Velasco Digests Compiled

2016 Dean Dean Danilo L. Concepcion Associate Dean Prof. Concepcion L. Jardeleza

University of the Philippines College of Law Bar Reviewer Contributors Evert Callueng Paulo Faustino Carlos Hernandez Carlo Robert Mercado Audrey Ng

Academics Committee Heads Evert Callueng Paulo Faustino Carlos Hernandez Audrey Ng Desiree Sokoken

UP Law Bar Operations Commission 2016

UP LAW BAR OPS 2016

UP LAW BOC

VELASCO, J. DECISIONS

TABLE OF CONTENTS Table of Contents

POLITICAL LAW Aquino v. Municipality of Malay, Aklan ............................................................................................................. 1 Umali v. COMELEC ............................................................................................................................................ 2 Regio vs. Commission on Elections .................................................................................................................. 3 Abundo, Sr. v. Commission on Elections .......................................................................................................... 4 Funa v. Villar ...................................................................................................................................................... 5 Bayan Muna v. Alberto Romulo and Blas F. Ople ........................................................................................... 7 Hacienda Luisita Incorporated v. Presidential Agrarian Reform Council, et. al. ........................................... 9 Hacienda Luisita, Inc. (HLI) v. Presidential Agrarian Reform Council (PARC) .............................................. 12 Note: The SC Resolution reconsidered its ruling that the qualified FWBs should be given an option to remain as stockholders of HLI, inasmuch as these qualified FWBs will never gain control given the present proportion of shareholdings in HLI. ........................................................................................ 13 Heirs of Dr. Jose Deleste v. Land Bank of the Philippines .............................................................................. 14 Philippine Coconut Producers Federation, Inc. v. Republic ........................................................................... 15 Office of the Ombudsman v. Sison .................................................................................................................. 16 Land Bank of the Philippines (LBP) v. Dept. of Agrarian Reform Adjudication Board (DARAB)................. 17 Go, Jr. v. Court of Apppeals ..............................................................................................................................18 Soriano v. Laguardia ......................................................................................................................................... 19 Pobre vs. Defensor-Santiago .......................................................................................................................... 20 Roque, Jr. v. Commission on Elections ........................................................................................................... 22 Batalla v. Commission on Elections ............................................................................................................... 24 Philippine Coconut Producers Federation, Inc. (COCOFED) v. Republic ..................................................... 25 Laynesa v. Uy ................................................................................................................................................... 26 Manila International Airport Authority (MIAA) v. Olongapo Maintenance Services .................................... 27 Ricardo Paloma v. Philippine Airlines, Inc...................................................................................................... 28 Dr. Pedro Gobenciong v. CA............................................................................................................................ 29 Social Justice Society v. Dangerous Drugs Board and PDEA ....................................................................... 30 Raul Boac et. al. v. People of the Philippines ................................................................................................ 32 Rodolfo M. Cuenca and Cuenca Investment Corp. v. The Presidential Commission on Good Government, Independent Realty corp., and Universal Holdings Corp. ............................................................................. 33 Joevanie Tabasa v. CA, Bureau of Immigration and Deportation, Wilson Soluren...................................... 34 Bases Conversion and Development Authority et al v. Uy ............................................................................ 35 Abdusakur Tan, Basaron Burahan v. COMELEC et al. .................................................................................. 36

LABOR LAW Bartolome v. Social Security System .............................................................................................................. 37 Transocean Ship Management (Phils.), Inc. v. Vedad ................................................................................... 38 Magdala Multipurpose & Livelihood Cooperative (MMLC) v. Kilusang Manggagawa ng LGS, Magdala Multipurpose & Livelihood Cooperative (KMLMS) ......................................................................................... 39 Oriental Shipmanagement Co., Inc. (OSCI) v. Bastol ....................................................................................40 UST Faculty Union v. UST ................................................................................................................................ 41 Locsin v. Philippine Long Distance Telephone Company, ............................................................................ 42

i

UP LAW BOC


Ricardo Paloma v. Philippine Airlines, Inc...................................................................................................... 43 NUWHRAIN-APL-IUF Dusit Hotel Nikko Chapter v. CA ............................................................................... 44 Genuino v. National Labor Relations Commission ........................................................................................ 45 King of Kings Transport v. Mamac .................................................................................................................. 46 Toyota Motor Phils. Corp Workers Association v. NLRC ............................................................................... 48

CIVIL LAW Bartolome v. Social Security System .............................................................................................................. 49 Abbas vs. Abbas...............................................................................................................................................50 Philippine National Bank v. Reblando ............................................................................................................ 51 Land Bank of the Philippines v. Ong .............................................................................................................. 52 Metropolitan Bank and Trust Co. v. Nicholson Pascual ................................................................................ 56 Korea Technologies v. Hon. Alberto Lerma ................................................................................................... 57 Estate of the Late Encarnacion Vda de Panlilio v. Gonzalo Dizon et al ....................................................... 59 Josephine Taguinod and Vic Aguila v. CA, Antonino Samaniego et al ........................................................60 Jovendo Del Castillo v. Abundio Orciga et al .................................................................................................. 61

TAXATION LAW Philippine American Life and General Insurance Company v, Secretary of Finance ................................... 62 Commissioner of Internal Revenue and Commissioner of Customs v. ........................................................ 63 Philippine Airlines, Inc. .................................................................................................................................... 63 Philippine British Assurance Company, Inc. (PBACI) v. Republic ................................................................. 64 South African Airways v. Commissioner of Internal Revenue ....................................................................... 65 Commissioner of Internal Revenue vs. Mirant Pagbilao Corporation .......................................................... 67 Commissioner of Internal Revenue v. Acesite (Philippines) Hotel Corporation ........................................... 68

MERCANTILE LAW Taiwan Kolin Corporation, Ltd. v. Kolin Electronics Co., Inc.......................................................................... 69 Narra Nickel Mining and Development Corp., Tesoro Mining and Development Inc. and Mcarthur Mining Inc v. Redmont Consolidated Mines Corporation ......................................................................................... 70 Hacienda Luisita Incorporated v. Presidential Agrarian Reform Council, et. al. .......................................... 71 Ty v. De Jemil ................................................................................................................................................... 74 Francisco, Jr. v. Toll Regulatory Board ........................................................................................................... 75 E.Y. Industrial Sales, Inc. v. Shen Dar Electricity and Machinery Co., Ltd. ................................................... 76 Kukan International Corp. v. Reyes ................................................................................................................ 77 Eternal Gardens Memorial Park Corporation v. ............................................................................................. 78 The Philippine American Life Insurance Company ........................................................................................ 78

CRIMINAL LAW Sydeco v. People .............................................................................................................................................. 79 People v. Sitco ................................................................................................................................................. 80 People v. Batoon ...............................................................................................................................................81 People v. Barba ................................................................................................................................................ 82 Garcia v. Sandiganbayan................................................................................................................................. 83 Robert Wa-Acon v. People of the Philippines ................................................................................................ 84

ii

UP LAW BOC


REMEDIAL LAW Tujan-Militante in behalf of the minor Criselda Cada v. Raquel M. Cada-Deapera .................................... 85 Sydeco v. People .............................................................................................................................................. 86 Vivares and Sps. Suzara v. St. Theresa’s College, Mylene Rheza Escudero, and John Does ...................... 87 Heirs of Faustino Mesina vs. Heirs of Domingo Fian, Sr. ............................................................................... 88 Senador v. People ............................................................................................................................................ 89 LBL Industries, Inc. v. City of Lapu-lapu .........................................................................................................90 Prosecutor Jorge Baculi v. Judge Medel Arnaldo B. Belen ............................................................................ 91 Diosdado S. Manungas v. Margarita Avila Loreto and Florencia Avila Parreo ............................................ 92 Gaudencio B. Pantilo III v. Judge Victor A. Canoy .......................................................................................... 92 Corazon Tenorio v. Alyn C. Perlas ................................................................................................................... 93 Hacienda Luisita Incorporated v. Presidential Agrarian Reform Council, et. al. ......................................... 94 PAGCOR v. Fontana Development Corporation............................................................................................ 97 Tomawis v. Balindong ..................................................................................................................................... 98 People vs. Sitco ................................................................................................................................................ 99 Kukan International Corp. v. Reyes .............................................................................................................. 100 Philippine British Assurance Company, Inc. (PBACI) v. Republic ................................................................ 101 Office of the Ombudsman v. Sison ............................................................................................................... 102 Rubrico v. Macapagal-Arroyo ....................................................................................................................... 103 Oriental Shipmanagement Co., Inc. (OSCI) v. Bastol .................................................................................. 104 People of the Philippines v. Manuel Resurreccion ...................................................................................... 105 Roque, Jr. v. Commission on Elections ......................................................................................................... 106 Batalla v. Commission on Elections ............................................................................................................. 108 Vitangcol v. New Vista Properties, Inc. .......................................................................................................... 110 Bildner vs. Ilusorio ........................................................................................................................................... 111 Marcos-Araneta v. Court of Appeals ............................................................................................................. 114 MMDA v. Concerned Residents of Manila Bay.............................................................................................. 116 Rombe Eximtrade (Phils.), Inc. v. Asiatrust Development Bank ................................................................... 117 Anastacio Tuballa Heirs v. Raul Cabrera et. al. ............................................................................................ 118 Korea Technologies v. Hon. Alberto Lerma .................................................................................................. 119 Temic Semiconductors, Inc. Employees Union, et. al. v. FFW .................................................................... 120 Ang Kek Chen v. Calasan ............................................................................................................................... 121 Casent Realty Development Corp v. Philbanking Corporation....................................................................122 Ma. Imelda Manotoc v. CA, Agapita Trajano on behalf of ........................................................................... 123 the Estate of Archimedes Trajano ................................................................................................................. 123 Bases Conversion and Development Authority et al v. Uy .......................................................................... 124 St. Martin Funeral Homes v. NLRC and Bievenido Aricayos ....................................................................... 125

LEGAL ETHICS Heirs of Simon Piedad v. Estrera .................................................................................................................. 126 Tejada v. Palaña............................................................................................................................................. 128

iii

UP LAW BOC

POLITICAL LAW


POLITICAL LAW Aquino v. Municipality of Malay, Aklan G.R. No. 211356 | September 29, 2014 Facts: While it was already operating a hotel, Boracay Island West Cove applied for a zoning compliance with the municipal government of Malay, Aklan. The application was denied on the ground that the proposed construction site was within the “no build zone” demarcated in a Municipal Ordinance. Meanwhile, petitioner continued with the construction, expansion and operation of the resort hotel. The municipal government issued a cease and desist order enjoining the expansion, and the Mayor then issued EO 10, ordering the closure and demolition of the hotel. Petitioner argued, among others, that judicial proceedings were necessary prior to such an order, that they had a Forest Land Use Agreement for Tourism Purposes (FLAgT) issued by the DENR, which gave them the right to construct permanent improvements in the area – and that since the area was forestland, it was the DENR and not the municipality or any other LGU which had primary jurisdiction over the area. Issue: WON the Mayor could order the building’s demolition without prior judicial proceedings Held: Yes. Generally, LGUs have no power to declare a particular thing as a nuisance unless it is a nuisance per se. However, Section 444(b)(3)(vi) of the LGC empowers the mayor to “Require owners of illegally constructed houses, buildings or other structures to obtain the necessary permit, subject to such fines and penalties as may be imposed by law or ordinance, or to make necessary changes in the construction of the same when said construction violates any law or ordinance, or to order the demolition or removal of said house, building or structure within the period prescribed by law or ordinance.” Given the presence of the requirements under Section 444 (b)(3)(vi), whether the building constituted a nuisance per se or a nuisance per accidens becomes immaterial. The hotel was demolished not exactly because it is a nuisance but because it failed to comply with the legal requirements prior to construction. Thus, a court order required under normal circumstances is dispensed with. The fact that petitioner was issued a FLAgT was not authorization to proceed with the hotel’s construction. Forestlands under the DENR’s management are not exempt form the territorial application of municipal laws. Furthermore, the conditions in the FLAgT and the limitations in the ordinance were not mutually exclusive, but rather cumulative. Aside from complying with the FLAgT, petitioner also had to comply with the no build zone restriction in the ordinance, which was already in force before the FLAgT was entered into. Moreover, the FLAgT could not excuse petitioner from complying with the National Building Code. A mere contractual agreement cannot amend or change the law.

1

UP LAW BOC

POLITICAL LAW


Umali v. COMELEC G.R. No. 204371 | April 22, 2014 Facts: Pursuant to the Resolution of the Sangguniang Panglungsod, the President proclaimed Cabanatuan City as a highly urbanized city (from a component city), subject to ratification in a plebiscite by the qualified voters therein. Acting on the proclamation, the COMELEC issued a minute resolution stating that only those registered residents of Cabanatuan City should participate in the said plebiscite. Petitioner Umali, governor of Nueva Ecija, filed a verified MR maintaining that the proposed conversion will necessarily and directly affect the mother province of Nueva Ecija, arguing that Section 453 of the LGC should be interpreted in conjunction with Section 10, Article X of the Constitution. He claims that the phrase “qualified voters therein” in the LGC should be interpreted to refer to the qualified voters of the units directly affected and not just those in the component city proposed to be upgraded. COMELEC denied the MR. Issue: WON the qualified voters of the entire province of Nueva Ecija should participate in the plebiscite Held: Yes. The conversion of a component city into an HUC is substantial alteration of boundaries. As the phrase implies, “substantial alteration of boundaries” involves and necessarily entails a change in the geographical configuration of a local government unit or units. However, the phrase “boundaries” should not be limited to the mere physical one, referring to the metes and bounds of the LGU, but also to its political boundaries. Pursuant to established jurisprudence, the phrase “by the qualified voters therein” in Sec. 453 should be construed in a manner that will avoid conflict with the Constitution. In identifying the LGU or LGUs that should be allowed to take part in the plebiscite, what should primarily be determined is whether or not the unit or units that desire to participate will be “directly affected” by the change. The economy of the parent province as well as that of the new province will be inevitably affected, either for the better or for the worse. Whatever be the case, either or both of these political groups will be affected and they are, therefore, the unit or units referred to in Section 3 of Article XI [Section 10, Article X] of the Constitution which must be included in the plebiscite contemplated therein.

2

UP LAW BOC

POLITICAL LAW


Regio vs. Commission on Elections 711 SCRA 448 | December 03, 2013 Facts: Regio and Co are among the candidates in an election for Punong Barangay. which the former won. Co filed an election protest, asserting that a recounting of the ballots shows that he obtained the greatest number of votes. MeTC dismissed the protest, ruling that: the court "should first be convinced that the ballots counted during the revision have not been tampered with before it can declare the ballots a) as superior evidence of how the electorate voted, and b) as sufficient evidence to set aside the election returns.” The COMELEC en banc overturned the decision, finding that the ballots subjected to revision were genuine. Issue: Whether the ballots subjected to revision were proven to be genuine Held: No. In the event of discrepancy between the revision results and the election returns, the burden of proof shifts to the protestee to provide evidence of actual tampering of the ballots, or at least a likelihood of tampering. However, It is only when the court or the COMELEC is fully satisfied that the ballots have been well preserved, and that there had been no tampering of the ballots, that it will accord credibility to the results of the revision. Co cannot simply rely on the alleged absence of evidence of reports of untoward incidents, and from there immediately conclude that the ballots have been preserved. What he should have presented are concrete pieces of evidence, independent of the revision proceedings that will tend to show that the ballots counted during the revision proceedings were the very same ones counted by the BETs during the elections The duty of the protestee in an election contest to provide evidence of actual tampering or any likelihood arises only when the protestant has first successfully discharge the burden or providing that the ballots have been secured to prevent tampering or susceptibility of charge, abstraction or substitution. Such need to present proof of tampering did not arise since protestant himself failed to provide evidence of the integrity of the ballots.

3

UP LAW BOC

POLITICAL LAW


Abundo, Sr. v. Commission on Elections 688 SCRA 149 | January 08, 2013 Facts: In the 2001, 2004, and 2007 elections, Abundo vied for the position of municipal mayor of Viga, Catanduanes. In both 2001 and 2007, he won accordingly served the corresponding terms. In the 2004 election, however, a certain Torres was initially proclaimed as winner. Abundo protested Torres’ election and proclamation and was eventually declared the winner of the 2004 contest. For this term he assumed office starting May 9, 2006 to June 30, 2007. For the 2010 mayoral race, Torres sought Abundo’s disqualification based on the three-consecutive term limit rule Issue: Whether Abundo is deemed to have served three consecutive terms from 2001 to 2010 Held: No. The consecutiveness of what otherwise would have been Abundo’s three successive, continuous mayorship was effectively broken during the 2004- 2007 term when he was initially deprived of the office and was later declared to rightfully be entitled to it. To constitute a disqualification to run for an elective local office, the following requisites must concur: (1) that the official concerned has been elected for three consecutive terms in the same local government post; and (2) that he has fully served three consecutive terms. The almost two-year period during which Abundo’s opponent actually served as Mayor is an involuntary interruption of Abundo’s continuity of service. An involuntary interrupted term, cannot, in the context of the disqualification rule, be considered as one term for purposes of counting the threeterm threshold

4

UP LAW BOC

POLITICAL LAW


Funa v. Villar 670 SCRA 579 | April 24, 2012 Facts: Following the retirement of COA Chairman Carague on February 2, 2008 and during the fourth year (of a seven year term) as COA Commissioner, Villar was designated as Acting Chairman of COA from February 4, 2008 to April 14, 2008. Subsequently, on April 18, 2008, Villar was nominated and appointed as Chairman of the COA. He was to serve as Chairman of COA, as expressly indicated in the appointment papers, until the expiration of the original term of his office as COA Commissioner or on February 2, 2011. Villar insists that his appointment as COA Chairman accorded him a fresh term of seven (7) years. As Villar agreed to step down, the case became moot and academic, but the court nevertheless decided to address the issue Issue: Whether Villars appointment as COA Chairman is valid in light of the term limitations Held: No The Court clarifies that “reappointment” found in Sec. 1(2), Art. IX(D) means a movement to one and the same office (Commissioner to Commissioner or Chairman to Chairman). On the other hand, an appointment involving a movement to a different position or office (Commissioner to Chairman) would constitute a new appointment and, hence, not, in the strict legal sense, a reappointment barred under the Constitution. Sec. 1(2), Art. IX(D), on its face, does not prohibit a promotional appointment from commissioner to chairman as long as the commissioner has not served the full term of seven years, further qualified by the third sentence of Sec. 1(2), Article IX (D) that the appointment to any vacancy shall be only for the unexpired portion of the term of the predecessor. In addition, such promotional appointment to the position of Chairman must conform to the rotational plan or the staggering of terms in the commission membership such that the aggregate of the service of the Commissioner in said position and the term to which he will be appointed to the position of Chairman must not exceed seven years so as not to disrupt the rotational system in the commission prescribed by Sec. 1(2), Art. IX(D) To sum up, the Court restates its ruling on Sec. 1(2), Art. IX(D) of the Constitution, viz: 1. The appointment of members of any of the three constitutional commissions, after the expiration of the uneven terms of office of the first set of commissioners, shall always be for a fixed term of seven (7) years; an appointment for a lesser period is void and unconstitutional. The appointing authority cannot validly shorten the full term of seven (7) years in case of the expiration of the term as this will result in the distortion of the rotational system prescribed by the Constitution. 2. Appointments to vacancies resulting from certain causes (death, resignation, disability or impeachment) shall only be for the unexpired portion of the term of the predecessor, but such appointments cannot be less than the unexpired portion as this will likewise disrupt the staggering of terms laid down under Sec. 1(2), Art. IX(D).

5

UP LAW BOC

POLITICAL LAW


3. Members of the Commission, e.g. COA, COMELEC or CSC, who were appointed for a full term of seven years and who served the entire period, are barred from reappointment to any position in the Commission. Corollarily, the first appointees in the Commission under the Constitution are also covered by the prohibition against reappointment. 4. A commissioner who resigns after serving in the Commission for less than seven years is eligible for an appointment to the position of Chairman for the unexpired portion of the term of the departing chairman. Such appointment is not covered by the ban on reappointment, provided that the aggregate period of the length of service as commissioner and the unexpired period of the term of the predecessor will not exceed seven (7) years and provided further that the vacancy in the position of Chairman resulted from death, resignation, disability or removal by impeachment. The Court clarifies that reappointment found in Sec. 1(2), Art. IX(D) means a movement to one and the same office (Commissioner to Commissioner or Chairman to Chairman). On the other hand, an appointment involving a movement to a different position or office (Commissioner to Chairman) would constitute a new appointment and, hence, not, in the strict legal sense, a reappointment barred under the Constitution. 5. Any member of the Commission cannot be appointed or designated in a temporary or acting capacity.

6

UP LAW BOC

POLITICAL LAW


Bayan Muna v. Alberto Romulo and Blas F. Ople G.R. No. 159618 | February 1, 2011 Facts: Bayan Muna assailed the constitutionality and validity of the RP-US Non-Surrender Agreement which says that US or Philippine citizens present in the territory of the other shall not, absent the express consent of the other party be surrendered or transferred by any means to any international tribunal for any purpose, unless such tribunal has been established by the UN Security Council, or be surrendered or transferred by any means to any other entity or third country, or expelled to a third country, for the purpose of surrender to or transfer to any international tribunal, unless such tribunal has been established by the UN Security Council. Issue:

1. 2. 3. 4.

Whether an exchange of notes could be a valid medium for concluding the Agreement. Whether Senate concurrence is required for the Agreement to be binding. Whether the Agreement is in contravention of the Rome Statute. Whether the Philippines, by signing the Agreement, bargained away the jurisdiction of the ICC to prosecute US nationals who commit serious crimes of international concerns in the Philippines. 5. Whether the Agreement amends RA 9851 which allows surrender or extradite suspected or accused persons in the Philippines to the appropriate international court, if any, or to another State. Held: 1. Yes. An exchange of notes falls into the category of inter-governmental agreements, which is an internationally accepted form of international agreement. In another perspective, the terms exchange of notes and executive agreements have been used interchangeably, exchange of notes being considered a form of executive agreement that becomes binding through executive action. On the other hand, executive agreements concluded by the President sometimes take the form of exchange of notes and at other times that of more formal documents denominated agreements or protocols. 2. No. International agreements may be in the form of (1) treaties that require legislative concurrence after executive ratification; or (2) executive agreements that are similar to treaties, except that they do not require legislative concurrence and are usually less formal and deal with a narrower range of subject matters than treaties. Under international law, there is no difference between treaties and executive agreements in terms of their binding effects on the contracting states concerned, as long as the negotiating functionaries have remained within their powers. The right of the Executive to enter into binding agreements without the necessity of subsequent Congressional approval has been confirmed by long usage. The categorization of subject matters that may be covered by international agreements mentioned in Eastern Sea Trading is not cast in stone. There are no hard and fast rules on the propriety of entering, on a given subject, into a treaty or an executive agreement as an instrument of international relations. The primary consideration in the choice of the form of agreement is the parties intent and desire to craft an international agreement in the form they so wish to further their respective interests.

7

UP LAW BOC

POLITICAL LAW


3. No. The Rome Statute expressly recognizes the primary jurisdiction of states, like the RP, over serious crimes committed within their respective borders, the complementary jurisdiction of the ICC coming into play only when the signatory states are unwilling or unable to prosecute. Art. 90(4) of the Rome Statute provides that if the requesting State is a State not Party to this Statute the requested State, if it is not under an international obligation to extradite the person to the requesting State, shall give priority to the request for surrender from the Court. In applying the provision, certain undisputed facts should be pointed out: first, the US is neither a State-Party nor a signatory to the Rome Statute; and second, there is an international agreement between the US and the Philippines regarding extradition or surrender of persons, i.e., the Agreement. 4. No. The Agreement is but a form of affirmance and confirmance of the Philippines’ national criminal jurisdiction. National criminal jurisdiction being primary, under the Rome Statute, it is always the responsibility and within the prerogative of the RP either to prosecute criminal offenses equally covered by the Rome Statute or to accede to the jurisdiction of the ICC. By their nature, treaties and international agreements actually have a limiting effect on the otherwise encompassing and absolute nature of sovereignty. By their voluntary act, nations may decide to surrender or waive some aspects of their state power or agree to limit the exercise of their otherwise exclusive and absolute jurisdiction. The Agreement is an assertion by the Philippines of its desire to try and punish crimes under its national law. The agreement is a recognition of the primacy and competence of the country’s judiciary to try offenses under its national criminal laws and dispense justice fairly and judiciously. 5. No. RA 9851 clearly: defines and establishes the crimes against international humanitarian law, genocide and other crimes against humanity; provides penal sanctions and criminal liability for their commission; and establishes special courts for the prosecution of these crimes and for the State to exercise primary criminal jurisdiction. Nowhere in RA 9851 is there a proviso that goes against the tenor of the Agreement. RA 9851 provides discretion to the Philippine State on whether to surrender or not a person accused of the crimes under RA 9851. The statutory proviso uses the word may which denotes discretion, and cannot be construed as having mandatory effect.

8

UP LAW BOC

POLITICAL LAW


Hacienda Luisita Incorporated v. Presidential Agrarian Reform Council, et. al. G.R. No. 171101 | July 5, 2011 Facts: EO 229 and RA 6657 were passed which allows for as an alternative to the actual land transfer scheme of CARP, to give qualified beneficiaries the right to purchase shares of stocks of the corporation under a stock ownership arrangement and/or land-to-share ratio. Hacienda Luisita Inc. (HLI) proposed a stock distribution plan and some 93% of the then farmworker-beneficiaries complement of Hacienda Luisita signified in a referendum their acceptance. Stock Distribution Option Agreement (SDOA), was entered into by Tarlac Development Corporation (Tadeco), HLI, and the 5,848 qualified farm worker beneficiaries (FWBs). HLI applied for the conversion of 500 hectares of land of the hacienda from agricultural to industrial use. Suniga and Andaya, identifying themselves as head of the Supervisory Group of HLI, and 60 other supervisors sought to revoke the SDOA as well as Galang, the styled head of Alyansa ng mga Manggagawang Bukid ng Hacienda Luisita (AMBALA), alleging that HLI had failed to give them their dividends and the 1% share in gross sales, as well as the 33% share in the proceeds of the sale of the converted 500 hectares of land. Issues:

1. Whether the supervisory Group, AMBALA and their respective leaders are real partiesin-interest. 2. Whether the Presidential Agrarian Reform Council (PARC) authority to revoke a stock distribution plan. 3. Whether subjecting its landholdings to compulsory distribution after its approved SDP has been implemented would impair the contractual obligations created under the SDOA. 4. Whether the Corporation Code is applicable and not RA 6657 in determining their rights, obligations and remedies. 5. Whether the inclusion of the agricultural land of Hacienda Luisita under the coverage of CARP and the eventual distribution of the land to the FWBs would amount to a disposition of all or practically all of the corporate assets of HLI which would entitle the application of provisions on corporate dissolution in the Corporation Code. 6. Whether the constitutionality of Sec. 31 of RA 6657, insofar as it affords the corporation, as a mode of CARP compliance, can be assailed. 7. Whether the SDOA complies with Sec. 31 of RA 6657. Held: 1. Yes. The SDOA no less identifies "the SDP qualified beneficiaries" as "the farmworkers who appear in the annual payroll, inclusive of the permanent and seasonal employees, who are regularly or periodically employed by [HLI]." Galang, per HLI’s own admission, is employed by HLI, and is, thus, a qualified beneficiary of the SDP. The supervisory group whose members were admittedly employed by HLI and their names and signatures even appeared in the annex of the SDOA. 2. Yes. Under Sec. 31 of RA 6657, as implemented by DAO 10, the authority to approve the plan for stock distribution of the corporate landowner belongs to PARC. The power to approve a license

9

UP LAW BOC

POLITICAL LAW


includes by implication, even if not expressly granted, the power to revoke it. By extension, the power to revoke is limited by the authority to grant the license, from which it is derived in the first place. SDOA is not an ordinary civil law contract and, as such, does not give rise to a cause of action cognizable by regular courts. The SDOA is a special contract imbued with public interest, entered into and crafted pursuant to the provisions of RA 6657. 3. No. A law authorizing interference, when appropriate, in the contractual relations between or among parties is deemed read into the contract and its implementation cannot successfully be resisted by force of the non-impairment guarantee. There is, in that instance, no impingement of the impairment clause, the non-impairment protection being applicable only to laws that derogate prior acts or contracts by enlarging, abridging or in any manner changing the intention of the parties. 4. No. The Corporation Code is the general law providing for the formation, organization and regulation of private corporations. On the other hand, RA 6657 is the special law on agrarian reform. As between a general and special law, the latter shall prevail—generalia specialibus non derogant. Besides, the present impasse between HLI and the private respondents is not an intra-corporate dispute which necessitates the application of the Corporation Code. 5. No. the provisions of the Corporation Code on corporate dissolution would apply insofar as the winding up of HLI’s affairs or liquidation of the assets is concerned. However, the mere inclusion of the agricultural land of Hacienda Luisita under the coverage of CARP and the land’s eventual distribution to the FWBs will not, without more, automatically trigger the dissolution of HLI. As stated in the SDOA itself, the percentage of the value of the agricultural land of Hacienda Luisita in relation to the total assets transferred and conveyed by Tadeco to HLI comprises only 33.296%, following this equation: value of the agricultural lands divided by total corporate assets. By no stretch of imagination would said percentage amount to a disposition of all or practically all of HLI’s corporate assets should compulsory land acquisition and distribution ensue. 6. No. While there is indeed an actual case or controversy, intervenor FARM, composed of a small minority of 27 farmers, has yet to explain its failure to challenge the constitutionality of Sec. 3l of RA 6657, since as early as November 21, l989 when PARC approved the SDP of Hacienda Luisita or at least within a reasonable time thereafter and why its members received benefits from the SDP without so much of a protest. It was only on December 4, 2003 or 14 years after approval of the SDP via PARC Resolution dated November 21, 1989 that said plan and approving resolution were sought to be revoked. Also the constitutionality of the said provision is not the lis mota of the case is whether or not PARC acted in grave abuse of discretion when it ordered the recall of the SDP for such noncompliance and the fact that the SDP, as couched and implemented, offends certain constitutional and statutory provisions. Neither does the situation falls under any of the exceptions where the Court decided on the constitutionality of the statute despite the issue being moot and academic. There appears to be no breach of the fundamental law. Sec. 4, Article XIII of the Constitution. Sec. 4 expressly authorizes collective ownership by farmers. By using the word "collectively," the Constitution allows for indirect ownership of land and not just outright agricultural land transfer. This is in recognition of the fact that land reform may become successful even if it is done through the medium of juridical entities

10

UP LAW BOC

POLITICAL LAW


composed of farmers. While it is true that the farmer is issued stock certificates and does not directly own the land, still, the Corporation Code is clear that the FWB becomes a stockholder who acquires an equitable interest in the assets of the corporation, which include the agricultural lands. It was explained that the "equitable interest of the shareholder in the property of the corporation is represented by the term stock, and the extent of his interest is described by the term shares. The expression shares of stock when qualified by words indicating number and ownership expresses the extent of the owner’s interest in the corporate property." 7. Yes. The mandatory minimum ratio of land-to-shares of stock supposed to be distributed or allocated to qualified beneficiaries, adverting to what Sec. 31 of RA 6657 refers to as that "proportion of the capital stock of the corporation that the agricultural land, actually devoted to agricultural activities, bears in relation to the company’s total assets" had been observed. The determination of the shares to be distributed to the 6,296 FWBs strictly adheres to the formula prescribed by Sec. 31(b) of RA 6657. Paragraph one of the SDOA, which was based on the SDP, conforms to Sec. 31 of RA 6657. The stipulation reads: “1. The percentage of the value of the agricultural land of Hacienda Luisita (P196,630,000.00) in relation to the total assets (P590,554,220.00) transferred and conveyed to the SECOND PARTY is 33.296% that, under the law, is the proportion of the outstanding capital stock of the SECOND PARTY, which is P355,531,462.00 or 355,531,462 shares with a par value of P1.00 per share, that has to be distributed to the THIRD PARTY under the stock distribution plan, the said 33.296% thereof being P118,391,976.85 or 118,391,976.85 shares.” Anent the requirement under Sec. 31(b) of the third paragraph, that the FWBs shall be assured of at least one (1) representative in the board of directors or in a management or executive committee irrespective of the value of the equity of the FWBs in HLI, the Court finds that the SDOA contained provisions making certain the FWBs’ representation in HLI’s governing board, thus: “5. Even if only a part or fraction of the shares earmarked for distribution will have been acquired from the FIRST PARTY and distributed to the THIRD PARTY, FIRST PARTY shall execute at the beginning of each fiscal year an irrevocable proxy, valid and effective for one (1) year, in favor of the farmworkers appearing as shareholders of the SECOND PARTY at the start of said year which will empower the THIRD PARTY or their representative to vote in stockholders’ and board of directors’ meetings of the SECOND PARTY convened during the year the entire 33.296% of the outstanding capital stock of the SECOND PARTY earmarked for distribution and thus be able to gain such number of seats in the board of directors of the SECOND PARTY that the whole 33.296% of the shares subject to distribution will be entitled to.”

11

UP LAW BOC

POLITICAL LAW


Hacienda Luisita, Inc. (HLI) v. Presidential Agrarian Reform Council (PARC) G.R. No. 171101 | November 22, 2011 Facts: Several MRs were filed against the July 5, 2011 decision which upheld the PARC resolutions approving the stock distribution option (SDO) program of HLI. However, the decision modified said resolutions such that the original 6,296 qualified farmworker-beneficiaries of Hacienda Luisita (FWBs) shall have the option to remain as stockholders of HLI. Issue: WON the doctrine of operative fact applies.—YES Held: DAR, PARC and other parties argue that the doctrine of operative fact does not apply to the instant case since: (1) there is no law or rule which has been invalidated on the ground of unconstitutionality; 2) the doctrine is a rule of equity which may be applied only in the absence of a law, and in this case, there is a positive law which mandates the distribution of the land as a result of the revocation of the stock distribution plan (SDP); and (3) there would be no undue harshness or injury to HLI in case lands are actually distributed to the farmworkers.

Operative Fact Doctrine Not Lim ited to Invalid or Unconstitutional Laws The operative fact doctrine does not only apply to laws subsequently declared unconstitutional or unlawful, as it also applies to executive acts subsequently declared as invalid. This is well-settled in our jurisprudence. Therefore, since PARC Resolution No. 89-12-2 (which approved the SDO of HLI), an executive act, was declared invalid, the operative fact doctrine is applicable. The term executive act is broad enough to encompass decisions of administrative bodies and agencies under the executive department which are subsequently revoked by the agency in question or nullified by the Court. Therefore, the operative fact doctrine is not confined to statutes and rules and regulations issued by the executive department that are accorded the same status as that of a statute or those which are quasi-legislative in nature. Significantly, a decision made by the President or the administrative agencies has to be complied with because it has the force and effect of law, springing from the powers of the President under the Constitution and existing laws. Prior to the nullification or recall of said decision, it may have produced acts and consequences in conformity to and in reliance of said decision, which must be respected. It is on this score that the operative fact doctrine should be applied to acts and consequences that resulted from the implementation of the PARC Resolution approving the SDP of HLI. Only those FWBs who signified their desire to remain as HLI stockholders are entitled to 18,804.32 shares each, while those who opted not to remain as HLI stockholders will be given land by DAR. The application of the operative fact doctrine to the FWBs is not iniquitous and prejudicial to their interests but is actually beneficial and fair to them. First, they are granted the right to remain in HLI as stockholders and they acquired said shares without paying their value to the corporation. On the other hand, the qualified FWBs are required to pay the value of the land to Land Bank if land is awarded to them by DAR pursuant to RA 6657. If the qualified FWBs really want agricultural land, then they can simply say no to the option. And second, if the operative fact doctrine is not applied to them, then the

12

UP LAW BOC

POLITICAL LAW


FWBs will be required to return to HLI the 3% production share, the 3% share in the proceeds of the sale of the 500-hectare converted land and the 80.51-hectare Subic-Clark-Tarlac Expressway (SCTEX) lot, the homelots and other benefits received by the FWBs from HLI. With the application of the operative fact doctrine, said benefits, homelots, etc. shall be respected with no obligation to refund or return them. The receipt of these things is an operative fact that can no longer be disturbed or simply ignored.

The Operative Fact Doctrine as Recourse in Equity Undeniably, the operative fact doctrine is a rule of equity. As a complement of legal jurisdiction, equity seeks to reach and complete justice where courts of law, through the inflexibility of their rules and want of power to adapt their judgments to the special circumstances of cases, are incompetent to do so. Equity regards the spirit and not the letter, the intent and not the form, the substance rather than the circumstance, as it is variously expressed by different courts. Remarkably, it is applied only in the absence of statutory law and never in contravention of said law. Respondents argue that the operative fact doctrine should not be applied since there is a positive law, particularly, Sec. 31 of RA 6657, which directs the distribution of the land as a result of the revocation of the SDP. Markedly, the use of the word or under the last paragraph of the said provision connotes that the law gives the corporate landowner an option to avail of the stock distribution option or to have the SDP approved within two (2) years from the approval of RA 6657. Given that HLI secured approval of its SDP in November 1989, well within the two-year period reckoned from June 1988 when RA 6657 took effect, then HLI did not violate the last paragraph of Sec. 31 of RA 6657. Pertinently, said provision does not bar Us from applying the operative fact doctrine.

Note: The SC Resolution reconsidered its ruling that the qualified FWBs should be given an option to remain as stockholders of HLI, inasmuch as these qualified FWBs will never gain control given the present proportion of shareholdings in HLI.

13

UP LAW BOC

POLITICAL LAW


Heirs of Dr. Jose Deleste v. Land Bank of the Philippines G.R. No. 169913 | June 8, 2011 Facts: Presidential Decree No. (PD) 27 was issued. This law mandates that tenanted rice and corn lands be brought under the Operation Land Transfer (OLT) Program and awarded to farmerbeneficiaries. The subject property was then placed under the said program. DAR then issued Certificates of Land Transfer (CLTs) in favor of Felipe Manreal, et al. who were tenants and actual cultivators of the subject property and afterwards Emancipation Patents (EPs) and OCTs were issued. The heirs of Deslete filed a petition to nullify the EPs. Issue:

1. Whether the reclassification of the lands via City Ordinance No. 1313 is valid despite lack of approval from the HLURB. 2. Whether the property is outside the coverage of the agrarian reform program in view of the enactment of City Ordinance No. 1313 by the City of Iligan reclassifying the area into a residential/commercial land. Held: 1. Yes. City Ordinance No. 1313 was enacted by the City of Iligan in 1975. Significantly, there was still no HLURB to speak of during that time. It was the Task Force on Human Settlements, the earliest predecessor of HLURB, which was already in existence at that time. The Task Force was not empowered to review and approve zoning ordinances and regulations. As a matter of fact, it was only on August 9, 1978, with the issuance of Letter of Instructions No. 729, that local governments were required to submit their existing land use plans, zoning ordinances, enforcement systems and procedures to the Ministry of Human Settlements for review and ratification. Accompanying the Certification issued by the Deputy Zoning Administrator of the City Planning and Development Office, Iligan City, and the letter issued by the Regional Officer of the HLURB, is the Certificate of Approval issued by Imelda Marcos, then Minister of Human Settlements and Chairperson of the HSRC, showing that the local zoning ordinance was, indeed, approved on September 21, 1978. This leads to no other conclusion than that City Ordinance No. 1313 enacted by the City of Iligan was approved by the HSRC, the predecessor of HLURB. 2. Yes. Since the subject property had been reclassified as residential/commercial land with the enactment of City Ordinance No. 1313 in 1975, it can no longer be considered as an agricultural land within the ambit of RA 6657. Even if under PD 27, tenant-farmers are deemed owners as of October 21, 1972, this is not to be construed as automatically vesting upon these tenant-farmers absolute ownership over the land they were tilling. Prior to compliance with the prescribed requirements, tenant-farmers have, at most, an inchoate right over the land they were tilling. In recognition of this, a CLT is issued to a tenant-farmer. In the case at bar, the CLTs were issued in 1984 before the enactment of the zoning ordinance.

14

UP LAW BOC

POLITICAL LAW


Philippine Coconut Producers Federation, Inc. v. Republic G.R. Nos. 177857-58 | February 11, 2010 Facts: This case resolves the MR of the SC Resolution approving the conversion of the sequestered common shares of San Miguel Corporation (SMC), registered in the name of Coconut Industry Investment Fund (CIIF) Holding Companies (“SMC Common Shares”), into Preferred Shares. Salonga, et al. anchor their plea for reconsideration on the grounds that: (1) the conversion of the shares is patently disadvantageous to the government and the coconut farmers, given that SMC’s option to redeem ensures that the shares will be bought at less than their market value; and (2) the SC overlooks the value of the fact that the government, as opposed to the (then) current adminstration of PGMA, is the winning party in the case below and thus has no incentive to convert. Issue: WON the Court can strike down the Executive Department’s decision to convert the shares.— NO Held: Due to the nature of stocks in general and the prevailing business conditions, the government, through the Presidential Commission on Good Government (PCGG), chose not to speculate with the CIIF SMC shares, as prima facie public property, in the hope that there would be a brighter economy in the future, and that the value of the shares would increase. We must respect the decision of the executive department, absent a clear showing of grave abuse of discretion. With regard to the second ground raised, the current administration, or any administration for that matter, cannot be detached from the government. In the final analysis, the seat of executive powers is located in the sitting President who heads the government and/or the administration. Under the government established under the Constitution, it is the executive branch, either pursuant to the residual power of the President or by force of her enumerated powers under the laws, that has control over all matters pertaining to the disposition of government property or, in this case, sequestered assets under the administration of the PCGG. Surely, such control is neither legislative nor judicial. The executive branch, through the PCGG, has given its assent to the conversion and such decision may be deemed to be the decision of the government. The notion suggested by oppositors-intervenors that the current administration, thru the PCGG, is without power to decide and act on the conversion on the theory that the head of the current administration is not government, cannot be sustained for lack of legal basis.

15

UP LAW BOC

POLITICAL LAW


Office of the Ombudsman v. Sison G.R. No. 185954 | February 16, 2010 Facts: The Office of the Ombudsman (“Omb”) found Sison, a public official in Samar, guilty of grave misconduct, dishonesty, and conduct prejudicial to the best interest of the service. Sison appealed to the CA, which reversed and set aside the Omb decision. The CA held that the Omb failed to adduce substantial evidence in order to convict Sison. The Omb filed an Omnibus Motion for Intervention and to Admit Attached MR, which was denied by the CA. Hence, this petition. Issue: WON the Omb may be allowed to intervene and seek reconsideration of the adverse decision rendered by the CA.—NO Held: The allowance or disallowance of a Motion to Intervene is addressed to the sound discretion of the court. To warrant intervention under Rule 19 of the Rules of Court, two requisites must concur: (1) the movant has a legal interest in the matter in litigation; and (2) intervention must not unduly delay or prejudice the adjudication of the rights of the parties, nor should the claim of the intervenor be capable of being properly decided in a separate proceeding. The interest, which entitles one to intervene, must involve the matter in litigation and of such direct and immediate character that the intervenor will either gain or lose by the direct legal operation and effect of the judgment. Clearly, the Office of the Ombudsman is not an appropriate party to intervene in the instant case. It must remain partial and detached. More importantly, it must be mindful of its role as an adjudicator, not an advocate. Judges should detach themselves from cases where their decisions are appealed to a higher court for review. The raison detre for such a doctrine is the fact that judges are not active combatants in such proceeding and must leave the opposing parties to contend their individual positions and the appellate court to decide the issues without the judges active participation.

16

UP LAW BOC

POLITICAL LAW


Land Bank of the Philippines (LBP) v. Dept. of Agrarian Reform Adjudication Board (DARAB) G.R. No. 183279 | January 25, 2010 Facts: The Adaza heirs protested against the valuation of their property which was compulsorily acquired under the Comprehensive Agrarian Reform Law (CARL) of 1988 or RA 6657. The LBP revalued the just compensation to a higher amount, but the Adazas still found the amount too low so they appealed to DARAB. Pending resolution of their appeal, the Adazas interposed a Motion to W ithdraw Amended Valuation, seeking the release to them of the reevaluated amount. They alleged having long been dispossessed of the subject property, while the farmer-beneficiaries installed on it are enjoying full possession of it. The LBP disputed the Adazas’ right to lay claim on the recomputed valuation and questioned the legality of their right before the DARAB. LBP argeued that pending finality of the resolution setting just compensation, no execution shall lie. The DARAB, however, found no merit in LBP’s argument and granted the Adazas’ motion, with a directive to its Secretariat to issue the necessary writ of execution. The LBP lamented about the impropriety of what amounts to the DARAB allowing execution pending appeal without requiring the Adazas to post a bond. Issue: WON execution of the DARAB decision pending appeal should be allowed without requiring the Adazas to put up a bond.—YES Held: The office of bond is for the payment of damages which the aggrieved party may suffer in the event the final order or decision is reversed on appeal. The possibility of having the LBP amended valuation be reversed is very remote. Thus, this Board is of the opinion that posting of bond is not necessary for the execution pending appeal of the DARAB decision. Besides the amount to be released is the amount computed by LBP itself. It is but just and proper to allow, with becoming dispatch, withdrawal of the revised compensation amount, albeit protested. The concept of just compensation contemplates of just and timely payment; it embraces not only the correct determination of the amount to be paid to the landowner, but also the payment of the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered “just,” for the owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for years before actually receiving the amount necessary to cope with his loss.

17

UP LAW BOC

POLITICAL LAW


Go, Jr. v. Court of Apppeals G.R. No. 172027 | July 29, 2010 Facts: Gonzalo Go, Jr., Chief of the LTFRB Legal Division classified as Atty. VI, Salary Grade (SG)-26, protested against the summary demotion or downgrading of his salary grade by the DBM from to SG25. According to the DBM, division chief positions in quasi-judicial or regulatory agencies, whose decisions are immediately appealable to the department secretary instead of to the court, are entitled only to Atty. V, SG-25 allocation. Go excepted from DBM’s main reason that the decisions or rulings of the LTFRB are only appealable to the DOTC Secretary under Sec. 6 of EO 202 of 1987 and not to the CA. Go argued that Sec. 6 of EO 202 cannot prevail over Sec. 9(3) of BP 129, or the Judiciary Reorganization Act of 1980, under which appeals from decisions of quasi-judicial bodies are to be made to the CA. The DBM Secretary denied Go’s protest. The OP also dismissed his appeal. His appeal to the CA was also dismissed on the ground that he resorted to the wrong mode of appeal, Rule 43 being available only to assail the decision of a quasi-judicial agency issued in the exercise of its quasijudicial functions, and DBM is not a quasi-judicial body. Issue: WON the dismissal by the CA of Go’s Rule 43 petition for review is proper. –YES, but not for the ground stated by the CA Held: Both Go and the CA overlooked the fact that the case involves personnel action in the government, i.e., Go is questioning the reallocation and demotion directed by the DBM which resulted in the diminution of his benefits. Thus, the proper remedy available to Go is to question the DBM denial of his protest before the Civil Service Commission (CSC) which has exclusive jurisdiction over cases involving personnel actions, and not before the OP. In turn, the resolution of the CSC may be elevated to the CA under Rule 43 and, finally, before the SC. Consequently, Go availed himself of the wrong remedy when he went directly to the CA under Rule 43 without repairing first to the CSC. Sec. 6 of EO 202 clearly provides that the DOTC, within the period fixed therein, may, on appeal or motu proprio, review the LTFRB’s rulings. While not expressly stated in the said section, the DOTC Secretary’s decision may, in turn, be further appealed to the OP. Thus, the LTFRB rulings are not directly appealable to the CA under Rule 43. EO 202 was issued by then President Corazon Aquino pursuant to her legislative powers under the then revolutionary government. Therefore, EO 202 has the force and effect of any legislation passed by Congress. Further, EO 202, creating the LTRFB, is a special law, thus enjoying primacy over a conflicting general, anterior law, such as BP 129. The special law must prevail since it evinces the legislative intent more clearly than that of a general statute. BP 129 must, on matters of appeals from LTFRB rulings, yield to the provision of EO 202, the subsequent special law being regarded as an exception to, or a qualification of, the prior general act.

18

UP LAW BOC

POLITICAL LAW


Soriano v. Laguardia G.R. No. 164785 | April 29, 2009 Facts: The MTRCB suspended Soriano from his program, “Ang Dating Daan,” for 3 months after he made the following remarks: “Lehitimong anak ng demonyo; sinungaling; Gago ka talaga Michael, masahol ka pa sa putang babae o di ba. Yung putang babae ang gumagana lang doon yung ibaba, [dito] kay Michael ang gumagana ang itaas, o di ba! O, masahol pa sa putang babae yan. Sabi ng lola ko masahol pa sa putang babae yan. Sobra ang kasinungalingan ng mga demonyong ito.” Issue: Whether Soriano was properly suspended. Held: Yes. (1) The mere absence of a provision on preventive suspension in PD 1986, without more, would not work to deprive the MTRCB a basic disciplinary tool, such as preventive suspension. The preventive suspension was actually done in furtherance of the law, imposed pursuant, to repeat, to the MTRCB's duty of regulating or supervising television programs, pending a determination of whether or not there has actually been a violation. (2) There was no violation of equal protection. The circumstances of petitioner, as host of Ang Dating Daan, on one hand, and the INC ministers, as hosts of Ang Tamang Daan, on the other, are, within the purview of this case, simply too different to even consider whether or not there is a prima facieindication of oppressive inequality. (3) He cannot invoke religious freedom. There is nothing in petitioner's statements subject of the complaints expressing any particular religious belief, nothing furthering his avowed evangelical mission. The fact that he came out with his statements in a televised bible exposition program does not automatically accord them the character of a religious discourse. Plain and simple insults directed at another person cannot be elevated to the status of religious speech. Even petitioner's attempts to place his words in context show that he was moved by anger and the need to seek retribution, not by any religious conviction.

19

UP LAW BOC

POLITICAL LAW


Pobre vs. Defensor-Santiago A.C. No. 7399 | August 25, 2009 Facts: Senator Miriam Defensor-Santiago's speech delivered on the Senate floor contained the following statement: “I am not angry. I am irate. I am foaming in the mouth. I am homicidal. I am suicidal. I am humiliated, debased, degraded. And I am not only that, I feel like throwing up to be living my middle years in a country of this nature. I am nauseated. I spit on the face of Chief Justice Artemio Panganiban and his cohorts in the Supreme Court, I am no longer interested in the position [of Chief Justice] if I was to be surrounded by idiots. I would rather be in another environment but not in the Supreme Court of idiots.” Pobre argued that the statements reflected a total disrespect towards the Chief Justice and the other members of the Court and constituted direct contempt of court. Accordingly, he asks that disbarment proceedings or other disciplinary actions be taken against the senator, who claims that the statement was covered by the constitutional provision on parliamentary immunity. Issue: Whether Senator Miriam Defensor-Santiago should be disbarred. Held: No. The immunity Senator Santiago claims is rooted primarily on the provision of Article VI, Section 11 of the Constitution, which provides: "A Senator or Member of the House of Representative shall, in all offenses punishable by not more than six years imprisonment, be privileged from arrest while the Congress is in session. No member shall be questioned nor be held liable in any other place for any speech or debate in the Congress or in any committee thereof." The plea of Senator Santiago for the dismissal of the complaint for disbarment or disciplinary action is well taken. Indeed, her privilege speech is not actionable criminally or in a disciplinary proceeding under the Rules of Court. It is felt, however, that this could not be the last word on the matter. We would be remiss in our duty if we let the Senator's offensive and disrespectful language that definitely tended to denigrate the institution pass by. It is imperative on our part to re-instill in Senator/Atty. Santiago her duty to respect courts of justice, especially this Tribunal, and remind her anew that the parliamentary nonaccountability thus granted to members of Congress is not to protect them against prosecutions for their own benefit, but to enable them, as the people's representatives, to perform the functions of their office without fear of being made responsible before the courts or other forums outside the congressional hall. It is intended to protect members of Congress against government pressure and intimidation aimed at influencing the decision-making prerogatives of Congress and its members.

20

UP LAW BOC

POLITICAL LAW


League of Cities of the Philippines (LCP) v. Commission on Elections 608 SCRA 636 | December 21, 2009 Facts: Sixteen (16) municipalities filed individual cityhood bills. Common to all 16 measures was a provision exempting the municipality covered from the PhP 100 million income requirement. The wholesale conversion of municipalities into cities will reduce the share of existing cities in the Internal Revenue Allotment (IRA), since more cities will partake of the internal revenue set aside for all cities under Sec. 285 of the LGC of 1991. Issue: Whether or not the cityhood laws are unconstitutional for violation of Sec. 10, Art. X of the Constitution, as well as for violation of the equal-protection clause. Held: No. The cityhood laws are constitutional. The classification is germane to the purpose of the law. The exemption of respondent LGUs/municipalities from the PhP 100 million income requirement was meant to reduce the inequality occasioned by the passage of the amendatory RA 9009. The nonretroactive effect of RA 9009 is not limited in application only to conditions existing at the time of its enactment. The uniform exemption clause would apply to municipalities that had pending cityhood bills before the passage of RA 9009 and were compliant with then Sec. 450 of the LGC of 1991, which prescribed an income requirement of PhP 20 million.

21

UP LAW BOC

POLITICAL LAW


Roque, Jr. v. Commission on Elections G.R. No. 188456 | September 10, 2009 Facts: The COMELEC awarded the 2010 Elections Automation Project to the joint venture of Total Information Management (TIM) and Smartmatic International Corporation (Smartmatic). There had not been pilot testing of the PCOS system in the Philippines prior to its proposed implementation in the May 2010 Elections. There was no resort to the mandatory built-in grievance mechanism under Sec. 55 in relation to Sec. 58 of the Government Procurement Reform Act (R.A. 9184) prior to the filing of the petition. Issue: (1) Whether election automation constitutes a wholesale abdication of the COMELEC’s constitutional mandate for election law enforcement.—NO. (2) Whether non-bidders must resort to the mandatory protest mechanism set forth in Secs. 55 and 58 of the Government Procurement Reform Act before the institution of court action to impugn contracts covered by the statute.—NO. (3) Whether R.A. 8436 (authorizing the adoption of an automated election system (AES)), as amended by R.A. 9369, requires that the system procured must have been piloted before its use in the May 2010 Elections and onwards.—NO. (4) Whether the lease or provision of goods and technical services for the automation of an election qualifies as a nationalized activity that falls within the ambit of the Anti-Dummy Law.—NO. Held:

(1)

The COMELEC is an independent constitutional. In the discharge of its awesome functions as overseer of fair elections, administrator and lead implementor of laws relative to the conduct of elections, it should be afforded ample elbow room in devising means and initiatives that would enable it to accomplish the great objective for which it was created—to promote free, orderly, honest and peaceful elections. Often, the COMELEC has to make decisions under difficult conditions to address unforeseen events to preserve the integrity of the election. Absent, therefore, a clear showing of grave abuse of discretion on its part, the Court should refrain from utilizing the corrective hand of certiorari to review, let alone nullify, the acts of that body. That the COMELEC would not be holding the public and private keys pair does not amount to a loss of control. The designation of Smartmatic as the JV partner in charge of the technical aspect of the counting and canvassing wares does not, without more, translate to ceding control of the electoral process. The COMELEC retains supervision and control to ensure effective and successful implementation of the project. The automation contract also provides that the entire process of voting, counting, transmission, consolidation and canvassing of votes shall be conducted by COMELEC’s personnel and officials. The role of Smartmatic TIM Corporation is basically to supply the goods necessary for the automation project. The COMELEC will still be conducting the election through its personnel.

(2)

The requirement to comply with the protest mechanism, contrary to what may have been suggested in Infotech v. COMELEC (G.R. No. 159139, 2004), is imposed on the bidders. Only a bidder is entitled to receive a notice of the protested BAC action, so only a losing bidder would

22

UP LAW BOC

POLITICAL LAW


be aggrieved by the action. As a consequence, only a losing bidder would have the personality to challenge the action. Petitioners are not losing bidders, and are therefore not covered by the provisions in question. Therefore, the filing of the petition is not premature.

(3) Sec. 6 of the amended R.A. 8436 conveys the idea of unconditional full automation in the 2010 elections. In its proper context, the last part is indicative of the legislative intent for the May 2010 electoral exercise to be fully automated, regardless of whether or not pilot testing was run in the 2007 polls. What may be taken as mandatory for full automation is that the system to be procured, whether the PCOS or any AES, be a technology tested either here or abroad, as provided by Sec. 8 of R.A. 8436, as amended. The AES to be used need not have been used in the 2007 elections, and the demonstration of its capability need not be in a previous Philippine election. Because the PCOS system had been successfully deployed in previous electoral exercises in foreign countries, there was compliance. It does not matter that Smartmatic was not the system provider in those exercises because R.A. 9360 does not call for the winner bidder of the automation project to be the same entity as in the foreign electoral exercise. In any case, the enactment of R.A. 9525, where an appropriation to automate the 2010 election was made clears up any doubt as to the Congressional intent with respect to the pilot testing requirement.

(4) There is no constitutional or statutory provision classifying as a nationalized activity the lease or provision of goods and technical services for the automation of an election. In fact, Sec. 8 of RA 8436, as amended, vests the COMELEC with specific authority to acquire AES from foreign sources. Therefore, the Anti-Dummy Law, liability under which attaches when there is a law limiting the enjoyment of certain economic activity to Filipino citizens, has no application in the present case.

23

UP LAW BOC

POLITICAL LAW


Batalla v. Commission on Elections G.R. No. 184268 | September 15, 2009 Facts: Ernesto Battalla and Teodoro Battaller were candidates for the position of Punong Barangay in Barangay Mapulang Daga, Bacacay, Albay during the October 29, 2007 barangay elections. Batalla was proclaimed the winner. Bataller filed an election protest before the MCTC claiming misappreciation of seven ballots. The MCTC found that Batalla and Bataller had garnered an equal number of votes. Batalla received the Decision on February 20, 2008 and filed his Notice of Appeal of the trial court’s decision and paid the appeal fee on February 22, 2008. However, he paid the additional appeal docket fee only on March 5, 2008, or 11 days after receiving the MCTC’s decision. The COMELEC First Division dismissed Batalla’s for failure to pay the appeal fee as prescribed by the COMELEC Rules of Procedure within the five-(5)-day reglementary period. The Comelec En Banc affirmed. Issue: Whether or not the appeal was perfected. Held: The appellant in an electoral protest case decided by the trial court must file his notice of appeal and pay the appeal fee to the trial court that rendered the decision, and must pay to the COMELEC Cash Division the required additional appeal fee. Under the present COMELEC Rules of Procedure, an appellant from a decision of a trial court in an election protest case is given a reglementary period of 5 days from the receipt of a copy of the decision within which to pay the additional appeal fee to the COMELEC Cash Division. However, the COMELEC En Banc issued on July 15, 2008 COMELEC Resolution No. 8486, which allowed the payment of the additional appeal fee to the COMELEC Cash Division within 15 days from the filing of the notice of appeal. Said Resolution has effectively amended Sec. 4, Rule 40 of the COMELEC Rules of Procedure. Therefore, Batalla had already perfected his appeal by paying the required appeal fees. He paid the appeal fee to the trial court on February 22, 2008 within the five-day period from receipt of the decision and the additional appeal fee to the COMELEC Cash Division on March 5, 2008 or within 15 days from the filing of his notice of appeal.

24

UP LAW BOC

POLITICAL LAW


Philippine Coconut Producers Federation, Inc. (COCOFED) v. Republic G.R. No. 177857-58; G.R. No. 178193; G.R. No. 180705 | September 17, 2009 Facts: COCOFED sought Court approval of the conversion of 753,848,312 Class A and Class B common shares of San Miguel Corporation (SMC) registered in the names of Coconut Industry Investment Fund and the so-called 14 Holding Companies (collectively known as CIIF companies) into 753,848,312 SMC Series 1 Preferred Shares. The SMC shares to be exchanged are presently sequestered. It proposed to constitute a trust fund, with the Republic, acting through the Philippine Coconut Authority (PCA), as trustee. The fund would have been subject to terms and conditions, including the need for prior approval by the Court of the conversion of the sequestered SMC Common Shares. A Partial Summary Judgment had been rendered by the Sandiganbayan declaring the Republic as owner, in trust for the coconut farmers, of the subject CIIF SMC shares (27%). The PCGG, shortly before this Decision was rendered, had also passed requested the Office of the Solicitor General (OSG) to seek Court approval for the proposed conversion. The Republic prayed that the PCGG be allowed to proceed and effect the conversion. Issue: Whether COCOFED is the proper party to seek the imprimatur on the conversion. Held: The PCGG, as the receiver of sequestered assets and in consonance with its duty under EO 1, Series of 1986, to protect and preserve them, has the power to exercise acts of dominion provided that those acts are approved by the proper court. The PCGG sequestered the SMC common shares registered in the name of CIIF companies on April 7, 1986. From that time on, these sequestered shares became subject to the management, supervision, and control of PCGG. As held in Republic v. Sandiganbayan (G.R. No. 88228, 1990), sequestration is like preliminary attachment and receivership under Rules 57 and 59 of the Rules of Court, and these rules have application to sequestration cases. These powers are always subject to the control of the court. The coconut levy funds used to acquire the sequestered CIIF SMC common shares in question were peremptorily determined to be prima facie public funds. In Republic v. COCOFED (G.R. Nos. 14706264, 2001), the government had been shown to be the prima facie owner of the funds used to purchase the shares because coconut levy funds are raised with the use of the police and taxing powers of the State. The very laws governing coconut levies recognize their public character. Therefore, the coconut levy funds are not only affected with public interest; they are, in fact, prima facie public funds. From the foregoing discussion, it is clear that it is the PCGG, not COCOFED or the CIIF companies, that has the right and/or authority during sequestration to seek this Courts approval for the proposed conversion. Consequently, the terms and conditions sought by COCOFED for the conversion are not material to the proposed conversion.

25

UP LAW BOC

POLITICAL LAW


Laynesa v. Uy G.R. No. 149553 | February 29, 2008 Facts: The Laynesas were Robert Morley’s tenants. The land was eventually owned by Pacita Uy, but the deed was not registered. In 1993, Pacita demanded that the Laynesas vacate the land. Pacita also obtained a certification from the Municipal Agricultural Office (MAO) that the property was not prime agricultural property, and from the Municipal Agrarian Reform Office (MARO) that the land was not covered by Operation Land Transfer (OLT) or by PD 27. The certifications were sought so the land could be reclassified as industrial land. The Municipal Council approved a resolution, which reclassified the land from agricultural to industrial. In 1995, the Laynesas filed a Complaint for threatened ejectment and redemption with a prayer for preliminary injunction with the DARAB. The spouses Uy alleged that the DARAB had no jurisdiction since the land had already been reclassified as industrial land. Issue: Whether the reclassification of a lot by a municipal ordinance, without the Department of Agrarian Reforms (DAR’s) approval, suffices to oust the jurisdiction of the DARAB over a petition for legal redemption filed by the tenants. Held: The DARAB retains jurisdiction over disputes arising from agrarian reform matters even though the landowner or respondent interposes the defense of reclassification of the subject lot from agricultural to non-agricultural use. The DAR, through the DARAB exercises quasi-judicial functions and has exclusive original jurisdiction over all disputes involving the enforcement and implementation of all agrarian reform laws. Sec. 4 of RA 6657 tells us that “all public and private agricultural laws […] including other lands of the public domain suitable for agriculture” are covered by the Comprehensive Agrarian Reform Program. However, the Local Government Code granted local government units the power to reclassify land. The LGC governs in case of conflict between it and RA 6657, as to the issue of reclassification. Despite the reclassification of an agricultural land to non-agricultural land by a local government unit under Sec. 20 of RA 7160, the DARAB still retains jurisdiction over a complaint filed by a tenant of the land in question for threatened ejectment and redemption. The averments of the DARAB case clearly pertain to an agrarian reform matter and involve the implementation of the agrarian reform laws. Such being the case, the complaint falls within the jurisdiction of the DARAB under Sec. 50 of RA 6657 on the quasi-judicial powers of the DAR. Sec. 50 of RA 6657 on quasi-judicial powers of the DAR has not been repealed by RA 7160. It bears stressing that the DAR has primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of the agrarian reform except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR). Primary jurisdiction means in case of seeming conflict between the jurisdictions of the DAR and regular courts, preference is vested with the DAR because of its expertise and experience in agrarian reform matters. Sec. 50 is also explicit that except for the DA and DENR, all agrarian reform matters are within the exclusive original jurisdiction of the DAR.

26

UP LAW BOC

POLITICAL LAW


Manila International Airport Authority (MIAA) v. Olongapo Maintenance Services G.R. No. 146184-85 | January 31, 2008 Facts: OMSI and TCSI were among the five contractors of MIAA which had janitorial and maintenance service contracts covering various areas in the Ninoy Aquino International Airport. Before their service contracts expired on October 31, 1998, the MIAA wrote OMSI and TCSI informing them that their contracts would no longer be renewed adding that it was to the government’s advantage to instead just negotiate with other contractors. Consequently, OMSI and TCSI instituted civil cases against MIAA to forestall the termination of their contracts and prevent MIAA from negotiating with other service contractors. Issue: WON contracts for public services may be exempted from public bidding Held: No. The law governing this case is EO 301, Sec. 1 of which provides for exceptions to public bidding or gives guidelines for negotiated contracts. As held in Kilosbayan v. Morato (1995), the said provision only applies to contracts for the purchase of supplies, materials, and equipment. Thus, a contract for janitorial and maintenance services is not included. However, the issue has become moot for MIAA, as part of its management prerogative, has chosen to hire its own personnel to render janitorial and messengerial services. To note, RA 9184 is the current law on government procurement signed into law on January 10, 2003. It expressly repealed, among others, EO 40, EO 262, EO 301, EO 302, and Presidential Decree No. 1594, as amended. This law still requires public bidding as a preferred mode of award. RA 9184 allows exceptions to public bidding rule in certain instances, conditions, or extraordinary circumstances. Sec. 53 of RA 9184 in particular authorizes negotiated procurement, while other alternative methods of procurement are set forth under Art. XVI of RA 9184. Under the present law, MIAA can enter into negotiated contracts in the exceptional situations allowed by RA 9184.

27

UP LAW BOC

POLITICAL LAW


Ricardo Paloma v. Philippine Airlines, Inc. G.R. No. 148415 | July 14, 2008 Facts: Paloma started working for PAL in 1957. In 1992, PAL was privatized. He retired nine months after and received post-employment benefits. However, he filed a claim before the NLRC for Commutation of Accrued Sick Leaves Totaling 392 days pursuant to EO 1077 which allows retiring government employees to commute, without limit, all his accrued vacation and sick leave credits. Paloma maintains that he is a government employee within the coverage of EO 1077. He argued that the EO was issued in 1986, before he severed official relations with PAL. Moreover, he was employed at a time when the applicable provision on the coverage of the civil service under the 1973 Constitution made no distinction between GOCCs with original charters and those without, like PAL, which was incorporated under the Corporation Code thus employees of PAL were covered by the civil service law. Issue: WON EO 1077 applicable to government employees, applied to PAL’s employees before its privatization Held: No. Although PAL was a government-controlled corporation in the sense that the GSIS owned a controlling interest over its stocks, PAL has through the years functioned as a private corporation and managed as such for profit. The Court took judicial notice of the fact that the civil service law and rules and regulations have not actually been made to apply to PAL and its employees but the Labor Code even prior to the adoption of the 1987 Constitution. Moreover, that PAL and Paloma may have, at a time, come within the embrace of the civil service by virtue of the 1973 Constitution is of little moment at this juncture. As held in National Service Corporation v. NASECO (1988), it is the Constitution in place at the time the case was decided that should govern, even if, incidentally, the cause of action accrued during the effectivity of an earlier Constitution. In this case, it is the 1987 Constitution which governs thus EO 1077 does not apply to Paloma, him not being considered a government employee.

28

UP LAW BOC

POLITICAL LAW


Dr. Pedro Gobenciong v. CA G.R. No. 159883 | March 31, 2008 Facts: Gobenciong held the position of Administrative Officer IV in a public hospital in Tacloban City. An administrative complaint before the Office of the Ombudsman-Visayas was filed charging Gobenciong and other officers with Falsification of Public Documents and Misconduct. The Deputy Ombudsman-Visayas placed Gobenciong et. al. under preventive suspension. The CA then granted Gobenciong a TRO. While the TRO was duly served, Gobenciong still failed to return to work or obtain his salary until the after the lapse of the suspension period. Gobenciong sought to have the officer in the Office of the Ombudsman cited in contempt but the CA did not act on the motion. The Ombudsman later rendered a decision finding Gobenciong et. al. guilty with penalty of one year suspension without pay. The Office of the Ombudsman-Visayas then directed DOH Regional Office to immediately implement the order. Upon Gobenciong’s petition, the CA eventually set aside the order of the Omdudsman insofar as said office directly imposes upon Gobenciong the penalty of suspension. Invoked as part of the ratio decidendi of the CA Decision was Tapiador v. Office of the Ombudsman (2002) which the appellate court viewed as declaring that the disciplinary power of the Ombudsman in administrative cases is limited only to recommending to the disciplining authority the appropriate penalty to be meted out. Issue: WON the Ombudsman has power to ensure compliance with imposition of penalties pursuant to his administrative disciplinary authority Held: Yes. The Office of the Ombudsman’s assertion, about being in possession of full administrative disciplinary authority over public officials and employees, except impeachable officials, members of Congress, and the Judiciary, including the power to determine the penalty therefor and to cause the same to be implemented by the head of the government agency concerned, is correct. Jurisprudence on the matter is settled. Accordingly, any suggestion that its power to remove, suspend, or censure is merely advisory or recommendatory has to be rejected outright. And the CA’s reference to Tapiador to underpin its conclusion on the recommendatory nature of the Ombudsmans disciplinary authority is misplaced and erroneous, the cited portion of Tapiador being a mere obiter dictum. The Court made this abundantly clear in Ledesma v. Court of Appeals where the Court said that the exercise of such power is well founded in the Constitution and RA 6770. Subsequently in Office of the Ombudsman v. CA, the Court stressed that the history of RA 6770 bears out the conclusion that Congress intended the Office of the Ombudsman to be an activist watchman, not merely a passive one, possessing full administrative disciplinary authority, including the power to impose the penalty of removal and to prosecute a public officer or employee found to be at fault. The Court, in Uy v. Sandiganbayan, gave validation to the legislative intent adverted to. Clearly then, as to the allegation of unconstitutionality of the grant unto the Ombudsman under RA 6770 of the power to take over a disciplinary case, at any stage of the investigation, to investigate any act or omission, administrative, or otherwise, and to direct the implementation of a preventive suspension order for being an undue delegation of authority is untenable. For, in the ultimate analysis, it is the 1987 Constitution no less which granted and allowed the grant by Congress of sweeping prosecutorial, investigatory, and disciplinary powers to the Ombudsman.

29

UP LAW BOC

POLITICAL LAW


Social Justice Society v. Dangerous Drugs Board and PDEA G.R. No. 157870 | November 3, 2008 Facts: In these kindred petitions, the constitutionality of Sec. 36 of RA 9165, otherwise known as the Comprehensive Dangerous Drugs Act of 2002, insofar as it requires mandatory drug testing of candidates for public office, students of secondary and tertiary schools, officers and employees of public and private offices, and persons charged before the prosecutors office with certain offenses, among other personalities, is put in issue. As regards testing of candidates for public office under Sec. 36(g), petitioner Aquilino Pimentel Jr., a senatorial candidate, avers that the provision is unconstitutional for imposing a qualification for candidates in addition to those provided under the Constitution. As regards testing of students and employees, petitioner Social Justice Society avers that paragraphs (c), (d), (f), and (g) of Sec. 36 of said law constitutes undue delegation of legislative power for giving schools and employers unbridled discretion in determining the manner of testing, and for trenching on the equal protection clause as well as the proscription against unreasonable searches and seizures. Lastly, petitioner Manuel Laserna Jr., as citizen and taxpayer, argues that the same paragraphs (c), (d), (f), and (g) of Sec. 36 should be struck down as unconstitutional for infringing on the constitutional right to privacy, the right against unreasonable search and seizure, and the right against self-incrimination, and for being contrary to the due process and equal protection guarantees. Issue: WON the questioned provisions are unconstitutional Held: 1. As regards the testing required for candidates for public office particular those for senatorial position, it is unconstitutional. It effectively enlarges the qualification requirements enumerated in the Sec. 3, Art. VI of the Constitution. As couched, said Sec. 36(g) unmistakably requires a candidate for senator to be certified illegal-drug clean, obviously as a pre-condition to the validity of a certificate of candidacy for senator or, with like effect, a condition sine qua non to be voted upon and, if proper, be proclaimed as senator-elect. 2. As regards testing for secondary and tertiary level students, while mandatory, is a random and suspicionless arrangement. However, it is argued to infringe on the right to privacy. The issue is one of first impression. Taking from US jurisprudence, particularly Vernonia School v. Acton and Board of Education v. Earls, it can be deduced and applied to this jurisdiction that (1) schools and their administrators stand in loco parentis with respect to their students; (2) minor students have contextually fewer rights than an adult, and are subject to the custody and supervision of their parents, guardians, and schools; (3) schools, acting in loco parentis, have a duty to safeguard the health and well-being of their students and may adopt such measures as may reasonably be necessary to discharge such duty; and (4) schools have the right to impose conditions on applicants for admission that are fair, just, and non-discriminatory. Indeed, it is within the prerogative of educational institutions to require, as a condition for admission, compliance with reasonable school rules and regulations and policies. To be sure, the right to enroll is not absolute; it is subject to fair, reasonable, and equitable requirements. Therefore, the subject provision is constitutional.

30

UP LAW BOC

POLITICAL LAW


3. As regards mandatory testing for officers and employees of public and private offices, it is also justifiable, albeit not exactly for the same reason as above. The argument of SJS and Laserna against the provision is that it violates the right to privacy. Authorities are agreed though that the right to privacy yields to certain paramount rights of the public and defers to the states exercise of police power. Given that the drug-testing policy for employees (and students) is in the nature of administrative search, the review should focus on the reasonableness of such search. The factors to consider are the reduced expectation of privacy on the part of the employees, the compelling state concern likely to be met by the search, and the well-defined limits set forth in the law to properly guide authorities in the conduct of the random testing. Taking these into account, the challenged drug test requirement is reasonable ergo constitutional. 4. For mandatory drug testing for persons accused of crimes, the Court finds no valid justification. The operative concepts in the mandatory drug testing are randomness and suspicionless. In the case of persons charged with a crime before the prosecutors office, a mandatory drug testing can never be random or suspicionless. When persons suspected of committing a crime are charged, they are singled out and are impleaded against their will. To impose mandatory drug testing on the accused is a blatant attempt to harness a medical test as a tool for criminal prosecution, contrary to the stated objectives of RA 9165. Drug testing in this case would violate a persons right to privacy guaranteed under Sec. 2, Art. III of the Constitution. Worse still, the accused persons are veritably forced to incriminate themselves.

31

UP LAW BOC

POLITICAL LAW


Raul Boac et. al. v. People of the Philippines G.R. No. 180597 | November 7, 2008 Facts: Petitioners Boac, et. al., members of the Philippine National Police (PNP)-Criminal Investigation and Detection Group (CIDG) were charged with violation of Sec. 2203 in relation to Sec. 3612 of the Tariff and Customs Code for flagging down, searching and seizing three container vans without lawful authority or delegation from the Collector of Customs. Petitioners assert that they did not conduct any search, seizure, or arrest since they merely witnessed the search conducted by the Customs Police themselves. Petitioners further claim that the police’ authority to stop, search, and effect seizure and arrest, if necessary, is no longer exclusively vested on the Collector of Customs. Regular PNP members are generally empowered by law to effect arrests in accordance with Sec. 24 (a), (b), (c) and (d) of RA 6975. Issue: WON the PNP need not coordinate with BOC in conducting search, seizure and arrest with regard to customs duties by virtue of Sec. 24 RA 6975 Held: No. There is no conflict between the aforementioned provisions of the Tariff and Customs Code and RA 6975, as amended. The jurisdiction of the Commissioner of Customs is clearly with regard to customs duties. Should the PNP suspect anything, it should coordinate with the BOC and obtain the written authority from the Collector of Customs in order to conduct searches, seizures, or arrests. Coordination is emphasized in the laws. While it is an admitted fact that there was no such coordination initiated by the PNP-CIDG in this instance, nevertheless, petitioners cannot be convicted under the Tariff and Customs Code since there is no evidence that they did actually search the container vans.

32

UP LAW BOC

POLITICAL LAW


Rodolfo M. Cuenca and Cuenca Investment Corp. v. The Presidential Commission on Good Government, Independent Realty corp., and Universal Holdings Corp. GR No. 159104-05 | October 05, 2007 Facts: Cuenca and CIC, purchased all the shares of stock and subscription rights of IRC in UHC and assume IRC’s unpaid subscription. Pursuant to the acquisition plan and agreement with IRC, Cuenca and CIC transferred their shares of stock in CDCP, Sta. Ines, and Resort Hotels to UHC to IRC. The only remaining matter to be accomplished was the transfer of the stocks and subscription rights of IRC in UHC to petitioners, but IRC did not comply. In July 1987, because of Marcos nominee Jose Yao Campos’ sworn statement, PCGG directed President of IRC, to dissolve all the boards of directors of IRC’s fully-owned subsidiaries. A year later, it turned over IRC and its subsidiary, UHC, to the Asset Privatization Trust (APT) for rehabilitation, conservation, or disposition. Petitioners filed a complaint before the Makati RTC to compel IRC to transfer all its stock and subscription rights in UHC to them or order IRC and UHC to return and re-convey to them all the assets and shares of stock they had transferred to UHC. Issue: Whether or not UHC was sequestered and if it was sequestered, whether the trial court still has the jurisdiction to hear the case for rescission of contract or specific performance. Held: Sandiganbayan has exclusive jurisdiction over the instant case. The shares of stock of UHC and CDCP, were also the subject matter of an ill-gotten wealth case before the Sandiganbayan. Sandiganbayan and not the Makati City RTC has jurisdiction over the disputed UHC and PNCC shares, being the alleged “ill-gotten wealth” of former President Ferdinand E. Marcos and petitioner Cuenca. The fact that the Makati City RTC civil case involved the performance of contractual obligations relative to the UHC shares is of no importance. The benchmark is whether said UHC shares are alleged to be ill-gotten wealth of the Marcoses and their perceived cronies. Interests of orderly administration of justice dictate that all incidents affecting the UHC shares and PCGG’s right of supervision or control over the UHC must be addressed to and resolved by the Sandiganbayan. Respondent UHC was duly sequestered by PCGG.

33

UP LAW BOC

POLITICAL LAW


Joevanie Tabasa v. CA, Bureau of Immigration and Deportation, Wilson Soluren GR No. 125793 | August 29, 2006 Facts: Tabasa was a natural-born citizen of the Philippines who acquired American citizenship when he was seven years old as a result of his father’s naturalization as an American citizen. He arrived in the Philippines on 1995, and was admitted as a "balikbayan" for one year. However, his passport was revoked by the U.S. and thus, BID arrested him for being an undocumented and undesirable alien. Tabasa alleged that he had acquired Filipino citizenship by repatriation in accordance with RA 8171, and that because he is now a Filipino citizen, he cannot be deported. Issue: Whether petitioner has validly reacquired Philippine citizenship under RA 8171. Held: No. The only persons entitled to repatriation under RA 8171 are the following: a.) Filipino women who lost their Philippine citizenship by marriage to aliens; b.) Natural-born Filipinos including their minor children who lost their Philippine citizenship on account of political or economic necessity. The privilege under RA 8171 belongs to children who are of minor age at the time of the filing of the petition for repatriation. Tabasa was 35 years old at that time. Neither can he be a natural-born Filipino who left the country due to political or economic necessity since he lost his Philippine citizenship by operation of law. Even if Tabasa can avail of the benefit of RA 8171, he failed to file his petition for repatriation with the Special Committee on Naturalization, and prove that his parents relinquished their Philippine citizenship on account of political or economic necessity; such necessity should have been specified.

34

UP LAW BOC

POLITICAL LAW


Bases Conversion and Development Authority et al v. Uy GR No. 144062 | November 2, 2006 Facts: RA 7227created the BCDA/ The Public Estates Authority was designates as BCDA’s project manager. PEA entered into a Landscaping and Construction Agreement with Uy. There were delays in the construction and landscaping under the LCA, and for which several extensions were granted to Uy. PEA terminated the LCA. Uy filed a case for injunction and damages against PEA, BCDA. RTC issued a TRO. BCDA raised the lack of jurisdiction of the RTC to hear an injunction case against the BCDA in view of the proscription under Section 21 of RA 7227; which not only prohibits lower courts from issuing a TRO or writ of injunction against BCDA projects but also clearly vests exclusive jurisdiction in the Supreme Court for injunctive relief and issuance of a TRO. Issue: Whether or not the trial court has jurisdiction to provisionally enjoin petitioners from terminating the LCA and to hear an injunction case against petitioners. Held: All courts, except the Supreme Court, are proscribed from issuing TROs and writs of preliminary injunction against the implementation or execution of specified government projects. The prohibition covers only temporary or preliminary restraining orders or writs but NOT decisions on the merits granting permanent injunctions. Thus, petitioners' claim that Judge Ricafort has no jurisdiction over the complaint for injunction plus damages with a prayer for temporary restraining order and writ of preliminary injunction does not hold water. RTC has jurisdiction to hear Uy's action and even grant his supplication for a permanent injunction. While the issuance of the assailed TRO t evidently constitutes a blatant violation of Section 21 of RA 7227 and hence void, the same has likewise been rendered moot for being functus officio, the 20-day validity period of the TRO having lapsed.

35

UP LAW BOC

POLITICAL LAW


Abdusakur Tan, Basaron Burahan v. COMELEC et al. GR No. 166143-47 | November 20, 2006 Facts: Petitioners were the gubernatorial and vice-gubernatorial candidates of Sulu in the May 10, 2004 elections. They filed with the COMELEC Petitions for Declaration of Failure of Elections in certain towns. They alleged systematic fraud, terrorism, illegal schemes, and machinations allegedly perpetrated by private respondents and their supporters resulting in massive disenfranchisement of voters. Issue: Whether or not there was disenfranchisement of voters. Held: No. The issue of the alleged abrupt change of polling place was raised by the petitioner only on appeal. Fairness and due process dictate that evidence and issues not presented below cannot be taken up for the first time on appeal. Even granting arguendo that the issue of the alleged change and transfer of polling places was raised before the COMELEC, it would still not justify a declaration of failure of election in the subject municipalities. It is apparent that the May 9, 2004 approval of the change and transfer of polling places—which was duly disseminated to the parties, candidates, and voters—was a mere formality to confirm what was already set way before the May 10, 2004 elections. There was no lack of ample notice to petitioners, their poll watchers and supporters, and the voters of the subject municipalities. The COMELEC correctly dismissed the Petitions for Declaration of Failure of Election since the electoral anomalies such as the alleged sham elections and sham canvassing should have been raised in an election protest, not in a petition to declare a failure of election. As to the massive disenfranchisement, there was no sufficient evidence presented.

36

UP LAW BOC

LABOR LAW


LABOR LAW Bartolome v. Social Security System G.R. No. 192531 | November 12, 2014 Facts: Bernardina Bartolome, John Colcol’s biological mother and, allegedly, sole remaining beneficiary, filed a claim for death benefits under PD 626 with the SSS. SSS denied her claim, ruling that she cannot be considered his parent, as John was legally adopted, thus severing their ties. This ruling was made pursuant to the Amended Rules on Employees’ Compensation, limiting the beneficiaries to legitimate parents. The Employees’ Compensation Commission affirmed the SSS’ ruling. Issue: WON the biological parents of the covered, but legally adopted, employee considered secondary beneficiaries and, thus, entitled to receive the benefits under the ECP Held: Yes. Under Article 167 (j) of the Labor Code, “(j) 'Beneficiaries' means the dependent spouse until he remarries and dependent children, who are the primary beneficiaries. In their absence, the dependent parents and subject to the restrictions imposed on dependent children, the illegitimate children and legitimate descendants who are the secondary beneficiaries.” The term “parents” in the phrase “dependent parents” in the afore-quoted Article 167 (j) of the Labor Code is used and ought to be taken in its general sense and cannot be unduly limited to “legitimate parents” as what the ECC did. When the law does not distinguish, one should not distinguish. Plainly, “dependent parents” are parents, whether legitimate or illegitimate, biological or by adoption, who are in need of support or assistance.

37

UP LAW BOC

LABOR LAW


Transocean Ship Management (Phils.), Inc. v. Vedad 694 SCRA 209 | March 20, 2013 Facts: Inocencio was a second engineer aboard a vessel. He fell ill and was eventually repatriated. Later, it was found out that he was suffering from cancer of the right tonsil. treatment at an estimated cost of PhP 500,000, which Transocean and General Marine promised to shoulder. Inocencio started with the procedure but could not continue due to the failure of Transocean and General Marine to provide the necessary amount, hence complaint for disability benefits and sickness allowance. Issue: Whether Inocencio is entitled to sickness allowance and disability benefits Held: No as to disability benefits, Yes as to the sickness allowance. As to sickness allowance, the fact that Inocencio's sickness was later medically declared as not workrelated does not prejudice his right to receive such allowance, considering that he got ill while on board the ship and was repatriated for medical treatment before the end of his I0-month employment contract. Moreover, at the time of his repatriation. his illness was not yet medically declared as not work-related by Dr. Cruz; thus, the presumption under the Sec. 20(B)(4) of the POEA-SEC applies (that it is workl-related). He is, therefore, entitled to sickness allowance pending assessment and declaration by the company-designated physician on the work-relatedness of his ailment However, as to the disability benefits, since the company-designated physician certified that the tonsil cancer of Inocencio was not work-related, it shifted the burden of proof to Inocencio who failed to substantiate that his illness was work-related. Thus, he is not entitled to claim total permanent disability benefits.

38

UP LAW BOC

LABOR LAW


Magdala Multipurpose & Livelihood Cooperative (MMLC) v. Kilusang Manggagawa ng LGS, Magdala Multipurpose & Livelihood Cooperative (KMLMS) G.R. Nos. 191138-39 | October 19, 2011 Facts: KMLMS is the union operating in MMLC. It filed a notice of strike and conducted its strike-vote before DOLE granted its registration application as an independent labor organization and before it officially became a local chapter of the Pambansang Kaisahan ng Manggagawang Pilipino. It staged the strike when it was already a legitimate labor organization (LLO). Several prohibited and illegal acts were committed by its participating members in the said strike. On the ground of lack of valid notice of strike, ineffective conduct of a strike-vote and commission of prohibited and illegal acts, MMLC filed a Petition to Declare the Strike Illegal before the NLRC Regional Arbitration Board (RAB). Issue: WON the strike was illegal.—YES Held: There is no question that the strike was illegal, first, because when KMLMS filed the notice of strike, it had not yet acquired legal personality and, thus, could not legally represent the eventual union and its members. And second, similarly when KMLMS conducted the strike-vote, there was still no union to speak of, since KMLMS only acquired legal personality as an independent the day after it conducted the strike-vote. Consequently, the mandatory notice of strike and the conduct of the strike-vote report were ineffective for having been filed and conducted before KMLMS acquired legal personality as an LLO, violating Art. 263(c), (d) and (f) of the Labor Code and Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code. It is, thus, clear that the filing of the notice of strike and the conduct of the strike-vote by KMLMS did not comply with the aforementioned mandatory requirements of law. Consequently, the strike is illegal.

39

UP LAW BOC

LABOR LAW


Oriental Shipmanagement Co., Inc. (OSCI) v. Bastol G.R. No. 186289 | June 29, 2010 Facts: Romy Bastol, a bosun (officer in a merchant ship) employed by OSCI, was repatriated from Algiers due to his illness (anterior myocardial infarction). He filed a Complaint before the Labor Arbiter for: (a) medical disability benefit; (b) illness allowance until he is deemed fit to work again; (c) medical benefits for the treatment of his ailment; (d) moral damages; and (e) attorney’s fees. The LA ruled in favor of Bastol, but on OSCI’s appeal to the NLRC, the LA’s ruling was reversed. The CA, however, reversed the NLRC decision and reinstated the LA’s. Issues: 1. WON the Complaint filed before the LA ought to be dismissed for lack of certification against forum shopping as required by the Rules. –NO 2. WON the verification by counsel is sufficient for Bastol’s Position Paper and Manifestation/Compliance. –YES Held: 1. For the expeditious and inexpensive filing of complaints by employees, the Regional Arbitration Branch (RAB) of the NLRC provides pro-forma complaint forms. This is to facilitate the exercise and protection of employees rights by the convenient assertion of their claims against employers untrammeled by procedural rules and complexities. To comply with the certification against forum shopping requirement, a simple question embodied in the Complaint form answerable by yes or no suffices. Employee-complainants are not even required to have a counsel before they can file their complaint. An officer of the RAB, duly authorized to administer oaths, is readily available to facilitate the execution of the required subscription or jurat of the complaint. This can be seen in the case at bar. Bastol, assisted by counsel, filled out the Complaint form, line No. 11 of which is a question on anti-forum shopping which he answered by underlining the word No. It is thus clear that the strict application of Sec. 4, Rule 7 of the Rules of Court does not apply to labor complaints filed before the NLRC RAB. 2. There is no law or rule requiring verification for the Manifestation/ Compliance. Further, the counsel’s verification in Bastol’s Position Paper substantially complies with the rule on verification—“I confirm that all the allegations therein contained are true and correct based on recorded evidence.”

40

UP LAW BOC

LABOR LAW


UST Faculty Union v. UST G.R. No. 180892 | April 7, 2009 Facts: Thus, there were two (2) groups claiming to be the USTFU: the Gamilla Group and the Mariño Group. The Mariño Group filed a complaint for ULP against UST. It also filed a complaint with the Office of the Med-Arbiter, praying for the nullification of the election of the Gamilla Group as officers of the USTFU. UST entered into a CBA with the Gamilla Group. Issue: Whether UST is guilty of ULP. Held: No. Until our Decision in G.R. No. 131235 that the Gamilla Group was not validly elected into office, there was no reason to believe that the members of the Gamilla Group were not the validly elected officers and directors of USTFU. The Gamilla Group submitted a Letter dated October 4, 1996 whereby it informed Fr. Rolando De La Rosa that its members were the newly elected officers and directors of USTFU. The records are bereft of any evidence to show that the Mariño Group informed the UST of their objections to the election of the Gamilla Group. As such, there was no reason not to recognize the Gamilla Group as the new officers and directors of USTFU. And as stated in the abovequoted provisions of the Labor Code, the UST was obligated to deal with the USTFU, as the recognized representative of the bargaining unit, through the Gamilla Group. UST's failure to negotiate with the USTFU would have constituted ULP. It is not the duty or obligation of UST to inquire into the validity of the election of the Gamilla Group. Such issue is properly an intra-union controversy subject to the jurisdiction of the med-arbiter of the DOLE. Respondents could not have been expected to stop dealing with the Gamilla Group on the mere accusation of the Mariño Group that the former was not validly elected into office.

41

UP LAW BOC

LABOR LAW


Locsin v. Philippine Long Distance Telephone Company, 602 SCRA 740 | October 02, 2009 Facts: In November 1990, PLDT and the Security and Safety Corporation of the Philippines (SSCP) entered into a Security Services Agreement (Agreement) whereby SSCP would provide armed security guards to PLDT to be assigned to its various offices. Locsin and Tomaquin were posted as security guards at a PLDT office. The Service Agreement was terminated in October 2001. However, Locsin and Tomaquin continued to secure the premises of their assigned office. They were allegedly directed to remain at their post by representatives of PLDT. In support of their contention, petitioners provided the Labor Arbiter with copies of their pay slips for the period of January to September 2002. Then, on September 30, 2002, their services were terminated. They filed a complaint before the Labor Arbiter for illegal dismissal. Issue: Whether or not Locsin and Tomaquin were employees of PLDT Held: Yes, they are employees of PLDT. They remained at their post under the instructions of PLDT. PLDT dictated upon them that they perform their regular duties to secure the premises during operating hours. This is sufficient to establish the existence of an employer-employee relationship. While PLDT and SSCP no longer had any legal relationship with the termination of the Agreement, Locsin and Tomaquin remained at their post securing the premises of respondent while receiving their salaries, allegedly from SSCP. It is but reasonable to conclude that, with the behest and, presumably, directive of respondent, petitioners continued with their services. Evidently, such are indicia of control that respondent exercised over petitioners. With the conclusion that respondent directed petitioners to remain at their posts and continue with their duties, it is clear that respondent exercised the power of control over them; thus, the existence of an employer-employee relationship.

42

UP LAW BOC

LABOR LAW


Ricardo Paloma v. Philippine Airlines, Inc. G.R. No. 148415 | July 14, 2008 Facts: Paloma started working for PAL in 1957. In 1992, PAL was privatized. He retired nine months after and received post-employment benefits. However, he filed a claim before the NLRC for Commutation of Accrued Sick Leaves Totaling 392 days pursuant to EO 1077 which allows retiring government employees to commute, without limit, all his accrued vacation and sick leave credits. Paloma maintains that he is a government employee within the coverage of EO 1077. He argued that the EO was issued in 1986, before he severed official relations with PAL. Moreover, he was employed at a time when the applicable provision on the coverage of the civil service under the 1973 Constitution made no distinction between GOCCs with original charters and those without, like PAL, which was incorporated under the Corporation Code thus employees of PAL were covered by the civil service law. Issue: WON EO 1077 applicable to government employees, applied to PAL’s employees before its privatization Held: No. Although PAL was a government-controlled corporation in the sense that the GSIS owned a controlling interest over its stocks, PAL has through the years functioned as a private corporation and managed as such for profit. The Court took judicial notice of the fact that the civil service law and rules and regulations have not actually been made to apply to PAL and its employees but the Labor Code even prior to the adoption of the 1987 Constitution. Moreover, that PAL and Paloma may have, at a time, come within the embrace of the civil service by virtue of the 1973 Constitution is of little moment at this juncture. As held in National Service Corporation v. NASECO (1988), it is the Constitution in place at the time the case was decided that should govern, even if, incidentally, the cause of action accrued during the effectivity of an earlier Constitution. In this case, it is the 1987 Constitution which governs thus EO 1077 does not apply to Paloma, him not being considered a government employee.

43

UP LAW BOC

LABOR LAW


NUWHRAIN-APL-IUF Dusit Hotel Nikko Chapter v. CA G.R. No. 163942 | November 11, 2008 Facts: NUWHRAIN and the Hotel failed to arrive at mutually acceptable terms. Conciliation hearings proved unsuccessful. The Union then decided to wage a strike. The Union held a general assembly at its office located in the Hotels basement, where some members sported closely cropped hair or cleanly shaven heads. The next day, or on January 18, 2002, more male Union members came to work sporting the same hair style. The Hotel prevented these workers from entering the premises claiming that they violated the Hotels Grooming Standards. The Union then staged a picket outside the premises. The Hotel issued notices to Union members, preventively suspending them and charging them with the several offenses. The Hotel later terminated the services of several Union officers and members. The Secretary then assumed jurisdiction over the labor dispute. The Secretary certified the case to the NLRC for compulsory arbitration, and gave the Hotel the option in lieu of actual reinstatement, to merely reinstate the dismissed or suspended workers in the payroll in light of the special circumstances attendant to their reinstatement. Issue: WON payroll reinstatement is allowed Held: Yes. The Court has held in University of Immaculate Concepcion, Inc. v. Secretary of Labor (2005) that the Secretary’s Order allowing payroll reinstatement instead of actual reinstatement the same is usually not allowed. This is consistent with the idea that any work stoppage or slowdown in that particular industry can be detrimental to the national interest. Thus, it was settled that in assumption of jurisdiction cases, the Secretary should impose actual reinstatement in accordance with the intent and spirit of Art. 263(g) of the Labor Code. As with most rules, however, this one is subject to exceptions. We held in Manila Diamond Hotel Employees Union v. CA (2004) that payroll reinstatement is a departure from the rule, and special circumstances which make actual reinstatement impracticable must be shown. The peculiar circumstances in the present case validate the Secretary’s decision to order payroll reinstatement instead of actual reinstatement. It is obviously impracticable for the Hotel to actually reinstate the employees who shaved their heads or cropped their hair because this was exactly the reason they were prevented from working in the first place. Further, as with most labor disputes which have resulted in strikes, there is mutual antagonism, enmity, and animosity between the union and the management. Payroll reinstatement, most especially in this case, would have been the only avenue where further incidents and damages could be avoided. Public officials entrusted with specific jurisdictions enjoy great confidence from this Court. The Secretary surely meant only to ensure industrial peace as she assumed jurisdiction over the labor dispute. In this case, we are not ready to substitute our own findings in the absence of a clear showing of grave abuse of discretion on her part.

44

UP LAW BOC

LABOR LAW


Genuino v. National Labor Relations Commission 539 SCRA 342 | December 04, 2007 Facts: Genuino was employed by Citibank sometime in January 1992 as Treasury Sales Division Head with the rank of Assistant Vice-President. On August 23, 1993, Citibank sent Genuino a letter charging her with knowledge and/or involvement in transactions which were irregular or even fraudulent. In the same letter, Genuino was informed she was under preventive suspension. Genuino did not appear in the administrative investigation held on September 21, 1993. Her lawyers wrote a letter to Citibank’s counsel asking what bank clients funds were diverted from the bank and invested in other companies, the specific amounts involved, the manner by which and the date when such diversions were purportedly affected. In reply, Citibanks counsel noted Genuinos failure to appear in the investigation and gave Genuino up to September 23, 1993 to submit her written explanation. Genuino did not submit her written explanation. On September 27, 1993, Citibank informed Genuino of the result of their investigation which resulted to termination of her employment on grounds of (1) serious misconduct, (2) willful breach of the trust reposed upon her by the bank, and (3) commission of a crime against the bank Issue: Whether or not Genuino was dismissed for a just cause and with due process? Held: Genuino was validly dismissed for just cause but without the observance of due process. The Implementing Rules and Regulations of the Labor Code provide that any employer seeking to dismiss a worker shall furnish the latter a written notice stating the particular acts or omissions constituting the grounds for dismissal. The purpose of this notice is to sufficiently apprise the employee of the acts complained of and enable him/her to prepare his/her defense. The two-notice requirement of the Labor Code is an essential part of due process. The first notice informing the employee of the charges should neither be pro-forma nor vague. It should set out clearly what the employee is being held liable for. The employee should be afforded ample opportunity to be heard and not mere opportunity. As explained in King of Kings Transport, Inc., ample opportunity to be heard is especially accorded the employees sought to be dismissed after they are specifically informed of the charges in order to give them an opportunity to refute such accusations leveled against them. Since the notice of charges given to Genuino is inadequate, the dismissal could not be in accordance with due process. In this case, the letters sent by Citibank did not identify the particular acts or omissions allegedly committed by Genuino. The extent of Genuino’s alleged knowledge and participation in the diversion of banks clients funds, manner of diversion, and amounts involved; the acts attributed to Genuino that conflicted with the banks interests; and the circumstances surrounding the alleged irregular transactions, were not specified in the notices/letters. In view of Citibanks failure to observe due process, however, nominal damages are in order but the amount is hereby raised to PhP 30,000 pursuant to Agabon v. NLRC.

45

UP LAW BOC

LABOR LAW


King of Kings Transport v. Mamac 526 SCRA 116 | June 29, 2007 Facts: Upon audit of the October 28, 2001 Conductors Report of Mamac, King of Kings Transport Inc. (KKTI) noted an irregularity. It discovered that Mamac declared several sold tickets as returned tickets causing KKTI to lose an income of P890. While no irregularity report was prepared on the October 28, 2001 incident, KKTI nevertheless asked Mamac to explain the discrepancy. In his letter, Mamac said that the erroneous declaration in his October 28, 2001 Trip Report was unintentional. He explained that during that days trip, the windshield of the bus assigned to them was smashed; and they had to cut short the trip in order to immediately report the matter to the police. As a result of the incident, he got confused in making the trip report. On November 26, 2001, Mamac received a letter terminating his employment effective November 29, 2001. The dismissal letter alleged that the October 28, 2001 irregularity was an act of fraud against the company. KKTI also cited as basis for Mamac’s dismissal the other offenses he allegedly committed since 1999. Issue: Whether or not KKTI complied with the due process requirements in terminating Mamac’s employment? Held: NO, Due process under the Labor Code involves two aspects: first, substantive - the valid and authorized causes of termination of employment under the Labor Code; and second, procedural - the manner of dismissal. For procedural due process, the following should be considered in terminating the services of employees: (1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. Reasonable opportunity under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against the employees. (2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of their defenses; and (3) rebut the evidence presented against them by the management. During the hearing or conference, the employees are given the chance to defend themselves personally, with the assistance of a representative or counsel

46

UP LAW BOC

LABOR LAW


of their choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement. (3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) grounds have been established to justify the severance of their employment. In this case, Mamac was not issued a written notice charging him of committing an infraction. The law is clear on the matter. A verbal appraisal of the charges against an employee does not comply with the first notice requirement. Second, the irregularity reports against respondent for his other offenses that such contained merely a general description of the charges against him. The reports did not even state a company rule or policy that the employee had allegedly violated. Likewise, there is no mention of any of the grounds for termination of employment under Art. 282 of the Labor Code. Thus, KKTIs standard charge sheet is not sufficient notice to the employee. Third, no hearing was conducted. Regardless of Mamac’s written explanation, a hearing was still necessary in order for him to clarify and present evidence in support of his defense. Thus, for non-compliance with the due process requirements in the termination of Mamac’s employment, KKTI is sanctioned to pay respondent the amount of thirty thousand pesos (PhP 30,000) as damages.

47

UP LAW BOC

LABOR LAW


Toyota Motor Phils. Corp Workers Association v. NLRC GR No. 158786 &158789 | October 19, 2007 Facts: TMPCWA filed a notice of strike based on Toyota’s refusal to bargain. NCMB-NCR converted the notice of strike into a preventive mediation case on the ground that the issue of whether or not the Union is the exclusive bargaining agent of all Toyota rank and file employees was still unresolved by the DOLE Secretary. 135 Union officers and members failed to render the required overtime work, and instead marched to and staged a picket in front of the BLR office in Intramuros, Manila. The Union also requested that its members be allowed to be absent on February 22, 2001 to attend the hearing and instead work on their next scheduled rest day. Though denied by Toyota, more than 200 employees staged mass actions on February 22 and 23, 2001 in front of the BLR and the DOLE offices, to protest the partisan and anti-union stance of Toyota. Toyota terminated the employment of 227 employees. Issue/s: Whether the mass actions committed by the Union on different occasions are illegal strikes. Held: Yes. The alleged protest rallies in front of the offices of BLR and DOLE Secretary and at the Toyota plants constituted illegal strikes. 6 categories of an illegal strike: (1) [when it] is contrary to a specific prohibition of law, such as strike by employees performing governmental functions; or (2) [when it] violates a specific requirement of law[, such as Article 263 of the Labor Code on the requisites of a valid strike]; or (3) [when it] is declared for an unlawful purpose, such as inducing the employer to commit an unfair labor practice against non-union employees; or (4) [when it] employs unlawful means in the pursuit of its objective, such as a widespread terrorism of non-strikers [for example, prohibited acts under Art. 264(e) of the Labor Code]; or (5) [when it] is declared in violation of an existing injunction[, such as injunction, prohibition, or order issued by the DOLE Secretary and the NLRC under Art. 263 of the Labor Code]; or (6) [when it] is contrary to an existing agreement, such as a no-strike clause or conclusive arbitration clause. Union contends that the protests or rallies are not within the ambit of strikes as defined in the Labor Code, since they were legitimate exercises of their right to peaceably assemble and petition the government for redress of grievances; mainly relying on the doctrine laid down in the case of Philippine Blooming Mills Employees Organization v. Philippine Blooming Mills Co., Inc. The PBM case is different because it does not involve an ongoing labor dispute. The Union failed to comply with the requisites of valid strike.

48

UP LAW BOC

CIVIL LAW


CIVIL LAW Bartolome v. Social Security System G.R. No. 192531 | November 12, 2014 Facts: Bernardina Bartolome, John Colcol’s biological mother and, allegedly, sole remaining beneficiary, filed a claim for death benefits under PD 626 with the SSS. SSS denied her claim, ruling that she cannot be considered his parent, as John was legally adopted, thus severing their ties. This ruling was made pursuant to the Amended Rules on Employees’ Compensation, limiting the beneficiaries to legitimate parents. The Employees’ Compensation Commission affirmed the SSS’ ruling. Issue: WON the biological parents of the covered, but legally adopted, employee considered secondary beneficiaries and, thus, entitled to receive the benefits under the ECP Held: Yes. Under Article 167 (j) of the Labor Code, “(j) 'Beneficiaries' means the dependent spouse until he remarries and dependent children, who are the primary beneficiaries. In their absence, the dependent parents and subject to the restrictions imposed on dependent children, the illegitimate children and legitimate descendants who are the secondary beneficiaries.” The term “parents” in the phrase “dependent parents” in the afore-quoted Article 167 (j) of the Labor Code is used and ought to be taken in its general sense and cannot be unduly limited to “legitimate parents” as what the ECC did. When the law does not distinguish, one should not distinguish. Plainly, “dependent parents” are parents, whether legitimate or illegitimate, biological or by adoption, who are in need of support or assistance.

49

UP LAW BOC

CIVIL LAW


Abbas vs. Abbas 689 SCRA 646 | January 30, 2013 Facts: In response to a bigamy charge, a petition was filed by Syed for the declaration of nullity of his marriage to Gloria. The Municipal Registrar testified that the marriage license number in the marriage contract does not pertain to Syed and Gloria, and that no marriage license of the same number was issued to other persons. The RTC declared the marriage void ab initio for lacking the marriage license. CA held that the Civil Registrar failed to categorically state that a diligent search for the marriage license was conducted, and thus held that said certification could not be accorded probative value. Issue: Whether it can be concluded that no marriage license was issued to the spouses Abbas Held: Yes (i.e. no marriage license was issued to the spouses) The certification of the Local Civil Registrar that their office had no record of a marriage license was adequate to prove the non-issuance of said license. Once a certification has been presented, it becomes the burden of the party alleging a valid marriage to prove that the marriage was valid, and that the required marriage license had been secured. All the evidence cited by the CA to show that a wedding ceremony was conducted and a marriage contract was signed does not operate to cure the absence of a valid marriage license Article 35(3) of the Family Code also provides that “a marriage solemnized without a license is void from the beginning, except those exempt from the license requirement . . .”

50

UP LAW BOC

CIVIL LAW


Philippine National Bank v. Reblando 680 SCRA 531 | September 12, 2012 Facts: Spouses Reblandos obtained PHP 150,000 load secured by a Real Estate Mortgage over a property denominated as Lot No. 10. They defaulted on the payments, which prompted PNB to institute extra-judicial foreclosure of the mortgage. PNB was able to consolidate ownership and obtain a writ of possession. Meanwhile, the Reblandos filed a petition for the nullity of the Real Estate Mortgage, alleging they were not the owner when the mortgage was constituted. As an affirmative defense, PNB raised the issue of estoppel by deed Issue: Whether respondents are estopped from denying the validity of the REM Held: Yes. Respondents’ act of entering into the mortgage contract with petitioner, benefiting through the receipt of the loaned amount, defaulting in payment of the loan, letting the property be foreclosed, failing to redeem the property within the redemption period, and thereafter insisting that the mortgage is void, cannot be countenanced We agree with PNB that respondents are estopped from contesting the validity of the mortgage, absent any proof that PNB coerced or fraudulently induced respondents into posting Lot No. 10 as collateral. The practice of obtaining loans, defaulting in payment, and thereafter contesting the validity of the mortgage after the collateral has been foreclosed without any meritorious ground should be deterred REMEDIAL LAW ; CIVIL LAW Diosdado S. Manungas v. Margarita Avila Loreto and Florencia Avila Parreo G .R. No. 197205 August 22, 2011 Facts: Diosdado Manungas, the illegitimate son of Florentino filed a petition for the issuance of letters of administration in his favor for the Estate of Engracia Manungas, the wife of Florentino. The petition was opposed by Loreto and Parreo saying that Diosdado is incompetent to be an administrator since he is a stranger and a debtor to Engracia. The RTC appointed Parreo as the special administrator and Diosdado opposed.. Issue: Whether Diosdado is qualified to be a special administrator of the Estate of Engracia. Held: No. While the court may use its discretion and appoint someone not interested in preserving the estate, still, there is no logical reason to appoint a person who is a debtor of the estate and otherwise a stranger to the deceased. To do so would be tantamount to grave abuse of discretion.

51

UP LAW BOC

CIVIL LAW


Land Bank of the Philippines v. Ong G.R. No. 190755 | November 24, 2010 Facts: Spouses Sy obtained a loan, secured by real properties, from Land Bank. Subsequently, they found they could no longer pay their loan. They sold three of their mortgaged parcels of land to Mrs. Sy’s mother under a Deed of Sale with Assumption of Mortgage. Mrs. Sy’s father, petitioner Alfredo Ong, later went to Land Bank to inform it about the sale and assumption of mortgage. Atty. Hingco, the Legazpi City Land Bank Branch Head, told Alfredo and his counsel that Alfredo should pay part of the principal which was computed at PhP 750,000 and to update due or accrued interests on the promissory notes so that Atty. Hingco could easily approve the assumption of mortgage. Two weeks later, Alfredo issued a check for PhP 750,000 and personally gave it to Atty. Hingco. Alfredo later found out that his application for assumption of mortgage was not approved by Land Bank. Alfredo initiated an action for recovery of sum of money with damages against Land Bank, as Alfredo's payment was not returned. Land Bank maintains that it enjoyed the presumption of regularity and was in good faith when it accepted Alfredo's tender of PhP 750,000. It reasons that it did not unduly enrich itself at Alfredo's expense during the foreclosure of the mortgaged properties, since it tendered its bid by subtracting PhP 750,000 from the Spouses Sy's outstanding loan obligation. Alfredo's recourse then, according to Land Bank, is to have his payment reimbursed by the Spouses Sy. Issue: Whether Land Bank is liable for the return of the amount paid. Held: Yes. Land Bank is still liable for the return of the PhP 750,000 based on the principle of unjust enrichment. Land Bank is correct in arguing that it has no obligation as creditor to recognize Alfredo as a person with interest in the fulfillment of the obligation. But while Land Bank is not bound to accept the substitution of debtors in the subject real estate mortgage, it is estopped by its action of accepting Alfredo's payment from arguing that it does not have to recognize Alfredo as the new debtor. By accepting Alfredo's payment and keeping silent on the status of Alfredo's application, Land Bank misled Alfredo to believe that he had for all intents and purposes stepped into the shoes of the Spouses Sy. Unjust enrichment exists "when a person unjustly retains a benefit to the loss of another, or when a person retains money or property of another against the fundamental principles of justice, equity and good conscience." There is unjust enrichment under Art. 22 of the Civil Code when (1) a person is unjustly benefited, and (2) such benefit is derived at the expense of or with damages to another. Additionally, unjust enrichment has been applied to actions called accion in rem verso. In order that the accion in rem verso may prosper, the following conditions must concur: (1) that the defendant has been enriched; (2) that the plaintiff has suffered a loss; (3) that the enrichment of the defendant is without just or legal ground; and (4) that the plaintiff has no other action based on contract, quasi-contract, crime, or quasi-delict. The principle of unjust enrichment essentially contemplates payment when there is no duty to pay, and the person who receives the payment has no right to receive it.

52

UP LAW BOC

CIVIL LAW


Philippine National Bank v. Court of Appeals 576 SCRA 537 | January 20, 2009 Facts: The ASB Group filed with the SEC a petition for rehabilitation with prayer for suspension of actions and proceedings pending rehabilitation. It stated that it possesses sufficient properties to cover their obligations but foresee inability to pay them within a period of one year. Creditor banks opposed the petition for rehabilitation on the ground that aSB Group is not insolvent. Issue: Whether or not a solvent corporation or debtor can file a petition for rehabilitation instead of just a petition for suspension of payments Held: Yes. Because the ASB Group is technically insolvent.The mere fact that the ASB Group averred that it has sufficient assets to cover its obligations does not make it "solvent" enough to prevent it from filing a petition for rehabilitation. A corporation may have considerable assets but if it foresees the impossibility of meeting its obligations for more than one year, it is considered as technically insolvent. Thus, at the first instance, a corporation may file a petition for rehabilitation. If the corporation opts for a direct petition for rehabilitation on the ground of technical insolvency, it should show in its petition and later prove during the proceedings that it will not be able to meet its obligations for longer than one year from the filing of the petition.

53

UP LAW BOC

CIVIL LAW


De Leon v. De Leon 593 SCRA 768 | July 23, 2009 Facts: Bonifacio purchased the lot from PHHC on installment before he married Anita. Some installments were paid by Bonifacio before the marriage but the title was issued to Bonifacio during the marriage. Issue: Whether or not the lot is conjugal property Held: The lot is a conjugal property. Title to the property in question only passed to Bonifacio after he had fully paid the purchase price on June 22, 1970. This full payment, to stress, was made more than two (2) years after his marriage to Anita on April 24, 1968. In net effect, the property was acquired during the existence of the marriage; as such, ownership to the property is, by law, presumed to belong to the conjugal partnership.

54

UP LAW BOC

CIVIL LAW


Republic v. Iglesia ni Cristo 591 SCRA 438 | June 30, 2009 Facts: On November 19, 1998, Iglesia Ni Cristo (INC), represented by Erao G. Manalo, as corporate sole, filed its Application for Registration of Title before the MCTC in Paoay-Currimao. The Republic filed an Opposition to INCs application. It argued the land was declared alienable and disposable land of the public domain only on May 16, 1993, or five (5) years before the filing of the application for registration on November 19, 1998, and that occupation must have started since June 12, 1945, or earlier for INC to be able to register the title in its name. Issues: 1. Whether or not the period of possession required under Sec. 14(1) of PD 1527 (original registration of land) is reckoned from the time of the declaration of the property as alienable and disposable 2. May a judicial confirmation of imperfect title prosper when the subject property has been declared as alienable only after June 12, 1945 Held: 1. No. The period of possession required under Sec. 14(1) of PD 1527 is not reckoned from the time of the declaration of the property as alienable and disposable. Section 48(b) merely requires possession since 12 June 1945 and does not require that the lands should have been alienable and disposable during the entire period of possession. Note: Sec. 48(b) of CA 141 (judicial confirmation of title) and Sec. 14(1) of PD 1529 (original registration of title) are virtually the same. Sec. 14(1) of PD 1529 pertinently provides: SEC. 14. Who may apply. The following persons may file in the proper Court of First Instance [now Regional Trial Court] an application for registration of title to land, whether personally or through their duly authorized representatives: (1) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier. 2. Yes. A petition for a judicial confirmation of imperfect title may prosper even when the subject property has been declared as alienable only after June 12, 1945. Sec. 14(1) of PD 1529 merely requires the property sought to be registered as already alienable and disposable at the time the application for registration of title is filed. Section 48(b) merely requires possession since 12 June 1945 and does not require that the lands should have been alienable and disposable during the entire period of possession. The possessor is entitled to secure judicial confirmation of his title thereto as soon as it is declared alienable and disposable.

55

UP LAW BOC

CIVIL LAW


Metropolitan Bank and Trust Co. v. Nicholson Pascual G.R. No. 163744 | February 29, 2008 Facts: Respondent Nicholson Pascual and Florencia Nevalga were married on January 19, 1985. During the union, Florencia a 250-square meter lot with a three-door apartment standing thereon located in Makati City. Subsequently, yhe TCT covering the purchased lot was issued in the name of Florencia, "married to Nelson Pascual" a.k.a. Nicholson Pascual. In 1995, the RTC declared their marriage null and void. In the same decision, the RTC ordered the dissolution and liquidation of the ex-spouses’ conjugal partnership of gains. Subsequent events saw the couple going their separate ways without liquidating their conjugal partnership. In 1997, Florencia, with others, obtained a loan from Metrobank secured by several real estate mortgages (REMs) on their respective properties including the abovementioned lot. Among the documents Florencia submitted to procure the loan were a copy of the TCT, a photocopy of the marriage-nullifying RTC decision, and a document denominated as "Waiver" that Nicholson purportedly executed in favor of Florencia covering the conjugal properties of the ex-spouses listed therein, but did not incidentally include the lot in question. The document was dated two months before the Upon Florencia and the others’ failure to pay the loan, Metrobank foreclosed on the REMs. Nicholson got wind of the foreclosure proceedings and filed a case to annul the mortgage of the disputed property for lack of his consent. Metrobank asserted that the property was paraphernal. Issue: WON the property was paraphernal Held: No. First, while Metrobank is correct in saying that Art. 160 of the Civil Code, not Art. 116 of the Family Code, is the applicable legal provision since the property was acquired prior to the enactment of the Family Code, it errs in its theory that, before conjugal ownership could be legally presumed, there must be a showing that the property was acquired during marriage using conjugal funds. Contrary to Metrobank’s submission, the Court did not, in Manongsong v. Estimo (2003) add the matter of the use of conjugal funds as an essential requirement for the presumption of conjugal ownership to arise. If proof on the use of conjugal is still required as a necessary condition before the presumption can arise, then the legal presumption set forth in the law would veritably be a superfluity. Second, the mere declaration of nullity of marriage, without more, does not automatically result in a regime of complete separation when it is shown that there was no liquidation of the conjugal assets. In Dael v. IAC (1989), we ruled that pending its liquidation following its dissolution, the conjugal partnership of gains is converted into an implied ordinary co-ownership. In this pre-liquidation scenario, Art. 493 of the Civil Code shall govern which provides that the effect of the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. Thus, Metrobank’s right, as mortgagee and as the successful bidder at the auction of the lot, is confined only to the 1/2 undivided portion thereof heretofore pertaining in ownership to Florencia given also that the purported waiver of Nicholson was found to be spurious.

56

UP LAW BOC

CIVIL LAW


Korea Technologies v. Hon. Alberto Lerma G.R. No. 143581 | January 7, 2008 Facts: Korea Technologies Co., Ltd. (KOGIES) is a Korean corporation engaged in the supply and installation of Liquefied Petroleum Gas (LPG) Cylinder manufacturing plants, while private respondent Pacific General Steel Manufacturing Corp. (PGSMC) is a domestic corporation. In 1997, the parties executed a contract in the Philippines for the setting up of an an LPG Cylinder Manufacturing Plant and later executed in Korea an amendment which included an Arbitration Clause. PGSMC later wrote a letter cancelling their contract claiming that KOGIES failed to follow the terms. KOGIES instituted an Application for Arbitration before the Korean Commercial Arbitration Board (KCAB) in Seoul, Korea pursuant to Art. 15 of their Contract as amended. KOGIES then filed a complaint for specific performance before the RTC alleging that PGSMC violated Art. 15 of their Contract, as amended, by unilaterally rescinding the contract without resorting to arbitration. The RTC and CA however declared the Arbitration Clause null and void for being contrary to public policy as it tended to oust the courts of jurisdiction over any dispute that may arise between the parties. The clause provides that “All disputes, controversies, or differences which may arise between the parties, out of or in relation to or in connection with this Contract or for the breach thereof, shall finally be settled by arbitration in Seoul, Korea in accordance with the Commercial Arbitration Rules of the Korean Commercial Arbitration Board. The award rendered by the arbitration(s) shall be final and binding upon both parties concerned.” Issue: WON the Arbitration Clause is valid Held: Yes. Established in this jurisdiction is the rule that the law of the place where the contract is made governs. Lex loci contractus. The contract in this case was perfected here in the Philippines. Therefore, our laws ought to govern. Art. 2044 of our Civil Code sanctions the validity of mutually agreed arbitral clause or the finality and binding effect of an arbitral award. Art. 2044 provides that any stipulation that the arbitrators award or decision shall be final, is valid, without prejudice to Articles 2038, 2039 and 2040. RA 876 supplements these Civil Codes provisions on arbitration. For domestic arbitration proceedings, we have particular agencies to arbitrate disputes arising from contractual relations. In case a foreign arbitral body is chosen by the parties, the arbitration rules of our domestic arbitration bodies would not be applied. As signatory to the Arbitration Rules of the UNCITRAL Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law (UNCITRAL) in the New York Convention on June 21, 1985, the Philippines committed itself to be bound by the Model Law. We have even incorporated the Model Law in RA 9285 or the Alternative Dispute Resolution Act of 2004 promulgated on April 2, 2004. Among the pertinent features of RA 9285 applying and incorporating the UNCITRAL Model Law are the following: (1) The RTC must refer to arbitration in proper cases. (Under Sec. 24 9285, the RTC does not have jurisdiction over disputes that are properly the subject of arbitration pursuant to an arbitration clause. The RTC is mandated to refer to the parties to arbitration when one party so requests not later than pre-trial or upon request of both parties) (2) Foreign arbitral awards must be confirmed by the RTC. (3) The RTC has jurisdiction to review foreign arbitral awards.

57

UP LAW BOC

CIVIL LAW


(4) Grounds for judicial review different in domestic and foreign arbitral awards. (For foreign or international arbitral awards which must first be confirmed by the RTC, the grounds for setting aside, rejecting or vacating the award by the RTC are provided under Art. 34(2) of the UNCITRAL Model Law. Final domestic arbitral awards, which also need confirmation by the RTC and recognized final and executory may only be assailed before the RTC and vacated on the grounds provided under Sec. 25 of RA 876.) (5) RTC decision of assailed foreign arbitral award appealable. (Pursuant to Sec. 46 RA 9285, the RTC decision may be appealed or reviewed via Rule 45 Petition for Review before the CA or SC)

58

UP LAW BOC

CIVIL LAW


Estate of the Late Encarnacion Vda de Panlilio v. Gonzalo Dizon et al GR No. 148777 | October 18, 2007 Facts: Panlilio is the owner of the disputed landholdings over a vast tract of land. She entered into a contract of lease over the said landholdings with Mercado. Sometime in 1973, Department of Agrarian Reform (DAR) issued Certificates of Land Transfer (CLTs) to Panlilio’s tenants. Mercado questioned the CLT issuance alleging that the land involved was principally being planted with sugar and was outside the coverage of PD 27. On January 12, 1977, Panlilio executed an Affidavit which expressed her desire to place her entire land under the coverage of PD 27. A purported second affidavit revoking the Jan 12 affidavit was presented. Some tenants also transferred the land to third parties. Issue: Whether or not the disputed land is covered by PD 27. Whether or not the transfers to third parties are valid. Held: Yes. The Court held that the second affidavit is not genuine thus, the Jan 12 affidavit was not revoked; thus the Jan 12, 1977 is a valid waiver. While PD 27 clearly applies to private agricultural lands primarily devoted to rice and corn under a system of sharecrop or lease-tenancy, whether classified as landed estate or not, it does not preclude nor prohibit the disposition of landholdings planted with other crops to the tenants by express will of the landowner under PD 27. No. PD 27 is clear that after full payment and title to the land is acquired, the land shall not be transferred except to the heirs of the beneficiary or the Government. If the amortizations for the land have not yet been paid, then there can be no transfer to anybody since the lot is still owned by the Government.

59

UP LAW BOC

CIVIL LAW


Josephine Taguinod and Vic Aguila v. CA, Antonino Samaniego et al GR No. 154654 | September 14, 2007 Facts: Pursuant to PD 27, DAR launched Operation Land Transfer (OLT) to implement and enforce the law's provisos of transferring ownership to qualified farmer-beneficiaries. When OLT was launched, Salud Alvarez Aguila was the registered owner of the disputed lots. Subsequently, 7.8262 ha. of the land, which was covered by a TCT which emanated from an OCT issued based on a patent, to then 14 year old Vic Aguila; while the other 2.6234-hectare was transferred to Taguinod. Both disputed lots were placed under the coverage of the OLT pursuant to PD 27 and distributed to tenants. Both Aguila and Taguinod, then filed protests for exclusion or exemption from the OLT. Issues: Whether or not petitioners are entitled to a retention of their rights over the lots. Held: No. There was no substantial evidence that would show that petitioner Aguila or Salud Aguila was entitled to the exemption pursuant to the homestead laws, the lot is indubitably under the coverage of the OLT of the government pursuant to PD 27.Salud Aguila (who transferred the lots to her children, the petitioners), is not entitled to retention rights over the subject lots. The DAR Secretary took cognizance of the Certification presented by private respondents regarding Salud Aguila's ownership of a total of 13 landholdings, including the subject lots. This unquestionably shows that Salud Aguila cannot be granted retention over the subject lots pursuant to LOI No. 474; which mandates the DAR Secretary to "undertake to place under the Land Transfer Program of the Government pursuant to Presidential Decree No. 27, all tenanted rice/corn lands with areas of seven (7) hectares or less belonging to landowners who own other agricultural lands of more than seven (7) hectares in aggregate areas or lands used for residential, commercial, industrial or other urban purposes from which they derive adequate income to support themselves and their families." The Court also considered that the seemingly simulated transfers made by Salud Aguila over the lots were done to circumvent the intent and application of PD 27 and the OLT.

60

UP LAW BOC

CIVIL LAW


Jovendo Del Castillo v. Abundio Orciga et al GR No. 153850 | August 31, 2006 Facts: Del Castillo is the son and administrator of the previous owner of a 1.3300-hectare riceland formerly cultivated by Eugenio Orciga. Pursuant to PD No. 27, Eugenio Orciga became the beneficiary of the Land Transfer Program and was awarded CLT over the said landholding. Orciga died and prior to selecting successor, the heirs agreed to rotate among themselves the cultivation of the Riceland. However, Ronald Orciga abandoned the said farm and left without turning over the landowner's share of the agricultural harvest. Fully armed with guns, del Castillo forcibly entered the said land and cultivated it over the objection of the respondents. Respondents filed a Complaint. Del Castillo claims that because of the respondents' pending payment of the amortizations, he should still be considered the owner. Issue: Who should be entitled to possess the disputed landholding under the DAR Land Transfer Program—the petitioner, as representative of the former titled landowner, or the respondents, as successors of the deceased beneficiary. Held: The respondents are the rightful possessors of the land. Eugenio Orciga, the original beneficiary was awarded a Certificate of Land Transfer, he is the acknowledged owner of the contested land. A CLT is a document issued to a tenant-farmer, which proves inchoate ownership of an agricultural land primarily devoted to rice and corn production. It is issued in order for the tenantfarmer to acquire the land. It is the provisional title of ownership over the landholding while the lot owner is awaiting full payment of the land's value or for as long as the beneficiary is an "amortizing owner." PD No. 27 is clear that in case of non-payment, the amortizations due shall be paid by the farmer's cooperative in which the defaulting tenant-farmer is a member, with the cooperative having a right of recourse against the farmer. The government shall guarantee such amortizations with shares of stocks in government-owned and government-controlled corporations. Therefore, the landowner is assured of payment. Del Castillo has two options; first, to bring the dispute on the non-payment of the land; and, second, to negotiate with the DAR and LBP for payment of the compensation claim. Reconveyance of the land to the former owner is not allowed.

61

UP LAW BOC

TAXATION LAW


TAXATION LAW Philippine American Life and General Insurance Company v, Secretary of Finance G.R. No. 210987 | November 24, 2014 Facts: Philamlife sold its Class A shares in PhilamCare for $2,190,000 to STI Investments, Inc., who emerged as the highest bidder. After the sale was completed and the necessary DST and CGT were paid, Philamlife filed an application for a certificate authorizing registration/tax clearance with the BIR Large Taxpayers Service Division to facilitate transfer of shares. It was instructed to secure a BIR Ruling due to potential donor’s tax. The Commissioner denied Philamlife’s request and imposed a donor’s tax pursuant to RR 06-08 and RMC 25-11, which Ruling was appealed to the Secretary of Finance, assailing the nullity of the rules and circular. The same was dismissed. Petitioner then appealed to the CA under Rule 43, which dismissed the petition for lack of jurisdiction, asserting that the same was with the CTA. Petitioner argued that the CTA had no jurisdiction over petitions for certiorari and may not rule on the nullity of rules. Issue: WON the CTA had jurisdiction over an appeal from the Secretary of Finance involving the nullity of revenue regulation and revenue memorandum circulars. Held: Yes. While there is no provision in the law that expressly provides where exactly the ruling of the Secretary of Finance under Section 4 of the NIRC is appealable to, RA 1125 (Creating the Court of Tax Appeals) addresses the seeming gap in the law as it vests the CTA with jurisdiction over the petition as “other matters” arising under the NIRC or other laws administered by the BIR. CTA furthermore has the power certiorari in cases within its appellate jurisdiction. As held in the case of City of Manila v. Grecia-Cuerdo, in order for any appellate court to effectively exercise its appellate jurisdiction, it must have the authority to issue, among others, a writ of certiorari. In transferring exclusive jurisdiction over appealed tax cases to the CTA, it can reasonably be assumed that the law intended to transfer also such power as is deemed necessary, if not indispensable, in aid of such appellate jurisdiction, such as the power to issue writs of certiorari.

62

UP LAW BOC

TAXATION LAW


Commissioner of Internal Revenue and Commissioner of Customs v. Philippine Airlines, Inc. G.R. Nos. 212536-37 | August 27, 2014 Facts: On June 11, 1978, PAL was granted under PD 1590 a franchise to operate air transport services domestically and internationally. Section 13 of the decree prescribes the tax component of PAL’s franchise, which states that during the lifetime of its franchise, it shall pay the government either basic corporate income tax or franchise tax based on revenues and/or the rate defined in the provision, whichever is lower and the taxes thus paid under either scheme shall be in lieu of all other taxes, duties and other fees. However, pursuant to the 1997 amendment to Section 131 of the NIRC, excise taxes on imported articles shall be paid by the owner/importer of cigaretters, distilled spirits, fermented liquors and wines, the provision of any special or general law to the contrary notwithstanding. PAL was assessed excise taxes on its importation of cigarettes and alcoholic drinks for its commissary supplies used in international flights. PAL paid under protest and filed administrative claims for refund. The CTA granted the refund. Issue: WON PAL’s importations of alcohol and tobacco products for its commissary supplies are subject to excise tax Held: No. It is a basic principle of statutory construction that a later law, general in terms and not expressly repealing or amending a prior special law, will not ordinarily affect the special provisions of such earlier statute. That the legislature chose not to amend or repeal PD 1590 even after PAL was privatized reveals the intent of the Legislature to let PAL continue to enjoy, as a private corporation, the very same rights and privileges under the terms and conditions stated in said charter.

63

UP LAW BOC

TAXATION LAW


Philippine British Assurance Company, Inc. (PBACI) v. Republic G.R. No. 185588 | February 02, 2010 Facts: PBACI, a domestic insurance company, issues customs bonds to its clients in favor of the BOC to secure the release of imported goods in order that the goods may be released from the BOC without prior payment of the corresponding customs duties and taxes. The Republic, represented by the BOC, filed a complaint against PBACI with the RTC for collection of money with damages, alleging that PBACI had oustanding unliquidated customs bonds with the BOC. The RTC ruled in favor of the Republic. PBACI appealed the decision to the CA, but the CA dismissed it for lack of jurisdiction. The CA ratiocinated that the jurisdiction over the appeal lies with the CTA because it is a tax collection case. PBACI, thus, appealed to the SC and argued that the CA erred in its ruling. According to PBACI, in as much as the Republic’s right was initially based on its right to collect duties and taxes, the same was converted to a right arising out of a contract, the bond being a contract between the Republic and PBACI. Issue: WON the CA has jurisdiction over the appeal of PBACI.—YES Held: The original complaint filed with the trial court was in the nature of a collection case, purportedly to collect on the obligation of PBACI by virtue of the bonds executed by it in favor of the Republic, essentially a contractual obligation. As PBACI correctly points out, an action to collect on a bond used to secure the payment of taxes is not a tax collection case, but rather a simple case for enforcement of a contractual liability. An action based upon a surety bond cannot be considered a tax collection case. Rather, such action would properly be a case based on a contract. Verily, the instant case is not a tax collection case; hence, the CA has jurisdiction over the case. In addition, even the BOC did not consider the case as one for tax collection. It instituted a complaint for collection of money, decidedly not a tax collection case, before the trial court. It purposefully did not follow the procedure in the proper prosecution of a tax collection case. This may only be explained with the fact that the BOC itself did not consider the action that it instituted as a tax collection case. Certainly, the administrative agencies tasked with the prosecution of cases within their specific area of concern should know the nature of the action to be filed and the proper procedure by which they can collect on liabilities to it.

64

UP LAW BOC

TAXATION LAW


South African Airways v. Commissioner of Internal Revenue G.R. No. 180356 | February 16, 2010 Facts: South African Airways (SAA), a foreign corporation, is an internal air carrier with no landing rights in the country. It has a general sales agent in the Philippines, which sells passage documents for compensation or commission for SAA’s off-line flights for the carriage of passengers and cargo between ports or points outside the territorial jurisdiction of the Philippines. SAA is not licensed to do business in the Philippines. For the taxable year (T.Y.) 2000, it filed income tax returns for its off-line flights. Subsequently, it filed a claim for the refund of 1.7M as erroneously paid tax on Gross Philippine Billings (GPB) for T.Y. 2000. SAA contends that with the amendment to Sec. 28(A)(3)(a) of the 1997 NIRC defining GPB, it is no longer liable under Sec. 28(A)(3)(a), and, consequently, it is excluded from the imposition of any income tax. Issue: WON SAA, as an off-line international carrier selling passage documents through an independent sales agent in the Philippines, is engaged in trade or business in the Philippines subject to the 32% income tax imposed by Sec. 28 (A)(1), 1997 NIRC.—YES Held: Essentially, prior to the 1997 NIRC, GPB referred to revenues from uplifts anywhere in the world, provided that the passage documents were sold in the Philippines. Now, it is the place of sale that is irrelevant; as long as the uplifts of passengers and cargo occur to or from the Philippines, income is included in GPB. CIR v. British Overseas Airways has already ruled that off-line air carriers having general sales agents in the Philippines are engaged in or doing business in the Philippines and that their income from sales of passage documents here is income from within the Philippines. Thus, an off-line air carrier is liable for the 32% tax on its taxable income. Even if decided under the 1939 NIRC, the said case is still applicable because Sec. 28(A)(3)(a) of the 1997 NIRC does not, in any categorical term, exempt all international air carriers from the coverage of Sec. 28(A)(1) of the 1997 NIRC. Thus, the logical interpretation of such provisions is that, if Sec. 28(A)(3)(a) is applicable to a taxpayer, then the general rule under Sec. 28(A)(1) would not apply. If, however, Sec. 28(A)(3)(a) does not apply, a resident foreign corporation, whether an international air carrier or not, would be liable for the tax under Sec. 28(A)(1).

65

UP LAW BOC

TAXATION LAW


Government Service Insurance System vs. City Treasurer of the City of Manila 609 SCRA 330 | December 23, 2009 Facts: City Treasurer of Manila assessed GSIS of the unpaid real property taxes due on the Katigbak property. The Katigbak property, covered by TCT Nos. 117685 and 119465 in the name of GSIS, has been leased to and occupied by the Manila Hotel Corporation (MHC), which has contractually bound itself to pay any realty taxes that may be imposed on the subject property. Issues: 1. Whether or not the Katigbak and Concepcion-Arroceros property in the name of GSIS are subject to real property tax 2. Which between GSIS, as the owner of the Katigbak property, or MHC, as the lessee thereof, is liable to pay the accrued real estate tax Held: 1. GSIS, as a government instrumentality, is not a taxable juridical person under Sec. 133(o) of the LGC. GSIS, however, lost in a sense that status with respect to the Katigbak property when it contracted its beneficial use to MHC, doubtless a taxable person. Thus, the real estate tax assessment of covering 1992 to 2002 over the subject Katigbak property is valid insofar as said tax delinquency is concerned as assessed over said property. 2. The unpaid tax attaches to the property and is chargeable against the taxable person who had actual or beneficial use and possession of it regardless of whether or not he is the owner. Being in possession and having actual use of the Katigbak property, MHC is liable for the realty taxes assessed over the Katigbak property.

66

UP LAW BOC

TAXATION LAW


Commissioner of Internal Revenue vs. Mirant Pagbilao Corporation 565 SCRA 154 | September 12, 2008 Facts: MPC is engaged in the generation of power which it sells to the National Power Corporation (NPC). For the construction of the electrical and mechanical equipment portion of its Pagbilao, Quezon plant from 1993 to 1996, MPC secured the services of Mitsubishi. Under Sec. 13 of RA 6395, NPC is exempt from all taxes. Believing it to be zero-rated, MPC opted not to pay the VAT component of the progress billings from Mitsubishi and only paid the VAT component from April 1993 to September 1996 on April 14, 1998. MPC later filed its quarterly VAT return on August 25, 1998, where it reflected an input VAT reflecting the payment of the said VAT component. MPC filed on December 20, 1999 an administrative claim for refund of unutilized input VAT. Issue: Whether or not MPC is entitled to the refund of its input VAT payments from 1993 to 1996? Held: No. The claim for refund or tax credit for the creditable input VAT payment made by MPC was filed beyond the period provided under Sec. 112 (A) of the NIRC. Under the said law, the reckoning frame would always be the end of the quarter when the pertinent sales or transaction was made, regardless when the input VAT was paid. Given that the last creditable input VAT due for the period was third quarter of 1996 ending September 30, 1996, any claim for unutilized creditable input VAT refund or tax credit for said quarter prescribed two years after September 30, 1996 or, to be precise, on September 30, 1998. Consequently, MPC’s claim for refund or tax credit filed on December 10, 1999 had already been prescribed. Furthermore, Secs. 204(C) and 229 of the NIRC is inapplicable because these provisions apply only to instances of erroneous payment or illegal collection of internal revenue taxes

67

UP LAW BOC

TAXATION LAW


Commissioner of Internal Revenue v. Acesite (Philippines) Hotel Corporation 516 SCRA 93 | February 16, 2007 Facts: Acesite leases 6,768.53 square meters of the hotels premises to the Philippine Amusement and Gaming Corporation [hereafter, PAGCOR] for casino operations. It also caters food and beverages to PAGCORs casino patrons through the hotels restaurant outlets. For the period January (sic) 96 to April 1997, Acesite incurred VAT amounting to P30,152,892.02 from its rental income and sale of food and beverages to PAGCOR during said period. Acesite tried to shift the said taxes to PAGCOR by incorporating it in the amount assessed to PAGCOR but the latter refused to pay the taxes on account of its tax exempt status. Thus, PAGCOR paid the amount due to Acesite minus the P30,152,892.02 VAT while the latter paid the VAT to the Commissioner of Internal Revenue [hereafter, CIR] as it feared the legal consequences of non-payment of the tax. However, Acesite belatedly arrived at the conclusion that its transaction with PAGCOR was subject to zero rate as it was rendered to a tax-exempt entity. On 21 May 1998, Acesite filed an administrative claim for refund with the CIR but the latter failed to resolve the same. Issue: Whether the zero percent (0%) VAT rate under then Section 102 (b)(3) of the Tax Code (now Section 108 (B)(3) of the Tax Code of 1997) legally applies to Acesite? Held: (1) Yes, The proviso in P.D. 1869, extending the exemption to entities or individuals dealing with PAGCOR in casino operations, is clearly to proscribe any indirect tax, like VAT, that may be shifted to PAGCOR. While it was proper for PAGCOR not to pay the 10% VAT charged by Acesite, the latter is not liable for the payment of it as it is exempt in this particular transaction by operation of law to pay the indirect tax. Such exemption falls within the former Section 102 (b) (3) of the 1977 Tax Code, as amended (now Sec. 108 [b] [3] of R.A. 8424), which provides: Section 102. Value-added tax on sale of services (a) Rate and base of tax There shall be levied, assessed and collected, a value-added tax equivalent to 10% of gross receipts derived by any person engaged in the sale of services x x x; Provided, that the following services performed in the Philippines by VATregistered persons shall be subject to 0%. xxxx (b) Transactions subject to zero percent (0%) rated. xxxx (3) Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services to zero (0%) rate

68

UP LAW BOC

MERCANTILE LAW


MERCANTILE LAW Taiwan Kolin Corporation, Ltd. v. Kolin Electronics Co., Inc. G.R. No. 209843 | March 25, 2015 Facts: Taiwan Kolin filed with the Intellectual Property Office a trademark application for the use of “KOLIN” on a combination of goods, including colored TVs, refrigerators, air conditioners, electric fans and water dispensers. Such goods allegedly fall under Classes 9, 11, and 21 of the Nice Classification (NCL). Kolin Electronics Co., Inc. opposed the application, arguing that the mark Taiwan Kolin seeks to register is identical, if not confusingly similar with its registered “KOLIN” mark covering products under Class 9 of the NCL, including automatic voltage regulator, converter, recharger, stereo booster, transformer, etc. The IPO denied the application to protect the right of Kolin Electronics against registration of an identical mark to be used on goods also belonging to Class 9 of the NCL. Issue: WON petitioner is entitled to its trademark registration of “KOLIN” Held: Yes. Mere uniformity in categorization, by itself, does not automatically preclude the registration of what appears to be an identical mark, if that be the case. It is hornbrook doctrine that emphasis should be on the similarity of the products involved and not on the arbitrary classification or general description of their properties or characteristics. In resolving one of the pivotal issues in this case––whether or not the products of the parties involved are related––the doctrine in Mighty Corporation is authoritative. There, the Court held that the goods should be tested against several factors before arriving at a sound conclusion on the question of relatedness. Among these are: (a) the business (and its location) to which the goods belong; (b) the class of product to which the goods belong (c) the product’s quality, quantity, or size, including the nature of the package, wrapper or container; (d) the nature and cost of the articles; (e) the descriptive properties, physical attributes or essential characteristics with reference to their form, composition, texture or quality; (f) the purpose of the goods; (g) whether the article is bought for immediate consumption, that is, day-to-day household items; (h) the fields of manufacture; (i) the conditions under which the article is usually purchased; and (j) the channels of trade through which the goods flow, how they are distributed, marketed, displayed and sold.

69

UP LAW BOC

MERCANTILE LAW


Narra Nickel Mining and Development Corp., Tesoro Mining and Development Inc. and Mcarthur Mining Inc v. Redmont Consolidated Mines Corporation G.R. No. 195580 | April 21, 2014 Facts: Redmont Consolidated Mines Corp., a domestic corporation, wanted to engage in mining in Palawan. However, the areas where it wanted to undertake exploration were already covered by applications for a Mineral Production Sharing Agreement (MPSA) by Narra, Tesoro and McArthur. Redmont filed before the Panel of Arbitrators 3 petitions for the denial of the three applications, alleging that all three were owned by MBMI Resources, a 100% Canadian-owned corporation, thus failing to complete with 60% Filipino ownership requirement under Art. XII Sec. 2 of the Constitution (state may engage in co-production contracts for the exploration, development and utilization of natural resources with Filipino citizens or corporations whose capital is owned 60% by Filipinos). Narra, Tesoro and Mcarthur claimed that they are qualified person to engage in mining under the Phil. Mining Act of 1995, since using the control test, 60% of their capital stock are owned by Filipinos. POA found that the corporations were foreign corporations and were being effectively controlled by MBMI thus their MPSAs were void. The CA used the grandfather rule and affirmed the POA. Issue: WON Narra, Tesoro and Mcarthur are foreign corporations Held: Yes. Based on DOJ Opinion No. 020, the Grandfather Rule applies only when the 60-40 Filipino-foreign equity ownership is in doubt (i.e., in cases where the joint venture corporation with Filipino and foreign stockholders with less than 60% Filipino stockholdings [or 59%] invests in other joint venture corporation which is either 60-40% Filipino-alien or the 59% less Filipino). Stated differently, where the 60-40 Filipino- foreign equity ownership is not in doubt, the Grandfather Rule will not apply. Clearly, in this case, because all corporations have a common investor, MBMI, who is a 100% Canadian corporation, the 60-40 Filipino-Foreign equity ownership is doubtful. Doubt does not only exist when stockholdings are less than 60%. It would be ludicrous to limit the application of the said word only to the instances where the stockholdings of non-Filipino stockholders are more than 40% of the total stockholdings in a corporation. The corporations interested in circumventing our laws would clearly strive to have "60% Filipino Ownership" at face value. Using the grandfather test, the court has found that all three corporations are foreign corporations. N.B. This case was affirmed on MR on January 28, 2015.

70

UP LAW BOC

MERCANTILE LAW



1. Whether the supervisory Group, AMBALA and their respective leaders are real partiesin-interest. 2. Whether the Presidential Agrarian Reform Council (PARC) authority to revoke a stock distribution plan. 3. Whether subjecting its landholdings to compulsory distribution after its approved SDP has been implemented would impair the contractual obligations created under the SDOA. 4. Whether the Corporation Code is applicable and not RA 6657 in determining their rights, obligations and remedies. 5. Whether the inclusion of the agricultural land of Hacienda Luisita under the coverage of CARP and the eventual distribution of the land to the FWBs would amount to a disposition of all or practically all of the corporate assets of HLI which would entitle the application of provisions on corporate dissolution in the Corporation Code. 6. Whether the constitutionality of Sec. 31 of RA 6657, insofar as it affords the corporation, as a mode of CARP compliance, can be assailed. 7. Whether the SDOA complies with Sec. 31 of RA 6657. Held: 1. Yes. The SDOA no less identifies "the SDP qualified beneficiaries" as "the farmworkers who appear in the annual payroll, inclusive of the permanent and seasonal employees, who are regularly or periodically employed by [HLI]." Galang, per HLI’s own admission, is employed by HLI, and is, thus, a qualified beneficiary of the SDP. The supervisory group whose members were admittedly employed by HLI and their names and signatures even appeared in the annex of the SDOA. 2. Yes. Under Sec. 31 of RA 6657, as implemented by DAO 10, the authority to approve the plan for stock distribution of the corporate landowner belongs to PARC. The power to approve a license includes by implication, even if not expressly granted, the power to revoke it. By extension, the power to revoke is limited by the authority to grant the license, from which it is derived in the first place.

71

UP LAW BOC

MERCANTILE LAW


SDOA is not an ordinary civil law contract and, as such, does not give rise to a cause of action cognizable by regular courts. The SDOA is a special contract imbued with public interest, entered into and crafted pursuant to the provisions of RA 6657. 3. No. A law authorizing interference, when appropriate, in the contractual relations between or among parties is deemed read into the contract and its implementation cannot successfully be resisted by force of the non-impairment guarantee. There is, in that instance, no impingement of the impairment clause, the non-impairment protection being applicable only to laws that derogate prior acts or contracts by enlarging, abridging or in any manner changing the intention of the parties. 4. No. The Corporation Code is the general law providing for the formation, organization and regulation of private corporations. On the other hand, RA 6657 is the special law on agrarian reform. As between a general and special law, the latter shall prevail—generalia specialibus non derogant. Besides, the present impasse between HLI and the private respondents is not an intra-corporate dispute which necessitates the application of the Corporation Code. 5. No. the provisions of the Corporation Code on corporate dissolution would apply insofar as the winding up of HLI’s affairs or liquidation of the assets is concerned. However, the mere inclusion of the agricultural land of Hacienda Luisita under the coverage of CARP and the land’s eventual distribution to the FWBs will not, without more, automatically trigger the dissolution of HLI. As stated in the SDOA itself, the percentage of the value of the agricultural land of Hacienda Luisita in relation to the total assets transferred and conveyed by Tadeco to HLI comprises only 33.296%, following this equation: value of the agricultural lands divided by total corporate assets. By no stretch of imagination would said percentage amount to a disposition of all or practically all of HLI’s corporate assets should compulsory land acquisition and distribution ensue. 6. No. While there is indeed an actual case or controversy, intervenor FARM, composed of a small minority of 27 farmers, has yet to explain its failure to challenge the constitutionality of Sec. 3l of RA 6657, since as early as November 21, l989 when PARC approved the SDP of Hacienda Luisita or at least within a reasonable time thereafter and why its members received benefits from the SDP without so much of a protest. It was only on December 4, 2003 or 14 years after approval of the SDP via PARC Resolution dated November 21, 1989 that said plan and approving resolution were sought to be revoked. Also the constitutionality of the said provision is not the lis mota of the case is whether or not PARC acted in grave abuse of discretion when it ordered the recall of the SDP for such noncompliance and the fact that the SDP, as couched and implemented, offends certain constitutional and statutory provisions. Neither does the situation falls under any of the exceptions where the Court decided on the constitutionality of the statute despite the issue being moot and academic. There appears to be no breach of the fundamental law. Sec. 4, Article XIII of the Constitution. Sec. 4 expressly authorizes collective ownership by farmers. By using the word "collectively," the Constitution allows for indirect ownership of land and not just outright agricultural land transfer. This is in recognition of the fact that land reform may become successful even if it is done through the medium of juridical entities composed of farmers. While it is true that the farmer is issued stock certificates and does not directly own the land, still, the Corporation Code is clear that the FWB becomes a stockholder who acquires an

72

UP LAW BOC

MERCANTILE LAW


equitable interest in the assets of the corporation, which include the agricultural lands. It was explained that the "equitable interest of the shareholder in the property of the corporation is represented by the term stock, and the extent of his interest is described by the term shares. The expression shares of stock when qualified by words indicating number and ownership expresses the extent of the owner’s interest in the corporate property." 7. Yes. The mandatory minimum ratio of land-to-shares of stock supposed to be distributed or allocated to qualified beneficiaries, adverting to what Sec. 31 of RA 6657 refers to as that "proportion of the capital stock of the corporation that the agricultural land, actually devoted to agricultural activities, bears in relation to the company’s total assets" had been observed. The determination of the shares to be distributed to the 6,296 FWBs strictly adheres to the formula prescribed by Sec. 31(b) of RA 6657. Paragraph one of the SDOA, which was based on the SDP, conforms to Sec. 31 of RA 6657. The stipulation reads: “1. The percentage of the value of the agricultural land of Hacienda Luisita (P196,630,000.00) in relation to the total assets (P590,554,220.00) transferred and conveyed to the SECOND PARTY is 33.296% that, under the law, is the proportion of the outstanding capital stock of the SECOND PARTY, which is P355,531,462.00 or 355,531,462 shares with a par value of P1.00 per share, that has to be distributed to the THIRD PARTY under the stock distribution plan, the said 33.296% thereof being P118,391,976.85 or 118,391,976.85 shares.” Anent the requirement under Sec. 31(b) of the third paragraph, that the FWBs shall be assured of at least one (1) representative in the board of directors or in a management or executive committee irrespective of the value of the equity of the FWBs in HLI, the Court finds that the SDOA contained provisions making certain the FWBs’ representation in HLI’s governing board, thus: “5. Even if only a part or fraction of the shares earmarked for distribution will have been acquired from the FIRST PARTY and distributed to the THIRD PARTY, FIRST PARTY shall execute at the beginning of each fiscal year an irrevocable proxy, valid and effective for one (1) year, in favor of the farmworkers appearing as shareholders of the SECOND PARTY at the start of said year which will empower the THIRD PARTY or their representative to vote in stockholders’ and board of directors’ meetings of the SECOND PARTY convened during the year the entire 33.296% of the outstanding capital stock of the SECOND PARTY earmarked for distribution and thus be able to gain such number of seats in the board of directors of the SECOND PARTY that the whole 33.296% of the shares subject to distribution will be entitled to.”

73

UP LAW BOC

MERCANTILE LAW


Ty v. De Jemil G.R. No. 182147 | December 15, 2010 Facts: Ty, et al. are stockholders of Omni Gas Corporation, which is in the business of trading and refilling of Liquefied Petroleum Gas (LPG) cylinders. They were charged with violations of BP 33 for refilling branded LPG cylinders without authority and for underdelivery or underfilling of LPG cylinders. They argue that there exists no probable cause for the charges against them because: (1) the branded LPG cylinders are owned by end-user customers and not by the major petroleum companies, i.e., Petron, Pilipinas Shell and Total; (2) granting that the brand owners still own their respective branded LPG cylinders already sold to consumers, still such fact will not bind third persons, like Omni, who is not privy to the agreement between the buying consumers and said major petroleum companies. Thus, a subsequent transfer by the customers of brand owners of the duly marked or stamped LPG cylinders through swapping, for example, will effectively transfer ownership of the LPG cylinders to the transferee, like Omni; and (3) LPG cylinder exchange or swapping is a common industry practice that the DOE recognizes. Issue: WON brand owners lose ownership of their branded LPG cylinders upon sale to their customers.—NO Held: Only the duly authorized dealers and refillers of branded LPG cylinders may refill such cylinders. Persuasive are the opinions and pronouncements by the DOE that brand owners are deemed owners of their duly embossed, stamped and marked LPG cylinders even if these are possessed by customers or consumers. The Court recognizes this right pursuant to the Intellectual Property Code of the Philippines. Mere unauthorized use of a container bearing a registered trademark in connection with the sale, distribution or advertising of goods or services which is likely to cause confusion, mistake or deception among the buyers/consumers can be considered as trademark infringement. The pernicious practice of tampering or changing the appearance of a branded LPG cylinder to look like another brand violates the brand owners’ property rights as infringement under Sec. 155.1 of RA 8293. Moreover, tampering of LPG cylinders is a mode of perpetrating the criminal offenses under BP 33, and clearly enunciated under DOE Circular No. 2000-06-010 which provided penalties on a per cylinder basis for each violation. Further, BP 33 does not require ownership of the branded LPG cylinders as a condition sine qua non for the commission of offenses involving petroleum and petroleum products. The offense of refilling a branded LPG cylinder without the written consent of the brand owner constitutes the offense regardless of the buyer/possessor of the branded LPG cylinder.

74

UP LAW BOC

MERCANTILE LAW


Francisco, Jr. v. Toll Regulatory Board G.R. No. 166910 | October 19, 2010 Facts: Petitioners question various Supplemental Toll Operation Agreements ("STOAs") and toll rate-fixing resolutions concerning the South Metro Manila Skyway, NLEX Expansion Project, and SLEX Project. Among others, these STOAs are alleged to be infirm as they effectively awarded purported "build-operate-transfer" ("BOT") projects without public bidding in violation of the BOT Law (R.A. 6957, as amended by R.A. 7718). Issue: Whether the STOAs are valid. Held: Yes. The subject STOAs are not ordinary contracts for the construction of government infrastructure projects, which requires public bidding as the preferred mode of contract award. Neither are they contracts where financing or financial guarantees for the project are obtained from the government. Rather, the STOAs actually constitute a statutorily-authorized transfer or assignment of usufruct of PNCC's existing franchise to construct, maintain and operate expressways. The conclusion would perhaps be different if the tollway projects were to be prosecuted by an outfit completely different from, and not related to, PNCC. In such a scenario, the entity awarded the winning bid in a BOT-scheme infrastructure project will have to construct, operate and maintain the tollways through an automatic grant of a franchise or TOC, in which case, public bidding is required under the law. Where, in the instant case, a franchisee undertakes the tollway projects of construction, rehabilitation and expansion of the tollways under its franchise, there is no need for a public bidding.

75

UP LAW BOC

MERCANTILE LAW


E.Y. Industrial Sales, Inc. v. Shen Dar Electricity and Machinery Co., Ltd. G.R. No. 184850 | October 20, 2010 Facts: Petitioner and respondent companies both claimed to have the right to register the trademark "VESPA" for air compressors. Shen Dar filed a Petition for Cancellation of EYIS' Certificate of Registration (COR) with the Bureau of Legal Affairs of the IPO. Shen Dar claimed to have first filed an application for the mark. The Director of the BLA issued its Decision in favor of EYIS. The IPO Director General affirmed this and cancelled Shen Dar’s COR. Shen Dar challenges the propriety of such cancellation on the ground that there was no petition for cancellation of its COR as required under Sec. 151 of RA 8293. Issue: Whether Shen Dar’s COR was properly cancelled despite the absence of a petition for cancellation. Held: Yes. Quasi-judicial and administrative bodies are not bound by technical rules of procedure. Such principle, however, is tempered by fundamental evidentiary rules, including due process. The fact that no petition for cancellation was filed against the COR issued to Shen Dar does not preclude the cancellation of Shen Dar's COR. It must be emphasized that, during the hearing for the cancellation of EYIS' COR before the BLA, Shen Dar tried to establish that it, not EYIS, was the true owner of the mark "VESPA" and, thus, entitled to have it registered. Shen Dar had more than sufficient opportunity to present its evidence and argue its case, and it did. It was given its day in court and its right to due process was respected. The IPO Director General's disregard of the procedure for the cancellation of a registered mark was a valid exercise of his discretion.

76

UP LAW BOC

MERCANTILE LAW


Kukan International Corp. v. Reyes G.R. No. 184850 | September 29, 2010 Facts: Morales filed a complaint with the RTC against Kukan, Inc. for a sum of money. RTC rendered a Decision finding for Morales and against Kukan, Inc. After the decision became final and executory, Morales moved for and secured a writ of execution against Kukan, Inc. The sheriff then levied upon various personal properties found at what was supposed to be Kukan, Inc.'s office. Alleging that it owned the properties thus levied and that it was a different corporation from Kukan, Inc., Kukan International Corporation (KIC) filed an Affidavit of Third-Party Claim. In reaction to the third party claim, Morales interposed an Omnibus Motion praying that, applying the principle of piercing the veil of corporate fiction, an order be issued for the satisfaction of the judgment debt of Kukan, Inc. with the properties under the name or in the possession of KIC, it being alleged that both corporations are but one and the same entity. Issue: Whether KIC can be made liable for the judgment rendered against Kukan, Inc. Held: No. The principle of piercing the veil of corporate fiction, and the resulting treatment of two related corporations as one and the same juridical person with respect to a given transaction, is basically applied only to determine established liability; it is not available to confer on the court a jurisdiction it has not acquired, in the first place, over a party not impleaded in a case. Elsewise put, a corporation not impleaded in a suit cannot be subject to the court's process of piercing the veil of its corporate fiction. In that situation, the court has not acquired jurisdiction over the corporation and, hence, any proceedings taken against that corporation and its property would infringe on its right to due process. The bottom line issue of whether Morales can proceed against KIC for the judgment debt of Kukan, Inc. resolves itself into the question of whether a mere motion is the appropriate vehicle for such purpose. In net effect, Morales' adverted motion to pierce the veil of corporate fiction stated a new cause of action, i.e., for the liability of judgment debtor Kukan, Inc. to be borne by KIC on the alleged identity of the two corporations. This new cause of action should be properly ventilated in another complaint and subsequent trial where the doctrine of piercing the corporate veil can, if appropriate, be applied, based on the evidence adduced. Establishing the claim of Morales and the corresponding liability of KIC for Kukan Inc.'s indebtedness could hardly be the subject, under the premises, of a mere motion interposed after the principal action against Kukan, Inc. alone had peremptorily been terminated. After all, a complaint is one where the plaintiff alleges causes of action.

77

UP LAW BOC

MERCANTILE LAW


Eternal Gardens Memorial Park Corporation v. The Philippine American Life Insurance Company G.R. No. 166245 | April 9, 2008 Facts: Philamlife entered into an agreement denominated as Creditor Group Life Policy No. P-1920 with Eternal. Under the policy, Eternal’s clients who purchased burial lots from it on installment basis would be insured by Philamlife. The policy provided an effective date as follows: “The insurance of any eligible Lot Purchaser shall be effective on the date he contracts a loan with the Assured. However, there shall be no insurance if the application of the Lot Purchaser is not approved by the Company.” Eternal submitted a letter containing a list of insurable balances of its lot buyers in 1982. It was marked “received” by Philamlife, stating that the insurance forms for the attached list of burial lot buyers were attached to the letter. One of the names submitted was “John Uy Chuang,” who then died in 1984. Eternal made a demand, which was denied by Philamlife. The latter claimed that no application was submitted prior to Chuang’s death so he was not covered by the insurance policy for lack of company approval. Philamlife then said that it will return all premiums paid on behalf of Chuang, which were simply held by it in trust until the prerequisites for insurance coverage were met. Issue: Whether Philamlife assumed the risk of loss without approving the application. Held: An insurance contract, being one of adhesion, must be construed liberally in favor of the insured and strictly against the insurer. The Effective Date Provision is ambiguous. The first sentence appears to state that the coverage became effective upon contracting a loan with Eternal, while the second sentence appears to require Philamlife to approve the contract. This ambiguity must be resolved in favor of Eternal. Further, the provisions must be harmonized such that upon a party’s purchase of a memorial lot on installment, an insurance contract covering the lot purchaser is created and the same is effective, valid and binding until terminated by Philamlife by disapproving the insurance application. The second sentence is in the nature of a resolutory condition leading to the cessation of the insurance contract. The termination of the insurance contract by the insurer must be explicit and unambiguous. Insurance contracts are imbued with public interest that must be considered whenever the rights and obligations of the insurer and the insured are to be delineated. To protect the interest of insurance applicants, insurance companies must be obligated to act with haste upon insurance applications, or otherwise be bound to honor the application as a valid, binding and effect insurance contract. Mere inaction of the insurer on the insurance application must not work to prejudice the insured.

78

UP LAW BOC

CRIMINAL LAW


CRIMINAL LAW Sydeco v. People G.R. No. 202692 | November 12, 2014 Facts: Separate Informations were filed against Sydeco for violation of Section 56(f) of RA 4136 (Land Transportation and Traffic Code) for driving a motor vehicle under the influence of liquor, and violation of Article 151 of the RPC for resistance and disobedience to a person in authority or the agents of such person. Sydeco claimed that they were signaled to stop by police officers at a checkpoint, who asked that petitioner open the vehicle’s door and alight for a body and vehicle search. He refused because of a previous extortion experience and instead opened his window and uttered “plain view lang”. This irked the policemen and accused him of being drunk, pointing to 3 cases of empty beer bottles in the trunk of the vehicle. The MeTC found him guilty, relying on the medical certificate depicting him positive for alcohol breath and the joint affidavit of the policemen. CA affirmed, relying on the presumption of regularity in the performance of duties by the police officers. Issue: WON the CA erred in upholding the presumption of regularity in the performance of duties by the police officers Held: Yes. The men manning the checkpoint in the subject area and during the period material appeared not to have performed their duties as required by law, or at least fell short of the norm expected of peace officers. They spotted the petitioner’s purported swerving vehicle. They then signaled him to stop which he obeyed. But they did not demand the presentation of the driver’s license or issue any ticket or similar citation paper for traffic violation as required under the particular premises by Sec. 29 of RA 4136. In fine, at the time of his apprehension, or when he was signaled to stop, to be precise, petitioner has not committed any crime or suspected of having committed one. “Swerving,” as ordinarily understood, refers to a movement wherein a vehicle shifts from a lane to another or to turn aside from a direct course of action or movement. The act may become punishable when there is a sign indicating that swerving is prohibited or where swerving partakes the nature of reckless driving, a concept defined under RA 4136. To constitute the offense of reckless driving, the act must be something more than a mere negligence in the operation of a motor vehicle, and a willful and wanton disregard of the consequences is required.

79

UP LAW BOC

CRIMINAL LAW


People v. Sitco G.R. No. 178202 | May 14, 2010 Facts: Officers from the Navotas Police Station conducted a buy-bust operation against accusedappellants. During trial, Police officer Buan identified accused-appellants, the four (4) PhP 500-bill marked money used, and the the drugs confiscated from both accused-appellants. Buan explained during his testimony that the boodle money placed in-between the genuine marked money the buybust team used was unavailable as it had been confiscated by a policeman named "Barlin" when he himself (Buan) was arrested for violating Sec. 27 of the Dangerous Drugs Act. Issue: Whether accused-appellants’ convictions should stand. Held: No. Buan's involvement as a police officer in illegal drug activities makes him a polluted source and renders his testimony against Sitco and Bagtas suspect, at best. It is like a pot calling a kettle black. To be believed, testimonial evidence should come only from the mouth of a credible witness. Given his service record, Buan can hardly qualify as a witness worthy, under the limited confines of this case, of full faith and credit. And lest it be overlooked, Buan is a rogue cop, having, per his own admission, been arrested for indulging in a pot session, eventually charged and dismissed from the police service. It would appear, thus, that Buan's had been a user. His arrest for joining a pot session only confirms this undesirable habit. But over and above the credibility of the prosecution's lone witness as ground for acquittal looms the matter of the custodial chain, a term which has gained traction in the prosecution of drug-related cases. There are glaring gaps or missing links in the chain of custody of evidence, raising doubt as to the identity of the seized items and necessarily their evidentiary value. This broken chain of custody is especially significant given that what are involved are fungible items that may be easily altered or tampered with. Given the prosecution's failure to abide by the rules on the chain of custody, the evidentiary presumption that official duties have been regularly performed cannot apply to this case. This presumption, it must be emphasized, is not conclusive. Not only is it rebutted by contrary proof, as here, but it is also inferior to the constitutional presumption of innocence.

80

UP LAW BOC

CRIMINAL LAW


People v. Batoon G.R. No. 184599 | November 24, 2010 Facts: During a buy-bust operation, the asset approached accused-appellant Melchor and introduced PO2 Vicente as customer. Melchor informed PO2 Vicente that the shabu was with his brother, accused-appellant Teddy. He then asked the money from PO2 Vicente and the latter gave him the marked P500 bill. Thereafter, Melchor approached Teddy, who was about 10 meters away from them. He handed the marked money to Teddy, who, in turn, gave Melchor a sachet. Melchor returned to where PO2 Vicente was and handed him the sachet. Issue: Whether Melchor can be convicted for possession of drugs. Held: Yes. Possession under the law, includes not only actual possession, but also constructive possession. Actual possession exists when the drug is in the immediate physical possession or control of the accused. On the other hand, constructive possession exists when the drug is under dominion and control of the accused or when he has the right to exercise dominion and control over the place where it is found. Exclusive possession or control is not necessary. The accused cannot avoid conviction if his right to exercise control and dominion over the place where the contraband is located, is shared with another. Thus, conviction need not be predicated upon exclusive possession, and a showing of non-exclusive possession would not exonerate the accused. Such fact of possession may be proved by direct or circumstantial evidence and any reasonable inference drawn therefrom. However, the prosecution must prove that the accused had knowledge of the existence and presence of the drug in the place under his control and dominion and the character of the drug. In this case, although the three sachets containing shabu were found solely in the possession of Teddy, it was evident that Melchor had knowledge of its existence. Moreover, as correctly found by the CA, Melchor had easy access to the shabu, because they conspired to engage in the illegal business of drugs.

81

UP LAW BOC

CRIMINAL LAW


People v. Barba 593 SCRA 711 | July 23, 2009 Facts: After the illegal drugs were seized from Barba, PO2 Rabina marked the plastic sachets with his initials. PO1 Almacen marked the tooter in the same manner. The seized aluminum foil was marked AA, presumably after PO2 Arnulfo Aguillon but there is no testimony on this. Issue: Whether or not Barba is guilty of selling prohibited drugs beyond reasonable doubt Held: No. Barba is not guilty of selling prohibited drugs beyond reasonable doubt. Although the non-presentation of some of the witnesses who can attest to an unbroken chain of evidence may in some instances be excused, there should be a justifying factor for the prosecution to dispense with their testimonies. Here, however, no explanation was proffered as to why key individuals who had custody over the drugs at certain periods were not identified and/or not presented as witnesses. Uncertainty, therefore, arises if the drugs and paraphernalia seized during the buy-bust operation on January 2003 were the same specimens presented in court in December of that same year. The very identity of the illegal drug is in question because of the absence of key prosecution witnesses. No one knows if the drug seized at the time of the buy-bust operation is the same drug tested and later kept as evidence against Barba. Though there was a stipulation during trial that the specimens submitted as evidence yielded positive for shabu, this only touches on one link in the chain of custody. Thus, given the failure of the prosecution to identify the continuous whereabouts of such fungible pieces of evidence, we are unable to conclude that all elements of the crime have been established beyond reasonable doubt.

82

UP LAW BOC

CRIMINAL LAW


Garcia v. Sandiganbayan 603 SCRA 348 | October 12, 2009 Facts: To recover unlawfully acquired funds and properties in the aggregate amount of PhP 143,052,015.29 that retired Maj. Gen. Carlos F. Garcia, his wife, and children (collectively, the Garcias) had allegedly amassed and acquired, the Republic, through the Office of the Ombudsman (OMB), filed with the Sandiganbayan (SB) a petition for the forfeiture of those properties (Forfeiture I). This petition was raffled to the Fourth Division of the anti-graft court. Another forfeiture case (Forfeiture II) to recover funds and properties amounting to PhP 202,005,980.55 was subsequently filed. This another forfeiture case was raffled also to the Fourth Division of the SB. Prior to the filing of Forfeiture II, but subsequent to the filing of Forfeiture I, the OMB charged the Garcias and three others with violation of RA 7080 (plunder) which placed the value of the property and funds plundered at PhP 303,272,005.99. The Information was raffled off to the Second Division of the SB. The plunder charge, as the parties pleadings seem to indicate, covered substantially the same properties identified in both forfeiture cases. Issue: Whether or not the plunder case absorbed the forfeiture cases, thus depriving the 4th Division of the SB of jurisdiction over the civil cases Held: No. The plunder case did not absorb the forfeiture cases. The Fourth Division of the SB did not lose its jurisdiction over the civil cases. The forfeiture cases are not the corresponding civil action for recovery of civil liability ex delicto. The civil liability for forfeiture cases does not arise from the commission of a criminal offense. The action of forfeiture arises when a public officer or employee [acquires] during his incumbency an amount of property which is manifestly out of proportion of his salary and to his other lawful income. Such amount of property is then presumed prima facie to have been unlawfully acquired. A forfeiture case and a plunder case have separate causes of action; the former is civil in nature while the latter is criminal. A forfeiture case under RA 1379 arises out of a cause of action separate and different from a plunder case, thus negating the notion that the crime of plunder absorbs the forfeiture cases. In a prosecution for plunder, what is sought to be established is the commission of the criminal acts in furtherance of the acquisition of ill-gotten wealth. On the other hand, all that the court needs to determine, by preponderance of evidence, under RA 1379 is the disproportion of respondents’ properties to his legitimate income, it being unnecessary to prove how he acquired said properties.

83

UP LAW BOC

CRIMINAL LAW


Robert Wa-Acon v. People of the Philippines GR No. 164575 | December 6, 2006 Facts: Wa-acon was convicted for Malversation under Art. 217 of the Revised Penal Code for misappropriating PhP 92,199.20, which forms part of his accountabilities as Special Collecting Officer of the National Food Authority (NFA). He asserts that the unremitted amounts for the rice stocks and the money allegedly gained from the empty sacks were not used for his personal use and therefore, the fourth element of malversation- that the accused appropriated, took, or misappropriated public funds or property for which he was accountable–was not proven. Issue: Whether or not Wa-acon is guilty beyond reasonable doubt. Held: Yes. The elements common to all acts of malversation – under Article 217 are: (a) that the offender be a public officer; (b) that he had custody or control of funds or property by reason of the duties of his office; (c) these funds were public funds or property for which he was accountable; and (d) that he appropriated, took, misappropriated or consented or through abandonment or negligence, permitted another person to take them. Article 217, as amended by Republic Act 1060, no longer requires proof by the State that the accused actually appropriated, took, or misappropriated public funds or property. Instead, a presumption, though disputable and rebuttable, was installed that upon demand by any duly authorized officer, the failure of a public officer to have duly forthcoming any public funds or property–with which said officer is accountable–should be prima facie evidence that he had put such missing funds or properties to personal use. Without any strong and convincing proof to bring down the disputable presumption of law, the Court sustained his conviction.

84

UP LAW BOC

REMEDIAL LAW


REMEDIAL LAW Tujan-Militante in behalf of the minor Criselda Cada v. Raquel M. Cada-Deapera G.R. No. 210636 July 28, 2014 Facts: On March 24, 2011, respondent filed before the RTC-Caloocan a verified petition for writ of habeas corpus, demanding the return to her custody over the child Criselda Cada. The RTC issued the writ and ordered that summons be served at petitioner’s 3 known addresses in Caloocan City, Quezon City and at the Sandiganbayan. Meanwhile on March 31, petitioner filed a petition for guardianship over the person of Criselda in RTC-QC. Respondent filed a motion to dismiss on the ground of litis pendentia, which the court granted. Petitioner contends that RTC-Caloocan has no jurisdiction over the habeas corpus petition filed by respondent pursuant to Section 3 of A.M. No. 03-04-04-SC, as the same should be filed before the family court that has jurisdiction over her place of residence or that of the minor or wherever the minor may be found. Respondent on the other hand, asserts that Section 20 (petition for writ of habeas corpus) and not Section 3 is applicable. Issue: WON RTC-Caloocan has jurisdiction over the habeas corpus petition where the residence of petitioner and the minor child are in Quezon City Held: Yes. Under Section 20, “A verified petition for a writ of habeas corpus involving custody of minors shall be filed with the Family Court. The writ shall be enforceable within its judicial region to which the Family Court belongs.” Under Section 13 of BP 129, the National Capital Region consists of the cities of Manila, Quezon, … Caloocan, etc. In view of the afore-quoted provision, it is indubitable that the filing of a petition for the issuance of a writ of habeas corpus before a family court in any of the cities enumerated is proper as long as the writ is sought to be enforced within the National Capital Judicial Region, as here. Anent petitioner’s insistence on the application of Section 3 of A.M. No. 03-04-04-SC, a plain reading of said provision reveals that the provision invoked only applies to petitions for custody of minors, and not to habeas corpus petitions.

85

UP LAW BOC

REMEDIAL LAW


Sydeco v. People G.R. No. 202692 | November 12, 2014 Facts: Separate Informations were filed against Sydeco for violation of Section 56(f) of RA 4136 (Land Transportation and Traffic Code) for driving a motor vehicle under the influence of liquor, and violation of Article 151 of the RPC for resistance and disobedience to a person in authority or the agents of such person. Sydeco claimed that they were signaled to stop by police officers at a checkpoint, who asked that petitioner open the vehicle’s door and alight for a body and vehicle search. He refused because of a previous extortion experience and instead opened his window and uttered “plain view lang”. This irked the policemen and accused him of being drunk, pointing to 3 cases of empty beer bottles in the trunk of the vehicle. The MeTC found him guilty, relying on the medical certificate depicting him positive for alcohol breath and the joint affidavit of the policemen. CA affirmed, relying on the presumption of regularity in the performance of duties by the police officers. Issue: WON the CA erred in upholding the presumption of regularity in the performance of duties by the police officers Held: Yes. The men manning the checkpoint in the subject area and during the period material appeared not to have performed their duties as required by law, or at least fell short of the norm expected of peace officers. They spotted the petitioner’s purported swerving vehicle. They then signaled him to stop which he obeyed. But they did not demand the presentation of the driver’s license or issue any ticket or similar citation paper for traffic violation as required under the particular premises by Sec. 29 of RA 4136. In fine, at the time of his apprehension, or when he was signaled to stop, to be precise, petitioner has not committed any crime or suspected of having committed one. “Swerving,” as ordinarily understood, refers to a movement wherein a vehicle shifts from a lane to another or to turn aside from a direct course of action or movement. The act may become punishable when there is a sign indicating that swerving is prohibited or where swerving partakes the nature of reckless driving, a concept defined under RA 4136. To constitute the offense of reckless driving, the act must be something more than a mere negligence in the operation of a motor vehicle, and a willful and wanton disregard of the consequences is required.

86

UP LAW BOC

REMEDIAL LAW


Vivares and Sps. Suzara v. St. Theresa’s College, Mylene Rheza Escudero, and John Does G.R. No. 202666 | September 29, 2014 Facts: Julia and Julienne were high school students of STC, set to graduate in March. Earlier that year in January, however, they posted pictures of themselves in their undergarments on Facebook while changing for a birthday beach party. Some of their Facebook friends showed the pictures to a professor, who brought the pictures to the attention of the school principal. As punishment, they were not allowed to take part in their graduation ceremony. Their parents filed a Petition for the Issuance of a Writ of Habeas Data before the RTC against STC, praying that the court direct the school to surrender all the photos. They claimed that it was a violation of their right to informational privacy. The RTC dismissed the petition, citing Vivares’ failure to prove the existence of the minors’ right to privacy. Issue: WON a writ of habeas data should be issued Held: The writ of habeas data is a remedy available to any person whose right to privacy in life, liberty or security is violated or threatened by an unlawful act or omission of a public official or employee, or of a private individual or entity engaged in the gathering, collecting or storing of data or information regarding the person, family, home and correspondence of the aggrieved party. 8. The “individual” here need not be in the business of collecting or storing data. To "engage" in something is different from undertaking a business endeavor. To "engage" means "to do or take part in something." It does not necessarily mean that the activity must be done in pursuit of a business. What matters is that the person or entity must be gathering, collecting, or storing said data or information about the aggrieved party or his or her family. However, the existence of a person’s right to informational privacy and a showing, at least by substantial evidence, of an actual or threatened violation of the right to privacy in life, liberty or security of the victim are indispensable before the privilege of the writ may be extended. There are 3 strands of the right to privacy: locational or situational privacy, informational privacy, and decisional privacy. Of the three, what is relevant in this case in the right to informational privacy. To address concerns about privacy, but without defeating its purpose, Facebook was armed with different privacy tools designed to regulate the accessibility of a user’s profile as well as information uploaded by the user. Without these privacy settings, respondents’ contention that there is no reasonable expectation of privacy in Facebook would, in context, be correct.

87

UP LAW BOC

REMEDIAL LAW


Heirs of Faustino Mesina vs. Heirs of Domingo Fian, Sr. 695 SCRA 34 | April 08, 2013 Facts: Spouses Mesina bought from Spouses Fian two parcels of land on installment. The heirs of Spouses Fian refused to acknowledge the sale. Heirs of Spouses Mesina brought a complaint for quieting of title, impleading only one of the heirs (Theresa) as representative of respondents Heirs of Fian. Theresa sought to dismiss the complaint as it states no cause of action for having failed to implead all heirs, as “Heirs of Mesina” and “Heirs of Fian” are not juridical entities authorized to file or be made defendant. RTC and CA ruled that all the heirs of the spouses Fian are indispensable parties and should have been impleaded in the complaint. Issue: Whether the complaint should be dismissed for stating no cause of action. Held: No. Failure to state a cause of action refers to the insufficiency of the pleading, as when it fails to aver the existence of the three essential elements of a cause of action. The infirmity in this case is not a failure to state a cause of action but a non-joinder of an indispensable party. The non-joinder of indispensable parties is not a ground for the dismissal of an action. The remedy is to implead the nonparty claimed to be indispensable. If the plaintiff refuses to implead an indispensable party despite the order of the court, that court may dismiss the complaint for the plaintiff’s failure to comply with the order

88

UP LAW BOC

REMEDIAL LAW


Senador v. People 692 SCRA 669 | March 06, 2013 Facts: Senador is charged with the crime of Estafa under Article 315, par. 1 (b) for receiving jewelry in the amount of PHP 705,685 for the purpose of selling on consignment and failing to return upon demand. The accused asserted that the person named as the offended party in the Information is not the same person who made the demand and filed the complaint. insisting on her acquittal on the postulate that her constitutional right to be informed of the nature of the accusation against her Issue: Whether an error in the designation in the Information of the offended party violates, as petitioner argues, the accused’s constitutional right to be informed of the nature and cause of the accusation against her, Held: No. In offenses against property, if the subject matter of the offense is generic and not identifiable, such as the money unlawfully taken, an error in the designation of the offended party is fatal and would result in the acquittal of the accused. However, if the subject matter of the offense is specific and identifiable, such as a warrant, or a check, an error in the designation of the offended party is immaterial.

89

UP LAW BOC

REMEDIAL LAW


LBL Industries, Inc. v. City of Lapu-lapu 705 SCRA 688 | September 16, 2013 Facts: On January 25, 2006, respondent City of Lapu-Lapu filed a complaint before the Regional Trial Court seeking to expropriate, a 300-square meter portion of land owned by LBL Industries on January 25, 2008, petitioner moved for the dismissal of the case on the ground that respondent failed to prosecute the case for an unreasonable length of time According to petitioner, respondent has yet to move for the setting of the case for pre-trial and it had done nothing to ensure compliance with the Orders for the issuance of the writ of execution. Respondent opposed the motion, explaining that the reason for the delay was that it is awaiting the RTC's resolution on the motion filed by petitioner for the conduct of a joint survey and for the setting of the case for pre-trial. Issue: Whether RTC erred in denying motion to dismiss Held: No. The present rule is that if the plaintiff fails to file a motion to set the case for pre-trial within five (5) days from the filing of a reply, the duty to set the case for pre-trial falls upon the branch clerk of court. However, this does not relieve the plaintiff of his own duty to prosecute the case diligently. For a plaintiff, as herein respondent, to be excused from its burden to promptly prosecute its case, it must convince the court that its failure to do so was due to justifiable reasons. If the neglect is justified, then a dismissal of the case on said ground is not warranted. The delay cannot solely be attributed to respondent City of Lapu-Lapu but is in fact due to the failure of the branch clerk of court to set the case for pre-trial, as well as the trial court's delay in resolving petitioner's Motion to Conduct Joint Survey and Set the Case for Pre-Trial. We find good reason to believe respondent's assertion that it acted in good faith when it did not move to set the case for pretrial, since petitioner already moved for the pre-trial setting. Another motion from respondent can be simply repetitive of petitioner's earlier motion.

90

UP LAW BOC

REMEDIAL LAW


Prosecutor Jorge Baculi v. Judge Medel Arnaldo B. Belen A.M. No. RTJ-09-2179; A.M. No. RTJ-10-2234 | September 24, 2012 Facts: Prosecutor Baculi filed two administrative complaints against Judge Belen gross ignorance of the law, gross misconduct, among other offenses, for citing him in indirect contempt and for failing to resolve his manifestations/motions. The OCA Report found that Judge Belen failed to follow the mandatory procedure under Rule 71, because the contempt proceedings were heard and decided under the same docket or case number. Issue: Whether Judge Belen followed the proper procedure in citing complainant in indirect contempt. Held: Yes. The Orders issued by Judge Belen are in the nature of a motu-proprio show-cause order. The Orders clearly directed Baculi, as respondent, to explain within 10 days from receipt of the Order why he should not be cited in contempt. when the court issues motu proprio a show-cause order, the duty of the court (1) to docket and (2) to hear and decide the case separately from the main case does not arise, much less to exercise the discretion to order the consolidation of the cases.

91

UP LAW BOC

REMEDIAL LAW


Diosdado S. Manungas v. Margarita Avila Loreto and Florencia Avila Parreo G .R. No. 197205 | August 22, 2011 Facts: Diosdado Manungas, the illegitimate son of Florentino filed a petition for the issuance of letters of administration in his favor for the Estate of Engracia Manungas, the wife of Florentino. The petition was opposed by Loreto and Parreo saying that Diosdado is incompetent to be an administrator since he is a stranger and a debtor to Engracia. The RTC appointed Parreo as the special administrator and Diosdado opposed.. Issue: Whether Diosdado is qualified to be a special administrator of the Estate of Engracia. Held: No. While the court may use its discretion and appoint someone not interested in preserving the estate, still, there is no logical reason to appoint a person who is a debtor of the estate and otherwise a stranger to the deceased. To do so would be tantamount to grave abuse of discretion.

Gaudencio B. Pantilo III v. Judge Victor A. Canoy A.M. No. RTJ-11-2262 | February 9, 2011 Facts: Melgazo, an accused in a criminal case, delivered P30,000 to the Clerk of Court to post bail. Melgazo did not file any written application for bail; did not provide any certificate of deposit from the BIR collector or provincial, city or municipal treasurer; and did not file any written undertaking. However, Judge Canoy ordered the police escorts to release Melgazo without any written order of release. Issue: Whether Judge Canoy erred in ordering the release of Melgazo despite failure to properly post bail. Held: Yes. The Rules do not provide for any form of constructive bail. The written application for bail, certificate of deposit from the BIR collector or provincial, city or municipal treasurer, written undertaking signed by Melgazo, and written release order are necessary before the accused is released on bail.

92

UP LAW BOC

REMEDIAL LAW


Corazon Tenorio v. Alyn C. Perlas A.M. No. P-10-2817 | January 26, 2011 Facts: Sheriff Perlas served upon Tenorio a Notice of Levy on Attachment clearly addressed to spouses Pile. Tenorio showed Sheriff Perlas the Certificate of Car Registration of their dump trucks and said that she was the registered owner of the trucks. Sheriff Perlas forcibly took the trucks without even verifying with the LTO as to who were the true registered owners of the trucks. Tenorio filed an administrative complaint for oppression, dishonesty and grave misconduct. Issue: Whether Sheriff Perla should be held liable for the wrongful levy of the trucks. Held: Yes. Errors in the levy of properties do not necessarily give rise to liability if circumstances exist showing that the erroneous levy was done in good faith. However, the conduct of Sheriff Perlas in implementing the Writ is inexcusable. The facts clearly show that the trucks seized by her did not belong to the spouses Pile but to herein complainant, Tenorio. What is more, she could have acted in good faith and checked from the LTO the identity of the registered owners of the said vehicles before proceeding with their seizure. Sheriffs are called upon to discharge their functions with due care and utmost diligence.

93

UP LAW BOC

REMEDIAL LAW



1. Whether the supervisory Group, AMBALA and their respective leaders are real partiesin-interest. 2. Whether the Presidential Agrarian Reform Council (PARC) authority to revoke a stock distribution plan. 3. Whether subjecting its landholdings to compulsory distribution after its approved SDP has been implemented would impair the contractual obligations created under the SDOA. 4. Whether the Corporation Code is applicable and not RA 6657 in determining their rights, obligations and remedies. 5. Whether the inclusion of the agricultural land of Hacienda Luisita under the coverage of CARP and the eventual distribution of the land to the FWBs would amount to a disposition of all or practically all of the corporate assets of HLI which would entitle the application of provisions on corporate dissolution in the Corporation Code. 6. Whether the constitutionality of Sec. 31 of RA 6657, insofar as it affords the corporation, as a mode of CARP compliance, can be assailed. 7. Whether the SDOA complies with Sec. 31 of RA 6657. Held: 1. Yes. The SDOA no less identifies "the SDP qualified beneficiaries" as "the farmworkers who appear in the annual payroll, inclusive of the permanent and seasonal employees, who are regularly or periodically employed by [HLI]." Galang, per HLI’s own admission, is employed by HLI, and is, thus, a qualified beneficiary of the SDP. The supervisory group whose members were admittedly employed by HLI and their names and signatures even appeared in the annex of the SDOA. 2. Yes. Under Sec. 31 of RA 6657, as implemented by DAO 10, the authority to approve the plan for stock distribution of the corporate landowner belongs to PARC. The power to approve a license includes by implication, even if not expressly granted, the power to revoke it. By extension, the power to revoke is limited by the authority to grant the license, from which it is derived in the first place.

94

UP LAW BOC

REMEDIAL LAW


SDOA is not an ordinary civil law contract and, as such, does not give rise to a cause of action cognizable by regular courts. The SDOA is a special contract imbued with public interest, entered into and crafted pursuant to the provisions of RA 6657. 3. No. A law authorizing interference, when appropriate, in the contractual relations between or among parties is deemed read into the contract and its implementation cannot successfully be resisted by force of the non-impairment guarantee. There is, in that instance, no impingement of the impairment clause, the non-impairment protection being applicable only to laws that derogate prior acts or contracts by enlarging, abridging or in any manner changing the intention of the parties. 4. No. The Corporation Code is the general law providing for the formation, organization and regulation of private corporations. On the other hand, RA 6657 is the special law on agrarian reform. As between a general and special law, the latter shall prevail—generalia specialibus non derogant. Besides, the present impasse between HLI and the private respondents is not an intra-corporate dispute which necessitates the application of the Corporation Code. 5. No. the provisions of the Corporation Code on corporate dissolution would apply insofar as the winding up of HLI’s affairs or liquidation of the assets is concerned. However, the mere inclusion of the agricultural land of Hacienda Luisita under the coverage of CARP and the land’s eventual distribution to the FWBs will not, without more, automatically trigger the dissolution of HLI. As stated in the SDOA itself, the percentage of the value of the agricultural land of Hacienda Luisita in relation to the total assets transferred and conveyed by Tadeco to HLI comprises only 33.296%, following this equation: value of the agricultural lands divided by total corporate assets. By no stretch of imagination would said percentage amount to a disposition of all or practically all of HLI’s corporate assets should compulsory land acquisition and distribution ensue. 6. No. While there is indeed an actual case or controversy, intervenor FARM, composed of a small minority of 27 farmers, has yet to explain its failure to challenge the constitutionality of Sec. 3l of RA 6657, since as early as November 21, l989 when PARC approved the SDP of Hacienda Luisita or at least within a reasonable time thereafter and why its members received benefits from the SDP without so much of a protest. It was only on December 4, 2003 or 14 years after approval of the SDP via PARC Resolution dated November 21, 1989 that said plan and approving resolution were sought to be revoked. Also the constitutionality of the said provision is not the lis mota of the case is whether or not PARC acted in grave abuse of discretion when it ordered the recall of the SDP for such noncompliance and the fact that the SDP, as couched and implemented, offends certain constitutional and statutory provisions. Neither does the situation falls under any of the exceptions where the Court decided on the constitutionality of the statute despite the issue being moot and academic. There appears to be no breach of the fundamental law. Sec. 4, Article XIII of the Constitution. Sec. 4 expressly authorizes collective ownership by farmers. By using the word "collectively," the Constitution allows for indirect ownership of land and not just outright agricultural land transfer. This is in recognition of the fact that land reform may become successful even if it is done through the medium of juridical entities composed of farmers. While it is true that the farmer is issued stock certificates and does not directly own the land, still, the Corporation Code is clear that the FWB becomes a stockholder who acquires an

95

UP LAW BOC

REMEDIAL LAW


equitable interest in the assets of the corporation, which include the agricultural lands. It was explained that the "equitable interest of the shareholder in the property of the corporation is represented by the term stock, and the extent of his interest is described by the term shares. The expression shares of stock when qualified by words indicating number and ownership expresses the extent of the owner’s interest in the corporate property." 7. Yes. The mandatory minimum ratio of land-to-shares of stock supposed to be distributed or allocated to qualified beneficiaries, adverting to what Sec. 31 of RA 6657 refers to as that "proportion of the capital stock of the corporation that the agricultural land, actually devoted to agricultural activities, bears in relation to the company’s total assets" had been observed. The determination of the shares to be distributed to the 6,296 FWBs strictly adheres to the formula prescribed by Sec. 31(b) of RA 6657. Paragraph one of the SDOA, which was based on the SDP, conforms to Sec. 31 of RA 6657. The stipulation reads: “1. The percentage of the value of the agricultural land of Hacienda Luisita (P196,630,000.00) in relation to the total assets (P590,554,220.00) transferred and conveyed to the SECOND PARTY is 33.296% that, under the law, is the proportion of the outstanding capital stock of the SECOND PARTY, which is P355,531,462.00 or 355,531,462 shares with a par value of P1.00 per share, that has to be distributed to the THIRD PARTY under the stock distribution plan, the said 33.296% thereof being P118,391,976.85 or 118,391,976.85 shares.” Anent the requirement under Sec. 31(b) of the third paragraph, that the FWBs shall be assured of at least one (1) representative in the board of directors or in a management or executive committee irrespective of the value of the equity of the FWBs in HLI, the Court finds that the SDOA contained provisions making certain the FWBs’ representation in HLI’s governing board, thus: “5. Even if only a part or fraction of the shares earmarked for distribution will have been acquired from the FIRST PARTY and distributed to the THIRD PARTY, FIRST PARTY shall execute at the beginning of each fiscal year an irrevocable proxy, valid and effective for one (1) year, in favor of the farmworkers appearing as shareholders of the SECOND PARTY at the start of said year which will empower the THIRD PARTY or their representative to vote in stockholders’ and board of directors’ meetings of the SECOND PARTY convened during the year the entire 33.296% of the outstanding capital stock of the SECOND PARTY earmarked for distribution and thus be able to gain such number of seats in the board of directors of the SECOND PARTY that the whole 33.296% of the shares subject to distribution will be entitled to.”

96

UP LAW BOC

REMEDIAL LAW


PAGCOR v. Fontana Development Corporation G.R. No. 187972 | June 29, 2010 Facts: In 1999, PAGCOR granted private respondent Fontana Development Corporation (FDC) the authority to operate and maintain a casino inside the CSEZ under a Memorandum of Agreement (MOA). In 2007, RA No. 9487 was enacted, extending PAGCOR's franchise. In 2008, PAGCOR informed FDC that it was extending the MOA on a month-to-month basis until the finalization of the renewal of the contract. FDC protested, claiming that the extension of PAGCOR's franchise had automatically extended the MOA. PAGCOR notified FDC that its [new] standard Authority to Operate shall now govern and regulate FDC's casino operations in place of the previous MOA. FDC filed before the RTC of Manila a complaint for Injunction against PAGCOR. PAGCOR argued that the RTC had no jurisdiction over the case and that the proper remedy is an original action before the Supreme Court, as the corporation is a body equal to the Securities and Exchange Commission (SEC). Issue: Whether the RTC has jurisdiction over the case. Held: Yes. A perusal of FDC's complaint easily reveals that it is an action for injunction based on an alleged violation of contract--the MOA between the parties. As such, the Manila RTC has jurisdiction over FDC's complaint anchored on Sec. 19, Chapter II of BP 129, which grants the RTCs original exclusive jurisdiction over "all civil actions in which the subject of the litigation is incapable of pecuniary estimation." Evidently, a complaint for injunction or breach of contract is incapable of pecuniary estimation. Moreover, the RTCs shall exercise original jurisdiction "in the issuance of writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction which may be enforced in any part of their respective regions" under Sec. 21 of BP 129. PAGCOR, however, insists that the Supreme Court has jurisdiction over an action contesting its exercise of licensing and regulatory powers, i.e., the revocation of FDC's license to operate a casino in CSEZ and that FDC's complaint is a case of first impression. PAGCOR's argument is bereft of merit. In PAGCOR v. Viola, we ruled that PAGCOR, in the exercise of its licensing and regulatory powers, has no quasi-judicial functions, as Secs. 8 and 9 of PD 1869 do not grant quasi-judicial powers to PAGCOR. As such, direct resort to this Court is not allowed. While we allowed said recourse in Del Mar v. PAGCOR and Jaworski v. PAGCOR, that is an exception to the principle of hierarchy of courts on the grounds of expediency and the importance of the issues involved. More importantly, we categorically ruled in PAGCOR v. Viola that cases involving revocation of a license falls within the original jurisdiction of the RTC. Moreover, it is settled that the normal rule is to strictly follow the hierarchy of courts.

97

UP LAW BOC

REMEDIAL LAW


Tomawis v. Balindong G.R. No. 182434 | March 5, 2010 Facts: Private respondents filed with the Shari’a District Court (SDC) an action for quieting of title of a parcel of land located in Marawi City against petitioner Sultan Jerry Tomawis and one Mangoda Radia. In his answer, Tomawis debunked the private respondents’ claim of ownership and raised, as one of his affirmative defenses, SDC's lack of jurisdiction over the subject matter of the case. As argued, the regular civil court, not SDC, had such jurisdiction pursuant to Batas Pambansa Blg. (BP) 129 or the Judiciary Reorganization Act of 1980. Issue: Whether the SDC had jurisdiction over the action for quieting of title. Held: Yes. Judging from the averments in the underlying complaint, it is basically a suit for recovery of possession and eventual reconveyance of real property which, under BP 129, as amended, falls within the original jurisdiction of either the RTC or MTC. The question that comes to the fore is whether the jurisdiction of the RTC or MTC is to the exclusion of the SDC. A reading of the pertinent provisions of BP 129 and PD 1083 shows that the former, a law of general application to civil courts, has no application to, and does not repeal, the provisions found in PD 1083, a special law, which only refers to Shari'a courts. BP 129 was enacted to reorganize only existing civil courts and is a law of general application to the judiciary. In contrast, PD 1083 is a special law that only applies to Shari'a courts. In order to give effect to both laws at hand, we must continue to recognize the concurrent jurisdiction enjoyed by SDCs with that of RTCs under PD 1083. While we recognize the concurrent jurisdiction of the SDCs and the RTCs with respect to cases involving only Muslims, the SDC has exclusive original jurisdiction over all actions arising from contracts customary to Muslims to the exclusion of the RTCs, as the exception under PD 1083, while both courts have concurrent original jurisdiction over all other personal actions. Said jurisdictional conferment, found in Art. 143 of PD 1083, is applicable solely when both parties are Muslims and shall not be construed to operate to the prejudice of a non-Muslim, who may be the opposing party against a Muslim.

98

UP LAW BOC

REMEDIAL LAW


People vs. Sitco G.R. No. 178202 | May 14, 2010 Facts: Officers from the Navotas Police Station conducted a buy-bust operation against accusedappellants. During trial, Police officer Buan identified accused-appellants, the four (4) PhP 500-bill marked money used, and the the drugs confiscated from both accused-appellants. Buan explained during his testimony that the boodle money placed in-between the genuine marked money the buybust team used was unavailable as it had been confiscated by a policeman named "Barlin" when he himself (Buan) was arrested for violating Sec. 27 of the Dangerous Drugs Act. Issue: Whether accused-appellants’ convictions should stand. Held: No. Buan's involvement as a police officer in illegal drug activities makes him a polluted source and renders his testimony against Sitco and Bagtas suspect, at best. It is like a pot calling a kettle black. To be believed, testimonial evidence should come only from the mouth of a credible witness. Given his service record, Buan can hardly qualify as a witness worthy, under the limited confines of this case, of full faith and credit. And lest it be overlooked, Buan is a rogue cop, having, per his own admission, been arrested for indulging in a pot session, eventually charged and dismissed from the police service. It would appear, thus, that Buan's had been a user. His arrest for joining a pot session only confirms this undesirable habit. But over and above the credibility of the prosecution's lone witness as ground for acquittal looms the matter of the custodial chain, a term which has gained traction in the prosecution of drug-related cases. There are glaring gaps or missing links in the chain of custody of evidence, raising doubt as to the identity of the seized items and necessarily their evidentiary value. This broken chain of custody is especially significant given that what are involved are fungible items that may be easily altered or tampered with. Given the prosecution's failure to abide by the rules on the chain of custody, the evidentiary presumption that official duties have been regularly performed cannot apply to this case. This presumption, it must be emphasized, is not conclusive. Not only is it rebutted by contrary proof, as here, but it is also inferior to the constitutional presumption of innocence.

99

UP LAW BOC

REMEDIAL LAW


Kukan International Corp. v. Reyes G.R. No. 184850 | September 29, 2010 Facts: Morales filed a complaint with the RTC against Kukan, Inc. for a sum of money. RTC rendered a Decision finding for Morales and against Kukan, Inc. After the decision became final and executory, Morales moved for and secured a writ of execution against Kukan, Inc. The sheriff then levied upon various personal properties found at what was supposed to be Kukan, Inc.'s office. Alleging that it owned the properties thus levied and that it was a different corporation from Kukan, Inc., Kukan International Corporation (KIC) filed an Affidavit of Third-Party Claim. In reaction to the third party claim, Morales interposed an Omnibus Motion praying that, applying the principle of piercing the veil of corporate fiction, an order be issued for the satisfaction of the judgment debt of Kukan, Inc. with the properties under the name or in the possession of KIC, it being alleged that both corporations are but one and the same entity. Issue: Whether KIC can be made liable for the judgment rendered against Kukan, Inc. Held: No. The principle of piercing the veil of corporate fiction, and the resulting treatment of two related corporations as one and the same juridical person with respect to a given transaction, is basically applied only to determine established liability; it is not available to confer on the court a jurisdiction it has not acquired, in the first place, over a party not impleaded in a case. Elsewise put, a corporation not impleaded in a suit cannot be subject to the court's process of piercing the veil of its corporate fiction. In that situation, the court has not acquired jurisdiction over the corporation and, hence, any proceedings taken against that corporation and its property would infringe on its right to due process. The bottom line issue of whether Morales can proceed against KIC for the judgment debt of Kukan, Inc. resolves itself into the question of whether a mere motion is the appropriate vehicle for such purpose. In net effect, Morales' adverted motion to pierce the veil of corporate fiction stated a new cause of action, i.e., for the liability of judgment debtor Kukan, Inc. to be borne by KIC on the alleged identity of the two corporations. This new cause of action should be properly ventilated in another complaint and subsequent trial where the doctrine of piercing the corporate veil can, if appropriate, be applied, based on the evidence adduced. Establishing the claim of Morales and the corresponding liability of KIC for Kukan Inc.'s indebtedness could hardly be the subject, under the premises, of a mere motion interposed after the principal action against Kukan, Inc. alone had peremptorily been terminated. After all, a complaint is one where the plaintiff alleges causes of action.

100

UP LAW BOC

REMEDIAL LAW


Philippine British Assurance Company, Inc. (PBACI) v. Republic G.R. No. 185588 | February 02, 2010 Facts: PBACI, a domestic insurance company, issues customs bonds to its clients in favor of the BOC to secure the release of imported goods in order that the goods may be released from the BOC without prior payment of the corresponding customs duties and taxes. The Republic, represented by the BOC, filed a complaint against PBACI with the RTC for collection of money with damages, alleging that PBACI had oustanding unliquidated customs bonds with the BOC. The RTC ruled in favor of the Republic. PBACI appealed the decision to the CA, but the CA dismissed it for lack of jurisdiction. The CA ratiocinated that the jurisdiction over the appeal lies with the CTA because it is a tax collection case. PBACI, thus, appealed to the SC and argued that the CA erred in its ruling. According to PBACI, in as much as the Republic’s right was initially based on its right to collect duties and taxes, the same was converted to a right arising out of a contract, the bond being a contract between the Republic and PBACI. Issue: WON the CA has jurisdiction over the appeal of PBACI.—YES Held: The original complaint filed with the trial court was in the nature of a collection case, purportedly to collect on the obligation of PBACI by virtue of the bonds executed by it in favor of the Republic, essentially a contractual obligation. As PBACI correctly points out, an action to collect on a bond used to secure the payment of taxes is not a tax collection case, but rather a simple case for enforcement of a contractual liability. An action based upon a surety bond cannot be considered a tax collection case. Rather, such action would properly be a case based on a contract. Verily, the instant case is not a tax collection case; hence, the CA has jurisdiction over the case. In addition, even the BOC did not consider the case as one for tax collection. It instituted a complaint for collection of money, decidedly not a tax collection case, before the trial court. It purposefully did not follow the procedure in the proper prosecution of a tax collection case. This may only be explained with the fact that the BOC itself did not consider the action that it instituted as a tax collection case. Certainly, the administrative agencies tasked with the prosecution of cases within their specific area of concern should know the nature of the action to be filed and the proper procedure by which they can collect on liabilities to it.

101

UP LAW BOC

REMEDIAL LAW


Office of the Ombudsman v. Sison G.R. No. 185954 | February 16, 2010 Facts: The Office of the Ombudsman (“Omb”) found Sison, a public official in Samar, guilty of grave misconduct, dishonesty, and conduct prejudicial to the best interest of the service. Sison appealed to the CA, which reversed and set aside the Omb decision. The CA held that the Omb failed to adduce substantial evidence in order to convict Sison. The Omb filed an Omnibus Motion for Intervention and to Admit Attached MR, which was denied by the CA. Hence, this petition. Issue: WON the Omb may be allowed to intervene and seek reconsideration of the adverse decision rendered by the CA.—NO Held: The allowance or disallowance of a Motion to Intervene is addressed to the sound discretion of the court. To warrant intervention under Rule 19 of the Rules of Court, two requisites must concur: (1) the movant has a legal interest in the matter in litigation; and (2) intervention must not unduly delay or prejudice the adjudication of the rights of the parties, nor should the claim of the intervenor be capable of being properly decided in a separate proceeding. The interest, which entitles one to intervene, must involve the matter in litigation and of such direct and immediate character that the intervenor will either gain or lose by the direct legal operation and effect of the judgment. Clearly, the Office of the Ombudsman is not an appropriate party to intervene in the instant case. It must remain partial and detached. More importantly, it must be mindful of its role as an adjudicator, not an advocate. Judges should detach themselves from cases where their decisions are appealed to a higher court for review. The raison detre for such a doctrine is the fact that judges are not active combatants in such proceeding and must leave the opposing parties to contend their individual positions and the appellate court to decide the issues without the judges active participation.

102

UP LAW BOC

REMEDIAL LAW


Rubrico v. Macapagal-Arroyo G.R. No. 188976 | February 18, 2010 Facts: A petition for writ for amparo was filed by Rubrico, et al. Named among the respondents were the AFP Chief of Staff (Gen. Esperon) and PNP Chief (Gen. Razon). They were included in the case on the theory that they, as commanders, were responsible for the unlawful acts allegedly committed by their subordinates against petitioners. The CA dismissed the case as against them, however, for the simple reason that petitioners have not presented evidence showing that those who allegedly abducted and illegally detained Lourdes Rublico and later threatened her and her family were, in fact, members of the military or the police force. The two generals, the CA’s holding broadly hinted, would have been accountable for the abduction and threats if the actual malefactors were members of the AFP or PNP. Issue: WON the dismissal of the petition as against the two generals should be sustained.—YES Held: The petitioners have not adduced substantial evidence pointing to government involvement in the disappearance of Lourdes. However, while in a qualified sense tenable, the dismissal by the CA of the case as against the two generals is incorrect if viewed against the backdrop of the stated rationale underpinning the assailed decision vis-à-vis the two generals, i.e., command responsibility. The Court assumes the latter stance owing to the fact that command responsibility, as a concept defined, developed, and applied under international law, has little, if at all, bearing in amparo proceedings. Command responsibility is “an omission mode of individual criminal liability,” whereby the superior is made responsible for crimes committed by his subordinates for failing to prevent or punish the perpetrators (as opposed to crimes he ordered). If command responsibility were to be invoked and applied to these proceedings, it should, at most, be only to determine the author who, at the first instance, is accountable for, and has the duty to address, the disappearance and harassments complained of, so as to enable the Court to devise remedial measures that may be appropriate under the premises to protect rights covered by the writ of amparo. However, the determination should not be pursued to fix criminal liability on respondents preparatory to criminal prosecution, or as a prelude to administrative disciplinary proceedings under existing administrative issuances, if there be any. An individual respondent’s criminal liability, if there be any, is beyond the reach of amparo, even if incidentally a crime or an infraction of an administrative rule may have been committed.

103

UP LAW BOC

REMEDIAL LAW


Oriental Shipmanagement Co., Inc. (OSCI) v. Bastol G.R. No. 186289 | June 29, 2010 Facts: Romy Bastol, a bosun (officer in a merchant ship) employed by OSCI, was repatriated from Algiers due to his illness (anterior myocardial infarction). He filed a Complaint before the Labor Arbiter for: (a) medical disability benefit; (b) illness allowance until he is deemed fit to work again; (c) medical benefits for the treatment of his ailment; (d) moral damages; and (e) attorney’s fees. The LA ruled in favor of Bastol, but on OSCI’s appeal to the NLRC, the LA’s ruling was reversed. The CA, however, reversed the NLRC decision and reinstated the LA’s. Issues: 3. WON the Complaint filed before the LA ought to be dismissed for lack of certification against forum shopping as required by the Rules. –NO 4. WON the verification by counsel is sufficient for Bastol’s Position Paper and Manifestation/Compliance. –YES Held: 3. For the expeditious and inexpensive filing of complaints by employees, the Regional Arbitration Branch (RAB) of the NLRC provides pro-forma complaint forms. This is to facilitate the exercise and protection of employees rights by the convenient assertion of their claims against employers untrammeled by procedural rules and complexities. To comply with the certification against forum shopping requirement, a simple question embodied in the Complaint form answerable by yes or no suffices. Employee-complainants are not even required to have a counsel before they can file their complaint. An officer of the RAB, duly authorized to administer oaths, is readily available to facilitate the execution of the required subscription or jurat of the complaint. This can be seen in the case at bar. Bastol, assisted by counsel, filled out the Complaint form, line No. 11 of which is a question on anti-forum shopping which he answered by underlining the word No. It is thus clear that the strict application of Sec. 4, Rule 7 of the Rules of Court does not apply to labor complaints filed before the NLRC RAB. 4. There is no law or rule requiring verification for the Manifestation/ Compliance. Further, the counsel’s verification in Bastol’s Position Paper substantially complies with the rule on verification—“I confirm that all the allegations therein contained are true and correct based on recorded evidence.”

104

UP LAW BOC

REMEDIAL LAW


People of the Philippines v. Manuel Resurreccion G.R. No. 186380 | October 12, 2009 Facts: A buy-bust operation was conducted against Resurreccion. Upon his arrest, he was taken to the NBI Office where he was printed and photographed. The shabu confiscated was marked at the arresting officers’ office and not immediately upon arrest. Issue: Whether the failure of the buy-bust team to immediately mark the seized drugs causes doubt as to the identity of the shabu.—NO. Held: The failure to immediately mark seized drugs will not automatically impair the integrity of the chain of custody. What is of utmost importance is the preservation of the integrity and the evidentiary value of the seized items. A perfect chain is not always the standard because it is almost always impossible to obtain an unbroken chain. RA 9165’s IRR itself recognizes this limitation by when it provides that non-compliance with the immediate physical inventory and photographing requirement under justifiable reasons does not render the seizure void, so long as the integrity and evidentiary value of the seized items are properly preserved. The first link in the chain of custody is that the marking be made (1) in the presence of the accused and (2) upon immediate confiscation. There is, however, no time frame that defines what ‘immediate confiscation’ means. Marking upon immediate confiscation contemplates even marking at the nearest police station or office of the apprehending team. In the given case, there was compliance with this requirement when the sachets of shabu were marked in the headquarters.

105

UP LAW BOC

REMEDIAL LAW


Roque, Jr. v. Commission on Elections G.R. No. 188456 | September 10, 2009 Facts: The COMELEC awarded the 2010 Elections Automation Project to the joint venture of Total Information Management (TIM) and Smartmatic International Corporation (Smartmatic). There had not been pilot testing of the PCOS system in the Philippines prior to its proposed implementation in the May 2010 Elections. There was no resort to the mandatory built-in grievance mechanism under Sec. 55 in relation to Sec. 58 of the Government Procurement Reform Act (R.A. 9184) prior to the filing of the petition. Issue: (1) Whether election automation constitutes a wholesale abdication of the COMELEC’s constitutional mandate for election law enforcement.—NO. (2) Whether non-bidders must resort to the mandatory protest mechanism set forth in Secs. 55 and 58 of the Government Procurement Reform Act before the institution of court action to impugn contracts covered by the statute.—NO. (3) Whether R.A. 8436 (authorizing the adoption of an automated election system (AES)), as amended by R.A. 9369, requires that the system procured must have been piloted before its use in the May 2010 Elections and onwards.—NO. (4) Whether the lease or provision of goods and technical services for the automation of an election qualifies as a nationalized activity that falls within the ambit of the Anti-Dummy Law.—NO. Held: (1) The COMELEC is an independent constitutional. In the discharge of its awesome functions as overseer of fair elections, administrator and lead implementor of laws relative to the conduct of elections, it should be afforded ample elbow room in devising means and initiatives that would enable it to accomplish the great objective for which it was created—to promote free, orderly, honest and peaceful elections. Often, the COMELEC has to make decisions under difficult conditions to address unforeseen events to preserve the integrity of the election. Absent, therefore, a clear showing of grave abuse of discretion on its part, the Court should refrain from utilizing the corrective hand of certiorari to review, let alone nullify, the acts of that body. That the COMELEC would not be holding the public and private keys pair does not amount to a loss of control. The designation of Smartmatic as the JV partner in charge of the technical aspect of the counting and canvassing wares does not, without more, translate to ceding control of the electoral process. The COMELEC retains supervision and control to ensure effective and successful implementation of the project. The automation contract also provides that the entire process of voting, counting, transmission, consolidation and canvassing of votes shall be conducted by COMELEC’s personnel and officials. The role of Smartmatic TIM Corporation is basically to supply the goods necessary for the automation project. The COMELEC will still be conducting the election through its personnel.

(2) The requirement to comply with the protest mechanism, contrary to what may have been suggested in Infotech v. COMELEC (G.R. No. 159139, 2004), is imposed on the bidders. Only a bidder is entitled to receive a notice of the protested BAC action, so only a losing bidder would be

106

UP LAW BOC

REMEDIAL LAW


aggrieved by the action. As a consequence, only a losing bidder would have the personality to challenge the action. Petitioners are not losing bidders, and are therefore not covered by the provisions in question. Therefore, the filing of the petition is not premature.

(3) Sec. 6 of the amended R.A. 8436 conveys the idea of unconditional full automation in the 2010 elections. In its proper context, the last part is indicative of the legislative intent for the May 2010 electoral exercise to be fully automated, regardless of whether or not pilot testing was run in the 2007 polls. What may be taken as mandatory for full automation is that the system to be procured, whether the PCOS or any AES, be a technology tested either here or abroad, as provided by Sec. 8 of R.A. 8436, as amended. The AES to be used need not have been used in the 2007 elections, and the demonstration of its capability need not be in a previous Philippine election. Because the PCOS system had been successfully deployed in previous electoral exercises in foreign countries, there was compliance. It does not matter that Smartmatic was not the system provider in those exercises because R.A. 9360 does not call for the winner bidder of the automation project to be the same entity as in the foreign electoral exercise. In any case, the enactment of R.A. 9525, where an appropriation to automate the 2010 election was made clears up any doubt as to the Congressional intent with respect to the pilot testing requirement.

(4) There is no constitutional or statutory provision classifying as a nationalized activity the lease or provision of goods and technical services for the automation of an election. In fact, Sec. 8 of RA 8436, as amended, vests the COMELEC with specific authority to acquire AES from foreign sources. Therefore, the Anti-Dummy Law, liability under which attaches when there is a law limiting the enjoyment of certain economic activity to Filipino citizens, has no application in the present case.

107

UP LAW BOC

REMEDIAL LAW


Batalla v. Commission on Elections G.R. No. 184268 | September 15, 2009 Facts: Ernesto Battalla and Teodoro Battaller were candidates for the position of Punong Barangay in Barangay Mapulang Daga, Bacacay, Albay during the October 29, 2007 barangay elections. Batalla was proclaimed the winner. Bataller filed an election protest before the MCTC claiming misappreciation of seven ballots. The MCTC found that Batalla and Bataller had garnered an equal number of votes. Batalla received the Decision on February 20, 2008 and filed his Notice of Appeal of the trial court’s decision and paid the appeal fee on February 22, 2008. However, he paid the additional appeal docket fee only on March 5, 2008, or 11 days after receiving the MCTC’s decision. The COMELEC First Division dismissed Batalla’s for failure to pay the appeal fee as prescribed by the COMELEC Rules of Procedure within the five-(5)-day reglementary period. The Comelec En Banc affirmed. Issue: Whether or not the appeal was perfected. Held: The appellant in an electoral protest case decided by the trial court must file his notice of appeal and pay the appeal fee to the trial court that rendered the decision, and must pay to the COMELEC Cash Division the required additional appeal fee. Under the present COMELEC Rules of Procedure, an appellant from a decision of a trial court in an election protest case is given a reglementary period of 5 days from the receipt of a copy of the decision within which to pay the additional appeal fee to the COMELEC Cash Division. However, the COMELEC En Banc issued on July 15, 2008 COMELEC Resolution No. 8486, which allowed the payment of the additional appeal fee to the COMELEC Cash Division within 15 days from the filing of the notice of appeal. Said Resolution has effectively amended Sec. 4, Rule 40 of the COMELEC Rules of Procedure. Therefore, Batalla had already perfected his appeal by paying the required appeal fees. He paid the appeal fee to the trial court on February 22, 2008 within the five-day period from receipt of the decision and the additional appeal fee to the COMELEC Cash Division on March 5, 2008 or within 15 days from the filing of his notice of appeal.

108

UP LAW BOC

REMEDIAL LAW


People v. Ara 609 SCRA 304 | December 23, 2009 Facts: Ara was arrested during a buy-bust operation. The marked money was not presented during the trial. Issue: Whether or not the presentation of marked money used during a buy-bust operation is required to convict the accused of violation of Republic Act No. (RA) 9165 or the Comprehensive Dangerous Drugs Act of 2002. Held: No. Presentation of the marked money used is not such a requirement. In the prosecution for the sale of dangerous drugs, the absence of marked money does not create a hiatus in the evidence for the prosecution, as long as the sale of dangerous drugs is adequately proved and the drug subject of the transaction is presented before the court. The police officers testimonies adequately established the illegal sale of shabu. The shabu was then presented before the trial court. The non-presentation of the marked money may, thus, be overlooked as a peripheral matter.

109

UP LAW BOC

REMEDIAL LAW


Vitangcol v. New Vista Properties, Inc. G.R. No. 176014 | September 17, 2009 Facts: Maria and Clemente Alipit executed an SPA in favor of Milagros de Guzman to sell their property. Pursuant to her authority, de Guzman executed a Deed of Absolute Sale conveying to New Vista a parcel of land. New Vista immediately entered into possession. However, the property delivered to and occupied by New Vista and specified in the SPA was not the same property specified in the deed of absolute sale. More than a decade later, Vitangcol claimed the parcel of land on the strength of a Deed of Absolute Sale between Vitangcol and Maria. New Vista commenced a suit for quieting of title, eventually filing an Amended Complaint. Unlike in the original complaint, the SPA was not attached. It, however, averred that the Alipits had ratified and validated the sale. Defendants motions to dismiss were denied. The RTC held that the amended complaint sufficiently stated a cause of action. Vitangcol sought reconsideration, attaching to the motion a copy of the SPA. The RTC granted reconsideration. It found that not attaching the SPA to the amended complaint is fatal to New Vista’s cause of action for quieting of title because its action is based on a document. The CA reversed. Issue: Whether the Amended Complaint sufficiently states a cause of action. Held: Lack of cause of action is not a ground for a dismissal of the complaint through a motion to dismiss under Rule 16 of the Rules of Court. Lack of cause of action is determined only during and/or after trial. That mode refers to a failure of the complaint to state a cause of action, based on Sec. 1(g) of Rule 16. When a motion to dismiss is grounded on the failure to state a cause of action, what is considered, as a rule, is only the facts alleged in the complaint. The focus is on the sufficiency, not the veracity, of the material allegations. The test of sufficiency of facts alleged in the complaint constituting a cause of action lies in whether or not the court, admitting the facts alleged, could render a valid verdict in accordance with the prayer of the complaint. To sustain a motion to dismiss for lack of cause of action, it must be shown that the claim for relief in the complaint does not exist, rather than that a claim has been defectively stated, or is ambiguous, indefinite, or uncertain. The SPA was correctly taken into account, as it was introduced during the hearing of the Motion to Dismiss. However, notwithstanding the variance in lot descriptions, the amended complaint contained a clear statement of New Vista’s cause of action. It alleged that after the purchase and compliance with its legal obligations, it was immediately placed in possession of the subject lot, but which Maria Alipit, by herself, later sold to Vitangcol to New Vistas prejudice.

110

UP LAW BOC

REMEDIAL LAW


Bildner vs. Ilusorio 588 SCRA 378 | June 05, 2009 Facts: Ilusorio wrote On the Edge of Heaven where the following statements appeared: (1) The Supreme Court broke up my family. (2) Was justice for sale? Was justice sold? Nasaan ang katarungan? (3) If your decision becomes res judicata haven’t you just provided a most convenient venue to separate spouses from each other x x x? (4) Why did you wait for more than one year and after my husband’s death to deny my motion for reconsideration? Is it because it is easier to do so now that it is academic? Does your conscience bother you at all? (5) How can the highest court of our land be a party to the break up of my family and, disregarding the Family Code x x x? (6) [I]f our courts can render this kind of justice to one like myself because I have lesser means, and lesser connections than my well-married daughters, what kind of justice is given to those less privileged? Issue: Whether or not Ilusorio is guilty of indirect contempt Held: Yes. Ilusorio is guilty of indirect contempt. Taken together, the foregoing statements and their reasonably deducible implications went beyond the permissible bounds of fair criticism. Erlinda Ilusorio minced no words in directly attacking the Court for its alleged complicity in the break up of the Ilusorio family, sharply insinuating that the Court intentionally delayed the resolution of her motion for reconsideration, disregarded the Family Code, and unduly favored wealthy litigants. But the worst cut is her suggestion about the Court selling its decisions. She posed the query, Nasaan ang katarungan? (Where is justice?), implying that this Court failed to dispense justice in her case. While most of her statements were in the form of questions instead of categorical assertions, the effect is still the same: they constitute a stinging affront to the honor and dignity of the Court and tend to undermine the confidence of the public in the integrity of the highest tribunal of the land. Crossing the permissible line of fair comment and legitimate criticism of the bench and its actuations shall constitute contempt which may be visited with sanctions from the Court as a measure of protecting and preserving its dignity and honor.

111

UP LAW BOC

REMEDIAL LAW


Heirs of the Late Jose De Luzuriaga v. Republic 591 SCRA 299 | June 30, 2009 Facts: OSG received the May 24, 1999 Decision on June 22, 1999. It did not file a notice of appeal. Instead, it filed an unverified petition for relief from judgment on November 24, 1999. Issues: 1. Whether or not the petition for relief from judgment of the OSG was filed out of time 2. Whether or not the pleading is fatally defective because it is unverified 3. Whether or not the petition for relief from judgment and the special civil action for quieting of title cannot proceed separately Held: 1. Yes, the unverified petition for relief from judgment of the OSG was filed out of time. Such a petition must be filed within: (a) sixty (60) days from knowledge of judgment, order, or other proceedings to be set aside; and (b) six (6) months from entry of such judgment, order, or other proceedings. The OSG admits receiving the May 24, 1999 Decision on June 22, 1999. The OSG belatedly filed its petition only on November 24, 1999, or more than five months from receipt or knowledge of the May 24, 1999 RTC Decision. 2. The requirement on verification is simply a condition affecting the form of pleadings. Noncompliance with it is not jurisdictional, and would not render the pleading fatally defective. A pleading required by the Rules of Court to be verified may be given due course even without a verification if the circumstances warrant the suspension of the rules in the interest of justice. Note: The Court relaxed the application of the rules in this case because the OSG had properly made out a prima facie case of double titling over the subject lot, meriting a ventilation of the factual and legal issues relative to that case. 3. No. Both actions may proceed independently. The case involved in the petition for relief from judgment and the suit for quieting of title in Civil each involves different concerns and can proceed independently. The cause of action of the Republic’s petition for relief from judgment of double titling of the subject lot is different from DAALCOs quest for quieting of title. From another perspective, DAALCO basically seeks to nullify the issuance of OCT No. RO-58 in the name of the De Luzuriaga heirs, while the Republic’s petition assails the grant of ownership to De Luzuriaga, Sr. over a parcel of land duly registered under OCT No. 2765 in the name of Lizares, who thereafter transferred the title to his heirs or assigns. In fine, both actions may proceed independently, albeit a consolidation of both cases would be ideal to obviate multiplicity of suits.

112

UP LAW BOC

REMEDIAL LAW


Bangko Sentral ng Pilipinas Monetary Board vs. Antonio-Valenzuela 602 SCRA 698 | October 02, 2009 Facts: Respondent banks filed a complaint for nullification of the BSP Report of Examination (ROE) with application for a TRO and writ of preliminary injunction before the against the BSP and its officers. They prayed that BSP be enjoined from submitting the ROE or any similar report to the Monetary Board (MB), or if the ROE had already been submitted, the MB be enjoined from acting on the basis of said ROE, on the allegation that the failure to furnish the bank with a copy of the ROE violated its right to due process. Judge Valenzuela issued an Order granting the prayer for the issuance of TROs Issue: Whether or not the issuance of preliminary injunction by RTC is proper Held: No. The issuance of preliminary injunction by RTC is not proper. The respondent banks have failed to show that they are entitled to copies of the ROEs. They can point to no provision of law, no section in the procedures of the BSP that shows that the BSP is required to give them copies of the ROEs. Sec. 28 of RA 7653, or the New Central Bank Act, which governs examinations of banking institutions, provides that the ROE shall be submitted to the MB; the bank examined is not mentioned as a recipient of the ROE. The respondent banks have shown no necessity for the writ of preliminary injunction to prevent serious damage. Under the law, the sanction of closure could be imposed upon a bank by the BSP even without notice and hearing. This "close now, hear later" scheme is grounded on practical and legal considerations to prevent unwarranted dissipation of the bank’s assets and as a valid exercise of police power to protect the depositors, creditors, stockholders, and the general public. The writ of preliminary injunction cannot, thus, prevent the MB from taking action, by preventing the submission of the ROEs and worse, by preventing the MB from acting on such ROEs. The respondent banks have failed to show their entitlement to the writ of preliminary injunction. The requirements for the issuance of the writ have not been proved. No invasion of the rights of respondent banks has been shown, nor is their right to copies of the ROEs clear and unmistakable. There is also no necessity for the writ to prevent serious damage.

113

UP LAW BOC

REMEDIAL LAW


Marcos-Araneta v. Court of Appeals G.R. No. 154096 | August 22, 2008 Facts: Irene Marcos-Araneta alleged that Benedicto, as trustor, placed in his name and in the name of his associates, as trustees, shares of stocks with the obligation to hold those shares and their fruits in trust and for the benefit of Irene. Several years after, Irene demanded the reconveyance of said stockholdings, but the Benedicto Group refused to oblige. Irene instituted before the RTC complaints for covenyance and recovery of the shares. The Benedictos filed a Motion to Dismiss, grounded on, among others, improper venue. During hearing on the motion, a Joint Affidavit of the household staff at the Marcos Mansion in Batac, Ilocos Norte was presented. It stated that Irene did not maintain residence there. In fact, she only visited the mansion twice in 1999, did not vote in Batac in the 1998 national elections, and was staying at her husband’s house in Makati City. Against the unrebutted joint affidavit, Irene presented her PhP 5 community tax certificate (CTC) issued on 11/07/99 in Curimao, Ilocos Norte. On June 29, 2000, the RTC dismissed both complaints for another reason. Irene interposed a MR for the dismissal. Pending resolution of the MR, Irene filed on July 17, 2000 a Motion to Admit Amended Complaint in which additional plaintiffs appeared, as Irene’s new trustees, from Ilocos Norte. The amended complaint stated practically the same cause of action. During the August 25, 2000 hearing, the RTC dictated in open court an order denying Irene’s motion for reconsideration, but deferred action on her motion to admit amended complaint. On October 9, 2000, the RTC issued an Order entertaining the amended complaint. Issue: (1) Whether the admission of the amended complaint was proper. (2) Whether Batac is the proper venue for an action to reconvey the shares. Held: (1) Sec. 2 of Rule 10 of the Rules of Court makes it abundantly clear that the plaintiff may amend his complaint once as a matter of right, i.e., without leave of court, before any responsive pleading is filed or served. A motion to dismiss is not a responsive pleading for purposes of Sec. 2 of Rule 10. The RTC did not err in admitting petitioners amended complaint because an answer had not yet been filed. The finality of the June 29, 2000 dismissal order had not set in when Irene filed the amended complaint on July 17, 2000, having sought reconsideration. The MR was only resolved on August 25, 2000. Thus, when Irene filed the amended complaint on July 17, 2000, the order of dismissal was not yet final, implying that there was strictly no legal impediment to her amending her original complaints. (2)

Sec. 2 of Rule 4 indicates that when there is more than one plaintiff in a personal action case, the residences of the principal parties should be the basis for determining proper venue. The word principal has been added to prevent the plaintiff from choosing the residence of a minor plaintiff or defendant as the venue. Irene stands undisputedly as the principal plaintiff, the real party-in-interest. As self-styled beneficiary of the disputed trust, she stands to be benefited or entitled to the avails of the present suit. The fellow plaintiffs in the amended complaint were

114

UP LAW BOC

REMEDIAL LAW


Irene’s new designated trustees. As trustees, they can only serve as mere representatives of Irene. Following Sec. 2 of Rule 4, the subject civil cases ought to be commenced and prosecuted at the place where Irene, and not her trustees, resides. Therefore, as to the venue of the action, it is Irene’s residence that is determinative. One can easily secure a basic residence certificate practically anytime in any BIR or Treasurer’s Office and dictate whatever relevant data one desires entered. That Irene holds a CTC No. 17019451 issued sometime in June 2000 in Batac and in which she indicated her address as Brgy. Lacub, Batac, Ilocos is really of no moment. Accordingly, Irene cannot, in a personal action, contextually opt for Batac as venue of her reconveyance complaint. Irene was a resident during the period material of Forbes Park, Makati City. She was not a resident of Brgy. Lacub, Batac, Ilocos Norte.

115

UP LAW BOC

REMEDIAL LAW


MMDA v. Concerned Residents of Manila Bay G.R. No. 171947-48 | December 18, 2008 Facts: Concerned Residents of Manila Bay (CRMB) filed a complaint against several government agencies for the cleanup, rehabilitation, and protection of the Manila Bay. The complaint alleged that the water quality of the Manila Bay had fallen way below the allowable standards set by law, specifically PD 1152 or the Philippine Environment Code. CRMB prayed that the MMDA be ordered to clean the Manila Bay and submit a concerted concrete plan of action for the purpose. Issue: Whether mandamus can compel agencies to clean up and rehabilitate the Manila Bay. Held: The writ of mandamus lies to require the execution of a ministerial duty, one that requires neither the exercise of official discretion nor judgment. Mandamus is available to compel action, when refused, on matters involving discretion, but not to direct the exercise of judgment or discretion one way or the other. The obligation to perform duties as defined by law, on one hand, and how these are to be carried out, on the other, are different. While implementation of the mandated tasks may entail a decision-making process, enforcement of the law is ministerial in nature and may be compelled by mandamus. The petitioners’ respective charters and pertinent laws tells us that these agencies are enjoined, as a matter of statutory obligation, to perform certain functions relating directly or indirectly to the cleanup, rehabilitation, protection, and preservation of Manila Bay. They are precluded from choosing not to perform these duties. Further, in Oposa v. Factoran, Jr. the Court stated that the right to a balanced and healthful ecology need not even be written in the Constitution for it is assumed to exist from the inception of mankind and it is an issue of transcendental importance with intergenerational implications. Assuming the absence of a categorical legal provision specifically prodding petitioners to clean up the bay, they cannot escape their obligation to future generations of Filipinos to keep the waters of the Manila Bay clean and clear as humanly as possible. Anything less would be a betrayal of the trust reposed in them. Under what other judicial discipline describes as continuing mandamus, the Court may, under extraordinary circumstances, issue directives with the end in view of ensuring that its decision would not be set to naught by administrative inaction or indifference. The cleanup and/or restoration of the Manila Bay is only an aspect of the long-term solution. It behooves the Court to put the heads of the petitioner-department-agencies and the bureaus and offices under them on continuing notice about, and to enjoin them to perform, their mandates and duties towards cleaning up the Manila Bay and preserving the quality of its water to the ideal level. 309

116

UP LAW BOC

REMEDIAL LAW


Rombe Eximtrade (Phils.), Inc. v. Asiatrust Development Bank G.R. No. 164479 | February 13, 2008 Facts: Rombe filed a petition for corporate rehabilitation. The RTC issued a Stay Order suspending the enforcement of all claims whether for money or otherwise judicial or extrajudicial against Rombe. Several parties, including Asiatrust Development Bank (Asiatrust), opposed the petition. The RTC issued an Order dismissing the case, and the Stay Order suspending all the claims against Rombe was lifted. Asiatrust initiated foreclosure proceedings against Rombe’s properties. Anticipating the foreclosure, Rombe filed for annulment of foreclosure with prayer for a TRO and injunction. The RTC then issued an Order granting the writ of preliminary injunction in favor of Rombe. Issue: Whether an injunction issued in a foreclosure case interferes with the judgment of another court in a rehabilitation case. Held: There is no interference by one co-equal court with another when the case filed in one involves corporate rehabilitation and suspension of extrajudicial foreclosure in the other. The two cases are different with respect to their nature, purpose, and the reliefs sought such that the injunctive writ issued in the annulment of foreclosure case did not interfere with the lifting of the Stay Order in the rehabilitation case. The rehabilitation case is distinct and dissimilar from the annulment of foreclosure case, in that the first case is a special proceeding while the second is a civil action. A.M. No. 00-8-10-SC to clarifies that a petition for rehabilitation seeks to establish the status of a party or a particular fact, that fact being the inability of the corporate debtor to pay its debts when they fall due so that a rehabilitation plan for the recovery of the corporation may be approved. It does not seek a relief from an injury. The purpose of the rehabilitation case and the reliefs prayed for by Rombe are the suspension of payments because it foresees the impossibility of meeting its debts when they respectively fall due, and the approval of its proposed rehabilitation plan. The objective and the reliefs sought by Rombe in the annulment of foreclosure case are, among others, to annul the unilateral increase in the interest rate and to cancel the auction of the mortgaged properties. Being dissimilar as to nature, purpose, and reliefs sought, the grant of the injunctive writ in the annulment of foreclosure case, therefore, did not interfere with the dismissal of the rehabilitation petition and lifting the Stay Order. Besides, the injunctive writ was issued when the rehabilitation petition was already dismissed.

117

UP LAW BOC

REMEDIAL LAW


Anastacio Tuballa Heirs v. Raul Cabrera et. al. G.R. No. 179104 | February 29, 2008 Facts: In a case of recovery of possession of a parcel of land, the RTC rendered a decision ordering the defendant to vacate “Lot No. 6597”. The CA affirmed the decision and issued an Entry of Judgment. Plaintiffs Tuballa filed a manifestation before the RTC pointing out the typographical error in the Lot number which must be “Lot No. 5697”. The RTC held that it had no power or authority to correct the decision since what is sought to be executed is the decision of the CA. The CA however dismissed the petition due to technicalities. Thus, a Rule 45 Petition for Review on Certiorari was filed before the SC. Issue: WON the RTC decision may be altered Held: Yes. The only exceptions to the rule that final judgments may no longer be modified in any respect are (1) the correction of clerical errors, (2) the so-called nunc pro tunc entries which cause no prejudice to any party, and (3) void judgments (Collantes v. CA 2007 citing Ramos v. Ramos 2003). In accordance with the first exception to modification of final judgment mentioned earlier, this Court hereby modifies the clerical error in the Decision of the RTC. (See Temic v. FFW Case No. 345 where additional cases were cited and a fourth exception was added)

118

UP LAW BOC

REMEDIAL LAW


Korea Technologies v. Hon. Alberto Lerma G.R. No. 143581 | January 7, 2008 Facts: Korea Technologies Co., Ltd. (KOGIES) is a Korean corporation engaged in the supply and installation of Liquefied Petroleum Gas (LPG) Cylinder manufacturing plants, while private respondent Pacific General Steel Manufacturing Corp. (PGSMC) is a domestic corporation. In 1997, the parties executed a contract in the Philippines for the setting up of an an LPG Cylinder Manufacturing Plant and later executed in Korea an amendment which included an Arbitration Clause. PGSMC later wrote a letter cancelling their contract claiming that KOGIES failed to follow the terms. KOGIES instituted an Application for Arbitration before the Korean Commercial Arbitration Board (KCAB) in Seoul, Korea pursuant to Art. 15 of their Contract as amended. KOGIES then filed a complaint for specific performance before the RTC alleging that PGSMC violated Art. 15 of their Contract, as amended, by unilaterally rescinding the contract without resorting to arbitration. The RTC and CA however declared the Arbitration Clause null and void for being contrary to public policy as it tended to oust the courts of jurisdiction over any dispute that may arise between the parties. The clause provides that “All disputes, controversies, or differences which may arise between the parties, out of or in relation to or in connection with this Contract or for the breach thereof, shall finally be settled by arbitration in Seoul, Korea in accordance with the Commercial Arbitration Rules of the Korean Commercial Arbitration Board. The award rendered by the arbitration(s) shall be final and binding upon both parties concerned.” Issue: WON the Arbitration Clause is valid Held: Yes. Established in this jurisdiction is the rule that the law of the place where the contract is made governs. Lex loci contractus. The contract in this case was perfected here in the Philippines. Therefore, our laws ought to govern. Art. 2044 of our Civil Code sanctions the validity of mutually agreed arbitral clause or the finality and binding effect of an arbitral award. Art. 2044 provides that any stipulation that the arbitrators award or decision shall be final, is valid, without prejudice to Articles 2038, 2039 and 2040. RA 876 supplements these Civil Codes provisions on arbitration. For domestic arbitration proceedings, we have particular agencies to arbitrate disputes arising from contractual relations. In case a foreign arbitral body is chosen by the parties, the arbitration rules of our domestic arbitration bodies would not be applied. As signatory to the Arbitration Rules of the UNCITRAL Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law (UNCITRAL) in the New York Convention on June 21, 1985, the Philippines committed itself to be bound by the Model Law. We have even incorporated the Model Law in RA 9285 or the Alternative Dispute Resolution Act of 2004 promulgated on April 2, 2004. Among the pertinent features of RA 9285 applying and incorporating the UNCITRAL Model Law are the following: (1) The RTC must refer to arbitration in proper cases. (Under Sec. 24 9285, the RTC does not have jurisdiction over disputes that are properly the subject of arbitration pursuant to an arbitration clause. The RTC is mandated to refer to the parties to arbitration when one party so requests not later than pre-trial or upon request of both parties) (2) Foreign arbitral awards must be confirmed by the RTC. (3) The RTC has jurisdiction to review foreign arbitral awards.

119

UP LAW BOC

REMEDIAL LAW


(4) Grounds for judicial review different in domestic and foreign arbitral awards. (For foreign or international arbitral awards which must first be confirmed by the RTC, the grounds for setting aside, rejecting or vacating the award by the RTC are provided under Art. 34(2) of the UNCITRAL Model Law. Final domestic arbitral awards, which also need confirmation by the RTC and recognized final and executory may only be assailed before the RTC and vacated on the grounds provided under Sec. 25 of RA 876.) (5) RTC decision of assailed foreign arbitral award appealable. (Pursuant to Sec. 46 RA 9285, the RTC decision may be appealed or reviewed via Rule 45 Petition for Review before the CA or SC)

Temic Semiconductors, Inc. Employees Union, et. al. v. FFW G.R. No. 160993 | May 20, 2008 Facts: Temic Semiconductors, Inc. Employees Union (TSIEU) is an affiliate of the Federation of Free Workers (FFW). TSIEU eventually split into two factions thus FFW placed TSIEU under its receivership. Forthwith, Dimaano, an elected leader of one faction (TSIEU-Dimaano) filed the instant case for Declaration of Nullity of Receivership. The petition was granted by the NCR Bureau of Labor Relations Regional Director and affirmed by the BLR. The RD then issued a Writ of Execution the order having become final and executory. The Writ, however, ordered the turn over of properties and remittance of monetary claims of TSIEU from FFW. It was found that the NCR RD allowed TSIEU-Dimaano to prove its claims in proceedings after the declaration of nullity of the receivership became final and executory. Issue: WON the Writ of Execution was valid Held: No. A scrutiny of the March 24, 1998 Order of the NCR RD clearly bears out that what had been granted thereat was the nullification of the receivership of TSIEU by FFW, no more and no less. It is axiomatic that a decision that has acquired finality becomes immutable and unalterable. Indeed, the principle of conclusiveness of prior adjudications is not confined in its operation to the judgments of what are ordinarily known as courts, but it extends to all bodies upon which judicial powers had been conferred. The only exceptions to the rule on the immutability of a final judgment are: (1) the correction of clerical errors; (2) the so-called nunc pro tunc entries which cause no prejudice to any party; (3) void judgments; and (4) whenever circumstances transpire after the finality of the decision rendering its execution unjust and inequitable (Pea v. GSIS 2004 citing Fortich v. Corona 1998, Sacdalan v. CA 2004, and Ramos v. Ramos 2003). None of the exceptions obtain in this case.

120

UP LAW BOC

REMEDIAL LAW


Ang Kek Chen v. Calasan 528 SCRA 124 | July 24, 2007 Facts: Atty. Eleazar S. Calasan was born in Aparri, Cagayan. He has been a registered voter in Aparri, Cagayan since 1969. He owns real property, his ancestral home, which was donated to him by his mother, situated on Quirino Street, Aparri, Cagayan. However, Atty. Calasan also has a house and lot in Las Pinas, Metro Manila, which he and his family live in; has a business address at 10/F Manufacturers Building, Plaza Sta. Cruz, 1003 Manila; applied for and received a commission as notary public from the Manila Regional Trial Court (RTC); and secured a Community Tax Certificate in Las Pinas City, Metro Manila. While Atty. Calasan was acting as counsel for Jaime Lim, Ang Kek Chen wrote a letter and filed a counter-affidavit which respondent Atty. Calasan believed maligned him, with copies furnished various people, among them high officials of the Philippine government. Atty. Calasan then filed criminal cases for libel against Ang Kek Chen in Aparri, Cagayan, which was dismissed. Later, Atty. Eleazar S. Calasan and Leticia B. Calasan filed a complaint for damages with the Aparri, Cagayan RTC against Ang Kek Chen and his spouse for alleged malicious imputations against Atty. Calasan. Issue: Whether or not RTC of Aparri, Cagayan has jurisdiction over the case for damages? NO Held: NO, There is clearly a distinction between the two terms, residence and domicile, which shall be applied in this civil action for damages. As stated in Koh v. CA: “There is a difference between domicile and residence. Residence is used to indicate a place of abode, whether permanent or temporary; domicile denotes a fixed permanent residence to which when absent, one has the intention of returning.” Art. 360 of the Revised Penal Code does not use the term domicile in providing for venue in the filing of the criminal case and the civil action for damages. The applicable clause of Art. 360 in this case states that where any of the offended parties actually resides at the time of the commission of the offense. In this case, Atty. Calasan’s residence at the time was No. 8 Galaxy Avenue, Mapayapa Village, Las Pinas City, Metro Manila. Atty. Calasans Community Tax Certificates (CTCs) for the years 2000 and 2001 were presented to prove residence. Moreover, Atty. Calasan did not deny that he had such an address in Las Pinas, which is only the import of the CTCs.

121

UP LAW BOC

REMEDIAL LAW


Casent Realty Development Corp v. Philbanking Corporation GR No. 150731 | September 14, 2007 Facts: Casent Realty Development Corporation executed two promissory notes in favor of Rare Realty Corporation which were assigned to Philbanking. Casent failed to pay the promissory notes. Philbanking filed a complaint for collection. In its Answer, Casent raised the following special/affirmative defenses and alleged that a Dacion en pago was executed to extinguish its obligations with Philbanking and that Casent presented a Confirmation Statement issued by respondent stating that petitioner had no loans with the bank. Philbanking failed to file a Reply to the Answer which raised the Dacion and Confirmation Statement. Casent, in its Motion for Judgment on Demurrer to Evidence, pointed out that such failure constituted an admission. Issue: Whether or not failure to file a Reply to the Answer which raised the Dacion and Confirmation Statement constituted an admission of the genuineness and execution of said documents. Held: Since respondent failed to file a Reply, in effect, respondent admitted the genuineness and due execution of said documents. Rule 8, Section 8 of the Rules of Court specifically applies to actions or defenses founded upon a written instrument and provides the manner of denying it. Thus, where the defense in the Answer is based on an actionable document, a Reply specifically denying it under oath must be made; otherwise, the genuineness and due execution of the document will be deemed admitted. Since respondent failed to deny the genuineness and due execution of the Dacion and Confirmation Statement under oath, then these are deemed admitted and must be considered by the court in resolving the demurrer to evidence.

122

UP LAW BOC

REMEDIAL LAW


Ma. Imelda Manotoc v. CA, Agapita Trajano on behalf of the Estate of Archimedes Trajano GR No. 130974 | August 16, 2006 Facts: Manotoc is the defendant in a civil case. The trial court issued a Summons on July 6, 1993 addressed to petitioner at Alexandra Condominium Corporation or Alexandra Homes, E2 Room 104, at No. 29 Meralco Avenue, Pasig City. On July 15, 1993, the Summons and a copy of the Complaint were allegedly served upon (Mr.) Macky de la Cruz, an alleged caretaker of Manotoc at the condominium unit. When Manotoc failed to file her Answer, the trial court declared her in default. She subsequently filed a Motion to Dismiss on the ground of lack of jurisdiction of the trial court over her person due to an invalid substituted service of summons. The grounds to support the motion were: (1) the address of defendant indicated in the Complaint (Alexandra Homes) was not her dwelling, residence, or regular place of business as; (2) De la Cruz was neither a representative, employee, nor a resident of the place; (3) the procedure prescribed by the Rules on personal and substituted service of summons was ignored; (4) defendant was a resident of Singapore; and (5) whatever judgment rendered in this case would be ineffective and futile. Issue: Whether or not the substituted service of summons is valid for the trial court to acquire jurisdiction over Manotoc. Held: No. Requirements for Substituted Service: (1) Impossibility of Prompt Personal Service; (2) Specific Details in the Return; (3) A Person of Suitable Age and Discretion; (4) A Competent Person in Charge. Based on the Return, the Court found that there is absence of material data on the serious efforts to serve the Summons on petitioner Manotoc in person. Besides, apart from the allegation of petitioner's address in the Complaint, it has not been shown that respondent or the Sheriff who served such summons, exerted extraordinary efforts to locate petitioner. Lastly, there was nonconformity from the requirement that the summons must be left with a "person of suitable age and discretion" residing in defendant's house or residence. Thus, there are two (2) requirements under the Rules: (1) recipient must be a person of suitable age and discretion; and (2) recipient must reside in the house or residence of defendant. Both requirements were not met. Due to non-compliance with the prerequisites for valid substituted service, the proceedings held before the trial court perforce was annulled.

123

UP LAW BOC

REMEDIAL LAW


Bases Conversion and Development Authority et al v. Uy GR No. 144062 | November 2, 2006 Facts: RA 7227created the BCDA/ The Public Estates Authority was designates as BCDA’s project manager. PEA entered into a Landscaping and Construction Agreement with Uy. There were delays in the construction and landscaping under the LCA, and for which several extensions were granted to Uy. PEA terminated the LCA. Uy filed a case for injunction and damages against PEA, BCDA. RTC issued a TRO. BCDA raised the lack of jurisdiction of the RTC to hear an injunction case against the BCDA in view of the proscription under Section 21 of RA 7227; which not only prohibits lower courts from issuing a TRO or writ of injunction against BCDA projects but also clearly vests exclusive jurisdiction in the Supreme Court for injunctive relief and issuance of a TRO. Issue: Whether or not the trial court has jurisdiction to provisionally enjoin petitioners from terminating the LCA and to hear an injunction case against petitioners. Held: All courts, except the Supreme Court, are proscribed from issuing TROs and writs of preliminary injunction against the implementation or execution of specified government projects. The prohibition covers only temporary or preliminary restraining orders or writs but NOT decisions on the merits granting permanent injunctions. Thus, petitioners' claim that Judge Ricafort has no jurisdiction over the complaint for injunction plus damages with a prayer for temporary restraining order and writ of preliminary injunction does not hold water. RTC has jurisdiction to hear Uy's action and even grant his supplication for a permanent injunction. While the issuance of the assailed TRO t evidently constitutes a blatant violation of Section 21 of RA 7227 and hence void, the same has likewise been rendered moot for being functus officio, the 20-day validity period of the TRO having lapsed.

124

UP LAW BOC

REMEDIAL LAW


St. Martin Funeral Homes v. NLRC and Bievenido Aricayos GR No. 142351 | November 22, 2006 Facts: As a sign of appreciation for assistance given to him, Aricayos extended assistance in managing St. Martin without compensation. There was no written employment contract; he was not even listed as an employee in the Company's payroll. Years after, Aricayos’ authority in managing St. Martin’s operations was removed. Aricayos accused St. Martin of illegal dismissal. The Labor Arbiter held that he had no jurisdiction over the case because the existence of an employer-employee relationship is disputed thus, under the regular court’s jurisdiction. NLRC reversed such decision. When its motion for reconsideration was rejected by the NLRC, petitioner filed a petition for certiorari under Rule 65 before the Supreme Court. The SC held in that case that all petitions for certiorari under Rule 65 assailing the decisions of the NLRC should be filed with the CA. Thus the case was remanded. Issue: Whether the Labor Arbiter made a determination of the presence of an employer-employee relationship between St. Martin and respondent Aricayos based on the evidence on record. Held: No. The Labor Arbiter did not set the labor case for hearing to be able to determine the veracity of the conflicting positions of the parties. On this point alone, a remand is needed. While a formal trial or hearing is discretionary on the part of the Labor Arbiter, when there are factual issues that require a formal presentation of evidence in a hearing, the Labor Arbiter cannot simply rely on the position papers, more so, on mere unsubstantiated claims of parties.

125

UP LAW BOC

LEGAL ETHICS


LEGAL ETHICS Heirs of Simon Piedad v. Estrera A.M. No. RTJ-09-2170 | December 10, 2009 Facts: Cebu City RTC ruled in favor of Simon Piedad, issuing a Writ of Demolition against Candelaria. In an attempt to stop the enforcement of the Writ of Demolition, Candelaria filed a Petition for Probate of the Last Will and Testament of Simeon Piedad before the Toledo City RTC. Candelaria also filed a petition for the issuance of a TRO and/or preliminary injunction with the Toledo City RTC to restrain the sheriff from enforcing the Writ of Demolition. Respondent Judge Estrera (Toledo City RTC Br. 29) took it upon himself to hear the case summarily. Finding that the matter was of extreme urgency and would cause grave injustice and irreparable injury to the plaintiff, Candelaria, since it involved the demolition of the properties owned by the latter, respondent Judge Estrera immediately issued a TRO. Judge Villarin (Toledo City RTC Br. 59) extended the TRO. Issue: Whether Judge Estrera and Judge Villarin are administratively liable. Held: Yes. The acts of respondent Judge Estrera in issuing a TRO and of respondent Judge Villarin in extending the TRO disregard the basic precept that no court has the power to interfere by injunction with the judgments or orders of a co-equal and coordinate court of concurrent jurisdiction having the power to grant the relief sought by injunction. Clearly, when the respondents-judges acted on the application for the issuance of a TRO, they were aware that they were acting on matters pertaining to a co-equal court, namely, Branch 9 of the Cebu City RTC, which was already exercising jurisdiction over the subject matter in Civil Case No. 435-T. Nonetheless, respondents-judges still opted to interfere with the order of a co-equal and coordinate court of concurrent jurisdiction, in blatant disregard of the doctrine of judicial stability, a well-established axiom in adjective law. As members of the judiciary, respondents-judges ought to know the fundamental legal principles; otherwise, they are susceptible to administrative sanction for gross ignorance of the law, as in the instant case.

126

UP LAW BOC

LEGAL ETHICS


Tanjuatco vs. Gako, Jr. 582 SCRA 200 | March 23, 2009 Facts: Judge Gako suggested to Vicente B’s counsel that the amendment to his complaint should, in relief portion, include a claim for rentals. The Investigating Justice faulted Judge Gako for not impleading complainant and her brother, Carlos del Rosario, as parties-plaintiffs. She reasoned that Judge Gako need not wait for complainant and the other heirs to intervene, it being the courts duty to implead all indispensable parties before resolving the case. Issues: 1. Whether or not Judge Gako is guilty of simple misconduct 2. Whether or not Judge Gako was correct in not simply adding complainant and Carlos del Rosario as co-plaintiffs of Vicente B Held: 1. Yes, Judge Gako is guilty of simple misconduct. Judge Gako indeed suggested to Vicente B’s counsel that the amendment to his complaint should, in relief portion, include a claim for rentals. This is improper and at least constitutes simple misconduct. Simple misconduct is punishable under Rule 140 as follows: B. If the respondent is guilty of a less serious charge, any of the following sanctions shall be imposed: 1. Suspension from office without salary and other benefits for not less than one (1) nor more than three (3) months; or 2. A fine of more than P10,000.00 but not exceeding P20,000.00. Since respondent has already retired, only a maximum fine of PhP 20,000 can be imposed under said rule. Since he, however, had previously been adjudged guilty of and penalized for various infractions in more than a few cases, with repeated warnings of more severe sanction in case of repetition, a fine of PhP 100,000 is appropriate, to be deducted from his retirement benefits. 2. While it is true that the pre-trial guidelines (A.M. No. 03-1-09-SC) obliges the judge, if proper, to add or drop parties to the case, the inclusion of parties-plaintiffs is a different situation. The investigation report stated that it is the duty of the judge to ensure that all indispensable parties are impleaded before resolving the case. This may be true with respect to the joinder of defendants as jurisdiction over their persons can be acquired by means of service of summons. With respect to other real parties-in-interest as additional plaintiffs, however, the court cannot simply issue an order towards the impleadment of said parties as additional plaintiffs. These proposed plaintiffs must give their consent to their inclusion as plaintiffs. Thus, the respondent was correct in not simply adding complainant and Carlos del Rosario as co-plaintiffs of Vicente B. since the RTC had yet to acquire jurisdiction over their persons. As a matter of fact, they filed a motion to intervene but was rejected because it was filed after the decision was promulgated.

127

UP LAW BOC

LEGAL ETHICS


Tejada v. Palaña 530 SCRA 771 | August 23, 2007 Facts: Petitioners-spouses Rosita and Amador Tejada filed a Complaint Affidavit before the Integrated Bar of the Philippines (IBP) to initiate disbarment proceedings against respondent Atty. Antoniutti K. Palaña for his continued refusal to settle his long overdue loan obligation to the complainants, in violation of his sworn duty as a lawyer to do justice to every man and Rule 7.03 of Canon 7 of the Code of Professional Responsibility. Sometime on January, 2001, Atty. Palaña taking advantage of his special knowledge as a lawyer represented to the petitioners that he has an alleged parcel of land covered by a TCT and that he needs P100,000.00 so that he could reconstitute the Torrens title on the same. However, after Atty. Palaña had gotten the P100,000.00 from the spouses, he from that time on up to the present had intentionally evaded the performance of his due, just, legal and demandable obligations to spouses. Issue: Whether or not Atty. Palaña should be suspended for his continued refusal to settle his obligation to the complainants and for his failure to participate in the proceedings? Held: YES. A lawyer shall at all times uphold the integrity and dignity of the legal profession. The trust and confidence necessarily reposed by clients requires in the attorney a high standard and appreciation of his duty to his clients, his profession, the courts and the public. The bar must maintain a high standard of legal proficiency as well as of honesty and fair dealing. Generally speaking, a lawyer can do honor to the legal profession by faithfully performing his duties to society, to the bar, to the courts and to his clients. To this end, members of the legal fraternity can do nothing that might tend to lessen in any degree the confidence of the public in the fidelity, honesty and integrity of the profession. In the instant case, Atty. Palaña’s unjustified withholding of the spouse’s money years after it became due and demandable demonstrates his lack of integrity and fairness, and this is further highlighted by his lack of regard for the charges brought against him. Instead of meeting the charges head on, he did not bother to file an answer nor did he participate in the proceedings to offer a valid explanation for his conduct. The Court has emphatically stated that when the integrity of a member of the bar is challenged, it is not enough that s/he denies the charges against him; s/he must meet the issue and overcome the evidence against him/her. S/he must show proof that s/he still maintains that degree of morality and integrity which at all times is expected of him/her. Atty. Palaña’s acts, which violated the Lawyer's Oath to delay no man for money or malice as well as the Code of Professional Responsibility, warrant the imposition of disciplinary sanctions against him.

128

Velasco Digests Compiled

Recommend Documents