LIST OF CASES

2016

Fenruary

1. UWE MATHAEUS vs. SPOUSES ERIC and GENEVIEVE MEDEQUISO

April

1. REPUBLIC OF THE PHILIPPINES v. HEIRS OF DIEGO LIM

May

1. Bradford United Church of Christ, Inc. v. Ando

June

1. Trinidad v. Fama Realty, Inc.

2. Malixi v. Mexicali Philippines

July

1. Pamaran v. Bank of Commerce

2. Petron Gasul LPG Dealers Association v. Lao

September

1. Naga Centrum Inc. v. Spouses Orzales

2. People of the Philippines v. Bombasi y Vergara

October

1. Leo’s Resturant and Café Bar v. Bensing

 UWE MATHAEUS vs. SPOUSES ERIC and GENEVIEVE MEDEQUISO
GR No.196651, February 03, 2016
By: Lapuz, Jesus Jr. Ros

Doctine: Certification Against Forum Shopping; Under Sections 1 and 2, Rule 42 of the 1997 Rules of Civil
Procedure, a party desiring to appeal from a decision of the Regional Trial Court (RTC) rendered in the exercise of
its appellate jurisdiction may file a verified petition for review with the Court of Appeals (CA), submitting together
with the petition a certification on non-forum shopping. noncompliance therewith or a defect therein, unlike in
verification, is generally not curable by its subse quent submission or correction thereof, unless there is a need to
relax the Rule on the ground of ‘substantial compliance’ or presence of ‘special circumstances or compelling
reasons.

FACTS: The Tagbilaran MTCC rendered a decision ordering petitioner to pay respondents P30,000. Petitioner
interposed an appeal before the RTC of Bohol. The RTC affirmed the decision of the MTCC. Petitioner moved to
reconsider but the RTC upheld its judgment. Petitioner filed a Petition for Review with the CA however it was
dismissed by the court. The Court of Appeals ratiocinated that the Verification and Certification on Non-Forum
Shopping was sworn to not before a notary public but before a clerk of court ergo considered as improperly verified
and treated as unsigned and dismissible.

ISSUES: 1. Whether or not clerks of court are at liberty to notarize complaints, answers, petitions, or any other
pleadings on a daily or regular basis;
2. Whether or not such action would lead to the dismissal of the case;

RULING:

1. No, they cannot. The Honorable Supreme Court stated that:

“Clerks of Court are notaries public ex-officio, and may thus notarize documents or administer oaths but only
when the matter is related to the exercise of their official functions. x x x [C]lerks of court should not,
in their ex-officio capacity, take part in the execution of private documents bearing no relation at all to
their official functions. We are not prepared to rule in petitioner’s favor on this score; as it is, the workload of a
clerk of court is already heavy enough. We cannot add to this the function of notarizing complaints, answers,
petitions, or any other pleadings on a daily or regular basis; such a responsibility can very well be relegated to
commissioned notaries public. Besides, if the practice – specifically the notarization by clerks of court of pleadings
filed in cases pending before their own salas or courts – is allowed, unpleasant consequences might ensue; it could
be subject to abuse, and it distracts the clerks of court’s attention from the true and essential work they
perform.”With the consequent denial of its intervention and dismissal of its complaint, petitioner should have
appealed such denial. An order denying a motion for intervention is appealable. Where the lower court’s denial of a
motion for intervention amounts to a final order, an appeal is the proper remedy. Having failed to take and
prosecute such appeal, petitioner acquired no right to participate in the proceedings, even question the judgment
of the RTC consequently rendered in said case.

2. Yes, it would lead to the dismissal of the case. The Honorable Supreme Court ruled that:
“Under Sections 1 and 2, Rule 42 of the 1997 Rules of Civil Procedure, a party desiring to appeal from a decision of
the RTC rendered in the exercise of its appellate jurisdiction may file a verified petition for review with the CA,
submitting together with the petition a certification on non-forum shopping. Under Section 3 of the same Rule,
“[t]he failure of the petitioner to comply with any of the foregoing requirements regarding the
payment of the docket and other lawful fees, the deposit for costs, proof of service of the petition, and
the contents of and the documents which should accompany the petition shall be sufficient ground for
the dismissal thereof” Specifically with respect to certifications against forum-shopping, we have repeatedly held
that “non-compliance therewith or a defect therein, unlike in verification, is generally not curable by its subsequent
submission or correction thereof, unless there is a need to relax the Rule on the ground of ‘substantial compliance’
or presence of ‘special circumstances or compelling reasons.”‘ Taking the foregoing circumstances and
considerations to mind, the Court is not inclined to relax the rules for the petitioner’s benefit; it perceives no
compelling reasons or circumstances to rule in his favor. Quite the contrary, the CA pronouncement ordering the
dismissal of his Petition for Review is just, and thus should stand.”
 REPUBLIC OF THE PHILIPPINES v. HEIRS OF DIEGO LIM
G.R. No. 195611 April 4, 2016
By: Lapuz, Jesus Jr. Ros

Doctine: A prospective intervenor’s right to appeal applies only to the denial of his intervention. Not being a party
to the case, a person whose intervention the court denied has no standing to question the decision of the court but
only the trial court’s orders denying his intervention, not the decision itself. As a general rule, a party who has not
appealed cannot obtain from the appellate court any affirmative relief other than the ones granted in the appealed
decision.

FACTS: Director of Lands filed with the then CFI of Zambales (CFI) a petition for cadastral hearing to settle and
adjudicate Lot 42. The Director of Lands claimed that Lot 42 was part of the public domain. Respondents
Romamban , Parong, Lim, and Josefat each claimed ownership of parts of the subject land. The CFI rendered
judgment in cadastral case adjudicating in favor of respondents. The petitioner Republic of the Philippines took
issue before the CA via an appeal. The CA issued a ruling in favor of the Republic.

Meanswhile, Lim and Josefat asserted that they were the actual occupants of the lot, and have filed with the
government applications to acquire the same; that Romamban and Parong surreptitiously subdivided the lot and
sold the lots to their co-respondents. Thus, they prayed that Romamban, Parong, and the other respondents be
ordered to vacate the lot and pay damages. Petitioner republic filed a motion for intervention which was granted
and its complaint in intervention was admitted. However, the trial court, the said complaint in intervention was
later dismissed for failure to prosecute.

RTC: declared the defendants and their respective transferees to be the absolute owners and lawful possessors.

The CA: rendered a decision affirming the RTC’s decision.

ISSUE: whether petitioner could appeal the RTC’s Decision

RULING: With the consequent denial of its intervention and dismissal of its complaint, petitioner should have
appealed such denial. An order denying a motion for intervention is appealable. Where the lower court’s denial of a
motion for intervention amounts to a final order, an appeal is the proper remedy. Having failed to take and
prosecute such appeal, petitioner acquired no right to participate in the proceedings, even question the judgment
of the RTC consequently rendered in said case.

A prospective intervenor’s right to appeal applies only to the denial of his intervention. Not being a party to the
case, a person whose intervention the court denied has no standing to question the decision of the court but only
the trial court's orders denying his intervention.

Since petitioner had no right to appeal the RTC’s decision, it was not entitled to a resolution of the substantive
issues it raised – particularly who is properly entitled to the subject land. Be that as it may, petitioner is not left
without a remedy. It can still file a reversion case against Romamban and Parong.

As mere respondent in herein case, Llim and Josefat cannot grant the affirmative relief they seek as they did not
themselves file a petition questioning the appellate court's decision. "It is a fundamental principle that a party who
does not appeal, or file a petitioμ for certiorari, is not entitled to any affirmative relief.
 Bradford United Church of Christ, Inc. v. Ando
G.R. No. 195669 May 30, 2016
Ponente: Del Castillo, J.
By: Alba, Angela

Doctrine: The filing of the summary action for unlawful detainer during the pendency of an action for recovery of
ownership of the same parcel of land subject of the summary action of unlawful detainer does not amount to forum
shopping.

Facts: Petitioner Bradford United Church of Christ, Inc. (BUCCI) filed a Complaint for unlawful detainer and
damages against herein respondents before the Municipal Trial Court in Cities (MTCC) of Mandaue City.

The MTCC rendered an order directing BUCCI to show cause why its Complaint should not be dismissed for its
failure to comply with the requirement on the certification against forum shopping under Rule 7, Section 5 of the
Rules of Court. According to the MTCC, BUCCI failed to mention in its certification against non--forum shopping a
complete statement of the present status of another case con-erning the recovery of ownership of certain parcels
of land earlier filed before the Regional Trial Court (RTC) by the UCCPI and the MBC against BUCCI.

The recovery of ownership case also involved the same parcel of land subject of the unlawful detainer case, and yet
another parcel of land denominated simply as Lot 3--C. MTCC issued an Order dismissing the unlawful detainer
case with prejudice for BUCCI’s failure to comply with the rule on certification against forum shopping. BUCCI
appealed to the RTC. The RTC affirmed the MTCC’s dismissal thereof, with prejudice. The RTC held that BUCCI was
guilty of forum shopping because it failed to certify under oath that there was another action involving the same
parties and the same Lot 3­F still pending before another court. BUCCI’s motion for reconsideration was likewise
denied by the RTC. BUCCI filed a Petition for Review before the CA. The CA held that the MTCC and the RTC
correctly dismissed the unlawful detainer case. Hence, BUCCI filed its Petition for Review on Certiorari with the
Supreme Court.

Issue: Whether BUCCI committed forum shopping when it failed to disclose in the certification on non--forum
shopping of the unlawful detainer case a complete statement of the status of the action for recovery of ownership
of property then pending before the RTC of Mandaue City.

Held: No, BUCCI did not commit forum shopping when it failed to disclose in the certification on non--forum
shopping of the unlawful detainer case a complete statement of the status of the action for recovery of ownership
of property then pending before the RTC of Mandaue City.

Section 5, Rule 7 of the Rules of Court requires a twofold compliance, and this covers both the non--commission of
forum shopping itself, and the submission of the certification against forum shopping.

x x x The essence of forum shopping is the filing of multiple suits involving the same parties for the same cause of
action, either simultaneously or successively, for the purpose of obtaining a favorable judgment. It exists where
the elements of litis pendentia are present or where a final judgment in one case will amount to res judicata in
another. On the other hand, for litis pendentia to be a ground for the dismissal of an action, the following requisites
must concur: (a) identity of parties, or at least such parties who represent the same interests in both actions; (b)
identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity
with respect to the two preceding particulars in the two cases is such that any judgment that may be rendered in
the pending case, regardless of which party is successful, would amount to res judicata in the other case.

Here, there is only identity of parties between the summary action of unlawful detainer and the land ownership
recovery case. However, the issues raised are not identical or similar in the two cases. The issue in the unlawful
detainer case is which party is entitled to, or should be awarded, the material or physical possession of the
disputed parcel of land (or possession thereof as a fact); whereas the issue in the action for recovery of ownership
is which party has the right to be recognized as lawful owner of the disputed parcels of land.

With respect to res judicata, the following requisites must concur to bar the institution of a subsequent action: “(1)
the former judgment must be final; (2) it must have been rendered by a court having jurisdiction over the subject
matter and [over] the parties; (3) it must be a judgment on the merits; and (4) there must be, between the first
and second actions, (a) identity of parties, (b) identity of subject matter, and (c) identity of cause of action.” It
bears notice that in its certification against non--forum shopping, now attached to this instant Petition, BUCCI
mentioned that the decision in the land ownership recovery case was still pending appeal before the CA, a claim
that was not controverted at all by respondents. Simply put, this means that the former judgment is not yet final.
Furthermore, the causes of action in the two cases are not identical or similar. To repeat, in the summary action of
unlawful detainer, the question to be resolved is which party has the better or superior right to the
physical/material possession (or de facto possession) of the disputed premises. Whereas in the action for recovery
of ownership, the question to be resolved is which party has the lawful title or dominical right (i.e., owner’s right)
to the disputed premises.

The CA thus erred in holding that, “[a]n adjudication in respondents’ recovery of ownership case would constitute
an adjudication of petitioner BUCCI’s unlawful detainer case, such that the court handling the latter case would be
bound thereby and could not render a contrary ruling in the issue of physical or material possession.”
 Trinidad v. Fama Realty, Inc.
G.R. No. 203336 June 6, 2016
Ponente: Del Castillo, J.
By: Alba, Angela

Doctrine: Where contempt is committed against quasi--judicial entities, the filing of contempt charges in court is
observed only when there is no law granting contempt powers to these quasi--judicial entities.

Facts: This is a prolonged case that has been going on since 1995. This case started with an action for specific
performance filed before the HLURB against respondent FAMA. After years of litigation, a Decision was issued
finally disposing the case. A writ of execution by the HLURB, however, the case still continued and execution was
not yet had.

This prompted petitioners to file a Petition for Contempt before the Supreme Court, praying that respondents be
cited for indirect contempt for delaying the execution of the HLURB Board’s April 2, 1997 Decision; for disregarding
the computations contained in the final and executory HLURB Board and Supreme Court dispositions; for filing an
appeal which is tantamount to a collateral attack of said dispositions; for violating the HLURB Rules of Procedure;
and for initiating another round of proceedings that touches on the merits of the case, which have already been
determined with finality. Petitioners further pray that the Court order the dismissal of respondents’ HLURB appeal,
which to them is unauthorized and prohibited under the HLURB Rules of Procedure.

Issue: Whether the Petition for Contempt filed before the Supreme Court in an HLURB case is proper.

Held: No, a Petition for Contempt before the Supreme Court is not proper in an HLURB case. Under the
circumstances, petitioners should have sought to cite respondents in contempt before the HLURB itself, and not
this Court.

Where contempt is committed against quasi--judicial entities, the filing of contempt charges in court is observed
only when there is no law granting contempt powers to these quasi--judicial entities. Under Section 12, Rule 71 of
the Rules of Court on Contempt, it is thus provided:

Sec. 12. Contempt against quasi--judicial entities. —Unless otherwise provided by law, this Rule shall apply to
contempt committed against persons, entities, bodies or agencies exercising quasi--judicial functions, or shall have
suppletory effect to such rules as they may have adopted pursuant to authority granted to them by law to punish
for contempt. The Regional Trial Court of the place wherein the contempt has been committed shall have
jurisdiction over such charges as may be filed therefor.

The Court in Robosa v. National Labor Relations Commission (First Division), made a pronouncement, thus: “… Rule
71 of the Rules of Court does not require the labor arbiter or the NLRC to initiate indirect contempt proceedings
before the trial court. This mode is to be observed only when there is no law granting them contempt powers.”

Such pronouncement applies to the HLURB as well; to restate, where contempt is committed against quasi- judicial
entities, the filing of contempt charges in court is allowed only when these quasi--judicial entities are not by law
granted contempt powers. Executive Order No. 648, the HLURB Charter, grants the HLURB Board the power to cite
and declare any person, entity or enterprise in direct or indirect contempt “[w]henever any person, entity or
enterprise commits any disorderly or disrespectful conduct before the Commission or in the presence of its
members or authorized representatives actually engaged in the exercise of their official functions or during the
conduct of any hearing or official inquiry by the said Commission, at the place or near the premises where such
hearing or proceeding is being conducted with obstruct, distract, interfere or in any other way disturb, the
performance of such functions or the conduct of such hearing or proceeding”; or “[w]henever any person,
enterprise or entity fails or refuses to comply with or obey without justifiable reason, any lawful order, decision,
writ or process of the Commission.” Accordingly, Rule 22 of the 2011 HLURB Revised Rules of Procedure, on
Contempt, provides:

Section 81. Indirect Contempt.—Any person, enterprise, or entity who fails or refuses to comply with or obey
without justifiable reason any lawful order, decision, writ, or process of the Board of Commissioners or its Arbiters
or Mediators, or any of its authorized officials, said person, enterprise, or entity shall, upon motion, be declared in
indirect contempt and may, in addition to the fine of P2,000.00, be imposed a fine of P500.00 for each day that the
violation or failure or refusal to comply continues, and order the confinement of the offender until the order or
decision shall have been complied with. In case the offender is a partnership, corporation, or asso-ciation or
enterprise, the above fine shall be imposed on the assets of such entity and the president, managing partner, or
chief executive officer thereof shall be ordered confined.

Thus, for respondents’ perceived misbehavior, disobedience, and disregard of the May 24, 2012 Order of Arbiter
Babiano and the HLURB Board’s April 2, 1997 Decision, petitioners should have invoked the contempt powers of
the HLURB instead. This Court does not have jurisdiction to resolve the instant Petition.
 Malixi v. Mexicali Philippines
G.R. No. 205061 June 8, 2016
Ponente: Del Castillo, J.
By: Alba, Angela

Doctrine: When a party to a suit appears by counsel, service of every judgment and all orders of the court must
be sent to the counsel. Notice to counsel is an effective notice to the client, while notice to the client and not his
counsel is not notice in law.

Facts: Petitioner Malixi filed an Amended Complaint for illegal dismissal and non-payment of service charges
before the Labor Arbiter against respondents Mexicali and its General Manager, Francesca Mabanta. She alleged
that she was employed by Mexicali as a team leader in the delivery service. She also alleged that she tendered her
resignation letter pursuant to Mexicali’s training officer Teves’ statement that Mexicali intends to transfer and
assign her as a Store Manager at a newly opened branch in Alabang Town Center, which is a joint venture between
Mexicali and Calexico Food Corporation (Calexico). She then averred that while working as a Store Manager in her
new designation, she was forced by Teves to sign an end--of--contract letter by reason of a criminal complaint for
sexual harassment she filed on December 3, 2008 against Mexicali’s operations manager, Pontero. When she
refused, Mexicali’s administrative officer, Luna, personally went to the branch and caused the signing of the same.
Upon her vehement refusal to sign, she was informed by Luna that it was her last day of work.

The Labor Arbiter rendered a Decision in favor of petitioner declaring that she was illegally dismissed and ordering
Calexico to reinstate her. Respondent filed an Appeal Memorandum with the NLRC, which was initially dismissed for
having been filed beyond the 10- day reglementary period to appeal. Respondents filed a Motion for
Reconsideration and Motion for Issuance of TRO/Injunction explaining that the Appeal Memorandum filed by them
contained a typographical error as to the date of actual receipt of the Labor Arbiter’s Decision; that while a copy of
the said decision was received by them on October 13, 2009, the same was only received by their counsel of record
on October 15, 2009 which is the reckoning date of the 10- day reglementary period within which to appeal.

The NLRC granted respondent’s motion and reinstated the appeal. The NLRC ruled that pursuant to its Rules of
Procedure, the date to reckon the 10-day reglementary period should be the date when the counsel actually
received the copy of the Labor Arbiter’s Decision and that respondents’ appeal was filed on time.

The NLRC likewise ruled on the merits of the appeal. It partly granted it by sustaining respondent’s contention that
Mexicali and Calexico are separate and distinct entities, Calexico being the true employer of petitioner at the time
of her dismissal. Contrary to the findings of the Labor Arbiter, petitioner voluntarily resigned from Mexicali to
transfer to Calexico in consideration of a higher pay and upon doing so severed her employment ties with Mexicali.
The NLRC, nevertheless, ordered Mexicali, being the employer of Teves and Luna who caused petitioner’s
termination from her employment with Calexico, to reinstate petitioner to her job at Calexico.

Petitioner filed a Petition for Certiorari with the Court of Appeals, which was denied. Petitioner’s motion for
reconsideration was likewise denied. Hence, this Petition.

Issue: Whether the appeal before the NLRC was filed on time.

Held: Yes, the appeal before the NLRC was timely filed.

Section 6, Rule III of the 2005 Revised Rules of Procedure of the NLRC (2005 NLRC Rules) expressly mandates that
“(f)or purposes of appeal, the period shall be counted from receipt of such decisions, resolutions, or orders by the
counsel or representative of record.” This procedure is in line with the established rule that if a party has appeared
by counsel, service upon him shall be made upon his counsel. “The purpose of the rule is to maintain a uniform
procedure calculated to place in competent hands the prosecution of a party’s case.” Thus, Section 9, Rule III of
the NLRC Rules provides that “(a)ttorneys and other representatives of parties shall have authority to bind their
clients in all matters of procedure x x x.”

Accordingly, the 10--day period for filing an appeal with the NLRC should be counted from the receipt by
respondents’ counsel of a copy of the Labor Arbiter’s Decision on October 15, 2009. Petitioner’s contention that the
reckoning period should be the date respondents actually received the Decision on October 13, 2009 is bereft of
any legal basis. As mentioned, when a party to a suit appears by counsel, service of every judgment and all orders
of the court must be sent to the counsel. Notice to counsel is an effective notice to the client, while notice to the
client and not his counsel is not notice in law. Therefore, receipt of notice by the counsel of record is the reckoning
point of the reglementary period. From the receipt of the Labor Arbiter’s Decision by respondent’s counsel on
October 15, 2009, the 10th day falls on October 25, 2009 which is a Sunday, hence, Monday, October 26, 2009, is
the last day to file the appeal. Consequently, respondents’ appeal was timely filed.
 Pamaran v. Bank of Commerce
G.R. No. 205753 July 4, 2016
Ponente: Del Castillo, J.
By: Alba, Angela

Doctrine: A real action must be filed in the proper court which has jurisdiction over the subject real property,
while a personal action may be filed where the plaintiff or defendant resides, or if the defendant is a nonresident,
where he may be found, at the election of the plaintiff. Personal actions include those filed for recovery of personal
property, or for enforcement of contract or recovery of damages for its breach, or for the recovery of damages for
injury committed to a person or property.

Facts: Petitioner instituted a Complaint with the RTC of Olongapo against respondent Bank. She alleged that she
was the owner of the house which was built on the lots owned by her children. She also alleged that while her
children, the owners of the lot, obtained several loans from respondent Bank secured by real estate mortgages on
their lots, these real estate mortgages did not cover her house as she did not consent to it nor was she a party to
the said mortgages. She further alleged that she was dispossessed of her house by virtue of a writ of possession
issued by RTC Muntinlupa in favor of respondent Bank.

On its Answer with Compulsory Counterclaim, respondent Bank raised the following affirmative defenses: 1) Rosa
has no cause of action against it; 2) the Complaint is a collateral attack on its title and an interference with the
jurisdiction of the RTC Muntinlupa; 3) Rosa was not deprived of due process; and 4) the venue was improperly laid.
Respondent Bank insisted that the Complaint interfered with the jurisdiction of RTC Muntinlupa, which already
granted in its favor writs of possession over the properties. It argued that while the Complaint is captioned as one
for “Damages and Restitution of Value of Residential House Unlawfully Taken,” the same is a real action because it
concerns Rosa’s claim of ownership over the subject house. It posited that the Complaint should have been filed
before the RTC Muntinlupa where such property is located. The RTC of Olongapo granted respondent Bank’s motion
to dismiss. Petitioner filed a motion for reconsideration which was denied by the RTC. Hence, this Petition.

Issues:
1. Whether the RTC Olongapo erred in dismissing the Complaint, without trial, and only upon motion to
dismiss by way of affirmative defenses raised in respondent Bank's Answer.
2. Whether the action is a real action or a personal action.

Held:
1. Yes, RTC Olongapo erred in dismissing the Complaint, without trial, and only upon motion to dismiss by
way of affirmative defenses raised in respondent Bank’s Answer.

Respondent Bank submitted its motion to dismiss by way of affirmative defenses. There had been no presentation
of evidence made and petitioner had not yet rested her case.

A cause of action is an act or omission by which a person violates the right of another. Its essential elements are:
(1) plaintiff’s right, which arises from or is created by whatever means, and is covered by whatever law; (2)
defendant’s obligation not to violate such right; and (3) defendant’s act or omission in violation of the such right
and for which plaintiff’s may seek relief from defendant.

When an action is filed, the defendant may, nevertheless, raise the issue of want of cause of action through a
proper motion to dismiss. Thus, a distinction must be made between a motion to dismiss for failure to state a
cause of action under Section 1(g) of Rule 16, and the one under Rule 33 of the Rules of Court.

In the first situation, the motion must be made before a responsive pleading is filed; and it can be resolved only on
the basis of the allegations in the initiatory pleading. On the other hand, in the second instance, the motion to
dismiss must be filed after the plaintiff rested his case; and it can be determined only on the basis of the evidence
adduced by the plaintiff. In the first case, it is immaterial if the allegations in the complaint are true or false;
however, in the second situation, the judge must determine the truth or falsity of the allegations based on the
evidence presented.
Stated differently, a motion to dismiss under Section 1(g) of Rule 16 is based on preliminary objections made
before the trial while the motion to dismiss under Rule 33 is a demurrer to evidence on the ground of insufficiency
of evidence, and is made only after the plaintiff rested his case.

Here, respondent Bank submitted its motion to dismiss by way of affirmative defenses. Clearly, there had been no
presentation of evidence made and Rosa had not yet rested her case. As respondent’s motion was made before
trial then, it falls within the first instance above discussed.

Respondent’s motion to dismiss must be resolved with reference to the allegations in the Complaint assuming them
to be true. The RTC Olongapo does not need to inquire on the truthfulness of these allegations and declare them to
be false. If it does, such court would be denying the plaintiff (Rosa) of her right to due process of law. In other
words, in determining whether a complaint states or does not state a cause of action, the court must hypothetically
admit the truth of the allegations and determine if it may grant the relief prayed for based on them. The court
cannot consider external factors in determining the presence or the absence of a cause of action other than the
allegations in the complaint.

The allegations in the Complaint provide that: Rosa is the owner of a residential house built on the lots owned by
her children; by reason of the foreclosure of these lots, Bankcom acquired the lots and also appropriated Rosa’s
house; thus, Rosa seeks recovery of damages against Bankcom. Hypothetically admitting these allegations to be
true, Rosa’s cause of action against Bancom involves a) her right over her house; b) Bankcom’s obligation to
respect Rosa’s right to enjoy her house; and c) Bankcom’s violation of such right, which gave rise to this action for
damages.

In granting respondent’s motion to dismiss, the RTC Olongapo took into consideration the arguments set forth in
the motion, and ignored the assertions in the Complaint. Not only did the RTC Olongapo disregard the allegations
in the Complaint, it also failed to consider that the Bankcom’s arguments necessitate the examination of the
evidence that can be done through a full--blown trial. The determination of whether Rosa has a right over the
subject house and of whether Bankcom violated this right cannot be addressed in a mere motion to dismiss. Such
determination requires the contravention of the allegations in the Complaint and the full adjudication of the merits
of the case based on all the evidence adduced by the parties.

2. The action is a personal action. Hence, it was properly filed before the RTC Olongapo.

This action involves Rosa’s interest in the value of the house but only insofar as to determine her entitlement to
damages. She is not interested in the house itself. Indeed, the primary objective of the Complaint is to recover
damages, and not to regain ownership or possession of the subject property. Hence, this case is a personal action
properly filed in the RTC Olongapo, where Rosa resided.
 Petron Gasul LPG Dealers Association v. Lao
G.R. No. 205010 July 18, 2016
Ponente: Del Castillo, J.
By: Alba, Angela

Doctrine: Generally, the Search Warrant application must be filed with the court which has territorial jurisdiction
over the place where the offense was alleged to be committed. However, for compelling reasons, which must be
expressly stated in the application, a Search Warrant application may be filed in a court other than the one having
jurisdiction over the place where the purported offense was committed and where the Search Warrants shall be
enforced.

Facts: On behalf of the People of the Philippines, Lising, the Supervising Agent of the National Bureau of
Investigation--Cordillera Administrative Region, filed with the RTC- La Trinidad separate Appli-cations for Search
Warrants against Benguet Gas and its owners; and Baguio Gas and its owners (respondents) for illegal trade of LPG
products, and underfilling of LPG products and/or possession of underfilled LPG cylinders.

Lising declared that his SW Applications with the RTC-La Trinidad included Baguio Gas even if it is located in Baguio
City because of “compelling reasons of urgency, subject, time, and place.” Lising explained that a) time is of
essence here as the volume of LPG cylinders being illegally refilled by Baguio Gas reflected the capacity of its
facilities to perpetrate illegal acts resulting to unhampered illegal trade of LPG and unhampered underfilling of LPG
products or possession of underfilled LPG cylinders for the purpose of sale, distribution, exchange or barter; b) the
brisk sales of LPG cylinders may result in the depletion of stocks, leaving nothing to be seized if an SW will be
eventually issued but at a later date; and c) the immediate hearing on and issuance of SW are precautions against
possible leakage of information to Baguio Gas.

The RTC -La Trinidad issued Search Warrants against Benguet Gas and its owners and against respondents. It
ordered Lising to make an immediate search on the above described premises, and seize the personal properties
subject of the Search Warrants.

Benguet Gas and its owners, and respondents respectively moved for the quashal of the Search Warrants against
them. According to Benguet Gas and its owners, there existed no probable cause for the issuance of Search
Warrants against them; such Search Warrants failed to describe with particularity the place to be searched and the
items to be seized; and the transfer of the seized items to another place will cause their deterioration resulting to
business losses and inconvenience.

Meanwhile, respondents argued that the offenses imputed against them were committed outside the RTC -La
Trinidad’s territorial jurisdiction, and there is no showing of any compelling reason that would warrant the issuance
of Search Warrants against them. They further contended that the Search Warrants were not supported by
probable cause and that they failed to describe with particularity the place to be searched and the items to be
seized.

The RTC -La Trinidad granted the respective Motions to Quash Search Warrants. On appeal, the CA partially
granted petitioner’s appeal reinstating the Search Warrants as to Benguet Gas while affirming the quashal of the
Search Warrants as to Baguio Gas. Hence, this Petition.

Issue: Whether there is any compelling reason warranting the RTC­ La Trinidad’s issuance of Search Warrants on
respondents, whose business presence is in Baguio City, not in La Trinidad.

Held: Yes, there are compelling reasons warranting the RTC La Trinidad to issue Search Warrants on respondents
whose business presence is in Baguio City, not La Trinidad.

Section 2 of Rule 126 of the Rules of Court provides for the proper court where an SW application shall be filed, to
wit:

Section 2. Court where application for search warrant shall be filed.—An application for search warrant shall be filed
with the following:

1. Any court within whose territorial jurisdiction a crime was committed.

 2. b) For compelling reasons stated in the application, any court within the judicial region where the crime
was committed if the place of the commission of the crime is known, or any court within the judicial region
where the warrant shall be enforced.
xxxx

Generally, the Search Warrant application must be filed with the court which has territorial jurisdiction over the
place where the offense was alleged to be committed. This, however, is not an iron--clad rule. For compelling
reasons, which must be expressly stated in the application, a Search Warrant application may be filed in a court
other than the one having jurisdiction over the place where the purported offense was committed and where the
Search Warrants shall be enforced.

In this case, Lising cited the foregoing compelling reasons on why the two separate Search Warrants applications
against respondents were filed with the RTC -La Trinidad instead in RTC -Baguio City, to wit:

The ‘compelling reasons of urgency, subject, time and place’ in the instant application[s] are:
(a) Time is absolutely of the essence in the case.
As attested to by [Lising] and his witness [Fortea] in their attached affidavits, the volume of the LPG cylinders
being illegally refilled by the respondents reflects the capacity of respondents’ facilities to perpetrate their
unauthorized and illegal acts. Respondents’ continued and unhampered acts of illegally tracing LPG products, in
violation of Section 2(a), in relation to Sections 3(c) and 4, of BP 33, as amended; [and of under delivery or
underfilling of LPG products or possession of underfilled LPG cylinders for the purpose of sale, distribution,
transportation, exchange or barter, in violation of Section 2(c), in relation to Section 4, of BP 33, as amended[,]
will result in the unabated and unhampered endangerment of consumers, deprivation of business from the
legitimate LPG industry players, and denial of payment of proper taxes to the government.
(b) The brisk sales of the subject LPG cylinders might result in the depletion of available stocks, leaving nothing to
be seized in case a search warrant be issued but on a later date.
(c) The immediate hearing on and issuance of the search warrant applied for are precautions against possible
leakage of information to respondents.

We find that the above cited portions of the SW applications satisfactorily comply with the required statement of
compelling reasons on why they were filed in RTC- La Trinidad and not in a court in Baguio City.
 Naga Centrum Inc. v. Spouses Orzales
G.R. No. 203576, September 14, 2016
Ponente: Del Castillo, J.
By: Arid, Hannah Mhae G.

Doctrine: If petitioner did not agree with Judge Formaran III,s continued handling of the case, it should have
registered its timely objection, that is, after receiving the pairing judge’s order declaring that he will resolve the
case. It was only after the unfavourable decision that it moved to vacate the same on ostensible ground that Judge
Formaran III had no authority as pairing judge to decide the case.

Facts: The plaintiffs-appellees5 own a house and lot situated at No. 28-B Valentin Street, Sabang, Naga City which
is surrounded on the North by the property of Aurora dela Cruz; on the West, by the property of Bernardo
Tawagon; and on the East and South, by the property of the defendant-appellant.6 The plaintiffs-appellees alleged
that when they acquired their property in 1965, their access to the public highway (Valentin Street) was through
Rizal Street, which forms part of a property now owned by the defendant-appellant But when the squatters
inhabiting said place were evicted, the defendant-appellant caused Rizal Street to be closed by enclosing its
property with a concrete fence. Although the plaintiffs-appellees were allowed to pass through the steel gate of the
defendant-appellant, the same is subject to the schedule set by the latter. This prompted the plaintiffs-appellees to
ask for a permanent right of way through the intervention of the court after the defendant-appellant refused their
offer to buy the portion where the proposed right of way is sought to be established.

The defendant-appellant, however, alleged that there is an existing passageway leading to Valentin Street along
Lot 1503 of Cad-290 which is available to the plaintiffs-appellees. Accordingly, it argued that the plaintiffs-
appellees' cause of action should be against the owner of the said property. But since the said owner of Lot 1503
was not impleaded, the instant complaint is defective for failure to implead indispensable party. It also denied mat
it granted the plaintiffs-appellees right of way on its property stating that title use by the latter of Rizal Street as
access to Valentin Street is unauthorized and illegal. Moreover, it said that the property of the plaintiffs-appellees
became isolated due to their own acts. As a counterclaim, the defendant-appellant asked for damages in the form
of litigation expenses, attorney's fees, and nominal damages.

RTC: rendered judgment in favor of the plaintiffs-appellees. The trial court found based on the two ocular
inspections conducted that the property of the plaintiffs-appellees is indeed isolated, and that an outlet to a public
road could be most conveniently and practically established along the property of the defendant-appellant which is
considerably bigger in size at 1.9 hectares than that of the other surrounding adjacent owners, like Bernardo
Tawagon, whose property measures only 140 square meters, Felisa Estela, 90 square meters, and Aurora dela
Cruz, 116 square meters, and which would provide the shortest route fora the public road to the former's
property[; t]hat the isolation of their property was not due to their own act[; t]hat the easement would be
established on the portion least prejudicial to the property of the defendant-appellant, that is, alongside the
boundary of its property and that of Felisa Estela and Aurora dela Cruz[; and t]hat the plaintiffs-appellees were
willing to pay the corresponding damages provided for by law if the right of way would be granted.

The trial court held that since the plaintiffs-appellees have an existing sufficient outlet to a public road through
Rizal Street when they bought their property in 1965, it was not necessary for them to demand a right of way from
the vendor of their property as suggested by the defendant-appellant. It opined that had the plaintiffs-appellees
known that Rizal Street would someday be closed by the defendant-appellant, they 'would never built [sic] a house
whose access would be towards the skies'. As to the concrete structure constructed by the defendant-appellant
along the proposed right of way, the trial court held that the portion which extends or obstructs the said proposed
right of way should be considered an illegal structure because it was placed after the instant complaint had already
been filed.

CA: AFFRIMED. Petitioner filed an appeal before the CA arguing that the trial court's decision was void as it was
issued by a pairing judge even after the regular judge for the sala had already been appointed; that even assuming
that the pairing judge had jurisdiction to render the decision, he should have held that respondents should have
sought a right of way from the seller when they bought the property; that the judge disregarded the fact that
Felisa Estela (Estela) and Aurora dela Cruz (Dela Cruz) should have also been impleaded in the case, since
respondents were using their properties for ingress and egress as well; that for failing to implead Estela and Dela
Cruz, Civil Case No. 2004-0036 should have been dismissed instead; and that it was error for the trial court to
have ordered the establishment of the easement at the boundary of petitioner, Estela, and Dela Cruz's respective
lots. The CA argued that as it appears, Judge Pablo Formaran III was the Presiding Judge of RTC-Naga City, Branch
21 and the Pairing Judge of Branch 22. After the case was submitted for decision, Judge Efren G. Santos was
appointed as the new Presiding Judge of Branch 22. However, he inhibited himself from deciding the case. Hence,
the case was raffled anew to Branch 26. But the Presiding Judge of Branch 26 refused to take cognizance of the
case, instead he remanded it to the Raffle Committee and suggested that the case should be decided upon by
Judge Pablo Formaran III pursuant to OCA Circular. Pursuant to the said memorandum, the plaintiffs-appellees
were ordered to manifest in writing whether they want their case to be decided by Judge Pablo Formaran III who
was the one who heard the case until it was submitted for decision. In their manifestation, the plaintiffs-appellees
opted for Judge Pablo Formaran III to decide their case. Having been confirmed that he has the authority to decide
the case, Judge Pablo Formaran III issued an order declaring that he would now resolve the merits of the case.

Issues:
1. Whether Easement should be granted.
2. Whether Judge Formaran III has jurisdiction to render the assailed decision.

Held:

1. YES, Judge Formaran has jurisdiction to issue the assailed decision. The Court finds no irregularity in the
assumption of the case by Judge Formaran III. On the contrary, he decided the case after his colleagues recused
themselves. His re-assumption of the case is not without valid reason. Even assuming, but only for the sake of
argument, that there is a hint of validity in petitioner's legal argument in this respect, Judge Formaran III's
Decision cannot be nullified, as it is deemed accepted by petitioner. It did not take issue with the OCA's findings
when they came out. Moreover, if petitioner did not agree with Judge Formaran III's continued handling of the
case, it should have registered its timely objection, that is, after receiving the pairing judge's order declaring that
he will resolve the case. And, when Judge Santos inhibited himself from deciding the case and the new judge to
whom the case was raffled likewise refused to take over, nothing was heard from petitioner even at this juncture.
And even after the case was finally accepted by Judge Formaran III, but not without the sanction of the November
9, 2008 OCA Memorandum citing OCA Circular No. 90-2004 as basis for Judge Formaran III to decide the case,
petitioner kept silent. It was only after the unfavorable December 23, 2008 Decision came out that it moved to
vacate the same on the ostensible ground that Judge Formaran III had no authority as pairing judge to decide the
case. In short, petitioner had multiple opportunities to quell its doubts; by not seizing upon these opportunities, it
confirmed that it did not have any.

The Court said that after voluntarily agreeing that Judge Formaran should hear and decide their case and
encountering an adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of
the court.

2. YES, easement should be granted. To be entitled to an easement of right of way, the following requisites should
be met:
1. An immovable is surrounded by other immovables belonging to other persons, and is without adequate
outlet to a public highway;
2. Payment of proper indemnity by the owner of the surrounded immovable;
3. The isolation of the immovable is not due to its owner's acts; and
4. The proposed easement of right of way is established at the point least prejudicial to the servient
estate, and insofar as consistent with this rule, where the distance of the dominant estate to a public
highway may be the shortest.

The Supreme Court held that all the requirements have been met.

On the argument of the petitioner that while the case for the right of way was still pending and it constructed
structures on the site subject of the right of way and assailed thereafter that the petition on the right of way was
improper because of the structures already built, the Supreme Court held that petitioner is guilty of gross and
evident malice.

“Petitioner thus acknowledged respondents’ right to use Rizal Street. It should have known from familiarity not
only with its own land, but with those adjoining it, and from the ongoing proceedings in the case, that respondents
had no other way to and from Valentin Street than through its property. For this reason, it is guilty of gross and
evident malice and bad faith when, even while Civil Case No. 2004-0036 was pending, it deliberately blocked
respondents’ access to Rizal Street by constructing a building thereon, dumping filling materials and junk on the
main gate of respondents’ home, and converting portions of the road into an auto repair shop and parking space,
making it difficult and inconvenient, if not humiliating, for respondents to traverse the path to and from their home.
Under Article 19 of the Civil Code, “every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith.” Under Article 26, “every
person shall respect the dignity, personality, privacy and peace of mind of his neighbors.” Petitioner’s action
betrays a perverse and deliberate intention to hurt and punish respondents for legally demanding a right of way
which it nevertheless knew was forthcoming, and which, considering the size of its land, it may give without the
least prejudice to its own rights.

The Court cannot therefore accept petitioner’s argument that since there are permanent structures already erected
on the appointed right of way, then the parties should negotiate a different location therefor. To allow this would be
tantamount to rewarding malice, cunning, and bad faith. Quite the contrary, petitioner deserves a lesson in not
trifling with the rights of others, the law, and the courts. A party cannot be allowed to influence and manipulate the
courts’ decisions by performing acts upon the disputed property during the pendency of the case, which would
allow it to achieve the objectives it desires.”
 People of the Philippines v. Bombasi y Vergara
G.R. No. 211608, September 7, 2016
Ponente: Del Castillo, J.
By: Arid, Hannah Mhae G.

Doctrine: The presumption of regularity in the performance of official duty invoked by the prosecution and relied
upon by the courts a quo cannot by itself overcome the presumption of innocence nor constitute proof of guilt
beyond reasonable doubt. An essential requirement in a drug-related case and a mandatory evidence to be
presented is the identity of the prohibited drug. The identity of the corpus delicti should be properly preserved and
established by the prosecution.

Facts: On January 23, 2006 at about 9:00 p.m., an asset-informant came to the office of the San Pedro Police
Station, San Pedro, Laguna and reported to SPO1 Melchor dela Peña (SPO1 Dela Peña) about the drug pushing
activity of appellant at Amante Street, Brgy. Cuyab, San Pedro, Laguna. SPO1 Dela Peña relayed the information to
their chief who ordered PO1 Jifford Signap (PO1 Signap) and SPO1 Alejandro Ame (SPO1 Ame) to conduct a
surveillance within the area. Upon learning of the location of the house of appellant, the two went back to their
office and informed their chief. Whereupon, the chief called a briefing and formed a buy-bust team composed of
PO1 Signap as the poseur-buyer, while SPO1 Dela Peña, SPO1 Ame and SPO1 Arnel Gonzales (SPO1 Gonzales)
acted as perimeter security. After discussing the procedure and preparation of two pieces of 100-peso bills, the
team accompanied by the informant immediately proceeded to the house of appellant. Thereat, the informant
introduced PO1 Signap to appellant as a prospective buyer of shabu. PO1 Signap gave the two 100-peso bills to
appellant who, in turn, handed to the former a small plastic sachet containing substance suspected to be shabu.
After the exchange, PO1 Signap went out of the house to call his back-up. However, when they returned, appellant
was no longer inside the house. Instead, they arrested two persons inside from whom two plastic sachets of shabu
were recovered. PO1 Signap marked the sachet subject of the sale with "MB," corresponding to the initials of
appellant. After preparing the request for laboratory examination of the suspected specimen, SPO1 Ame brought
the specimen to the Philippine National Police (PNP) Crime Laboratory. Per Chemistry Report No. D-023-06, the
specimen submitted and examined contains methamphetamine hydrochloride, a dangerous drug.

RTC: The RTC found appellant guilty as charged and sentenced him to suffer the penalty of life imprisonment and
pay a fine of P500,000.00.
CA: Affirmed RTC’s Judgment.

Issue: Whether the integrity of the subject shabu was not ensured and its identity was not established with moral
certainty hence inadmissible as evidence against the accused.

Held: The Supreme Court reversed the appellate court’s decision and held that the prosecution failed to establish
the identity of the prohibited drug which constitutes the corpus delicti of the offense, an essential requirement in a
drug-related case. Recall that PO1 Signap categorically testified that he marked the seized substance placed in a
small heat-sealed transparent plastic sachet with appellant's initial "M.B." However, when the same substance was
brought to the PNP Crime Laboratory for examination, per written request, the specimen submitted bore a different
marking "MB-B." Precisely, this is the same substance with the corresponding marking that was examined by PCI
Tria and eventually offered in court as evidence which undoubtedly is not the same substance marked by the
poseur-buyer. Worse, there was no explanation given on the discrepancy in the markings.
To recapitulate, for a successful prosecution of the offense of illegal sale of dangerous drugs like shabu, the
prosecution is bound not only to establish the following elements: (1) identity of the buyer and the seller, the
object and consideration of the sale and (2) the delivery of the thing sold and the payment therefor 11 but also it is
equally essential that the prohibited drug confiscated or recovered from the suspect is the very same substance
offered in court as exhibit; and that the identity of said drug be established with the same unwavering exactitude
as that requisite to make a finding of guilt.12 This requirement is found wanting in this case. It is evident that the
identity of the corpus delicti has not been properly preserved and established by the prosecution. We therefore find
that the prosecution has not been able to prove the guilt of appellant beyond reasonable doubt. The presumption of
regularity in the performance of official duty invoked by the prosecution and relied upon by the courts a quo cannot
by itself overcome the presumption of innocence nor constitute proof of guilt beyond reasonable doubt.
 Leo’s Resturant and Café Bar v. Bensing
G.R. No. 208535, Ocotber 19, 2016
Ponente: Del Castillo, J.
By: Arid, Hannah Mhae G.

Doctrine: As a rule, the findings of facts of the Court of Appeals when fully supported by evidence are conclusive
and binding on the parties and not reviewable by the Supreme Court.

Facts: Kimwa Construction & Development Corporation (Kimwa) employed respondent as liaison officer. Kimwa
also operated Leo's Restaurant and Bar Cafe (Restobar), and the Mountain Suite Business Apartelle (Apartelle);
thereafter it appointed respondent as Administrative Officer/Human Resource (HR) Head of these establishments.
Afterwards, Leo, the Manager of the Restobar and the Apartelle, issued upon respondent a Memorandum
requesting her to temporarily report at Kimwa's Main Office.
Another memorandum from Leo requiring her to explain the circumstances surrounding the agreement between
the Restobar and Pepsi Products Philippines, Inc. and the benefits she derived therefrom. Leo accused her of
having signed said contract without authority from him and of not informing him of the benefits arising from the
contract. In her explanation, respondent stated that in the presence of the Sales Manager of Pepsi, Leo verbally
authorized her to sign the contract with Pepsi on behalf of the Restobar. The following day, the sales manager of
Pepsi returned to the Restobar, and respondent signed the contract pursuant to Leo's verbal instruction. She gave
no explanation anent the benefits arising from the contract as she purportedly did not intervene in Leo and
Ablanque's discussion on the matter. She added that the Restobar received only 10 and additional 20 cases of
Pepsi drinks, and she did not receive personal benefits arising from the contract. Thereafter, respondent was
required to answer these charges: 1) she committed dishonesty when she charged to the Restobar's account 50%
of the food she ordered therefrom without approval of its Owner or Manager; 2) she violated her duties when she
did not inform Leo of the signing of the Pepsi contract; and, 3) she failed to account for 47 soft drinks cases that
Pepsi gave the Restobar.

The respondent asserted that the charges of dishonesty was not related to the Pepsi Contract such that she opted
not to answer said accusation. With regard to the alleged missing Pepsi drinks, she affirmed that Pepsi clarified the
matter already, particularly to where these soft drinks were placed or given. Pepsi, through its Settlement and
Credit Manager Jerome T. Eslabon, certified that Pepsi gave the Restobar 10 cases of Pepsi products on its opening
day, and 20 cases of Pepsi 12 oz. on December 7, 2005. It stressed that it did riot give cash assistance or cash
equivalent to any staff of the Restobar. It also asked Leo to disregard the erroneous volume of documents it
inadvertently gave him, and assured him that Pepsi already adjusted his records to reflect the correct figures.

However, on the ground of loss of trust and confidence, Leo terminated respondent that prompted the latter to file
an Amended Complaint for illegal dismissal, illegal suspension, non-payment of 13th month pay, separation pay in
lieu of reinstatement, moral and exemplary damages, and attorney's fees against Kimwa, and herein petitioners,
the Restobar, the Apartelle, Leo, and/or Amelia Y. Lua (Amelia).

In her Position Paper, respondent claimed that petitioners and Kimwa failed to establish that she was dismissed for
valid causes. She argued that as Administrative Officer/HR Head, she was tasked to oversee the operations of the
Restobar and the Apartelle, including the authority to sign the agreement with Pepsi. According to her, Leo also
authorized her to sign the agreement in his behalf, and such authority was. communicated to her in the presence
of the Sales Manager of Pepsi. In addition, respondent emphasized that she received no personal benefits in
connection with the Pepsi contract, and there was no proof that she received anything from Pepsi. She also
stressed that Pepsi was delivering its products to the Restobar and the Apartelle, not to her. In fine, she. argued
that her having entered the Pepsi contract was insufficient basis for petitioners and Kimwa to lose their trust in her,
and use the same to terminate her.

For their part, petitioners and Kimwa, in their Position Paper, argued that it was Amelia, Leo's sister, who owned
the Restobar and the Apartelle. They averred that these establishments were separate entities from Kimwa, and
Leo was merely its Manager. They further claimed respondent resigned from Kimwa and transferred to the
Restobar and the Apartelle for higher pay. In addition, petitioners and Kimwa asserted that respondent, was validly
terminated as she committed dishonesty, abuse of confidence, and breach of trust against her employer. They
explained that respondent entered into a contract with Pepsi, whereby the Restobar committed to purchase 2,400
cases of Pepsi products per year for a period of two years or from October 2005 to October 2007. They stressed
that respondent entered this contract without prior authority from Leo or Amelia, and without disclosure to them of
the benefits arising therefrom. They also alleged that respondent committed dishonesty when she charged some of
her meals and offer/invitation expenses to the Restobar, without approval of its Owner or Manager. They likewise
stated that respondent was given opportunity to explain her side before she was terminated. Furthermore,
petitioners and Kimwa insisted that while under the employ of Kimwa, respondent received advance payment of
her benefits, separation pay and other claims. They added that having received monetary benefits, respondent had
no more cause of action against them.

Executive Labor Arbiter: Dismissed the complaint for lack of merit. The LA decreed that petitioners and Kimwa
validly dismissed respondent on the ground of loss of trust and confidence. He pointed out that employers cannot
be compelled to retain the services of their employees who were guilty of acts inimical to the interests of the
employer; and, the dismissal of an erring employee was a measure of self-protection. The LA also declared that
respondent committed acts contrary to the interest of her employer when she charged personal food consumption
to the Restobar, entered into an exclusive contract with Pepsi, and failed to account for the Pepsi products donated
to the Restobar. He further stated that petitioners and Kimwa complied with the required procedural due process
when they issued memoranda informing respondent of the charges against her and giving her notice of her
dismissal.

NLRC: Reversed, ruled in favour of the respondent. But lupon motion for reconsideration, it reversed its decision
and held that respondent's functions did not include any authority to sign or execute contracts for and in behalf of
the Restobar. It added that even assuming that Leo verbally authorized her to sign the Pepsi agreement,
respondent signed the same in her name, as if she was the Restobar's owner. It also held that if not for the fact
that respondent was suspended and later dismissed, the whereabouts of the donated Pepsi products would not
have been traced. It likewise faulted respondent for charging 50% of her meals to the Restobar without approval
from its Owner or Chief Officer. It added that respondent was given opportunity to be heard when various
memoranda were issued to her.

Court of Appeals: Reversed, ruled in favour of the respondent. The CA reasoned that as Administrative Officer/HR
Head, respondent held a position of trust and confidence. Nevertheless, it explained that petitioners failed to prove
that respondent committed any of the following acts imputed against her: a) signing the Pepsi agreement on behalf
of the Restobar without authority from Leo; b) failure to account for the products donated by Pepsi to the
Restobar; and, c) unauthorized charges of food on the account of the Restobar. The CA stressed that the foregoing
grounds had been adequately passed upon in the NLRC November 28, 2008 Resolution before it reversed itself and
issued its June 4, 2009 and July 31, 2009 Resolutions. It added that even if respondent had no express authority to
sign the agreement with Pepsi, her having entered it was not sufficient to dismiss her from work, especially in the
absence of malicious intent or fraud on her part. It pointed out that the Restobar did not suffer damage because of
respondent's act. According to the CA, respondent even acted in good faith when she signed the contract with Pepsi
on the impression that sit was part of her duties and responsibilities. It also quoted with approval the November
28, 2003 NLRC Resolution declaring that there was no evidence that respondent abused her representation
privilege, which included the charging of food expense when entertaining guests of the Restobar. Finally, it held
that respondent did not deserve the penalty of dismissal especially so since she committed no prior infractions in
her more than three years of service.

Hence this petition.

Issue: Whether respondent was validly dismissed on the ground of loss of trust and confidence.

Held: No. The Supreme Court upheld the decision of the appellate court. As a rule, the findings of fact of the CA
when fully supported by evidence are conclusive and binding on the parties and are not reviewable by the Court.
However, this rule admits of exceptions including such instance where the factual findings of the CA are contrary to
those of the labor tribunals. In this case, the LA and the NLRC are one in ruling that respondent was validly
dismissed from work. The CA ruled otherwise, Considering these divergent positions, the Court deems it necessary
to review, re-evaluate, and re-examine the findings of the CA as they are contrary to those of the LA and the
NLRC.

First, petitioners deny that Kimwa owned and operated the Restobar and the Apartelle. They claim that Amelia
owned these establishments, and Leo only managed them. The Supreme Court was not convinced. Sufficient pieces
of evidence show that Kimwa, Leo, and Amelia owned, managed, and operated the Restobar and the Apartelle.
They also continuously employed respondent, previously as liaison officer and thereafter as Administrative
Officer/HR Head of the Restobar and the Apartelle. It is settled that where it shows that business entities are
owned, controlled, and conducted by tfce same parties, Jaw and equity will disregard the legal fiction that they are
distinct and shall treat them as one entity in order to protect the rights of third persons. Here, it appearing that
Kimwa, Leo, and Amelia owned, controlled and managed the Restobar and the Apartelle, they are treated as a
single entity accountable for the dismissal of respondent.

Second, petitioners argue that respondent was validly terminated for loss of trust and confidence. Such argument
is without merit. An employer has the right to dismiss an employee for just causes, which include willful breach of
trust and confidence reposed on him or her by the employer. To temper such right to dismiss, and to reconcile it
with the employee's security of tenure, it is the employer who has the burden to show that the dismissal of the
employee is for a just cause. Such determination of just cause must also be made with fairness, in good faith, and
only after observance of due process of law. Moreover, to dismiss an employee on the ground of loss of trust and
confidence, two requisites must concur: (a) the concerned employee must be holding a position of trust; and, (b)
the loss of trust must be based on willful breach of trust based on clearly established facts.

Here, respondent, as Administrative Officer/HR Head of the Restobar and the Apartelle, had the following duties
and functions:
1. Has the authority/information in all operation, administrative and functional matters.
2. Reports directly to the owner.
3. Oversees the entire operations of the business that includes over-all property/furnitur[e] maintenance
& expenditures.
4. Handles all employees of the establishments.
5. Carries out HR policies & procedures[.]
6. Responsible in the recruitment, screening & selection of new employment for vacant position. .
7. Plans & conducts new employee orientation to foster positive attitude towards company goals.
8. Develops & maintains a human resourc[e] system that meets top management information needs.
9. Wage and salary administration.
10. Labor & Employee relations, welfare & benefits.46]

As far as the first requisite is concerned, respondent is shown to occupy a position of trust as her managerial work
was directly related to management policies, and generally required exercise of discretion and independent
judgment. Nonetheless, the second requirement is wanting since petitioners failed to prove that their loss of trust
on respondent was founded on clearly established facts. Records show that on December 30, 2005, Leo required
respondent to explain her supposed infractions when she signed, without the approval of the owner, the contract
between the Restobar and Pepsi; and her failure to account the items Pepsi donated to the Restobar. Respondent
aptly explained these matters to Leo. According to her, Leo verbally authorized her to sign the agreement with
Pepsi. This verbal instruction was given in the presence of Ablanque, Sales Manager of Pepsi. In his Affidavit ,
Ablanque corroborated respondent's assertion. He certified that during his visits in the Restobar, he discussed with
Leo his proposal of an exclusivity contract between Pepsi and the Restobar. In the course of their negotiation in
September 2005, Leo agreed to the contract, and authorized respondent to sign the same. Also, as declared by the
CA, even granting for the sake of argument that respondent signed the Pepsi contract without the express
authority from Leo, her act was .well within her functions. As above quoted, respondent 1) had the authority in all
operational, administrative and functional matters of the Restobar and the Apartelle; and, 2) had the duty to
oversee the entire operations of the business, including the over-all property/furniture, maintenance and
expenditures. Therefore, having entered the Pepsi contract is not sufficient basis for petitioners to lose their;; trust
in respondent. Leo authorized her to enter said agreement. Even assuming that there was no explicit order for her
to do so, respondent still acted within her authority as in-charge of all operation, administrative and functional
matters of the establishments.

Indeed, there was no malice or any fraudulent intent on the part of respondent when she sighed the Pepsi contract.
There is likewise no evidence that she personally benefited therefrom. In fact, the Restobar itself received the
items donated by Pepsi, and the Restobar did not suffer any damage arising from the Pepsi contract. Loss of trust
and confidence must stem from dishonest, deceitful or fraudulent acts. In the absence of such malicious intent or
fraud on the part of respondent, she committed no willful breach of trust against her employer. In addition, the
Court finds that the charge that respondent failed to account for a certain number of products Pepsi donated to the
Restobar is without basis. Pepsi clarified that it donated only 10 cases of its products on the opening night of the
Restobar, and an additional 20 cases of Pepsi 12 oz. on December 7, 2005. It added that Pepsi gave no other
donation to the Restobar or its staff. Pepsi admitted its lapses, and apologized to Leo; it also requested him to
disregard the inadvertent entries in the documents it gave him. Since Pepsi clarified the matter and as established,
there is no unaccounted donation made by Pepsi to the Restobar, then the allegation - that respondent committed
loss of trust because of unaccounted donation from Pepsi — is untenable. Indeed, petitioners' loss of trust and
confidence was merely simulated. It was arbitrarily asserted despite sufficient evidence to the contrary. Moreover,
the charge of dishonesty against respondent for purportedly charging 50% of the food she personally ordered to
the account of the Restobar is unsubstantiated. This accusation was cited in Leo's January 3,2006 Memorandum
but was not at all specified in the Notice of Termination against respondent as said notice centered on respondent's
act of having entered the contract with Pepsi. In any case, as correctly observed in the November 28, 2008
Resolution of the NLRC, Restobar "was not really saddled by those entertainment expenses because the foods and
meals were eventually deducted against [respondent's] salary, which for one reason or another [respondent]
offered no objection."