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February 2013 Philippine Supreme

Court Decisions on Commercial Law


Posted on

March 1, 2013 by Hector M. de Leon Jr Posted in Commercial Law


Tagged banks, loan, trust Leave a comment

Nature of bank relationship with depositors; fiduciary nature does not convert the
contract from a simple loan to a trust agreement; bank must observe high standards of
integrity and performance. Contrary to the petitioners position, UCPB did not become a
trustee by the mere opening of the ACCOUNT. While this may seem to be the case, by
reason of the fiduciary nature of the banks relationship with its depositors, this fiduciary
relationship does not convert the contract between the bank and its depositors from a
simple loan to a trust agreement, whether express or implied. It simply means that the
bank is obliged to observe high standards of integrity and performance in complying
with its obligations under the contract of simple loan. Per Article 1980 of the Civil Code,
a creditor-debtor relationship exists between the bank and its depositor. The savings
deposit agreement is between the bank and the depositor; by receiving the deposit, the
bank impliedly agrees to pay upon demand and only upon the depositors order. Joseph
Goyanko, Jr., as administrator of the Estate of Joseph Goyanko, Sr. vs. United Coconut
Planters Bank, Mango Avenue Branch, G.R. No. 179096. February 6, 2013

Revised Implementing Rules and Regulations for the Adopt-A-School Program


Posted on February 18, 2013 by Imelda A. Manguiat Posted in Philippines - Law, Philippines Regulation Leave a comment

The Department of Education (DepED) promulgated the revised implementing rules and
regulations (IRR) for Republic Act 8525, or the Adopt-a-School Act of 1998, on 18
January 2013. DepED Order 2 series of 2013 is the latest revision to Department Order
No. 80 s. 1998 the first IRR issued for RA 8525.
The said law aims to improve access to quality education by promoting private sector
participation in school building, rehabilitation and development. Under RA 8525, an
adopting private entity (APE) must enter into a Memorandum of Agreement (MOA) with
a public school. The MOA must be for at least two years and shall contain the terms of
the adoption. Under such a MOA, the APE may provide training to a schools faculty or
construct or upgrade school facilities. It may also donate educational materials to public
schools, whether elementary, secondary or tertiary, within the twenty poorest provinces
in the country. In return, the law allows the APE to have its name displayed below the
name of the adoptee school apart from an additional deduction to gross income
equivalent to half of the expenses incurred and representation in the local school board.
The revised IRR clarifies the meaning of the allowable assistance an APE may provide to
a school. In contrast to the old rules, it now specifically includes donation of cash,
physical facilities, real estate, reading materials and devices for children with special
needs apart from infrastructure, training, learning support, food assistance, and

computer and science labs. Public schools are also defined more broadly to include
government learning institutions.
It also adds the criteria for adopting private entities a provision not found in the old
rules. Under Rule 2 of the revised IRR, in particular, an APE must have existed for at
least a year from registration with the Securities and Exchange Commission, or the
Cooperative Development Authority with a credible track record. It should not have
been prosecuted and found guilty of illegal activities, particularly money laundering.
The rule states that the APE must possess these qualifications at any time during the
term of the MOA. The wording of this particular provision is unfortunate as it could lead
to absurd interpretations, such as an entity wishing to avail of the tax incentives could
adopt a school under the program and then comply with the qualifications later, or it
may keep a clean record at the beginning of the program and then use the corporate
vehicle for money laundering activities later on. This is obviously not the intent of the
revised IRR.
Regarding incentives, on the other hand, the provision on tax deduction is primarily
implemented by the Bureau of Internal Revenue through Revenue Regulation 10-2003.
However, the revised IRR amends the timing of the application and availment for these
incentives. Under the old Rule, the application for tax deduction should be filed at the
end of the fiscal year. Now, such claims shall be claimed or availed of within the taxable
year it was incurred. It also deleted the provision that required the Coordinating Council,
composed of the DepED, Commission on Higher Education (CHED), National AntiPoverty Commission (NAPC), the National Federation of the Chambers of Commerce and
Industry and the Technical Education and Skills Development Authority (TESDA) to
resolve the application for deduction within 30 days from receipt by the National
Secretariat.
The revised IRR also made the DepED the primary implementing agency tasked with
overall management of the program, with the TESDA and CHED providing only focal
persons. It also explicitly requires DepED to institutionalize the Secretariat within its
department by providing plantilla positions.
Finally, in contrast to the explicit wording of RA 8525 mandating the Presidential Council
for Countryside Development, now the NAPC, to identify the twenty poorest provinces in
the country in line with the prioritization scheme of the law, the IRR now entrusts this
task to the National Statistical Coordination Board.
(Imee thanks April Carmela B. Lacson for assisting in the preparation of this post.)

January 2013 Philippine Supreme Court Decisions on Remedial Law


Posted on February 15, 2013 by Carlos Roberto Z. Lopez Posted in Philippines - Cases, Remedial
Law Tagged appeal,certiorari, contempt, ejectment, evidence, execution, forum
shopping, injunction, judgment, litis pendentia, mandamus,pleadings, support, unlawful detainer
Leave a comment

Here are select January 2013 rulings of the Supreme Court of the Philippines on
remedial law:
Civil Procedure
Annulment of Judgment; exception to final judgment rule; lack of due process as
additional ground. A petition for Annulment of Judgment under Rule 47 of the Rules of
Court is a remedy granted only under exceptional circumstances where a party, without
fault on his part, has failed to avail of the ordinary remedies of new trial, appeal,
petition for relief or other appropriate remedies. Said rule explicitly provides that it is
not available as a substitute for a remedy which was lost due to the partys own neglect
in promptly availing of the same. The underlying reason is traceable to the notion that
annulling final judgments goes against the grain of finality of judgment, litigation must
end and terminate sometime and somewhere, and it is essential to an affective
administration of justice that once a judgment has become final, the issue or cause
involved therein should be laid to rest.
While under Section 2, Rule 47 of the Rules of Court a Petition for Annulment of
Judgment may be based only on the grounds of extrinsic fraud and lack of jurisdiction,
jurisprudence recognizes lack of due process as additional ground to annul a judgment.
In Arcelona v. Court of Appeals, this Court declared that a final and executory judgment
may still be set aside if, upon mere inspection thereof, its patent nullity can be shown
for having been issued without jurisdiction or for lack of due process of law. Leticia
Diona, represented by her Attorney-in-fact, Marcelina Diona v. Romeo Balangue, Sonny
Balangue, Reynaldo Balangue, and Esteban Balangue, Jr.; G.R. No. 173559. January 7,
2013
Appeal; filing of motion for extension of time to file motion for reconsideration in CA
does not toll fifteen-day period to appeal; rule suspended in exceptional cases to serve
substantial justice. The assailed CA resolution upheld the general rule that the filing of a
motion for reconsideration in the CA does not toll the fifteen-day period to appeal,
citing Habaluyas Enterprises, Inc. v. Japson. However, in previous cases we suspended
this rule in order to serve substantial justice.
In Barnes v. Padilla, we exempted from the operation of the general rule the petitioner
whose motion for extension of time to file a motion for reconsideration was denied by
the CA. In the Resolution denying the motion for reconsideration of our Decision dated
September 30, 2004, we held that:
A suspension of the Rules is warranted in this case since the procedural infirmity was
not entirely attributable to the fault or negligence of the petitioner. Petitioners counsel
was understandably confused with the absence of an explicit prohibition in the 2002
Internal Rules of the Court of Appeals (IRCA) that the period of filing a motion for
reconsideration is non-extendible, which was expressly stated in the Revised Internal
Rules of the Court of Appeals that was in effect prior to the IRCA. The lawyers

negligence without any participatory negligence on the part of the petitioner is a


sufficient reason to set aside the resolution of the CA.
More significantly, a careful study of the merits of the case and the lack of any showing
that the review sought is merely frivolous and dilatory, dictated the setting aside of the
resolutions of the CA in CA-G.R. SP No. 69573 and Branch 215 in Civil Case NO. Q-9937219, as both are patently erroneous. x x x
Furthermore, the private respondents will not be unjustly prejudiced by the suspension
of the rules. What is subject of the appeal is only a question of law, involving the issue
of forum shopping, and not a factual matter involving the merits of each partys
respective claims and defenses relating to the enforcement of the MOA, wherein
petitioner was given an option to purchase the subject property. Litigations should, as
much as possible, be decided on their merits and not on mere technicalities. Every
party-litigant should be afforded the amplest opportunity for the proper and just
disposition of his cause, freed from the constraint of technicalities.
After a conscientious view, we hold that a suspension of the Rules is warranted in this
case since the delay of one week and two days in the filing of the motion for
reconsideration was not occasioned by negligence on the part of petitioners lawyer in
charge of the case, the latter having a valid excuse to immediately take leave of
absence in view of her fathers sudden demise. There is likewise no showing that the
review sought is merely frivolous and dilatory. Winston F. Garcia, in his capacity as
President and General Manager of the GSIS v. Court of Appeals and Rudy C. Tesoro; G.R.
No. 169005. January 28, 2013
Certification against forum shopping; SPA designating counsel to sign must be executed
if party-pleader cannot sign. The need to abide by the Rules of Court and the procedural
requirements it imposes has been constantly underscored by this Court. One of these
procedural requirements is the certificate of non-forum shopping which, time and again,
has been declared as basic, necessary and mandatory for procedural orderliness.
In Vda. De Formoso v. Philippine National Bank, the Court reiterated the guidelines
respecting non-compliance with or submission of a defective certificate of non-forum
shopping, the relevant portions of which are as follows:
4) As to certification against forum shopping, non-compliance therewith or a defect
therein, xxx, is generally not curable by its subsequent submission or correction thereof,
unless there is a need to relax the Rule on the ground of substantial compliance or
presence of special circumstances or compelling reasons.
xxxx
6) Finally, the certification against forum shopping must be executed by the party
pleader, not by his counsel. If, however, for reasonable or justifiable reasons, the party-

pleader is unable to sign, he must execute a Special Power of Attorney designating his
counsel of record to sign on his behalf.
The requirement that it is the petitioner, not her counsel, who should sign the certificate
of non-forum shopping is due to the fact that a certification is a peculiar personal
representation on the part of the principal party, an assurance given to the court or
other tribunal that there are no pending cases involving basically the same parties,
issues and causes of action. Obviously, it is the petitioner, and not always the counsel
whose professional services have been retained for a particular case, who is in the best
position to know whether [she] actually filed or caused the filing of a petition in that
case. Per the above guidelines, however, if a petitioner is unable to sign a certification
for reasonable or justifiable reasons, she must execute an SPA designating her counsel
of record to sign on her behalf. A certification which had been signed by counsel without
the proper authorization is defective and constitutes a valid cause for dismissal of the
petition. Mary Louise Anderson v. Enrique Ho, G.R. No. 172590. January 7, 2013
Certification against forum shopping; non-compliance is not curable by subsequent
submission unless there is substantial compliance or special circumstance. In this light,
the Court finds that the CA correctly dismissed Andersons Petition for Review on the
ground that the certificate of non-forum shopping attached thereto was signed by Atty.
Oliva on her behalf sans any authority to do so. While the Court notes that Anderson
tried to correct this error by later submitting an SPA and by explaining her failure to
execute one prior to the filing of the petition, this does not automatically denote
substantial compliance. It must be remembered that a defective certification is
generally not curable by its subsequent correction, and while it is true that in some
cases the Court considered such a belated submission as substantial compliance, it did
so only on sufficient and justifiable grounds that compelled a liberal approach while
avoiding the effective negation of the intent of the rule on non-forum shopping. Mary
Louise Anderson v. Enrique Ho, G.R. No. 172590. January 7, 2013
Contempt of Court; definition. Contempt of court is defined as a disobedience to the
court by acting in opposition to its authority, justice and dignity, and signifies not only a
willful disregard of the courts order, but such conduct which tends to bring the
authority of the court and the administration of law into disrepute or, in some manner,
to impede the due administration of justice. To be considered contemptuous, an act
must be clearly contrary to or prohibited by the order of the court. Thus, a person
cannot be punished for contempt for disobedience of an order of the Court, unless the
act which is forbidden or required to be done is clearly and exactly defined, so that
there can be no reasonable doubt or uncertainty as to what specific act or thing is
forbidden or required. Rivulet Agro-Industrial Corporation v. Anthony Parungao, Narciso
B. Nieto, in their capacity as Undersecretaries of Legal Affairs and Field Operations of
the Department of Agrarian Reform, et al., G.R. No. 197507. January 14, 2013
Ejectment; possession de facto; distinction between forcible entry and unlawful detainer
cases. At the outset, it bears to reiterate the settled rule that the only question that the
courts resolve in ejectment proceedings is: who is entitled to the physical possession of

the premises, that is, to the possession de facto and not to the possession de jure. It
does not even matter if a partys title to the property is questionable. In an unlawful
detainer case, the sole issue for resolution is the physical or material possession of the
property involved, independent of any claim of ownership by any of the party litigants.
Where the issue of ownership is raised by any of the parties, the courts may pass upon
the same in order to determine who has the right to possess the property. The
adjudication is, however, merely provisional and would not bar or prejudice an action
between the same parties involving title to the property. Juanita Ermitao, represented
by her Attorney-in-fact, Isabelo Ermitao v. Lailanie M. Paglas; G.R. No. 174436. January
23, 2013
Execution; issuance of writ is trial courts ministerial duty once decision is final; writ of
execution must conform to dispositive portion of judgment; order of execution which
varies tenor of judgment is void. In the present case, the Court finds meritorious
grounds to admit the petition and absolve the petitioners from their procedural lapse.
It is undisputed that the CA Decision dated September 29, 2006 is already final and
executory. As a rule, once a judgment becomes final and executory, all that remains is
the execution of the decision which is a matter of right. The prevailing party is entitled
to a writ of execution, the issuance of which is the trial courts ministerial duty. The writ
of execution, however, must conform substantially to every essential particular of the
judgment promulgated. It must conform, more particularly, to that ordained or decreed
in the dispositive portion of the decision.
Clearly, the RTC exceeded its authority when it insisted on applying its own construal of
the dispositive portion of the CA Decision when its terms are explicit and need no
further interpretation. It would also be inequitable for the petitioners to pay and for the
respondents, who did not appeal the CA decision or questioned the deletion of the 12%
per annum interest, to receive more than what was awarded by the CA. The assailed
RTC order of execution dated December 21, 2009 and the alias writ of execution dated
May 17, 2010 are, therefore, void. Time and again, it has been ruled that an order of
execution which varies the tenor of the judgment, or for that matter, exceeds the terms
thereof is a nullity. Spouses Ricardo and Elena Golez v. Spouses Carlos and Amelita
Navarro; G.R. No. 192532. January 30, 2013
Forum Shopping; definition and nature. Forum shopping is defined as an act of a party,
against whom an adverse judgment or order has been rendered in one forum, of
seeking and possibly getting a favorable opinion in another forum, other than by appeal
or special civil action forcertiorari. It may also be the institution of two or more actions
or proceedings grounded on the same cause on the supposition that one or the other
court would make a favorable decision. x x x It is expressly prohibited xxx because it
trifles with and abuses court processes, degrades the administration of justice, and
congest our court dockets. A willful and deliberate violation of the rule against forum
shopping is a ground for summary dismissal of the case, and may also constitute direct
contempt. Estrellla Aduan Orpiano v. Spouses Antonio C. Tomas and Myrna U.
Tomas;G.R. No. 178611. January 14, 2013

Grave abuse of discretion; proper ground in a petition for certiorari but not in a petition
for review on certiorari. It is to be noted that the above issues raised by petitioner
alleged grave abuse of discretion committed by the CA, which is proper in a petition
for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as amended, but not in
the present petition for review on certiorariunder Rule 45. Heirs of Faustino C. Ignacio v.
Home Bankers Savings and Trust Company, et al., G.R. No. 177783. January 23, 2013
Hierarchy of courts; concurrence of jurisdiction; non-observance results in dismissal. We
emphasize that the concurrence of jurisdiction among the Supreme Court, Court of
Appeals and the Regional Trial Courts to issue the writs of certiorari, prohibition,
mandamus, quo warranto, habeas corpus and injunction did not give petitioners the
unrestricted freedom of choice of court forum. An undue disregard of this policy against
direct resort to the Court will cause the dismissal of the recourse. In Banez, Jr. v.
Concepcion, we explained why, to wit:
The court must enjoin the observance of the policy on the hierarchy of courts, and now
affirms that the policy is not to be ignored without serious consequences, the strictness
of the policy is designed to shield the Court from having to deal with causes that are
also well within the competence of the lower courts, and thus leave time to the Court to
deal with the more fundamental and more essential tasks that the Constitution has
assigned to it, the Court may act on petitions for the extraordinary writs of certiorari,
prohibition, and mandamus only when absolutely necessary or when serious and
important reasons justify an exception to the policy. xxx
Accordingly, every litigant must remember that the Court is not the only judicial forum
from which to seek and obtain effective redress of his or her grievances. As a rule, the
Court is a court of last resort, not a court of first instance. Hence, every litigant who
brings petitions for the extraordinary writs of certiorari, prohibition and mandamus
should ever be mindful of the policy on the hierarchy of courts, the observance of which
is explicitly defined and enjoined in Section 4 of Rule 65. Spouses Augusto Dacudao and
Ofelia Dacudao v. Secretary of Justice Raul Gonzales of the Department of Justice,G.R.
No. 188056. January 8, 2013
Interlocutory and Final orders; distinction. This Court has laid down the distinction
between interlocutory and final orders, as follows:
xxx A final judgment or order is one that finally disposes of a case, leaving nothing
more to be done by the Court in respect thereto, e.g., an adjudication on the merits
which, on the basis of the evidence presented at the trial, declares categorically what
the rights and obligations of the parties are and which party is in the right; or a
judgment or order that dismisses an action on the ground, for instance, of res judicata
or prescription. Once rendered, the task of the court is ended, as far as deciding the
controversy or determining the rights and liabilities of the litigants is concerned.
Nothing more remains to be done by the court except to await the parties next move
(which among others, may consist of the filing of a motion for new trial or
reconsideration, or the taking of an appeal) and ultimately, of course, to cause the

execution of the judgment once it becomes final or, to use the established and more
distinctive term, final and executory.
xxxx
Conversely, an order that does not finally dispose of the case, and does not end the
Courts task of adjudicating the parties contentions and determining their rights and
liabilities as regards each other, but obviously indicates that other things remain to be
done by the court is interlocutory e.g., an order denying a motion to dismiss under
Rule 16 of the Rules, or granting a motion for extension of time to file a pleading, or
authorizing amendment thereof, or granting or denying applications for postponement,
or production or inspection of documents or things, etc. unlike a final judgment or
order, which is appealable. As above pointed out, an interlocutory order may not be
questioned on appeal except only as part of an appeal that may eventually be taken
from the final judgment rendered in the case. Ma. Carmina Calderon represented by her
Attorney-in-fact, Marycris V. Baldevia v. Jose Antonio Roxas and Court of Appeals, G.R.
No. 185595. January 9, 2013
Interlocutory and Final orders; application to provisional remedies especially to
support pendente lite. The assailed orders relative to the incident of support pendent
lite and support in arrears, as the term suggests, were issued pending the rendition of
the decision on the main action for declaration of nullity of marriage and are therefore
interlocutory. They did not finally dispose of the case nor did they consist of a final
adjudication of the merits of petitioners claims as to the ground of psychological
incapacity and other incidents as child custody, support, and conjugal assets. Ma.
Carmina Calderon represented by her Attorney-in-fact, Marycris V. Baldevia v. Jose
Antonio Roxas and Court of Appeals, G.R. No. 185595. January 9, 2013
Interlocutory and Final orders; remedy against interlocutory order is not appeal. The
remedy against an interlocutory order not subject of an appeal is an appropriate special
civil action under Rule 65 provided that the interlocutory order is rendered without or in
excess of jurisdiction or with grave abuse of discretion. Having chosen the wrong
remedy in questioning the subject interlocutory orders of the RTC, petitioners appeal
was correctly dismissed by the CA. Ma. Carmina Calderon represented by her Attorneyin-fact, Marycris V. Baldevia v. Jose Antonio Roxas and Court of Appeals, G.R. No.
185595. January 9, 2013
Judgment; compromise agreement. There is no question that the
foregoing Agreement was a compromise that the parties freely and voluntarily entered
into for the purpose of finally settling their dispute in this case. Under Article 2028 of
the Civil Code, a compromise is a contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already commenced. Accordingly, a
compromise is either judicial, if the objective is to put an end to a pending litigation, or
extrajudicial, if the objective is to avoid a litigation. As a contract, a compromise is
perfected by mutual consent. However, a judicial compromise, while immediately
binding between the parties upon its execution, is not executory until it is approved by

the court and reduced to a judgment. The validity of a compromise is dependent upon
its compliance with the requisites and principles of contracts dictated by law. Also, the
terms and conditions of a compromise must not be contrary to law, morals, good
customs, public policy and public order.Land Bank of the Philippines v. Heirs of Spouses
Jorja Rigor Soriano and Magin Soriano, G.R. No. 178312. January 30, 2013
Jurisdiction; personal jurisdiction in civil cases; voluntary appearance. In civil cases,
jurisdiction over the person of the defendant may be acquired either by service of
summons or by the defendants voluntary appearance in court and submission to its
authority.
In this case, the MeTC acquired jurisdiction over the person of respondent Hertz by
reason of the latters voluntary appearance in court. In Philippine Commercial
International Bank v. Spouses Dy, we had occasion to state:
Preliminarily, jurisdiction over the defendant in a civil case is acquired either by the
coercive power of legal processes exerted over his person, or his voluntary appearance
in court. As a general proposition, one who seeks an affirmative relief is deemed to have
submitted to the jurisdiction of the court. It is by reason of this rule that we have had
occasion to declare that the filing of motions to admit answer, for additional time to file
answer, for reconsideration of a default judgment, and to lift order of default with
motion for reconsideration, is considered voluntary submission to the courts
jurisdiction. This, however, is tempered by the concept of conditional appearance, such
that a party who makes a special appearance to challenge, among others, the courts
jurisdiction over his person cannot be considered to have submitted to its authority.
Prescinding from the foregoing, it is thus clear that: (1) special appearance operates as
an exception to the general rule on voluntary appearance; (2) Accordingly, objections to
the jurisdiction of the court over the person of the defendant must be explicitly made,
i.e., set forth in an unequivocal manner; (3) Failure to do so constitutes voluntary
submission to the jurisdiction of the court, especially in instances where a pleading or
motion seeking affirmative relief is filed and submitted to the court for
resolution. Optima Realty Corporation v. Hertz Phil. Exclusive Cars, Inc., G.R. No.
183035. January 9, 2013
Litis pendentia; elements. Litis pendentia requires the concurrence of the following
elements: (1) identity of parties, or at least their representation of the same interests in
both actions; (2) identity of rights asserted and reliefs prayed for, the relief being
founded on the same facts; and (3) identity with respect to the two preceding
particulars in the two cases, such that any judgment that may be rendered in the
pending case, regardless of which party is successful, would amount to res judicata in
the other case. Optima Realty Corporation v. Hertz Phil. Exclusive Cars, Inc., G.R. No.
183035. January 9, 2013
Parties; authority of private counsel to represent local officials in suit. The present case
stemmed from Special Civil Action 2002-0019 for mandamus and damages. The

damages sought therein could have resulted in personal liability, hence petitioner
cannot be deemed to have been improperly represented by private counsel. In Alinsug
v. RTC Br. 58, San Carlos City, Negros Occidental,the Court ruled that in instances like
the present case where personal liability on the part of local government officials is
sought, they may properly secure the services of private counsel, explaining:
it can happen that a government official, ostensibly acting in his official capacity, is later
held to have exceeded his authority. On the one hand, his defense would have then
been underwritten by the peoples money which ordinarily should have been his
personal expense. On the other hand, personal liability can attach to him without,
however, his having had the benefit of assistance of a counsel of his own choice.
In Correa v. CFI, the Court held that in the discharge of governmental functions,
municipal corporations are responsible for the acts of its officers, except if and when,
and only to the extent that, they have acted by authority of the law, and in conformity
with the requirements thereof.
In such instance, this Court has sanctioned the representation by private counsel. In one
case, We held that where rigid acceptance to the law on representation of local affairs in
court actions could deprive a party of his right to redress for a valid grievance, the
hiring of a private counsel would be proper. And in Alburra v. Torres, this Court also said
that a provincial governor sued in his official capacity may engage the services of
private counsel when the complaint contains other allegations and a prayer for moral
damages, which, if due from the defendants, must be satisfied by them in their private
capacity. Romeo Gontang, in his official capacity as Mayor of Gainza, Camarines Sur v.
Engr. Cecilia Alayan; G.R. No. 191691. January 16, 2013
Parties; dropping of parties; remedies for joinder or misjoinder. Under the Rules, parties
may be dropped or added by order of the court on motion of any party or on its own
initiative at any stage of the action and on such terms as are just. Indeed, it would have
been just for the collection court to have allowed Estrella to prosecute her annulment
case by dropping her as a party plaintiff in the collection case, not only so that she
could protect her conjugal share, but also to prevent the interests of her co-plaintiffs
from being adversely affected by their conflicting actions in the same case. By seeking
to be dropped from the collection case, Estrella was foregoing collection of her share in
the amount that may be due and owing from the sale. It does not imply a waiver in any
manner that affects the rights of the other heirs.
While Estrella correctly made use of the remedies available to her amending the
complaint and filing a motion to drop her as a party she committed a mistake in
proceeding to file the annulment case directly after these remedies were denied her by
the collection court without first questioning or addressing the propriety of these
denials. While she may have been frustrated by the collection courts repeated rejection
of her motions and its apparent inability to appreciate her plight, her proper recourse
nevertheless should have been to file a petition for certiorari or otherwise question the
trial courts denial of her motion to be dropped as plaintiff, citing just reasons which call
for a ruling to the contrary. Issues arising from joinder or misjoinder of parties are the

proper subject of certiorari. Estrella Aduan Orpiano v. Spouses Antonio C. Tomas and
Myrna U. Tomas, G.R. No. 178611. January 14, 2013
Petition for review on certiorari (Rule 45); contents; not an absolute rule that will lead to
dismissal; liberal construction. The court significantly pointed out in F.A.T Kee Computer
Systems, Inc. v. Online Networks International, Inc. that the requirement in Section 4,
Rule 45 of the Rules of Court is not meant to be an absolute rule whose violation would
automatically lead to the petitions dismissal. The Rules of Court has not been intended
to be totally rigid. In fact, the Rules of Court provides that the Supreme Court may
require or allow the filing of the such pleadings, briefs, memoranda, or documents, as it
may deem necessary within such periods and under such conditions as it may consider
appropriate; and [i]f the petition is given due course, the Supreme Court may require
the elevation of the complete record of the case or specified parts thereof within fifteen
(15) days from notice. These provisions are in keeping with the overriding standard
that procedural rules should be liberally construed to promote their objective and to
assist the parties in obtaining a just, speedy, and inexpensive determination of every
action or proceeding. Metropolitan Bank & Trust Company v. Absolute Management
Corporation, G.R. No. 170498. January 9, 2013
Petition for review on certiorari (Rule 45); only questions of law may be raised;
exceptions. It is a settled rule, indeed, that in the exercise of our power of review, the
Court is not a trier of facts and does not normally undertake the re-examination of the
evidence presented by the contending parties during the trial of the case. The Court
relies on the findings of fact of the Court of Appeals or of the trial court, and accepts
such findings as conclusively and binding unless any of the following exceptions,
obtains, namely: (a) when the findings are grounded entirely on speculation, surmises,
or conjectures; (b) when the inference made is manifestly mistaken, absurd or
impossible; (c) when there is grave abuse of discretion; (d) when the judgment is based
on a misapprehension of facts; (e) when the findings of fact are conflicting; (f) when in
making its findings the Court of Appeals or the trial court went beyond the issues of the
case, or its findings are contrary to the admissions of both the appellant and the
appellee; (g) when the findings are contrary to the trial court; (h) when the findings are
conclusions without citation of specific evidence on which they are based; (i) when the
facts set forth in the petition as well as in the petitioners main and reply briefs are not
disputed by the respondent; (j) when the findings of fact are premised on the supposed
absence of evidence and contradicted by the evidence on record; and (k) when the
Court of Appeals or the trial court manifestly overlooked certain relevant facts not
disputed by the parties, which, if properly considered, would justify a different
conclusion. However, none of the aforementioned exception applies herein. Special
People, Inc. Foundation, represented by its Chairman, Roberto P. Cericos v. Nestor M.
Canda, et al., G.R. No. 160932. January 14, 2013
Petition for review on certiorari (Rule 45); only questions of law may be raised;
exceptions. It is well settled that in a petition for review on certiorari under Rule 45 of
the Rules of Court, only questions of law may be raised. This Court, in numerous
instances, has had the occasion to explain that it is not its function to analyze or weigh

evidence all over again. As a rule, the Court respects the factual findings of the CA and
of quasi-judicial agencies like the DAR, giving them a certain measure of finality. There
are, however, recognized exceptions to this rule, one of which is when the findings of
fact are conflicting. Heirs of Luis A. Luna and Remegio A. Luna, et al. v. Ruben S. Afable,
et al., G.R. No. 188299. January 23, 2013
Petition for review on certiorari (Rule 45); only questions of law may be raised;
applicable to expropriation cases. This Court is not a trier of facts. Questions of fact may
not be raised in a petition brought under Rule 45, as such petition may only raise
questions of law. This rule applies in expropriation cases. Moreover, factual findings of
the trial court, when affirmed by the CA, are generally binding on this Court. An
evaluation of the case and the issues presented leads the Court to the conclusion that it
is unnecessary to deviate from the findings of fact of the trial and appellate courts.
Under Section 8 of Rule 67 of the Rules of Court, the trial court sitting as an
expropriation court may, after hearing, accept the commissioners report and render
judgment in accordance therewith. This is what the trial court did in this case. The CA
affirmed the trial courts pronouncement in toto. Given these facts, the trial court and
the CAs identical findings of fact concerning the issue of just compensation should be
accorded the greatest respect, and are binding on the Court absent proof that they
committed error in establishing the facts and in drawing conclusions from them. There
being no showing that the trial court and the CA committed any error, we thus accord
due respect to their findings. Republic of the Philippines, represented by the
Department of Public Works and Highways v. Heirs of Spouses Pedro Bautista and
Valentina Malabanan,G.R. No. 181218. January 28, 2013
Petition for review on certiorari (Rule 45); review errors of judgment; orders granting
execution are interlocutory and should be subject of petition for certiorari under Rule 65;
exceptions. The petition filed in this case is one for review on certiorari under Rule 45 of
the Rules of Court. Petitions filed under this rule bring up for review errors of judgment.
It is an ordinary appeal and the petition must only raise questions of law which must be
distinctly set forth and discussed. The present petition, however, assails the RTC Order
of execution dated December 21, 2009 and alias writ of execution dated May 27, 2010.
It is a settled rule that orders granting execution are interlocutory orders; hence the
petitioners should have filed a petition for certiorari under Rule 65. This is categorically
provided in Rule 41, viz:
Section 1. Subject of appeal. An appeal may be taken from a judgment or final order
that completely disposes of the case, or of a particular matter therein when declared by
these Rules to be applicable.
No appeal may be taken from:
xxxx
(f) An order of execution;

xxxx
In all the above instances where the judgment or final order is not appealable, the
aggrieved party may file an appropriate special civil action under Rule 65.
Nevertheless, there are exceptions to this rule, one of which is when the writ of
execution varies the judgment. Thus, in Shugo Noda & Co., Ltd. V. Court of Appeals the
Court acknowledged that, in the past, it considered an appeal to be a proper remedy
when it is perceived that the order varies, or may not be in consonance with, the
essence of the judgment. Other exceptions include: (1) There has been a change in the
situation of the parties making execution inequitable or unjust; (2) Execution is sought
to be enforced against property exempt from execution; (3) It appears that the
controversy has been submitted to the judgment of the court; (4) The terms of the
judgment are not clear enough and there remains room for interpretation thereof; or (5)
It appears that the writ of execution has been improvidently issued, or that it is
defective in substance, or issued against the wrong party, or that the judgment debt
has been paid or otherwise satisfied, or the writ issued without authority.
In such case, considerations of justice and equity dictate that there be some remedy
available to the aggrieved party. Likewise, the Court, in the interest of equity or when
justice demands, may interchangeably treat an appeal as a petition for certiorari under
Rule 65 of the Revised Rules of Court, and vice versa.
In the present case, the Court finds meritorious grounds to admit the petition and
absolve the petitioners from their procedural lapse. Spouses Ricardo and Elena
Golez v. Spouses Carlos and Amelita Navarro, G.R. No. 192532. January 30, 2013
Pleadings; relief. It is settled that courts cannot grant a relief not prayed for in the
pleadings or in excess of what is being sought by the party. They cannot also grant a
relief without first ascertaining the evidence presented in court. In Development Bank of
the Philippines v. Tecson, this Court expounded that:
Due process considerations justify this requirement, it is improper to enter an order
which exceeds the scope of relief sought by the pleadings, absent notice, which affords
the opposing party an opportunity to be heard with respect to the proposed relief. The
fundamental purpose of the requirement that allegations of the complaint must provide
the measure of recovery is to prevent surprise to the defendant.
Notably, the Rules is even more strict in safeguarding the right to due process of a
defendant who was declared in default than of a defendant who participated in trial. For
instance, amendment to conform to the evidence presented during trial is allowed the
parties under the Rules. But the same is not feasible when the defendant is declared in
default because Section 3(d), Rule 9 of the Rules of Court comes into play and limits the
relief that may be granted by the courts to what has been prayed for in the complaint.
xxx The raison detre in limiting the extent of relief that may be granted is that it cannot
be presumed that the defendant would not file an Answer and allow himself to be

declared in default had he know that the plaintiff will be accorded a relief greater than
or different in kind from that sought in the Complaint. No doubt, the reason behind
Section 3(d), Rule 9 of the Rules of Court is to safeguard defendants right to due
process against unforeseen and arbitrarily issued judgment. This, to the mind of the
Court, is akin to the very essence of due process. It embodies the sporting idea of fair
play and forbids the grant of relief on matters where the defendant was not given the
opportunity to be heard thereon. Leticia Diona, represented by her Attorney-in-fact,
Marcelina Diona v. Romeo Balangue, Sonny Balangue, Reynaldo Balangue, and Esteban
Balangue, Jr.; G.R. No. 173559. January 7, 2013
Preliminary injunction; abuse of discretion if writ issued despite absence of clear legal
right. The issuance of a preliminary injunction rests entirely within the discretion if the
court taking cognizance of the case and is generally not interfered with except in cases
of manifest abuse. For the issuance of the writ of preliminary injunction to be proper, it
must be shown that the invasion of the right sought to be protected is material and
substantial, that the right of complainant is clear and unmistakable, and that there is an
urgent and paramount necessity for the writ to prevent serious damage. In the absence
of a clear legal right, the issuance of a writ of injunction constitutes grave abuse of
discretion. TML Gasket Industries, Inc. v. BPI Family Savings Bank, Inc., G.R. No. 188768.
January 7, 2013
Preliminary injunction; injunctive relief not issued for self-inflicted losses which
are damnum absque injuria. In arriving at a contrary conclusion, the Court of Appeals
dwelt on the grave and irremediable financial losses respondent was poised to sustain
as a result of EO 156s enforcement, finding such prejudice inequitable. No doubt, by
importing used vehicles in contravention of the ban under EO 156, respondent risked
sustaining losses. Such risk, however, was self- imposed. Having miscalculated its
chances, respondent cannot look to courts for an injunctive relief against self-inflicted
losses which are in the nature of damnum absque injuria.Injunction will not issue on the
mere possibility that a litigant will sustain damage, without proof of a clear legal right
entitling the litigant to protection. Executive Secretary, Secretary of Finance,
Commissioner of Customs, District Collector of Customs, Port of Aparri, Cagayan,
District Collector of Customs, Port of San Fernando La Union, and Head of the Land
Transportation Office v. Forerunner Multi Resources, Inc., G.R. No. 199324. January 7,
2013
Preliminary injunction; requirement of actual and existing right. Petitioners argument
fails to impress. The CA did not nullify the October 15, 2004 Order merely because of
the interchanged pages. Instead, the CA determined that the applicant, Vitaliano, was
not able to show that he had an actual and existing right that had to be protected by a
preliminary injunction. The most that Vitaliano was able to prove was a future right
based on his victory in the suit. Contrasting this future right of Vitaliano with
respondents existing right under the GIS, the CA determined that the trial court should
not have disturbed the status quo. Vitaliano Aguirre II and Fidel Aguirre v. FQB+7, Inc.,
Nathaniel Bocobo, Priscila Bocobo, and Antonio De Villa, G.R. No. 170770. January 9,
2013

Preliminary injunction; requirement of clear legal right. It is a deeply ingrained doctrine


in Philippine remedial law that a preliminary injunctive relief under Rule 58 issues only
upon a showing of the applicants clear legal right being violated or under threat of
violation by the defendant. Clear legal right, within the meaning of Rule 58,
contemplates a right clearly founded in or granted by law. Any hint of doubt or dispute
on the asserted legal right precludes the grant of preliminary injunctive relief. For suits
attacking the validity of laws or issuances with the force and effect of law, as here, the
applicant for preliminary injunctive relief bears the added burden of overcoming the
presumption of validity inhering in such laws or issuances. These procedural barriers to
the issuance of a preliminary injunctive writ are rooted on the equitable nature of such
relief, preserving the status quo while, at the same time, restricting the course of action
of the defendants even before adverse judgment is rendered against them. Executive
Secretary, Secretary of Finance, Commissioner of Customs, District collector of customs,
Port of Aparri, Cagayan, District Collector of Customs, Port of San Fernando La Union,
and Head of the Land Transportation Office v. Forerunner Multi Resources, Inc., G.R. No.
199324. January 7, 2013
Preliminary injunction; requisites. Section 3, Rule 58 of the Rules of Court lists the
grounds for the issuance of a writ of preliminary injunction:
Sec.3. Grounds for the issuance of preliminary injunction. A preliminary injunction may
be granted when it is established:
(a)
that the applicant is entitled to the relief demanded, and the whole or part of
such relief consists un restraining the commission or continuance of the act or acts
complained of, or in requiring the performance of an act or acts, either for a limited
period or perpetually;
(b)
that the commission, continuance or non-performance of the act or acts
complained of during the litigation would probably work injustice to the applicant; or
(c)
that a party, court, agency, or a person doing, threatening, or is attempting
to do, or is procuring or suffering to be done, some act or acts probably in violation of
the right of the applicant respecting the subject of the action or proceeding, and tending
to render the judgment ineffectual
As such, a writ of preliminary injunction may be issued only upon clear showing of an
existing legal right to be protected during the pendency of the principal action. The
requisites of a valid injunction are the existence of a right and its actual or threatened
violations. Thus, to be entitled to an injunctive writ, the right to be protected and the
violation against that right must be shown. TML Gasket Industries, Inc. v. BPI Family
Savings Bank, Inc., G.R. No. 188768. January 7, 2013
Special Civil Action for Certiorari (Rule 65); nature; distinction between excess of
jurisdiction, acts without jurisdiction and grave abuse of discretion. A certiorari
proceeding is limited in scope and narrow in character. The special civil action for

certiorari lies only to correct acts rendered without jurisdiction, in excess of jurisdiction,
or with grave abuse of discretion. Certiorari will issue only to correct errors of
jurisdiction, not errors of procedure or mistakes in the findings or conclusions of the
lower court. As long as the court acts within its jurisdiction, any alleged errors
committed in the exercise of its discretion will amount to nothing more than mere errors
of judgment, correctible by an appeal or a petition for review under Rule 43 of the Rules
of Court, and not a petition for certiorari.
In a petition for certiorari, the public respondent acts without jurisdiction if it does not
have the legal power to determine the case; there is excess of jurisdiction where the
respondent, being clothed with the power to determine the case, oversteps its authority
as determined by law. There is grave abuse of discretion where the public respondent
acts in a capricious, whimsical, arbitrary or despotic manner in the exercise of its
judgment as to be said to be equivalent to lack of jurisdiction. Mere abuse of discretion
is not enough.
Excess of jurisdiction, as distinguished from absence of jurisdiction means that an act,
though within the general power of a tribunal, board or officer is not authorized, and
invalid with respect to the particular proceeding, because the conditions which alone
authorize the exercise of the general power in respect of it are wanting. The supervisory
jurisdiction of the court to issue a certiorari writ cannot be exercised in order to review
the judgment of the lower court as to intrinsic correctness, either upon the law or the
facts of the case. In the absence of a showing that there is a reason for the court to
annul the decision of the concerned tribunal or to substitute its own judgment, it is not
the office of the Court in a petition for certiorari to inquire into the correctness of the
assailed decision or resolution. Winston F. Garcia, in his capacity as President and
General Manager of the GSIS v. Court of Appeals and Rudy C. Tesoro, G.R. No. 169005.
January 28, 2013
Special Civil Action for Certiorari (Rule 65); nature; an extraordinary remedy; judicial and
quasi-judicial functions. The decision on whether or not to accept a petition for certiorari
as well as to grant due course thereto, is addressed to the sound discretion of the court.
A petition for certiorari being an extraordinary remedy, the party seeking to avail of the
same must strictly observe the procedural rules laid down by law, and non-observance
thereof may not be brushed aside as mere technicality.
As provided in Section 1, Rule 65, a writ of certiorari is directed against a tribunal
exercising judicial or quasi-judicial functions. Judicial functions are exercised by a body
or officer clothed with authority to determine what the law is and what the legal rights
of the parties are with respect to the matter in controversy. Quasi-judicial function is a
term that applies to the action or discretion of public administrative officers or bodies
given the authority to investigate facts or ascertain the existence of facts, hold
hearings, and draw conclusions from them as a basis for their official action using
discretion of a judicial nature.

The Central Bank Monetary Board (now BSP-MB) was created to perform executive
functions with respect to the establishment, operation or liquidation of banking and
credit institutions, and branches and agencies thereof. It does not perform judicial or
quasi-judicial functions. Certainly, the issuance of CB Circular No. 905 was done in the
exercise of an executive function. Certiorari will not lie in the instant case. Advocates for
Truth in Lending, Inc. & Eduardo B. Olaguer v. Bangko Sentral Monetary Board,
Represented by its Chairman, Governor Armando M. Tetangco, Jr., etc., G.R. No. 192986.
January 15, 2013
Special Civil Action for Certiorari (Rule 65); requisites; burden of proof For a special civil
action of certiorari to prosper, therefore, the following requisites must concur, namely:
(a) it must be directed against a tribunal, board or officer exercising judicial or quasijudicial functions; (b) the tribunal, board or officer, must have acted without or in excess
of jurisdiction or with grave abuse of discretion amounting to lack or excess of
jurisdiction; and (c) there is no appeal nor any plain, speedy, and adequate remedy in
the ordinary course of law. The burden of proof lies on petitioners to demonstrate that
the assailed order was issued without or in excess of jurisdiction or with grave abuse of
discretion amounting to lack or excess of jurisdiction. Spouses Augusto Dacudao and
Ofelia Dacudao v. Secretary of Justice Raul Gonzales of the Department of Justice, G.R.
No. 188056. January 8, 2013
Special Civil Action for Certiorari (Rule 65); when available. The writ of certiorari is
available only when any tribunal, board or officer, exercising judicial or quasi-judicial
functions has acted without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any
plain speedy and adequate remedy in the ordinary course of law. The sole office of the
writ of certiorari, according to Delos Santos v. Metropolitan Bank and Trust Company:
xxx is the correction of errors of jurisdiction, which includes the commission of grave
abuse of discretion amounting to lack of jurisdiction. In this regard, mere abuse of
discretion is not enough to warrant the issuance of the writ. The abuse of discretion
must be grave which means either that the judicial or quasi-judicial power was
exercised in an arbitrary or despotic manner by reason of passion or personal hostility,
or that the respondent judge, tribunal or board evaded a positive duty, or virtually
refused to perform the duty enjoined or to act in contemplation of law, such as when
such judge, tribunal or board exercising judicial or quasi-judicial powers acted in a
capricious or whimsical manner as to be equivalent to lack of jurisdiction.
Spouses Augusto Dacudao and Ofelia Dacudao v. Secretary of Justice Raul Gonzales of
the Department of Justice, G.R. No. 188056. January 8, 2013
Special Civil Action for Certiorari under Rule 64; proper mode of review of COMELEC en
bancResolutions not relating to pre-proclamation controversies. Section 7, Article IX of
the 1987 Constitution in part substantially provides that any decision, order or ruling of
any of the Constitutional Commissions may be brought for review to the Supreme Court
on certiorari within 30 days from receipt of a copy thereof. The orders, ruling and

decisions rendered or issued by the COMELEC en banc must be final and made in the
exercise of its adjudicatory or quasi-judicial power. Further, Section 1, Rule 64 of the
Rules of Court states that it shall govern the review of final judgments and orders or
resolutions of the COMELEC and the Commission on Audit.
In the case at bar, the now assailed Resolutions dated December 22, 2009 and May 6,
2010 were issued with finality by the COMELEC en banc. Under the Constitution and the
Rules of Court, the said Resolutions can be reviewed by way of filing before us a petition
for certiorari. Besides, the issues raised do not at all relate to alleged irregularities in the
preparation, transmission, receipt, custody and appreciation of the election returns or to
the composition and the proceedings of the board of canvassers. What the instant
petition challenges is the authority of the MBOC to suspend Ibrahims proclamation and
of the COMELEC en banc to issue the assailed resolutions. The crux of the instant
Petition does not qualify as one which can be raised as a pre-proclamation
controversy.Kamarudin K. Ibrahim v. Commission on Elections and Rolan G. Buagas, G.R.
No.192289. January 8, 2013
Special Civil Action for Mandamus; exhaustion of administrative remedies. It is
axiomatic, to begin with, that a party who seeks the intervention of a court of law upon
an administrative concern should first avail himself of all the remedies afforded by
administrative processes. The issues that an administrative agency is authorized to
decide should not be summarily taken away from it and submitted to a court of law
without first giving the agency the opportunity to dispose of the issues upon due
deliberation. The court of law must allow the administrative agency to carry out its
functions and discharge its responsibilities within the specialized areas of its
competence. This rests on the theory that the administrative authority is in a better
position to resolve questions addressed to its particular expertise, and that errors
committed by subordinates in their resolution may be rectified by their superiors if
given a chance to do so. Special People, Inc. Foundation, represented by its Chairman,
Roberto P. Cericos v. Nestor M. Canda, et al., G.R. No. 160932. January 14, 2013
Special Civil Action for Mandamus; nature; when available. Similarly, the petition could
not be one for mandamus, which is a remedy available only when any tribunal,
corporation, board, officer or person unlawfully neglects the performance of an act
which the law specifically enjoins as a duty resulting from an office, trust, or station, or
unlawfully excludes another from the use and enjoyment of a right or office to which
such other is entitled, and there is no other plain, speedy, and adequate remedy in the
ordinary course of law, the person aggrieved thereby may file a verified petition in the
proper court. The main objective of mandamus is to compel the performance of a
ministerial duty on the part of the respondent. Plainly enough, the writ
ofmandamus does not issue to control or review the exercise of discretion or to compel
a course of conduct, which, it quickly seems to us, was what petitioners would have the
Secretary of Justice do in their favor. Consequently, their petition has not indicated how
and where the Secretary of Justices assailed issuances excluded them from the use and
enjoyment of a right or office to which they were unquestionably entitled. Spouses

Augusto Dacudao and Ofelia Dacudao v. Secretary of Justice Raul Gonzales of the
Department of Justice, G.R. No. 188056. January 8, 2013
Special Civil Action for Mandamus; nature; compels performance of ministerial duties. A
key principle to be observed in dealing with petitions for mandamus is that such
extraordinary remedy lies to compel the performance of duties that are purely
ministerial in nature, not those that are discretionary. A purely ministerial act or duty is
one that an officer or tribunal performs in a given state of facts, in a prescribed manner,
in obedience to the mandate of a legal authority, without regard to or the exercise of its
own judgment upon the propriety or impropriety of the act done. The duty is ministerial
only when its discharge requires neither the exercise of official discretion or
judgment. Special People, Inc. Foundation, represented by its Chairman, Roberti P.
Cericos v. Nestor M. Canda, et al., G.R. No. 160932. January 14, 2013
Unlawful detainer; nature. Going to the main issue in the instant petition, it is settled
that in unlawful detainer, one unlawfully withholds possession thereof after the
expiration or termination of his right to hold possession under any contract, express or
implied. In such case, the possession was originally lawful but became unlawful by the
expiration or termination of the right to possess; hence the issue of rightful possession
is decisive for, in such action, the defendant is in actual possession and the plaintiffs
cause of action is the termination of the defendants right to continue in
possession. Juanita Ermitao, represented by her Attorney-in-fact, Isabelo
Ermitao v. Lailanie M. Paglas, G.R. No. 174436. January 23, 2013
Unlawful detainer; failure to pay rentals and expiration of lease as grounds. We find that
the RTCs ruling upholding the ejectment of Hertz from the building premises was
proper. First, respondent failed to pay rental arrearages and utility bills to Optima;
and second, the Contract of lease expired without any request from Hertz for a
renegotiation thereof at least 90 days prior to its expiration.Optima Realty Corporation
v. Hertz Phil. Exclusive Cars, Inc., G.R. No. 183035. January 9, 2013
Unlawful detainer; award of monthly compensation and attorneys fees. As to the award
of monthly compensation, we find that Hertz should pay adequate compensation to
Optima, since the former continued to occupy the leased premises even after the
expiration of the lease contract.
Finally we uphold the award of attorneys fees in the amount of P30, 000 and judicial
costs in the light of Hertz unjustifiable and unlawful retention of the leased premises,
thus forcing Optima to file the instant case in order to protect its rights and
interest. Optima Realty Corporation v. Hertz Phil. Exclusive Cars, Inc., G.R. No. 183035.
January 9, 2013
Special Proceedings
Settlement of Estate; claims include quasi-contract and contingent claims; In Maclan v.
Garcia,Maclan filed a civil case to recover from Ruben Garcia the necessary expenses he

spent as possessor of a piece of land. Garcia acquired the land as an heir of its previous
owner, he set up the defense that this claim should have been filed in the special
proceedings to settle the estate of his predecessor. Maclan, on the other hand,
contended that his claim arises from law and not from contract, express or implied.
Thus, it need not be filed in the settlement of the estate of Garcias predecessor, as
mandated by Section 5, Rule 87 of the Rules of Court (now Section 5, Rule 86).
The court held under these facts that a claim for necessary expenses spent as previous
possessor of the land is a kind of quasi-contract. Citing Leung Ben v OBrien, it
explained that the term implied contracts, as used in our remedial law, originated
from the common law where obligations derived from quasi-contracts and from law are
both considered as implied contracts. Thus, the term quasi-contract is included in the
concept implied contracts as used in the Rules of Court. Accordingly, the liabilities of
the deceased arising from quasi-contracts should be filed as claims in the settlement of
his estate, as provided in Section 5, Rule 86 of the Rules of Court.
A distinctive character of Metrobanks fourth-party complaint is its contingent nature
the claim depends on the possibility that Metrobank would be adjudged liable to AMC, a
future event that may or may not happen. This characteristic unmistakably marks the
complaint as a contingent one that must be included in the claims falling under the
terms of Section 5, Rule 86 of the Rules of Court. Metropolitan Bank & Trust Company v.
Absolute Management Corporation, G.R. No. 170498. January 9, 2013
Settlement of Estate; specific rules on settlement prevail over general rules. We read
with approval the CAs use of statutory construction principle of lex specialis derogate
generali, leading to the conclusion that the specific provisions of Section 5, Rule 86 of
the Rules of Court should prevail over the general provisions of Section 11, Rule 6 of the
Rules of Court; the settlement of the estate of deceased persons (where claims against
the deceased should be filed) is primarily governed by the rules on special proceedings,
while the rules provided for ordinary claims, including Section 11, Rule 6 of the Rules of
Court, merely apply suppletorily. Metropolitan Bank & Trust Company v. Absolute
Management Corporation, G.R. No. 170498. January 9, 2013
Other Proceedings
Construction Industry Arbitration Commission (CIAC) jurisdiction; requisites. Based on
Section 4 of E.O. No. 1008, in order for the CIAC to acquire jurisdiction, two requisites
must concur: first, the dispute must somehow be related to a construction contract;
and second, the parties must have agreed to submit the dispute to arbitration
proceedings. The Manila Insurance Company, Inc. v. Spouses Roberto and Aida
Amurao, G.R. No. 179628. January 16, 2013
Construction Industry Arbitration Commission (CIAC) jurisdiction; monetary claims under
a construction contract. In William Golangco Construction Corporation v. Ray Burton
Development Corporation, we declared that monetary claims under a construction
contract are disputes arising from differences in interpretation of the contract because

the matter of ascertaining the duties and obligations of the parties under their contract
all involve interpretation of the provisions of the contract. Following our reasoning in
that case, we find that the issue of whether respondent-spouses are entitled to collect
on the performance bond issued by petitioner is a dispute arising in the course of the
execution and performance of [the CCA] by reason of difference in the interpretation of
the contract documents. The Manila Insurance Company, Inc. v. Spouses Roberto and
Aida Amurao, G.R. No. 179628. January 16, 2013
Construction Industry Arbitration Commission (CIAC) jurisdiction; performance bond. A
careful reading of the Performance Bond reveals that the bond is coterminous with the
final acceptance of the project. Thus, the fact that it was issued prior to the execution
of the Construction Contract Agreement does not affect its validity or effectivity.
In fact, in Prudential Guarantee and Assurance, Inc. v. Anscor Land, Inc., we rejected the
argument that the jurisdiction of CIAC is limited to the construction industry, and thus
cannot be extended to surety contracts. In that case, we declared that although not
the construction contract itself, the performance bond is deemed as an associate of the
main construction contract that it cannot be separated or severed from its principal. The
Performance Bond is significantly and substantially connected to the construction
contract that there can be no doubt it is the CIAC which has jurisdiction over any dispute
arising from or connected with it. The Manila Insurance Company, Inc. v. Spouses
Roberto and Aida Amurao, G.R. No. 179628. January 16, 2013
Election Cases; review extends only to final decisions or resolutions of COMELEC en
banc and not to interlocutory orders issued by a division. The petitioners resort to the
extraordinary remedy ofcertiorari to assail and interlocutory order issued by the
COMELEC First Division is amiss. A party aggrieved by an interlocutory order issued by
a Division of the COMELEC in an election protest may not directly assail the ordr in this
Court through a special civil action for certiorari. The remedy is to seek the review of the
interlocutory order during the appeal of the decision of the Division in due course.
xxx
Thus, exceptionally, this Court may take cognizance of a certiorari action directed
against an interlocutory order issued by a Division of the COMELEC when the following
circumstances are present: first, the order was issued without jurisdiction or in excess of
jurisdiction or with grave abuse of discretion tantamount to lack or excess of
jurisdiction; and second, under the COMELEC Rules of Procedure, the subject of the
controversy is a matter which (1) the COMELEC en banc may not sit and consider or (2)
a Division is not authorized to act or (3) the members of the Division unanimously vote
to refer to the COMELEC en banc. Governor Sadikul A. Sahali and Vice-Governor Ruby
M. Sahali v. Commission on Elections (First Division), Rashidin H. Matba and Jilkasi J.
Usman, G.R. No. 201796. January 15, 2013
Financial Rehabilitation and Insolvency Act; prospective application of the law. Sec. 146
of the FRIA, which makes it applicable to all further proceedings in insolvency,

suspension of payments and rehabilitation cases xxx except to the extent that in the
opinion of the court, their application would not be feasible or would work injustice, still
presupposes a prospective application. The wording of the law clearly shows that it is
applicable to all further proceedings. In no way could it be made retrospectively
applicable to the Stay Order issued by the rehabilitation court back in 2002. Situs Dev.
Corporation, et al., v. Asiatrust Bank, et al., G.R. No. 180036. January 16, 2013
HLURB; jurisdiction; annulment of mortgages of condominium or subdivision
units. Section 1 of PD No. 957 limits the HLURBs jurisdiction to three kinds of cases: (a)
unsound real estate business practices; (b) claims involving refund and any other claims
filed by subdivision lot or condominium unit buyers against the project owner,
developer, dealer, broker or salesman; and (c) cases involving specific performance of
contractual and statutory obligations filed by buyers of subdivision lots or condominium
units against the owner, developer, dealer, broker or salesman. While paragraphs (b)
and (c) limit the HLURB cases to those between the buyer and the subdivision or
condominium owner, developer, dealer, broker, or salesman, (a) is broad enough to
include third parties to the sales contract.
Jurisprudence consistently recognizes the rationale behind the enactment of PD No. 957
to protect innocent lot buyers from scheming developers. For this reason, the Court
has broadly construed the jurisdiction of the HLURB to include complaints for annulment
of mortgages of condominium or subdivision units. Indeed, in Manila Banking
Corporation v. Spouses Rabina, even if the mortgagee bank was under
receivership/liquidation, the Court declared that the HLURB retains jurisdiction over an
action for the annulment of the mortgage:
The jurisdiction of the HLURB to regulate the real estate trade is broad enough to
include jurisdiction over complaints for annulment of mortgage. To disassociate the
issue of nullity of mortgage and lodge it separately with the liquidation court would only
cause inconvenience to the parties and would not serve the ends of speedy and
inexpensive administration of justice as mandated by the laws vesting quasi-judicial
powers in the agency. Philippine Bank of Communications v. Pridisons Realty
Corporation, Antonio Gonzales, Bormacheco, Inc., Nazario Santos, Teresita Chua Tek,
Charito Ong Lee, and Ernesto Sibal, G.R. No. 155113. January 9, 2013
Intra-corporate disputes; elements. Thus, to be considered as an intra-corporate
dispute, the case: (a) must arise out of intra-corporate or partnership relations; and (b)
the nature of the question subject of the controversy must be such that it is intrinsically
connected with the regulation of the corporation or the enforcement of the parties
rights and obligations under the Corporation Code and the internal rules of the
corporation. So long as these two criteria are satisfied, the dispute is intra-corporate
and the RTC, acting as a special commercial court, has jurisdiction over it. Vitaliano
Aguirre II and Fidel Aguirre v. FQB+7, Inc., Nathaniel Bocobo, Priscila Bocobo, and
Antonio De Villa, G.R. No. 170770. January 9, 2013

Intra-corporate disputes; application to dissolved corporations. It bears reiterating that


Section 145 of the Corporation Code protects, among others, the rights and remedies of
corporate actors against other corporate actors. The statutory provision assures an
aggrieved party that the corporations dissolution will not impair, much less remove,
his/her rights or remedies against the corporation, its stockholders, directors and
officers. It also states that corporate dissolution will not extinguish any liability already
incurred by the corporation, its stockholders, directors or officers. In short, Section 145
preserves a corporate actors cause of action and remedy against another corporate
actor. In so doing, Section 145 also preserves the nature of the controversy between the
parties as an intra-corporate dispute.
The dissolution of the corporation simply prohibits it from continuing its business.
However, despite such dissolution, the parties involved in the litigation are still
corporate actors. The dissolution does not automatically convert the parties into total
strangers or change their intra-corporate relationships. Neither does it change or
terminate existing causes of action, which arose because of the corporate ties between
the parties. Thus, a cause of action involving an intra-corporate controversy remains
and must be filed as an intra-corporate dispute despite the subsequent dissolution of
the corporation. Vitaliano Aguirre II and Fidel Aguirre v. FQB+7, Inc., Nathaniel Bocobo,
Priscila Bocobo, and Antonio De Villa, G.R. No. 170770. January 9, 2013
Just compensation; compromise agreement. There is no question that the
foregoing Agreement was a compromise that the parties freely and voluntarily entered
into for the purpose of finally settling their dispute in this case. Under Article 2028 of
the Civil Code, a compromise is a contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already commenced. Accordingly, a
compromise is either judicial, if the objective is to put an end to a pending litigation, or
extrajudicial, if the objective is to avoid a litigation. As a contract, a compromise is
perfected by mutual consent. However, a judicial compromise, while immediately
binding between the parties upon its execution, is not executory until it is approved by
the court and reduced to a judgment. The validity of a compromise is dependent upon
its compliance with the requisites and principles of contracts dictated by law. Also, the
terms and conditions of a compromise must not be contrary to law, morals, good
customs, public policy and public order.Land Bank of the Philippines v. Heirs of Spouses
Jorja Rigor Soriano and Magin Soriano, G.R. No. 178312. January 30, 2013
Evidence
Evidence; conclusive presumptions; estoppel against tenants. The conclusive
presumption found in Section 2 (b), Rule 131 of the Rules of Court, known
as estoppel against tenants, provides as follows:
Sec. 2.Conclusive presumptions. The following are instances of conclusive
presumptions:
xxxx

(b) the tenant is not permitted to deny the title of his landlord at the time of the
commencement of the relation of landlord and tenant between them. (Emphasis
supplied)
It is clear from the above-quoted provision that what a tenant is estopped from denying
is the title of his landlord at the time of the commencement of the landlord-tenant
relation. If the title asserted is one that is alleged to have been acquired subsequent to
the commencement of that relation, the presumption will not apply. Hence, the tenant
may show that the landlords title has expired or been conveyed to another or himself;
and he is not estopped to deny a claim for rent, if he has been ousted or evicted by title
paramount. In the present case, what respondent is claiming is her supposed title to the
subject property which she acquired subsequent to the commencement of the landlordtenant relation between her and petitioner. Hence, the presumption under Section 2 (b),
Rule 131 of the Rules of Court does not apply. Juanita Ermitao, represented by her
Attorney-in-fact, Isabelo Ermitao vs. Lailanie M. Paglas; G.R. No. 174436. January 23,
2013
The invaluable help of Ms. Frances Yani P. Domingo in the preparation of this
post is gratefully acknowledged.

Dissension in the Court: January 2013


Posted on February 13, 2013 by Rafael L. Encarnacion Posted in Philippines - Cases, Philippines Law, Tax Law Taggedvalue added tax Leave a comment

The same legal issue resolved in the earlier case of Fort Bonifacio Development
Corporation v. Commissioner of Internal Revenue (G.R. Nos. 158885 & 170680, 2
October 2009) regarding the proper interpretation of Section 105 (now Section 111(A))
of the National Internal Revenue Code (Tax Code) was again raised in the recent
case of Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue
and Revenue District Officer, Revenue District No. 44, Taguig and Pateros, Bureau of
Internal Revenue (G.R. No. 173425, January 22, 2013), resulting in the same decision
and dissenting opinion.
Section 105 of the old Tax Code provides:
SEC. 105. Transitional input tax credits. A person who becomes liable to valueadded tax or any person who elects to be a VAT-registered person shall, subject to the
filing of an inventory prescribed by regulations, be allowed input tax on his
beginning inventory of good, materials and supplies equivalent to 8% of the
value of such inventory or the actual value-added tax paid on such goods,
materials and supplies, whichever is higher, which shall be creditable against the
output tax. (Emphasis supplied.)
The recent case began with the purchase by Fort Bonifacio Development Corporation
(FBDC) on February 8, 1995 from the national government of a portion of the Fort

Bonifacio Global City. On January 1, 1996, RA 7716 restructured the VAT system by,
among others, extending the VAT to real properties held primarily for sale to customers
or held for lease in the ordinary course of trade of business.
On September 19, 1996, FBDC submitted to the BIR Revenue District No. 44 an
inventory of all its real properties, the book value of which aggregated around
Php71.2B, and claimed entitlement to the 8% transitional input tax credit of roughly
Php5.7B, pursuant to Section 105 of the old Tax Code.
For the first quarter of 1997, FBDC generated close to Php3.7B from its sales and lease
of lots, on which the output VAT payable was Php368.5M. FBDC credited its Php8.9M
unutilized input tax credit on purchases of goods and services (not its transitional input
tax credit) and paid Php359.6M. Realizing that its Php5.7B transitional input tax credit
was not applied in computing its output VAT for the first quarter of 1997, FBDC filed with
the BIR on November 17, 1998 a claim for refund of the Php359.6M erroneously paid as
output VAT for the said period.
The Court of Tax Appeals (CTA), to whom the matter was elevated by FBDC due to the
inaction of the Commissioner of Internal Revenue (CIR), denied on October 12, 2000
FBDCs claim for refund on the basis that the benefit of transitional input tax credit
comes with the condition that business taxes should have been paid first. The CTA
noted that since, in this case, FBDC acquired the Global City property from the national
government under a VAT-free sale transaction, it cannot avail of the transitional input
tax credit. The CTA likewise pointed out that under Revenue Regulations No. (RR) 7-95,
implementing Section 105 of the Tax Code, the 8% transitional input tax credit should
be based on the value of the improvements on land, and not on the book value of the
real property.
FBDC filed a Petition for Review before the Court of Appeals (CA), but the latter affirmed
the decision of the CTA and further ruled, as to the validity of RR 7-95, that the latter is
entitled to great weight as it was issued pursuant to the rule-making authority of the
Secretary of Finance under Section 245 of the old Tax Code. FBDC filed a Petition for
Review on Certiorari with the Supreme Court, whereupon the latter on September 4,
2012, through Justice Mariano Del Castillo, but with Justice Antonio Carpio (joined by
Chief Justice Sereno and Justices Brion, Reyes, and Perlas-Bernabe, and subsequently
Justice Leonen) dissenting, reversed the CA decision and ordered the CIR to refund
petitioner FBDC the amount of Php359,652,009.47 paid as output VAT for the first
quarter of 1997 in light of the transitional input tax credit available to petitioner for the
said quarter, or in the alternative, to issue a tax credit certificate corresponding to such
amount.
The CIR moved for reconsideration but this was denied with finality by the Supreme
Court in its order promulgated last January 22, 2013. Justice Carpio again took exception
to this ruling of the majority and voted to grant the motion for reconsideration filed by
the CIR, basing his argument on the same four grounds he had raised in this and in the
2009 FBDC case, which the majority addressed again accordingly as follows:

First, the dissenter argues that prior payment of taxes is a prerequisite before a
taxpayer could avail of the transitional input tax credit. He claims that the VAT provides
a tax crediting system that allows a tax credit for taxes previously paid when the
same goods and services are sold further in the chain of transactions. The purpose of
this tax crediting system is to prevent double taxation in the subsequent sale of the
same product or services that were already previously paid. Since the national
government did not pass on to FBDC any previous sales tax or VAT as part of the
purchase price of the Global City land (since (i) the national government is not subject
to any tax, including VAT, when the law authorizes it to sell government property like
the Global City land, and (ii) in 1995, the old VAT law did not yet impose VAT on the sale
of land), FBDC will not be subject to double taxation on its subsequent sale of that land
and is thus not entitled to any transitional input VAT refund or credit when it
subsequently sells that land.
According to the dissenter, there can be no refund or credit unless there is actual or, in
the case of the transitional input tax, assumed tax payment, whether actually paid or
not. In either case, there must be a law imposing the input VAT. This can be inferred
from the provision of Section 105 that a taxpayer is allowed input tax on his beginning
inventory equivalent to 8% , or the actual value-added tax paid , whichever
is higher. The phrase actual value-added tax paid means there was a law imposing
the VAT, whether or not it was actually paid. Since there was no law imposing VAT on
the sale of the Global City land, there is no possibility of an actual or even assumed tax
payment of input VAT on such sale. Hence, there can be no refund or credit of input
VAT. The dissenter claims that the transitional input VAT was introduced to ease the
transition from the old VAT to the expanded VAT system by allowing an 8% presumptive
input VAT on goods and services newly covered by the expanded VAT system without
need of substantiating the same, on the legal presumption that the VAT
imposed by law prior to the expanded VAT system had been paid, regardless
of whether it was actually paid.
The majority believes though that prior payment of taxes in not necessary before a
taxpayer could avail of the 8% transitional input tax credit. First, all that Section 105
requires for a taxpayer to avail of the 8% transitional input tax credit is to file a
beginning inventory with the BIR. Second, since Section 105 does not provide for prior
payment of taxes, to require it now would be tantamount to judicial legislation. Third, a
transitional input tax credit is not a tax refund per se but a tax credit and, logically, prior
payment of taxes is not required before a taxpayer could avail of transitional input tax
credit. Fourth, as held in the 2009 FBDC case, if the intent of the law were to limit the
input tax to cases where actual VAT was paid, it could have simply said that the tax
base shall be the actual VAT paid. Instead, the law as framed contemplates a situation
where a transitional input tax credit is claimed even if there was no actual payment of
VAT in the underlying transaction. In such cases, the tax base used shall be the value of
the beginning inventory of good, materials and supplies. In this regard, the majority
ruled that RR 7-95, insofar as it restricts the definition of goods under Section 105 in
relation to Section 100 of the old Tax Code (which includes real properties held
primarily for sale to customers or held for lease in the ordinary course of business) and

limits the transitional input tax credit to the value of the improvements of the real
properties, is an administrative regulation that contravenes the law on which it is based
and is hence a nullity. Fifth, as held in Commissioner of Internal Revenue v. Central
Luzon Drug Corp(496 Phil. 307 (2005):
While a tax liability is essential to the availment or use of any tax credit, prior tax
payments are not. On the contrary, for the existence or grant solely of such tax credit,
neither a tax liability nor a prior tax payment is needed. The Tax Code is replete with
provisions granting or allowing tax credits even though no taxes have been previously
paid (e.g., Tax Code Section 86(E) on estate taxes and Section 101(C) on donors taxes
which allow tax credits for taxes paid to a foreign country, even if not made to our
government; and Sections 110, 111(B), 112(A), 28(B)(5)(b), and 34(C)(3) in relation to
Section 34(C)(7)(b) which allow a tax credit where no tax is actually paid prior to
availment of the credit)
xxx
In addition to the above-cited provisions in the Tax Code, there are also tax treaties and
special laws (e.g., Article 48 of PD 1789, as amended by BP 391) that grant or allow tax
credits, even though no prior tax payments have been made.
xxx
Citing further the history of the transitional input tax credit, the majority dispels
dissenters claim that the transitional input tax credit is integrally related to previously
paid sales taxes since Congress has reenacted the transitional input tax credit several
times, belying the absence of any relationship between such tax credit and the longabolished sales taxes. Section 105 states that the transitional input tax credit may be
claimed by a newly-VAT registered person such as a starting enterprise. It is not always
true that the acquisition of goods, materials and supplies by a new business entails the
payment of taxes on its part. For example, if the goods are not acquired from a person
in the course of trade or business, the sale would be subject to capital gains tax, not
VAT, and it is the seller who would shoulder the tax. If acquired through donation, again
it is not subject to VAT but to donors tax which the donor would be liable to pay. If
through succession, again the transfer would not be subject to VAT but liable instead for
estate tax. The interpretation proffered by the CTA and the dissenter would exclude
goods which are acquired through the foregoing means from the beginning inventory on
which the transitional input tax credit is based. Nothing in the Tax Code qualifies the
previous payment of VAT or any other taxes on the goods as a prerequisite for inclusion
in the beginning inventory.
Second, the dissenter argues that Section 110(B) of the Tax Code does not allow any
cash refund of input VAT (which the decision of September 4, 2012 erroneously
allowed), only a tax credit of the input VAT against output VAT, and any excess of the
input VAT can only be carried over to the succeeding quarters until totally credited or
used up.

The majority believes, as it had already held in the 2009 FBDC case, that, while Section
110 only provides for a tax credit, a taxpayer who excessively pays his output tax is
entitled to recover the payments either as a tax credit or tax refund, and notes that
both the 2009 FBDC decision and the September 4, 2012 decision did not outrightly
direct the cash refund but instead directed the CIR toeither refund the amount paid as
output VAT or to issue a tax credit certificate.
Third, the dissenter claims that Section 112(A) of the Tax Code does not allow any cash
refund or credit of transitional input tax even for zero-rated or effectively zero-rated
taxpayers:
Sec. 112. Refunds or Tax Credits of Input Tax
(A)
Zero-rated or Effectively Zero-rated Sales. Any VAT-registered person,
whose sales are zero-rated or effectively zero-rated, may within two (2) years after the
close of the taxable quarter when the sales were made, apply for the issuance of a tax
credit certificate or refund of creditable input tax due or paid attributable to such
sales, except transitional input tax, to the extent that such input tax has not been
applied against output tax: xxx (Emphasis supplied)
Contrary to the dissent, the majority believes that Section 112 does not prohibit cash
refund or tax credit of transitional input tax and that the phrase except transitional
input tax was inserted not to exclude tax refunds or credits of transitional input tax
but to distinguish transitional input tax from creditable input tax. Transitional input tax
credits are input taxes on a taxpayers beginning inventory and may only be availed of
once by first-time VAT taxpayers. On the other hand, creditable input taxes which are
the subject of Section 112 are input taxes of VAT taxpayers in the course of their trade
of business, which should be applied within two years after the close of the taxable
quarter when the sales were made.
Fourth, the dissenter claims that the cash refund, not being supported by any prior
actual tax payment, is unconstitutional since public funds will be used to pay for the
refund which is for the exclusive benefit of petitioner, a private entity, contrary to
Section 4(2) of the Government Auditing Code requiring that government funds or
property shall be spent or used solely for public purposes. Moreover, such refund
without prior tax payment is an expenditure of public funds without an appropriation
law. Without any previous tax payment as source, a tax refund or credit will be paid out
of the general funds of the government, a payment that requires an appropriation law.
The Tax Code, particularly its provisions on VAT, is a revenue measure, not an
appropriation law.
The majority believes, however, that the grant of a refund or tax credit would not be
unconstitutional and would not contravene the Government Auditing Code because it is
precisely pursuant to Section 105 of the old Tax Code which allows a refund or tax
credit.

In sum, the majority believes that adopting the arguments presented by the dissenter
would result in the courts limiting the application or coverage of a law or imposing
conditions not provided therein and that to do so would constitute judicial legislation.

January 2013 Philippine Supreme Court Decisions on Labor Law and Procedure
Posted on February 11, 2013 by Leslie C. Dy Posted in Labor Law, Philippines - Cases, Philippines Law Tagged appeal,arbitration, backwages, forum shopping, NLRC, redundancy, reinstatement
Leave a comment

Here are select January 2013 rulings of the Supreme Court of the Philippines on labor
law and procedure:
Appeal to the National Labor Relations Commission (NLRC); Requisites for perfection of
appeal; Joint declaration under oath accompanying the surety bond; Substantial
compliance with procedural rules. There was substantial compliance with the NLRC
Rules of Procedure when the respondents PAL Maritime Corporation and Western
Shipping Agencies, Pte., Ltd. filed, albeit belatedly, the Joint Declaration Under Oath,
which is required when an employer appeals from the Labor Arbiters decision granting
a monetary award and posts a surety bond. Under the NLRC rules, the following
requisites are required to perfect the employers appeal: (1) it must be filed within the
reglementary period; (2) it must be under oath, with proof of payment of the required
appeal fee and the posting of a cash or surety bond; and (3) it must be accompanied by
typewritten or printed copies of the memorandum of appeal, stating the grounds relied
upon, the supporting arguments, the reliefs prayed for, and a statement of the date of
receipt of the appealed decision, with proof of service on the other party of said appeal.
If the employer posts a surety bond, the NLRC rules further require the submission by
the employer, his or her counsel, and the bonding company of a joint declaration under
oath attesting that the surety bond posted is genuine and that it shall be in effect until
the final disposition of the case.
In the case at bar, the respondents posted a surety bond equivalent to the monetary
award and filed the notice of appeal and the appeal memorandum within the
reglementary period. When the NLRC subsequently directed the filing of a Joint
Declaration Under Oath, the respondents immediately complied with the said order.
There was only a late submission of the Joint Declaration. Considering that there was
substantial compliance with the rules, the same may be liberally construed. The
application of technical rules may be relaxed in labor cases to serve the demands of
substantial justice. Rolando L. Cervantes vs. PAL Maritime Corporation and/or Western
Shipping Agencies, Pte., Ltd. G.R. No. 175209. January 16, 2013.
Completeness of service by registered mail; Exception to the general rule regarding a
corporations verification and certification of non-forum shopping; Interpretation of
school CBA. A school CBA must be read in conjunction with statutory and administrative
regulations governing faculty qualifications. Such regulations form part of a valid CBA
without need for the parties to make express reference to the same.

In the case at bar, the University of the East (UE) repeatedly extended only semester-tosemester faculty appointments to the respondents Pepanio and Bueno, since they had
not completed postgraduate degrees. The respondents, however, claimed that the
1994 CBA between UE and the faculty union did not yet require a masters degree for a
teacher to acquire regular status. Having rendered more than three consecutive years
of full-time service to the school, the respondents insisted that UE should have given
them permanent appointments.
The Supreme Court observed that the policy requiring college teachers to have
postgraduate degrees was provided in the Manual of Regulations issued as early as
1992 by the Department of Education, Culture and Sports (DECS), now the Department
of Education. In promulgating the Manual of Regulations, DECS exercised its power of
regulation over educational institutions, which includes prescribing the minimum
academic qualifications for teaching personnel. The legislature subsequently
transferred the power to prescribe such qualifications for teachers in institutions of
higher learning to the Commission on Higher Education (CHED). However, the 1992
Manual of Regulations issued by DECS continued to apply to colleges and universities
until 2010, when CHED issued a Revised Manual of Regulations.
Thus, the requirement of a masters degree for college teachers, as originally provided
in the 1992 Manual of Regulations, was deemed incorporated in the 1994 CBA between
UE and the faculty union. Furthermore, the subsequent CBA in 2001, which provided for
the extension of conditional probationary status to the respondents, subject to their
obtaining a masters degree within the probationary period, clearly showed that UE
intended to subject the respondents appointments to the standards set by the law.
The requirement of a masters degree for tertiary education teachers is not
unreasonable, considering that the operation of educational institutions involves public
interest. The government has a right to ensure that only qualified persons, in
possession of sufficient academic knowledge and teaching skills, are allowed to teach in
such institutions.
The Supreme Court also overruled the respondents contention that UE filed its appeal
to the NLRC beyond the required ten (10)-day period. For completeness of service by
registered mail, the reckoning period starts either from the date of actual receipt of the
mail by the addressee or after five (5) days from the date he or she received the first
notice from the postmaster. In this case, the respondents averred that, on March 17,
2005, the postmaster gave UEs counsel a notice to claim the mail containing the Labor
Arbiters decision. The respondents claimed that UEs counsel was deemed in receipt of
the decision 5 days after the giving of the notice, or on March 22, 2005. Thus,
according to the respondents, when UE filed its appeal to the NLRC on April 14, 2005,
the 10-day reglementary period had already lapsed. The Supreme Court, however,
ruled that there must be conclusive proof that the registry notice was received by or at
least served on the addressee. In this case, the records did not show that UEs counsel
in fact received the alleged registry notice requiring him to claim the mail. On the other
hand, UE was able to present a registry return receipt showing that its counsel actually

received a copy of the Labor Arbiters decision on April 4, 2005. Reckoned from this
date, the 10-day reglementary period had not yet lapsed when UE filed its appeal to the
NLRC on April 14, 2005.
Anent UEs failure to comply with the general rule that the Board of Directors or Board
of Trustees of a corporation must authorize the person who shall sign the verification
and certification of non-forum shopping accompanying a petition, the Supreme Court
held that such authorization is not necessary when it is self-evident that the signatory is
in a position to verify the truthfulness and correctness of the allegations in the petition.
The Supreme Court declared that Dean Eleanor Javier, who signed UEs verification and
certification, was in such a position, since she knew the factual antecedents of the case
and she actually communicated with the respondents regarding the required
postgraduate qualification. University of the East, et al. vs. Analiza F. Pepanio and
Mariti D. Bueno. G.R. No. 193897. January 23, 2013.
Disease as a ground for termination; Retirement under the Labor Code; Age and tenure
requirements for retirement; Financial assistance. Under the Labor Code provision on
disease as a ground for termination (formerly, Article 284, but now renumbered
pursuant to Republic Act No. 10151), it must be the employer who initiates the
termination of the employees services. The aforementioned provision cannot be
applied in this case, considering that it was the late petitioner Padillo, and not the Rural
Bank of Nabunturan, Inc. (Bank), who severed the employment relations. With his
memory impaired after suffering a mild stroke due to hypertension, Padillo wrote a letter
to the Bank, expressing his intention to avail of an early retirement package. The clear
import of Padillos letter and the fact that he had stopped reporting for work even before
sending the said letter shows that he voluntarily retired. Given the inapplicability of the
Labor Code provision on disease as a ground for termination, it necessarily follows that
Padillos claim for separation pay must be denied.
As regards Padillos claim for retirement benefits, the provision of the Labor Code on
retirement (formerly, Art. 287, but now renumbered pursuant to R.A. No. 10151) states
that, in the absence of any applicable agreement, an employee who has served at least
five (5) years in the company may retire upon reaching the age of sixty (60) years, but
not beyond sixty-five (65) years, to be entitled to retirement pay equivalent to at least
one-half (1/2) month salary for every year of service, with a fraction of at least six (6)
months being considered as one whole year. Notably, the aforementioned age and
tenure requirements are cumulative, and non-compliance with either negates the
employees entitlement to the retirement pay under the Labor Code. In this case, the
Bank did not have a retirement plan or any other contract with its employees, setting
the terms and conditions for retirement. Padillo also served the Bank for twenty-nine
(29) years, far more than the 5-year tenure requirement. Padillo, however, did not meet
the age requirement, considering that he was only fifty-five (55) years old, or less than
60 years of age, when he retired. Thus, Padillos claim for retirement pay must also be
denied.

Nevertheless, the Supreme Court awarded Padillo financial assistance in the amount of
P75,000, considering the length of time which had supervened before the disposition of
this case and Padillos unblemished record of 29 years of service to the Bank. The
award was in addition to the P100,000 benefit receivable under the Philam Life Plan that
the Bank had procured in favor of Padillo. Eleazar S. Padillo vs. Rural Bank of
Nabunturan, Inc., et al. G.R. No. 199338. January 21, 2013.
Redundancy as an authorized cause for termination; Difference between retirement and
termination due to redundancy; General rule regarding the factual findings of the NLRC
and the exceptions thereto. Under the Labor Code, redundancy is one of the authorized
causes for termination of employment. The following are the requisites for the valid
implementation of a redundancy program: (a) the employer must serve a written notice
to the affected employees and to the Department of Labor and Employment (DOLE) at
least one month before the intended date of termination; (b) the employer must pay the
employees separation pay equivalent to at least one month pay or at least one month
pay for every year of service, whichever is higher; (c) the employer must abolish the
redundant positions in good faith; and (d) the employer must set fair and reasonable
criteria in ascertaining which positions are redundant and may be abolished. The
Supreme Court has also held that a company cannot simply declare redundancy without
basis. To exhibit its good faith and to show that there were fair and reasonable criteria
in ascertaining redundant positions, a company claiming to be over manned must
produce adequate proof of the same.
In the case at bar, the General Milling Corporation (GMC) furnished respondent Viajar a
written notice informing her of the termination of her services on the ground of
redundancy. GMC also submitted to the DOLE an Establishment Termination Report,
regarding the employees, including Viajar, whose positions were deemed redundant.
Viajar and the DOLE received the respective notices one month before the effective date
of the employees termination. Furthermore, GMC issued to Viajar two checks
amounting to P440,253.02 and P21,211.35, representing her separation pay. However,
the Supreme Court held that, notwithstanding compliance with the requirements on
notice and the payment of separation pay, GMC is still considered to have illegally
dismissed Viajar because the company failed to present substantial proof to support its
general allegations of redundancy. GMC could have presented evidence to substantiate
redundancy, such as a new staffing pattern or feasibility studies or proposals on the
viability of newly created positions, job descriptions and the approval by management
of the restructuring program, or the companys audited financial reports. However, no
such evidence was submitted by GMC.
On the other hand, Viajar presented proof negating GMCs claim of redundancy and
clearly showing GMCs bad faith in implementing the redundancy program: (1) GMC had
hired new employees before it terminated Viajars employment; (2) Vaijar was barred
from entering the company premises even before the effectivity of her separation; and
(3) Viajar was also forced to sign an Application for Retirement and Benefits so that
she could avail of her separation pay. The last circumstance is significant, considering
that there is a difference between voluntary retirement and forced termination of an

employee. Retirement from service is contractual or based on a bilateral agreement of


the employer and the employee, while termination of employment is statutory or
governed by the Labor Code and other related laws. Voluntary retirement cuts
employment ties, leaving no residual employer liability; involuntary retirement amounts
to a discharge, rendering the employer liable for termination without cause. GMCs
demand that Viajar sign an Application for Retirement and Benefits, when she had
already been informed of the termination of her services due to redundancy, shows that
this case involves not a voluntary retirement, but an illegal termination.
While the Labor Arbiter and the NLRC both found that Viajar was validly dismissed, the
general rule that the factual findings of the NLRC must be accorded respect and finality
is not applicable in this case. One of the exceptions to the said rule covers instances
when the findings of fact of the trial court, or of the quasi-judicial agencies concerned,
are conflicting or contradictory with those of the Court of Appeals, as in the present
case. Another exception to the general rule is when the said findings are not supported
by substantial evidence or the inference or conclusion arrived at is manifestly
erroneous. In the case at bar, the Supreme Court agreed with the Court of Appeals that
the NLRCs conclusion that Viajar was legally dismissed is manifestly
erroneous. General Milling Corporation vs. Violeta L. Viajar. G.R. No. 181738. January
30, 2013.
Reinstatement; Backwages. It is basic in jurisprudence that illegally dismissed workers
are entitled to reinstatement with backwages plus interest at the legal rate.
This labor controversy started when the employer Automotive Engine Rebuilders, Inc.
(AER) and the Progresibong Unyon ng mga Manggagawa sa AER (Union) filed charges
against each other for violating labor laws. AER filed a complaint against the Union and
eighteen (18) of its members for conducting an illegal strike. On the other hand, thirtytwo (32) employees filed a complaint against AER for unfair labor practices, illegal
dismissal, illegal suspension, and run-away shop. In a previous decision (G.R. No.
160138, July 13, 2011), the Supreme Court had held that both parties were at fault or in
pari delicto; hence, the complaining employees should be reinstated but without
backwages. The Motion for Partial Reconsideration filed by the Union is resolved in the
present case.
The Supreme Court found that, of the 32 employees who filed the complaint against
AER, only 18 had been charged by AER with illegal strike, leaving 14 excluded from the
employers complaint. As no charges had been filed against the 14 workers, they
cannot be found guilty of illegal strike. Neither can they be considered in pari delicto.
However, of the 14 employees, five failed to write their names and affix their signatures
in the Membership Resolution attached to their petition before the Court of Appeals,
authorizing the union president to represent them. Thus, while these five employees
will also be reinstated, they cannot be granted backwages. On the other hand, the nine
workers who signed their names in the aforementioned Membership Resolution will be
reinstated with backwages plus interest at the legal rate. Automotive Engine
Rebuilders, Inc. (AER), et al. vs. Progresibong Unyon ng mga Manggagawa sa AER, et al.

/ Progresibong Unyon ng mga Manggagawa sa AER, et al. vs. Automotive Engine


Rebuilders, Inc., et al. G.R. Nos. 160138 and 160192. January 16, 2013.
Resignation; Resignation in relation to the subsequent filing of an illegal dismissal
case. Petitioner Cervantess claim that he did not resign but was terminated from
employment is untenable. Resignation is the voluntary act of an employee who finds
himself in a situation where he believes that personal reasons cannot be sacrificed in
favor of the exigency of the service, such that he has no other choice but to
disassociate himself from his employment.
In the present case, Cervantess employer merely informed him of the numerous
complaints against him. It was Cervantes himself who opted to be relieved from his
post and who initiated his repatriation to Manila. This is clear from the tenor of his telex
message, which reads in part: ANYHOW TO AVOID REPETITION [ON] MORE HARSH
REPORTS TO COME. BETTER ARRANGE MY RELIEVER [AND] C/O BUSTILLO RELIEVER
ALSO. UPON ARR NEXT USA LOADING PORT FOR THEIR SATISFACTION. Cervantess
message contains an unmistakable demand to be relieved of his assignment. His
employer merely accepted his resignation. Thus, the rule that the filing of a complaint
for illegal dismissal is inconsistent with resignation does not hold true in this case. The
clear tenor of Cervantess resignation letter and the filing of this case one year after his
alleged termination shows that the complaint for illegal dismissal was a mere
afterthought. Rolando L. Cervantes vs. PAL Maritime Corporation and/or Western
Shipping Agencies, Pte., Ltd. G.R. No. 175209. January 16, 2013.
Voluntary Arbitration; Plenary authority and jurisdiction of a voluntary arbitrator;
Concept and exercise of management prerogative; Limitations on the exercise of
management prerogative; Nature of collective bargaining agreements (CBA). Goya,
Inc.s contention that the Voluntary Arbitrator (VA) exceeded his power in ruling on a
matter not covered by the sole issue submitted for voluntary arbitration is untenable. In
a prior case, the Supreme Court has ruled that, in general, the arbitrator is expected to
decide those questions expressly stated and limited in the submission agreement.
However, since arbitration is the final resort for the adjudication of disputes, the
arbitrator can assume that he has the power to make a final settlement. The VA has
plenary jurisdiction and authority to interpret the CBA and to determine the scope of his
or her own authority. Subject to judicial review, this leeway of authority and adequate
prerogative is aimed at accomplishing the rationale of the law on voluntary arbitration
speedy labor justice.
In the case at bar, Goya, Inc. and Goya, Inc. Employees Union (Union) submitted for
voluntary arbitration the sole issue of whether or not the company is guilty of an unfair
labor practice in engaging the services of PESO, a third party service provider, under
existing CBA, laws, and jurisprudence. The Union claimed that the hiring of contractual
workers from PESO violated the CBA provision that prescribes only three categories of
workers in the company, namely: the probationary, the regular, and the casual
employees. Instead of hiring contractual workers, Goya, Inc. should have hired
probationary or casual employees, who could have become additional Union members,

pursuant to the union security clause in the CBA. The VA ruled that while Goya, Inc. was
not guilty of any unfair labor practice, it still committed a violation of the CBA, though
such violation was not gross in character. The Supreme Court held that the VAs ruling
is interrelated and intertwined with the sole issue submitted for arbitration. The ruling
was necessary to make a complete and final adjudication of the dispute between the
parties.
Furthermore, Goya, Inc.s assertion that its hiring of contractual workers was a valid
exercise of management prerogative is erroneous. Declaring that a particular act falls
within the concept of management prerogative is significantly different from
acknowledging that such act is a valid exercise thereof. While the VA and the Court of
Appeals ruled that the act of contracting out or outsourcing work is within the purview
of management prerogative, they did not declare such act to be a valid exercise
thereof. As repeatedly held, the exercise of management prerogative is not unlimited; it
is subject to the limitations found in the law, CBA, or general principles of fair play and
justice.
In this case, the CBA provision prescribing the categories of employees in the company
and the union security clause are interconnected and must be given full force and
effect. The parties in a CBA are free to establish such stipulations they may deem
convenient, provided that the same are not contrary to law, morals, good customs,
public order, or public policy. Where the CBA is clear and unambiguous, the literal
meaning of its stipulations shall control. The CBA becomes the law between the parties,
and compliance therewith is mandated by the express policy of the law. Goya, Inc. vs.
Goya, Inc. Employees Union-FFW. G.R. No. 170054. January 21, 2013.
(Leslie thanks Carlos Manuel S. Prado for his assistance in the the preparation of this
post.)

January 2013 Philippine Supreme Court Decisions on Criminal Law and Procedure
Posted on February 8, 2013 by Dominador Maphilindo O. Carrillo Posted in Criminal
Law, Philippines - Cases, Philippines - Law Tagged conspiracy, dangerous drugs, evidence, evident
premeditation, information, murder, probable cause, rape,search 1 Comment

Here are select January 2013 rulings of the Supreme Court of the Philippines on criminal
law and procedure:
1.

REVISED PENAL CODE

Conspiracy. Appellant questions the lower courts finding of conspiracy between her and
co-accused. She claims that she merely accompanied Espiritu in going to the RFC Food
Court and had nothing to do with the transaction. As a matter of fact, the shabu was not
even found in or recovered from her possession. It just so happened that she was in the

area during the delivery of the drugs. The argument did not persuade the Supreme
Court. There is conspiracy if two or more persons agree to commit a felony and decide
to commit it. Conspiracy must be proven on the same quantum of evidence as the
felony subject of the agreement of the parties. Conspiracy may be proved by direct or
circumstantial evidence consisting of acts, words, or conduct of the alleged conspirators
before, during and after the commission of the felony to achieve a common design or
purpose. The existence of conspiracy in this case was clearly established not only by the
prosecutions evidence but also by appellants very own testimony. As can be gleaned
from appellants testimony as well as from the testimony of Carla as to what transpired
during the actual buy-bust operation, appellant acted in common concert with her coaccused in the illegal sale ofshabu. She cannot therefore isolate her act of merely
accompanying Espiritu to the RFC Food Court or carrying the shabu since in conspiracy
the act of one is the act of all. To be a conspirator, one need not participate in every
detail of the execution; he need not even take part in every act or need not even know
the exact part to be performed by the others in the execution of the conspiracy. People
of the Philippines v. Simpresueta M. Seraspe, G.R. No. 180919, January 9, 2013.
Extinction of criminal liability and civil liability ex delicto upon death of accused. Article
89(1) of the Revised Penal Code provides that criminal liability is totally extinguished by
the death of the convict, as to the personal penalties; and as to pecuniary penalties,
liability therefor is extinguished only when the death of the offender occurs before final
judgment. It is also settled that upon the death of the accused pending appeal of his
conviction, the criminal action is extinguished inasmuch as there is no longer a
defendant to stand as the accused; the civil action instituted therein for recovery of civil
liability ex delicto is ipso facto extinguished, grounded as it is on the criminal. While
appellant Florencio died way back on February 7, 2007, the said information was not
timely relayed to the Supreme Court (SC), such that the SC was unaware of the same
when it rendered its December 14, 2011 Decision. It was only later that the SC was
informed of Florencios death through the June 8, 2012 letter of the Officer-in-Charge of
the New Bilibid Prison. Due to this development, it therefore became necessary for the
SC to declare Florencios criminal liability, as well as his civil liability ex delicto, to have
been extinguished by his death prior to final judgment. The judgment of conviction is
thus set aside insofar as Florencio is concerned. People of the Philippines v. Florencio
Agacer, et al, G.R. No. 177751, January 7, 2013.
Instigation; distinguished from entrapment. Appellant raises the defense of instigation
to gain her acquittal. She argues that the government, through the PAOCTF operatives,
induced her to commit the offense when they repeatedly approached and asked her to
sell them shabu. The Supreme Court was unswayed. Instigation means luring the
accused into a crime that he, otherwise, had no intention to commit, in order to
prosecute him. It differs from entrapment which is the employment of ways and means
in order to trap or capture a criminal. In instigation, the criminal intent to commit an
offense originates from the inducer and not from the accused who had no intention to
commit and would not have committed it were it not for the prodding of the inducer. In
entrapment, the criminal intent or design originates from the accused and the law
enforcers merely facilitate the apprehension of the criminal by using ruses and

schemes. Instigation results in the acquittal of the accused, while entrapment may lead
to prosecution and conviction. Here, the evidence clearly established that the police
operatives employed entrapment, not instigation, to capture appellant and her cohorts
in the act of selling shabu. It must be recalled that it was only upon receipt of a report of
the drug trafficking activities of Espiritu from the confidential informant that a buy-bust
team was formed and negotiations for the sale of shabu were made. Also, appellant
testified that she agreed to the transaction of her own free will when she saw the same
as an opportunity to earn money. Notably too, appellant was able to quickly produce a
sample. This confirms that she had a ready supply of the illegal drugs. Clearly, she was
never forced, coerced or induced through incessant entreaties to source the prohibited
drug for Carla and PO3 Cario and this she even categorically admitted during her
testimony. People of the Philippines v. Simpresueta M. Seraspe, G.R. No. 180919,
January 9, 2013.
Mitigating circumstances; minority of accused may be proved on appeal. Appellant
Franklin is entitled to the privileged mitigating circumstance of minority. Franklins
Certificate of Live Birth shows that he was born on December 20, 1981; hence, he was
merely 16 years old at the time of the commission of the crime on April 2, 1998. He is
therefore entitled to the privileged mitigating circumstance of minority embodied in
Article 68(2) of the Revised Penal Code. It provides that when the offender is a minor
over 15 and under 18 years, the penalty next lower than that prescribed by law shall be
imposed on the accused but always in the proper period. The rationale of the law in
extending such leniency and compassion is that because of his age, the accused is
presumed to have acted with less discernment. This is regardless of the fact that his
minority was not proved during the trial and that his birth certificate was belatedly
presented for our consideration, since to rule accordingly will not adversely affect the
rights of the state, the victim and his heirs. People of the Philippines v. Florencio Agacer,
et al, G.R. No. 177751, January 7, 2013.
Murder; elements. To be convicted of murder, the following must be established: (1) a
person was killed; (2) the accused killed him; (3) the killing was with the attendance of
any of the qualifying circumstances under Article 248 of the Revised Penal Code; and (4)
the killing neither constitutes parricide nor infanticide. People of the Philippines v.
Benjamin Peteluna and Abundio Binondo, G.R. No. 187048, January 23, 2013.
Murder; evident premeditation. The SC, however held that, the prosecution failed to
establish the presence of the qualifying circumstance of evident premeditation. Such
could only be appreciated if there was evidence to show the following: (1) the time
when the offender was determined to commit the crime; (2) an act manifestly indicating
that the accused clung to his determination; and (3) a sufficient lapse of time between
determination and execution to allow himself time to reflect upon the consequences of
his act. None, for any such circumstance, was offered in the instant case. The testimony
of Romeo, save from the statement that the appellants were whispering to each other
before they placed their arms on Pablos shoulder, was confined to the acts that caused
the death of the victim. People of the Philippines v. Benjamin Peteluna and Abundio
Binondo, G.R. No. 187048, January 23, 2013.

Murder; treachery. Appellants maintain that the qualifying circumstance of treachery


was not attendant in the commission of the crime considering that there was no
element of surprise when Pablo was attacked. Pablo had the opportunity to defend
himself. Appellant Benjamin, in his Supplemental Brief, further argued that even if there
was suddenness of the attack, Pablo could have chosen to retreat. The Supreme Court
(SC) was not convinced. The SC has time and again declared that the essence of
treachery is a deliberate and sudden attack, affording the hapless, unarmed and
unsuspecting victim no chance to resist or to escape, and that it may still exist even if
the attack is frontal so long as the same is sudden and unexpected. In this case, it was
clear that the elderly victim had no inkling of the impending danger against him. The
attack was sudden notwithstanding the prior act of placing the assailants arms on the
shoulder of the victim because such was done in a friendly manner. Records would show
that Pablo was fifty-seven (57) years old at the time of his death. Admittedly, ones
thought processes and reflexes slow with age that Pablo did not readily understand the
intentions of the appellants. The attack was, therefore, clearly sudden and
unexpected. People of the Philippines v. Benjamin Peteluna and Abundio Binondo, G.R.
No. 187048, January 23, 2013.
Rape; absence of injuries on genitalia of victim not a defense. The accused argues that
the findings of old healed vaginal lacerations during the physical examinations
disproved the charges against him, stressing that the old healed lacerations, being
indicative of the lapse of three months from the time of the alleged sexual assault to the
time of the medical examination, belied AAAs claim of being raped on April 13, 1999,
which was but only two months prior to the medical examination. He insists that the
finding that her genitalia showed no fresh laceration or hymenal injury suffered in the
previous seven days was inconsistent with BBBs claim about being raped nine hours
prior to her physical examination. The Supreme Court held that the arguments of the
accused are unwarranted. The essence of rape is the carnal knowledge of a female
either against her will(through force or intimidation) or without her consent (where the
female is deprived of reason or otherwise unconscious, or is under 12 years of age, or is
demented). Carnal knowledge of a female simply means a male having bodily
connections with a female. As such, the presence or absence of injury or laceration in
the genitalia of the victim is not decisive of whether rape has been committed or not.
Such injury or laceration is material only if force or intimidation is an element of the
rape charged; otherwise, it is merely circumstantial evidence of the commission of the
rape. Verily, a medical examination and a medical certificate, albeit corroborative of the
commission of rape, are not indispensable to a successful prosecution for rape. The
accused may then be convicted solely on the basis of the victims credible, natural and
convincing testimony. This is no less true when the rape victim testifies against her own
father; unquestionably, there would be reason to give her testimony greater weight than
usual. People of the Philippines v. Pedro Buado Jr., y Cipriano, G.R. No. 170634, January
8, 2013.
Rape; assessment by the trial court of the credibility of the victims testimony
respected. Ultimately and frequently, the resolution of the charge of rape hinges on the
credibility of the victims testimony. The Supreme Court has consistently relied on the

assessment of such credibility by the trial court, because the factual findings of the trial
court, particularly those bearing on such assessment, are the product of the trial judges
peculiar opportunity to observe the deportment and demeanor of the witnesses while
they personally appear and testify during the trial, as contrasted with the dependence
by the appellate courts on the mute pages of the records of the trial. This consistent
reliance proceeds from the reality that the trial judge is in the best position to detect
that frequently thin line between truth and prevarication that determines the guilt or
innocence of the accused. Thus, an appellate court will not disturb the credence the trial
court accorded to the testimonies of the witnesses unless the trial court is shown to
have overlooked or arbitrarily disregarded facts and circumstances of significance in the
correct resolution of the case. Here, the Regional Trial Court as the trial court and the
Court of Appeals as the intermediately reviewing tribunal did not overlook or disregard
any fact or circumstance of significance. Instead, they correctly appreciated the
evidence, and rightly concluded that the accused committed the rapes of his own
daughters.They regarded and accepted AAA and BBB as credible witnesses whose
recollections about their fathers lecherous acts deserved the fullest faith and credence.
The trial records entirely supported the lower courts findings in favor of the credibility
of AAA and BBBs recollections. Indeed, AAA and BBB deserved the credence accorded
to them, for they were reliable in their recollection of their ordeals at the hands of the
accused. People of the Philippines v. Pedro Buado, Jr., y Cipriano, G.R. No. 170634,
January 8, 2013.
Rape; delay of victim in reporting of rape not a defense. Accused-appellant tries to
undermine the credibility of AAA as a rape victim. He contends that the belated filing
of the Complaint, AAAs act of still returning to their house even after she was
allegedly raped therein by the appellant, her failure to shout and offer resistance during
the rape, and the several material inconsistencies between her affidavit and her open
court testimony, tainted her credibility. The Supreme Court (SC) disagreed. Indeed,
there was no prompt revelation of what befell AAA. But this is, according to the SC,
not enough reason to discredit her. A delay in reporting a rape case for two months or
longer, as in this case, cannot be taken against the rape victim. Long silence and delay
in reporting the crime of rape have not always been construed as indications of a false
accusation. A rape charge becomes doubtful only when the delay or inaction in
revealing its commission is unreasonable and unexplained. In this case. AAAs delay in
filing the Complaint is not without a valid reason. She was cowed by appellants threats
which hindered her from immediately reporting her painful ordeal to the
authorities. People of the Philippines v. Rolando Cabungan, G.R. No. 189355, January
23, 2013.
Rape; lack of resistance of victim. Neither does AAAs alleged failure to shout and offer
resistance during the incident deserve credence. Contrary to appellants assertion, the
records show that AAA tried to resist his advances but was not successful because he
is bigger and stronger than her. In any event, the law does not impose upon a rape
victim the burden of proving resistance especially when, as in this case, intimidation is
exercised upon the victim who submitted herself to the advances of her assailant

because of fear for her life. People of the Philippines v. Rolando Cabungan, G.R. No.
189355, January 23, 2013.
Rape; minor inconsistencies in testimony of rape victim. Anent the inconsistencies
between AAAs affidavit and her testimony in open court as pointed out by the
appellant, the SC found that the same are not material and refer only to minor details.
The alleged contradictions as to whether appellant is her uncle or step-father and
whether it was she or her friend who revealed her ordeal to her mother are
inconsequential matters that will not affect the determination of whether appellant is
innocent of the crime charged or not. People of the Philippines v. Rolando
Cabungan, G.R. No. 189355, January 23, 2013.
Rape; principles guiding appellate courts in review of rape convictions. In reviewing rape
convictions, the Court has been guided by three principles, namely: (a) that an
accusation of rape can be made with facility; it is difficult for the complainant to prove
but more difficult for the accused, though innocent, to disprove; (b) that in view of the
intrinsic nature of the crime of rape as involving only two persons, the rapist and the
victim, the testimony of the complainant must be scrutinized with extreme caution; and
(c) that the evidence for the Prosecution must stand or fall on its own merits, and
cannot be allowed to draw strength from the weakness of the evidence for the
defense. People of the Philippines v. Pedro Buado, Jr., y Cipriano, G.R. No. 170634,
January 8, 2013.
Rape; special qualifying relationship of victim with the accused should be proved. The
crime committed in this case is simple rape only in view of the failure of the prosecution
to prove with clarity the special qualifying circumstance of relationship. While the
information alleges that AAA is the step-daughter of the appellant, there is nothing on
record to support the same. The step-father step-daughter relationship as a qualifying
circumstance presupposes that the victims mother and the accused are married to
each other which, however, is not obtaining in this case. Hence, the Court of Appeals
affirmance of the penalty of reclusion perpetua as imposed upon appellant by the
Regional Trial Court is proper. People of the Philippines v. Rolando Cabungan, G.R. No.
189355, January 23, 2013.
2.

SPECIAL PENAL LAWS

Dangerous Drugs; chain of custody rule. The accused argues that the NBI operatives
failed to observe the chain of custody rule in dangerous drugs cases. The Supreme
Court did not agree. The alleged failure of the apprehending team to inventory and
photograph the confiscated items immediately after the operation is not fatal to the
prosecutions cause. What is of utmost importance is the preservation of the integrity
and the evidentiary value of the seized items, as the same would be used in the
determination of the guilt or innocence of the accused. Here, the integrity and
evidentiary value of the seized drugs had been preserved as there is evidence to
account for the crucial links in the chain of custody of the seized shabu, starting from its

confiscation to its presentation as evidence in the Regional Trial Court. People of the
Philippines v. Hong Yen E and Tsien Tsien Chua, G.R. No. 181826, January 9, 2013.
Illegal Possession of Dangerous Drugs; elements. The elements of illegal possession of
prohibited drugs are as follows: (a) the accused is in possession of an item or object
which is identified to be a prohibited drug; (b) such possession is not authorized by law;
and (c) the accused freely and consciously possessed the prohibited drug. The evidence
on record clearly established that appellant Chua was in possession of the plastic bags
containing prohibited drugs without the requisite authority. Applying section 3(j), Rule
131 of the Rules of Court, a disputable presumption arises that she is the owner of the
bag and its contents. It may be rebutted by contrary proof that the accused did not in
fact exercise power and control over the thing in question, and did not intend to do so.
The burden of evidence is thus shifted to the possessor to explain absence ofanimus
possidendi. Here, Chua failed to present evidence to rebut the presumption. People of
the Philippines v. Hong Yen E and Tsien Tsien Chua, G.R. No. 181826, January 9, 2013.
Illegal Sale of Dangerous Drugs; buy-bust operations or decoy solicitations are valid. A
police officers act of soliciting drugs from appellant during the buy-bust operation, or
what is known as the decoy solicitation, is not prohibited by law and does not
invalidate the buy-bust operation. InPeople v. Legaspi, the Supreme Court pronounced
that in a prosecution for sale of illicit drugs, any of the following will not exculpate the
accused: (1) that facilities for the commission of the crime were intentionally placed in
his way; or (2) that the criminal act was done at the solicitation of the decoy or poseurbuyer seeking to expose his criminal act; or (3) that the police authorities feigning
complicity in the act were present and apparently assisted in its commission. Hence,
even assuming that the PAOCTF operatives repeatedly asked her to sell them shabu,
appellants defense of instigation will not prosper. This is especially true in that class of
cases where the offense is the kind that is habitually committed, and the solicitation
merely furnished evidence of a course of conduct. Mere deception by the police officer
will not shield the perpetrator, if the offense was committed by him free from the
influence or instigation of the police officer. People of the Philippines v. Simpresueta M.
Seraspe, G.R. No. 180919, January 9, 2013.
Illegal Sale of Dangerous Drugs; elements. In the prosecution of illegal sale of
dangerous drugs, the two essential elements are: (1) the identity of the buyer and the
seller, the object, and the consideration; and (2) the delivery of the thing sold and the
payment therefor. Hence, evidence that establishes both elements by the required
quantum of proof, i.e., guilt beyond reasonable doubt, must be presented. Here, the
said elements were duly proved by the prosecution. Carla and P/Chief Insp. Dandan
positively identified appellant and her co-accused as the sellers of the contraband who
sold the same in exchange for the marked money. The item was seized, marked and
upon examination was identified as shabu, a dangerous drug. The same was
subsequently presented in evidence. Moreover, Carla provided a detailed testimony as
to the delivery and sale ofshabu. Thus, the Supreme Court (SC) found no reason to
doubt the above testimony of Carla. Aside from the fundamental rule that findings of
the trial court regarding the credibility of prosecution witnesses are accorded respect

considering that it is the trial court that had the opportunity to observe their conduct
and demeanor, the SC noted that appellant herself corroborated the prosecutions
account of the crime. People of the Philippines v. Simpresueta M. Seraspe, G.R. No.
180919, January 9, 2013.
RA 7832; 48-hour prior notice of disconnection of electricity required; damages awarded
for improper disconnection of electricity. The Court of Appeals here held that petitioner
abused its right when it disconnected the electricity of Permanent Light. The appellate
court upheld the validity of the provision in petitioners service contract which allows
the utility company to disconnect service upon a customers failure to pay the
differential billing. It however stressed that under section 97 of Revised Order No. 1 of
the Public Service Commission, the right of a public utility to discontinue its service to a
customer is subject to the requirement of a 48-hour written notice of disconnection.
Petitioners failure in this regard, according to the appellate court, justifies the award of
moral and exemplary damages to respondents. The Supreme Court (SC) took note of
Resolution No. 95-21, or the Standard Rules and Regulations Governing the Operation of
Electrical Power Services, of the Energy Regulatory Board (ERB) which superseded and
revoked Revised Order No. 1 of the Public Service Commission adopted on November
27, 1941. Section 48 of ERB Resolution No. 95-21, reads: SEC. 48. Refusal or
Discontinuance of Service. Service may be discontinued for the non-payment of bills
as provided for in Section 43 hereof, provided that a forty eight (48)-hour written notice
of such disconnection has been given the customer. True, Section 48 of ERB Resolution
No. 95-21 expressly provides for the application of the 48-hour notice rule to Section 43
on Payment of Bills. However, petitioner Meralco, through its Revised Terms and
Conditions of Service, adopted said notice requirement in cases where disconnection of
service is warranted because (1) the consumer failed to pay the adjusted bill after the
meter stopped or failed to register the correct amount of energy consumed, (2) or for
failure to comply with any of the terms and conditions, (3) or in case of or to prevent
fraud upon the Company. Considering the discovery of the tampered meter by its Fully
Phased Inspectors, petitioner Meralco could have disconnected electricity to Permanent
Light for no other reason but to prevent fraud upon the Company. Therefore, under the
Revised Terms and Conditions of Service vis--vis Section 48 of ERB Resolution No. 9521, petitioner is obliged to furnish respondents with a 48-hour notice of disconnection.
Having failed in this regard, the SC found basis for the award of moral and exemplary
damages in favor of respondents for the unceremonious disconnection of electricity to
Permanent Light. Manila Electric Company (MERALCO) v. Atty. P.M. Castillo, doing
business under the trade name and style of Permanent Light Manufacturing Enterprises,
et al, G.R. No. 182976. January 14, 2013.
RA 9262; violence against women and children; leniency in favor of accused due to
ambiguity of the law inapplicable. The Supreme Court held that it cannot construe the
statute in favor of petitioner using the rule of leniency because there is no ambiguity in
RA 9262 that would necessitate any construction. While the degree of physical harm
under RA 9262 and Article 2668 of the Revised Penal Code are the same, there is
sufficient justification for prescribing a higher penalty for the former. Clearly, the
legislative intent is to purposely impose a more severe sanction on the offenders whose

violent act/s physically harm women with whom they have or had a sexual or dating
relationship, and/or their children with the end in view of promoting the protection of
women and children. Karlo Angelo Dabalos y San Diego v. Regional Trial Court, Branch
59, Angeles City, etc., et al, G.R. No. 193960, January 7, 2013.
RA 9262; violence against women and children; crime of violence against women;
elements. Petitioner here insists that the act which resulted in physical injuries to
private respondent is not covered by RA 9262 because its proximate cause was not their
dating relationship. Instead, he claims that the offense committed was only slight
physical injuries under the Revised Penal Code which falls under the jurisdiction of the
Municipal Trial Court. The Supreme Court (SC) did not give credence to this argument.
In Ang v. Court of Appeals, the SC enumerated the elements of the crime of violence
against women through harassment, to wit: (1) The offender has or had a sexual or
dating relationship with the offended woman; (2) The offender, by himself or through
another, commits an act or series of acts of harassment against the woman; and (3) The
harassment alarms or causes substantial emotional or psychological distress to
her. Karlo Angelo Dabalos y San Diego v. Regional Trial Court, Branch 59, Angeles City,
etc., et al, G.R. No. 193960, January 7, 2013.
RA 9262; violence against women and children; crime of violence against women need
not be a consequence of an existing or present dating relationship. Notably, while it is
required that the offender has or had a sexual or dating relationship with the offended
woman for RA 9262 to be applicable, it is not indispensable that the act of violence be a
consequence of such relationship. Nowhere in the law can such limitation be inferred.
Hence, applying the rule on statutory construction that when the law does not
distinguish, neither should the courts, then, clearly, the punishable acts refer to all acts
of violence against women with whom the offender has or had a sexual or dating
relationship. As correctly ruled by the Regional Trial Court, it is immaterial whether the
relationship had ceased for as long as there is sufficient evidence showing the past or
present existence of such relationship between the offender and the victim when the
physical harm was committed. Consequently, the SC did not depart from the parallelism
in Ang and give credence to petitioners assertion that the act of violence should be due
to the sexual or dating relationship.Karlo Angelo Dabalos y San Diego v. Regional Trial
Court, Branch 59, Angeles City, etc., et al, G.R. No. 193960, January 7, 2013.
3.

CRIMINAL PROCEDURE

Alibi and Denial; alibi cannot prevail over positive identification. It is a time-honored
principle that the positive identification of the appellant by a witness destroys the
defense of alibi and denial. In this case, Romeo positively identified the appellants,
whom he both knew since he was a child, thereby rendering the defenses of alibi and
denial weak. Certainly, it was not physically impossible for appellant Abundio to be at
the hilly portion of Sitio Liki where Pablo was attacked, the same being only a kilometer
away from his own house and two (2) kilometers away from the farm where he and his
father allegedly were on that fateful day. Appellant Benjamins bare denial, on the other
hand, is definitely self-serving. It cannot stand against the positive identification of an

unbiased and credible witness. People of the Philippines v. Benjamin Peteluna and
Abundio Binondo, G.R. No. 187048, January 23, 2013.
Information; designation of the crime charged not controlling; language of the statute
need not be used. Amistoso was specifically charged in the Information with statutory
rape under Article 266-A, paragraph (1)(d), of the Revised Penal Code. It is undisputed
that AAA was over 12 years old on July 10, 2000; thus, Amistoso cannot be convicted of
statutory rape. Nonetheless, it does not mean that Amistoso cannot be convicted of
rape committed under any of the other circumstances described by Article 266-A,
paragraph 1 of the Revised Penal Code, as long as the facts constituting the same are
alleged in the Information and proved during trial. What is controlling in an Information
should not be the title of the complaint, nor the designation of the offense charged or
the particular law or part thereof allegedly violated, these being by and large mere
conclusions of law made by the prosecutor, but the description of the crime charged
and the particular facts therein recited. In addition, the Information need not use the
language of the statute in stating the acts or omissions complained of as constituting
the offense. What is required is that the acts or omissions complained of as constituting
the offense are stated in ordinary and concise language sufficient to enable a person of
common understanding to know the offense charged. People of the Philippines v.
Anastacio Amistoso y Broca, G.R. No. 201447, January 9, 2013.
Information; designation of the crime charged not controlling; language of the statute
need not be used. In this case, a perusal of the Information against Amistoso reveals
that the allegations therein actually constitute a criminal charge for qualified rape under
Article 266-A, paragraph (1)(a), in relation to Section 266-B, paragraph (1) of the
Revised Penal Code. The elements of rape under Article 266-A, paragraph (1)(a) of the
Revised Penal Code are: (1) that the offender had carnal knowledge of a woman; and (2)
that such act was accomplished through force, threat, or intimidation. But when the
offender is the victims father, there need not be actual force, threat, or intimidation.
Then to raise the crime of simple rape to qualified rape under Article 266-B, paragraph
(1) of the Revised Penal Code, the twin circumstances of minority of the victim and her
relationship to the offender must concur. The foregoing elements of qualified rape under
Article 266-A, paragraph (1)(a), in relation to Article 266-B , paragraph (1), of the
Revised Penal Code, are sufficiently alleged in the Information against Amistoso, viz: (1)
Amistoso succeeded in having carnal knowledge of AAA against her will and without her
consent; (2) AAA was 12 years old on the day of the alleged rape; and (3) Amistoso is
AAAs father. Amistoso cannot claim that he had been deprived of due process in any
way. He adequately understood from the Information that he was being charged with
the rape of his own daughter AAA to which he proffered the defense of denial and alibi,
totally refuting the fact of AAAs rape regardless of how it was purportedly
committed.People of the Philippines v. Anastacio Amistoso y Broca, G.R. No. 201447,
January 9, 2013.
Petition for Certiorari; Rule 65 petition for certiorari distinguished from Rule 45 petition
for review on certiorari. The petitioner committed a serious procedural faux pas by filing
before the Supreme Court (SC) a petition for certiorari under Rule 65, when the proper

remedy should have been a petition for review on certiorari under Rule 45 of the Rules
of Court. Decisions, final orders or resolutions of the Court of Appeals (CA) in any
case, i.e., regardless of the nature of the action or proceedings involved, may be
appealed to the SC by filing a petition for review under Rule 45, which would be but a
continuation of the appellate process over the original case. The period to file a petition
for review on certiorari is 15 days from notice of the decision appealed from or of the
denial of the petitioners motion for reconsideration. Here, the petitioner received a
copy of the CAs May 5, 2010 Resolution, which denied his second motion for
reconsideration, on May 20, 2010, thus, he only had until June 4, 2010 to file a petition
for review on certiorari with the SC. This he failed to do. The perfection of an appeal in
the manner and within the period prescribed by law is mandatory. Failure to conform to
the rules regarding appeal will render the judgment final and executory and, hence,
unappealable. Thus, the petitioners failure to file a petition for review under Rule 45
within the reglementary period rendered the CAs June 24, 2008 Decision, as modified
by its March 4, 2009 Resolution, final and executory. Raul Escalante v. People of the
Philippines, et al, G.R. No. 192727, January 9, 2013.
Petition for Certiorari; Rule 65 petition for certiorari no substitute for a Rule 45 petition
for review on certiorari. It is at once evident that the instant certiorari action is merely
being used by the petitioner to make up for his failure to promptly interpose an appeal
from the CAs June 24, 2008 Decision and March 4, 2009 Resolution. However, a special
civil action under Rule 65 cannot cure petitioners failure to timely file a petition for
review on Certiorari under Rule 45 of the Rules of Court. It is settled that a special civil
action for certiorari will not lie as a substitute for the lost remedy of appeal, especially if
such loss or lapse was occasioned by ones own neglect or error in the choice of
remedies. Raul Escalante v. People of the Philippines, et al, G.R. No. 192727, January 9,
2013.
Preliminary investigations; probable cause; courts may review probable-cause findings
of public prosecutors where grave abuse of discretion is shown. Petitioner contends
that the Court of Appeals (CA) should not have taken cognizance of the petitions
for certiorari filed before it because criminal proceedings shall not be restrained once
probable cause has been determined and the corresponding information has been filed
in courts. The Supreme Court, invoking its judicial power under Section 1, Article VIII of
the 1987 Constitution, held that, settled is the rule that courts retain the power to
review findings of prosecutors in preliminary investigations, although in a mere few
exceptional cases showing grave abuse of discretion. Although policy considerations
call for the widest latitude of deference to the prosecutors findings, courts should not
shirk from exercising their power, when the circumstances warrant, to determine
whether prosecutors findings are supported by the facts or by the law. In so doing,
courts do not act as prosecutors but as organs of the judiciary that are exercising their
mandate under the Constitution, relevant statutes, and remedial rules to settle cases
and controversies. Antonio L Tan, Jr. v. Yoshitsugu Matsuura and Carolina
Tanjutco/Antonio L. Tan Jr. v. Julie O Cua, G.R. Nos. 179003 & 195816. January 9, 2013.

Preliminary investigations; probable cause; courts may review probable-cause findings


of public prosecutors where grave abuse of discretion is shown. While the findings of
prosecutors are reviewable by the Department of Justice (DOJ), this does not preclude
courts from intervening and exercising their powers of review with respect to the DOJs
findings. In the exceptional case in which grave abuse of discretion is committed, as
when a clear sufficiency or insufficiency of evidence to support a finding of probable
cause is ignored, the Court of Appeals (CA) may take cognizance of the case via a
petition under Rule 65 of the Rules of Court. Based on the grounds raised by the
respondents in their petitions with the CA, the appellate courts exercise of its power to
review was also the proper and most prudent course to take after the Secretary had
successively issued several resolutions with varying findings of fact and conclusions of
law on the existence of probable cause, even contrary to the own findings of the Office
of the City Prosecutor that conducted the preliminary investigation. Although by itself,
such circumstance was not indicative of grave abuse of discretion, there was a clear
issue on the Secretary of Justices appreciation of facts, which commanded a review by
the court to determine if grave abuse of discretion attended the discharge of his
functions. Antonio L Tan, Jr. v. Yoshitsugu Matsuura and Carolina Tanjutco/Antonio L. Tan
Jr. v. Julie O Cua, G.R. Nos. 179003 & 195816. January 9, 2013.
Searches and Seizures; conduct of house searches; presence of owner of house during
search not indispensable where witnesses present. The Supreme Court held that there
was nothing irregular in the conduct of search of petitioners house. There were
variations in the witnesses testimonies as to whether petitioner was inside the house
during the search. One witness testified that petitioner was coming in and out of the
house during the search while the other witnesses claimed that petitioner was waiting
just outside the house. Assuming that petitioner was indeed outside the house, it does
not taint the regularity of the search. Section 8, Rule 126 of the Rules of Court allows
the absence of the lawful occupant provided that two witnesses are present. The
presence of the two barangay officials was not disputed by petitioner. As found by the
trial court, accused-appellant and his wife were not prevented from entering their house
to observe the search conducted therein. This is bolstered by the testimonies of police
officers. Thus, PO3 Villano testified on cross-examination that the wife of the accused
was inside, watching. Likewise. P/C Insp. Perfecto de Lima Jr. testified that the accusedappellant and his wife went in and out of their house while the team was conducting a
search inside said house; that Valleno and his wife stood outside and sometimes, came
in while the search was being conducted; and that before the search the Valleno
spouses were requested not to go inside the house, but during the search they kept
going in and out of said house. In addition, the search was conducted in the presence of
two witnesses of sufficient age and discretion residing in the same locality, in the
persons of Brgy. Kgd. Reynaldo Brito and Chief Tanod Wilfredo Brito. Resultantly, the
seized items cannot therefore, be considered as fruits of the poisonous tree. Nelson
Valleno y Lucito v. People of the Philippines, G.R. No. 192050, January 9, 2013.
Testimony of Police Officers; presumption of regularity in the performance of functions;
minor inconsistencies in testimonies not fatal. The Supreme Court (SC) noted the
inconsistencies in the testimonies of prosecution witnesses, particularly that

of barangay tanod Reynaldo Brito and PO3 Molina, relating to the place where one of
the plastic sachets was found and to the person who brought the illegal drugs to the
crime laboratory, respectively. The SC however brushed aside these inconsistencies as
inconsequential. Indeed, one can hardly expect their testimonies to be in perfect
agreement. As held in the past, it is perhaps too much to hope that different
eyewitnesses shall give, at all times, testimonies that are in all fours with the realities
on the ground. Minor discrepancies in their testimonies are, in fact, to be expected; they
neither vitiate the essential integrity of the evidence in its material entirety nor reflect
adversely on the credibility of witnesses.Nelson Valleno y Lucito v. People of the
Philippines, G.R. No. 192050, January 9, 2013.
Testimony of Police Officers; presumption of regularity in the performance of functions;
minor inconsistencies in testimonies not fatal. For a successful appeal, the
inconsistencies brought up should pertain to that crucial moment when the accused was
caught selling shabu, not to peripheral matters. Testimonies of witnesses need only
corroborate each other on important and relevant details concerning the principal
occurrence. The inconsistent testimony of Reynaldo Brito deserves little weight in light
of the consonant testimonies of all the police officers who testified in court. It is wellsettled that the testimonies of the police officers in dangerous drugs cases carry with it
the presumption of regularity in the performance of official functions. Absent any clear
showing that the arresting officers had ill-motive to falsely testify against the petitioner,
their testimonies must be respected and the presumption of regularity in the
performance of their duties must be upheld. Petitioner himself testified that he never
had any personal encounter with the police prior to his arrest, thus negating any illmotive on the part of the police officers. Nelson Valleno y Lucito v. People of the
Philippines, G.R. No. 192050, January 9, 2013.
(Lindy thanks Izabel Seria, Elaine de los Santos, and Vince Juan for their assistance in
the preparation of this post.)

January 2013 Philippine Supreme Court Decisions on Commercial Law


Posted on February 1, 2013 by Hector M. de Leon Jr Posted in Commercial Law, Philippines Cases, Philippines - Law Tagged corporation, rehabilitation Leave a comment

Here are select January 2013 rulings of the Supreme Court of the Philippines on
commercial law:
Corporations; power of bank employee to bind bank. Even assuming that the bank
officer or employee whom petitioner claimed he had talked to regarding the March 22,
1984 letter had acceded to his own modified terms for the repurchase, their supposed
verbal exchange did not bind respondent bank in view of its corporate nature. There
was no evidence that said Mr. Lazaro or Mr. Fajardo was authorized by respondent

banks Board of Directors to accept petitioners counter-proposal to repurchase the


foreclosed properties at the price and terms other than those communicated in the
March 22, 1984 letter. As this Court ruled in AF Realty & Development, Inc. v. Dieselman
Freight Services, Co.:
Section 23 of the Corporation Code expressly provides that the corporate powers of all
corporations shall be exercised by the board of directors. Just as a natural person may
authorize another to do certain acts in his behalf, so may the board of directors of a
corporation validly delegate some of its functions to individual officers or agents
appointed by it. Thus, contracts or acts of a corporation must be made either by the
board of directors or by a corporate agent duly authorized by the board. Absent such
valid delegation/authorization, the rule is that the declarations of an individual director
relating to the affairs of the corporation, but not in the course of, or connected with, the
performance of authorized duties of such director, are held not binding on the
corporation.
Thus, a corporation can only execute its powers and transact its business through its
Board of Directors and through its officers and agents when authorized by a board
resolution or its by-laws.
In the absence of conformity or acceptance by properly authorized bank officers of
petitioners counter-proposal, no perfected repurchase contract was born out of the
talks or negotiations between petitioner and Mr. Lazaro and Mr. Fajardo. Petitioner
therefore had no legal right to compel respondent bank to accept the P600,000 being
tendered by him as payment for the supposed balance of repurchase price. Heirs of
Fausto C. Ignacio vs. Home Bankers Savings and Trust Co., et al., G.R. No. 177783.
January 23, 2013.
Dissolution; continuation of business. Section 122 of the Corporation Code prohibits a
dissolved corporation from continuing its business, but allows it to continue with a
limited personality in order to settle and close its affairs, including its complete
liquidation. Thus:
Sec. 122. Corporate liquidation. Every corporation whose charter expires by its own
limitation or is annulled by forfeiture or otherwise, or whose corporate existence for
other purposes is terminated in any other manner, shall nevertheless be continued as a
body corporate for three (3) years after the time when it would have been so dissolved,
for the purpose of prosecuting and defending suits by or against it and enabling it to
settle and close its affairs, to dispose of and convey its property and to distribute its
assets, but not for the purpose of continuing the business for which it was
established. (emphasis supplied)
The Court fails to find in the prayers any intention to continue the corporate business of
FQB+7. The Complaint does not seek to enter into contracts, issue new stocks, acquire
properties, execute business transactions, etc. Its aim is not to continue the corporate
business, but to determine and vindicate an alleged stockholders right to the return of

his stockholdings and to participate in the election of directors, and a corporations right
to remove usurpers and strangers from its affairs. The Court fails to see how the
resolution of these issues can be said to continue the business of FQB+7. Vitaliano N.
Aguirre II and Fidel N. Aguirre II and Fidel N. Aguirre vs. FQB+, Inc., Nathaniel D.
Bocobo, Priscila Bocobo and Antonio De Villa, G.R. No. 170770. January 9, 2013.
Dissolution; board of directors. A corporations board of directors is not
rendered functus officio by its dissolution. Since Section 122 allows a corporation to
continue its existence for a limited purpose, necessarily there must be a board that will
continue acting for and on behalf of the dissolved corporation for that purpose. In fact,
Section 122 authorizes the dissolved corporations board of directors to conduct its
liquidation within three years from its dissolution. Jurisprudence has even recognized
the boards authority to act as trustee for persons in interest beyond the said three-year
period. Thus, the determination of which group is the bona fide or rightful board of the
dissolved corporation will still provide practical relief to the parties involved. Vitaliano N.
Aguirre II and Fidel N. Aguirre II and Fidel N. Aguirre vs. FQB+, Inc., Nathaniel D.
Bocobo, Priscila Bocobo and Antonio De Villa, G.R. No. 170770. January 9, 2013.
Dissolution; effect on property rights. A partys stockholdings in a corporation, whether
existing or dissolved, is a property right which he may vindicate against another party
who has deprived him thereof. The corporations dissolution does not extinguish such
property right. Section 145 of the Corporation Code ensures the protection of this right,
thus:
Sec. 145. Amendment or repeal. No right or remedy in favor of or against any
corporation, its stockholders, members, directors, trustees, or officers, nor any
liability incurred by any such corporation, stockholders, members, directors, trustees,
or officers, shall be removed or impaired either by the subsequent dissolution of said
corporation or by any subsequent amendment or repeal of this Code or of any part
thereof. (Emphasis supplied.)
Vitaliano N. Aguirre II and Fidel N. Aguirre II and Fidel N. Aguirre vs. FQB+, Inc.,
Nathaniel D. Bocobo, Priscila Bocobo and Antonio De Villa, G.R. No. 170770. January 9,
2013.
FRIA; retroactive application. Sec. 146 of the FRIA, which makes it applicable to all
further proceedings in insolvency, suspension of payments and rehabilitation cases x x
x except to the extent that in the opinion of the court their application would not be
feasible or would work injustice, still presupposes a prospective application. The
wording of the law clearly shows that it is applicable to all further proceedings. In no
way could it be made retrospectively applicable to the Stay Order issued by the
rehabilitation court back in 2002.
At the time of the issuance of the Stay Order, the rules in force were the 2000 Interim
Rules of Procedure on Corporate Rehabilitation (the Interim Rules). Under those rules,
one of the effects of a Stay Order is the stay of the enforcement of all claims, whether

for money or otherwise and whether such enforcement is by court action or otherwise,
against the debtor, its guarantors and sureties not solidarily liable with the debtor.
Nowhere in the Interim Rules is the rehabilitation court authorized to suspend
foreclosure proceedings against properties of third-party mortgagors. In fact, we have
expressly ruled in Pacific Wide Realty and Development Corp. v. Puerto Azul Land, Inc.
that the issuance of a Stay Order cannot suspend the foreclosure of accommodation
mortgages. Whether or not the properties subject of the third-party mortgage are used
by the debtor corporation or are necessary for its operation is of no moment, as the
Interim Rules do not make a distinction. To repeat, when the Stay Order was issued, the
rehabilitation court was only empowered to suspend claims against the debtor, its
guarantors, and sureties not solidarily liable with the debtor. Thus, it was beyond the
jurisdiction of the rehabilitation court to suspend foreclosure proceedings against
properties of third-party mortgagors. Situs Development Corporation, et al. vs. Asia
Trust Bank, et al, G.R. No. 180036, January 16, 2013.
(Hector thanks Patrick Henry D. Salazar for his assistance to Lexoterica.)

November 2012 Philippine Supreme Court Decisions on Civil Law


Posted on December 14, 2012 by Rose Marie M. King-Dominguez Posted in Civil Law, Philippines Cases, Philippines - Law Tagged co-ownership, contract, damages, filiation, laches, land
registration, lease, marriage, mortgage, sale,succession, will

Here are select November 2012 rulings of the Supreme Court of the Philippines on civil
law:
Civil Code
Co-ownership; validity of partition contracts. Contrary to the finding of the Court of
Appeals, the subdivision agreements forged by Mendoza and her alleged co-owners
were not for the partition ofpro-indiviso shares of co-owners of Lot 733 but were actually
conveyances, disguised as partitions, of portions of Lot 733 specifically Lots 733-A and
733-B, and portions of the subsequent subdivision of Lot 733-C. It cannot be
overemphasized enough that the two deeds of absolute sale over portions of
substantially the same parcel of land antedated the subdivision agreements in question
and their execution acknowledged too before a notary public. Rupeta Cano Vda. De
Viray and Jesus Carlo Gerard Viray v. Spouses Jose Usi and Amelita Usi, G.R.No.192486.
November 21,2012.
Constructive delivery; execution of public instrument only prima facie presumption of
delivery.Article 1477 of the Civil Code recognizes that the ownership of the thing sold
shall be transferred to the vendee upon the actual or constructive delivery thereof.
Related to this article is Article 1497 which provides that [t]he thing sold shall be
understood as delivered, when it is placed in the control and possession of the vendee.
With respect to incorporeal property, Article 1498 of the Civil Code lays down the
general rule: the execution of a public instrument shall be equivalent to the delivery of

the thing which is the object of the contract, if from the deed the contrary does not
appear or cannot clearly be inferred. However, the execution of a public instrument
gives rise only to a prima facie presumption of delivery, which is negated by the failure
of the vendee to take actual possession of the land sold. [A] person who does not have
actual possession of the thing sold cannot transfer constructive possession by the
execution and delivery of a public instrument. In this case, no constructive delivery of
the land transpired upon the execution of the deed of sale since it was not the spouses
Villamor, Sr. but the respondents who had actual possession of the land. The
presumption of constructive delivery is inapplicable and must yield to the reality that
the petitioners were not placed in possession and control of the land. Sps. Erosto
Santiago and Nelsi Santiago v. Mancer Villamor, et al.; G.R. No. 168499. November
26,2012
Contracts; inadequacy of consideration does not render the contract void; need not be
monetary.Inadequacy of consideration does not vitiate a contract unless it is proven
which in the case at bar was not, that there was fraud, mistake or undue influence.
While consideration is usually in the form of money or property, it need not be
monetary. Eduardo M. Cojuangco, Jr. vs. Republic of the Philippines; G.R. No. 180705.
November 27, 2012.
Contracts; requisites; disputable presumption that there is sufficient consideration for a
Contract. Under Art. 1318 of the Civil Code, there is no contract unless the following
requisites concur: (1) consent of the contracting parties;(2) object certain which is the
subject matter of the contract;(3) cause of the obligation which is established. The
following contract is inexistent and void from the beginning: those whose cause or
object did not exist at the time of the transaction. There is a disputable presumption
that there was a sufficient consideration for a contract. The rule then is that the party
who stands to profit from a declaration of the nullity of a contract on the ground of
insufficiency of consideration which would necessarily refer to one who asserts such
nullityhas the burden of overthrowing the presumption offered by the Rules of
Court. Eduardo M. Cojuangco, Jr. vs. Republic of the Philippines; G.R. No. 180705.
November 27, 2012.
Damages; entitlement; when death results from delict. Anent the award of damages,
when death occurs due to a crime, the following may be recovered: (1) civil
indemnity ex delicto for the death of the victim; (2) actual or compensatory damages;
(3) moral damages; (4) exemplary damages; (5) attorneys fees and expenses of
litigation; and (6) interest, in proper cases. People of the Philippines v. Marcial M.
Malicdem; G.R. No. 184601. November 12, 2012.
Damages; exemplary damages in delict; awarded when there is an aggravating
circumstance, whether ordinary or qualifying. Unlike the criminal liability which is
basically a State concern, the award of damages, however, is likewise, if not primarily,
intended for the offended party who suffers thereby. It would make little sense for an
award of exemplary damages to be due the private offended party when the
aggravating circumstance is ordinary but to be withheld when it is qualifying. Withal, the

ordinary or qualifying nature of an aggravating circumstance is a distinction that should


only be of consequence to the criminal, rather than to the civil, liability of the offender.
In fine, relative to the civil aspect of the case, an aggravating circumstance, whether
ordinary or qualifying, should entitle the offended party to an award of exemplary
damages within the unbridled meaning of Article 2230 of the Civil Code. People of the
Philippines v. Marcial M. Malicdem;G.R. No. 184601. November 12, 2012.
Damages for violation of right to privacy; inviolability of diplomatic residence. As
already exhaustively discussed by both the RTC and the CA, Nestor himself admitted
that he caused the taking of the pictures of Lavinas residence without the latters
knowledge and consent. Nestor reiterates that he did so sans bad faith or malice.
However, Nestors surreptitious acts negate his allegation of good faith. If it were true
that Lavina kept ivories in his diplomatic residence, then, his behavior deserves
condemnation. However, that is not the issue in the case at bar. Nestor violated the New
Civil Code prescriptions concerning the privacy of ones residence and he cannot hide
behind the cloak of his supposed benevolent intentions to justify the invasion. Hence,
the award of damages and attorneys fees in Lavinas favor is proper. Nestor N.
Padalhin, et al. Vs. Nelson D. Lavia.G.R. No. 183026. November 14,2012.
Filiation; support; entitlement; clear and convincing proof of filiation. Time and again,
this Court has ruled that a high standard of proof is required to establish paternity and
filiation. An order for support may create an unwholesome situation or may be an
irritant to the family or the lives of the parties so that it must be issued only if paternity
or filiation is established by clear and convincing evidence. Antonio Perla v. Mirasol
Baring and Randy B. Perla; G.R. No. 172471, November 12, 2012.
Filiation; open and continuous possession of status. To prove open and continuous
possession of the status of an illegitimate child, there must be evidence of the
manifestation of the permanent intention of the supposed father to consider the child as
his, by continuous and clear manifestations of parental affection and care, which cannot
be attributed to pure charity. Such acts must be of such a nature that they reveal not
only the conviction of paternity, but also the apparent desire to have and treat the child
as such in all relations in society and in life, not accidentally, but continuously. Here,
the single instance that Antonio allegedly hugged Randy and promised to support him
cannot be considered as proof of continuous possession of the status of a child. To
emphasize, [t]he fathers conduct towards his son must be spontaneous and
uninterrupted for this ground to exist. Antonio Perla v. Mirasol Baring and Randy B.
Perla; G.R. No. 172471, November 12, 2012.
Filiation; proof; Certificate of Live Birth; not competent proof of paternity when putative
father had no hand in preparation; Baptismal Certificate; per se not a competent proof
of filiation or circumstantial evidence to prove filiation. Just like in a birth certificate, the
lack of participation of the supposed father in the preparation of a baptismal certificate
renders this document incompetent to prove paternity. And while a baptismal
certificate may be considered a public document, it can only serve as evidence of the
administration of the sacrament on the date specified but not the veracity of the entries

with respect to the childs paternity. Thus, baptismal certificates are per se inadmissible
in evidence as proof of filiation and they cannot be admitted indirectly as circumstantial
evidence to prove the same. Antonio Perla v. Mirasol Baring and Randy B. Perla; G.R.
No. 172471, November 12, 2012.
Laches; elements. The elements of laches must be proven positively. Laches is
evidentiary in nature, a fact that cannot be established by mere allegations in the
pleadings. Evidence is of utmost importance in establishing the existence of laches
because there is no absolute rule as to what constitutes laches or staleness of demand;
each case is to be determined according to the particular circumstances. Verily, the
application of laches is addressed to the sound discretion of the court as its application
is controlled by equitable considerations.
Laches is not concerned only with the mere lapse of time. The following elements must
be present in order to constitute laches: (1) conduct on the part of the defendant, or of
one under whom he claims, giving rise to the situation of which complaint is made for
which the complaint seeks a remedy; (2) delay in asserting the complainants rights, the
complainant having had knowledge or notice, of the defendants conduct and having
been afforded an opportunity to institute a suit; (3) lack of knowledge or notice on the
part of the defendant that the complaint would assert the right on which he bases his
suit; and (4) injury or prejudice to the defendant in the event the relief is accorded to
the complainant, or the suit is not held to be barred. Jack Arroyo v. Bocago Inland Devt
Corp. (BIDECO), G.R. No. 167880 November 14,2012
Lease; rescission in reciprocal obligation. Article 1191 of the Civil Code provides that the
power to rescind obligations is implied in reciprocal ones, in case one of the obligors
should not comply with what is incumbent upon him. A lease contract is a reciprocal
contract. By signing the lease agreement, the lessor grants possession over his/her
property to the lessee for a period of time in exchange for rental payment. Indeed,
rescission is statutorily recognized in a contract of lease. The aggrieved party is given
the option to the aggrieved party to ask for: (1) the rescission of the contract; (2)
rescission and indemnification for damages; or (3) only indemnification for damages,
allowing the contract to remain in force. Sps. Socrates Sy and Cely Sy v. Andoks Litson
Corporation. G.R. No. 192108. November 21, 2012.
Marriage; petition for nullity of marriage; AM No. 02-11-10; appearance by the Office of
the Solicitor General still required. The Resolution nowhere stated that appeals by the
OSG were no longer required. On the contrary, the Resolution explicitly required the
OSG to actively participate in all stages of the proceedings. Arabelle Mendoza v.
Republic of the Philippines and Dominic Mendoza, G.R. No. 157649. November 12, 2012.
Marriage; psychological incapacity; elements. Psychological incapacity under Article 36
of the Family Code contemplates an incapacity or inability to take cognizance of and to
assume basic marital obligations, and is not merely the difficulty, refusal, or neglect in
the performance of marital obligations or ill will. It consists of: (a) a true inability to
commit oneself to the essentials of marriage; (b) the inability must refer to the essential

obligations of marriage, that is, the conjugal act, the community of life and love, the
rendering of mutual help, and the procreation and education of offspring; and (c) the
inability must be tantamount to a psychological abnormality. Proving that a spouse
failed to meet his or her responsibility and duty as a married person is not enough; it is
essential that he or she must be shown to be incapable of doing so due to some
psychological illness. Republic v. Court of Appeals and Eduardo de Quintos, Jr., G.R. No.
159594. November 12, 2012.
Marriage; psychological incapacity; expert evidence; thorough and in-depth assessment
required. The expert evidence presented in cases of declaration of nullity of marriage
based on psychological incapacity presupposes a thorough and in-depth assessment of
the parties by the psychologist or expert to make a conclusive diagnosis of a grave,
severe and incurable presence of psychological incapacity. Republic v. Court of Appeals
and Eduardo de Quintos, Jr., G.R. No. 159594. November 12, 2012.
Marriage; psychological incapacity; proof of natal or disabling supervening factor
required. It is not enough that the respondent, alleged to be psychologically
incapacitated, had difficulty in complying with his marital obligations, or was unwilling
to perform these obligations. Proof of a natal or supervening disabling factor an
adverse integral element in the respondents personality structure that effectively
incapacitated him from complying with his essential marital obligations must be
shown. Republic v. Court of Appeals and Eduardo de Quintos, Jr., G.R. No. 159594.
November 12, 2012.
Marriage; psychological incapacity; Santos and Molina guidelines. The pronouncements
in Santosand Molina have remained as the precedential guides in deciding cases
grounded on the psychological incapacity of a spouse. But the Court has declared the
existence or absence of the psychological incapacity based strictly on the facts of each
case and not on a priori assumptions, predilections or generalizations. Indeed, the
incapacity should be established by the totality of evidence presented during trial,
making it incumbent upon the petitioner to sufficiently prove the existence of the
psychological incapacity. Republic v. Court of Appeals and Eduardo de Quintos, Jr., G.R.
No. 159594. November 12, 2012.
Marriage; psychological incapacity; three basic requirements. To entitle petitioner
spouse to a declaration of the nullity of his or her marriage, the totality of the evidence
must sufficiently prove that respondent spouses psychological incapacity was grave,
incurable and existing prior to the time of the marriage. Arabelle Mendoza v. Republic of
the Philippines and Dominic Mendoza, G.R. No. 157649. November 12, 2012.
Marriage; psychological incapacity; totality of evidence proving incapacity
required. Even if the expert opinions of psychologists are not conditions sine qua non in
the granting of petitions for declaration of nullity of marriage, the actual medical
examination was to be dispensed with only if the totality of evidence presented was
enough to support a finding of his psychological incapacity. This did not mean that the
presentation of any form of medical or psychological evidence to show the psychological

incapacity would have automatically ensured the granting of petition for declaration of
nullity of marriage. What was essential, we should emphasize herein, was the presence
of evidence that can adequately establish the partys psychological condition. But
where, like here, the parties had full opportunity to present the professional and expert
opinions of psychiatrists tracing the root cause, gravity and incurability of the alleged
psychological incapacity, then the opinions should be represented and be weighed by
the trial courts in order to determine and decide whether or not to declare the nullity of
the marriages. It bears repeating that the trial courts, as in all other cases they try,
must always base their judgments not solely on the expert opinions presented by the
parties but on the totality of evidence adduced in the course of their
proceedings. Arabelle Mendoza v. Republic of the Philippines and Dominic Mendoza, G.R.
No. 157649. November 12, 2012.
Mortgage; mortgagee in good faith relying on Torrens Certificate of Title;
Indefeasibility. Primarily, it bears noting that the doctrine of mortgagee in good faith is
based on the rule that all persons dealing with property covered by a Torrens Certificate
of Title are not required to go beyond what appears on the face of the title. This is in
deference to the public interest in upholding the indefeasibility of a certificate of title as
evidence of lawful ownership of the land or of any encumbrance thereon. In the case of
banks and other financial institutions, however, greater care and due diligence are
required since they are imbued with public interest, failing which renders the
mortgagees in bad faith. Thus, before approving a loan application, it is a standard
operating practice for these institutions to conduct an ocular inspection of the property
offered for mortgage and to verify the genuineness of the title to determine the real
owner(s) thereof. The apparent purpose of an ocular inspection is to protect the true
owner of the property as well as innocent third parties with a right, interest or claim
thereon from a usurper who may have acquired a fraudulent certificate of title
thereto. Philippine Banking Corporation v. Arturo Dy, et al., G.R. No. 183774. November
14, 2012
Property; accretion; elements; By law, accretion the gradual and imperceptible deposit
made through the effects if the current of the water belongs to the owner if the land
adjacent to the banks of rivers where it forms. The drying up of the river is not
accretion. Hence, the dried-up riverbed belongs to the State as property of public
dominion, not to the riparian owner, unless a law vests the ownership in some other
person. Republic of the Philippines v. Arcadio Ivan Santos III and Arcadio Santos, Jr. G.R.
No. 160453. November 12, 2012
Property; builder in good faith; not limited to those claiming ownership over property;
builder in good faith; landowners options. Article 448 of the Civil Code applies when the
builder believes that he is the owner of the land or that by some title he has the right to
build thereon, or that, at least, he has a claim of title thereto. In Tuatis, we ruled that
the seller (the owner of the land) has two options under Article 448: (1) he may
appropriate the improvements for himself after reimbursing the buyer (the builder in
good faith) the necessary and useful expenses under Articles 546 and 548 of the Civil
Code; or (2) he may sell the land to the buyer, unless its value is considerably more

than that of the improvements, in which case, the buyer shall pay reasonable
rent. Communities Cagayan, Inc. v. Sps. Arsenio (deceased) and Angeles Nanol, et
al. G.R. No. 176791. November 14, 2012
Quieting of title. The issues in a case for quieting of title are fairly simple; the plaintiff
need to prove only two things, namely: (1) the plaintiff or complainant has a legal or an
equitable title to or interest in the real property subject of the action; and (2) that the
deed, claim, encumbrance or proceeding claimed to be casting a cloud on his title must
be shown to be in fact invalid or inoperative despite its prima facie appearance of
validity or legal efficacy. Stated differently, the plaintiff must show that he has a legal or
at least an equitable title over the real property in dispute, and that some deed or
proceeding beclouds its validity or efficacy. Joaquin G. Chung, Jr., et al. Vs. Jack Daniel
Mondragon, et al.; G.R. No. 179754. November 21, 2012.
Quieting of title; legal or equitable title in quieting of title. An action for quieting of title
is essentially a common law remedy grounded on equity. The competent court is tasked
to determine the respective rights of the complainant and other claimants, not only to
place things in their proper place, to make the one who has no rights to said immovable
respect and not disturb the other, but also for the benefit of both, so that he who has
the right would see every cloud of doubt over the property dissipated, and he could
afterwards without fear introduce the improvements he may desire, to use, and even to
abuse the property as he deems best. But for an action to quiet title to prosper, two
indispensable requisites must concur, namely: (1) the plaintiff or complainant has a
legal or an equitable title to or interest in the real property subject of the action; and (2)
the deed, claim, encumbrance, or proceeding claimed to be casting cloud on his title
must be shown to be in fact invalid or inoperative despite its prima facie appearance of
validity or legal efficacy.Dionisio Mananquil, et al. v. Roberto Moico; G.R. No. 180076.
November 20, 2012.
Sales; Art 1544; elements of double sale. A double sale situation, which would call, if
necessary, the application of Art. 1544 of the Civil Code, arises when, as jurisprudence
teaches, the following requisites concur: (a) The two (or more) sales transactions must
constitute valid sales; (b) The two (or more) sales transactions must pertain to exactly
the same subject matter; (c) The two (or more) buyers at odds over the rightful
ownership of the subject matter must each represent conflicting interests; and (d) The
two (or more) buyers at odds over the rightful ownership of the subject matter must
each have bought from the very same seller. Rupeta Cano Vda. De Viray and Jesus Carlo
Gerard Viray v. Spouses Jose Usi and Amelita Usi, G.R.No.192486. November 21,2012.
Sales; contract of sale; purchasers in good faith. A purchaser in good faith is one who
buys property without notice that some other person has a right to or interest in such
property and pays its fair price before he has notice of the adverse claims and interest
of another person in the same property. However, where the land sold is in the
possession of a person other than the vendor, the purchaser must be wary and must
investigate the rights of the actual possessor; without such inquiry, the buyer cannot be
said to be in good faith and cannot have any right over the property.Sps. Erosto

Santiago and Nelsi Santiago v. Mancer Villamor, et al.; G.R. No. 168499. November
26,2012.
Succession; will; attestation clause; statement of number of pages; mandatory
requirement; substantial compliance only when evidence aliunde is not necessary.The
law is clear that the attestation must state the number of pages used upon which the
will is written. The purpose of the law is to safeguard against possible interpolation or
omission of one or some of its pages and prevent any increase or decrease in the pages.
While Article 809 allows substantial compliance for defects in the form of the attestation
clause, Richard likewise failed in this respect. The statement in the Acknowledgment
portion of the subject last will and testament that it consists of 7 pages including the
page on which the ratification and acknowledgment are written cannot be deemed
substantial compliance. The will actually consists of 8 pages including its
acknowledgment which discrepancy cannot be explained by mereexamination of the will
itself but through the presentation of evidence. Richard B. Lopez v. Diana Jeanne Lopez,
et al., G.R. No. 189984. November 12, 2012.
Special Laws
Family Code; abandonment not a ground for declaration of nullity.Abandonment was not
one of the grounds for the nullity of marriage under the Family Code. It did not also
constitute psychological incapacity, it being instead a ground for legal separation under
Article 55(10) of the Family Code.Republic v. Court of Appeals and Eduardo de Quintos,
Jr., G.R. No. 159594. November 12, 2012.
Land Titles and Deeds; confirmation of imperfect title; requirements. Under Section
14(1) of Presidential Decree No. 1529 (Property Registration Decree), then, applicants
for confirmation of imperfect title must prove the following, namely: (a) that the land
forms part of the disposable and alienable agricultural lands of the public domain; and
(b) that they have been in open, continuous, exclusive, and notorious possession and
occupation of the land under a bona fide claim of ownership either since time
immemorial or since June 12, 1945. Republic of the Philippines v. Arcadio Ivan Santos III
and Arcadio Santos, Jr. G.R. No. 160453. November 12, 2012
Land Titles and Deeds; property of public dominion; proof of alienability and
disposability; not subject to acquisitive prescription. The principle that the riparian
owner whose land receives the gradual deposits of soil does not need to make an
express act of possession, and that no acts of possession are necessary in that instance
because it is the law itself that pronounces the alluvium to belong to the riparian owner
from the time that the deposit created by the current of the water becomes manifest
has no applicability herein. This is simply because the lot was not formed through
accretion. Hence the ownership of the land adjacent to the river bank by respondents
predecessor-in-interest did not translate to possession of the subject lot that would ripen
to acquisitive prescription.

Yet, even conceding, for the sake of argument that respondents possessed the subject
lot for more than thirty years in the character they claimed, they did not thereby
acquire the land by prescription or by other means without any competent proof that
the land was already declared as alienable and disposable by the government. Absent
that declaration, the land still belonged to the State as part of its public
dominion. Republic of the Philippines v. Arcadio Ivan Santos III and Arcadio Santos,
Jr. G.R. No. 160453. November 12, 2012
Maceda Law; entitlement to cash surrender value; requisites; cancellation of contract;
requisites. In this connection, we deem it necessary to point out that, under the Maceda
Law, the actual cancellation of a contract to sell takes place after 30 days from receipt
by the buyer of the notarized notice of cancellation, and upon full payment of the cash
surrender value to the buyer. In other words, before a contract to sell can be validly and
effectively cancelled, the seller has (1) to send a notarized notice of cancellation to the
buyer and (2) to refund the cash surrender value. Until and unless the seller complies
with these twin mandatory requirements, the contract to sell between the parties
remains valid and subsisting. Thus, the buyer has the right to continue occupying the
property subject of the contract to sell, and may still reinstate the contract by updating
the account during the grace period and before the actual cancellation of the
contract. Communities Cagayan, Inc. v. Sps. Arsenio (deceased) and Angeles Nanol, et
al. G.R. No. 176791. November 14, 2012.
(Rose thanks Frances Yani P. Domingo for assisting in the preparation of this post.)

November 2012 Philippine Supreme Court Decisions on Criminal Law and Procedure
Posted on December 12, 2012 by Dominador Maphilindo O. Carrillo Posted in Criminal
Law, Philippines - Cases,Philippines - Law Tagged arrest, dangerous
drugs, evidence, information, malversation, probable cause, proximate cause,qualified
rape, rape, robbery, Sandiganbayan, self defense, treachery

Here are select November 2012 rulings of the Supreme Court of the Philippines on
criminal law and procedure:
1.

REVISED PENAL CODE

Proximate cause; definition. The Supreme Court rejected the argument of petitioners
that the Court of Appeals failed to consider in its entirety the testimony of the doctor
who performed the autopsy. What really needs to be proven in a case when the victim
dies is the proximate cause of his death. Proximate cause has been defined as that
cause, which, in natural and continuous sequence, unbroken by any efficient intervening
cause, produces the injury, and without which the result would not have occurred. The
autopsy report indicated that the cause of the victims death is multiple organ failure.
According to Dr. Wilson Moll Lee, the doctor who conducted the autopsy, it can be
surmised that multiple organ failure was secondary to a long standing infection
secondary to a stab wound which the victim allegedly sustained. Thus, it can be

concluded that without the stab wounds, the victim could not have been afflicted with
an infection which later on caused multiple organ failure that caused his death. The
offender is criminally liable for the death of the victim if his delictual act caused,
accelerated or contributed to the death of the victim. Rodolfo Belbis Jr. y Competente
and Alberto Brucales v. People of the Philippines, G.R. No. 181052, November 14, 2012.
Rape; qualifying circumstances; concurrence of minority and relationship. Under Article
266-B of the Revised Penal Code, as amended by R.A. No. 8353 or the Anti-Rape Law of
1997, the concurrence of minority and relationship qualifies the crime of rape. To
warrant the imposition of the death penalty, however, both the minority and the
relationship must be alleged in the Information and proved during the trial. In the
instant case, both circumstances were properly alleged in the Informations and proved
during trial. The Informations alleged that AAA was 15 years old when the crimes were
committed. Her minority was established not only by her Certificate of Live Birth but
also by her testimony that she was born on November 6, 1985. Anent AAAs relationship
with appellant, the Informations sufficiently alleged that AAA is appellants daughter.
This fact was likewise openly admitted by the appellant and further bolstered by the
said Certificate of Live Birth indicating appellant as AAAs father. Moreover, the
relationship between appellant and AAA became the subject of admission during the
pre-trial conference. Hence, pursuant to the said article, the presence of the above
special qualifying circumstances increases the penalty to death. In view, however, of
the passage of R.A. No. 9346 proscribing the imposition of death penalty, the proper
penalty imposable on appellant, in lieu of death and pursuant to Section 2 thereof, is
reclusion perpetua. People of the Philippines v. Enerio Ending y Onyong, G.R. No.
183827, November 12, 2012.
Rape; rupture of hymen not an element. The Supreme Court gave no credence to the
claim of accused-appellant that the crime of rape was negated by the medical findings
of an intact hymen or absence of lacerations in the vagina of AAA. Hymenal rupture,
vaginal laceration or genital injury is not indispensable because the same is not an
element of the crime of rape. An intact hymen does not negate a finding that the victim
was raped. Here, the finding of reddish discoloration of the hymen of AAA during her
medical examination and the intense pain she felt in her vagina during and after the
sexual assault sufficiently corroborated her testimony that she was raped.People of the
Philippines v. Benjamin Soria y Gomez, G.R. No. 179031, November 14, 2012.
Rape; minority of victim must be proved independently. With respect to minority, the
Information described AAA as a 7-year old daughter of appellant. While this also
became the subject of stipulation during the pre-trial conference, the same is
insufficient evidence of AAAs age. Her minority must be proved conclusively and
indubitably as the crime itself.
There must be independent evidence proving the age of the victim, other than the
testimonies of prosecution witnesses and the absence of denial by the accused.
Documents such as her original or duly certified birth certificate, baptismal certificate or
school records would suffice as competent evidence of her age. Here, there was nothing

on record to prove the minority of AAA other than her testimony, appellants absence of
denial, and their pre-trial stipulation. The prosecution also failed to establish that the
documents referred to above were lost, destroyed, unavailable or otherwise totally
absent. Philippines v. Benjamin Soria y Gomez, G.R. No. 179031, November 14, 2012.
Rape; elements of qualified rape. The Supreme Court held that both the Regional Trial
Court and the Court of Appeals (CA) correctly found the following elements of qualified
rape, as defined in the relevant provisions of the Revised Penal Code to concur: (1) that
the victim is a female over 12 years but under 18 years of age; (2) that the offender is a
parent, ascendant, stepparent, guardian or relative by consanguinity or affinity within
the third civil degree, or the common-law spouse of the parent of the victim; and (3)
that the offender has carnal knowledge of the victim either through force, threat or
intimidation; or when she is deprived of reason or is otherwise unconscious; or by
means of fraudulent machinations or grave abuse of authority. People of the Philippines
v. Neil B. Colorado, G.R. No. 200792, November 14, 2012.
Rape; elements of qualified rape. The age of the victim at the time of the crimes
commission is undisputed. During the pre-trial, the parties agreed on the existence of
AAAs Certificate of Live Birth, a certified true/xerox copy of which forms part of the
records and provides that AAA was born on October 10, 1990. AAA was then only 12
years old in December 2002, a significant fact that was sufficiently alleged in the
Information. As to the second element, there is no dispute that Colorado is a full-blood
brother of AAA, as this was also among the parties stipulated facts during the cases
pre-trial. The grounds now being raised by Colorado to justify his exoneration delve
mainly on the alleged absence of the crimes third element. He denies AAAs claim that
he had ravished her, raising the defense of alibi and the alleged doubt and suspicion
that should be ascribed to AAAs accusations. On this matter, settled is the rule that the
findings of the trial court on the credibility of a witness deserve great weight, given the
clear advantage of a trial judge in the appreciation of testimonial evidence. The SC has
repeatedly recognized that the trial court is in the best position to assess the credibility
of witnesses and their testimonies, because of its unique opportunity to observe the
witnesses first hand and to note their demeanor, conduct, and attitude under gruelling
examination. These are significant factors in evaluating the sincerity of witnesses, in the
process of unearthing the truth. The rule finds even more stringent application where
the said findings are sustained by the CA. Thus, except for compelling reasons, the SC is
doctrinally bound by the trial courts assessment of the credibility of witnesses. The SC
then took due consideration of the trial courts findings of fact, its assessment of AAAs
credibility, her testimony and the manner by which her statements were relayed. Given
the foregoing, the SC ruled that the CA did not err in affirming the trial courts
conviction of Colorado. People of the Philippines v. Neil B. Colorado, G.R. No. 200792,
November 14, 2012.
Rape; insanity as a defense. Under Article 800 of the Civil Code, the presumption is that
every human is sane. Anyone who pleads the exempting circumstance of insanity bears
the burden of proving it with clear and convincing evidence. It is in the nature of
confession and avoidance. An accused invoking insanity admits to have committed the

crime but claims that he or she is not guilty because of insanity. The testimony or proof
of an accuseds insanity must, however, relate to the time immediately preceding or
simultaneous with the commission of the offense with which he is charged. In the case
at bench, the defense failed to overcome the presumption of sanity. Accused Isla exactly
knew that what he was doing was evil so much so that he had to employ cunning
means, by discreetly closing the windows and the door of the house and by resorting to
threats and violence, to ensure the consummation of his dastardly deed. The fact that
he scampered away after AAA was able to take the knife from him would only show that
he fully understood that he committed a crime for which he could be held liable. If Isla
had become insane after the commission of the crime, such fact does not alter the
situation and the Supreme Courts ruling is the same. His defense still fails considering
that he was not insane during the commission of the acts charged. People of the
Philippines v. Edwin Isla y Rossell, G.R. No. 199875, November 21, 2012.
Robbery; elements. To constitute robbery, the following elements must be established:
(1) The subject is personal property belonging to another; (2) There is unlawful taking of
that property; (3) The taking is with the intent to gain; and (4) There is violence against
or intimidation of any person or use of force upon things. Admittedly, the subject
10th floor unit is owned by the corporation and served as the family residence prior to
the death of petitioner and respondents parents. The 10th floor unit, including the
personal properties inside, is the subject of estate proceedings pending in another court
and is, therefore, involved in the disputed claims among the siblings (petitioner and
respondents). Respondents admitted that armed with a board resolution authorizing
them to break open the door lock system of said unit and to install a new door lock
system, they went up to the subject unit to implement said resolution. The said
corporate action was arrived at because petitioner had allegedly prevented prospective
buyers from conducting ocular inspection. Petitioner, however, claims that on December
16, 1999 and sometime in January 2000, respondents brought out from the unit 34
boxes containing her personal belongings worth more than P10 million. The Supreme
Court said that it cannot fathom why petitioner did not immediately report the first
incident and waited for yet another incident after more or less one month. If the value
involved is what she claims to be, it is contrary to human nature to just keep silent and
not immediately protect her right. Her general statement that she was intimidated by
Benito who was known to be capable of inflicting bodily harm cannot excuse her
inaction. Petitioner, therefore, failed to establish that there was unlawful taking.
Assuming that respondents indeed took said boxes containing personal belongings, said
properties were taken under claim of ownership which negates the element of intent to
gain. Lily Sy v. Hon. Secretary of Justice Ma. Merceditas N. Gutierrez, Benito Fernandez
Go, Berthold Lim, Jennifer Sy, Glenn Ben Tiak Sy and Merry Sy,G.R. No. 171579,
November 14, 2012.
Robbery; elements. Taking, as an element of robbery, means depriving the offended
party of ownership of the thing taken with the character of permanency. The taking
should not be under a claim of ownership. Thus, one who takes the property openly and
avowedly under claim of title offered in good faith is not guilty of robbery even though
the claim of ownership is untenable. The intent to gain cannot be established by direct

evidence being an internal act. It must, therefore, be deduced from the circumstances
surrounding the commission of the offense. In this case, it was shown that respondents
believed in good faith that they and the corporation own not only the subject unit but
also the properties found inside. If at all, they took them openly and avowedly under
that claim of ownership. This is bolstered by the fact that at the time of the alleged
incident, petitioner had been staying in another unit because the electric service in the
10th floor was disconnected. Therefore, respondents should not be held liable for the
alleged unlawful act absent a felonious intent. Lily Sy v. Hon. Secretary of Justice Ma.
Merceditas N. Gutierrez, Benito Fernandez Go, Berthold Lim, Jennifer Sy, Glenn Ben Tiak
Sy and Merry Sy, G.R. No. 171579, November 14, 2012.
Self-defense; requisites. By invoking self-defense, accused Joel needed to prove by clear
and convincing evidence the following requisites: (a) unlawful aggression; (b)
reasonable necessity of the means employed to prevent or repel it; and (c) lack of
sufficient provocation on the part of the person defending himself. Here, the testimonies
of Dolor and Enrique, accepted as credible by both the trial court and the Court of
Appeals, show that accused Joel, not Clarence, was the armed aggressor. Enrique saw
Joel draw a knife from his waist and proceed to stab Clarence. Indeed, both witnesses
testified that it was Clarence who was trying to put up a futile defense against Joels
continued thrusts. The location of the wounds on the victims body corroborates such
testimonies. For his part, accused Joel did not bother to offer any corroborative
evidence, such as a medical report establishing the wounds he allegedly sustained in
his struggle to seize Clarences knife from him or someone who saw those wounds
around the time they were supposedly inflicted. Thus, the Supreme Court found Joels
claim of self-defense to be hallow. People of the Philippines v. Joel Artajo y
Alimangohan, G.R. No. 198050, November 14, 2012.
Technical malversation; elements. The crime of technical malversation as penalized
under Article 220 of the Revised Penal Code has three elements: a) that the offender is
an accountable public officer; b) that he applies public funds or property under his
administration to some public use; and c) that the public use for which such funds or
property were applied is different from the purpose for which they were originally
appropriated by law or ordinance. Accused Ysidoro claims that he could not be held
liable for the offense under its third element because the four sacks of rice and two
boxes of sardines he gave the Core Shelter Assistance Program (CSAP) beneficiaries
were not appropriated by law or ordinance for a specific purpose. But the evidence
shows that on November 8, 2000 the Sangguniang Bayan of Leyte enacted Resolution
00-133 appropriating the annual general fund for 2001. This appropriation was based on
the executive budget which allocated P100,000.00 for the Supplemental Feeding
Program (SFP) and P113,957.64 for the Comprehensive and Integrated Delivery of
Social Services which covers the CSAP housing projects. The creation of the two items
shows the Sanggunians intention to appropriate separate funds for SFP and the CSAP in
the annual budget. Since the municipality bought the subject goods using SFP funds,
then those goods should be used for SFPs needs, observing the rules prescribed for
identifying the qualified beneficiaries of its feeding programs. Ysidoro here disregarded
the guidelines when he approved the distribution of the goods to those providing free

labor for the rebuilding of their own homes. This is technical malversation. Arnold James
M. Ysidoro v. People of the Philippines, G.R. No. 192330, November 14, 2012.
Technical malversation; mala prohibita. Ysidoro insists that he acted in good faith when
he diverted the food intended for those suffering from malnutrition to the beneficiaries
of reconstruction projects affecting the homes of victims of calamities since, first, the
idea of using the Supplemental Feeding Program (SFP) goods for the Core Shelter
Assistance Program (CSAP) beneficiaries came, not from him, but from Garcia and
Polinio; and, second, he consulted the accounting department if the goods could be
distributed to those beneficiaries. Having no criminal intent, he argues that he cannot
be convicted of the crime of technical malversation. But criminal intent is not an
element of technical malversation. The law punishes the act of diverting public property
earmarked by law or ordinance for a particular public purpose to another public
purpose. The offense is mala prohibita, meaning that the prohibited act is not inherently
immoral but becomes a criminal offense because positive law forbids its commission
based on considerations of public policy, order, and convenience. It is the commission of
an act as defined by the law, and not the character or effect thereof that determines
whether or not the provision has been violated. Hence, malice or criminal intent is
completely irrelevant. Arnold James M. Ysidoro v. People of the Philippines, G.R. No.
192330, November 14, 2012.
Treachery. Anent the finding of treachery by the Regional Trial Court, the Supreme Court
(SC) agreed that appellants act of suddenly stabbing Wilson as he was about to leave
constituted the qualifying circumstance of treachery. As the SC previously ruled,
treachery is present when the offender commits any of the crimes against persons,
employing means, methods, or forms in the execution, which tend directly and specially
to insure its execution, without risk to the offender arising from the defense which the
offended party might make. Here, appellant caught Wilson by surprise when he
suddenly embraced him and proceeded immediately to plunge a knife to his chest. The
swift turn of events did not allow Wilson to defend himself, in effect, assuring appellant
that he complete the crime without risk to his own person. People of the Philippines
v.Marcial M. Malicdem, G.R. No. 184601, November 12, 2012.
Treachery. As to the issue of treachery, the Supreme Court (SC) found it difficult in
concurring with the findings of the Regional Trial Court and the Court of Appeals that
accused Joel resorted to treachery in killing Clarence. There is treachery, according to
Article 14, paragraph 16 of the Revised Penal Code, when the offender employs means,
methods, or forms in attacking his victim which tend directly and specially to insure its
execution, without risk to himself arising from the defense which the offended party
might make. Here, Dolors testimony contains nothing that hints upon treachery being
employed. She did not see how the attack began. As she went outside and looked,
accused Joel was already attacking his father. Quite curiously, what she further saw was
that his father was trying to fight back, not just trying to parry Joels blows, indicating
that the latter had not employed means that would eliminate any risk to him arising
from the defense which Clarence might make. If he employed treachery, Joel could very
well have aimed his first blow to immediately disable Clarence. On the other hand,

Enrique, a neighbor, testified that he saw Clarence and Joel come out of the back door
of the house together. Clearly then Joel did not lie in ambush. Since they came out
together, Clarence must have perceived the attack for he even tried to keep his grip on
his assailant after it started. And the evidence is clear that Joel did not purposely stab
Clarence on the back. Enrique testified that it was only when Clarence fell to the ground
flat on his face that Joel sat astride on him and stabbed him on the back. Those back
wounds were not treacherously delivered at the beginning with the victim having no
premonition of their coming. For the above reasons, the SC concluded that, although
Joel killed Clarence, the killing was not accompanied by the qualifying circumstance of
treachery. Accused Joel is guilty only of homicide. People of the Philippines v. Joel Artajo
y Alimangohan, G.R. No. 198050, November 14, 2012.
Voluntary surrender; requisites. As to the claim of petitioners that they are entitled to
the mitigating circumstance of voluntary surrender, the Supreme Court ruled that the
same does not deserve merit. For voluntary surrender to be appreciated, the following
requisites should be present: (1) the offender has not been actually arrested; (2) the
offender surrendered himself to a person in authority or the latters agent; and (3) the
surrender was voluntary. The essence of voluntary surrender is spontaneity and the
intent of the accused to give himself up and submit himself to the authorities either
because he acknowledges his guilt or he wishes to save the authorities the trouble and
expense that may be incurred for his search and capture. Without these elements, and
where the clear reasons for the supposed surrender are the inevitability of arrest and
the need to ensure his safety, the surrender is not spontaneous and, therefore, cannot
be characterized as voluntary surrender to serve as a mitigating circumstance. In the
present case, when the petitioners reported the incident and allegedly surrendered the
bladed weapon used in the stabbing, such cannot be considered as voluntary surrender
within the contemplation of the law. Besides, there was no spontaneity, because they
only surrendered after a warrant of their arrest had already been issued. Rodolfo Belbis,
Jr. y Competente and Alberto Brucales v. People of the Philippines, G.R. No. 181052,
November 14, 2012.
2.

SPECIAL PENAL LAWS

Dangerous Drugs Act; buy-bust operation. Accused Robelo asserts that the alleged buybust operation is tainted with infirmity due to the absence of a prior surveillance or
investigation. Moreover, per the testimony of PO2 Tubbali, accused did not say anything
when the former was introduced to him as an interested buyer of shabu. Accused points
out that it is contrary to human nature that the seller would say nothing to the buyer
who is a complete stranger to him. The Supreme Court sustained the validity of the buybust operation. A buy-bust operation has been proven to be an effective mode of
apprehending drug pushers. In this regard, police authorities are given wide latitude in
employing their own ways of trapping or apprehending drug dealers inflagrante delicto.
There is no prescribed method on how the operation is to be conducted. As ruled
in People v. Garcia, the absence of a prior surveillance or test-buy does not affect the
legality of the buy-bust operation as there is no textbook method of conducting the
same. As long as the constitutional rights of the suspected drug dealer are not violated,

the regularity of the operation will always be upheld. Furthermore, the law does not
prescribe as an element of the crime that the vendor and the vendee be familiar with
each other. As aptly held by the Court of Appeals in this case, peddlers of illicit drugs
have been known with ever increasing casualness and recklessness to offer and sell
their wares for the right price to anybody, be they strangers or not. People of the
Philippines v. Joseph Robelo y Tungala, G.R. No. 184181, November 26, 2012.
Dangerous Drugs Act; evidence; possession. Accused Eyam was caught in possession of
methylamphetamine hydrochloride or shabu, a dangerous drug. He failed to show that
he was authorized to possess the same. By his mere possession of the drug, there is
already a prima facie evidence of knowledge, which he failed to rebut. Supreme Court
sustained his conviction for the crime of illegal possession of dangerous drug, in
violation of Section 11 of Article II of R.A. 9165 otherwise known as the Comprehensive
Dangerous Drugs Act of 2002. People of the Philippines v. George Eyam y Watang, G.R.
No. 184056, November 26, 2012.
Dangerous Drugs Act; illegal possession of drug paraphernalia; elements. The Regional
Trial Court and the Court of Appeals convicted of Godofredo of illegal possession of drug
paraphernalia. The elements of illegal possession of equipment, instrument, apparatus
and other paraphernalia for dangerous drugs under Section 12, Article II, R.A. No. 9165
are: (1) possession or control by the accused of any equipment, apparatus or other
paraphernalia fit or intended for smoking, consuming, administering, injecting,
ingesting, or introducing any dangerous drug into the body; and (2) such possession is
not authorized by law. The prosecution here has convincingly established that
Godofredo was in possession of drug paraphernalia such as aluminum foil,
aluminium tooter and lighter, all of which were offered in evidence. The corresponding
receipt and inventory of the seized shabu and other drug paraphernalia were likewise
presented in evidence. Moreover, Police Superintendent Leonidas Diaz Castillo attested
to the veracity of the contents of these documents. Thus, the Supreme Court affirmed
the decision of the lower courts. People of the Philippines v. Godofredo Mariano y
Feliciano and Allan Doringo y Gunan, G.R. No. 191193, November 14, 2012.
Dangerous Drugs Act; illegal sale of drugs; elements. Under Section 5, Article II of R.A.
No. 9165, the elements necessary for the prosecution of illegal sale of drugs are: (1) the
identities of the buyer and the seller, the object, and consideration; and (2) the delivery
of the thing sold and the payment therefor. What is material to the prosecution for
illegal sale of dangerous drugs is the proof that the transaction or sale actually took
place, coupled with the presentation in court of evidence ofcorpus delicti. All these
elements were duly established by the prosecution in this case. Appellants were caught
in flagrante delicto selling shabu during a buy-bust operation conducted by the buy-bust
team. The poseur-buyer, PO1 Olleres, positively testified that the sale took place and
that appellants sold the shabu. Simply put, Godofredo produced two (2) plastic sachets
containing shabuand gave it to PO1 Olleres in exchange for P1,000.00. Also, Allan had
offered and given two (2) more sachets containing shabu to PO3 Razo, who in turn,
handed him P600.00. PO3 Razo corroborated the account of PO1 Olleres. The result of
the laboratory examination confirmed the presence ofmethamphetamine

hydrochloride on the white crystalline substances inside the four (4) plastic sachets
confiscated from appellants. The marked money was presented in evidence. Thus, the
delivery of the illicit drug to PO1 Olleres and PO3 Razo and the receipt by appellants of
the marked money successfully consummated the buy-bust transaction. People of the
Philippines v. Godofredo Mariano y Feliciano and Allan Doringo y Gunan, G.R. No.
191193, November 14, 2012.
3.

CRIMINAL PROCEDURE

Arrests; warrantless arrests. The Supreme Court found appellants insistence on the
illegality of their warrantless arrest to be unmeritorious. Section 5, Rule 113 of the Rules
of Court allows a warrantless arrest under any of the circumstances cited in the
provision. In the instant case, the warrantless arrest was effected under the first mode
or aptly termed as in flagrante delicto. PO1 Olleres and PO3 Razo personally witnessed
and were in fact participants to the buy-bust operation. After laboratory examination,
the white crystalline substances placed inside the four (4) separate plastic sachets were
found positive for methamphetamine hydrochloride or shabu, a dangerous drug. Under
these circumstances, it is beyond doubt that appellants were arrested in flagrante
delictowhile committing a crime, in full view of the arresting team. People of the
Philippines v. Godofredo Mariano y Feliciano and Allan Doringo y Gunan, G.R. No.
191193, November 14, 2012.
Determination of probable cause. At the outset, a perusal of the records of Criminal
Case No. 02-199574 in People of the Philippines v. Benito Fernandez Go, et al., pending
before the Regional Trial Court (RTC) where the Information for Robbery was filed, will
show that on March 12, 2008, Presiding Judge Zenaida R. Daguna issued an Order
granting the Motion to Withdraw Information filed by Assistant City Prosecutor Armando
C. Velasco. The withdrawal of the information was based on the alleged failure of
petitioner to take action on the Amended Decision issued by the Court of Appeals which,
in effect, reversed and set aside the finding of probable cause, and in order for the case
not to appear pending in the docket of the court. The propriety of the determination of
probable cause is, however, the subject of this present petition. Besides, in allowing the
withdrawal of the information, the RTC in fact did not make a determination of the
existence of probable cause. Thus, the withdrawal of the information does not bar the
Supreme Court (SC) from making a final determination of whether or not probable
cause exists to warrant the filing of an Information for Robbery against respondents in
order to write finis to the issue elevated before the SC. Lily Sy v. Hon. Secretary of
Justice Ma. Merceditas N. Gutierrez, Benito Fernandez Go, Berthold Lim, Jennifer Sy,
Glenn Ben Tiak Sy and Merry Sy, G.R. No. 171579, November 14, 2012.
Determination of probable cause. Judge Untalan acted well within the exercise of his
judicial discretion when he denied the Motion to Dismiss and/or Withdraw Information
filed by the prosecution. His finding that there was probable cause to indict respondents
for unfair competition, and that the findings of the DOJ would be better appreciated in
the course of a trial, was based on his own evaluation of the evidence brought before
him. It was an evaluation that was required of him as a judge. Crespo v. Mogul instructs

in a very clear manner that once a complaint or information is filed in court, any
disposition of the case as to its dismissal, or the conviction or acquittal of the accused,
rests on the sound discretion of the said court, as it is the best and sole judge of what to
do with the case before it. While the resolution of the prosecutorial arm is persuasive, it
is not binding on the court. It may therefore grant or deny at its option a motion to
dismiss or to withdraw the information based on its own assessment of the records of
the preliminary investigation submitted to it, in the faithful exercise of judicial discretion
and prerogative, and not out of subservience to the Prosecutor. Shirley F. Torres v.
Imelda Perez and Rodrigo Perez / Shirley F. Torres vs. Imelda Perez and Rodrigo
Perez, G.R. Nos. 188225 & 198728, November 28, 2012.
Evidence; credibility of victims testimony. The Supreme Court (SC), like the courts
below, found that AAA was without doubt telling the truth when she declared that her
father raped her on three separate occasions. She was consistent in her narration on
how she was abused by her father in their own house, in the copra drier, and even in a
nearby pasture land. After she was forced to lie down, appellant removed her clothes,
went on top of her, inserted his penis into her vagina and threatened her with death if
she would report the incidents. Hence, appellants attempt to discredit the testimony of
AAA deserves no merit. When credibility is in issue, the SC generally defers to the
findings of the trial court considering that it was in a better position to decide the
question, having heard the witnesses themselves and observed their deportment during
trial. Here, there is nothing from the records that impelled the SC to deviate from the
findings and conclusions of the trial court as affirmed by the Court of Appeals. People of
the Philippines v. Enerio Ending y Onyong, G.R. No. 183827, November 12, 2012.
Evidence; credibility of victims testimony. Time and again, the Supreme Court (SC)
has stated that, in the absence of any clear showing that the trial court overlooked or
misconstrued cogent facts and circumstances which would alter a conviction, it
generally defers to the trial courts evaluation of the credibility of witnesses especially if
such findings are affirmed by the Court of Appeals. This must be so since the trial courts
are in a better position to decide the question of credibility, having heard the witnesses
themselves and having observed first hand their deportment and manner of testifying
under gruelling examination. Given the factual circumstances of the present case, the
SC saw no need to depart from the foregoing rules. Appellant here failed to present
proof of any showing that the trial court overlooked, misconstrued or misapplied some
fact or circumstance of weight and substance that would have affected the result of the
case. Prosecution witnesses have in fact positively identified appellant to have stabbed
the victim. People of the Philippines v. Marcial M. Malicdem, G.R. No. 184601, November
12, 2012.
Evidence; credibility of victims testimony. Both the trial court and the Court of Appeals
held that AAA was a credible witness. They ruled that her testimony deserved credence
and is sufficient evidence that she was raped by appellant. The Supreme Court found no
cogent reason to overturn these findings. It would be highly inconceivable for AAA to
impute to her own father the crime of raping her unless the imputation is true. In fact, it
takes a certain amount of psychological depravity for a young woman to concoct a story

which would put her own father in jail for the rest of his remaining life and drag the rest
of the family including herself to a lifetime of shame unless the imputation is true. When
a rape victims testimony on the manner she was defiled is straightforward and candid,
and is corroborated by the medical findings of the examining physician, as in this case,
the same is sufficient to support a conviction for rape. People of the Philippines v.
Benjamin Soria y Gomez, G.R. No. 179031, November 14, 2012.
Evidence; denial and alibi. In assailing the Decision of the lower courts finding him guilty
beyond reasonable doubt of three counts of rape, accused-appellant here proffers the
defense of denial and alibi. The Supreme Court, however, did not give credence to his
defense. As often stressed, mere denial, if unsubstantiated by clear and convincing
evidence, has no weight in law and cannot be given greater evidentiary value than the
positive testimony of a rape victim. In this case, appellants testimony, particularly his
denial, was not substantiated by clear and convincing evidence. Also, for his alibi to
prosper, appellant must establish that he was not at the locus delictiat the time the
offense was committed and that it was physically impossible for him to be at the scene
of the crime at the time of its commission. Appellant failed to establish these elements.
The fact that AAA was living with her grandparents did not preclude the possibility that
appellant was present at the crime scenes during their commission. Appellant himself
admitted that the distance between his residence and that of AAAs grandparents is
only approximately 7 kilometers and which can be traversed by riding a pedicab in
less than 30 minutes. In other words, it was not physically impossible for appellant to
have been at the situs of the crimes during the dates when the separate acts of rape
were committed. Moreover, it has been invariably ruled that alibi cannot prevail over
the positive identification of the accused. Here, appellant was positively identified by
AAA as the perpetrator of the crimes without showing any dubious reason or fiendish
motive on her part to falsely charge him. People of the Philippines v. Enerio Ending y
Onyong, G.R. No. 183827, November 12, 2012.
Evidence; factual findings of trial court accorded great respect. Accused Mangune
asseverates that the lower courts should have acquitted him based on reasonable doubt
as AAAs testimony is not worthy of belief for having been fabricated. He supports such
assertion by making much of the fact that AAA did not sustain any external physical
marks, as shown by the medico-legal findings, despite her testimony that he slapped
her many times on the face. This, Mangune insists, makes AAAs testimony incredible.
The Supreme Court (SC) cited People v. Paringit, where it declared that not all blows
leave marks. Thus, the fact that the medico-legal officer found no signs of external
injuries on AAA, especially on her face, which supposedly had been slapped several
times, does not invalidate her statement that Mangune slapped her to silence her.
Mangunes attempt to discredit AAAs testimony that he raped her on May 7, 2003 must
ultimately fail as he has shown no solid grounds to impeach it. The Regional Trial Court
(RTC), which had the opportunity to hear the testimonies live and observe the
witnesses in person, found not only AAA credible, but her testimony as well. It even
declared that AAAs testimony alone can justify the conviction of Mangune. The
foregoing were subscribed to by the Court of Appeals as well when it affirmed the RTCs
Decision in its entirety. The SC thus found no valid reason to depart from the time-

honored doctrine that where the issue is one of credibility of witnesses, and in this case,
their testimonies as well, the findings of the trial court are not to be disturbed unless
the consideration of certain facts of substance and value, which have been plainly
overlooked, might affect the result of the case. Mangune was therefore adjudged guilty
beyond reasonable doubt of the crime of rape. People of the Philippines v. William
Mangune y Del Rosario, G.R. No. 186463. November 14, 2012.
Evidence; factual findings of trial court accorded great respect. The Supreme Court
(SC) here found no cogent reason to disturb the factual findings of the Regional Trial
Court, as affirmed by the Court of Appeals. It is well-settled that factual findings of the
trial court, especially on the credibility of the rape victim, are accorded great weight and
respect and will not be disturbed on appeal. In its assessment of the instant case, the
SC was convinced that the testimony of XXX positively identifying Lansangan as her
perpetrator is worthy of belief. The clear, consistent and spontaneous testimony of XXX
unrelentingly established that Lansangan inserted his penis and his index finger into her
vagina while she was in his custody. Being a child of tender years, her failure to resist or
struggle while Lansangan molested her would all the more prove how she felt
intimidated by her Tatay. Besides, in rape cases, physical resistance need not be
established when intimidation is exercised upon the victim and the latter submits
herself out of fear. People of the Philippines v. Victor Lansangan, G.R. No. 201587,
November 14, 2012.
Information; aggravating and qualifying circumstances should be alleged. Article 266-B
of the Revised Penal Code prescribes the penalty of reclusion perpetua to death
whenever the rape is committed with the use of a deadly weapon. Although the
information alleged the use by the accused of a deadly weapon (bolo) in the
commission of the rape, the Supreme Court ruled that the Court of Appeals still correctly
prescribed the lesser penalty of reclusion perpetua because the information did not
allege the attendance of any aggravating circumstances. With the intervening revision
of the Rules of Criminal Procedure in order to now require the information to state the
acts or omissions complained of as constituting the offense and the qualifying and
aggravating circumstances xxx in ordinary and concise language and not necessarily in
the language used in the statute but in terms sufficient to enable a person of common
understanding to know what offense is being charged as well as its qualifying and
aggravating circumstance and for the court to pronounce judgment, the prosecution
became precluded from establishing any act or circumstance not specifically alleged in
the information if such act or circumstance would increase the penalty to the maximum
period. People of the Philippines v. Rogelic Abrencillo, G.R. No. 183100, November 28,
2012.
Presumption of Innocence; presumption of regularity of performance of duties. Both the
trial court and the Court of Appeals favored the members of the buy-bust team with the
presumption of regularity in the performance of their duty, mainly because the accused
did not show that they had ill motive behind his entrapment. However, the Supreme
Court ruled that presuming that the members of the buy-bust team regularly performed
their duty was patently bereft of any factual and legal basis. It held that the

presumption of regularity in the performance of duty could not prevail over the stronger
presumption of innocence favoring the accused. Otherwise, the constitutional guarantee
of the accused being presumed innocent would be held subordinate to a mere rule of
evidence allocating the burden of evidence. Where, like here, the proof adduced against
the accused has not even overcome the presumption of innocence, the presumption of
regularity in the performance of duty could not be a factor to adjudge the accused guilty
of the crime charged. Moreover, the regularity of the performance of their duty could
not be properly presumed in favor of the policemen because the records were replete
with indicia of their serious lapses. As a rule, a presumed fact like the regularity of
performance by a police officer must be inferred only from an established basic fact, not
plucked out from thin air. Where there is any hint of irregularity committed by the police
officers in arresting the accused and thereafter, there can be no presumption of
regularity of performance in their favor. People of the Philippines v. Louie Catalan y
Dedala, G.R. No. 189330, November 28, 2012.
Sandiganbayan; jurisdiction. Subject matter jurisdiction is conferred by law, not by the
consent or acquiescence of any or all of the parties. In turn, the issue on whether a suit
comes within the penumbra of a statutory conferment is determined by the allegations
in the complaint, regardless of whether or not the suitor will be entitled to recover upon
all or part of the claims asserted. The Supreme Court upheld the Sandiganbayans
assumption of jurisdiction over the subject matter of Civil Case (CC) Nos. 0033-A and
0033-F. Judging from the allegations of the defendants illegal acts thereat made, it is
fairly obvious that both CC Nos. 0033-A and CC 0033-F partake, in the context of EO
Nos. 1, 2 and 14, series of 1986, the nature of ill-gotten wealth suits. Both deal with the
recovery of sequestered shares, property or business enterprises claimed, as alleged in
the corresponding basic complaints, to be ill-gotten assets of President Marcos, his
cronies and nominees and acquired by taking undue advantage of relationships or
influence and/or through or as a result of improper use, conversion or diversion of
government funds or property. Recovery of these assets determined as shall
hereinafter be discussed as prima facie ill-gotten falls within the unquestionable
jurisdiction of the Sandiganbayan under P.D. No. 1606, as amended by R.A. No. 7975
and E.O. No. 14, Series of 1986, which vests the Sandiganbayan with, among others,
original jurisdiction over civil and criminal cases instituted pursuant to and in connection
with E.O. Nos. 1, 2, 14 and 14-A. Eduardo M. Cojuangco Jr. v. Republic of the
Philippines, G.R. No. 180705, November 27, 2012.

(Lindy thanks Elaine B. De Los Santos for assisting in the preparation of this post.)

October 2012 Philippine Supreme Court Decisions on Tax Law


Posted on November 12, 2012 by Carina C. Laforteza Posted in Philippines - Cases, Philippines Law, Philippines - Regulation, Tax Law

Here are select October 2012 rulings of the Supreme Court of the Philippines on tax law:

National Internal Revenue Code; Quarterly income tax; irrevocability of option to carryover excess or claim for refund. It is clear that once a corporation exercises the option
to carry-over, such option is irrevocable for that taxable period. Having chosen to
carry-over the excess quarterly income tax, the corporation cannot thereafter choose to
apply for a cash refund or for the issuance of a tax credit certificate for the amount
representing such overpayment. To avoid confusion, the Court has defined the phrase
for that taxable year as merely identifying the excess income tax, subject of the
option, by referring to the taxable period when it was acquired by the
taxpayer. United International Pictures, AB vs. Commissioner of Internal Revenue, G.R.
No. 168331, October 11, 2012.
National Internal Revenue Code; income tax overpayments; claim for refund;
requirements. In claiming for refund of excess creditable withholding tax, petitioner
must show compliance with the following basic requirements: (1) the claim for refund
was filed within two years as prescribed under Section 229 of the NIRC of 1997; (2) the
income upon which the taxes were withheld were included in the return of the recipient
(Sec 10, Revenue Regulations No. 6-85); and (3) the fact of withholding is established by
a copy of a statement (BIR Form 1743.1) duly issued by the payor (withholding agent) to
the payee showing the amount paid and the amount of tax withheld therefrom (Section
10, Revenue Regulations No. 6-85). Parenthetically, the Office of Solicitor General
pointed out that the amount of income payments in the income tax return must
correspond and tally to the amount indicated in the certificate of withholding, since
there is no possible and efficacious way by which the Bureau of Internal Revenue can
verify the precise identity of the income payments as reflected in the income tax
return. United International Pictures, AB vs. Commissioner of Internal Revenue, G.R. No.
168331, October 11, 2012.
(Caren thanks Grace Ann C. Lazaro for assisting in the preparation of this post.)