Certificate of Title (TCT) No. N-290546 of the Registry of Deeds
of Quezon City in the first week of January 2007 in the Regional Trial Court (RTC) in Quezon City. They
impleaded as defendants Ramon and Josefina Ricafort, Juliet Vargas and the Register of Deeds of Quezon
City. They caused to be annotated on TCT No. N-290546 their affidavit of adverse claim, as well as the
notice of lis pendens. Atty. Tolentino, Jr. was the counsel of defendant Ramon and Josefina Ricafort. As
the surviving children of the late Spouses Antonio and Nemesia Torres, they inherited upon the deaths of
their parents a residential lotL that they discovered that TCT No. RT64333(35652) had been unlawfully
cancelled and replaced by TCT No. N290546 of the Register of Deeds of Quezon City under the names of
Ramon and Josefina Ricafort; and that, accordingly, they immediately caused the annotation of their
affidavit of adverse claim on TCT No. N-290546. It appears that the parties entered into an amicable
settlement during the pendency of Civil Case No. Q-07-59598 in order to end their dispute, whereby the
complainants agreed to sell the property and the proceeds thereof would be equally divided between the
parties, and the complaint and counterclaim would be withdrawn respectively by the complainants (as the
plaintiffs) and the defendants. Pursuant to the terms of the amicable settlement, Atty. Victorio, Jr. filed a
Motion to Withdraw Complaint dated February 26, 2008, which the RTC granted in its order dated May
16, 2008 upon noting the defendants lack of objection thereto and the defendants willingness to similarly
withdraw their counterclaim. The complainants alleged that from the time of the issuance by the RTC of
the order dated May 16, 2008, they could no longer locate or contact Atty. Victorio, Jr. despite making
several phone calls and visits to his office; that they found out upon verification at the Register of Deeds of
Quezon City that new annotations were made on TCT No. N-290546.

ISSUE: Whether or not the respondent must be disbarred

RULING: A lawyer may be disciplined for misconduct committed either in his professional or private
capacity. The test is whether his conduct shows him to be wanting in moral character, honesty, probity, and
good demeanor, or whether his conduct renders him unworthy to continue as an officer of the Court. Verily,
Canon 7 of the Code of Professional Responsibility mandates all lawyers to uphold at all times the dignity
and integrity of the Legal Profession. Lawyers are similarly required under Rule 1.01, Canon 1 of the same
Code not to engage in any unlawful, dishonest and immoral or deceitful conduct. Failure to observe these
tenets of the Code of Professional Responsibility exposes the lawyer to disciplinary sanctions as provided
in Section 27, Rule 138 of the Rules of Court.

The complainants allegations of the respondents acts and omissions are insufficient to establish any
censurable conduct against them. The duty of the Register of Deeds is ministerial in nature under Section
10 of Presidential Decree No. 1529 (Property Registration Decree). A purely ministerial act or duty is one
that an officer or tribunal performs in a given state of facts, in a prescribed manner, in obedience to the
mandate of a legal authority, without regard to or the exercise of his own judgment upon the propriety or
impropriety of the act done. If the law imposes a duty upon a public officer and gives him the right to decide
how or when the duty shall be performed, such duty is discretionary, not ministerial. The duty is ministerial
only when its discharge requires neither the exercise of official discretion nor the exercise of judgment.
The Court finds no abuse of authority or irregularity committed by Atty. Quilala, Atty. Cunanan, and Atty.
Caluya, Jr. with respect to the cancellation of the notice of adverse claim and the notice of lis pendens
annotated on TCT No. N-290546. Whether or not the RTC order dated May 16, 2008 or the letter-request
dated June 30, 2008 had been falsified, fraudulent or invalid was not for them to determine inasmuch as
their duty to examine documents presented for registration was limited only to what appears on the face of
the documents. If, upon their evaluation of the letter-request and the RTC order, they found the same to be
sufficient in law and to be in conformity with existing requirements, it became obligatory for them to
perform their ministerial duty without unnecessary delay