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POLITICAL LAW

ELECTION LAW

De Guzman vs. COMELEC


G.R. No. 182380, August 28,2009

Doctrines:
1. Release, disbursement or expenditure of public funds. Public works are works designed to subserve
some purpose of public necessity, use or convenience, such as public buildings, roads, aqueducts,
parks, etc. Since the purchase of the lots is not within the contemplation of the word public works, Sec.
261 (v) of the Omnibus Election Code was not violated.

2. Prohibition against the issuance of treasury warrants. Whether or not the treasury warrant was
intended for public works is of no moment. The prohibition is violated in either of two ways: (a) by any
person who, within 45 days preceding a regular election and 30 days before a special election,
undertakes the construction of any public works except those enumerated in the preceding paragraph;
or (b) by any person who issues, uses or avails of treasury warrants or any device undertaking future
delivery of money, goods or other things of value chargeable against public funds within 45 days
preceding a regular election and 30 days before a special election.

Facts:
On Mar. 31, 2004, the Sangguniang Panlungsod of Tuguegarao City passed Resolution No. 048-2004
authorizing Mayor Ting to acquire 2 parcels of land for use as public cemetery. Mayor Ting purchased the
lands and as payment, City Treasurer Garcia issued Treasury Warrants. Petitioner filed a complaint
against Mayor Ting and City Treasurer Garcia, charging them with violation of Sec. 261, para. (v) and (w),
of the Omnibus Election Code (OEC), for having undertaken to construct a public cemetery and for
having released, disbursed and expended public funds within 45 days prior to the May 9, 2004 election, in
disregard of the prohibitions under said provisions due to the election ban period having commenced on
Mar. 26, 2004 and ended on May 9, 2004.

Issues:
1. Whether the acquisition of lots during the election ban period violates Sec. 261(v) of the OEC
2. Whether the issuance of Treasury Warrant during the election ban period violates Sec. 261(w) of the
OEC

Ruling/Ratio:
1. No. The acquisition of lots during the period of the election ban is not considered as public works in
violation of Sec. 261(v) of the OEC. To be liable for violation of Sec. 261(v), these elements must
concur:
a. A public official or employee releases, disburses, or expends any public funds;
b. The release, disbursement or expenditure of such funds must be within forty-five days before
regular election;
c. The release, disbursement or expenditure of said public funds is for any and all kinds of public
works; and
d. The release, disbursement or expenditure of the public funds should not cover any exceptions
of Section 261 (v).

The term public works as used in Sec. 261 (v) is properly construed to refer to any building or
structure on land or to structures (such as roads or dams) built by the Government for public use and
paid by public funds. Public works are clearly works, whether of construction or adaptation
undertaken and carried out by the national, state, or municipal authorities, designed to subserve
some purpose of public necessity, use or convenience, such as public buildings, roads, aqueducts,
parks, etc.; or, in other words, all fixed works constructed for public use. Since the purchase of the
lots is not within the contemplation of the word public works, the third element is not present. Hence,
Sec. 261 (v) of the OEC was not violated.

2. Yes. The issuance of the Treasury Warrant during the period of the election ban violated Sec. 261(w)
of the OED. Sec. 261(w) is violated in either of two ways:

a. By any person who, within 45 days preceding a regular election and 30 days before a special
election, undertakes the construction of any public works except those enumerated in the
preceding paragraph; or
b. By any person who issues, uses or avails of treasury warrants or any device undertaking future
delivery of money, goods or other things of value chargeable against public funds within 45 days
preceding a regular election and 30 days before a special election.

For purposes of the prohibition, the acts are separate and distinct. Consequently, whether or not the
treasury warrant in question was intended for public works was even of no moment in determining if
the legal provision was violated. There was probable cause to believe that Sec. 261(w),
subparagraph (b) was violated when City Mayor Ting and City Treasurer Garcia issued Treasury
Warrant No. 0001534514 during the election ban period.

LEGISLATIVE POWER & EQUAL PROTECTION CLAUSE

League of Cities vs. COMELEC


G.R. Nos. 176951, 177499, 178056, February 15, 2011

Doctrines:
1. The enactment of the Cityhood Laws is an exercise by Congress of its legislative power. Legislative
power is the authority, under the Constitution, to make laws, and to alter and repeal them. The
Constitution, as the expression of the will of the people in their original, sovereign, and unlimited
capacity, has vested this power in the Congress of the Philippines.

2. The existence of substantial distinction with respect to the municipalities covered by the Cityhood
Laws is measured by the purpose of the LG Code. The distinction lies in the capacity and viability of
municipalities to become component cities of their respective provinces. Congress, by enacting the
Cityhood Laws, recognized this capacity and viability of municipalities to become the States partners
in accelerating economic growth and development in the provincial regions, which is the very thrust
of the LG Code.

Facts:
During the 11th Congress, Congress enacted into law 33 bills converting 33 municipalities into cities.
However, Congress did not act on bills converting 24 other municipalities into cities.

During the 12th Congress, Congress enacted into law, R.A. No. 9009 amending Sec. 450 of the LG Code.
This law increased the annual income requirement for conversion of a municipality into a city from P20M
to P100M. The amendment was to restrain the mad rush of municipalities converting into cities to secure
a larger share in the Internal Revenue Allotment. In the same Congress, the lower house adopted a Joint
Resolution which sought to exempt from the P100M income requirement the 24 municipalities whose
cityhood bills were not approved in the 11th Congress. However, the 12th Congress ended without the
Senate approving the Joint Resolution.

During the 13th Congress, the Senate again failed to approve the said Joint Resolution. Thus, following
the advice of Sen. Pimentel, 16 municipalities filed through their respective sponsors individual cityhood
bills. The 16 cityhood bills contained a common provision which exempted these municipalities from the
P100M income requirement in R.A. No. 9009.
The bills lapsed into Cityhood Laws on various dates from March-July 2007. The laws directed
COMELEC to hold plebiscites to determine whether the voters in each municipality approved of their
conversion to a city.

Issues:
1. Whether or not the Cityhood Laws violate Sec. 10, Art. X of the Constitution
2. Whether or not the Cityhood Laws violate the equal protection clause

Ruling/Ratio:
1. No, the Cityhood Bills do not violate Sec. 10, Art. X of the Constitution. Before Senate Bill No. 2157,
now R.A. No. 9009, was introduced, there were 57 bills filed for conversion of 57 municipalities into
cities. During the 11th Congress, 33 of these were enacted into law, while 24 remained pending.
Among these 24 were the 16 municipalities that were converted into component cities through the
Cityhood Laws.

While R.A. No. 9009 was being deliberated upon, Congress was well aware of the pendency of
conversion bills of several municipalities, including those covered by the Cityhood Laws, desiring to
become component cities which qualified under the P20M income requirement of the old Sec. 450 of
the LG Code.

In the interpellation, the Congress clearly intended that those with pending Cityhood Bills during the
11th Congress would not be covered by the new and higher income requirement of P100M imposed
by R.A. No. 9009.

Congress saw the wisdom of exempting respondent municipalities from complying with the higher
income requirement imposed by R.A. No. 9009. They have proven themselves viable and capable to
become component cities of their respective provinces. They were centers of trade and commerce,
points of convergence of transportation, rich havens of agricultural, mineral, and other natural
resources, and flourishing tourism spots.

The enactment of the Cityhood Laws is an exercise by Congress of its legislative power. Legislative
power is the authority, under the Constitution, to make laws, and to alter and repeal them. The
Constitution, as the expression of the will of the people in their original, sovereign, and unlimited
capacity, has vested this power in the Congress of the Philippines.

The LG Code is a creation of Congress through its law-making powers. Congress has the power to
alter or modify it as it did when it enacted R.A. No. 9009. Such power of amendment of laws was
again exercised when Congress enacted the Cityhood Laws. Since the Cityhood Laws explicitly
exempted the concerned municipalities from the amendatory R.A. No. 9009, such Cityhood Laws
are, therefore, also amendments to the LG Code itself.

2. No, the Cityhood Laws do not violate the equal protection clause. The equal protection clause
permits a valid classification, provided that it: (1) rests on substantial distinctions; (2) is germane to
the purpose of the law; (3) is not limited to existing conditions only; and (4) applies equally to all
members of the same class.

Petitioners argue that there is no substantial distinction between municipalities with pending cityhood
bills in the 11th Congress and municipalities that did not have pending bills, such that the mere
pendency of a cityhood bill in the 11th Congress is not a material difference to distinguish one
municipality from another for the purpose of the income requirement.

The determination of existence of substantial distinction does not simply lie on the mere pendency of
their cityhood bills during the 11th Congress. The existence of substantial distinction with respect to
respondent municipalities covered by the Cityhood Laws is measured by the purpose of the law, not
by R.A. No. 9009, but by the very purpose of the LG Code the capacity and viability of respondent
municipalities to become component cities of their respective provinces. Congress, by enacting the
Cityhood Laws, recognized this capacity and viability of respondent municipalities to become the
States partners in accelerating economic growth and development in the provincial regions, which is
the very thrust of the LGC, manifested by the pendency of their cityhood bills during the 11 th
Congress and their relentless pursuit for cityhood up to the present. Truly, the urgent need to
become a component city arose way back in the 11th Congress, and such condition continues to
exist.

STATE IMMUNITY

Air Transportation Office (ATO) vs. Sps. Ramos


G.R. No. 159402, February 23, 2011

Doctrine: Immunity is determined by the character of the objects for which the government agency was
organized. An agency performing governmental functions is immune from suit while an agency
performing proprietary functions is not. ATO is involved in the management and maintenance of the
Loakan Airport, an activity that is not the exclusive prerogative of the State in its sovereign capacity.
Hence, ATO had no claim to the States immunity from suit.

Facts:
Respondents Sps. Ramos discovered that a portion of their land was being used as part of the runway
and running shoulder of the Loakan Airport which is being operated by petitioner ATO. The parties agreed
to convey the affected portion by deed of sale to ATO but the latter failed to pay the consideration despite
demands. Thus, the respondents filed an action for collection against ATO and some of its officials. ATO
asserted that the RTC had no jurisdiction to entertain the action without the States consent considering
that the deed of sale had been entered into in the performance of governmental functions.

Issue:
Whether or not ATO is immune from suit

Ruling/Ratio:
No. The States immunity from suit does not extend to ATO because it is an agency of the State engaged
in an enterprise that is far from being the States exclusive prerogative. ATO is an agency of the
Government not performing a purely governmental or sovereign function, but was instead involved in the
management and maintenance of the Loakan Airport, an activity that was not the exclusive prerogative of
the State in its sovereign capacity.

The immunity of the State from suit is expressly provided in Art. XVI of the Constitution. Practical
considerations dictate the establishment of an immunity from suit in favor of the State. Otherwise, if the
State is suable at the instance of every other individual, government service may be severely obstructed
and public safety endangered because of the number of suits that the State has to defend against.
Immunity has been upheld in favor of a government agency performing governmental function because
its function is governmental or incidental to such function. On the other hand, immunity has not been
upheld in favor of one that is performing proprietary functions because such agencys function was not in
pursuit of a necessary function of government but was essentially a business.

LAW ON PUBLIC OFFICER

Funa vs. Agra


G.R. No. 191644, 19 Feb 2013

Doctrine: While all other appointive officials in the civil service are allowed to hold other office in the
government during their tenure when such is allowed by law or by the primary functions of their positions,
Members of the Cabinet, their deputies and assistants may do so only when expressly authorized by the
Constitution. Being designated as the Acting Secretary of Justice concurrently with his position of Acting
Solicitor General, Agra was covered by Sec. 13, Art. VII. Hence, he could not validly hold any other office
during his tenure as the Acting Solicitor General, because the Constitution has not otherwise so provided.

A de facto officer is one who derives his appointment from one having colorable authority to appoint, if the
office is an appointive office, and whose appointment is valid on its face. All official actions of Agra as a
de facto Acting Secretary of Justice, assuming that was his later designation, were presumed valid,
binding and effective as if he was the officer legally appointed and qualified.

Facts:
President Arroyo appointed respondent Agra as the Acting Secretary of Justice (SOJ). Days after,
President Arroyo designated Agra as the Acting Solicitor General (SolGen) in a concurrent capacity.
Petitioner commenced this suit to challenge the constitutionality of Agras concurrent appointments, as it
is prohibited under Sec. 13, Art. VII of the Constitution. Respondents contend that Agras concurrent
designations were only in a temporary capacity; that even on the assumption that it constituted "holding of
multiple offices," his continued service as the Acting SolGen was akin to a hold-over; that upon Agras
designation as the Acting SOJ, his term as the Acting SolGen expired in view of the constitutional
prohibition against holding of multiple offices; that under the principle of hold-over, Agra continued his
service as the Acting SolGen until his successor is elected to prevent a hiatus in the government pending
the time when a successor may be chosen into office and that during his continued service, he did not
receive any salaries and emoluments from the OSG.

Issue:
Whether Agras concurrent designations violate the constitutional prohibition against dual or multiple
offices for the Members of the Cabinet

Ruling/Ratio:
Yes. While all other appointive officials in the civil service are allowed to hold other office or employment
in the government during their tenure when such is allowed by law or by the primary functions of their
positions, Members of the Cabinet, their deputies and assistants may do so only when expressly
authorized by the Constitution. Sec. 7, Art. IX-B is meant to lay down the general rule applicable to all
elective and appointive public officials and employees, while Sec. 13, Art. VII is meant to be the exception
applicable only to the President, the Vice-President, Members of the Cabinet, their deputies and
assistants.

The phrase "unless otherwise provided in this Constitution" must be given a literal interpretation to refer
only to those particular instances cited in the Constitution itself. Being designated as the Acting SOJ
concurrently with his position of Acting SOJ, Agra was covered by Sec. 13, Art. VII. Hence, Agra could
not validly hold any other office or employment during his tenure as the Acting SolGen, because the
Constitution has not otherwise so provided.

It was of no moment that Agras designation was in an acting or temporary capacity. The prohibition
against dual or multiple offices being held by one official must be construed as to apply to all
appointments or designations, whether permanent or temporary. Agras designation as the Acting SOJ
was not in an ex officio capacity, by which he would have been validly authorized to concurrently hold the
two positions due to the holding of one office being the consequence of holding the other.

Nevertheless, Agra was a de facto officer during his tenure as Acting SOJ. A de facto officer is one who
derives his appointment from one having colorable authority to appoint, if the office is an appointive office,
and whose appointment is valid on its face. All official actions of Agra as a de facto officer were presumed
valid, binding and effective.
LAW ON PUBLIC OFFICERS

Office of the Ombudsman vs. De Leon


G.R. No. 154083, 27 Feb 2013

Doctrine: A public official is guilty of grave misconduct when he neglects to act upon a complaint about a
violation of the law he is enforcing.

Facts:
Acting on a report of illegal quarrying in Baras, Officer Tomilla of the Office of the Ombudsman conducted
an investigation. Tornilla filed his report to Ombudsman Desierto confirming the illegal quarrying. Tornilla
recommended that a preliminary investigation be conducted agains Mayor Roberto Ferrera, Jonathan
Llagas, and Venancio Javier for the probable violation of Sec. 3(e) of R.A. No. 3019 (Anti-Graft and
Corrupt Practices Act); and that administrative proceedings for violations of the Civil Service Rules be
also undertaken. DILG Resident Ombudsman Falcis II sought the inclusion in the investigation of
petitioner De Leon as the Provincial Environment and Natural Resources Officer (PENRO) and as
concurrently the Chairman of the Provincial Mining Regulatory Board (PMRB) of Rizal.

Issue:
Whether or not de Leon is liable for gross neglect of duty

Ruling/Ratio:
Yes. Gross neglect of duty or gross negligence refers to negligence characterized by the want of even
slight care, or by acting or omitting to act in a situation where there is a duty to act, not inadvertently but
willfully and intentionally, with a conscious indifference to the consequences, insofar as other persons
may be affected. It is the omission of that care that even inattentive and thoughtless men never fail to give
to their own property. In cases involving public officials, gross negligence occurs when a breach of duty is
flagrant and palpable. Simple neglect of duty means the failure of an official to give proper attention to a
task expected of him or her, signifying a disregard of a duty resulting from carelessness or indifference.

De Leon, given his rank and level of responsibility, was guilty of gross neglect in not performing the act
expected of him. He was assigned to perform tasks in order to achieve the objectives of environmental
protection. He chose to be passive despite clear indications of the illegal quarrying activities that had
been first brought to his official attention as early as in 1997. The most that he did on the complaint was
to dispatch his subordinates to verify the report of quarrying. After the subordinates returned with the
information that there were no quarrying activities, he was apparently content with their report. He was
not even spurred into further action by the subordinates simultaneous report on having observed at the
site the presence of earthmoving equipment. Had he been conscientious, the presence of the equipment
would have quickly alerted him to the high probability of their being used in quarrying activities. The
seriousness of the matter should have prodded him to take further actions, including personally inspecting
the site himself either to confirm the findings of the subordinates or to satisfy himself that the earthmoving
equipment was not being used for quarrying. The flagrant and culpable refusal or unwillingness of De
Leon to perform his official duties denoted gross neglect of duty also because the illegal quarrying had
been going for a period of time. His actions were inadequate, and could even be seen as a conscious
way to mask a deliberate and intentional refusal to perform the duties that his position required. Making it
worse for him was that the quarrying site was a mere stones throw away from the main road, being only
about 400 meters away from the main road.
ELECTION LAW

Tagolino vs. HRET


G.R. No. 202202, March 19,2013

Doctrine: A candidate who is disqualified under Sec. 68 of the OEC can be validly substituted because
he remains a candidate until disqualified; but a person whose COC has been denied due course to and/or
cancelled under Sec. 78 cannot be substituted because he is not considered a candidate. Richard Gomez
lacked the 1 year residency requirement under the Constitution, which is one of the grounds under Sec.
78. Hence, he cannot be validly substituted by the private respondent, Lucy Torres-Gomez.

Facts:
On November 30, 2009, Richard Gomez filed his certificate of candidacy (COC) as Representative for the
Fourth District of Leyte. One of the opposing candidates, Buenaventura Juntilla filed a Petition for
disqualification and denial/cancellation of COC, alleging that Richard is actually a resident of San Juan
City, and not of Ormoc City, thus failing to meet the 1 year residency requirement under Sec. 6, Art. VI of
the Constitution. The COMELEC First Division granted the petition without any qualification. It provided
that Richard was disqualified to run for the said position but did not explicitly decree the denial and/or
cancellation of the COC. On May 5, 2010, respondent Lucy Torres-Gomez filed her COC as a substitute
for Richard. The COMELEC En Banc allowed the substitution. In view of the substitution, Richards votes
were credited in favor of respondent and she was proclaimed the duly-elected Representative.

On May 24, 2010, petitioner filed a Petition for quo warranto before the HRET to oust private respondent
from her congressional seat, claiming, among others, that she did not validly substitute Richard as his
COC was void ab initio. The HRET dismissed the petition observing that the Resolution denying Richards
candidacy spoke of disqualification and not of COC cancellation hence, the substitution was legal and
valid.

Issue:
Whether .or not the substitution of respondent was valid.

Ruling/Ratio:
No. The OEC provides for certain remedies to assail a candidates bid for public office. Among these are:
1. A petition for disqualification under Sec. 68; and
2. A petition to deny due course to and/or cancel a certificate of candidacy under Sec. 78.

A disqualification case under Sec. 68 is hinged on either: (a) a candidates possession of a permanent
resident status in a foreign country; or (b) his or her commission of certain acts of disqualification. One
who is disqualified under Sec. 68 is still technically considered to have been a candidate, albeit
proscribed to continue as such only because of supervening infractions which do not, however, deny his
or her statutory eligibility.

A denial in due course to and/or cancellation of a COC under Sec. 78 is premised on a persons
misrepresentation of any of the material qualifications required for the elective office (age, residence,
citizenship or non-possession of natural-born Filipino status). If the candidate subsequently states a
material representation in the COC that is false, the COMELEC is empowered to deny due course to or
cancel such certificate. A person whose COC had been denied due course to and/or cancelled under
Sec. 78 is deemed to have not been a candidate at all. The reason being is that a cancelled COC is
considered void ab initio and thus, cannot give rise to a valid candidacy and necessarily, to valid votes.

Richard was disqualified to run due to his failure to comply with the 1 year residency requirement. The
confusion, however, stemmed from the use of the word disqualified in the Resolution of the COMELEC
First Division, which was adopted by the COMELEC En Banc in granting the substitution, and even
further perpetuated by the HRET in denying the quo warranto petition. The fact that the COMELEC First
Divisions Resolution did not explicitly decree the denial of due course to and/or cancellation of Richards
COC should not have obviated the COMELEC En Banc from declaring the invalidity of private
respondents substitution. The clear and unequivocal basis for Richards disqualification is his failure to
comply with the residency requirement under Sec. 6, Art. VI of the Constitution which is a ground for the
denial of due course to and/or cancellation a COC under Sec. 78 of the OEC, not for disqualification.

Owing to the lack of proper substitution, private respondent was therefore not a bona fide candidate for
the position of Representative for the Fourth District of Leyte when she ran for office, which means that
she could not have been elected.

LOCAL GOVERNMENTS

Legaspi vs. City of Cebu


G.R. Nos. 159110 and 159692, December 10, 2013

Doctrines:
1. The goal of the decentralization of powers to the LGUs is to ensure the enjoyment by each of the
territorial and political subdivisions of the State of a genuine and meaningful local autonomy. The
Local Government Code (LGC) has expressly empowered the LGUs to enact and adopt ordinances
to regulate vehicular traffic and to prohibit illegal parking within their jurisdictions.

2. The clamping of the petitioners vehicles pursuant to Ordinance No. 1664 is one of the exceptions of
notice and hearing. The immobilization of illegally parked vehicles by clamping the tires was
necessary because the transgressors were not around at the time of apprehension. Notice and
hearing would be superfluous. Nor should the lack of a trial-type hearing prior to the clamping
constitute a breach, for giving the transgressors the chance to reverse the apprehensions through a
timely protest could equally satisfy the need for a hearing.

Facts:
The Sangguniang Panlungsod of Cebu City enacted Ordinance No. 1664 authorizing traffic enforcers to
immobilize any motor vehicle violating the parking restrictions and prohibitions in order to have a smooth
flow of vehicular traffic. Petitioners contend that the Ordinance, by leaving the confiscation and
immobilization of the motor vehicles to the traffic enforcers or the PNP instead of to officials exercising
judicial authority, was violative of the constitutional guaranty of due process and that such confiscation
and immobilization should only be made after a hearing on the merits by courts because the
immobilization and the clamping of the cars and motor vehicles by the police or traffic enforcers could be
subject to abuse. Petitioners further assert that drivers or vehicle owners affected were not accorded the
opportunity to protest the clamping, towing, and impounding of the vehicles, or even to be heard and to
explain their side prior to the immobilization of their vehicles; and that the ordinance was oppressive and
arbitrary for that reason.

Issue:
Whether or not the Ordinance No. 1664 is valid

Ruling/Ratio:
Yes. The tests of a valid ordinance are the following:

1. Formal: it was enacted within the corporate powers of the LGU and passed in accordance with the
procedure prescribed by law.

Congress enacted the LGC as the implementing law for the delegation to the various LGUs of the States
great powers. Police power cannot be exercised by any group or body of individuals not possessing
legislative power. The Legislature, however, may delegate this power to the lawmaking bodies of LGUs.
Once delegated, the agents can exercise only such legislative powers as are conferred on them by the
national lawmaking body. Vesting cities with the legislative power to enact traffic rules and regulations
was expressly done through Sec. 458 of the LGC, and also generally by virtue of the General Welfare
Clause embodied in Sec. 16 of the LGC. LGUs would be in the best position to craft their traffic codes
because of their familiarity with the conditions peculiar to their communities.

2. Substantive: (a) It must not contravene the Constitution or any statute; (b) It must not be unfair or
oppressive; (c) It must not be partial or discriminatory. (d) It must not prohibit but may regulate; (e) It
must be general and consistent with public policy; and (f) It must not be unreasonable.

Considering that traffic congestions were already retarding the growth and progress in the population and
economic centers of the country, the plain objective of Ordinance No. 1664 was to serve the public
interest and advance the general welfare in the City. Ordinance No. 1664 was far from oppressive and
arbitrary. Any driver or vehicle owner whose vehicle was immobilized by clamping could protest such
action of a traffic enforcer or PNP personnel enforcing the ordinance as provided under Sec. 3 of the
Ordinance.

Notice and hearing are the essential requirements of procedural due process. Yet, there are many
instances in which the absence of one or both of such requirements is not necessarily a denial or
deprivation of due process. The clamping of the vehicles was of the same character as the established
exceptions dispensing with notice and hearing. The immobilization of illegally parked vehicles by
clamping the tires was necessary because the transgressors were not around at the time of
apprehension. Under such circumstance, notice and hearing would be superfluous. Nor should the lack of
a trial-type hearing prior to the clamping constitute a breach of procedural due process, for giving the
transgressors the chance to reverse the apprehensions through a timely protest could equally satisfy the
need for a hearing. The prior intervention of a court was not indispensable to ensure a compliance with
due process.

BILL OF RIGHTS

People vs. Sandiganbayan (First and Third Division)


G.R. Nos. 188165 and 189063, December 11, 2013

Doctrine: The right to a speedy disposition of cases is not limited to the accused in criminal proceedings
but extends to all parties in all cases, including civil and administrative cases, and in all proceedings,
including judicial and quasi-judicial hearings. At no time should the progress and success of the
preliminary investigation of a criminal case be made dependent upon the ratification of a treaty by the
Senate that would provide to the prosecutorial arm of the State, already powerful and overwhelming in
terms of its resources, an undue advantage unavailable at the time of the investigation. To allow the delay
under those terms would definitely violate fair play and nullify due process of law.

Facts:
The acts of the accused had supposedly occurred in the period from Feb. 13-23, 2001. Yet, the criminal
complaint came to be initiated only on Nov. 25, 2002 when Ombudsman Marcelo requested the PAGC to
provide his office with the documents relevant to the expos of Cong. Villarama. Cong. Jimenez delivered
a speech confirming Cong. Villaramas expos and accusing Secretary Perez of extorting $2 Million from
him in 2001. Subsequently, on Dec. 23, 2002, Cong. Jimenez submitted his complaint-affidavit to the
Office of the Ombudsman. It was only on Nov. 6, 2006, however, when the Special Panel issued the Joint
Resolution recommending that the criminal informations be filed against the accused. Ombudsman
Gutierrez approved the Joint Resolution only on Jan. 5, 2007. Ultimately, the informations charging the
accused with 4 different crimes were filed on Apr. 15, 2008. In sum, the fact-finding investigation and
preliminary investigation by the Office of the Ombudsman lasted nearly 5 years and 5 months.

Issue:
Whether or not the accuseds constitutional right to the speedy disposition of cases was violated
Ruling/Ratio:
Yes. The right to the speedy disposition of cases is enshrined in Art. III, Sec. 16 of the Constitution. Such
right is not limited to the accused in criminal proceedings but extends to all parties in all cases, including
civil and administrative cases, and in all proceedings, including judicial and quasi-judicial hearings. The
right to the speedy disposition of a case is deemed violated when the proceedings are attended by
vexatious, capricious, and oppressive delays; or when unjustified postponements of the trial are asked for
and secured; or when without cause or justifiable motive a long period of time is allowed to elapse without
the party having his case tried.

The Office of the Ombudsman had taken an unusually long period of time just to investigate the criminal
complaint and to determine whether to criminally charge the accused. Such long delay was inordinate
and oppressive, and constituted under the peculiar circumstances of the case an outright violation of the
accuseds right to the speedy disposition of their cases.

It is incumbent for the State to prove that the delay was reasonable, or that the delay was not attributable
to it. In both regards, the State miserably failed. For one, the State explains that the criminal cases could
not be immediately filed in court primarily because of the insufficiency of the evidence to establish
probable cause, like not having a document showing that the funds had reached Secretary Perez and that
to enable it to obtain the document and other evidence, it needed to await the ratification of the treaties
RP-HKSAR Agreement, and the RP-Swiss MLAT. The States dependence on the ratification of the two
treaties was not a sufficient justification for the delay. To allow the delay under those terms would
definitely violate fair play and nullify due process of law. There was really no sufficient justification
tendered by the State for the long delay of more than five years. For such a simple charge of Robbery
there is nothing more to consider and all the facts and circumstances upon which to anchor a resolution
whether to give due course to the complaint or dismiss it are on hand. Failure to act on the same is a
clear transgression of the constitutional rights of the accused.

DUE PROCESS & DISQUALIFICATION AND INHIBITION OF JUDGES

Lai vs. People


G.R. No. 175999, 1 Jul 2015

Doctrine:
1. An essential part of the right is to be afforded a just and fair trial before an accuseds conviction for
any crime.

2. The trial judge who participated as a public prosecutor in the same criminal case should be
disqualified. That Judge Elumbas prior participation as the public prosecutor was passive, or that he
entered his appearance as the public prosecutor long after the Prosecution had rested its case
against the petitioner did not really matter. The purpose of this stricture is to ensure that the
proceedings in court that would affect the life, liberty and property of the petitioner as the accused
should be conducted and determined by a judge who was wholly free, disinterested, impartial and
independent.

Facts:
This case involves the shooting of Enrico Villanueva, Jr. by the petitioner Nelson Lai. On August 21,
2001, RTC Judge Elumba found petitioner guilty of Homicide. Judge Elumba had been assigned on
March 23, 1998 as the public prosecutor in Br. 42 of the RTC in Negros Occidental, and became the
Presiding Judge of Br. 42 on April 27, 2000. Br. 42 was the trial court hearing and ultimately deciding the
Criminal Case against the petitioner. The Court of Appeals ruled in favor of Judge Elumba contending
that when the judge, who was then a public prosecutor, entered his appearance, the prosecution had
already long rested its case. He appeared only when the last witness for the defense was presented, not
to mention the fact that it was a private prosecutor who cross-examined the witness.
Issue:
Whether or not the non-disqualification of Judge Elumba prejudiced the petitioners right to due process

Ruling/Ratio:
Yes. An essential part of the right is to be afforded a just and fair trial before his conviction for any crime.
The cold neutrality of an impartial judge is the indispensable imperative of due process. The judge must
not only be impartial but must also appear to be impartial as an added assurance to the parties that his
decision will be just. Without such confidence, there would be no point in invoking his action for the justice
they expect.

The mere appearance of his name as the public prosecutor in the records of the Criminal Case sufficed to
disqualify Judge Elumba from deciding the case. Having represented the State in the prosecution of the
petitioner, he could not sincerely claim neutrality or impartiality as the trial judge who would continue to
hear the case. That Judge Elumbas prior participation as the public prosecutor was passive, or that he
entered his appearance as the public prosecutor long after the Prosecution had rested its case against
the petitioner did not really matter. The evil sought to be prevented by the rules on disqualification had no
relation whatsoever with the judges degree of participation in the case before becoming the judge.

Under the circumstances, Judge Elumba could not be expected to render impartial, independent and
objective judgment on the criminal case of the petitioner. Hence, his non-disqualification resulted in the
denial of the petitioners right to due process.

RIGHT TO BAIL

Enrile vs. Sandiganbayan (Third Division)


G.R. No. 213847, August 18, 2015

Doctrine: The decision whether to detain or release an accused before and during trial is ultimately an
incident of the judicial power to hear and determine his criminal case. The strength of the Prosecution's
case, albeit a good measure of the accuseds propensity for flight or for causing harm to the public, is
subsidiary to the primary objective of bail, which is to ensure that the accused appears at trial. Enriles
advanced age and ill health justifies his admission to bail. Granting provisional liberty to Enrile will enable
him to have his medical condition be properly addressed and better attended to by competent physicians
in the hospitals of his choice. This will not only aid in his adequate preparation of his defense but, more
importantly, will guarantee his appearance in court for the trial.

Facts:
The Office of the Ombudsman charged petitioner Enrile with plunder on the basis of their involvement in
the diversion and misuse of PDAF. Petitioner filed his Omnibus Motion and Supplemental Opposition,
praying that he be allowed to post bail should probable cause be found against him. Sandiganbayan
denied his bail, on the ground of its prematurity considering that Enrile had not yet then voluntarily
surrendered or been placed under the custody of the law. Accordingly, the Sandiganbayan ordered his
arrest.

Enrile voluntarily surrendered and was later on confined at the PNP General Hospital. Thereafter, Enrile
filed his Motion to Fix Bail arguing that he should be allowed to post bail because: (a) the Prosecution had
not yet established that the evidence of his guilt was strong; (b) although he was charged with plunder,
the penalty as to him would only be reclusion temporal, not reclusion perpetua, since he is over 70 years
old and he voluntarily surrendered; and (c) he was not a flight risk, and his age and physical condition
must further be seriously considered.

Sandiganbayan denied Enriles Motion, arguing that it is only after the prosecution shall have presented
its evidence and the Court shall have made a determination that the evidence of guilt is not strong against
accused Enrile can he demand bail as a matter of right.
Issue:
Whether or not the petitioner is entitled to bail

Ruling/Ratio:
Yes. The right to bail is expressly afforded by Sec. 13, Art. III of the Constitution. This constitutional
provision is repeated in Sec. 7, Rule 114 of the Rules of Court:

No person charged with a capital offense, or an offense punishable by reclusion perpetua or life
imprisonment, shall be admitted to bail when evidence of guilt is strong, regardless of the stage of the
criminal prosecution.

The general rule is that any person, before being convicted of any criminal offense, shall be bailable,
unless he is charged with a capital offense, or with an offense punishable with reclusion perpetua or life
imprisonment, and the evidence of his guilt is strong. For purposes of admission to bail, the determination
of whether evidence of guilt is strong in criminal cases involving capital offenses, or offenses punishable
with reclusion perpetua or life imprisonment lies within the discretion of the trial court. But such discretion
may be exercised only after the hearing called to ascertain the degree of guilt of the accused for the
purpose of whether or not he should be granted provisional liberty.

In resolving bail applications of the accused who is charged with a capital offense, or an offense
punishable by reclusion perpetua or life imprisonment, the trial judge is expected to comply with the
guidelines outlined in Cortes v. Catral, to wit:
1. In all cases, notify the prosecutor of the hearing of the application for bail or require him to submit
his recommendation (Sec. 18, Rule 114 of the ROC);
2. Where bail is a matter of discretion, conduct a hearing of the application for bail regardless of
whether or not the prosecution refuses to present evidence to show that the guilt of the accused
is strong for the purpose of enabling the court to exercise its sound discretion; (Secs. 7 and 8,
supra)
3. Decide whether the guilt of the accused is strong based on the summary of evidence of the
prosecution;
4. If the guilt of the accused is not strong, discharge the accused upon the approval of the bailbond
(Sec. 19, supra) Otherwise petition should be denied.

Petitioners social and political standing and his having immediately surrendered to the authorities upon
his being charged in court indicate that the risk of his flight or escape from this jurisdiction is highly
unlikely. His personal disposition from the onset of his indictment for plunder has demonstrated his utter
respect for the legal processes. With his solid reputation in both his public and his private lives, his long
years of public service, and historys judgment of him being at stake, he should be granted bail.

The currently fragile state of Enriles health presents another compelling justification for his admission to
bail. The Director of the PGH attested that his medical conditions, singly or collectively, could pose
significant risks to the life of Enrile. Granting provisional liberty to Enrile will then enable him to have his
medical condition be properly addressed and better attended to by competent physicians in the hospitals
of his choice. This will not only aid in his adequate preparation of his defense but, more importantly, will
guarantee his appearance in court for the trial.

Sandiganbayan arbitrarily ignored the objective of bail to ensure the appearance of the accused during
the trial; and unwarrantedly disregarded the clear showing of the fragile health and advanced age of
Enrile. As such, the Sandiganbayan gravely abused its discretion in denying Enriles Motion To Fix Bail.
OFFICE OF THE OMBUDSMAN

Soriano vs. Deputy Ombudsman Fernandez


G.R. No. 168157, August 19,2015

Doctrine: The discretion of the Office of the Ombudsman in the determination of probable cause to
charge a respondent public official or employee cannot be interfered with in the absence of a clear
showing of grave abuse of discretion amounting to lack or excess of jurisdiction.

Facts:
Atty. Cleofe, the Acting Registrar of Deeds of Batangas, was charged with violation of Sec. 3(e) of R.A.
No. 3109 (Anti-Graft and Corrupt Practices Act). Petitioner, as president of Soriano Holdings Corporation
(SHC), alleged that Atty. Cleofe had given one Teresa Robles an unwarranted advantage by illegally
canceling his Transfer Certificate of Title (TCT) and then issuing a new owners TCT without the payment
of proper taxes and fees. Petitioner insisted that the Deed of Sale between the Sps. Santos and Robles
was void because the parcel of land had already been sold/assigned to SHC and that SHC still held the
owner's copy of TCT.

The Office of the Deputy Ombudsman dismissed the charge for lack of probable cause. The record is
bereft of any evidence to prove that Atty. Cleofe was actuated with malice and/or bad faith when he
issued a new title in the name of Robles. Neither was there evidence to show that Atty. Cleofe had gained
pecuniary benefit from such act. Also, Atty. Cleofe, in issuing the new title, even without the payment of
taxes, is guided by the Order previously issued by the LRA in a similar case.

Issue:
Whether or not the Office of the Deputy Ombudsman gravely abused its discretion amounting to lack or
excess of jurisdiction

Ruling/Ratio:
No. The exclusive discretion to determine the existence of probable cause to charge a public official in a
criminal case pertained to the Office of the Ombudsman. Such office is vested with the sole power to
investigate and prosecute, motu proprio or on complaint of any person, any act or omission of any public
officer or employee, office, or agency when such act or omission appears to be illegal, unjust, improper,
or inefficient. The Ombudsman's power to investigate and to prosecute is plenary and unqualified.

It has the discretion to determine whether a criminal case, given its attendant facts and circumstances,
should be filed or not. However, this Court is not precluded from reviewing the Ombudsman's action when
there is grave abuse of discretion, in which case the certiorari jurisdiction of the Court may be
exceptionally invoked pursuant to Sec. 1, Art. VIII of the Constitution. In the following instances, the
courts may interfere with the Ombudsman's investigatory powers:
1. To afford protection to the constitutional rights of the accused;
2. When necessary for the orderly administration of justice or to avoid oppression or multiplicity of
actions;
3. When there is a prejudicial question which is sub judice;
4. When the acts of the officer are without or in excess of authority;
5. Where the prosecution is under an invalid law, ordinance or regulation;
6. When double jeopardy is clearly apparent;
7. Where the court has no jurisdiction over the offense;
8. Where it is a case of persecution rather than prosecution;
9. Where the charges are manifestly false and motivated by the lust for vengeance.

None of the exceptions was present herein. To justify the issuance of the writ of certiorari, the petitioner
must show that the Office of the Ombudsman gravely abused its discretion amounting to lack or excess of
jurisdiction, which connotes the whimsical and capricious exercise of judgment. The abuse must be so
patent and gross as to amount to an evasion of a positive duty or to a virtual refusal to perform a duty
enjoined by law, or to act at all in contemplation of law as where the power is exercised in an arbitrary
and despotic manner by reason of passion or hostility. Obviously, the Office of the Ombudsman, having
correctly resolved the question of probable cause, did not abuse their discretion, least of all gravely, in
dismissing the charge against Atty. Cleofe.

RIGHT TO INFORMATION

Sereno vs. Committee on Trade and Related Matters of NEDA


G.R. No. 175210, February 1, 2016

Doctrine: The constitutional guarantee to information does not open every door to any and all
information, but is rather confined to matters of public concern. It is subject to such limitations as may be
provided by law. The State's policy of full public disclosure is restricted to transactions involving public
interest, and is tempered by reasonable conditions prescribed by law.

Facts:
On May 23, 2005, respondent Committee on Tariff and Related Matters (CTRM), an office under the
NEDA, resolved to recommend to President Arroyo the lifting of the suspension of the tariff reduction
schedule on petrochemicals and certain plastic products under the ASEAN AFTA-CEPT Scheme.
President Macapagal-Arroyo signed E.O. No. 486 adopting the said recommendation. Petitioner filed a
petition for mandamus to compel CTRM to provide him a copy of the minutes of its May 23, 2005 meeting
as well as copies of all official records, documents, papers and government research data used as basis
for the issuance of E.O. No. 486. The request for information was motivated by his desire to understand
the basis for the recommendation that allegedly caused tremendous losses to the petrochemical industry
claiming that the implementation of E.O. No. 486 effectively deprived the industry of tariff support and
market share, jeopardizing large investments without due process of law.

Issue:
Whether or not the CTRM may be compelled by mandamus to furnish the petitioner with a copy of the
minutes based on the constitutional right to information on matters of public concern and the State's
policy of full public disclosure

Ruling/Ratio:
No. The constitutional guarantee of the right to information on matters of public concern enunciated in
Sec. 7 of Art. III of the Constitution complements the State's policy of full public disclosure in all
transactions involving public interest expressed in Sec. 28 of Art. II of the Constitution. These are aimed
at ensuring transparency in policy-making as well as in the operations of the Government, and at
safeguarding the exercise by the people of the freedom of expression.

Two requisites must concur before the right to information may be compelled by mandamus:
1. The information must be in relation to matters of public concern or public interest.
2. It must not be exempt by law from the operation of the constitutional guarantee.

As to the first requisite, the Philippine petrochemical industry centers on the manufacture of plastic and
other related materials, and provides essential input requirements for the agricultural and industrial
sectors of the country. Thus, the position of the petrochemical industry as an essential contributor to the
overall growth of our country's economy easily makes the information sought a matter of public concern
or interest.

As to the second requisite, the following are declared to be excluded by law:


1. National security matters and intelligence information, trade secrets and banking transactions and
criminal matters
2. Diplomatic correspondence, closed-door Cabinet meeting and executive sessions of either house of
Congress
3. Internal deliberations of the Supreme Court
4. Matters acknowledged as "privileged information under the separation of powers," which include
"Presidential conversations, correspondences, or discussions during closed-door Cabinet meetings."
5. Information on military and diplomatic secrets, information affecting national security, and information
on investigations of crimes by law enforcement agencies before the prosecution of the accused

The May 23, 2005 meeting was classified as a closed-door Cabinet meeting by virtue of the committee's
composition and the nature of its mandate dealing with matters of foreign affairs, trade and policy-making.
The information withheld was within the scope of the exemption from disclosure because the CTRM
meetings were directly related to the exercise of the sovereign prerogative of the President as the Head
of State in the conduct of foreign affairs and the regulation of trade. It is always necessary, given the
highly important and complex powers to fix tariff rates vested in the President, that the recommendations
submitted for the President's consideration be well-thought out and well-deliberated.
LABOR LAW
TRANSFER AS CONSTRUCTIVE DISMISSAL

CHATEAU ROYALE SPORTS AND COUNTRY CLUB, INC. vs RACHELLE G. BALBA and MARINEL
N. CONSTANTE
G.R. No. 197492, January 16, 2017

Doctrine: In the resolution of whether the transfer of the respondents, we have to weigh and consider, on
the one hand, that management has a wide discretion to regulate all aspects of employment, including
the transfer and re-assignment of employees according to the exigencies of the business; and, on the
other, that the transfer constitutes constructive dismissal when it is unreasonable, inconvenient or
prejudicial to the employee, or involves a demotion in rank or diminution of salaries, benefits and other
privileges, or when the acts of discrimination, insensibility or disdain on the part of the employer become
unbearable for the employee, forcing him to forego her employment.

Facts:
Petitioner, a domestic corporation operating a resort complex in Nasugbu, Batangas, hired the
respondents as Account Executives on probationary status. Later, the respondents were promoted to
Account Managers. As part of their duties as Account Managers, they were instructed by the Director of
Sales and Marketing to forward all proposals, event orders and contracts for an orderly and systematic
bookings in the operation of the petitioners business. However, they failed to comply with the directive.
Accordingly, a notice to explain was served on them, to which they promptly responded.

A notice of administrative hearing were served to the respondents. Thereupon, respondents sent a letter
asking for the postponement of the hearing which was denied by the management and at the same time
informed them that the petitioners Corporate Infractions Committee had found them to have committed
acts of insubordination, and they were suspended for seven days. The suspension order was lifted even
before its implementation.

Later, respondents filed a complaint for illegal suspension, non-payment of allowances and commissions,
and constructive dismissal. It has come to the respondents knowledge that the management has a plan
to transfer them to Manila Office. The proposed transfer was prompted by the shortage of personnel at
the Manila Office as a result of the resignation of three account managers and the director of sales and
marketing. Despite the attempts to convince them to accept the transfer to Manila, they declined because
their families were living in Nasugbu, Batangas.

Issue:
Whether or not the respondents were constructively dismissed

Ruling/Ratio:
No. In the resolution of whether the transfer of the respondents, we have to weigh and consider, on the
one hand, that management has a wide discretion to regulate all aspects of employment, including the
transfer and re-assignment of employees according to the exigencies of the business; and, on the other,
that the transfer constitutes constructive dismissal when it is unreasonable, inconvenient or prejudicial to
the employee, or involves a demotion in rank or diminution of salaries, benefits and other privileges, or
when the acts of discrimination, insensibility or disdain on the part of the employer become unbearable for
the employee, forcing him to forego her employment.

In this case, the Court is satisfied that there had been a valid exercise of management prerogative. First,
the management had the prerogative to determine the place where the employee is best qualified to
serve the interests of the business given the qualifications, training and performance of the affected
employee. Second, the transfer is not unreasonable nor oppressive, the transfer would be without
demotion in rank, or without diminution of benefits and salaries. Third, respondents did not show
substantial evidence that the petitioner was acting in bad faith or had ill-motive in ordering the transfer.
Lastly, the respondents, by having voluntarily affixed their signatures on their respective letters of
appointment, acceded to the terms and conditions therein, including the prerogative of the management
to transfer and re-assign its employees from one job to another as it may deem necessary or desirable
.
REMEDIES

SUGARSTEEL INDUSTRIAL INC. AND MR. BEN YAPJOCO VS. VICTOR ALBINA, VICENTE UY AND
ALEX VELASQUEZ
G.R. No. 168749, June 6, 2016

Doctrine: The CA may review and disregard the factual findings of the NLRC upon a clear showing of its
capricious, whimsical or arbitrary disregard of the evidence or of circumstances of considerable
importance crucial or decisive of the controversy. In such eventuality, the writ of certiorari should issue,
and the CA enjoys the leeway to make its own independent evaluation of the evidence of the parties as
well as to ascertain whether or not substantial evidence supported the NLRC's ruling.

Facts:
A clog-up occurred at the kettle sheet guide. At that time, the petitioners were on duty working in their
assigned areas. As a consequence, twenty (20) GI sheets were clogged-up inside the kettle, causing
damage to the private respondent. On the same day, a memorandum was issued by Mr. Ben S. Yapjoco,
manager of the private respondent, requiring all the petitioners to submit written explanation on the
aforesaid incident and why no action shall be taken against them for gross negligence. Individual notices
of suspension were sent to the petitioners pending final decision relative to the incident. On August 29,
1996, Mr. Yapjoco again sent individual notices of termination of employment to all petitioners, stating
that after the management conducted an investigation on the circumstances surrounding the incident, the
petitioners were found guilty of gross neglect of duty and by reason thereof they were terminated from
their employment. Respondents Victor Albina, Vicente Uy and Alex Velasquez charged the petitioners in
the Regional Arbitration Branch of the National Labor Relations Commission (NLRC) in Cebu City with
having illegally dismissed them as kettleman, assistant kettleman, and inspector, respectively. Labor
Arbiter (LA) ruled that although the dismissal of the respondents was justified because of their being guilty
of gross negligence, the petitioners should pay them their separation pay at the rate of 1/2 month per year
of service. NLRC denied the respondents' motion for reconsideration. CA granted the petition for
certiorari.

Issue:
Did the CA depart from well-settled rules on what findings the CA could review on certiorari?

Ruling/Ratio:
No. The policy of practicing comity towards the factual findings of the labor tribunals does not preclude
the CA from reviewing the findings, and from disregarding the findings upon a clear showing of the
NLRC's capricious, whimsical or arbitrary disregard of the evidence or of circumstances of considerable
importance crucial or decisive of the controversy. In such eventuality, the writ of certiorari should issue,
and the CA, being also a court of equity, then enjoys the leeway to make its own independent evaluation
of the evidence of the parties as well as to ascertain whether or not substantial evidence supported the
NLRC's ruling.

NLRC affirmed the decision of the LA based on its observation that the alleged ground for the
respondents' appeal -that "the decision with all due respect, is not supported by evidence and is contrary
to the facts obtaining" -was not one of those expressly enumerated under Article 223 of the Labor Code.

CA acted judiciously in undoing the too literal interpretation of Article 223 of the Labor Code by the
NLRC.. Their phrasing of the ground, albeit not hewing closely (or literally) to that of Article 223, related to
the first and the last grounds under the provision. In dismissing the appeal on that basis, the NLRC
seemed to prefer form and technicality to substance and justice. Thereby, the NLRC acted arbitrarily, for
its dismissal of the appeal became entirely inconsistent with the constitutional mandate for the protection
to labor. CA's overturning of the NLRC's ruling was based on its finding that the petitioners did not
sufficiently establish the just and valid cause to dismiss the respondents from their employment. The CA
thereby enforced against the petitioners the respected proposition that it was the employer who bore the
burden to show that the dismissal was for just and valid cause. The failure of the petitioners to discharge
their burden of proof as the employers necessarily meant that the dismissal was illegal. The outcome
could not be any other way. In order to warrant the dismissal of the employee for just cause, Article 282
(b) of the Labor Code requires the negligence to be gross and habitual. Gross negligence is the want of
even slight care, acting or omitting to act in a situation where there is duty to act, not inadvertently but
willfully and intentionally, with a conscious indifference to consequences insofar as other persons may be
affected. Habitual neglect connotes repeated failure to perform one's duties for a period of time,
depending upon the circumstances. Obviously, a single or isolated act of negligence does not constitute a
just cause for the dismissal of the employee. Considering, however, that the petitioners did not refute the
respondents' claim that the incident was their first offense, and that the petitioners did not present any
evidence to establish the supposed habitual neglect on the part of the respondents, like employment or
other records indicative of the service and personnel histories of the respondents during the period of
their employment, the CA reasonably found and concluded that the just cause to dismiss them was not
established by substantial evidence.

REMEDIES

ROBINA FARMS CEBU VS. ELIZABETH VILLA


G.R. No. 175869, April 18, 2016

Doctrine: The requirement under Section 4(a), Rule VI of the Amended NLRC Rules of Procedure that
an appeal should be verified by the appellant herself is a mere formal requirement intended to secure
and to give assurance that the matters alleged in the pleading are true and correct. The requirement is
complied with when one who has the ample knowledge to swear to the truth of the allegations in the
complaint or petition signs the verification, or when the matters contained in the petition have been
alleged in good faith or are true and correct. Being a mere formal requirement, the courts may even
simply order the correction of improperly verified pleadings, or act on the same upon waiving the strict
compliance with the rules of procedure.

Facts:
Respondent Elizabeth Villa brought against the petitioner her complaint for illegal suspension, illegal
dismissal, nonpayment of overtime pay, and nonpayment of service incentive leave pay in the Regional
Arbitration Branch No. VII of the NLRC in Cebu City.

Villa averred that she had been employed by petitioner Robina Farms as sales clerk since August 1981;
that in the later part of 2001, the petitioner had enticed her to avail herself of the company's special
retirement program; that on March 2, 2002, she had received a memorandum from Lily Ngochua requiring
her to explain her failure to issue invoices for unhatched eggs in the months of January to February 2002;
that she had explained that the invoices were not delivered on time because the delivery receipts were
delayed and overlooked; that despite her explanation, she had been suspended for 10 days from March
8, 2002 until March 19, 2002; that upon reporting back to work, she had been advised to cease working
because her application for retirement had already been approved; that she had been subsequently
informed that her application had been disapproved, and had then been advised to tender her resignation
with a request for financial assistance; that she had manifested her intention to return to work but the
petitioner had confiscated her gate pass; and that she had since then been prevented from entering the
company premises and had been replaced by another employee.

Labor Arbiter found that Villa had not been dismissed from employment. NLRC dismissed the appeal of
the petitioner but granted that of Villa. The CA treated the petitioner's appeal as an unsigned pleading
because the petitioner did not present proof showing that Florabeth P. Zanoria, its Administrative Officer
and Chief Accountant who had signed the verification, had been authorized to sign and file the appeal.
Issue/s:
1. Whether or not Villa's appeal should be treated as an unsigned pleading because she had
accompanied her appeal with the same verification attached to her position paper.
2. Whether or not petitioner did not admit Villa back to work.

Ruling/Ratio:
1. No. Section 4(a), Rule VI of the Amended NLRC Rules of Procedure requires an appeal to be
verified by the appellant herself. The verification is a mere formal requirement intended to secure
and to give assurance that the matters alleged in the pleading are true and correct. The requirement
is complied with when one who has the ample knowledge to swear to the truth of the allegations in
the complaint or petition signs the verification, or when the matters contained in the petition have
been alleged in good faith or are true and correct. Being a mere formal requirement, the courts may
even simply order the correction of improperly verified pleadings, or act on the same upon waiving
the strict compliance with the rules of procedure. It is the essence of the NLRC Rules of Procedure
to extend to every party-litigant the amplest opportunity for the proper and just determination of his
cause, free from the constraints of technicalities. Accordingly, the substantial compliance with the
procedural rules is appreciated in favor of Villa.

For one, it belatedly submitted proof of Zanoria' s authority to verify the pleading for the petitioner. Also, it
did not submit the certification of non-forum shopping at the time of the filing of the appeal. The non-
submission of the certification, being a ground for dismissal, was fatal to the petition. There is no
question that the non-compliance with the requirement for the certification, or a defect in the
certification, would not be cured by the subsequent submission or the correction of the certification,
except in cases of substantial compliance or upon compelling reasons. Accordingly, the dismissal of
the petitioner's appeal cannot be reversed or undone.
2. Yes. We note that the CA and the NLRC agreed on their finding that the petitioner did not admit Villa
back to work after the completion of her 10-day suspension. Neither did Villa's application for early
retirement manifest her intention to sever the employer-employee relationship. Although she applied
for early retirement, she did so upon the belief that she would receive a higher benefit based on the
petitioner's offer. As such, her consent to be retired could not be fairly deemed to have been
knowingly and freely given.

Retirement is the result of a bilateral act of both the employer and the employee based on their voluntary
agreement that upon reaching a certain age, the employee agrees to sever his employment. The
difficulty in the case of Villa arises from determining whether the retirement was voluntary or
involuntary.
On one hand, voluntary retirement cuts the employment ties leaving no residual employer liability; on the
other, involuntary retirement amounts to a discharge, rendering the employer liable for termination
without cause. In case of early retirement programs, the offer of benefits must be certain while the
acceptance to be retired should be absolute. The acceptance by the employees contemplated herein
must be explicit, voluntary, free and uncompelled. Under the circumstances, the CA did not err in
declaring the petitioner guilty of illegal dismissal for violating Article 282 of the Labor Code and the
twin notice rule.

CLASSES OF EMPLOYEES

ALUMAMAY JAMIAS ET AL VS. NLRC


G.R. No. 159350, March 9, 2016

Doctrine: Article 280 does not preclude an agreement providing for a fixed term of employment
knowingly and voluntarily executed by the parties. The test to determine whether a particular employee is
engaged as a project or regular employee is whether or not the employee is assigned to carry out a
specific project or undertaking, the duration or scope of which was specified at the time of his
engagement. There must be a determination of, or a clear agreement on, the completion or termination of
the project at the time the employee is engaged and it must satisfactorily appear that the employer and
employee dealt with each other on more or less equal terms.

Facts:
Respondent Innodata Philippines, Inc. (Innodata), a domestic corporation engaged in the business of
data processing and conversion for foreign clients, hired the several individuals on various dates. After
the respective contracts of the employees expired, they filed a complaint for illegal dismissal claiming that
Innodata had made it appear that they had been hired as project employees in order to prevent them from
becoming regular employees.

The petitioners argue that Innodata circumvented the security of tenure by providing a fixed term; and that
they were regular employees because of the work they performed were necessary and desirable to the
business of Innodata.

Issue:
Were the petitioners regular or project employees of Innodata?

Ruling/Ratio:
Petitioners are project employees.

A fixed period in a contract of employment does not by itself signify an intention to circumvent Article 280
of the Labor Code.
The provision contemplates three kinds of employees, namely: (a) regular employees; (b) project
employees; and (c) casuals who are neither regular nor project employees. The nature of employment of
a worker is determined by the factors provided in Article 280 of the Labor Code, regardless of any
stipulation in the contract to the contrary. Obviously, Article 280 does not preclude an agreement
providing for a fixed term of employment knowingly and voluntarily executed by the parties.
A fixed term agreement, to be valid, must strictly conform to the requirements and conditions provided in
Article 280 of the Labor Code. The test to determine whether a particular employee is engaged as a
project or regular employee is whether or not the employee is assigned to carry out a specific project or
undertaking, the duration or scope of which was specified at the time of his engagement. There must be a
determination of, or a clear agreement on, the completion or termination of the project at the time the
employee is engaged. Otherwise put, the fixed period of employment must be knowingly and voluntarily
agreed upon by the parties, without any force, duress or improper pressure being brought to bear upon
the employee and absent any other circumstances vitiating his consent, or it must satisfactorily appear
that the employer and employee dealt with each other on more or less equal terms with no moral
dominance whatsoever being exercised by the former on the latter.
For one, it would be unusual for a company like Innodata to undertake a project that had no relationship
to its usual business. Also, the necessity and desirability of the work performed by the employees are not
the determinants in term employment, but rather the day certain voluntarily agreed upon by the parties.
In fine, the employment of the petitioners who were engaged as project employees for a fixed term legally
ended upon the expiration of their contract. Their complaint for illegal dismissal was plainly lacking in
merit.

TERMINATION OF EMPLOYMENT

JENNIFER LAGAHIT VS. PACIFIC CONCORD CONTAINER LINES/ MONETTE CUENCA


G.R. No. 177680, January 13, 2016

Doctrine: In cases of unlawful dismissal, the employer bears the burden of proving that the termination
was for a valid or authorized cause, but before the employer is expected to discharge its burden of
proving that the dismissal was legal, the employee must first establish by substantial evidence the fact of
her dismissal from employment.
Facts:
Respondent Pacific Concord Container Lines, a domestic corporation engaged in cargo forwarding, hired
the petitioner as an Account Executive/Marketing Assistant. In January 2002, Pacific Concord promoted
her as a sales manager with the monthly salary rate of P25,000.00, and provided her with a brand new
Toyota Altis plus gasoline allowance. On November 8, 2002, she reported for work at 9:00 a.m. and left
the company premises at around 10:30 a.m. to make client calls. At 1:14 p.m. of that day, she received
the text message from respondent Monette Cuenca saying she is no longer connected with them. Pacific
Concord also caused the publication of the notice to the public in the Sunstar Daily. Petitioner filed her
complaint for constructive dismissal. In their position paper, the respondents denied having terminated
the petitioner despite the fact that there were valid grounds to do so. They insisted that the petitioner had
betrayed the trust and confidence reposed in her when she: (a) used the company-issued vehicle for her
own personal interest; (b) failed to achieve her sales quota, and to enhance and develop the Sales
Department; (c) enticed her marketing assistant, Jo Ann Otrera, to resign and join her in transferring to
another forwarding company; (d) applied for other employment during office hours and using company
resources; (e) solicited and offered the services of Seajet International, Inc. during her employment with
Pacific Concord; (f) received a personal commission from Wesport Line, Inc. for container shipments; and
( g) illegally manipulated and diverted several containers to Seajet International.

Issue:
Did the petitioner resign as sales manager of Pacific Concord? Did Pacific Concord have sufficient
grounds to terminate her for breach of trust and confidence under Article 282 of the Labor Code?

Ruling/Ratio:
Lagahit did not resign from her employment.

In cases of unlawful dismissal, the employer bears the burden of proving that the termination was for a
valid or authorized cause, but before the employer is expected to discharge its burden of proving that the
dismissal was legal, the employee must first establish by substantial evidence the fact of her dismissal
from employment.

In this case, the petitioner proved the overt acts committed by the respondents in abruptly terminating her
employment through the text messages sent by Cuenca to the petitioner and her husband, as well as the
notices distributed to the clients and published in the Sun Star. It is notable that the respondents did not
deny or controvert her evidence on the matter. Thereby, she showed Pacific Concords resolve to
terminate her employment effective November 8, 2002.

As a rule, the employer who interposes the resignation of the employee as a defense should prove that
the employee voluntarily resigned. The resignation must be unconditional and with a clear intention to
relinquish the position. Consequently, the circumstances surrounding the alleged resignation must be
consistent with the employees intent to give up the employment. In this connection, the acts of the
employee before and after the resignation are considered to determine whether or not she intended, in
fact, to relinquish the employment.

Here, the facts and circumstances before and after the petitioners severance from her employment did
not show her resolute intention to relinquish her job. Indeed, it would be unfounded to infer the intention to
relinquish from her letter, which, to us, was not a resignation letter due to the absence therefrom of
anything evincing her desire to sever the employer-employee relationship. The letter instead presented
her as a defenseless employee unjustly terminated for unknown reasons who had been made the subject
of notices and flyers informing the public of her unexpected termination. It also depicted her as an
employee meekly accepting her unexpected fate and requesting the payment of her backwages and
accrued benefits just to be done with the employer.

Lagahit did not breach her employers trust; her dismissal was, therefore, illegal.

To justify the dismissal of an employee, the employer must prove that the dismissal was for a just cause,
and that the employee was afforded due process prior to dismissal. As a complementary principle, the
employer has the onus of proving the validity of the dismissal with clear, accurate, consistent, and
convincing evidence.

Article 282(c) of the Labor Code authorizes an employer to dismiss an employee for committing fraud, or
for willful breach of the trust reposed by the employer. However, loss of confidence is never intended to
provide the employer with a blank check for terminating its employee. For this to be a valid ground for the
termination of the employee, the employer must establish that: (1) the employee must be holding a
position of trust and confidence; and (2) the act complained against would justify the loss of trust and
confidence. There are two classes of employees vested with trust and confidence. To the first class
belong the managerial employees or those vested with the powers or prerogatives to lay down
management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees or effectively recommend such managerial actions. The second class includes those who in
the normal and routine exercise of their functions regularly handle significant amounts of money or
property. Cashiers, auditors, and property custodians are some of the employees in the second class.
The petitioner discharged the duties and responsibilities as sales manager. Her position as sales
manager did not immediately make the petitioner a managerial employee. It was her actual work not her
job title, determines whether she was a managerial employee vested with trust and confidence. Her
employment as sales manager was directly related with the sales of cargo forwarding services of Pacific
Concord, and had nothing to do with the implementation of the managements rules and policies. As
such, the position of sales manager came under the second class of employees vested with trust and
confidence. At any rate, the employer must present clear and convincing proof of an actual breach of duty
committed by the employee by establishing the facts and incidents upon which the loss of confidence in
the employee may fairly be made to rest. The required amount of evidence for doing so is substantial
proof.

With these guidelines in mind, we cannot hold that the evidence submitted by the respondents (consisting
of the three affidavits) sufficiently established the disloyalty of the petitioner. The affidavits did not show
how she had betrayed her employers trust. Considering that the petitioners duties related to the sales of
forwarding services offered by Pacific Concord, her calling other forwarding companies to inquire for
vacant positions did not breach the trust reposed in her as sales manager. Such act, being at worst a
simple act of indiscretion, did not constitute the betrayal of trust that merited the extreme penalty of
dismissal from employment.

STRIKE

HONGKONG & SHANGHAI BANKING CORPORATION ET AL VS. NLRC


G.R. No. 156635, January 11, 2016

Doctrine: A strike staged without compliance with the requirements of Article 263 of the Labor Code is
illegal, and may cause the termination of the employment of the participating union officers and members.
However, the liability for the illegal strike is individual, not collective. To warrant the termination of an
officer of the labor organization on that basis, the employer must show that the officer knowingly
participated in the illegal strike. An ordinary striking employee cannot be terminated based solely on his
participation in the illegal strike, for the employer must further show that the employee committed illegal
acts during the strike.

Facts:
Petitioner Hongkong & Shanghai Banking Corporation Employees Union (Union) was the duly recognized
collective bargaining agent of the rank-and-file employees of respondent Hongkong & Shanghai Banking
Corporation (HSBC). Their CBA included a salary structure of the employees comprising of grade levels,
entry level pay rates and the individual pays depending on the length of service.

On January 18, 1993, HSBC announced its implementation of a job evaluation program (JEP) retroactive
to January 1, 1993. The JEP consisted of a job designation per grade level with the accompanying salary
scale providing for the minimum and maximum pay the employee could receive per salary level. By letter
dated January 20, 1993, The Union demanded the suspension of the JEP, which it labeled as an unfair
labor practice (ULP). Union informed HSBC that it would exercise its right to concerted action. Union
members started picketing during breaktime while wearing black hats and black bands on their arms and
other appendages. Due to the sustained concerted actions, HSBC filed a complaint for ULP in the
Arbitration Branch of the National Labor Relations Commission. The Union conducted a strike vote on 22
December 19, 1993 after HSBC accorded regular status to Patrick King, the first person hired under the
JEP. The majority of the members of the Union voted in favor of a strike. Union's officers and members
walked out and gathered outside the premises of HSBC's offices. Union members blocked the entry and
exit points of the bank premises, preventing the bank officers. HSBC filed its complaint to declare the
strike illegal. HSBC issued return-to-work notices to the striking employees. Only 25 employees complied
and returned to work. Due to the continuing concerted actions, HSBC terminated the individual
petitioners.

Issue:
Whether or not the strike was lawfully conducted and whether the petitioners were illegally dismissed

Ruling/Ratio:
Non-compliance with Article 263 of the Labor Code renders a labor strike illegal.

The right to strike as a means for the attainment of social justice is never meant to oppress or destroy the
employers. Thus, the law prescribes limits on the exercise of the right to strike. Article 263 of the Labor
Code specifies the limitations on the exercise of the right to strike. The procedural requirements for a
valid strike are (1) a notice of strike filed with the DOLE at least 30 days before the intended date thereof,
or 15 days in case of ULP; (2) a strike vote approved by the majority of the total union membership in the
bargaining unit concerned, obtained by secret ballot in a meeting called for that purpose; and (3) a notice
of the results of the voting at least seven days before the intended strike given to the DOLE. These
requirements are mandatory, such that non-compliance therewith by the union will render the strike
illegal.

Here, the petitioners neither filed the notice of strike with the DOLE, nor observed the cooling off period,
nor submitted the result of the strike vote. Moreover, although the strike vote was conducted, the same
was done by open, not secret, balloting, in blatant violation of Article 263 and Section 7, Rule XIII of the
Omnibus Rules Implementing the Labor Code. It is not amiss to observe that the evident intention of the
requirements for the strike-notice and the strike-vote report is to reasonably regulate the right to strike for
the attainment of the legitimate policy objectives embodied in the law. As such, the petitioners committed
a prohibited activity under Article 264(a) of the Labor Code, and rendered their strike illegal.

Commission of unlawful acts during the strike further rendered the same illegal. The strike was far from
orderly and peaceful. HSBC's claim that from the time when the strike was commenced on December 22,
1993 the petitioners had on several instances obstructed the ingress into and egress from its offices in
Makati and in Pasig was not competently disputed, and should thus be accorded credence in the light of
the records. It was undeniable that such acts of the strikers forced HSBC's officers to resort to unusual
means of gaining access into its premises at one point. The situation during the strike actually went out of
hand because of the petitioners' illegal conduct, compelling HSBC to secure an injunction from the NLRC
as well as to file its petition for habeas corpus in the proper court in the interest of its trapped officers and
employees; and at one point to lease an helicopter to extract its employees and officers from its premises
on the eve of Christmas Day of 1993.

Good faith did not avail because of the patent violation of Article 263 of the Labor Code. The petitioners'
disregard of the procedural requirements for conducting a valid strike negated their claim of good faith.
For their claim to be upheld, it was not enough for them to believe that their employer was guilty of ULP,
for they must also sufficiently show that the strike was undertaken with a modicum of obeisance to the
restrictions on their exercise of the right to strike prior to and during its execution as prescribed by the
law. They did not establish their compliance with the requirements specifically for the holding of the strike
vote and the giving of the strike notice.
The finding on the illegal strike did not justify the wholesale termination of the strikers from employment.

As a general rule, the mere finding of the illegality of the strike does not justify the wholesale termination
of the strikers from their employment. To avoid rendering the recognition of the workers' right to strike
illusory, the responsibility for the illegal strike is individual instead of collective. The last paragraph of
Article 264(a) of the Labor Code defines the norm for terminating the workers participating in an illegal
strike. The officers may be deemed terminated from their employment upon a finding of their knowing
participation in the illegal strike, but the members of the union shall suffer the same fate only if they are
shown to have knowingly participated in the commission of illegal acts during the strike. In the case of
Fermin, HSBC did not satisfactorily prove his presence during the strike, much less identify him as among
the strikers. In contrast, Union president Ma. Dalisay dela Chica testified that Fermin was not around
when the Union's Board met after the strike vote to agree on the date of the strike. In that regard,
Corazon Fermin, his widow, confirmed the Union president's testimony by attesting that her husband had
been on leave from work prior to and during the strike because of his heart condition. Although Corazon
also attested that her husband had fully supported the strike, his extending moral support for the strikers
did not constitute sufficient proof of his participation in the strike in the absence of a showing of any overt
participation by him in the illegal strike. The burden of proving the overt participation in the illegal strike by
Fermin solely belonged to HSBC, which did not discharge its burden. However, the dismissal of Rivera
and of the rest of the Union's officers is upheld. Regardless of whether the strike was illegal or not, the
dismissal of the members could be upheld only upon proof that they had committed illegal acts during the
strike. They must be specifically identified because the liability for the prohibited acts was determined on
an individual basis. For that purpose, substantial evidence available under the attendant circumstances
justifying the penalty of dismissal sufficed.

LABOR UNION RIGHTS

THE HERITAGE HOTEL MANILA VS. SECRETARY OF LABOR AND EMPLOYMENT ET AL


G.R. No. 172132, July 23, 2014

Doctrine: Basic in the realm of labor union rights is that the certification election is the sole concern of the
workers, and the employer is deemed an intruder as far as the certification election is concerned.

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

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

Ruling/Ratio:
No. Basic in the realm of labor union rights is that the certification election is the sole concern of the
workers, and the employer is deemed an intruder as far as the certification election is concerned. Thus,
the petitioner lacked the legal personality to assail the proceedings for the certification election, and
should stand aside as a mere bystander who could not oppose the petition, or even appeal the Med-
Arbiters orders relative to the conduct of the certification election.

Under the long established rule, too, the filing of the petition for the cancellation of NUWHRAINHHMSCs
registration should not bar the conduct of the certification election. In that respect, only a final order for
the cancellation of the registration would have prevented NUWHRAIN-HHMSC from continuing to enjoy
all the rights conferred on it as a legitimate labor union, including the right to the petition for the
certification election. This rule is now enshrined in Article 238-A of the Labor Code, as amended by
Republic Act No. 9481.

On NUWHRAIN-HHMSCs failure to submit its periodic financial reports and updated list of its members
pursuant to Article 238 and Article 239 of the Labor Code, we cannot ascribe abuse of discretion to the
Regional Director and the DOLE Secretary in denying the petition for cancellation of respondent's
registration. The union members and, in fact, all the employees belonging to the appropriate bargaining
unit should not be deprived of a bargaining agent, merely because of the negligence of the union officers
who were responsible for the submission of the documents to the BLR. The Labor Code's provisions on
cancellation of union registration and on reportorial requirements have been recently amended by R.A.
No. 9481, which lapsed into law on May 25, 2007 and became effective on June 14, 2007. The
amendment sought to strengthen the workers right to self-organization and enhance the Philippines'
compliance with its international obligations as embodied in the International Labor Organization (ILO)
Convention No. 87, pertaining to the non-dissolution of workers organizations by administrative authority.
Failure to comply with the above requirements shall not be a ground for cancellation of union registration
but shall subject the erring officers or members to suspension, expulsion from membership, or any
appropriate penalty.

KINDS OF EMPLOYEES; PROJECT EMPLOYEES


VOLUNTARYRESIGNATION

D.M. CONSUNJI CORPORATION vs ROGELIO P. BELLO


G.R. No. 159371, July 29, 2013

Doctrine: A project employee is one who is hired for a specific project or undertaking, and the completion
or termination of such project or undertaking had been determined at the time of engagement of the
employee. However, the extension of the employment of a project employee long after the supposed
project has been completed removes the employee from the scope of a project employee and makes him
a regular employee.

Voluntary Resignation: For the resignation of an employee to be a viable defense in an action for illegal
dismissal, an employer must prove that the resignation was voluntary, and its evidence thereon must be
clear, positive and convincing. The employer cannot rely on the weakness of the employee's evidence.

Facts:
Respondent claim that petitioner had employed him as a mason without interruption from February 1,
1990 until October 10 1997. During his employment, he was diagnosed to be suffering from Pulmonary
Tuberculosis (PTB), thereby necessitating his leave of absence. Upon his recovery, he reported back to
work, but the petitioner had refused to accept him and had instead handed to him a termination paper due
to RSD. He contends that he does not know the meaning of RSD as the cause of his termination and
that it was not explained to him. However, petitioner contends that respondent had only been a project
employee. That the respondent tendered his voluntary resignation for health reasons that had rendered
him incapable of performing his job. That after his termination from employment, petitioner complied with
the reportorial requirement of the DOLE. Respondent filed an illegal dismissal complaint against the
petitioner.

Issue/s:
1. Whether or not respondent was a regular employee.
2. Whether or not respondent voluntarily resigned.

Ruling/Ratio:
1. Yes, respondent was a regular employee.

A project employee is one who is hired for a specific project or undertaking, and the completion or
termination of such project or undertaking had been determined at the time of engagement of the
employee. However, the extension of the employment of a project employee long after the supposed
project has been completed removes the employee from the scope of a project employee and
makes him a regular employee.

In this case, the respondents appointment and employment showed that he performed his tasks as
a mason in DMCIs various constructions projects. His successive re-engagement in order to
perform the same kind of work as a mason firmly manifested the necessity and desirability of his
work in DMCIs usual business construction.

2. No. For the resignation of an employee to be a viable defense in an action for illegal dismissal, an
employer must prove that the resignation was voluntary, and its evidence thereon must be clear,
positive and convincing. The employer cannot rely on the weakness of the employee's evidence.

In this case, the Court affirmed the ruling of the CA that the supposed resignation letter was
undeniably different from that of the complainant, something that DMCI had not rebutted.

ILLEGALLY DISMISSED EMPLOYEES

MANILA JOCKEY CLUB, INC. vs AIMEE O. TRAJANO


G.R. No. 160982, June 26, 2013
Doctrine: An illegally dismissed employee is entitled to her reinstatement without loss of seniority rights
and other privileges, and to full backwages, inclusive of allowances and other benefits or their monetary
equivalent. Should the reinstatement be no longer feasible, an award of separation pay in lieu of
reinstatement will be justified, and the backwages shall be reckoned from the time her wages were
withheld until the finality of the decision.

Facts:
Petitioner employed respondent as a selling teller of betting tickets since November 1989. On April 25,
1989, two regular bettors gave their respective list of bets and money for the bets for Race 14. Later, she
realized that she had a mistake on cancelling the bet of the other bettor that was supposedly for the other
bettor and explained that the cancellation was not intentional but a result of an honest mistake on her
part. She offered to personally pay the dividends should the other bettor win the Race, which the latter
accepted. However, the other bettor lost, thus relieved of the obligation to pay any winnings.

The reliever-supervisor of the petitioner later approached the respondent and told her to submit a written
explanation about the ticket cancellation incident in which she complied. She submitted a hand written
explanation to the Assistant Racing Supervisor. She was then informed that she was placed under
preventive suspension, for an unstated period of time. At the end of 30 days of her suspension, she
reported back for work. But she was no longer admitted. She then learned that she had been dismissed
when she read a copy of an inter-office correspondence about her termination posted in a selling
situation.

Respondent filed a complaint of illegal dismissal against petitioner. In 1998, more than 14 years from the
time of her assailed dismissal, respondent filed her position paper. She contends that her dismissal was
without due process of law because she was not notified about or furnished a copy of the notice of
dismissal.

The Labor Arbiter ruled in favor of the petitioner and dismissed the complaint. The NLRC reversed the
LAs ruling and held that respondent was illegally dismissed and entitled to be reinstated. In 2003, the CA
upheld the ruling of the NLRC. The Supreme Court affirmed the decision of the CA but found that
reinstatement is no longer possible.

Issue:
What are the entitlements of an illegally dismissed employees?

Ruling/Ratio:
There is no question that an illegally dismissed employee is entitled to her reinstatement without loss of
seniority rights and other privileges, and to full backwages, inclusive of allowances and other benefits or
their monetary equivalent.

In case the reinstatement is no longer possible, however, an award of separation pay, in lieu of
reinstatement, will be justified. The Court has ruled that reinstatement is no longer possible: (a) when the
former position of the illegally dismissed employee no longer exists; or (b) when the employers business
has closed down; or (c) when the employer-employee relationship has already been strained as to render
the reinstatement impossible. The Court likewise considered reinstatement to be non-feasible because a
considerable time has lapsed between the dismissal and the resolution of the case. In that regard, a lag
of eight years or ten years is sufficient to justify an award of separation pay in lieu of reinstatement.
Applying the foregoing to this case, the Court concludes that the reinstatement of Trajano is no longer
feasible. More than 14 years have already passed since she initiated her complaint for illegal dismissal in
1998, filing her position paper on September 3, 1998, before the Court could finally resolve her case. The
lapse of that long time has rendered her reinstatement an impractical, if not an impossible, option for both
her and MJCI. Consequently, an award of separation pay has become the practical alternative, computed
at one month pay for every year of service.

LABOR UNION

LEPANTO CONSOLIDATED MINING COMPANY vs THE LEPANTO CAPATAZ UNION


GR No. 157086
February 18, 2013

Doctrine: Capatazes or foremen are not rank-and-file employees because they perform supervisory
functions for the management, they are an extension of the management, and as such they may
influence the rank-and-file workers under them to engage in slowdowns or similar activities detrimental to
the policies, interests or business objectives of the employers.; hence, they may form their own union that
is separate and distinct from the labor organization of rank-and file employees.

Facts:
Petitioner is a domestic corporation authorized to engage in large-sacle mining. Respondent is a labor
organization duly registered with DOLE.
Respondent filed a petition for consent election with the Industrial Relations Division of Cordillera
Regional Office of DOLE. They propose to represent 139 capatazes or foremen, employees of the
Petitioner who are tasked to instruct miners and mackers with their performance.

Petitioner opposed the petition, contending that the Union was in reality seeking a certification election,
not a consent election and would be thereby competing with the Lepanto Employees Union (LEU), the
current collective bargaining agent. Petitioner asserts that the capatazes were already members of the
LEU, the exclusive representative of all rank-and-file employees of its Mine Division.

Issue:
Whether or not Capatazes can form their own union.

Ruling/Ratio:
Yes. Capatazes or foremen are not rank-and-file employees because they perform supervisory functions
for the management, they are an extension of the management, and as such they may influence the rank-
and-file workers under them to engage in slowdowns or similar activities detrimental to the policies,
interests or business objectives of the employers.; hence, they may form their own union that is separate
and distinct from the labor organization of rank-and file employees.
CIVIL LAW
PERSONS AND FAMILY RELATIONS

Soledad Lavadia vs. Heirs of Juan Luces Luna


G.R. No. 171914, July 23, 2014

Doctrine: Divorce between Filipinos is void and ineffectual under the nationality rule adopted by
Philippine law. Hence, any settlement of property between the parties of the first marriage involving
Filipinos submitted as an incident of a divorce obtained in a foreign country which lacks competent judicial
approval cannot be enforced against the assets of the husband who contracts a subsequent marriage.

Facts:
Atty. Luna was first married to Eugenia. Subsequently, they entered into an Agreement for Separation
and Property Settlement, whereby they agreed to live separately and to dissolve and liquidate their
conjugal property. Atty. Luna obtained a divorce decree of his marriage in the CFI of Dominican Republic
and contracted another marriage with Soledad. Atty. Luna and Soledad returned to the Philippines and
lived together as husband and wife until 1987. Atty. Luna organized the law firm LUPSICON where he
purchased a condominium as its office. Upon dissolution of LUPSICON, the condominium was partitioned
with Atty. Luna receiving 25/100 interest. Thereafter, Atty. Luna established another law firm and used a
portion of the condominium for its office. When Atty. Luna died, his share in the firms properties was
taken over by his son on the first marriage, Gregorio Luna. These properties became the subject of the
complaint filed by Soledad against the heirs of Atty. Luna. Soledad alleged that the subject properties
were acquired through their joint efforts and since they had no children, Soledad became co-owner of the
said properties.

Issues:
1. Whether the divorce decree had validly dissolved the first marriage
2. Whether the Agreement for Separation and Property Settlement was valid and enforceable
3. Whether the second marriage entitled Soledad to any rights in the property of Atty. Luna

Ruling/Ratio:
1. No, the first marriage had not been validly dissolved by the divorce decree. The law in force at the
time of the first marriage was the Spanish Civil Code, which adopted the nationality rule, to the effect
that Philippine laws relating to family rights and duties, or to the status, condition and legal capacity of
persons were binding upon citizens of the Philippines, although living abroad. Both Atty. Luna and
Eugenio are Filipinos. From the time of the celebration of the marriage on September 10, 1947 until
the present, absolute divorce between Filipino spouses has not been recognized in the Philippines.
Conformably, the divorce, even if voluntarily obtained abroad, did not dissolve the marriage between
Atty. Luna and Eugenia, which subsisted up to the time of his death on July 12, 1997.

2. No, the Agreement for Separation and Property Settlement was void. Considering that Atty. Luna and
Eugenia had not entered into any marriage settlement prior to their marriage, the system of relative
community or conjugal partnership of gains governed their property relations. This is because the
Spanish Civil Code did not specify the property regime of the spouses in the event that they had not
entered into any marriage settlement before or at the time of the marriage. The mere execution of the
Agreement by Atty. Luna and Eugenia did not per se dissolve and liquidate their conjugal partnership
of gains. The approval of the Agreement by a competent court was still required under Article 190 and
Article 191 of the Civil Code. Moreover, with the divorce not being itself valid and enforceable under
Philippine law, the approval of the Agreement by the CFI of Dominican Republic was not also valid
and enforceable.

3. No, Soledad was not entitled to any rights in the property of Atty. Luna. The second marriage was
void for being bigamous, since the first marriage had not been dissolved by the Divorce Decree. As
the second marriage is void ab initio for being bigamous, the properties acquired during such
marriage were governed by the rules on co-ownership. To establish co-ownership, the petitioner must
prove her actual contributions in the acquisition of the property. Soledad was not able to prove that
her own funds were used to buy the properties.

LAW ON PRESCRIPTION

Dico vs. Vizcaya Management Corp.


GR No. 161211, July 17, 2013

Doctrine: The prescription of actions for the reconveyance of real property based on implied trust is 10
years.

Facts:
Spouses Dico were the possessors of Lot No. 29-B. Respondent Vizcaya Management Corporation
(VMC) was the registered owner of the said lot deriving its title from Lopezes who were registered owners
of the lot since September 30, 1934 until November 10, 1956, when the title to Lot 29-B was registered
under VMCs name. On May 12, 1986, the Dicos commenced an action for annulment and cancellation of
the title of VMC alleging that the latter obtained it through fraud. The RTC ruled in favor of the Dicos. The
CA reversed the decision and ruled that prescription and laches already barred the Dicos from asserting
their rights.

Issue:
Whether prescription already barred petitioners cause of action

Ruling/Ratio:
Yes, the action of the Dicos for reconveyance has already prescribed. Under Article 1456 of the Civil
Code, the person obtaining property through mistake or fraud is considered by force of law a trustee of an
implied trust for the benefit of the person from whom the property comes. Under Article 1144 of the Civil
Code, an action upon an obligation created by law must be brought within 10 years from the time the right
of action accrues. Consequently, an action for reconveyance based on implied or constructive trust
prescribes in 10 years.

The filing of the complaint only on May 12, 1986 proved too late for them. The reckoning point for
purposes of the Dicos demand of reconveyance based on fraud was their discovery of the fraud. Such
discovery was properly pegged on the date of the registration of the TCT in the adverse parties names,
because registration was a constructive notice to the whole world. The long period of 29 years that had
lapsed from the issuance of the TCT on September 30, 1934 (the date of recording of TCT in the name of
the Lopezes) or on November 10, 1956 (the date of recording of TCT in VMCs name) was way beyond
the prescriptive period of 10 years.

LAND TITLE AND DEEDS

Heirs of Malabanan vs. Republic


GR No. 179987, September 3, 2013

Doctrine: Section 48(b) of the Public Land Act, in relation to Section 14(1) 1 of the Property Registration
Decree, presupposes that the land subject of the application for registration must have been already
classified as agricultural land of the public domain in order for the provision to apply. Thus, absent proof

1
Section 14. Who may apply. The following persons may file in the proper Court of First Instance an application for registration of
title to land, whether personally or through their duly authorized representatives:
(1) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious
possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June
12, 1945, or earlier.
that the land is already classified as agricultural land of the public domain, the Regalian Doctrine applies,
and overcomes the presumption that the land is alienable and disposable as laid down in Section 48(b) of
the Public Land Act.

On the other hand, if a public land is classified as no longer intended for public use or for the
development of national wealth by declaration of Congress or the President, thereby converting such land
into patrimonial or private land of the State, the applicable provision concerning disposition and
registration is no longer Section 48(b) of the Public Land Act but the Civil Code, in conjunction with
Section 14(2)2 of the Property Registration Decree. As such, prescription can now run against the State.

Facts:
On February 20, 1998, Malabanan purchased a land from Velasco and filed an application for land
registration. Malabanan presented a certification issued by CENRO-DENR which states that the land was
classified as alienable and disposable on March 15, 1982. The RTC granted the application. The CA
reversed the RTC decision and dismissed Malabanans application on the ground that under Section
14(1) of the Property Registration Decree (PRD), any period of possession prior to the classification of the
land as alienable and disposable (i.e., March 15, 1982) should be excluded from the computation of the
period of possession.

In their motion, petitioners submit that the mere classification of the land as alienable or disposable
should be deemed sufficient to convert it into patrimonial property. They argue that the reclassification of
the land as alienable or disposable opened it to acquisitive prescription under the Civil Code; that
Malabanan had purchased the property believing in good faith that Velazco and his predecessors-in-
interest had been the real owners of the land; that consequently, the 10-year period prescribed by Article
1134 of the Civil Code, in relation to Section 14(2) of the PRD, applied in their favor; and that when
Malabanan filed the application for registration on February 20, 1998, he had already been in possession
of the land for almost 16 years reckoned from 1982, the time when the land was declared alienable and
disposable by the State.

On the other hand, the Republic contends that that an applicant is entitled to registration only when the
land subject of the application had been declared alienable and disposable since June 12, 1945 or earlier.

Issue:
Whether Malabanan is entitled to the registration of the land

Ruling/Ratio:
No, Malabanan is not entitled to the registration of the land. As a general rule and pursuant to the
Regalian Doctrine, all lands of the public domain belong to the State and are inalienable. Lands that are
not clearly under private ownership are also presumed to belong to the State and, therefore, may not be
alienated or disposed. The following are exceptions to the general rule:

1. Agricultural lands of the public domain are rendered alienable and disposable through any of the
exclusive modes enumerated under Section 11 of the Public Land Act. If the mode is judicial
confirmation of imperfect title under Section 48(b) of the Public Land Act, the agricultural land subject
of the application needs only to be classified as alienable and disposable as of the time of the
application, provided the applicants possession and occupation of the land dated back to June 12,
1945, or earlier. Thereby, a conclusive presumption that the applicant has performed all the
conditions essential to a government grant arises, and the applicant becomes the owner of the land
by virtue of an imperfect or incomplete title. By legal fiction, the land has already ceased to be part of
the public domain and has become private property.

2
Section 14. Who may apply. The following persons may file in the proper Court of First Instance an application for registration of
title to land, whether personally or through their duly authorized representatives:
xxxx
(2) Those who have acquired ownership of private lands by prescription under the provisions of existing laws.
2. Lands of the public domain subsequently classified or declared as no longer intended for public use
or for the development of national wealth are removed from the sphere of public dominion and are
considered converted into patrimonial lands or lands of private ownership that may be alienated or
disposed through any of the modes of acquiring ownership under the Civil Code. If the mode of
acquisition is prescription, whether ordinary or extraordinary, proof that the land has been already
converted to private ownership prior to the requisite acquisitive prescriptive period is a condition sine
qua non in observance of the law (Article 1113, Civil Code) that property of the State not patrimonial
in character shall not be the object of prescription.

The petitioners failed to present sufficient evidence to establish that they and their predecessors-in-
interest had been in possession of the land since June 12, 1945. Without satisfying the requisite
character and period of possession - possession and occupation that is open, continuous, exclusive,
and notorious since June 12, 1945, or earlier - the land cannot be considered ipso jure converted to
private property even upon the subsequent declaration of it as alienable and disposable. Prescription
never began to run against the State, such that the land has remained ineligible for registration under
Section 14(1) of the PRD. Likewise, the land continues to be ineligible for land registration under
Section 14(2) of the PRD unless Congress enacts a law or the President issues a proclamation
declaring the land as no longer intended for public service or for the development of the national
wealth.

LAND TITLE AND DEEDS

Cusi vs. Domingo


GR No. 195825, February 27, 2013

Doctrine: Under the Torrens system of land registration, the registered owner of realty cannot be
deprived of her property through fraud, unless a transferee acquires the property as an innocent
purchaser for value. A transferee who acquires the property covered by a reissued owners copy of the
certificate of title without taking the ordinary precautions of honest persons in doing business and
examining the records of the proper Registry of Deeds, or who fails to pay the full market value of the
property is not considered an innocent purchaser for value.

Facts:
On July 18, 1997, Radelia Sy, representing herself as the owner of a certain property, petitioned the RTC
for the issuance of a new owners copy of Domingos TCT No. N-165606. Appending to her petition were
a Deed of Absolute Sale dated July 14, 1997 purportedly executed in her favor by Domingo and an
affidavit of loss claiming that her bag containing the owners copy of TCT No. N-165606 had been
snatched from her. The RTC granted Sys application and the Registry of Deeds issued a new TCT in
Sys name. Subsequently, Sy subdivided the property into two, and sold each half by way of contract to
sell to Spouses De Vera and Spouses Cusi. All the while, these transactions were unknown to Domingo
whose TCT No. T-165606 remained in her possession. In July 1999, Domingo learned that construction
activities were being undertaken on her property without her consent. Domingo commenced an action
against spouses Sy, the De Veras and the Cusis seeking the annulment and cancellation of titles,
injunction and damages.

Issue:
Whether the petitioners are buyers in good faith and for value

Ruling/Ratio:
No, the petitioners are not purchasers in good faith and for value. A person dealing in registered land has
the right to rely on the Torrens certificate of title and to dispense with the need of inquiring further, except
when the party has actual knowledge of facts and circumstances that would impel a reasonable cautious
man to make such inquiry.
There is no question that the petitioners exerted some effort as buyers to determine whether the property
did rightfully belong to Sy. Nonetheless, their observance of a certain degree of diligence within the
context of the principles underlying the Torrens system was not their only barometer under the law and
jurisprudence by which to gauge the validity of their acquisition of title. As the purchasers of the property,
they also came under the clear obligation to purchase the property not only in good faith but also for
value.

The petitioners were shown to have been deficient in their vigilance as buyers of the property. It was not
enough for them to show that the property was unfenced and vacant. Otherwise, it would be too easy for
any registered owner to lose her property, including its possession, through illegal occupation. Nor is it
safe for them to simply rely on the face of Sys TCT in view of the fact that they were aware that her TCT
was derived from a duplicate owners copy. That circumstance should have already alerted them to the
need to inquire beyond the face of Sys TCT. There were other circumstances, like the almost
simultaneous transactions affecting the property within a short span of time, as well as the gross
undervaluation of the property in the deeds of sale. That also excited suspicion, and required them to be
extra cautious in dealing with Sy on the property.

LAND TITLE AND DEEDS

Republic vs. Zurbaran Realty and Development Corporation


GR No. 164408, March 24, 2014

Doctrine: An application for original registration of the public domain under Section 14(2) of Presidential
Decree No. 1529 must show not only that the land has previously been declared alienable and
disposable, but also that the land has been declared patrimonial property of the State at the onset of the
30-year or 10-year period of possession and occupation required under the law on acquisitive
prescription.

Facts:
Respondent Zurbaran Realty and Development Corporation filed an application for original registration of
land claiming that it had purchased the land on March 9, 1992 from Abalos and that the applicant and its
predecessorsininterest had been in open, continuous and exclusive possession and occupation of the
land in the concept of an owner. The Republic opposed the application, arguing that the applicant and its
predecessorsininterest had not been in open, continuous, exclusive and notorious possession and
occupation of the land since June 12, 1945; that the land was a portion of the public domain, and,
therefore, was not subject to private appropriation. A certification was issued by the LMB stating that it
had no record of any kind of public land applications/land patents covering the subject land. The RTC
granted the application for registration and affirmed by the CA.

Issue:
Whether the Respondent is entitled to the registration of the land

Ruling/Ratio:
No, the Respondent is not entitled to the registration of the land. Section 14 of P.D. No. 1529 enumerates
those who may file an application for registration of land based on possession and occupation of a land of
the public domain:
(1) Those who by themselves or through their predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of alienable and disposable lands of the public
domain under a bona fide claim of ownership since June 12, 1945, or earlier.
(2) Those who have acquired ownership of private lands by prescription under the provision of existing
laws.

An application for registration under Section 14(1) of PD 1529 must establish the following requisites: (1)
the land is alienable and disposable property of the public domain; (2) the applicant and its predecessors
in interest have been in open, continuous, exclusive and notorious possession and occupation of the land
under a bona fide claim of ownership; and (3) the applicant and its predecessors-in-interest have
possessed and occupied the land since June 12, 1945 or earlier. It is not necessary that the land must be
alienable and disposable as of June 12, 1945, or earlier, because the law simply requires the property
sought to be registered to be alienable and disposable at the time the application for registration of title is
filed.

In other words, registration under Section 14(1) of PD No. 1529 is based on possession and occupation
of the alienable and disposable land of the public domain since June 12, 1945, or earlier, without regard
to whether the land was susceptible to private ownership at that time. The applicant needs only to show
that the land had already been declared alienable and disposable at any time prior to the filing of the
application for registration.

On the other hand, an application under Section 14(2) of PD No. 1529 is based on acquisitive prescription
and must comply with the law on prescription as provided by the Civil Code. In that regard, only the
patrimonial property of the State may be acquired by prescription pursuant to the Civil Code. Therefore,
for acquisitive prescription to set in, the land being possessed and occupied must already be classified or
declared as patrimonial property of the State. Otherwise, no length of possession would vest any right in
the possessor if the property has remained land of the public dominion. Even if the land is later converted
to patrimonial property of the State, possession of it prior to such conversion will not be counted to meet
the requisites of acquisitive prescription. Thus, registration under Section 14(2) of PD No. 1529 requires
that the land had already been converted to patrimonial property of the State at the onset of the period of
the possession required by the law on prescription.

An application for registration based on Section 14(2) of PD No. 1520 must, therefore, establish the
following requisites: (a) the land is an alienable and disposable, and patrimonial property of the public
domain; (b) the applicant and its predecessors-in-interest have been in possession of the land for at least
10 years, in good faith and with just title, or for at least 30 years, regardless of good faith and just title;
and (c) the land had already been converted to or declared as patrimonial property of the State at the
beginning of the said 10-year or 30-year period of possession.

The respondents application does not enlighten as to whether it was filed under Section 14(1) or Section
14(2) of PD No. 1529. The application alleged that the respondent and its predecessors-in-interest had
been in open, continuous and exclusive possession and occupation of the property in the concept of an
owner, but did not state when possession and occupation commenced and the duration of such
possession. At any rate, the evidence presented by the respondent and its averments reveal that the
application for registration was filed based on Section 14(2), not Section 14(1) of PD No. 1529. The
respondent did not make any allegation in its application that it had been in possession of the property
since June 12, 1945, or earlier, nor did it present any evidence to establish such fact. Moreover, there is
no evidence showing that the land in question was within the area expressly declared by law either to be
the patrimonial property of the State, or to be no longer intended for public service or the development of
the national wealth. Hence, the application for registration should be dismissed.

LAND TITLE AND DEEDS

Republic vs De Joson
GR No. 163767, March 10, 2014

Doctrine: Under Section 14(1) of the Property Registration Decree, the applicant had to prove that: (1)
the land forms part of the alienable and disposable land of the public domain; and (2) he, by herself or
through her predecessors-in-interest, had been in open, continuous, exclusive, and notorious possession
and occupation of the land under a bona fide claim of ownership from June 12, 1945, or earlier. It is the
applicant who carries the burden of proving that the two requisites have been met.
Facts:
Respondent filed her application for land registration covering a rice land which had been originally
owned and possessed by Mamerto Dionisio since 1907. Dionisio, by way of Deed of Sale, sold the land to
Romualda Jacinto. Maria Jacinto, mother of the respondent, inherited the land from her sister, Romualda.
Upon the death of Maria, the respondent inherited the same, owning and possessing it openly, publicly,
uninterruptedly, adversely against the whole world, and in the concept of owner.

In their opposition, the Director of Lands and the Director of Forest Development averred that whatever
legal and possessory rights the respondent had acquired by reason of any Spanish government grants
had been lost, abandoned or forfeited for failure to occupy and possess the land for at least 30 years
immediately preceding the filing of the application; and that the land applied for, being actually a portion of
the Labangan Channel operated by the Pampanga River Control System, could not be subject of
appropriation or land registration. The CFI ordered the registration of the land in favor of the respondent.

Issue:
Whether the respondent is entitled to the registration of the land

Ruling/Ratio:
No, the land is not susceptible for registration. Under Section 14(1) of the Property Registration Decree,
the respondent had to prove that: (1) the land forms part of the alienable and disposable land of the public
domain; and (2) she, by herself or through her predecessors-in-interest, had been in open, continuous,
exclusive, and notorious possession and occupation of the land under a bona fide claim of ownership
from June 12, 1945, or earlier. It is the applicant who carries the burden of proving that the two requisites
have been met. Failure to do so warrants the dismissal of the application.

The respondent complied with the second requisite by virtue of her having in open, continuous, exclusive
and notorious possession and occupation of the land since June 12, 1945, or earlier. Nonetheless, the
respondent did not discharge her burden to prove classification of the land as demanded by the first
requisite. She did not present evidence of the land, albeit public, having been declared alienable and
disposable by the State. Belatedly realizing her failure to prove the alienable and disposable classification
of the land, the petitioner attached a certification dated March 8, 2000 issued by the DENR-CENRO
stating that the land subject of application is an alienable and disposable land.

To be subject of appropriation, the land of public domain must be declared alienable and disposable
either by the President or the Secretary of DENR. This doctrine unavoidably means that the mere
certification issued by the CENRO or PENRO did not suffice to support the application for registration,
because the applicant must also submit a copy of the original classification of the land as alienable and
disposable as approved by the DENR Secretary and certified as a true copy by the legal custodian of the
official records. The Regalian doctrine dictates that all lands of the public domain belong to the State. The
applicant for land registration has the burden of overcoming the presumption of State ownership by
establishing through incontrovertible evidence that the land sought to be registered is alienable or
disposable based on a positive act of the government.

Thus, the present rule is that an application for original registration must be accompanied by the
following: (1) a CENRO or PENRO Certification; and (2) a copy of the original classification approved by
the DENR Secretary and certified as a true copy by the legal custodian of the official records.

LAND TITLE AND DEEDS

Republic vs. Bautista, Jr.


GR No. 166890, June 28, 2016

Doctrine: Only the title of those who had possessed and occupied alienable and disposable lands of the
public domain since June 12, 1945 or earlier could be judicially confirmed. Indeed, alienable public land
held by a possessor, either personally or through his predecessors-in-interest, openly, continuously and
exclusively during the prescribed statutory period is converted to private property by the mere lapse or
completion of the period.

Facts:
In 1996, after inheriting a land from his father, Apolonio, Jr. commenced an application for land
registration in the MTC. He testified that his father had been in actual possession since 1969, and had
eventually acquired the land from Jardin and Villanueva through the notarized Deeds of Absolute Sale
and that his father had paid taxes on the land. The MTC granted Apolonio, Jrs application and declared
him as the owner in fee simple of the land, and confirmed his ownership thereof. The government
appealed the decision pointing out that Apolonio, Jr. had given general statements pertaining to the open,
continuous, exclusive and notorious possession of his father. It also averred that because the application
of imperfect title was filed on October 21, 1996, the applicable law was Section 48(b) of the Public Land
Act. Accordingly, the required period of possession must be June 12, 1945 or earlier.

Issue:
Whether Apolonio, Jr. is entitled to the registration of the land

Ruling/Ratio:
No, Apolonio, Jr. is not entitled to the registration as he failed to establish his lawful occupation of the
land. The requisite period of possession of the property should conform to that provided for in Section
48(b) of the Public Land Act, as amended, which has limited the right to apply for judicial confirmation to
citizens of the Philippines "who by themselves or through their predecessors in interest have been in
open, continuous, exclusive, and notorious possession and occupation of alienable and disposable lands
of the public domain, under a bona fide claim of acquisition of ownership, since June 12, 1945, or earlier,
immediately preceding the filing of the application for confirmation of title except when prevented by war
or force majeure.

Apolonio, Jr. presented only himself to establish the possession and ownership of his father who was his
immediate predecessor-in-interest. He did not present as witnesses during the trial either of the
transferors of Apolonio, Sr. - that is, Jardin or Villanueva - to establish the requisite length of the
possession of the predecessors-in-interest of the applicant that would be tacked to his own. Considering
that the possession and occupation of the property in question by Apolonio, Jr. and his predecessors-in-
interest were not shown in the records to have been "since June 12, 1945, or earlier," the application
must be rejected.

It should be stressed that only the title of those who had possessed and occupied alienable and
disposable lands of the public domain within the requisite period could be judicially confirmed. Indeed,
alienable public land held by a possessor, either personally or through his predecessors-in-interest,
openly, continuously and exclusively during the prescribed statutory period is converted to private
property by the mere lapse or completion of the period.

CREDIT TRANSACTIONS

Spouses Pen vs. Spouses Julian


GR No. 160408, January 11, 2016

Doctrines:
1. The creditor is prohibited from appropriating the things given by way of pledge or mortgage, or from
disposing them. Any stipulation to the contrary is null and void.

2. No interest shall be due unless it has been expressly stipulated in writing. In order for monetary
interest to be imposed, the following requirements must be present: (1) that there has been an
express stipulation for the payment of interest; and (2) that the agreement for the payment of interest
has been reduced in writing.
Facts:
The Spouses Julian obtained a loan from Adelaida Pen. Two promissory notes were executed and as
security, a Real Estate Mortgage was also executed. When the loans became due, the Julians failed to
pay despite several demands. As such, Adelaida instituted foreclosure proceedings. The Julians offered
their mortgaged property as payment in kind. Thereafter, they executed a Deed of Sale and the title to the
property was transferred to Adelaida. The Julians however aver that at the time the mortgage was
executed, they were required to sign an Absolute Deed of Sale, which did not contain any consideration.
Upon verification with the Registry of Deeds, she was informed that the title to the mortgaged property
had already been registered in the name of Adelaida. Spouses Julian filed a suit for the Cancellation of
Sale, Cancellation of Title, recovery of possession and damages.

The RTC ruled in favor of the respondents. On the other hand, the CA pronounced the deed of sale as
void but not because of the supposed lack of consideration but because of it having been executed at the
same time as the real estate mortgage, which rendered the sale as a prohibited pactum commissorium. It
also ruled that the promissory notes contained no stipulation on the payment of interest, for which reason
no monetary interest could be imposed for the use of money and that compensatory interest should
instead be imposed as a form of damages arising from Lindas failure to pay the outstanding obligation.

Issues:
1. Whether the deed of sale is void for being a pactum commissorium
2. Whether no monetary interest was due for Lindas use of Adelaidas money.

Ruling/Ratio:
1. Yes, the deed of sale is void for being pactum commissorium. Article 2088 of the Civil Code prohibits
the creditor from appropriating the things given by way of pledge or mortgage, or from disposing
them. Any stipulation to the contrary is null and void. The elements of pactum commissorium are as
follows: (1) that there should be a pledge or mortgage wherein the property is pledged or mortgaged
by way of security for the payment of the principal obligation; and (2) that there should be a stipulation
for an automatic appropriation by the creditor of the thing pledged or mortgaged in the event of non-
payment of the principal obligation within the stipulation period.

The first element was present considering that the property of the respondents was mortgaged by
Linda in favor of Adelaida as security for the formers indebtedness. As to the second, the
authorization for Adelaida to appropriate the property subject of the mortgage upon default was
implied from Lindas having signed the blank deed of sale simultaneously with her signing of the real
estate mortgage. The haste with which the transfer of property was made upon the default by Linda
on her obligation, and the eventual transfer of the property in a manner not in the form of a valid
dacion en pago ultimately confirmed the nature of the transaction as a pactum commissorium.

2. Yes, no monetary interest could be imposed for the use of money. Pursuant to Article 1956 of the
Civil Code, no interest shall be due unless it has been expressly stipulated in writing. In order for
monetary interest to be imposed, therefore, two requirements must be present: (1) that there has
been an express stipulation for the payment of interest; and (2) that the agreement for the payment of
interest has been reduced in writing. Considering that the promissory notes contained no stipulation
on the payment of monetary interest, monetary interest cannot be validly imposed.

TORTS AND DAMAGES


Transportation Law

Metro Manila Transit Corporation vs. Cuevas


GR No. 167797, June 15, 2015

Doctrine: In case of motor vehicle mishaps, the registered owner of the vehicle is considered as the
employer of the tortfeasor-driver, and is made primarily liable for tort committed by the latter. In so far as
third persons are concerned, the registered owner of the motor vehicle is the employer of the negligent
driver, and the actual employer is considered merely as an agent of such owner.

Facts:
Metro Manila Transit Corporation (MMTC) and Minas Transit Corporation (Minas Transit) entered into an
agreement to sell, whereby the latter bought several bus from the former. They agreed that MMTC would
retain the ownership of the buses until certain conditions were met, but in the meantime Minas Transit
could operate the buses. One of the buses hit and damaged a motorcycle owned by Reynaldo and driven
by Junnel. Reynaldo and Junnel sued MMTC and Minas Transit for damages alleging that the
defendants MMTC and Minas Transit are registered joint-owners or operators of an MMTC/Minas Transit
passenger bus. MMTC denied liability and averred that although it retained the ownership of the bus, the
actual operator and employer of the driver was Minas Transit; and that, in support of its cross-claim
against Minas Transit, a provision in the agreement to sell mandated Minas Transport to hold it free from
liability arising from the use and operation of the bus units.

Issue:
Whether MMTC is liable for the injuries sustained by the respondents despite the provision in the
agreement to sell that shielded it from liability

Ruling/Ratio:
Yes, MMTC is liable. Under the registered-owner rule, the registered owner of the motor vehicle involved
in a vehicular accident could be held liable for the consequences. In case of motor vehicle mishaps, the
registered owner of the motor vehicle is considered as the employer of the tortfeasor-driver, and is made
primarily liable for the tort committed by the latter under Article 2176, in relation with Article 2180, of the
Civil Code. In so far as third persons are concerned, the registered owner of the motor vehicle is the
employer of the negligent driver, and the actual employer is considered merely as an agent of such
owner.

Indeed, MMTC could not evade liability by passing the buck to Minas Transit. The stipulation in the
agreement to sell did not bind third parties who were expected to simply rely on the data contained in the
registration certificate of the erring bus. Although the registered-owner rule might seem to be unjust
towards MMTC, the law did not leave it without any remedy or recourse. MMTC could recover from Minas
Transit, the actual employer of the negligent driver, under the principle of unjust enrichment, by means of
a cross-claim seeking reimbursement of all the amounts it could be required to pay as damages arising
from the drivers negligence.

OBLIGATIONS AND CONTRACTS

Megaworld Properties and Holdings, Inc. vs. Majestic Finance and Investment Co., Inc.
GR No. 169694, December 9, 2015

Doctrine: Reciprocal obligations are those that arise from the same cause, and in which each party is a
debtor and a creditor of the other at the same time, such that the obligations of one are dependent upon
the obligations of the other. They are to be performed simultaneously, so that the performance by one is
conditioned upon the simultaneous fulfillment by the other. Being reciprocal in nature, the respective
obligations of the parties were dependent upon the performance by the other of its obligations; hence,
any claim of delay or non-performance against the other could prosper only if the complaining party had
faithfully complied with its own correlative obligation.

Facts:
Megaworld Properties and Holdings, Inc. (developer) entered into a Joint Venture Agreement (JVA) with
Majestic Finance and Investment Co., Inc. (owner) for the development of the residential subdivision. The
joint venture property would be for the sole account of the developer; and that upon completion of the
subdivision, the owner would compensate the developer in the form of saleable residential subdivision
lots. The JVA further provided that the developer would advance all the costs for the relocation and
resettlement of the occupants of the property, subject to reimbursement by the owner; and that the
developer would deposit the initial amount of P10,000,000 to defray the expenses for the relocation and
settlement, and the costs for obtaining the permits and clearances.

The developer and owner agreed to an addendum to the JVA, to increase the initial deposit from
P10,000,000 to P160,000,000. Subsequently, the developer assigned to Empire East Land Holdings, Inc.
(developer/assignee) the JVA including the addendum. The owner filed a complaint for specific
performance with damages against the developer, the assignee and Andrew Tan based on their failure to
comply with their obligations under the JVA, including the obligation to maintain a strong security force to
safeguard the entire joint venture property from illegal entrants and occupants.

Issue:
Whether petitioners are obligated to perform their obligations under the JVA, including that of providing
round-the-clock security for the subject properties, despite respondents failure or refusal to acknowledge,
or perform their reciprocal obligations

Ruling/Ratio:
No, petitioners are not obligated to perform their obligations under the JVA. The obligations of the parties
under the JVA were reciprocal. Reciprocal obligations are those that arise from the same cause, and in
which each party is a debtor and a creditor of the other at the same time, such that the obligations of one
are dependent upon the obligations of the other. They are to be performed simultaneously, so that the
performance by one is conditioned upon the simultaneous fulfillment by the other.

For the first activity (i.e., the relocation of the occupants), the developer was obliged to negotiate with the
occupants, to advance payment for disturbance compensation, and to relocate the occupants to an area
within the subject land, while the owner was obliged to agree to and to allocate the resettlement site
within the property, and to approve the expenses to be incurred for the process. Should the owner fail to
allocate the site for the resettlement, the obligation of the developer to relocate would not be demandable.
Conversely, should the developer fail to negotiate with the occupants, the owner's obligation to allocate
the resettlement site would not become due. As to the second activity (i.e., the completion of the
development plan), the developer had the obligation to lay out the plan, but the owner needed to conform
to the plan before the same was finalized. Accordingly, the final development plan would not be
generated should the owner fail to approve the lay-out plan; nor would the owner be able to approve if no
such plan had been initially laid out by the developer.

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

Being reciprocal in nature, their respective obligations as the owner and the developer were dependent
upon the performance by the other of its obligations; hence, any claim of delay or non-performance
against the other could prosper only if the complaining party had faithfully complied with its own
correlative obligation.
LAW ON SUCCESSION

Heirs of Arado vs. Alcoran


GR No. 163362, July 8, 2015

Doctrines:
1. An acknowledged illegitimate child is entitled to inherit from the estate of his/her putative father.
2. An illegitimate child has no right to inherit ab intestate from the legitimate children and relatives of his
father or mother. In the same manner, such children or relatives shall not inherit from the illegitimate
child. The right of representation is not available to illegitimate descendants of legitimate children in
the inheritance of a legitimate grandparent.
3. No will shall pass either real or personal property unless the same is proved and allowed in
accordance with the Rules of Court. In order that a will may take effect, it has to be probated,
legalized or allowed in the proper testamentary proceeding. The probate of the will is mandatory.

Facts:
Raymundo Alcoran was married to Joaquina Arado, and begot a son named Nicolas Alcoran. Nicolas
married Florencia. Nicolas had an extramarital affair with Francisca, who gave birth to respondent
Anacleto Alcoran. Anacleto married Elenette Sonjaco. Raymundo died in 1939, while Nicolas died in
1954. Florencia died in 1960, and Joaquina died in 1981.

The petitioners (Joaquinas siblings and their heirs) filed a complaint for recovery of property and
damages against Anacleto and Elenette, alleging among others that when Nicolas died in 1954 without
issue, half of his properties were inherited by his wife, Florencia, and the other half by his mother,
Joaquina; that Nicolas did not recognize Anacleto as his spurious child during Nicolas lifetime; hence,
Anacleto was not entitled to inherit from Nicolas; that Anacleto claimed entitlement to the properties as
the heir of Nicolas and by virtue of the will executed by Joaquina; that the will was void for not having
been executed according to the formalities of the law and was not submitted for probate. Respondents
countered that Anacleto was expressly recognized by Nicolas as the latters son in his birth certificate.
They also alleged that Joaquina executed a last will and testament in Anacletos favor and Joaquinas
possession of the properties was for and in behalf of Anacleto.

Issues:
1. Whether Anacleto is a recognized illegitimate son of Nicolas
2. Whether Anacleto is entitled to the properties of Nicolas and Joaquina

Ruling/Ratio:
1. Yes, Anacleto is a recognized illegitimate son of Nicolas. Article 175 of the Family Code provides that
illegitimate children may establish their illegitimate filiation in the same way and on the same
evidence as legitimate children. Article 172 provides that the filiation of legitimate children is
established by, among others, the record of birth appearing in the civil register or a final judgment.

The birth certificate of Anacleto showed that Nicolas himself caused the registration of the birth of
Anacleto. Considering that Nicolas had a direct hand in the preparation of the birth certificate, reliance
on the birth certificate of Anacleto as evidence of paternity was fully warranted.

2. Anacleto is entitled to the properties of Nicolas, but not of Joaquina. Under the Old Civil Code (which
was in effect when Nicolas died), the heirs entitled to inherit from Nicolass estate were Joaquina (his
mother), Florencia (his surviving spouse), and Anacleto (his acknowledged illegitimate son). Said
heirs became co-owners of the properties comprising the entire estate of Nicolas.

When Joaquina died, she had no surviving legitimate descendant, ascendant, illegitimate child or
spouse. In such case, Article 1003 of the Old Civil Code mandated that her collateral relatives should
inherit her entire estate. Anacleto cannot inherit from the estate of Joaquina by right of representation
Under Article 992 of the Civil Code, an illegitimate child has no right to inherit ab intestate from the
legitimate children and relatives of his father or mother. In the same manner, such children or
relatives shall not inherit from the illegitimate child. The right of representation is not available to
illegitimate descendants of legitimate children in the inheritance of a legitimate grandparent.
Moreover, Anacleto could not inherit by virtue of Joacquinas last will and testament. Article 383 of the
Civil Code dictates that no will shall pass either real or personal property unless the same is proved
and allowed in accordance with the Rules of Court. In order that a will may take effect, it has to be
probated, legalized or allowed in the proper testamentary proceeding. The probate of the will is
mandatory. It appears that the will remained ineffective considering that the records are silent as to
whether it had ever been presented for probate, and had been allowed by a court of competent
jurisdiction.
TAXATION
DEDUCTIONS FROM GROSS INCOME

H. Tambunting Pawnshop Inc. vs. Commissioner of Internal Revenue


G.R. No. 173373, July 29, 2013

Doctrine: To be entitled to claim a tax deduction, the taxpayer must competently establish the factual and
documentary bases of its claim.

Facts:
Tambunting Pawnshop was assessed with deficiency income tax by the BIR by disallowing certain
deductions on its gross income. The BIR alleged that these deductions were not duly substantiated. First,
the loss on auction sale was only supported by entries on the Companys internal records, i.e., the
Subasta, Rematado and Schedule of Losses on Auction Sale, which are not proper documents to
prove actual loss. Only lessors certification, withholding tax returns, cash vouchers and contract of lease
and no official receipts were submitted to support the security and janitorial expenses, management and
professional fees, and rental expenses. As to the proof of loss due to fire, the Company did not submit the
required sworn declaration for such casualty loss to the BIR mandated by RR 12-77.

Issue/s:
Whether the petitioner is entitled to tax deductions

Ruling/Ratio:
No, the rule that tax deductions, being in the nature of tax exemptions, are to be construed in strictissimi
juris against the taxpayer is well settled. Corollary to this rule is the principle that when a taxpayer claims
a deduction, he must point to some specific provision of the statute in which that deduction is authorized
and must be able to prove that he is entitled to the deduction which the law allows. An item of
expenditure, therefore, must fall squarely within the language of the law in order to be deductible. A mere
averment that the taxpayer has incurred a loss does not automatically warrant a deduction from its gross
income.

The requisites for the deductibility of ordinary and necessary trade or business expenses, like those paid
for security and janitorial services, management and professional fees, and rental expenses, are that: (a)
the expenses must be ordinary and necessary; (b) they must have been paid or incurred during the
taxable year; (c) they must have been paid or incurred in carrying on the trade or business of the
taxpayer; and (d) they must be supported by receipts, records or other pertinent papers.

Deductions for income tax purposes partake of the nature of tax exemptions and are strictly construed
against the taxpayer, who must prove by convincing evidence that he is entitled to the deduction claimed.
Tambunting did not discharge its burden of substantiating its claim for deductions due to the inadequacy
of the documentary support of its claim. Its reliance on withholding tax returns, cash vouchers, lessors
certifications, and the contracts of lease was futile because such documents had scant probative value.
As the CTA En Banc succinctly put it, the law required Tambunting to support its claim for deductions with
the corresponding official receipts issued by the service providers concerned.

REFUND OR TAX CREDIT OF EXCESS INPUT TAX

Luzon Hydro Corp. vs. CIR


G.R. No. 188260, November 13, 2013

Doctrine: To be able to claim refund on the basis of zero-rated sales, taxpayer must prove the existence
of zero-rated sales though its VAT returns and receipts issued for such zero-rated sales.
Facts:
The petitioner, a producer of electricity, has been registered with the BIR as a VAT taxpayer. Pursuant to
its Power Purchase Agreement entered into with the National Power Corporation (NPC), the electricity
produced by the petitioner was to be sold exclusively to NPC. Relative to its sale to NPC, the petitioner
was granted by the BIR certificates for Zero Rate for VAT purposes in the periods from January 1, 2000
to December 31, 2001. The petitioner alleged that it had incurred input VAT on its domestic purchases of
goods and services used in its generation and sales of electricity to NPC in the four quarters of 2001; and
that it had declared the input VAT in its amended VAT returns. Petitioner filed a written claim for refund or
tax credit relative to those unutilized input VAT. Respondent CIR did not ultimately act on the petitioners
claim. Hence, the petitioner filed its petition for review in the CTA.

Issue/s:
Whether the petitioner is entitled to input VAT refund

Ruling/Ratio:
No, a claim for refund or tax credit for unutilized input VAT may be allowed only if the following requisites
concur, namely: (a) the taxpayer is VAT-registered; (b) the taxpayer is engaged in zero-rated or
effectively zero-rated sales; (c) the input taxes are due or paid; (d) the input taxes are not transitional
input taxes; (e) the input taxes have not been applied against output taxes during and in the succeeding
quarters; (f) the input taxes claimed are attributable to zero-rated or effectively zero-rated sales; (g) for
zero-rated sales under Section 106(A)(2)(1) and (2); 106(B); and 108(B)(1) and (2), the acceptable
foreign currency exchange proceeds have been duly accounted for in accordance with the rules and
regulations of the Bangko Sentral ng Pilipinas; (h) where there are both zero-rated or effectively zero-
rated sales and taxable or exempt sales, and the input taxes cannot be directly and entirely attributable to
any of these sales, the input taxes shall be proportionately allocated on the basis of sales volume; and (i)
the claim is filed within two years after the close of the taxable quarter when such sales were made.
Petitioner did not produce evidence showing that it had zero-rated sales for the four quarters of taxable
year 2001. As the CTA En Banc precisely found, the petitioner did not reflect any zero-rated sales from its
power generation in its four quarterly VAT returns, which indicated that it had not made any sale of
electricity.

Petitioners assertion that its sale of electricity to NPC was automatically zero-rated pursuant to Republic
Act No. 9136 (EPIRA Law); hence, it need not prove that it had zero-rated sales of electricity by
presenting the VAT official receipts and VAT returns cannot be upheld.

JURISDICTION OF THE CTA

Commissioner of Customs vs. Oilink International Corporation


G.R. No. 161759, July 02, 2014

Doctrine: The principle of non-exhaustion of administrative remedies was not an iron-clad rule because
there were instances in which the immediate resort to judicial action was proper.

Facts:
URC and Oilink had interlocking directors when Oilink started its business. Customs Commissioner
formally directed that URC pay the special duties, VAT, and Excise Taxes that it had failed to pay. URC
denied liability, insisting instead that only a lower amount should be paid by way of compromise, which
was rejected by the Commissioner.

URCs President conveyed to the Commissioner URCs willingness to pay of which the initial amount
would be taken from the collectibles of Oilink. On July 2, 1999, the Commissioner made a final demand
upon URC and Oilink. Also on July 8, 1999, Oilink formally protested the assessment on the ground that it
was not the party liable for the assessed deficiency taxes.
On July 12, 1999, the Commissioner stressed that the Bureau of Customs (BoC) would not issue any
clearance to Oilink unless the amount demanded as Oilinks tax liability be first paid. On July 30, 1999,
Oilink appealed to the CTA.

The CTA rendered its decision declaring as null and void the assessment of the Commissioner.
Aggrieved, the Commissioner brought a petition for review in the CA. The Commissioner posits that Oilink
did not exhaust its administrative remedies under Section 2308 of the Tariff and Customs Code by paying
the assessment under protest; that the CTA should not take cognizance of the case because of the lapse
of the 30-day period within which to appeal, arguing that on November 25, 1998 URC had already
received the BoCs final assessment demanding payment of the amount due within 10 days, but filed the
petition only on July 30, 1999. As to whether or not the Commissioner could lawfully pierce the veil of
corporate fiction in order to treat Oilink as the mere alter ego of URC, the CA concurred with the CTA that
the corporate veil could not be pierced.

Issue/s:
1. Whether the CTA had jurisdiction over the subject matter
2. Whether Oilink had a cause of action
3. Whether the Commissioner could pierce the veil of corporate fiction

Ruling/Ratio:
1. Yes, R.A. No. 1125, the law creating the CTA, defined the appellate jurisdiction of the CTA which
includes decisions of the Commissioner of Customs in cases involving liability for customs duties,
fees or other money charges; fines, forfeitures or other penalties imposed in relation thereto; or other
matters arising under the Customs Law or other law or part of law administered by the BOC. The
CTA correctly ruled that the reckoning date for Oilinks appeal was July 12, 1999, not July 2, 1999,
because it was on the former date that the Commissioner denied the protest of Oilink. Clearly, the
filing of the petition on July 30, 1999 by Oilink was well within its reglementary period to appeal. The
insistence by the Commissioner on reckoning the reglementary period to appeal from November 25,
1998, the date when URC received the final demand letter, is unwarranted. The November 25, 1998
final demand letter of the BoC was addressed to URC, not to Oilink. As such, the final demand sent
to URC did not bind Oilink unless the separate identities of the corporations were disregarded in
order to consider them as one.

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

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

Agriex Co. Ltd. vs. Hon. Titus Villanueva


G.R. No. 158150, September 10, 2014

Doctrine: Both the SBMA and the BOC have the power to seize and forfeit goods or articles entering the
Subic Bay Freeport, except that SBMAs authority to seize and forfeit goods or articles entering the Subic
Bay Freeport has been limited only to cases involving violations of RA No. 7227 or its IRR. There is no
question therefore, that the authority of the BOC is larger in scope because it covers cases concerning
violations of the customs laws. The authority of the BOC to seize and forfeit goods and articles entering
the Subic Bay Freeport does not contravene the nature of the Subic Bay Freeport as a separate customs
authority.

Facts:
The petitioner, a foreign corporation, entered into a contract of sale with PT. Gloria Mitra of Surabaya,
Indonesia for 180,000 bags of Thai white rice. Later on, it entered into another contract of sale with R&C
Agro Trade of Cebu City for 20,000 bags of Thai white rice. It chartered the vessel MV Hung Yen to
transport the 200,000 bags of Thai white rice to the Subic Free Port for transshipment to their designated
consignees in the Fiji Islands and Indonesia (for the 180,000 bags), and in Cebu City (for the 20,000
bags).

The Collector of Customs issued Warrant of Seizure and Detention (WSD) against the 20,000 bags of
Thai white rice, MV Hung Yen, and the remaining 180,000 bags of Thai white rice intended for
transshipment.

The petitioner filed with the BoC an Urgent Motion to Quash the WSD. The Collector quashed WSD over
the MV Hung Yen on the ground that the vessel was not chartered or leased but denied the motion for the
quashal of the warrant of seizure issued against the rice shipments. The Commissioner granted the
motion for settlement and accordingly ordered the release of the 20,000 bags of Thai rice to claimants.
Thereafter, the Commissioner directed the sale of the 180,000 bags of Thai white rice at public auction.

The petitioner claims that the Collector of Customs had no jurisdiction to issue WSD and the Notice of
Sale concerning the 180,000 bags of Thai white rice, which had entered the SBF only for transshipment
to other countries. It insists that the auction sale of the 180,000 bags was null and void.

Issue/s:
Whether the Collector of Customs has jurisdiction to hear and determine questions involving the seizure
and forfeiture of dutiable goods

Ruling/Ratio:
Yes, the Collector of Customs was authorized to institute seizure proceedings and to issue WSDs in the
Subic Bay Freeport, subject to the review by the Commissioner of Customs. Accordingly, the proper
remedy to question the order or resolution of the Commissioner of Customs was an appeal to the CTA,
not to the CA.

Both the SBMA and the BOC have the power to seize and forfeit goods or articles entering the Subic Bay
Freeport, except that SBMAs authority to seize and forfeit goods or articles entering the Subic Bay
Freeport has been limited only to cases involving violations of RA No. 7227 or its IRR. There is no
question therefore, that the authority of the BOC is larger in scope because it covers cases concerning
violations of the customs laws. The authority of the BOC to seize and forfeit goods and articles entering
the Subic Bay Freeport does not contravene the nature of the Subic Bay Freeport as a separate customs
authority. Indeed, the investors can generally and freely engage in any kind of business as well as import
into and export out goods with minimum interference from the Government.
The treatment of the Subic Bay Freeport as a separate customs territory cannot completely divest the
Government of its right to intervene in the operations and management of the Subic Bay Freeport,
especially when patent violations of the customs and tax laws are discovered. After all, Section 602 of the
Tariff and Customs Code vests exclusive original jurisdiction in the BOC over seizure and forfeiture cases
in the enforcement of the tariff and customs laws.

In this case, an examination of the shipment by the customs officials pursuant to Mission Order initially
revealed no cause to hold the release of the 180,000 bags of rice. However, further investigation led to
the discovery that the consignees of the 180,000 bags of rice in Indonesia were non-existent, and the
consignee in the Fiji Islands denied being involved in the importation of rice.

EXCISE TAX

Chevron Philippines Inc. vs. Commissioner of Internal Revenue


G.R. No. 210836, September 1, 2015

Doctrine: Excise tax on petroleum products is essentially a tax on property, the direct liability for which
pertains to the statutory taxpayer (i.e., manufacturer, producer or importer). Any excise tax paid by the
statutory taxpayer on petroleum products sold to any of the entities or agencies named in Section 135 of
the National Internal Revenue Code (NIRC) exempt from excise tax is deemed illegal or erroneous, and
should be credited or refunded to the payor pursuant to Section 204 of the NIRC. This is because the
exemption granted under Section 135 of the NIRC must be construed in favor of the property itself, that
is, the petroleum products.

Facts:
Chevron sold and delivered petroleum products to Clark Development Corporation (CDC). Chevron did
not pass on to CDC the excise taxes paid on the importation of the petroleum products sold to
CDC; hence, it filed an administrative claim for tax refund or issuance of tax credit certificate. Since the
CIR did not act on the administrative claim for tax refund or tax credit, Chevron elevated its claim to the
CTA by petition for review. The CTA First Division denied Chevrons judicial claim for tax refund or tax
credit. Chevron appealed to the CTA En Banc which affirmed the ruling of the CTA First Division, stating
that there was nothing in Section 135(c) of the NIRC that explicitly exempted Chevron as the seller of the
imported petroleum products from the payment of the excise taxes; and holding that because it did not fall
under any of the categories exempted from paying excise tax, Chevron was not entitled to the tax refund
or tax credit.

Issue/s:
Whether Chevron was entitled to the tax refund or the tax credit for the excise taxes paid on the
importation of petroleum products that it had sold to CDC

Ruling/Ratio:
Yes, under Section 129 of the NIRC, as amended, excise taxes are imposed on two kinds of goods,
namely: (a) goods manufactured or produced in the Philippines for domestic sales or consumption or for
any other disposition; and (b) things imported. Undoubtedly, the excise tax imposed under Section 129 of
the NIRC is a tax on property. With respect to imported things, Section 131 of the NIRC declares that
excise taxes on imported things shall be paid by the owner or importer to the Customs officers,
conformably with the regulations of the DOF and before the release of such articles from the customs
house, unless the imported things are exempt from excise taxes and the person found to be in
possession of the same is other than those legally entitled to such tax exemption. For this purpose, the
statutory taxpayer is the importer of the things subject to excise tax.

Chevron, being the statutory taxpayer, paid the excise taxes on its importation of the petroleum products.
Pursuant to Section 135(c), petroleum products sold to entities that are by law exempt from direct and
indirect taxes are exempt from excise tax. The phrase which are by law exempt from direct and indirect
taxes describes the entities to whom the petroleum products must be sold in order to render the
exemption operative. Section 135(c) should thus be construed as an exemption in favor of the petroleum
products on which the excise tax was levied in the first place. The exemption cannot be granted to the
buyers that is, the entities that are by law exempt from direct and indirect taxes because they are not
under any legal duty to pay the excise tax.

In cases involving excise tax exemptions on petroleum products under Section 135 of the NIRC, the
Court has consistently held that it is the statutory taxpayer, not the party who only bears the economic
burden, who is entitled to claim the tax refund or tax credit. But the Court has also made clear that this
rule does not apply where the law grants the party to whom the economic burden of the tax is shifted by
virtue of an exemption from both direct and indirect taxes. In which case, such party must be allowed to
claim the tax refund or tax credit even if it is not considered as the statutory taxpayer under the law.

The general rule applies here because Chevron did not pass on to CDC the excise taxes paid on the
importation of the petroleum products, the latter being exempt from indirect taxes by virtue of Section 24
of R.A. No. 7916, in relation to Section 15 of R.A. No. 9400, not because Section 135(c) of the NIRC
exempted CDC from the payment of excise tax.

SUSPENSION OF COLLECTION OF TAX

Tridharma Marketing Corporation vs. Court of Tax Appeals


G.R. No. 215950, June 20, 2016

Doctrine: CTA may order the suspension of the collection of taxes provided that the taxpayer either: (1)
deposits the amount claimed; or (2) files a surety bond for not more than double the amount.

Facts:
Petitioner received a Preliminary Assessment Notice (PAN) from the BIR assessing it with various
deficiency. A substantial portion of the deficiency income tax and VAT arose from the complete
disallowance by the BIR of the petitioner's purchases from Etheria Trading. Petitioner received from the
BIR a Formal Letter of Demand (FLD). It filed a protest against the FLD. Respondent CIR required the
petitioner to submit additional documents in support of its protest, and the petitioner complied. Petitioner
received a Final Decision on Disputed Assessment (FDDA). Petitioner filed with the CIR a protest through
a Request for Reconsideration. However, the CIR rendered a decision denying the request for
reconsideration. Petitioner appealed the CIRs decision to the CTA via Petition for Review with Motion to
Suspend Collection of Tax. The CTA in Division required petitioner to deposit a surety bond equivalent to
150% of the assessment.

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

Ruling/Ratio:
Yes, CTA may order the suspension of the collection of taxes provided that the taxpayer either: (1)
deposits the amount claimed; or (2) files a surety bond for not more than double the amount.

The Court holds that the CTA in Division gravely abused its discretion under Section 11 or RA 1125
because it fixed the amount of the bond at nearly five times the net worth of the petitioner without
conducting a preliminary hearing to ascertain whether there were grounds to suspend the collection of the
deficiency assessment on the ground that such collection would jeopardize the interests of the taxpayer.
It behooved the CTA in Division to consider other factors recognized by the law itself towards suspending
the collection of the assessment, like whether or not the assessment would jeopardize the interest of the
taxpayer, or whether the means adopted by the CIR in determining the liability of the taxpayer was legal
and valid. Simply prescribing such high amount of the bond like the initial 150% of the deficiency
assessment or later on even reducing the amount of the bond to equal the deficiency assessment would
practically deny to the petitioner the meaningful opportunity to contest the validity of the assessments,
and would likely even impoverish it as to force it out of business.

Section 11 of R.A. 1125, as amended, indicates that the requirement of the bond as a condition
precedent to suspension of the collection applies only in cases where the processes by which the
collection sought to be made by means thereof are carried out in consonance with the law, not when the
processes are in plain violation of the law that they have to be suspended for jeopardizing the interests of
the taxpayer.

REFUND OR TAX CREDIT OF EXCESS INPUT TAX; VAT EXEMPTION; PEZA LAW

Coral Bay Nickel Corporation vs. Commissioner of Internal Revenue


G.R. No. 190506, June 13, 2016

Doctrine: PEZAregistered enterprises, which would necessarily be located within ECOZONES, are VAT-
exempt entities, not because of Section 24 of R.A. No. 7916, as amended, which imposes the 5%
preferential tax rate on gross income of PEZA registered enterprises, in lieu of all taxes; but rather,
because of Section 8 of the same statute which establishes the fiction that ECOZONES are foreign
territory.

Facts:
Petitioner is a VAT entity registered with the BIR and also registered with PEZA as an Ecozone Export
Enterprise. Petitioner filed its Amended VAT Return declaring unutilized input tax prior to its registration
with PEZA as Ecozone Export Enterprise. It filed with Revenue District Office in Palawan its Application
for Tax Credits/Refund. The CTA in Division promulgated its decision denying the petitioners claim for
refund.

Issue/s:
Whether the petitioner, an entity located within an ECOZONE, is entitled to the refund of its unutilized
input taxes incurred before it became a PEZA-registered entity

Ruling/Ratio:
No, Section 8 of R.A. No. 7916 mandates that PEZA shall manage and operate the ECOZONE as a
separate customs territory. The provision thereby establishes the fiction that an ECOZONE is a foreign
territory separate and distinct from the customs territory. Accordingly, the sales made by suppliers from a
customs territory to a purchaser located within an ECOZONE will be considered as exportations.
Following the Philippine VAT systems adherence to the Cross Border Doctrine and Destination Principle,
the VAT implications are that no VAT shall be imposed to form part of the cost of goods destined for
consumption outside of the territorial border of the taxing authority.
Moreover, RMC No. 7499 categorically declared that all sales of goods, properties, and services made by
a VAT registered supplier from the Customs Territory to an ECOZONE enterprise shall be subject to VAT,
at zero percent (0%) rate, regardless of the latters type or class of PEZA registration; and, thus, affirming
the nature of a PEZAregistered or an ECOZONE enterprise as a VATexempt entity.

The petitioners principal office was located in Barangay Rio Tuba, Bataraza, Palawan. Its plant site was
specifically located inside the Rio Tuba Export Processing Zone a special economic zone
(ECOZONE). As such, the purchases of goods and services by the petitioner that were destined for
consumption within the ECOZONE should be free of VAT; hence, no input VAT should then be paid on
such purchases, rendering the petitioner not entitled to claim a tax refund or credit.
CRIMINAL LAW
RECKLESS IMPRUDENCE; MITIGATING CIRCUMSTANCE; LESS GRAVE FELONY; PENALTY

Reynaldo Mariano vs. People of the Philippines


G.R. No. 178145, July 07, 2014

Doctrine:
1. Reckless imprudence consists in voluntary, but without malice, doing or failing to do an act from
which material damage results by reason of inexcusable lack of precaution on the part of the person
performing or failing to perform such act, taking into consideration his employment or occupation,
degree of intelligence, physical condition and other circumstances regarding persons, time and
place. To constitute the offense of reckless driving, the act must be something more than a mere
negligence in the operation of the motor vehicle, but a willful and wanton disregard of the
consequences is required.

2. The rules in Article 64 of the RPC are not applicable in reckless imprudence. Par. 5 of Art. 365, RPC,
expressly states that in the imposition of the penalties, the courts shall exercise their sound
discretion, without regard to the rules prescribed in Article 64 of the Revised Penal Code.

Facts:
Accused-appellant Reynaldo and his wife, Rebecca, tried to show that the jeep of Ferdinand stopped on
the road in front of the house of the latters mother about 5 to 6 meters away from their pick-up. Reynaldo
stopped the pick-up as he saw an oncoming vehicle, which he allowed to pass. Thereafter, Reynaldo
made a signal and overtook the jeep of Ferdinand. However, Ferdinand suddenly alighted from his jeep,
lost his balance and was sideswiped by the overtaking pick-up. Reynaldo did not stop his pick-up and he
proceeded on his way for fear that the bystanders might harm him and his companions. After bringing his
companions to their house in Marungko, Angat, Bulacan, Reynaldo proceeded to Camp Alejo S. Santos
in Malolos, Bulacan to surrender and report the incident.

The RTC convicted the petitioner of frustrated homicide. On appeal, the CA promulgated its assailed
decision modifying the felony committed by the petitioner from frustrated homicide to reckless imprudence
resulting in serious physical injuries, imposing a penalty of 2 months and 1 day of arresto mayor, as
minimum, to 1 year, 7 months and 11 days of prision correccional, as maximum.

In this appeal, the petitioner argues that his guilt for any crime was not proved beyond reasonable doubt,
and claims that Ferdinands injuries were the result of a mere accident. He insists that he lacked criminal
intent; that he was not negligent in driving his pick-up truck; and that the CA should have appreciated
voluntary surrender as a mitigating circumstance in his favor.

Issue/s:
1. Whether or not the conviction for the crime of reckless imprudence resulting in serious physical
injuries should be upheld
2. Whether the mitigating circumstance should be appreciated
3. Whether the penalty imposed by the CA is proper

Ruling/Ratio:
1. Yes. We affirm the conviction of the petitioner for reckless imprudence resulting in serious physical
injuries.

As aptly observed by the court a quo, only a vehicle that is moving beyond the normal rate of speed
and within the control of the drivers hands could have caused Ferdinands injuries. The very fact of
speeding is indicative of imprudent behavior, as a motorist must exercise ordinary care and drive at a
reasonable rate of speed commensurate with the conditions encountered, which will enable him or
her to keep the vehicle under control and avoid injury to others using the highway. Thus, had
Reynaldo not driven his pick-up at a fast speed in overtaking the jeep of Ferdinand, he could have
easily stopped his pick-up or swerved farther to the left side of the road, as there was no oncoming
vehicle, when he saw that Ferdinand alighted from his jeep and lost his balance, in order to avoid
hitting the latter or, at least, minimizing his injuries.

The findings by the CA are controlling on the Court. Indeed, the findings of both lower courts on the
circumstances that had led to the injuries of Ferdinand fully converged except for the RTCs
conclusion that malicious intent had attended the commission of the offense.

Reckless imprudence consists involuntary, but without malice, doing or failing to do an act from which
material damage results by reason of inexcusable lack of precaution on the part of the person
performing of failing to perform such act, taking intoconsideration his employment or occupation,
degree of intelligence, physical condition and other circumstances regarding persons, time and
place." To constitute the offense of reckless driving, the act must be something more than a mere
negligence in the operation of the motor vehicle, but a willful and wanton disregard of the
consequences is required. The Prosecution must further show the direct causal connection between
the negligence and the injuries or damages complained of.

2. No. Contrary to the petitioners insistence, the mitigating circumstance of voluntary surrender cannot
be appreciated in his favor. Par. 5 of Art. 365, RPC, expressly states that in the imposition of the
penalties, the courts shall exercise their sound discretion, without regard to the rules prescribed in
Article 64 of the Revised Penal Code. The rationale of the law can be found in the fact that in quasi-
offenses penalized under Article 365, the carelessness, imprudence or negligence which
characterizes the wrongful act may vary from one situation to another, in nature, extent, and resulting
consequences, and in order that there may be a fair and just application of the penalty, the courts
must have ample discretion in its imposition, without being bound by what we may call the
mathematical formula provided for in Art. 64 of the RPC. On the basis of this particular provision, the
trial court was not bound to apply par. 5 of Art. 64 in the instant case even if appellant had two
mitigating circumstances in his favor with no aggravating circumstance to offset them.

3. No. The CA erred in imposing on the petitioner the penalty for reckless imprudence resulting in
serious physical injuries.

The penalty for the offender guilty of reckless imprudence is based on the gravity of the resulting
injuries had his act been intentional. Thus, Art. 365 of the RPC stipulates that had the act been
intentional, and would constitute a grave felony, the offender shall suffer arresto mayor in its
maximum period to prision correccional in its medium period; if it would have constituted a less grave
felony, arresto mayor in its minimum and medium periods shall be imposed; and if it would have
constituted a light felony, arresto menor in its maximum period shall be imposed. Pursuant to Art. 9 of
the RPC, a grave felony is that to which the law attaches the capital punishment or a penalty that in
any of its periods is afflictive in accordance with Art. 25 of the RPC; a less grave felony is that which
the law punishes with a penalty that is correctional in its maximum period in accordance with Art. 25
of the RPC; and a light felony is an infraction of law for the commission of which a penalty of either
arresto menor or a fine not exceeding P200, or both is provided.

In turn, Art. 25 of the RPC enumerates the principal afflictive penalties to be reclusion perpetua,
reclusion temporal, and prision mayor; the principal correctional penalties to be prision correccional,
arresto mayor, suspension and destierro; and the light penalties to be arresto menor and fine not
exceeding P200. Under this provision, death stands alone as the capital punishment.

Art. 263 of the RPC classifies the felony of serious physical injuries based on the gravity of the
physical injuries. (See Art. 263) The CA found that Ferdinand had sustained multiple facial injuries, a
fracture of the inferior part of the right orbital wall, and subdural hemorrhage secondary to severe
head trauma; that he had become stuporous and disoriented as to time, place and person. He was
unable to attend to his general merchandise store for 3 months due to temporary amnesia; and that
he had required the attendance of caregivers and a masseur until October 31, 1999.

With Ferdinand not becoming insane, imbecile, impotent, or blind, his physical injuries did not fall
under Art. 263 (1). Consequently, the CA incorrectly considered the petitioners act as a grave felony
had it been intentional, and should not have imposed the penalty at arresto mayor in its maximum
period to prision correccional in its medium period. Instead, the petitioners act that caused the
serious physical injuries, had it been intentional, would be a less grave felony under Art. 25 of the
RPC, because Ferdinands physical injuries were those under Art. 263 (3) for having incapacitated
him from the performance of the work in which he was habitually engaged in for more than 90 days.

Conformably with Art. 365 of the RPC, the proper penalty is arresto mayor in its minimum and
medium periods, which ranges from 1 to 4 months. As earlier mentioned, the rules in Art. 64 of the
RPC are not applicable in reckless imprudence, and considering further that the maximum term of
imprisonment would not exceed 1 year, rendering the Indeterminate Sentence Law inapplicable, the
Court holds that the straight penalty of 2 months of arresto mayor was the correct penalty for the
petitioner.

MALVERSATION OF PUBLIC FUNDS THROUGH FALSIFICATION OF PUBLIC DOCUMENT;


PENALTY; INDETERMINATE SENTENCE LAW

Manolito Zafra vs. People of the Philippines


G.R. No. 176317, July 23, 2014

Doctrine: In convicting an accused of the complex crime of malversation of public funds through
falsification of a public document, the courts shall impose the penalty for the graver felony in the
maximum period pursuant to Art. 48 of the RPC, plus fine in the amount of the funds malversed or the
total value of the property embezzled. In addition, the courts shall order the accused to return to the
Government the funds malversed, or the value of the property embezzled.

Facts:
Appellant was the Revenue Collection Agent of the BIR, Revenue District 3, in San Fernando, La Union
from 1993-1995. Among his duties was to receive tax payments for which revenue official receipts (ROR)
were issued. The original of the ROR was then given to the taxpayer while a copy thereof was retained by
the collection officer.

On 06 July 1995, an audit team from BIR central office was tasked to audit the cash and non-cash
accountabilities of the appellant. Among the documents reviewed by the audit team were the Certificate
Authorizing Registration (CARs); triplicate copies of the RORs; and appellants monthly report of
collections (MRCs). The audit team likewise requested and was given copies of the RORs issued to the
La Union branch of the Philippine National Bank (PNB). A comparison of the entries in said documents
revealed that the data pertaining to 18 RORs with the same serial number vary with respect to the name
of the taxpayer, the kind of tax paid, the amount of tax and the date of payment. Of particular concern to
the audit team were the lesser amounts of taxes reported in appellants MRCs and the attached RORs
compared to the amount reflected in the CARs and PNBs RORs.
Although the RORs bear the same serial numbers, the total amount reflected in the CARs and PNBs 12
copies of RORs is PhP615,493.93, while only Php1,342.00 was reported as tax collections in the RORs
triplicate copies submitted by appellant to COA and in his MRCs, or a discrepancy of Php614,151.93,
Thus, the audit team sent to appellant a demand letter requiring him to restitute the total amount of
Php614,151.93. Appellant ignored the letter, thus, prompting the institution of the 18 cases for
malversation of public funds through falsification of public document against him.

The RTC convicted the petitioner of 18 counts of malversation of public funds through falsification of
public documents. The CA affirmed the conviction of the petitioner and the penalties imposed by the RTC.
The petitioner contends that the RTC and the CA erroneously convicted him of several counts of
malversation of public funds through falsification of public documents on the basis of the finding that he
had been negligent in the performance of his duties; that the acts imputed to him did not constitute
negligence; and that he could not be convicted of intentional malversation and malversation through
negligence at the same time.

Issue/s:
1. Whether the conviction of the petitioner for several counts of malversation of public funds through
falsification of public documents should be upheld
2. Whether the penalty imposed is proper

Ruling/Ratio:
1. Yes. The RTC noted that there is a big disparity between the amount covered by RORs issued to the
taxpayer, and the amount for the same receipt number appearing in the MCRs indicating the
falsification resorted to by the accused in the official reports he filed, thereby remitting less than what
was collected from taxpayers concerned, resulting to the loss of revenue for the government as
unearthed by the auditors.

The findings of fact of the RTC were affirmed by the CA. Hence, the petitioner was correctly
convicted of the crimes charged because such findings of fact by the trial court, being affirmed by the
CA as the intermediate reviewing tribunal, are now binding and conclusive on the Court. Accordingly,
we conclude that the Prosecution sufficiently established that the petitioner had been the forger of
the falsified and tampered public documents, and that the falsifications of the public documents had
been necessary to commit the malversations of the collected taxes.

The CAs disquisition regarding malversation through negligence had the same tenor as that of the
RTCs, and later on even went to the extent of opining that the petitioner ought to be held guilty of
malversation through negligence. But such opinion on the part of the CA would not overturn his
several convictions for the intentional felonies of malversation of public funds through falsification of
public documents. As can be seen, both lower courts unanimously concluded that the States
evidence established his guilt beyond reasonable doubt for malversation of public funds through
falsification of public documents.

At any rate, even if it were assumed that the findings by the CA warranted his being guilty only of
malversation through negligence, the Court would not be barred from holding him liable for the
intentional crime of malversation of public funds through falsification of public documents because
his appealing the convictions kept the door ajar for an increase in his liability. It is axiomatic that by
appealing he waived the constitutional protection against double jeopardy, leaving him open to being
convicted of whatever crimes the Court would ultimately conclude from the records to have been
actually committed by him within the terms of the allegations in the informations under which he had
been arraigned.

2. No. We see an obvious need to correct the penalties imposed on the petitioner. He was duly
convicted of 18 counts of malversation of public funds through falsification of public documents, all
complex crimes. Pursuant to Art. 48 of the RPC, the penalty for each count is that prescribed on the
more serious offense, to be imposed in its maximum period. Falsification of a public document by a
public officer is penalized with prision mayor and a fine not to exceed P5,000. (See Art. 171, RPC)
Prision mayor has a duration of 6 years and 1 day to 12 years of imprisonment. In contrast, the
penalty for malversation ranges from prision correccional in its medium and maximum periods to
reclusion temporal in its maximum period to reclusion perpetua depending on the amount
misappropriated, and a fine equal to the amount of the funds malversed or to the total value of the
property embezzled. (See Art. 271, RPC)

To determine the maximum periods of the penalties to be imposed on the petitioner, therefore, we
must be guided by the following rules, namely: (1) the penalties provided under Art. 217 of the RPC
constitute degrees; and (2) considering that the penalties provided under Art. 217 are not composed
of three periods, the time included in the penalty prescribed should be divided into 3 equal portions,
which each portion forming one period, pursuant to Art. 65 of the RPC. Accordingly, the penalties
prescribed under Art. 217 should be divided into 3 periods, with the maximum period being the
penalty properly imposable on each count, except in any instance where the penalty for falsification
would be greater than such penalties for malversation.

Under Sec. 1 of the Indeterminate Sentence Law, an indeterminate sentence is imposed on the
offender consisting of a maximum term and a minimum term. The maximum term is the penalty
under the RPC properly imposed after considering any attending circumstance; while the minimum
term is within the range of the penalty next lower than that prescribed by the RPC for the offense
committed. The Indeterminate Sentence Law was applicable here, save for the counts for which the
imposable penalty was reclusion perpetua. Considering that each count was a complex crime
without any modifying circumstances, the maximum term of the penalty for each count is the
maximum period (computed based on the rules in the preceding paragraph), except for the count
dealt with in Criminal Case No. 4635 involving the misappropriated amount of P4,869 for which the
corresponding penalty for malversation was prision mayor in its minimum and medium periods.
However, because such penalty for malversation was lower than the penalty of prision mayor
imposable on falsification of a public document under Art. 171 of the RPC, it is the penalty of prision
mayor in its maximum period that was applicable. On other hand, the minimum of the indeterminate
sentence for each count should come from the penalty next lower than that prescribed under Art. 217
of the RPC except in Criminal Case No. 4635 where the penalty next lower is prision correccional in
its full range.

To illustrate, the count involving the largest amount misappropriated by the accused totaling
P75,489.76 merited the penalty of reclusion temporal in its maximum period to reclusion perpetua,
and a fine of P75,489.76. Obviously, the penalty is that prescribed for malversation of public funds,
the more serious offense.

In its consolidated decision of February 17, 2004, the RTC erred in pegging the maximum terms
within the minimum periods of the penalties prescribed under Art. 217 of the RPC. It committed
another error by fixing indeterminate sentences on some counts despite the maximum of the
imposable penalties being reclusion perpetua. There is even one completely incorrect indeterminate
sentence. And, as earlier noted, the penalty for falsification under Art. 171 of the RPC was applicable
in Criminal Case No. 4635 involving P4,869 due to its being the higher penalty.

One more omission by the CA and the RTC concerned a matter of law. This refers to their failure to
decree in favor of the Government the return of the amounts criminally misappropriated by the
accused. That he was already sentenced to pay the fine in each count was an element of the
penalties imposed under the RPC, and was not the same thing as finding him civilly liable for
restitution, which the RTC and the CA should have included in the judgment.

JUSTIFYING CIRCUMSTANCES; DEFENSEOF A RELATIVE

Ricardo Medina Jr. vs. People of the Philippines


G.R. No. 161308, January 15, 2014

Doctrine: In order that defense of a relative is to be appreciated in favor of Ricardo, the following
requisites must concur, namely: (1) unlawful aggression by the victim; (2) reasonable necessity of the
means employed to prevent or repel the aggression; and (3) in case the provocation was given by the
person attacked, that the person making the defense took no part in the provocation. Like in selfdefense,
it is the accused who carries the burden to prove convincingly the attendance and concurrence of these
requisites because his invocation of this defense amounts to an admission of having inflicted the fatal
injury on the victim.
Facts:
This case concerns the fatal stabbing of Lino Mulinyawe which was preceded by a fight during a
basketball game between Ross Mulinyawe, Linos son, and Ronald Medina, the younger brother of
Ricardo and Randolf. Ronald had hit Ross with a piece of stone; hence, Ross was brought to the hospital
for treatment. Lino learned that his son had sustained a head injury, he forthwith went towards the house
of the Medinas accompanied by his drinking buddies, Tapan and Menes. He had a bread knife tucked in
the back, but his companions were unarmed. Along the way, Lino encountered Randolf whom he
confronted about the fight. The two of them had a heated argument. Lino lashed out at Randolf and
gripped the latters hand. Randolf retreated towards the store and took two empty bottles of beer, broke
the bottles and attacked Lino with them. Arriving at the scene, Ricardo saw what was happening, and
confronted Lino. Ricardo entered their house to get a kitchen knife and came out. Lino made a thrust at
Ricardo but failed to hit the latter, who then stabbed Lino on the left side of his chest, near the region of
the heart. Lino fell face down on the ground. The Office of the City Prosecutor of Pasig City charged
Randolf with homicide. The information was amended with leave of court to include Ricardo as a co
conspirator. The Defense claimed that it was Lino who had attacked Ricardo with a knife, and that Lino
had accidentally stabbed himself by falling frontward and into his own knife. The RTC acquitted Randolf
but convicted Ricardo of homicide for it found no evidence of conspiracy between Randolf and Ricardo.
The CA affirmed his conviction. On appeal, the petitioner argues that the CA erred in making a finding
that he stabbed the deceased but disregarded the justifying circumstance of defense of a relative.

Issue:
Whether or not the justifying circumstance of defense of a relative should be appreciated

Ruling/Ratio:
No. Reviewing the records, we find that appellants guilt as the perpetrator of the unlawful killing of the
victim Lino Mulinyawe had been adequately proven by prosecution evidence, both testimonial and
physical.

In order that defense of a relative is to be appreciated in favor of Ricardo, the following requisites must
concur, namely: (1) unlawful aggression by the victim; (2) reasonable necessity of the means employed to
prevent or repel the aggression; and (3) in case the provocation was given by the person attacked, that
the person making the defense took no part in the provocation. Like in selfdefense, it is the accused who
carries the burden to prove convincingly the attendance and concurrence of these requisites because his
invocation of this defense amounts to an admission of having inflicted the fatal injury on the victim.

In invoking defense of a relative, Ricardo states that his immediate impulse upon seeing Randolf being
attacked by Lino with a knife was to get his own weapon and to aid in the defense of Randolf. But that
theory was inconsistent with his declaration at the trial that Linos fatal wound had been self-inflicted, as it
presupposes direct responsibility for inflicting the mortal wound. Thus, his defense was unworthy of belief
due to its incongruity with human experience. However, his defense was unworthy of belief due to its
incongruity with human experience.

CIVIL LIABILITY

Dr. Encarnacion Lumantas vs. Hanz Calapiz


G.R. No. 163753, January 15, 2014

Doctrine: It is axiomatic that every person criminally liable for a felony is also civilly liable. Nevertheless,
the acquittal of an accused of the crime charged does not necessarily extinguish his civil liability.

Facts:
Spouses Calapiz brought their son Hanz Calapiz to the Misamis Occidental Provincial Hospital, Oroquieta
City, for an emergency appendectomy. Hanz was attended to by the petitioner, who suggested to the
parents that Hanz also undergo circumcision at no added cost to spare him the pain. Hanz complained of
pain in his penis, which exhibited blisters. His testicles were swollen. The parents noticed that the child
urinated abnormally after the petitioner forcibly removed the catheter, but the petitioner dismissed the
abnormality as normal. Hanz was discharged from the hospital over his parents protestations. Hanz was
confined in a hospital because of the abscess formation between the base and the shaft of his penis. The
petitioner referred him to Dr. Henry Go, an urologist, who diagnosed the boy to have a damaged urethra.
Thus, Hanz underwent cystostomy, and thereafter was operated on three times to repair his damaged
urethra. When his damaged urethra could not be fully repaired and reconstructed, Hanzs parents brought
a criminal charge against the petitioner for reckless imprudence resulting to serious physical injuries. The
RTC acquitted the petitioner of the crime charged for insufficiency of the evidence, but ruled the petitioner
was liable for moral damages because there was a preponderance of evidence showing that Hanz had
received the injurious trauma from his circumcision by the petitioner.

Issue:
Whether or not the petitioner can be held civilly liable despite his acquittal of the crime of reckless
imprudence resulting in serious physical injuries

Ruling/Ratio:
Yes. It is axiomatic that every person criminally liable for a felony is also civilly liable. Nevertheless, the
acquittal of an accused of the crime charged does not necessarily extinguish his civil liability. Our law
recognizes two kinds of acquittal, with different effects on the civil liability of the accused. First is an
acquittal on the ground that the accused is not the author of the act or omission complained of. This
instance closes the door to civil liability, for a person who has been found to be not the perpetrator of any
act or omission cannot and can never be held liable for such act or omission. The second instance is an
acquittal based on reasonable doubt on the guilt of the accused. In this case, even if the guilt of the
accused has not been satisfactorily established, he is not exempt from civil liability which may be proved
by preponderance of evidence only. Conformably with the foregoing, therefore, the acquittal of an
accused does not prevent a judgment from still being rendered against him on the civil aspect of the
criminal case unless the court finds and declares that the fact from which the civil liability might arise did
not exist. The petitioners contention that he could not be held civilly liable because there was no proof of
his negligence deserves scant consideration. The failure of the Prosecution to prove his criminal
negligence with moral certainty did not forbid a finding against him that there was preponderant evidence
of his negligence to hold him civilly liable. With the RTC and the CA both finding that Hanz had sustained
the injurious trauma from the hands of the petitioner on the occasion of or incidental to the circumcision,
and that the trauma could have been avoided, the Court must concur with their uniform findings.

VIOLATION OF ANTI-GRAFT AND CORRUPTION PRACTICES ACT

Teofilo Giangan vs. People of the Philippines


G.R. No. 169385, August 26, 201

Doctrine: Manifest partiality should be inferred only if there was a clear showing that there had been
others who had been bothered by the similar allegedly illegal constructions and had complained, but the
accused, in their capacities as barangay officials, did not deal with such complaint with the same alacrity.

Facts:
In his capacity as the barangay chairman, Giangan, along with his co-accused Domail, a barangay
councilor, and Bontia, the head of the barangay tanods, were charged with the violation of Section 3 (e) of
R. A. No. 3019. It appears that Aurelia Bernadas hired Delfin Buot to construct the wooden fence on her
land; that the accused removed the fence; that Buot learned that Giangan and his co-accused removed
the wooden fence; that Buot first directly inquired from Giangan why the latter had destroyed the fence,
but he harshly told him to tell Bernadas to just file a case against him; and that Buot accompanied
Bernadas and her spouse to confront Giangan, who reiterated his dare for them to just file a case.
Bernadas testified that she had caused the construction of the fence on her three properties because the
fruits of the coconut trees growing on her properties were frequently stolen, and also because the sand
on the seashore within her properties was being excavated; that she reported the theft to Giangan, who
did not take any action on her complaint; that she spent a total of P11,200 for labor and materials in the
construction of the fence; that upon learning of the removal of the fence, she visited Giangan to inquire,
but the latter shouted at her: It is within my power as barangay captain to destroy the fence, and Dont
tell me what to do, you just file a case in court; that many landowners put up fences on their properties in
the area, but the fences were not removed; and that there was no established road right of way on her
properties ever since she could remember. The RTC rendered its judgment finding all of the accused
guilty as charged.

Issue:
Whether or not the conviction of Giangan for the crime charged is proper

Ruling/Ratio:
In every prosecution for the violation of Section 3 (e) of R.A. No. 3019, the State must prove the following
essential elements, namely:
(1) The accused is a public officer discharging administrative, judicial or official functions;
(2) He must have acted with manifest partiality, evident bad faith, or gross inexcusable negligence in
the discharge of his functions and;
(3) His action caused any undue injury to any party, including the Government, or gave any private
party unwarranted benefits, advantage or preference in the discharge of his functions.

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

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

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

Aurora Fransdilla vs. People of the Philippines


G.R. No. 197562, August 20, 2015

Doctrines:
1. The complex crime of robbery in an inhabited house by armed persons and robbery with violence
against or intimidation of persons was committed when the accused, who held firearms, entered the
residential house of the victims and inflicted injury upon the victims in the process of committing the
robbery. Hence, the penalty is that imposed for the robbery in an inhabited house, the more serious.

2. It is not always required to establish that two or more persons met and explicitly entered into the
agreement to commit the crime by laying down the details of how their unlawful scheme or objective
would be carried out. Conspiracy can also be deduced from the mode and manner in which the
offense is perpetrated, or can be inferred from the acts of the several accused evincing their joint or
common purpose and design, concerted action and community of interest. Once conspiracy is
established, the act of each conspirator is the act of all.

3. Considering that the clear objective of the Indeterminate Sentence Law is to have the convict serve
the minimum penalty before becoming eligible for release on parole pursuant to the Indeterminate
Sentence Law, both the minimum and the maximum penalties must be definite, not ranging. This
objective cannot be achieved otherwise, for determining when the convict would be eligible for
release on parole would be nearly impossible if the minimum and the maximum were indefinite.

Facts:
Aurora Engson Fransdilla, the lone appellant, seeks to reverse the decision of CA affirming her conviction
and that of her co-accused for robbery on the basis of conspiracy. At private complainants residence,
private complainant Lalaine Yreverre saw appellant Fransdilla in front of their gate. Upon noticing
Fransdilla, Lalaine went to the gate and asked Fransdilla what is their purpose, as there were 4 of them.
Fransdilla then inquired about Cynthia Yreverre, Lalaines sister. The latter replied that Cynthia was in the
Japanese Embassy and asked Fransdilla if there was any other person whom she wanted to talk to. It
was then that Aurora told Lalaine that she was from the Philippine Overseas Employment Agency
(POEA). It was upon said pretension that Lalaine offered herself to instead talk to her and allowed her to
enter their house. Later on, four men who are with Fransdilla went inside the house and announced that it
was a hold-up.

The RTC convicted Fransdilla and her co-accused of robbery under Article 299 of the RPC and in the
application of the Indeterminate Sentence Law, sentenced the accused to imprisonment of 12 years and
1 day to 14 years and 8 months of reclusion temporal as minimum to 17 years, 4 months and 1 day to 20
years of reclusion temporal as maximum. On appeal, the CA affirmed the conviction of all of the accused,
but modified the penalty imposed by the RTC. The CA ruled that all the accused, including Fransdilla,
were guilty of committing the complex crime of robbery in an inhabited house under Art. 299, RPC, and
robbery with intimidation or violence under Art. 294, RPC. Thus, it held that the penalty for the complex
crime under Art. 48 of the RPC was that for the more serious offense, to be imposed in its maximum
period. Taking into consideration that no mitigating or aggravating circumstances were present, it set the
indeterminate sentence of 12 years of prision mayor, as minimum, to 17 years and 4 months of reclusion
temporal, as maximum.

Issue/s:
1. Whether or not conspiracy was proved
2. Whether or not Indeterminate Sentence Law was properly applied by the RTC
3. Whether or not the modified penalty imposed by the CA is proper
Ruling/Ratio:
1. Yes. Conspiracy of Fransdilla with her co-accused was established beyond reasonable doubt.
Contrary to Fransdillas contentions, the State competently and credibly established her active
participation in the execution of the robbery through Lalaines testimony detailing her specific acts.
In the eyes of the law, conspiracy exists when two or more persons come to an agreement
concerning the commission of a crime and decide to commit it. For an accused to be validly held to
have conspired with her co-accused in committing the crime, her overt acts must evince her active
part in the execution of the crime agreed to be committed. The overt acts of each of the conspirators
must tend to execute the offense agreed upon, for the merely passive conspirator cannot be held to
be still part of the conspiracy without such overt acts, unless such conspirator is the mastermind.
Here, Fransdilla was satisfactorily shown not to have been a mere passive coconspirator, but an
active one who had facilitated the access into the house by representing herself as an employee of
the POEA. In that respect, it is not always required to establish that two or more persons met and
explicitly entered into the agreement to commit the crime by laying down the details of how their
unlawful scheme or objective would be carried out. Conspiracy can also be deduced from the mode
and manner in which the offense is perpetrated, or can be inferred from the acts of the several
accused evincing their joint or common purpose and design, concerted action and community of
interest. Once conspiracy is established, the act of each conspirator is the act of all.

2. No. That the trial judge fixed the indeterminate sentence at "imprisonment of 12 years and 1 day to 14
years and 8 months of reclusion temporal as minimum to 17 years, 4 months and 1 day to 20 years of
reclusion temporal as maximum was a patent elementary error. Such fixing contravened the letter
and spirit of the Indeterminate Sentence Law, Section 1. The CA justifiably deemed it necessary to
correct the indeterminate sentence. Under Section 1 of the ISL the minimum of the indeterminate
sentence is a penalty "within the range of the penalty next lower to that prescribed by the RPC for the
offense," and the maximum is "that which, in view of the attending circumstances, could be properly
imposed under the rules of the said Code." Considering that the clear objective of the Indeterminate
Sentence Law is to have the convict serve the minimum penalty before becoming eligible for release
on parole pursuant to the Indeterminate Sentence Law, both the minimum and the maximum
penalties must be definite, not ranging. This objective cannot be achieved otherwise, for determining
when the convict would be eligible for release on parole would be nearly impossible if the minimum
and the maximum were as indefinite as the RTC fixed the indeterminate sentence. Indeed, that the
sentence is an indeterminate one relates only to the fact that such imposition would leave the period
between the minimum and the maximum penalties indeterminate" in the sense that he may, under the
conditions set out in said Act, be released from serving said period in whole or in part."

3. Yes. We concur with the CA. Indeed, one who, by breaking a wall, enters, with a deadly weapon, an
inhabited house and steals therefrom valuable effects, without violence against or intimidation upon
persons, is punishable under Art. 299 of the RPC with reclusion temporal. Art. 294 applies where
robbery with violence against or intimidation of a person takes place without entering an inhabited
house, under the conditions set forth in Art. 299 of the RPC.

When the elements of both provisions are present, the crime is a complex one, calling for the
imposition as provided in Art. 48 of said Code of the penalty for the most serious offense, in its
maximum period, which, in the case at bar, is reclusion temporal in its maximum period.

In this case, Par. 5 of Art. 294, RPC is the relevant provision, under which the penalty is prision
correccional in its maximum period to prision mayor in its medium period. For Art. 299, relevant are
par. (a)4 (because Fransdilla pretended to be from the POEA) and par. (b)2 (because the accused
brought the vault down from Cynthias upstairs bedroom and forced it open outside the place where
the robbery was committed). The penalty for the crime is reclusion temporal.

Under Art. 48 of the RPC, the penalty for the complex crime is that for the more serious felony, which,
in this case, was the robbery in an inhabited house by armed men punishable by reclusion temporal,
to be imposed in the maximum period (i.e., 17 years, 4 months and 1 day to 20 years). Hence, the
maximum of the indeterminate sentence of 12 years of prision mayor, as minimum, to 17 years and 4
months of reclusion temporal, must be corrected to 17 years, 4 months and 1 day of reclusion
temporal.

CHAIN OF CUSTODY; R.A. No. 9165 (COMPREHENSIVE DANGEROUS DRUGS ACT)

People of the Philippines vs. Recto Angngao and Robert Carlin


G.R. No. 189296, March 11, 2015

Doctrine: The State bears the burden of establishing the chain of custody of the dangerous drugs
confiscated during a buy-bust operation. The evidence of the chain of custody must meet the test of proof
beyond reasonable doubt.

Facts:
The Office of the City Prosecutor of Baguio City filed in the RTC two informations against Angngao and
Robert Carlin y Pecdasen, charging them with the illegal sale of marijuana resin and illegal possession of
marijuana hashish oil in violation of RA No. 9165 (Comprehensive Dangerous Drugs Act of 2002). They
were apprehended by a buy-bust operation. The RTC convicted Angngao but acquitted Carlin. The CA
promulgated its assailed judgment affirming the conviction of Angngao. Angngao questioned the
decisions on the ground that the prosecution failed to establish the chain of custody of the confiscated
drugs.

Issue/s:
Whether or not the guilt of the accused is proved beyond reasonable doubt

Ruling/Ratio:
No. To ensure a conviction for the illegal sale of dangerous drugs, the following elements constituting the
crime must be present, namely: (a) the identities of the buyer and seller, the object of the sale, and the
consideration; and (b) the delivery of the thing sold and the payment for the thing. Such prosecution for
the sale of illegal drugs requires more than the hasty presentation of evidence to prove each element of
the crime. The presentation of the drugs as evidence in court is indispensable in every prosecution for the
illegal sale of dangerous drugs because the drugs are the corpus delicti of the crime. As such, the State
should establish beyond doubt the identity of the dangerous drugs by showing that the dangerous drugs
offered in court as evidence were the same substances bought during the buy-bust operation. This
requirement is complied with by ensuring that the custody of the seized drugs from the time of
confiscation until presentation in court is safeguarded under what is referred to as the chain of custody by
Republic Act No. 9165, whose objective is to remove unnecessary doubts concerning the identity of the
evidence.

Should the State not definitively establish that the dangerous drugs presented in court were the very
same substances actually recovered from the accused, the criminal prosecution for drug pushing should
fail because the guilt of the accused was not established beyond reasonable doubt.

The manner and timing of the marking of the seized drugs or related items in accordance with the rules
under RA 9165 are crucial in proving the chain of custody. The marking by the arresting officer of the
drugs, being the starting point in the custodial link, should be made immediately upon the seizure, or, if
that is not possible, as close to the time and place of the seizure as practicable under the obtaining
circumstances. This immediate marking is essential because the succeeding handlers of the drugs would
use the markings as their reference to the seizure, and because it further serves to segregate the marked
seized drugs from all other evidence from the time and point of seizure until the drugs are disposed of at
the end of the criminal proceedings. The deliberate taking of these identifying steps is statutorily aimed at
obviating switching, planting or contamination of the evidence. Verily, the preservation of the chain of
custody vis--vis the drugs ensures the integrity of the evidence incriminating the accused, and fulfills the
element of relevancy as a requisite for the admissibility of the evidence.

The integrity of the evidence presented the corpus delicti no less became suspicious by the
mysterious silence of the record on what transpired after the transaction. An examination of the record
indicates that no testimony on the links in the chain of custody from the time the drugs were confiscated
up to the time they were offered as evidence in court was given by the arresting lawmen and the others
who could have handled the drugs. This omission deprived the lower courts of the means of knowing the
details as to every person who touched the drugs, as to how and from whom the drugs were received, as
to where the drugs were at any given point in that interval, and as to what happened to the drugs while in
the possession of each handler, including the relative condition in which the drugs were received and the
state in which they were delivered to the next links in the chain. It is quite notable that the officers who
served as the only witnesses to the buy-bust operation neither described the precautions taken to ensure
that there had been no change in the condition of the drugs nor specified that there was no opportunity for
any person not in the chain to have possession of the drugs.

TREACHERY

People of the Philippines vs. Mariano Oandasan Jr.,


G. R. No. 194605, June 14, 2016

Doctrine: The attack was mounted with treachery because the two conditions in order for this
circumstance to be appreciated concurred, namely: (a) that the means, methods and forms of execution
employed gave the person attacked no opportunity to defend themselves or to retaliate; and (b) that such
means, methods and forms of execution were deliberately and consciously adopted by the accused
without danger to his person. The essence of treachery lay in the attack that came without warning, and
was swift, deliberate and unexpected, affording the hapless, unarmed and unsuspecting victims no
chance to resist, or retaliate, or escape, thereby ensuring the accomplishment of the deadly design
without risk to the aggressor, and without the slightest provocation on the part of the victims.

Facts:
Cutaran testified that appellant aimed and fired his gun at Montegrico. Cutaran ran away after seeing the
appellant shoot Mentegrico. He did not witness the shooting of the other two victims Tamanu and Paleg.
As a result of the shooting incident, Montegrico and Tamanu, died; while Mario Paleg survived. Three
informations were filed against the accused-appellant, two of which were for murder involving the fatal
shooting of Tamanu and Montegrico, and the third was for frustrated homicide involving the near fatal
shooting of Paleg. The RTC convicted the accused of murder for the fatal shooting of the first victim, and
guilty of homicide and frustrated homicide as to the second and third victims.

Issue:
Whether or not the findings against the accused should be upheld

Ruling/Ratio:
No. Treachery attended the shooting of Tamanu and Paleg; hence, the accused is guilty of two counts of
murder and one count of frustrated murder. Although the CA and the RTC correctly concluded that the
accused had been directly responsible for the shooting of Tamanu and Paleg, we are perplexed why both
lower courts only characterized the killing of Tamanu and the near-killing of Paleg as homicide and
frustrated homicide while characterizing the killing of Montegrico as murder because of the attendance of
treachery. The distinctions were unwarranted. The fact that the shooting of the three victims had occurred
in quick succession fully called for a finding of the attendance of treachery in the attacks against all the
victims. Montegrico, Tamanu and Paleg were drinking together outside their bunkhouse prior to the
shooting when the accused suddenly appeared from the rear of the dump truck, walked towards their
table and shot Montegrico without any warning. That first shot was quickly followed by more shots. In that
situation, none of the three victims was aware of the imminent deadly assault by the accused, for they
were just enjoying their drinks outside their bunkhouse. They were unarmed, and did not expect to be
shot, when the accused came and shot them.

The attack was mounted with treachery because the two conditions in order for this circumstance to be
appreciated concurred, namely: (a) that the means, methods and forms of execution employed gave the
person attacked no opportunity to defend themselves or to retaliate; and (b) that such means, methods
and forms of execution were deliberately and consciously adopted by the accused without danger to his
person. The essence of treachery lay in the attack that came without warning, and was swift, deliberate
and unexpected, affording the hapless, unarmed and unsuspecting victims no chance to resist, or
retaliate, or escape, thereby ensuring the accomplishment of the deadly design without risk to the
aggressor, and without the slightest provocation on the part of the victims. What was decisive is that the
execution of the attack made it impossible for the victims to defend themselves or to retaliate. Treachery
as an aggravating or attendant circumstance must be established beyond reasonable doubt.

PENALTY

Pedro Ladines vs. People of the Philippines


G.R. No. 167333, January 11, 2016

Doctrine: To impose the highest within a period of the imposable penalty without specifying the
justification for doing so is an error on the part of the trial court that should be corrected on appeal. In
default of such justification, the penalty to be imposed is the lowest of the period.

Facts:
An information was filed in the RTC charging the petitioner and Licup with homicide. While Prosecution
witnesses along with victim Erwin were watching a dance, the petitioner suddenly and without warning
approached and stabbed Erwin below the navel with a machete. The petitioner then left after delivering
the blow. At that juncture, Licup also mounted his attack against Erwin but the latter evaded the blow by
stepping back. Erwin pulled out the machete from his body and wielded it against Licup, whom he hit in
the chest. Licup pursued but could not catch up with Erwin because they both eventually fell down. Erwin
was rushed to the hospital where he succumbed. RTC pronounced the petitioner guilty of the crime
Homicide, sans any mitigating circumstances and applying the Indeterminate Sentence Law, sentenced
him to suffer an imprisonment of from 10 years and 1 day of prision mayor as minimum to 17 years and 4
months of reclusion temporal as maximum.

Issue:
Whether or not the penalty was proper

Ruling/Ratio:
No. Homicide is punished with reclusion temporal. We declare that the lower courts could not impose 17
years and four months of the medium period of reclusion temporal, which was the ceiling of the medium
period of reclusion temporal, as the maximum of the indeterminate penalty without specifying the
justification for so imposing. They thereby ignored that although Article 64 of the RPC, which has set the
rules for the application of penalties which contain three periods, requires under its first rule that the
courts should impose the penalty prescribed by law in the medium period should there be neither
aggravating nor mitigating circumstances, its seventh rule expressly demands that within the limits of
each period, the courts shall determine the extent of the penalty according to the number and nature of
the aggravating and mitigating circumstances and the greater or lesser extent of the evil produced by the
crime. By not specifying the justification for imposing the ceiling of the period of the imposable penalty,
the fixing of the indeterminate sentence became arbitrary, or whimsical, or capricious. In the absence of
the specification, the maximum of the indeterminate sentence for the petitioner should be the lowest of
the medium period of reclusion temporal, which is 14 years, eight months and one day of reclusion
temporal.
ILLEGAL RECRUITMENT INLARGE SCALE; ESTAFA

People of the Philippines vs. Marissa Bayker


G.R. No. 170192, February 10, 2016

Doctrine: An illegal recruiter can be liable for the crimes of illegal recruitment committed in large scale
and estafa without risk of being put in double jeopardy, provided that the accused has been so charged
under separate informations.

Facts:
Caniazares, Dahab and Miparanum testified that they had met the accused-appellant who represented
herself to be recruiting workers for overseas employment. They paid her for their medical examination
and placement fees for which a receipt is issued. However, they were not deployed as promised by the
accused. Subsequently, the learned from the POEA that the accused appellant had not been issued the
license to recruit and place people overseas. The Office of the City Prosecutor of Makati filed a complaint
for Illegal Recruitment and Estafa against the accused.

Issue:
Whether the accused-appellant is guilty for the crimes of illegal recruitment in large scale and estafa

Ruling/Ratio:
Yes. Illegal recruitment is committed by a person who: (a) undertakes any recruitment activity defined
under Article 13(b) or any prohibited practice enumerated under Art. 34 and Art. 38 of the Labor Code;
and (b) does not have a license or authority to lawfully engage in the recruitment and placement of
workers. It is committed in large scale when it is committed against 3 or more persons individually or as a
group. The accused-appellant committed illegal recruitment in large scale because she had committed
acts of recruitment against at least 3 persons despite her not having been duly licensed or authorized by
the POEA for that purpose. The accused-appellant's insistence on her very limited participation in the
recruitment of the complainants did not advance or help her cause any because the State established her
having personally promised foreign employment either as hotel porters or seafarers to the complainants
despite her having no license or authority to recruit from the POEA. The records made it clear enough
that her participation was anything but limited, for she herself had accompanied them to their respective
medical examinations at their own expense. In addition, she herself brought them to GNB Marketing and
introduced them to her co-accused.

The conviction of the accused-appellant for illegal recruitment committed in large scale did not preclude
her personal liability for estafa under Art. 315(2)(a) of the RPC on the ground of subjecting her to double
jeopardy. The elements of estafa as charged are: (1) the accused defrauded another by abuse of
confidence or by means of deceit; and (2) the offended party, or a third party suffered damage or
prejudice capable of pecuniary estimation. In contrast, the crime of illegal recruitment committed in large
scale, as indicated earlier, requires different elements. Double jeopardy could not result from prosecuting
and convicting the accused-appellant for both crimes considering that they were entirely distinct from
each other not only from their being punished under different statutes but also from their elements being
different.

The active representation by the accused-appellant of having the capacity to deploy Miparanum abroad
despite not having the authority or license to do so from the POEA constituted deceit as the first element
of estafa. Her representation induced the victim to part with his money, resulting in damage that is the
second element of the estafa.
MERCANTILE LAW
SUBSCRIPTION AGREEMENT;CERTIFICATE OF STOCK

Interport Resources Corporation v. Securities Specialist Inc.


GR No. 154069, June 6, 2016

Doctrine: The effect of assignment of subscription agreements is to make the agreements binding
between the corporation and the assignee. No transfer of shares of stock shall be valid, except as
between the parties, until the transfer is recorded in the books of the corporation (Section 63, Corporation
Code). Hence, a transfer of shares not recorded in the stock and transfer book of the corporations is non-
existent as far as the corporation is concerned.

Facts:
Oceanic Oil and Mineral Resources Inc. entered into a subscription agreement with RC Lee (domestic
corporation) over 5 million shares for a total par value of P50,000, where RC Lee paid 25% of the
subscription. Oceanic merged with Interport Resources (surviving corporation; publicly-listed domestic
corporation). Securities Specialist Inc (SSI; domestic corporation) registered as a dealer in securities and
received in the ordinary course of business the outstanding Subscription Agreements all in the name of
RC Lee.

Later on, upon request from Interports Corporate Secretary, RC Lee found no record showing any
transfer or assignment of the Oceanic subscription agreements and stock certificates of Interport and thus
paid its unpaid subscriptions and was accordingly issued the corresponding stock certificates.

Interport issued a call for the full payment of subscription receivables. SSI tendered payment before the
deadline through two stockbrokers, but Interport refused to honor the Oceanic subscriptions. SSI still
directly tendered payment to Interport for the balance of the 5M shares, which was originally rejected by
Interport since the Oceanic subscription agreements should have been previously converted to shares in
Interport.

SSI required Interport to furnish it with a copy of the notice requiring conversion but Interport failed to
show any proof, so SSI asked SEC for a copy of the Board Resolution requiring the conversion. SEC
informed SSI that there is no record of any such resolution. No copy of the resolution was produced and
the tender of payment was still rejected. SSI later learned that Interport issued 5M shares to RC Lee
based on RC Lees registration as the owner of the subscriptions agreement in Interports books and on
RC Lees Presidents affidavit that no transfer or encumbrances of the shares had been made.

SSI demanded from RC Lee the delivery of the 5M shares but RC Lee failed to return the shares since
they were already sold to other parties. SSI demanded RC Lee to pay the current market value of the 5M
shares.

Issue:
Was Interport liable to deliver to SSI the Oceanic shares of stock (or the value thereof) under the
subscription agreements?

Ruling/Ratio:
YES, because by the assignment, the subscription agreements became binding between SSI and
Interport, but Interport denied recognition of the said subscription agreements.

The effect of the assignment of the subscription agreements to SSI was to extinguish the obligation of
R.C. Lee to Oceanic (now Interport) to settle the unpaid balance on the subscription. Due to the
assignment, Interport was no longer obliged to accept any payment from R.C. Lee because the latter had
ceased to be privy to the subscription agreements. Interport was legally bound to accept SSI's tender of
payment for the 75% balance on the subscription price because SSI had become the new debtor under
the agreements. As such, the issuance of the stock certificates in the name of R.C. Lee had no legal
basis in the absence of a contractual agreement between R.C. Lee and Interport.

Under Section 63 of the Corporation Code, no transfer of shares of stock shall be valid, except as
between the parties, until the transfer is recorded in the books of the corporation to show the names of
the parties, date of transfer, number of certificates and number of shares transferred. Hence, a transfer of
shares not recorded in the stock and transfer book of the corporations is non-existent as far as the
corporation is concerned. As between the corporation and its shareholders and third persons, the
corporation looks only to its books to determine who its shareholders are. It is only when the transfer has
been recorded in the stock and transfer book that a corporation may rightfully regard the transferee as
one of its stockholders, and from this time, the corporation has the consequent obligation to recognize
such rights as mandated by law.

The subscription agreements were now binding between SSI and Interport only, and only such parties
were expected to comply with the terms thereof. Hence, Interport was liable to deliver to SSI the Oceanic
shares under the subscription agreements.

The right to have the transfer registered exists from the time of the transfers and it is to the transferees
benefit that the right must be exercised early. Since the law does not prescribe any period within which
the registration should be effected, the action to enforce the right does not accrue until there has been a
demand and a refusal to record the transfer. Thus, here, SSI acted with sufficient dispatch in seeking to
enforce its rights under the subscription agreements within the reasonable period where the denial of the
recognition of its subscription agreements and the complaint happened within the same year.

INSURANCE CODE; EXEMPTION FROM LEVY OF SECURITY DEPOSIT

Capital Insurance and Surety Co v. Del Monte Motor Works Inc.


G.R. No. 159979, December 9, 2015

Doctrine: The security deposit (under Section 203 of the Insurance Code) is exempt from levy by a
judgment creditor or any claimant because the securities are held as contingency fund to answer for the
claims against the insurance company by all its policy holders and their beneficiaries. Consequently, the
Insurance Commissioners refusal to release the security deposit despite garnishment on execution is
legally justified because the Insurance Commissioner has the specific legal duty to hold the security
deposits for the benefit of all policy holders.

Facts:
Del Monte Motor Works sued Vilfran Liner, Hilaria Villegas and Maura Villegas to recover unpaid billings
for the fabrication and construction of passenger bus bodies. The case resulted in the levy of 10 buses
and three parcels of land and garnishment of funds in several bank accounts of the defendants. To
enforce the RTC decision in Del Montes favor, a notice of garnishment was issued against the security
deposit of Capital Insurance in the Insurance Commission. The RTC ordered the Insurance Commission
to withdraw from the security deposit of the Capital Insurance the amount to satisfy the notice of
garnishment. The Insurance Commissioner turned down the request to release claiming that under
Section 203 of the Insurance Code, security deposit is exempt from execution.

Issues:
1. May the security deposit of Capital Insurance be a subject of levy in contravention of Section 203 of
the Insurance Code?
2. Was the Insurance Commissioners refusal to release the security deposit despite the garnishment on
execution legally justified?

Ruling/Ratio:
1. No, the security deposit was immune from levy or execution.
The last paragraph of Section 203 of the Insurance Code regarding investment of funds in securities
to be deposited with and held by the Insurance Commissioner provides that no judgment creditor or
other claimant shall have the right to levy upon any securities of the insurer held on deposit under this
section or held on deposit pursuant to the requirement of the Commissioner.

Such provision indicates that the security deposit is exempt from levy by a judgment creditor or any
claimant. The purpose of the exemption is because the securities are held as contingency fund to
answer for the claims against the insurance company by all its policy holders and their beneficiaries.
This step is taken if the company becomes insolvent or otherwise unable to satisfy the claims against
it. Thus, a single claimant may not lay stake on the securities to the exclusion of all others. The other
parties may have their own claims against the insurance company under other insurance contracts it
has entered.

Denying this exemption would potentially pave the way for a single claimant to short-circuit the
procedure normally undertaken in adjudicating claims against an insolvent company under the rules
on concurrence and preference of credits. To allow the Del Monte to proceed independently against
the security deposit of Capital Insurance would not only prejudice the policy holders and their
beneficiaries, but would also annul the very reason for which the law required the security deposit.

If at all, Del Montes interest in the security deposit could only be inchoate or a mere expectancy, and
thus had no attribute as property.

2. Yes, because the Insurance Commissioner had the specific legal duty to hold the security deposits for
the benefit of all policy holders.

Among the regulatory responsibilities of the Insurance Commissioner is the duty to hold the security
deposits (under Secs 191 and 203 of the Insurance Code) for the benefit and security of all policy
holders. The law specifically confers custody over the securities upon the commissioner, with whom
these investments are required to be deposited. As the officer vested with custody of the security
deposit, the insurance commissioner is in the position to determine when it may be released without
prejudicing the rights of other policy holders. Before allowing the withdrawal or the release of the
deposit, the commissioner must be satisfied that the conditions contemplated by the law are met and
all policy holders protected. In this case, the Insurance Commissioner properly refused the request to
release under the notice of garnishment.

INTELLECTUAL PROPERTY; COPYRIGHT INFRINGEMENT

Microsoft Corporation v. Manansala


GR No. 166391, October 21, 2015

Doctrine: The gravamen of copyright infringement is not merely the unauthorized manufacturing of
intellectual works but rather the unauthorized performance of any of the acts covered by the copyright
(Section 5, Decree on Intellectual Property) such that any person who performs any of the acts under
Section 5 without obtaining the copyright owners prior consent renders himself civilly and criminally liable
for copyright infringement.

Facts:
Microsoft Corporation is the copyright and trademark owner of all rights relating to all versions and
editions of Microsoft software and their user guides and manuals. Rolando Manansala is doing business
under the name Dataman Trading Company and/or Comic Alley. Manansala was engaged in
distributing and selling Microsoft computer software programs without authority from Microsoft. Through a
test-purchase, an NBI agent was able to purchase from Manansala six CD ROMS containing various
computer programs belonging to Microsoft. Later on, through a search of Manansalas premises yielded
several illegal copies of Microsoft programs. The charge of copyright infringement against Manansala was
dismissed by the State Prosecutor because there is no proof that Manansala was the one who really
printed or copied the products of Microsoft for sale in his store.

Issue:
Is printing or copying essential in the commission of the crime of copyright infringement under Section 29
of Presidential Decree No. 49? In other words, does mere selling of pirated computer software constitute
copyright infringement?

Ruling/Ratio:
No, the printing or copying is not essential, because the commission of any of the acts 3 of exclusive right
that consists a copyright under Section 5 of the Decree on Intellectual Property without the copyright
owners consent constitute actionable copyright infringement.

Infringement of a copyright is a trespass on a private domain owned and occupied by the owner of the
copyright, and, therefore, protected by law, and infringement of copyright, or piracy, which is a
synonymous term in this connection, consists in the doing by any person, without the consent of the
owner of the copyright, of anything the sole right to do is conferred by statute on the owner of the
copyright.

The gravamen of copyright infringement is not merely the unauthorized manufacturing of intellectual
works but rather the unauthorized performance of any of the acts covered by the copyright (Section 5,
Decree on Intellectual Property). Hence, any person who performs any of the acts under Section 5
without obtaining the copyright owners prior consent renders himself civilly and criminally liable for
copyright infringement.

STOCKHOLDERS RIGHT TO INSPECT CORPORATE BOOKS AND RECORDS

Terelay Investment and Development Corporation v. Yulo


G.R. No. 160924, August 5, 2015

Doctrine: All stockholders have the right to inspect the corporate books and records, without requiring
any specific amount of interest for the exercise of the right to inspect to be protected from possible
mismanagement by its officers. Officers and directors have no legal authority to close the office doors
against shareholders for whom they are only agents, and withhold from them the right to inspect the
books which furnishes the most effective method of gaining information which the law has provided, on
mere doubt or suspicion as to the motives of the shareholder.

Facts:
Cecilia Yulo, a stockholder who owns .001% interest in Terelay Investment, wrote a letter request to the
corporation to be allowed to examine its books and records. Terelay denied the request and demanded
Yulo to show proof that she was a bona fide stockholder. Yulo resent a letter request clarifying that her
purpose is to inquire into the financial condition of Terelay and the conduct of its affairs by the principal
officers. Terelays counsel advised Yulo not to continue with the inspection to avoid trouble. Terelay
pointed out that Yulos name as incorporator, stockholder and director in the Articles of Incorporation and
Amendments were unsigned; she did not pay for the five shares appearing in the Amended AOI and
General Information Sheet; she did not subscribe to the shares; she has neither been in possession of

3
(A) To print, reprint, publish, copy, distribute, multiply, sell, and make photographs, photo-engravings, and pictorial
illustrations of the works;
(B) To make any translation or other version or extracts or arrangements or adaptations thereof; to dramatize it if it be a non-
dramatic work; to convert it into a non-dramatic work if it be a drama; to complete or execute if it be a model or design;
(C) To exhibit, perform, represent, produce, or reproduce, the work in any manner or by any method whatever for profit or
otherwise; it not reproduced in copies for sale, to sell any manuscript or any record whatsoever thereof;
(D) To make any other use or disposition of the work consistent with the laws of the land.
nor seen the certificate of stock covering the five share; the donation of the five shares was null and void
and there was no acceptance by her as donee.

Issue:
Is Yulo considered a stockholder entitled to inspect the corporations books and records despite her
shareholding of .001% interest considering that corporate documents show that she is a registered
stockholder?

Ruling/Ratio:
Yes, since the corporate documents support Yulos claim as a registered stockholder, she has the right
under Section 74 and 75 of the Corporation Code to inspect the corporations books, records, and
financial statements.

Yulo has the right to be fully informed of Terelays corporate condition and the manner its affairs are being
managed. It is well-settled that the ownership of shares of stock gives stockholders the right under the
law to be protected from possible mismanagement by its officers. This right is predicated upon self-
preservation. In any case, Terelay was not able to prove that Yulo was in bad faith or had an ulterior
motive in demanding her right as stockholder.

Terelays claim that Yulo has insignificant stockholding is also unwarranted. The Corporation Code
granted to all stockholders the right to inspect the corporate books and records, without requiring any
specific amount of interest for the exercise of the right to inspect. (When the law has made no distinction,
we ought not to recognize any distinction.)

Terelay cannot also arbitrarily deny Yulos right to inspect on the ground that the inspection would be
used for a dubious or doubtful reason. Under Section 74 of the Corporation Code, the only time when the
demand to examine and copy the corporations records could be refused is when the corporation puts up
as a defense to any action that the person demanding had improperly used any information secured
through any prior examination of the records or minutes of such corporation or of any other corporation,
or was not acting in good faith or for a legitimate purpose in making his demand. The right of the
shareholder to inspect the books and records of the corporation should not be made subject to the
condition of a showing of any particular dispute or of proving any mismanagement or other occasion
rendering an examination proper, but if the right is to be denied, the burden of proof is upon the
corporation to show that the purpose of the shareholder is improper, by way of defense.

In general, officers and directors have no legal authority to close the office doors against shareholders for
whom they are only agents, and withhold from them the right to inspect the books which furnishes the
most effective method of gaining information which the law has provided, on mere doubt or suspicion as
to the motives of the shareholder.

BY LAWS; ARTICLES OF INCORPORATION

Forest Hills Golf and Country Club v. Gardpro Inc.


G.R. No. 164686, October 22, 2014

Doctrine: In resolving inconsistencies between the by-laws and an officers affidavit, the by-laws should
prevail because they constituted the private statutes of the corporation and its members and must be
strictly complied with and applied to the letter.

The articles of incorporation and the by-laws of a corporation define and regulate the relations between
the corporation and the stockholders. In interpreting them, the literal meaning of their provisions shall
control, and such provisions should be construed as a whole and not in isolation.
Facts:
Forest Hills is a non-profit stock corporation established to promote social, recreational and athletic
activities among its members, that constructed and maintained golf courses, tennis courts, swimming
pools, and other indoor and outdoor sports and recreational facilities.

Gardpro bought class C common shares of stock. These are special corporate shares that entitled the
registered owner to designate two nominees or representatives for membership in the Club. When
Gardpro designated its corporate nominees, Forest Hills charged them membership fees of P50,000 (with
25,000 discount) each. At the time, the membership fee per nominee was increased from P45,000 to
P75,000 each per resolution of the BOD. When Gardpro later changed its designated nominees, Forest
Hills charged new membership fees, which Gardpro refused to pay, so the replacement did not take
place.

It was pointed out by the SEC En Banc that nowhere in the by-laws is there a provision that authorizes
the collection of membership fees every time a nominee of corporate shareholder is to be replaced. What
the by-laws authorizes is the collection of a transfer fee, in such amount as may be prescribed by the
Board, for every change in the designated nominees of a juridical entity (a provision that should be
differentiated from another by-laws provision that authorizes the collection of transfer fee of P60,000 for
corporate members for each transfer of stock in the club's books.)

Issue:
Is the collection of new membership fees for replacement nominees allowed? (as within the prerogative of
Forest Hills to determine its own rules and procedure governing membership and within the power of its
Board of Directors to decide upon all questions on the construction of Articles of Incorporation, By-Laws
and rules and regulations of the Club?)

Ruling/Ratio:
No, Forest Hills is not authorized under its articles of incorporation and by-laws to collect new
membership fees for the replacement nominees of Gardpro.

There is no question that Gardpro held class C common stocks that entitled it to two memberships in the
Club. Its nominees could be admitted as regular members upon approval of the Board of Directors but
only one nominee for each class C share as designated in the resolution could vote as such.
According to the second paragraph of Section 13.6 of the by-laws, the transfer of playing rights entailed
the payment of P10,000. Yet, Section 2.2.2 of the by-laws stipulated a transfer fee for every replacement.
This warranted the conclusion that Gardpro should pay to Forest Hills the transfer fee of P10,000
because it desired to change its nominees.

There was an inconsistency between the by-laws of Forest Hills and the affidavit of the General Manager
as to the amounts of the membership fees of corporate members. On one hand, Section 13.7
(Membership Fees) of the by-laws stated that the membership fee of P45,000 x x x for corporate
members must be paid by the applicant; on the other, the General Managers affidavit alleged that each
nominee shall pay the P75,000 membership fee. To resolve the inconsistency, the by-laws should
prevail because they constituted the private statutes of the corporation and its members and must
be strictly complied with and applied to the letter.

The relevant provisions of the articles of incorporation and the by- laws of Forest Hills governed the
relations of the parties as far as the issues between them were concerned. On the other hand, the by-
laws were the self-imposed rules resulting from the agreement between Forest Hills and its members to
conduct the corporate business in a particular way. In that sense, the by-laws were the private statutes
by which Forest Hills was regulated, and would function. The charter and the by-laws were thus the
fundamental documents governing the conduct of Forest Hills corporate affairs; they established
norms of procedure for exercising rights, and reflected the purposes and intentions of the incorporators.
Until repealed, the by-laws were a continuing rule for the government of Forest Hills and its officers, the
proper function being to regulate the transaction of the incidental business of Forest Hills. The by-laws
constituted a binding contract as between Forest Hills and its members, and as between the members
themselves. Every stockholder governed by the by-laws was entitled to access them. The by-laws were
self-imposed private laws binding on all members, directors and officers of Forest Hills. The prevailing
rule is that the provisions of the articles of incorporation and the by-laws must be strictly complied with
and applied to the letter.

DILIGENCE REQUIRED OF BANKS

Comsavings Bank (GSIS Family Bank) v. Sps. Capistrano


GR No. 170942; August 28, 2013

Doctrine: A banking institution serving as an originating bank for the United Home Lending Program
(UHLP) of the Government owes a duty to observe the highest degree of diligence and a high standard of
integrity and performance in all its transactions with its clients because its business is imbued with public
interest.

Facts:
Sps. Capistrano availed of the United Home Lending Program (UHLP) [implemented by the National
Home Mortgage Finance Corporation (NHMFC)] to build a house on their owned lot. They executed a
construction contract with the proprietor of GCB Builders. To finance the construction, GCB Builders
facilitated the spouses loan application with Comsavings Bank, an originating bank of the UHLP.
Comsavings Bank informed Mrs. Capistrano that she would have to sign various documents as part of the
requirements for the release of the loan, which includes a certificate of house completion and acceptance.
Later on, Comsavings informed Sps. Capistrano of the approval of an interim loan to be paid out from the
proceeds of the NHMC loan. GCB Builders received the construction cost from Comsavings in four
releases. The completion of the house was delayed that Sps. Capistrano demanded its completion. But
the proprietor of GCB told them to give additional construction cost. Later on, the spouses received letter
from NHMFC to start paying their loan that was released directly to Comsavings bank. Mrs. Capistrano
visited the construction site and found that the house was still unfinished. The spouses sent a protest
letter to NHMFC over the amortization payments considering that they had not signed any certificate of
completion and acceptance, and that even if there was such a certification of completion and acceptance,
it would have been forged. They sued GCB Builders, Comsavings Bank, and NHMFC. Comsavings bank
averred that the spouses cannot question the signing of the certificate of house acceptance/completion
since the spouses had the option not to presign the certificate and that it did not make any representation
as to the conditions and facilitation of the loan with NHMFC because such representations were normal
and regular requirements in loan processing of the conduit banks of NHMFC.

Issue:
Is Comsavings Bank solidarily liable with GCB Builders for the misrepresentation it did when it made the
spouses pre-sign the certificate of house completion and acceptance even before the construction
started?

Ruling/Ratio:
Yes, because it acted irregularly when it made Mrs. Capistrano sign the certificate when the house
construction had not yet even started.

Based on Articles 204 and 11705 of the Civil Code, a banking institution like Comsavings Bank is obliged
to exercise the highest degree of diligence as well as high standards of integrity and performance in all its
transactions because its business is imbued with public interest. The stability of banks largely depends
on the confidence of the people in the honesty and efficiency of banks.

4
Article 20. Every person who, contrary to law, willfully or negligently causes damage to another, shall indemnify the latter for
the same.
5
Article 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any
manner contravene the tenor thereof, are liable for damages.
There is no question that Comsavings Bank was grossly negligent in its dealings with respondents
because it did not comply with its legal obligation to exercise the required diligence and integrity. As a
banking institution serving as an originator under the UHLP and being the maker of the certificate of
acceptance/completion, it was fully aware that the purpose of the signed certificate was to affirm that the
house had been completely constructed according to the approved plans and specifications, and that the
spouses had thereby accepted the delivery of the completed house. Given the purpose of the certificate,
it should have desisted from presenting the certificate to Sps. Capistrano for their signature without such
conditions having been fulfilled. But it made respondents sign the certificate despite the construction of
the house not yet even starting. Its act was irregular per se because it contravened the purpose of the
certificate. The pre-signing of the certificate was even fraudulent because it was thereby enabled to gain
in the process the amount of P17,306.83 in the form of several deductions from the proceeds of the loan
on top of other benefits as an originator bank. On the other hand, the spouses were prejudiced,
considering that the construction of the house was then still incomplete and was ultimately defective.
Comsavings Bank should have been fair towards them as its clients, and therefore should not have made
them pre-sign the certificate until it had confirmed that the construction of the house had been completed.

CHANGE OF CORPORATE NAME

Zuellig Freight and Cargo Systems v. NLRC


G.R. No. 157900; July 22,2013

Doctrine: The mere change in the corporate name is not considered under the law as the creation of a
new corporation; hence, the renamed corporation remains liable for the illegal dismissal of its employee
separated under that guise.

Facts:
San Miguel filed an illegal dismissal case against his employer, Zuellig Freight and Cargo Systems, which
was formerly known as Zeta Brokerage Corporation. He had been a checker/customs representative of
Zeta since 1985. In June 1994, the employees were informed that Zeta would cease operations and that
affected employees, including him, would be separated. He was informed by Zeta of his termination,
reluctantly accepted his separation pay subject to the standing offer to be hired to his former position by
Zuellig. Then he was summarily terminated. San Miguel contended that the amendments of the articles of
incorporation of Zeta were for changing the corporate name, broadening the primary functions, and
increasing the capital stock; and that such amendments could not mean that Zeta had been thereby
dissolved.

Issue:
Was the change of name from Zeta Brokerage Corporation to Zuellig Freight and Cargo Systems a
dissolution of Zeta as a corporation tantamount to closure of business as authorized cause of dismissal
under the Labor Code?

Ruling/Ratio:
No, because Zeta and Zuellig remained to be one and the same corporation, since verily, the
amendments of the articles of incorporation of Zeta to change the corporate name to Zuellig Freight and
Cargo Systems, Inc. did not produce the dissolution of the former as a corporation.

The Corporation Code defined and delineated the different modes of dissolving a corporation, and
amendment of the articles of incorporation was not one of such modes. The effect of the change of name
was not a change of the corporate being because the changing of the name of a corporation is no more
the creation of a corporation than the changing of the name of a natural person is begetting of a natural
person. The act, in both cases is a change of name, and not a change of being.

A change in the corporate name does not make a new corporation, whether effected by a special act or
under a general law. It has no effect on the identity of the corporation, or on its property, rights, or
liabilities. The corporation, upon the change in its name, is in no sense a new corporation, nor the
successor of the original corporation. It is the same corporation with a different name, and its character is
in no respect changed.

In short, Zeta and Zuellig remained one and the same corporation. The change of name did not give
Zuellig the license to terminate employees of Zeta like San Miguel without just or authorized cause. The
situation was not like that of an enterprise buying the business of another company where the purchasing
company had no obligation to rehire terminated employees of the latter. Zuellig, despite its new name,
was the mere continuation of Zeta's corporate being, and still held the obligation to honor all of Zeta's
obligations, one of which was to respect San Miguel's security of tenure. The dismissal of San Miguel
from employment on the pretext that Zuellig, being a different corporation, had no obligation to accept him
as its employee, was illegal and ineffectual.

DOCTRINE OF SEPARATE JURIDICAL PERSONALITY

Stronghold Insurance Company v. Cuenca


G.R. No. 173297, March 6, 2013
Doctrine: The personality of a corporation is distinct and separate from the personalities of its
stockholders. Hence, its stockholders are not themselves the real parties in interest to claim and recover
compensation for the damages arising from the wrongful attachment of its assets. Only the corporation is
the real party in interest for that purpose.

Facts:
Manuel Maraon filed with the RTC a collection case with an application for issuance of writ of preliminary
attachment against the Cuencas. Maraon posted a bond issued by Stronghold Insurance. The writ of
preliminary attachment was issued and was served to the Cuencas along with the summons and
complaint. The sheriff levied upon the equipment, supplies, materials and various other personal property
belonging to Arc Cuisine, Inc. that were found in the leased corporate office-cum-commissary or kitchen
of the corporation. Later, the sheriff reported to the RTC among others that the attached properties are
seen at a bakeshop owned by Maraon. The Cuencas filed a Motion to Require Sheriff to Deliver
Attached Properties and to Set Case for Hearing, praying, among others, that Maraon should pay actual
damages for the value of the lost attached properties because they are accountable and would turn over
the amount to Art Cuisine. Maraon argued that since the attached properties belonged to Arc Cuisine,
50% of the stockholding of which the Cuencas owned, it should follow that 50% of the value of the
missing attached properties constituted liquidating dividends that should remain with and belong to him.

Issue:
Could the Cuencas themselves recover damages arising from the wrongful attachment of the assets of
Arc Cuisine Inc?

Ruling/Ratio:
No, because it is only Art Cuisine that had the right under substantive law to claim and recover such
damages, which right could not be asserted by the Cuencas unless they did so in the name of the
corporation itself.

There is no dispute that the properties subject to the levy on attachment belonged to Arc Cuisine alone,
not to the Cuencas in their own right. They were only stockholders of Arc Cuisine, Inc., which had a
personality distinct and separate from that of any or all of them. The damages occasioned to the
properties by the levy on attachment, wrongful or not, prejudiced Arc Cuisine, not them. In this case,
however, Arc Cuisine was not even joined in the action either as an original party or as an intervenor.

The Cuencas were clearly not vested with any direct interest in the personal properties coming under the
levy on attachment by virtue alone of their being stockholders in Arc Cuisine. Their stockholdings
represented only their proportionate or aliquot interest in the properties of the corporation, but did not vest
in them any legal right or title to any specific properties of the corporation. Arc Cuisine remained the
owner as a distinct legal person. Given the separate and distinct legal personality of Arc Cuisine, the
Cuencas lacked the legal personality to claim the damages sustained from the levy of the corporations
properties. Even when the foreclosure on the assets of the corporation was wrongful and done in bad
faith, the stockholders had no standing to recover for themselves moral damages; otherwise, they would
be appropriating and distributing part of the corporations assets prior to the dissolution of the corporation
and the liquidation of its debts and liabilities.

If at all, the case should have been brought by the Cuencas in behalf of the corporation, directly in the
name of Arc Cuisine Inc.

TRADEMARKS; TEST TO DETERMINE CONFUSING SIMILARITY; HOLISTIC TEST

Diaz v. People of the Philippines


G.R. No. 180677, February 18, 2013

Doctrine: It is the tendency of the allegedly infringing mark to be confused with the registered trademark
that is the gravamen of the offense of infringement of a registered trademark. The acquittal of the
accused should follow if the allegedly infringing mark is not likely to cause confusion.

Facts:
The DOJ filed two informations in the RTC, charging Victorio Diaz with violation of Sec. 155, in relation to
Sec. 170 of the IP Code, alleging that Diaz was engaged in counterfeiting and colorably imitating Levis
registered trademarks or dominant features thereof such as the:

1. leather patch showing two horses pulling a pair of pants

2. the arcuate pattern with the inscription LEVI STRAUSS & CO


3. the arcuate design that refers to the two parallel stitching curving downward that are being sewn
on both back pockets of a Levis Jeans

4. the tab or piece of cloth located on the structural seam of the right back pocket, upper left side.

Diaz allegedly sold and distributed such counterfeit patches and imitations of LEVIS 501 in his tailoring
shops. All these Levis trademarks were registered in the Philippine Patent Office in the 1970s, 1980s
and early 1990s. The NBI were able to seize several fake LEVIS 501 jeans from Diaz.

Diaz argued that he used the label LS Jeans Tailoring (which was registered with the IPO) in the jeans
he made and sold. He added that the jeans were easily recognizable because the label LS Jeans
Tailoring and the names of customers were placed inside the pockets, and each of the jeans had an
LSJT red tab. LS stood for Latest Style and that the leather patch on his jeans had two buffaloes, not
two horses.

Issue:
Did Diaz commit trademark infringement?
Ruling/Ratio:

No, because applying the holistic test, the two marks are not confusingly similar.

The likelihood of confusion is the gravamen of the offense of trademark infringement. The holistic test 6 is
applicable in the case considering that the criminal cases also involved trademark infringement in relation
to jeans products. Accordingly, the jeans trademarks of Levis Philippines and Diaz must be considered
as a whole in determining the likelihood of confusion between them.

The maong pants or jeans made and sold by Levis Phils., which included LEVIS 501, were very popular
in the Philippines. The consuming public knew that the original LEVIS 501 jeans were under a foreign
brand and quite expensive. Such jeans could be purchased only in malls or boutiques as ready-to-wear
items, and were not available in tailoring shops like those of Diazs as well as not acquired on a made-to-
order basis. Confusion and deception were remote. These are not your ordinary household items like
catsup, soy sauce or soap which are of minimal cost. Maong pants or jeans are not inexpensive.
Accordingly, the casual buyer is predisposed to be more cautious and discriminating in and would prefer
to mull over his purchase.

Levis Petitioner
Trademark LEVI STRAUSS & CO LS JEANS TAILORING
The word LS cannot be confused as a
derivative from LEVI STRAUSS by virtue of the
LS being connected to the word TAILORING,
thereby openly suggesting that the jeans
bearing the trademark LS JEANS TAILORING
came or were bought from the tailoring shops of
Diaz, not from malls or boutiques selling original
LEVIS 501 jeans
Design Two horse design Buffalo design
A horse and a buffalo are two different animals
which an ordinary customer can easily
distinguish
Red tab Indicates the word LEVIS Indicates the letters LSJT
Classes of Customers: mall goers Customers: class D and E market who can only afford
customers belonging to class A and B P300 for a pair of made-to-order pants
and channels market group
of trade

DOCTRINE OF PIERCING THE CORPORATE VEIL

Gold Line Tours Inc. v. Heirs of Lacsa


G.R. No. 159108, June 18, 2012

Doctrine: The veil of corporate existence of a corporation is a fiction of law that should not defeat the
ends of justice. Whenever necessary for the interest of the public or for the protection of enforcement of
their rights, the notion of legal entity should not and is not to be used to defeat public convenience, justify
wrong, protect fraud or defend crime.

Facts:
Concepcion and Miriam Lacsa (sisters) boarded a Goldline passenger bus, driven by Rene Abania, and
owned and operated by Travel & Tours Advisers Inc. enroute from Sorsogon to Cubao. The bus collided

6
The holistic test considers the entirety of the marks, including labels and packaging, in determining confusing similarity. The
focus is not only on the predominant words but also on the other features appearing on the labels.
with a passenger jeepney coming from the opposite direction. A metal part of the jeepney was detached
and struck Concepcion in the chest, causing her instant death. Concepcions heirs filed a case for
damages against Travel & Tours and Abania. Eventually, the case was decided in favor of Concepcions
heirs and a tourist bus was levied. Gold Line Tours submitted a third-party claim asking the return of the
levied bus claiming that it was the owner of said bus, that Gold Line was not a party to the Concepcions
heirs case, and that it was a corporation entirely different from Travel & Tours. It was notable though that
Gold Lines Articles of Incorporation was amended shortly after Concepcions heirs filed the case against
Travel & Tours.

Issue:
Should the veil of corporate existence be pierced in this case considering that William Ching, the owner-
operator of Travel & Tours is also the President/Manager and incorporator of Gold Line Tours that claims
to be the owner of the levied bus?

Ruling/Ratio:
Yes, because the notion that a corporation has an existence separate and/or distinct from its members is
not applicable insofar as this case is concerned, because whenever necessary for the interest of the
public or for the protection of enforcement of their rights, the notion of legal entity should not and is not to
be used to defeat public convenience, justify wrong, protect fraud or defend crime.

Where the main purpose in forming the corporation was to evade ones subsidiary liability for damages in
a criminal case, the corporation may not be heard to say that it has a personality separate and distinct
from its members, because to allow it to do so would be to sanction the use of fiction of corporate entity
as a shield to further an end subversive of justice. Gold Line might not be shielded from liability under
the final judgment using the doctrine of separate corporate identity. Truly, this fiction of law could not be
employed to defeat the ends of justice.
REMEDIAL LAW
RULES OF PROCEDURE IN ARBITRATION; MODE OF APPEAL

Andrew Fyfe et al vs. Philippine Airlines, Inc


G.R. No. 160071, June 6, 2016

Doctrine: The Special Rules of Court on Alternative Dispute Resolution provides that the appropriate
remedy from an order of the RTC vacating a domestic arbitral award is an appeal by petition for review in
the CA under Rule 45, not an ordinary appeal under Rule 41 of the Rules of Court.

Facts:
The Respondent underwent rehabilitation proceedings, which resulted in the suspension of all claims for
payment against it. To convince its creditors to approve the rehabilitation plan, the respondent decided to
hire technical advisers. Respondent and Regent Star entered into a Technical Services Agreement (TSA)
for the delivery of technical and advisory or management services. Petitioners were hired by Regent Star
Services Ltd., who rendered their services to the respondent immediately after the TSA was executed.
The respondent, however, sent a notice terminating the TSA on the ground of lack of confidence.
Petitioners wrote to the respondent to seek clarification on the status of the TSA, but was unheeded.
Thereafter, the petitioners initiated arbitration proceedings in the Philippine Dispute Resolution Center,
Inc. (PDRCI) pursuant to the TSA.

The PDRCI ordered the respondent to pay termination penalties. The respondent filed an Application to
Vacate Arbitral Award before the RTC, which was granted. The RTC stressed that PAL is under
receivership and the SECs order to suspend all claims for payment against PAL effectively deprived all
other tribunals of jurisdiction to hear and decide all actions for claims against PAL for the duration of the
receivership. Petitioners then appealed to the CA by notice of appeal. The CA dismissed the petitioners
appeal stating that that the appropriate remedy against the order of the RTC vacating the award was a
petition for review on certiorari under Rule 45.

Issue/s:
1. Whether the CA erred in dismissing the appeal of the petitioners for being an inappropriate remedy.
2. Whether the Panel of Arbitrators had jurisdiction to hear and decide the petitioners' claim.

Ruling/Ratio:
1. No, Section 29 of the Arbitration Law has limited the ground of review to "questions of law."
Accordingly, the CA correctly dismissed the appeal of the petitioners because pursuant to Section 2,
Rule 41 of the Rules of Court an appeal of questions of law arising in the courts in the first instance is
by petition for review on certiorari under Rule 45.

It is noted, however, that since the promulgation of the assailed decision by the CA on May 30, 2003,
the law on the matter underwent changes. On February 4, 2004. Republic Act No. 9285 (Alternative
Dispute Resolution Act of 2004) was passed by Congress, and was approved by the President on
April 2, 2004. Pursuant to Republic Act No. 9285, the Court promulgated on September 1, 2009 in
A.M. No. 07-11-08-SC the Special Rules of Court on Alternative Dispute Resolution, which are now
the present rules of procedure governing arbitration. Among others, the Special Rules of Court on
Alternative Dispute Resolution requires an appeal by petition for review to the CA of the final order of
the RTC confirming, vacating, correcting or modifying a domestic arbitral award.

Although the Special Rules of Court on Alternative Dispute Resolution provides that the appropriate
remedy from an order of the RTC vacating a domestic arbitral award is an appeal by petition for
review in the CA under Rule 45, not an ordinary appeal under Rule 41 of the Rules of Court, the
Court cannot set aside and reverse the assailed decision on that basis because the decision was in
full accord with the law or rule in force at the time of its promulgation.
2. No, the lower courts correctly opined that the SEC's suspension order effective July 1, 1998 deprived
the arbitration panel of the jurisdiction to hear any claims against the respondent. Jurisprudence is
settled that the suspension of proceedings referred to in the law uniformly applies to all actions for
claims filed against a corporation, partnership or association under management or receivership,
without distinction, except only those expenses incurred in the ordinary course of business.

ANNULMENT OF JUDGMENT BASED ON COMPROMISE AGREEMENT

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

Doctrine: A compromise agreement has the effect and authority of res judicata between the parties, and
is immediately final and executory, unless rescinded upon grounds that vitiate consent. Once stamped
with judicial imprimatur, it is more than a mere contract between the parties. Any effort to annul the
judgment based on compromise on the ground of extrinsic fraud must proceed in accordance with Rule
47 of the Rules of Court.

Facts:
Petitioners, filed a complaint to recover from the respondent a sum of money and damages (with prayer
for a writ of attachment). The suit involved the contract to sell, whereby the respondent, as the vendor,
undertook to deliver to the petitioners, as the vendees, shares of stock worth P10,606,266.00 in Island
Information and Technology, Inc. The petitioners alleged that the respondent failed to deliver the shares
of stock corresponding to the agreed amount on the date fixed by the contract. Later on, the parties filed
their Joint Motion for Approval of a Compromise Agreement. The compromise agreement stipulated that
the parties agreed to settle their respective claims and counterclaims in the amount of $250,000.00.

The respondent did not pay the second installment despite demand. Instead, he filed in the CA a petition
for annulment of judgment, seeking to nullify the order granting the application for the writ of attachment,
and the order approving the compromise agreement. Meanwhile, the petitioners sought the execution of
the judgment upon the compromise agreement on the ground of the respondent's failure to pay the
second installment.

Issue/s:
Whether the judicial compromise agreement could no longer be assailed through certiorari because the
lapse of time between the approval of the compromise agreement on October 20, 2003 and the filing of
the petition for certiorari on March 7, 2005 had rendered the compromise agreement conclusive and
immutable

Ruling/Ratio:
Yes, a compromise agreement is a contract whereby the parties make reciprocal concessions to avoid
litigation or to put an end to one already commenced. It attains the authority and effect of res
judicata upon the parties upon its execution, and becomes immediately final and executory, unless
rescinded by grounds which vitiate consent. Once stamped with judicial imprimatur, it ceases to be a
mere contract between the parties, and becomes a judgment of the court, to be enforced through writ of
execution.

The action before the CA was a special civil action for certiorari that had been brought on March 7, 2005,
which was way beyond the period of 60 days from the rendition of the judgment based on the
compromise agreement on October 20, 2003. Moreover, the grounds relied upon by the respondent in his
petition for certiorari that the RTC had committed grave abuse of discretion tantamount to excess or lack
of jurisdiction for issuing the writ of execution that was patently unjust, one-side, unfair, fraudulent and
unconscionable compromise agreement; and for issuing the writ of execution of the compromise
agreement that lacked consideration - were not proper grounds for assailing the judgment based on the
compromise agreement.
Also, if the ground of the respondent to assail the judgment based on the compromise agreement was
extrinsic fraud, his action should be brought under Rule 47. The remedy under Rule 47 is to be availed of
only if the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies are no
longer available through no fault of the petitioner. The respondent could have availed himself of the
petition for relief from judgment under Rule 38. Hence, his failure to resort to such remedy precluded him
from availing himself of the remedy to annul the judgment based on the compromise agreement.

JUDGMENT ON THE PLEADINGS

Fernando Medical Enterprises Inc. vs. Wesleyan University Philippines


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

Doctrine: The trial court may render a judgment on the pleadings upon motion of the claiming party when
the defending party's answer fails to tender an issue, or otherwise admits the material allegations of the
adverse party's pleading. For that purpose, only the pleadings of the parties in the action are considered.
It is error for the trial court to deny the motion for judgment on the pleadings because the defending
party's pleading in another case supposedly tendered an issue of fact.

Facts:
Petitioner entered into several contracts with respondent to deliver and to install medical equipment and
supplies at the respondents hospital. According to the petitioner, the respondent left unpaid the sum of
P54,654,195.54. Later on, the parties entered into an agreement whereby the petitioner reduced its claim
to only P50,400,000.00, and allowed the respondent to pay the adjusted obligation on installment basis
within 36 months. However, the respondents new administration refused to pay the balance, claiming
that the contracts were defective and rescissible due to economic prejudice or lesion. Due to the
respondents failure to pay as demanded, the petitioner filed its complaint for sum of money.

The petitioner filed its Motion for Judgment Based on the Pleadings, stating that the respondent had
admitted the material allegations of its complaint and thus did not tender any issue as to such allegations.
The lower courts denied the petitioners motion, stating that a judgment on the pleadings would be
improper because the outstanding balance due to the petitioner remained to be an issue in the face of the
allegations of the respondent in its complaint for rescission.

Issue/s:
Whether the CA erred in denying the petitioners motion for judgment on the pleadings

Ruling/Ratio:
Yes, the essential query in resolving a motion for judgment on the pleadings is whether or not there are
issues of fact generated by the pleadings. Section 10, Rule 8 of the Rules of Court recognizes only three
modes by which the denial in the answer raises an issue of fact. The first is by the defending party
specifying each material allegation of fact the truth of which he does not admit and, whenever practicable,
setting forth the substance of the matters upon which he relies to support his denial. The second applies
to the defending party who desires to deny only a part of an averment, and the denial is done by the
defending party specifying so much of the material allegation of ultimate facts as is true and material and
denying only the remainder. The third is done by the defending party who is without knowledge or
information sufficient to form a belief as to the truth of a material averment made in the complaint by
stating so in the answer. Any material averment in the complaint not so specifically denied are deemed
admitted except an averment of the amount of unliquidated damages.

Here, the respondent expressly admitted paragraphs related to the petitioners allegations on: (a) the four
transactions for the delivery and installation of various hospital equipment; (b) the total liability of the
respondent; (c) the payments made by the respondents; (d) the balance still due to the petitioner; and (e)
the execution of agreement. With the consequent admission engendered by petitioners failure to properly
deny the Acknowledgment in their Answer, coupled with its proper authentication, identification and offer
by the respondent, not to mention petitioners admissions in paragraphs 4 to 6 of their Answer that they
are indeed indebted to respondent, the Court believes that judgment may be had solely on the document,
and there is no need to present receipts and other documents to prove the claimed indebtedness.

PRELIMINARY INJUNCTION

The City of Iloilo, represented by Hon. Mayor Jerry Treas vs. Hon. Judge Rene Honrado,
Presiding
Judge of RTC Branch 29 Iloilo City and JPV Motor Vehicle Emission Testing and Car Care Center
December 9, 2015, G.R. No. 160399

Doctrine: The essential office of preliminary injunction is to preserve the rights of the parties before the
final adjudication of the issues. Where injunction is the main relief sought in the action, therefore, the trial
court should desist from granting the plaintiff's application for temporary restraining order or writ of
preliminary injunction if such grant would tend to prejudge the case on the merits. The preliminary
injunction should not determine the merits of the case, or decide controverted facts, but should still look to
a future final hearing.

Facts:
The Department of Transportation and Communications (DOTC) issued Department Order No. 2002-31
(with the subject "AUTHORIZATION OF PRIVATE EMISSION TESTING CENTERS"). Item No. 2 of
Department Order No. 2002-31 stated: one (1) Private Emission Testing Center (PETC) lane shall be
authorized for every 15,000 registered vehicles in an LTO Registering District.

JPV Motor Vehicle Emission Testing and Car Care Center (JPV), a partnership authorized to operate a
PETC in Iloilo City, was granted a capacity of four lanes that could cater to 15,000 motor vehicles per
lane for the total capacity of 60,000 motor vehicles. At the time JPV filed a civil complaint to prevent the
petitioner from acting on the pending application for the operation of another PETC in Iloilo City because
it already had the capability to serve all the registered motor vehicles in Iloilo City pursuant to Department
Order No. 2002-31. The RTC granted JPVs application for the writ of preliminary injunction. Hence,
petitioner challenged the RTCs decision directly before this Court on certiorari.

Issue/s:
Whether the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction in
ordering petitioner City Mayor of Iloilo and his representatives to desist from issuing a mayors permit to
operate a PETC in the city.

Ruling/Ratio:
Yes, a preliminary injunction is an order granted at any stage of an action or proceeding prior to the
judgment or final order requiring a party or a court, an agency, or a person to refrain from a particular act
or acts. Its essential role is preservative of the rights of the parties in order to protect the ability of the
court to render a meaningful decision, or in order to guard against a change of circumstances that will
hamper or prevent the granting of the proper relief after the trial on the merits. Another essential role is
preventive of the threats to cause irreparable harm or injury to a party before the litigation could be
resolved.

Section 3, Rule 58 of the Rules of Court set the guidelines for when the issuance of a writ of preliminary
injunction is justified, namely: (a) when the applicant is entitled to the relief demanded, and the whole or
part of such relief consists in 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; or (b) when 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) when a party, court, agency or a person is doing,
threatening, or is attempting to do, or is procuring or suffering to be done, some act or acts probably in
violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to
render the judgment ineffectual.
The prevailing rule is that courts should avoid issuing a writ of preliminary injunction which would in effect
dispose of the main case without trial. The granting of JPV's application already amounted to the virtual
acceptance of JPV's alleged entitlement to preventing the petitioner from considering and passing upon
the applications of other parties to operate their own PETC in Iloilo City based on JPV's still controversial
capability to serve all the registered motor vehicles in Iloilo City pursuant to Department Order No. 2002-
31. The granting amounted to the prejudgment of the merits of the case, something the RTC could not
validly do.

For a petition for certiorari and prohibition to prosper and be given due course, it must be shown that: (a)
the respondent judge or tribunal issued the order without or in excess of jurisdiction or with grave abuse
of discretion; or (b) the assailed interlocutory order is patently erroneous, and the remedy of appeal
cannot afford adequate and expeditious relief. Yet, the allegation that the 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 will not alone suffice. Equally imperative is that the petition must satisfactorily
specify the acts committed or omitted by the tribunal, board or officer that constitute grave abuse of
discretion.

APPEAL FROM FINAL ORDERS OF VOLUNTARY ARBITRATOR

Rogelio Baronda vs. Court of Appeals


G.R. No. 161006, October 14, 2015

Doctrine: The order issued by the Voluntary Arbitrator is a final order, as contrasted from a merely
interlocutory order, because its issuance left nothing more to be done or taken by the Voluntary Arbitrator
in the case. The proper remedy from such order was to appeal to the CA by petition for review under Rule
43 of the Rules of Court.

Facts:
Private respondent Hideco Sugar Milling Co., Inc. (HIDECO) employed the petitioner as a mud press
truck driver. Petitioner hit HIDECO's transmission lines while operating a dump truck, causing a total
factory blackout. Power was eventually restored but the restoration cost HIDECO damages totaling
P26,481.11. Petitioner was eventually dismissed by HIDECO on the ground of gross negligence. He filed
in the Office of the Voluntary Arbitrator of the National Conciliation and Mediation Board in Tacloban City
a complaint for illegal dismissal against HIDECO. Voluntary Arbitrator Antonio C. Lopez, Jr. handled the
case and eventually rendered his decision finding the petitioner's dismissal illegal, and ordering his
reinstatement. Hence, HIDECO reinstated the petitioner.

Petitioner filed his manifestation with motion for the issuance of the writ of execution in the Office of the
Voluntary Arbitrator, praying for the execution of the decision, and insisting on being entitled to
backwages, unpaid wages, 13th month pay and bonuses from January 16, 2001, the date when his
reinstatement was effected, until his actual reinstatement. HIDECO opposed because the items prayed
for are not included in the dispositive portion of the decision of the voluntary arbitrator, neither are the
said items mentioned in any part of the same decision.

The Voluntary Arbitrator granted the petitioner's motion for execution. Having received a copy of the
order, HIDECO instituted a special civil action for certiorari in the CA. the CA considered the petition for
certiorari filed by private respondent as one filed under Rule 43 and ruled in favor of HIDECO. It held that
the voluntary arbitrator had issued the writ of execution despite his decision lacking such award for
backwages and other benefits.

Issue/s:
1. Whether the CA erred in granting HIDECO's petition for certiorari.
2. Whether the reinstatement aspect of the Voluntary Arbitrator's decision was executory pending
appeal.
Ruling/Ratio:
1. Yes, the order issued by the Voluntary Arbitrator was a final order, as contrasted from a merely
interlocutory order, because its issuance left nothing more to be done or taken by the Voluntary
Arbitrator in the case. It thus completely disposed of what the reinstatement of the petitioner as
ordered by the Voluntary Arbitrator.

The proper remedy from such order was to appeal to the CA by petition for review under Rule 43 of
the Rules of Court. Yet, HIDECO filed the petition for certiorari, and the CA liberally treated the
petition for certiorari as a petition for review under Rule 43. Such treatment by the CA was
procedurally unwarranted.

2. Yes, although the timely filing of a motion for reconsideration or of an appeal forestalls the finality of
the decision or award of the Voluntary Arbitrator, the reinstatement aspect of the Voluntary
Arbitrator's decision or award remains executory regardless of the filing of such motion for
reconsideration or appeal.
The immediate reinstatement of the employee pending the appeal has been introduced by Section 12
of Republic Act No. 6715, which amended Article 223 of the Labor Code.

WRIT OF EXECUTION

National Housing Authority vs. Ernesto Roxas


G.R. No. 171953, October 21, 2015

Doctrine: No court should issue a writ of execution upon any monetary judgment rendered against the
NHA unless such monetary judgment is first submitted to and passed upon by the Commission on Audit
(COA).

Facts:
The NHA is charged with the development of the Dagat-dagatan Development Project (project) in
Navotas. Roxas applied for commercial lots in the project for the use of his business of buying and selling
gravel, sand and cement products. The NHA approved his application and the notice of award for the lots
in favor of Roxas. Roxas completed his payment for the subject lots. The NHA informed Roxas about the
increase in the area of the subject lots, and approved the award of the additional area of 144 square
meters to him at P3,500.00/square meter. Although manifesting his interest in acquiring the additional
area, he appealed for the reduction of the price to P1,500.00/square meter. The NHA rejected his appeal
so he commenced in the RTC this action for specific performance and damages, with prayer for the
issuance of a writ of preliminary injunction.

The RTC and CA ruled in favor of Roxas. NHA sought to undo the adverse decision of the CA through its
petition for certiorari. However, this Court dismissed the petition for certiorari.

Subsequently, Roxas filed his motion for the issuance of the writ of execution, which the RTC granted. In
order to prevent the execution, the NHA brought another petition for certiorari in the CA. The CA
dismissed the NHA's petition for certiorari through the presently assailed decision because it found that
the RTC did not gravely abuse its discretion amounting to lack or excess of jurisdiction in granting Roxas'
motion for the issuance of the writ of execution.

Issue/s:
Whether the money judgment awarded to Roxas could not be recovered by motion for execution but
should have been first filed in the COA.
Ruling/Ratio:
Yes, section 26 of Presidential Decree No. 1445, specifically vested in the COA the power, authority and
duty to examine, audit and settle "all debts and claims of any sort" due from or owing to the Government,
or any of its subdivisions, agencies, or instrumentalities, including government-owned and controlled
corporations with original charters. Government funds and property may not be seized pursuant to writs of
execution or writs of garnishment to satisfy judgments. The functions and public services of the State
cannot be allowed to be paralyzed or disrupted by the diversion of public fund from their legitimate and
specific objects, and as appropriated by law. The rule is based on obvious considerations of public policy.

WARRANT OF ARREST; PROBABLE CAUSE

Mayor Anwar Berua vs. Court of Appeals


G.R. No. 177600, October 19, 2015

Doctrine: The issuance by the trial court of the warrant of arrest upon filing of the information and
supporting papers implies the determination of probable cause for the offense charged. It is then
superfluous for the accused to seek the judicial determination of probable cause on the pretext that the
trial court should still act and proceed independently of the executive determination of probable cause to
charge the proper offense.

Facts:
A shooting incident took place in Lanao del Sur that resulted in the death of Dante Limbona and Ante
Maguindanao, and the serious wounding of Azis Panda and Kiri Hadji Salik. In the course of the
preliminary investigation the investigating prosecutor found probable cause to charge private respondents
with Double Murder with Multiple Frustrated Murder. However, after reinvestigation ordered by the trial
court, the Office of the Provincial Prosecutor downgraded the charges against private respondents.
Private complainant Zenaida Limbona, the widow of the victim Limbona, filed a petition for review
questioning the Provincial Prosecutor's Resolution before the DOJ. Then Secretary Serafin Cuevas
modified the assailed resolution and directed the Provincial Prosecutor to file instead "two (2) informations
for frustrated murder with attempted murder, two (2) informations for frustrated murder and an information
for attempted murder" against private respondents.

Later, the criminal cases were re-raffled to the RTC of Quezon City, which found probable cause to
charge private respondents for Murder with Attempted Murder in Criminal Case No. Q-01-998992-
93, Frustrated Murder in Criminal Case No. Q-01-100542-43, and Attempted Murder in Criminal Case No.
Q-01-100594. The warrants of arrest were accordingly issued against private respondents, who,
undaunted, went up to the Supreme Court to question the Decision of the Court of Appeals by way of a
petition for review on certiorari docketed as G.R. No. 159962. The SC denied the petition on June 2006
and held that "there is no longer any obstacle to the implementation of the existing warrants of arrest.

Nonetheless, private respondents then filed before RTC-Branch 83 a Motion to Re-Determine the
Existence or Non-Existence of Probable Cause Which May Even Warrant Dismissal - Even of the
Appropriate Charges of Homicide, Frustrated and Attempted Homicides. Respondent Judge Lee issued
the assailed Order granting private respondents' motion for redetermination of probable cause and
consequently ordering the downgrading of the crimes charged. The cases were then re-raffled to RTC-
Branch 77, presided by respondent Judge Vivencio S. Baclig, who then issued the second
assailed Order denying a Motion for Reconsideration of the 12 May 2006 Order issued by respondent
Judge Lee.

Aggrieved by the orders of Judge Ralph S. Lee and Judge Vivencio S. Baclig, the State, through the
Office of Solicitor General, commenced a special civil action for certiorari in the CA. The CA declared the
assailed orders of Judge Lee and Judge Baclig to be in clear defiance of this Court's June decision in
G.R. No. 159962.
Issue/s:
Whether the respondents were precluded from still seeking from the RTC the judicial determination of
probable cause against them because all that the Court had upheld in G.R. No. 159962 was only the
executive determination of probable cause.

Ruling/Ratio:
Yes, rule 112 of the Rules of Court provides:

Sec. 6. When warrant of arrest may issue. (a) By the Regional Trial Court. Within ten (10) days from
the filing of the complaint or information, the judge shall personally evaluate the resolution of the
prosecutor and its supporting evidence. He may immediately dismiss the case if the evidence on record
clearly fails to establish probable cause. If he finds probable cause, he shall issue a warrant of arrest,
or a commitment order if the accused has already been arrested pursuant to a warrant issued by the
judge who conducted the preliminary investigation when the complaint or information was filed pursuant
to section 7 of this Rule. In case of doubt on the existence of probable cause, the judge may order the
prosecutor to present additional evidence within five (5) days from notice and the issue must be resolved
by the court within thirty (30) days from the filing of the complaint or information.

The trial judge, by issuing the warrants of arrest, already found the existence of probable cause against
Balindong, et al. Indeed, the act of issuing the warrant of arrest upon filing of the information and
supporting papers implied that the judge has determined the existence of probable cause for the offenses
charged. It is then superfluous for the accused to seek the judicial determination of probable cause on the
pretext that the trial court should still act and proceed independently of the executive determination of
probable cause to charge the proper offense.

Balindong, et al. could not reasonably support their position that they could still have the trial court
determine the existence of probable cause in their criminal cases independently of the executive
determination of probable cause by the DOJ by relying on Section 14, Rule 110, in relation to Section 19,
Rule 119, both of the Rules of Court. Section 14 applies only to a situation in which there has been a
mistake on the part of public prosecutor in charging the proper offense. Here, there was no mistake in
charging the proper offenses.

SPECIAL PROCEEDINGS; INTERVENTION; APPEAL

Nilo Chiongian vs. Victoria Benitez-Lirio et al


G.R. No. 162692, August 26, 2015

Doctrine: Under Section 3 of Rule 41, a party who wants to appeal a judgment or final order in special
proceedings has 30 days from notice of the judgment or final order within which to perfect an appeal
because he will be filing not only a notice of appeal but also a record on appeal that will require the
approval of the trial court with notice to the adverse party. Failure to perfect the appeal within the
prescribed time rendered the judgment final and beyond review on appeal.

Facts:
The late Vicente Benitez was married to Isabel Chipongian, the petitioner's sister. Isabel had
predeceased Vicente. After the death of Isabel, Vicente and the petitioner had executed a deed of
extrajudicial settlement respecting the estate of Isabel, whereby the latter waived all his rights to the
estate of Isabel in favor of Vicente. According to the petitioner, however, Vicente executed an affidavit on
the same date whereby he affirmed that the waiver did not extend to the paraphernal properties of Isabel.

Upon the death of Vicente, Victoria, a sister of Vicente, and Feodor, a nephew of Vicente, initiated
proceedings for the settlement of the estate of Vicente. The petitioner intervened in the Special
Proceeding. He sought to exclude the paraphernal properties of Isabel from inclusion in the estate of
Vicente based on the affidavit of Vicente. The petitioner specifically moved for the exclusion of the
paraphernal properties of Isabel from Vicente's estate. However, he withdrew the motion even before the
RTC could rule on it. Instead, he filed a Motion for Leave to Intervene and to Admit Complaint-in-
Intervention. The RTC Dismissed the complaint.

The petitioner then instituted a petition for certiorari in the CA, alleging that the RTC had committed grave
abuse of discretion amounting to lack or excess of jurisdiction in dismissing his appeal on the ground that
it had been filed beyond the reglementary period. The CA dismissed the petition for certiorari.

Issue/s:
Whether the CA gravely abused its discretion in dismissing his petition for certiorari

Ruling/Ratio:
No, intervention is a remedy by which a third party, not originally impleaded in the proceedings, becomes
a litigant therein to enable him, her or it to protect or preserve a right or interest which may be affected by
such proceedings. If an intervention makes a third party a litigant in the main proceedings, his pleading-
in-intervention should form part of the main case. Accordingly, when the petitioner intervened in Special
Proceedings No. SP-797, his complaint-in-intervention, once admitted by the RTC, became part of the
main case, rendering any final disposition thereof subject to the rules specifically applicable to special
proceedings, including Rule 109 of the Rules of Court, which deals with appeals in special proceedings.

Section 1 of Rule 41 enunciates the final judgment rule by providing that 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 appealable." The dismissal of the petitioner's intervention constituted "a
final determination in the lower court of the rights of the party appealing," that is, his right in the
paraphernal properties of his deceased sister.

Under Section 3 of Rule 41, a party who wants to appeal a judgment or final order in special proceedings
has 30 days from notice of the judgment or final order within which to perfect an appeal because he will
be filing not only a notice of appeal but also a record on appeal that will require the approval of the trial
court with notice to the adverse party. For the petitioner, therefore, the period for perfecting the appeal by
record on appeal was 30 days from notice of the final order dismissing the intervention. The start of the
period of 30 days happened on September 18, 1998, the date when his counsel received the decision
dismissing his intervention. However, the entire time from the filing of his Motion for Reconsideration on
October 2, 1998 until his receipt of the denial of the Motion for Reconsideration on March 18, 1999 should
be deducted from the reckoning of the period to perfect his appeal. He filed the notice of appeal on March
19, 1999, and paid the appellate court docket fees on March 31, 1999.

Considering that the petitioner did not submit a record on appeal in accordance with Section 3 of Rule 41,
he did not perfect his appeal of the judgment dismissing his intervention. As a result, the dismissal
became final and immutable. The right to appeal, being statutory in nature, required strict compliance with
the rules regulating the exercise of the right. As such, his perfection of his appeal within the prescribed
period was mandatory and jurisdictional, and his failure to perfect the appeal within the prescribed time
rendered the judgment final and beyond review on appeal.

CONTENTS OF PETITION; EFFECT OF NON-COMPLIANCE

Charlie Te vs. Hon. Augusto Breva


G.R. No. 164974, August 5, 2015

Doctrine: If the search warrant had been issued in the name of the People of the Philippines, that fact
rendered the People of the Philippines to be indispensable parties in the special civil action for certiorari.
Hence, the petition must be dismissed for failure to implead the People of the Philippines as respondents.

Facts:
Respondent Presiding Judge issued a search warrant against the petitioner on the basis of his finding of
probable cause for a violation of Section 2(b) of Batas Pambansa Blg. 33, as amended by Presidential
Decree No. 1865, for hoarding large quantities of liquefied petroleum gas (LPG) in steel cylinders
belonging to respondent Pryce Gases, Inc. The petitioner presented his Omnibus Motion to Quash
Warrant and/or Suppress Evidence and to Order Return of Seized Items, raising therein the lack of
probable cause, failure to specify the single offense committed, illegality of the nighttime search, improper
application of the plain view doctrine, and inclusion of other offenses.

Respondent Presiding Judge denied the petitioner's motion by observing that he had issued the search
warrant for one specific offense; that there was probable cause to issue the search warrant; that the
search began late in the day and continued into the night, but the actual seizure was carried out in the
daytime of the next day; and that the seizure of the blue cylinders with the markings and logo of Pryce
Gases was justified under the plain view doctrine because they were found among the large stockpile of
cylinders in the petitioner's warehouse.

The petitioner assailed the order on certiorari, but the CA dismissed the petition for failure to implead the
People of the Philippines as respondents, and for lack of any showing that a copy of the petition had been
served on the OSG.

Issue/s:
Whether the failure to implead the People of the Philippines as an indispensable party is a fatal defect

Ruling/Ratio:
Yes, impleading the People of the Philippines in the petition for certiorari did not depend on whether or
not an actual criminal action had already been commenced in court against the petitioner. It cannot be
denied that the search warrant in question had been issued in the name of the People of the Philippines,
and that fact rendered the People of the Philippines indispensable parties in the special civil action
for certiorari brought to nullify the questioned orders of respondent Presiding Judge. We also note that the
impleading is further expressly demanded in Section 3, Rule 46 of the Rules of Court:

Section 3. Contents and filing of petition; effect of non-compliance with requirements. - The petition shall
contain the full names and actual addresses of all the petitioners and respondents. a concise statement of
the matters involved. the factual background of the case, and the grounds relied upon for the relief prayed
for. x x x The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient
ground for the dismissal of the petition.

The petitioner could have quickly rectified his omission by the immediate amendment of the petition.
However, although made aware of the omission as a fatal defect, he did not cause the amendment but
continued to ignore the need to amend.

ANNULMENT OF JUDGMENT; JURISDICTION

Berlinda Oribello vs. Court of Appeals and Remedios Oribello


August 5, 2015, G.R. No. 163504

Doctrine: No court has the authority to nullify the judgments or processes of another court of equal rank
and category, having the equal power to grant the reliefs sought. Such power devolves exclusively upon
the proper appellate court. The reason for the rule is to avoid conflict of power between different courts of
equal or coordinate jurisdiction which would surely lead to confusion and seriously hinder the proper
administration of justice.

Facts:
Toribio was twice married. Toribio's marriage to his first wife was dissolved. He subsequently married
appellee in La Union. Toribio died intestate. Remedios Oribello, represented by her natural father Alfredo
Selga filed an action against appellee for partition and damages involving several parcels of land, which
were under Toribios name. the action was anchored on the theory that appellant is an adopted daughter
of Toribio per a decision of the CFI. Denying that appellant is an adopted daughter of Toribio, appellee
averred in her answer that the decree of adoption was fraudulently secured by Alfredo.

Issue/s:
Whether the validity of the adoption decree in favor of the respondent should NOT be assailed in an
action for partition

Ruling/Ratio:
Yes, a petition for annulment of judgment is a remedy in equity so exceptional in nature that it may be
availed of only when other remedies are wanting, and only if the judgment, final order or final resolution
sought to be annulled was rendered by a court lacking jurisdiction or through extrinsic fraud. Yet, the
remedy, being exceptional in character, is not allowed to be so easily and readily abused by parties
aggrieved by the final judgments, orders or resolutions. The Court has thus instituted safeguards by
limiting the grounds for the annulment to lack of jurisdiction and extrinsic fraud, and by prescribing in
Section 1 of Rule 47 of the Rules of Court that the petitioner should show that the ordinary remedies of
new trial, appeal, petition for relief or other appropriate remedies are no longer available through no fault
of the petitioner.

The attitude of judicial reluctance towards the annulment of a judgment, final order or final resolution is
understandable, for the remedy disregards the time-honored doctrine of immutability and unalterability of
final judgments, a solid corner stone in the dispensation of justice by the courts. The doctrine of
immutability and unalterability serves a two-fold purpose, namely: (a) to avoid delay in the administration
of justice and thus, procedurally, to make orderly the discharge of judicial business; and (b) to put an end
to judicial controversies, at the risk of occasional errors, which is precisely why the courts exist.

Based on the foregoing, the RTC did not have the jurisdiction to determine or to review the validity of the
decree of adoption issued by the CFI of Occidental Mindoro by virtue of the equal rank and category
between the RTC and the CFI. Indeed, no court has the authority to nullify the judgments or processes of
another court of equal rank and category, having the equal power to grant the reliefs sought. Such power
devolves exclusively upon the proper appellate court. The reason for the rule is to avoid conflict of power
between different courts of equal or coordinate jurisdiction which would surely lead to confusion and
seriously hinder the proper administration of justice.
LEGAL ETHICS

QUALIFICATIONS FOR ADMISSION TO THE BAR

Ma. Cecilia Advincula vs. Atty. Leonardo Advincula


A.C. No. 9226, June 14, 2016

Doctrine: The good moral conduct or character must be possessed by lawyers at the time of their
application for admission to the Bar, and must be maintained until retirement from the practice of law. It is
expected that every lawyer, being an officer of the Court, must not only be in fact of good moral character,
but must also be seen to be of good moral character and leading lives in accordance with the highest
moral standards of the community.

Facts:
Dr. Advincula averred that while Atty. Advincula was still married to her, he had extra-marital sexual
relations with Ma. Judith Ortiz Gonzaga and their relations bore a child named Alexandria. Atty. Advincula
failed to give financial support to their own children, despite his having sufficient financial resources. He
admitted in the affidavit of late registration of birth of Alexandria that he had contracted another marriage
with Ms. Gonzaga; that even should Atty. Advincula prove that his declaration in the affidavit of late
registration of birth was motivated by some reason other than the fact that he truly entered into a
subsequent marriage with Ms. Gonzaga, then making such a declaration was in itself still unlawful; that
making a false declaration before a notary public was an unlawful conduct punishable under the RPC. Dr.
Advincula prayed that Atty. Advincula be disbarred.

Issue:
Whether or not respondent must be disbarred.

Ruling/Ratio:
No. The good moral conduct or character must be possessed by lawyers at the time of their application
for admission to the Bar, and must be maintained until retirement from the practice of law. It is expected
that every lawyer, being an officer of the Court, must not only be in fact of good moral character, but must
also be seen to be of good moral character and leading lives in accordance with the highest moral
standards of the community. More specifically, a member of the Bar and officer of the Court is required
not only to refrain from adulterous relationships or keeping mistresses but also to conduct himself as to
avoid scandalizing the public by creating the belief that he is flouting those moral standards. If the
practice of law is to remain an honorable profession and attain its basic ideals, whoever is enrolled in its
ranks should not only master its tenets and principles but should also, in their lives, accord continuing
fidelity to them. The requirement of good moral character is of much greater import, as far as the general
public is concerned, than the possession of legal learning. Although his siring the child with a woman
other than his legitimate wife constituted immorality, he committed the immoral conduct when he was not
yet a lawyer. The degree of his immoral conduct was not as grave than if he had committed the
immorality when already a member of the Philippine Bar. Even so, he cannot escape administrative
liability. Taking all the circumstances of this case into proper context, the Court considers suspension
from the practice of law for three months to be condign and appropriate. Atty. Advincula manifested in his
compliance that he had immediately accepted the resolution of the IBP Board of Governors suspending
him from the practice of law for two months as final and executory; that he had then gone on leave from
work in the NBI for two months; and that such leave from work involved refraining from performing his
duties. A lawyer like him ought to know that it is only the Court that wields the power to discipline lawyers.
The IBP Board of Governors did not possess such power, rendering its recommendation against him
incapable of finality. It is the Court's final determination of his liability as a lawyer that is the reckoning
point for the service of sanctions and penalties. As such, his supposed compliance with the
recommended two-month suspension could not be satisfied by his going on leave from his work at the
NBI. Moreover, his being a government employee necessitates that his suspension from the practice of
law should include his suspension from office. A leave of absence will not suffice. This is so considering
that his position mandated him to be a member of the Philippine Bar in good standing. The suspension
from the practice of law will not be a penalty if it does not negate his continuance in office for the period of
the suspension. If the rule is different, this exercise of reprobation of an erring lawyer by the Court is
rendered inutile and becomes a mockery because he can continue to receive his salaries and other
benefits by simply going on leave for the duration of his suspension from the practice of law.

ATTORNEYS FEES; QUANTUM MERUIT

Nenita Sanchez vs. Atty Romeo Aguilos


A.C. No. 10543, March 16, 2016

Doctrine: The attorneys fees shall be those stipulated in the retainers agreement between the client
and the attorney, which constitutes the law between the parties for as long as it is not contrary to law,
good morals, good customs, public policy or public order. In the absence of the written agreement, the
lawyers compensation shall be based on quantum meruit, which means as much as he deserved.

Facts:
Complainant Nenita Sanchez has charged respondent with misconduct for the latter's refusal to return the
amount she had paid for his professional services despite his not having performed the services. She
avers that she sought the legal services of the respondent to represent her in the annulment of her
marriage; that the respondent accepted the engagement, fixing his fee at P150,000, plus the appearance
fee of P5,000/hearing; that she then gave to him the initial amount of P90,000; that she had gone to his
residence to inquire on the developments in her case, but he told her that he would only start working on
the case upon her full payment of the acceptance fee; that she had only learned then that what he had
contemplated to file for her was a petition for legal separation, not one for the annulment of her marriage;
that he further told her that she would have to pay a higher acceptance fee for the annulment of her
marriage; that she subsequently withdrew the case from him, and requested the refund of the amounts
already paid, but he refused to do the same as he had already started working on the case; that she had
sent him a letter to demand the return of her payment less whatever amount corresponded to the legal
services he had already performed; that the respondent did not heed her demand letter despite his not
having rendered any appreciable legal services to her; and that prompted her to bring an administrative
complaint against him in the IBP.

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

Ruling/Ratio:
No. Respondent was liable for misconduct, and he should be ordered to return the entire amount received
from the client. Respondent misrepresented his professional competence and skill to the complainant. He
did not know the distinction between the grounds for legal separation and for annulment of marriage.
Such knowledge would have been basic and expected of him as a lawyer accepting a professional
engagement for either causes of action. His explanation that the client initially intended to pursue the
action for legal separation should be disbelieved. The case unquestionably contemplated by the parties
and for which his services was engaged, was no other than an action for annulment of the complainants
marriage with her husband. They did not contemplate legal separation at all, for legal separation would
still render her incapacitated to re-marry. That the respondent was insisting in his answer that he had
prepared a petition for legal separation, and that she had to pay more as attorneys fees if she desired to
have the action for annulment was, therefore, beyond comprehension other than to serve as a hallow
afterthought to justify his claim for services rendered. As such, the respondent failed to live up to the
standards imposed on him as an attorney. He thus transgressed Canon 18, and Rules 18.01, 18.02 and
18.03 of the CPR.
Every attorney is entitled to have and receive a just and reasonable compensation for services performed
at the special instance and request of his client. As long as the attorney is in good faith and honestly
trying to represent and serve the interests of the client, he should have a reasonable compensation for
such services. The attorneys fees shall be those stipulated in the retainers agreement between the client
and the attorney, which constitutes the law between the parties for as long as it is not contrary to law,
good morals, good customs, public policy or public order. In the absence of the written agreement, the
lawyers compensation shall be based on quantum meruit, which means as much as he deserved. The
determination of attorneys fees on the basis of quantum meruit is also authorized when the counsel, for
justifiable cause, was not able to finish the case to its conclusion. Moreover, quantum meruit becomes
the basis of recovery of compensation by the attorney where the circumstances of the engagement
indicate that it will be contrary to the parties expectation to deprive the attorney of all compensation.

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

RULE 139-B

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

Doctrine: Under the revisions of Rule 139-B, the administrative complaints against attorneys are
generally not dismissed outright but are instead referred for investigation, report and recommendation
either to the IBP, or the Office of the Bar Confidant (OBC), or any office of the Court or even a judge of a
lower court.

Facts:
Pante avers that the CSP-PLC constructed its church building on the land owned by Maria Omiles.
Omiles and Pastor Maliked received the summons issued by the Municipal Trial Court (MTC) requiring
them to answer the complaint for unlawful detainer filed against them by the respondent. The respondent
claimed ownership of the land where the church had been erected, attaching the copy of deed of absolute
sale executed between him and one Pedro Loy. The MTC later on decided the case by declaring the
respondent to have the better right of possession. The respondent sought and obtained the writ of
execution from the MTC after the defendants, including the complainant, reneged on the promise to
voluntarily vacate and surrender the premises in consideration of the respondents financial assistance.
The writ of execution and the writ of demolition were issued. The sheriffs, accompanied by the
respondent and elements of the PNP, implemented the writ of execution and writ of demolition. Pante
now insists that the demolition was done without a demolition order from the MTC; that the respondent
had taken advantage of his legal knowledge to cause the premature demolition of the structures sans the
demolition order; that such taking away of the dismantled materials constituted robbery and malicious
mischief; and that his act warranted his disbarment.

Issue:
Whether or not respondent must be disbarred

Ruling/Ratio:
No. Under the revisions of Rule 139-B, the administrative complaints against attorneys are generally not
dismissed outright but are instead referred for investigation, report and recommendation either to the IBP,
or the Office of the Bar Confidant (OBC), or any office of the Court or even a judge of a lower court. Such
referral ensures that the parties right to due process is respected as to matters that require further inquiry
and which cannot be resolved by the mere evaluation of the documents attached to the pleadings.
Consequently, whenever the referral is made by the Court, the IBP, the OBC or other authorized office or
individual must conduct the formal investigation of the administrative complaint, and this investigation is a
mandatory requirement that cannot be dispensed with except for valid and compelling reasons because it
serves the purpose of threshing out all the factual issues that no cursory evaluation of the pleadings can
determine. However, the referral to the IBP is not compulsory when the administrative case can be
decided on the basis of the pleadings filed with the Court, or when the referral to the IBP for the conduct
of formal investigation would be redundant or unnecessary, such as when the protraction of the
investigation equates to undue delay. Dismissal of the case may even be directed at the outset should the
Court find the complaint to be clearly wanting in merit. Indeed, the Rules of Court should not be read as
preventing the giving of speedy relief whenever such speedy relief is warranted. It is upon this that we
dispense with the need to refer the complaint against the respondent to the IBP for the conduct of the
formal investigation. The documents he submitted to substantiate his denial of professional wrongdoing
are part of the records of the trial court, and, as such, are sufficient to establish the unworthiness of the
complaint as well as his lawful entitlement to the demolition of the structures of the defendants.
Specifically, the demolition was authorized by the order issued by the MTC. In the execution of the final
and executory decision, the sheriffs dutifully discharged their functions. The presence of the respondent
during the execution proceedings was by no means irregular or improper, for he was the plaintiff in the
case. The complainant was then represented by Pante and some other members of the congregation,
who did not manifest any resistance or objection to any irregularity in the conduct of the execution. After
all, the elements of the PNP were also present to ensure the peaceful implementation of the writ of
execution. Neither do we find anything wrong, least of all criminal, in the act of the respondent of taking
away the materials of the demolished structures. The parties put an end to their dispute by the
defendants, including the complainant and Pante, opting to withdraw their notice of appeal and
undertaking to voluntarily vacate and to peacefully turn over the premises to the respondent in exchange
for the latters financial assistance.

DUTY TO THE CLIENT; CANONS 17 and 18 of CPR

Angelito Ramiscal and Mercedes Orzame vs. Atty. Edgar Orro


A.C. No. 10945, February 23, 2016

Doctrine: The fiduciary duty of every lawyer towards his client requires him to conscientiously act in
advancing and safeguarding the latter's interest. His failure or neglect to do so constitutes a serious
breach of his Lawyer's Oath and the canons of professional ethics, and renders him liable for gross
misconduct that may warrant his suspension from the practice of law.

Facts:
Complainants Spouses Ramiscals engaged the legal services of respondent Atty. Edgar S. Orro to
handle a case in which they were the defendants. Upon receiving the acceptance fee, the respondent
handled the trial of the case until the RTC decided it in their favor. As expected, the plaintiffs appealed to
the CA, and they ultimately filed their appellants brief. Upon receipt of the appellants brief, the
respondent requested from the complainants an additional amount for the preparation and submission of
their appellees brief. They obliged and paid him the amount requested. CA reversed the decision of the
RTC. The respondent did not inform the Ramiscals of the adverse decision of the CA. They endeavored
to communicate with the respondent but their efforts were initially in vain. When they finally reached him,
he asked an additional P7,000 from them as his fee in filing a motion for reconsideration in their behalf,
albeit telling them that such motion would already be belated. Even so, they paid to him the amount
sought. To their dismay, they later discovered that he did not file the motion for reconsideration; hence,
the decision attained finality, eventually resulting in the loss of their property. The Ramiscals brought this
administrative complaint against the respondent.

Issue:
Whether or not the respondent competently and diligently discharge his duties as the lawyer of the
Ramiscals
Ruling/Ratio:
No. Every lawyer, upon becoming a member of the Philippine Bar, solemnly takes the Lawyers Oath, by
which he vows, among others, that: I will delay no man for money or malice, and will conduct myself as a
lawyer according to the best of my knowledge and discretion, with all good fidelity as well to the courts as
to my clients. If he should violate the vow, he contravenes the CPR, particularly its Canon 17, and Rules
18.03 and 18.04 of Canon 18. It is beyond debate, therefore, that the relationship of the lawyer and the
client becomes imbued with trust and confidence from the moment that the lawyer-client relationship
commences, with the lawyer being bound to serve his clients with full competence, and to attend to their
cause with utmost diligence, care and devotion. To accord with this highly fiduciary relationship, the client
expects the lawyer to be always mindful of the formers cause and to be diligent in handling the formers
legal affairs. As an essential part of their highly fiduciary relationship, the client is entitled to the periodic
and full updates from the lawyer on the developments of the case. The lawyer who neglects to perform
his obligations violates Rule 18.03 of Canon 18 of the CPR. But he obviously failed to discharge his
burdens to the best of his knowledge and discretion and with all good fidelity to his clients. By voluntarily
taking up their cause, he gave his unqualified commitment to advance and defend their interest therein.
Even if he could not thereby guarantee to them the favorable outcome of the litigation, he reneged on his
commitment nonetheless because he did not file the motion for reconsideration in their behalf despite
receiving from them the P7,000 he had requested for that purpose. He further neglected to regularly
update them on the status of the case, particularly on the adverse result, thereby leaving them in the dark
on the proceedings that were gradually turning against their interest. Updating the clients could have
prevented their substantial prejudice by enabling them to engage another competent lawyer to handle
their case. As it happened, his neglect in that respect lost for them whatever legal remedies were then
available. His various omissions manifested his utter lack of professionalism towards them. We further
underscore that the respondent owed it to himself and to the entire Legal Profession of the Philippines to
exhibit due respect towards the IBP as the national organization of all the members of the Legal
Profession.

CANONS 1 and 7; GROUNDS FOR DISBARMENT (SEC. 27, RULE 138)

Jessie Campugan vs. Atty. Federico Tolentino Jr.


A.C. No. 8261, March 11, 2015

Doctrine: A lawyer may be disciplined for misconduct committed either in his professional or private
capacity. The test is whether his conduct shows him to be wanting in moral character, honesty, probity,
and good demeanor, or whether his conduct renders him unworthy to continue as an officer of the Court.

Facts:
Atty. Victorio, Jr. is the counsel of the complainants in a civil action they brought to seek the annulment of
land title. They impleaded as defendants Ramon and Josefina Ricafort, Juliet Vargas and the Register of
Deeds (RD). They caused to be annotated on TCT their affidavit of adverse claim, as well as the notice of
lis pendens. Atty. Tolentino, Jr. was the counsel of defendant Ramon and Josefina Ricafort. As the
surviving children of the late Spouses Antonio and Nemesia Torres, they inherited upon the deaths of
their parents a residential lot and they discovered that the title had been unlawfully cancelled and
replaced by another title by the RD under the names of Ramon and Josefina Ricafort; and that,
accordingly, they immediately caused the annotation of their affidavit of adverse claim on the TCT. It
appears that the parties entered into an amicable settlement during the pendency of the Civil Case in
order to end their dispute, whereby the complainants agreed to sell the property and the proceeds thereof
would be equally divided between the parties, and the complaint and counterclaim would be withdrawn
respectively by the complainants (as the plaintiffs) and the defendants. Pursuant to the terms of the
amicable settlement, Atty. Victorio, Jr. filed a Motion to Withdraw Complaint, which the RTC granted upon
noting the defendants lack of objection thereto and the defendants willingness to similarly withdraw their
counterclaim. The complainants alleged that from the time of the issuance by the RTC of the order, they
could no longer locate or contact Atty. Victorio, Jr. despite making several phone calls and visits to his
office; that they found out upon verification at the RD that new annotations were made on the TCT.
Issue:
Whether or not the respondent must be disbarred

Ruling/Ratio: No. A lawyer may be disciplined for misconduct committed either in his professional or
private capacity. The test is whether his conduct shows him to be wanting in moral character, honesty,
probity, and good demeanor, or whether his conduct renders him unworthy to continue as an officer of the
Court. Verily, Canon 7 of the CPR mandates all lawyers to uphold at all times the dignity and integrity of
the Legal Profession. Lawyers are similarly required under Rule 1.01, Canon 1 of the same Code not to
engage in any unlawful, dishonest and immoral or deceitful conduct. Failure to observe these tenets of
the CPR exposes the lawyer to disciplinary sanctions as provided in Section 27, Rule 138 of the Rules of
Court. The complainants allegations of the respondents acts and omissions are insufficient to establish
any censurable conduct against them. The duty of the RD is ministerial in nature under Section 10 of
Presidential Decree No. 1529 (Property Registration Decree). A purely ministerial act or duty is one that
an officer or tribunal performs in a given state of facts, in a prescribed manner, in obedience to the
mandate of a legal authority, without regard to or the exercise of his own judgment upon the propriety or
impropriety of the act done. If the law imposes a duty upon a public officer and gives him the right to
decide how or when the duty shall be performed, such duty is discretionary, not ministerial. The duty is
ministerial only when its discharge requires neither the exercise of official discretion nor the exercise of
judgment. The Court finds no abuse of authority or irregularity committed by Atty. Quilala, Atty. Cunanan,
and Atty. Caluya, Jr. with respect to the cancellation of the notice of adverse claim and the notice of lis
pendens annotated on TCT. Whether or not the RTC order or the letter-request had been falsified,
fraudulent or invalid was not for them to determine inasmuch as their duty to examine documents
presented for registration was limited only to what appears on the face of the documents. If, upon their
evaluation of the letter-request and the RTC order, they found the same to be sufficient in law and to be in
conformity with existing requirements, it became obligatory for them to perform their ministerial duty
without unnecessary delay.

PROHIBITION FOR JUDICIAL EMPLOYEES TO WORK AS INSURANCE AGENTS

Re: Anonymous Letter-Complaint on the Alleged Involvement and for Engaging in the Business of
Lending Money at Usurious Rates of Interest of Ms. Dolores Lopes
A.M. No. 2010-21-SC, September 30, 2014

Doctrine: An anonymous complaint is always received with great caution, originating as it does from a
source unwilling to identify himself or herself. But the mere anonymity of the source should not call for the
outright dismissal of the complaint on the ground of its being baseless or unfounded provided its
allegations can be reliably verified and properly substantiated by competent evidence.

Facts:
An undated letter-complaint addressed to the Supreme Court triggered this administrative matter. The
letter-complaint, purportedly sent by a concerned employee who chose to remain anonymous, assailed
the profitable money lending with usurious interest scheme engaged in by respondents Dolores Lopez,
and Fernando Montalvo, both of the Checks Disbursement Division of the Courts Fiscal Management
and Budget Office (FMBO), alleging that the respondents had been involved in the money-lending
activities targeting the low-salaried employees of the Court; that such money-lending had been going on
with the help of the personnel of the Checks Disbursement Division of FMBO by enticing employees of
the Court to pledge forthcoming benefits at a discounted rate. In her memorandum, Lopez neither denied
nor admitted the allegations against her. She dared the OAS instead to allow her to confront the
complainant head on and to openly address each issue. In his memorandum, Montalvo dismissed the
letter-complaint as maliciously sent for the purpose of tarnishing his reputation and the reputation of his
office. He denied being engaged in the lending business in the Court. Like Lopez, he insinuated that the
OAS had not required any comments from other employees and officials of the Court against whom more
serious accusations had been raised. Lopez and Montalvo appeared before the CID for the clarificatory
hearing. Specifically, Lopez denied the allegation that she had lent money to around 300 court
employees, and that she had held their ATM cards in her custody as collateral; but admitted having lent
money to only about 20 personnel of the janitorial agency and to some low-ranking employees of the
Court. Lopez acknowledged that she was the only person in the Checks Disbursement Division of FMBO
who had lent money, absolving Montalvo and the other members of the staff of that office by saying that
they had nothing to do with her transactions. The OAS submitted its report, recommending dismissal of
the letter-complaint against Montalvo for lack of merit; but endorsed Lopezs suspension for 30 days for
lending money with interest to a number of economically challenged employees and janitors; and directed
her to immediately cease and desist from engaging in any form of personal business and other financial
transactions, with a warning that a repetition of the same or similar act in the future will be dealt with more
severely.

Issue:
Whether or not the Lopez should be held administratively liable based on the anonymous letter complaint.

Ruling/Ratio:
Yes. An anonymous complaint is always received with great caution, originating as it does from a source
unwilling to identify himself or herself. But the mere anonymity of the source should not call for the
outright dismissal of the complaint on the ground of its being baseless or unfounded provided its
allegations can be reliably verified and properly substantiated by competent evidence. Here, therefore,
the anonymous complaint has to be dealt with, and its veracity tested with utmost care, for it points the
finger of accusation at two employees of the Court for engaging in money-lending activities at
unconscionable rates of interest, with low-ranking employees of the Court as their targets. That such a
complaint, albeit anonymous, has been made impacts on their reputations as individuals as well as on
their integrity as personnel of the Court itself. We cannot ignore the complaint, hoping that it will be
forgotten, but must inquire into it and decide it despite the anonymity of the complainant.

Re: Montalvo
The Court concurs with the findings of the OAS that the complaint against Montalvo had no factual basis.
His involvement in money lending was not shown to be habitual, going on only as far as accommodating
his friends during their personal emergencies without imposing any interests. It is notable that Montalvo
firmly denied the allegations against him, and that Lopez corroborated his denial. Accordingly, the
complaint against Montalvo should be dismissed.

Re: Lopez
As to Lopez, no witnesses appeared during the investigation to prove the allegations of the complaint. But
the complaint should still be assessed on the basis of her several admissions in the course of the
investigation. The Court agrees with the observations and findings of the OAS about Lopez having
engaged in money-lending activities. Her various admissions entirely belied her insistence that her
activities did not constitute money lending. The fact of her parting with her money in favor of another upon
the condition that the same amount would be paid back was exactly what constituted a loan under the
law, particularly Article 1933 of the Civil Code.

Did Lopezs money-lending activities render her administratively liable?


Administrative Circular No. 5 (Re: Prohibition for All Officials and Employees of the Judiciary to Work as
Insurance Agents), has prohibited all officials and employees of the Judiciary from engaging directly in
any private business, vocation or profession, even outside their office hours. The prohibition has been at
ensuring that full-time officers and employees of the courts render full-time service, for only thereby could
any undue delays in the administration of justice and in the disposition of court cases be avoided.
Although many moonlighting activities were themselves legal acts that would be permitted or tolerated
had the actors not been employed in the public sector, moonlighting, albeit not usually treated as a
serious misconduct, can amount to a malfeasance in office by the very nature of the position held. In the
case of Lopez, her being the Chief of the Checks Disbursement Division of the FMBO, a major office of
the Court itself, surely put the integrity of the Division and the entire FMBO under so much undeserved
suspicion. We do not need to stress that she was expected to be circumspect about her acts and
actuations, knowing that the impression of her having taken advantage of her position and her having
abused the confidence reposed in her office and functions as such would thereby become unavoidable.
There is no doubt about her onerous lending activities greatly diminishing the reputation of her office and
of the Court itself in the esteem of the public. No less that the Constitution itself impresses this
expectation in Section 1 of its Article XI, to wit: Public office is a public trust. Public officers and
employees must at all times, be accountable to the people, serve them with utmost responsibility,
integrity, loyalty, and efficiency, act with patriotism and justice, and lead modest lives. Lopez was quite
aware that the foregoing declarative language of the Constitution on the nature of her public office and
her responsibilities as a public officer was not mere rhetoric expressing idealistic sentiments, but a
definite working standard and a statement of attainable goals that the actual deeds of the public officers
and employees should match. She plainly disregarded the Constitution. The Court has invariably imposed
commensurate sanctions upon court employees found and declared to be violating Administrative
Circular No. 5. The sanctions have depended on the gravity of the violations committed and on the careful
consideration of the personal records of the employees concerned, like their prior administrative cases.
Based on the foregoing, Lopez committed simple misconduct, a less grave offense that is punishable
under Rule IV, Section 52 of the Revised Uniform Rules on Administrative Cases in the Civil Service by
suspension from one month and one day to six months for the first offense, and dismissal for the second
offense. Yet, although a first-time offender, she could not be punished with the minimum of the imposable
penalty because she clearly abused her being a high-ranking officer in the FMBO in conducting her
private transactions within court premises during office hours, thereby putting the image of the Judiciary in
a bad light. Hence, her appropriate penalty is suspension from office for three months without pay.

In ordering their investigation upon the anonymous complaint, the Court did not discriminate and
unfairly act against the respondents
In ordering the administrative investigation of the respondents, the Court was moved only by the most
laudable of purposes. To start with, the investigation would never be unfair because they would thereby
be accorded the full opportunity to be heard in order to clear themselves. And, secondly, they were not
being singled out because the Court has always acted upon every appropriate complaint or grievance
anonymous or not brought against officials and employees of the Judiciary without regard to their ranks
or responsibilities, including any of its sitting Members, the incumbent Justices of the third-level courts,
and other active judges of the first and second levels of the courts. Only last week did the Court remove a
very senior Justice of the Sandiganbayan for cause, and in his case there was not even any formal
complaint brought against him. To accuse the Court of unfairness and discrimination was, therefore,
censurable. Nonetheless, the Court accords to Montalvo and Lopez the reasonable opportunity to show
cause why they should not be disciplined or otherwise sanctioned for their censurable statements.

LAWYERS OATH; RULE 1.03, CANON 1, CPR; RULE 11.04, CANON 11, CPR

Presiding Judge Jose Madrid vs. Atty. Juan Dealca


A.C. No. 7474, September 09, 2014

Doctrine: Although the Court always admires members of the Bar who are imbued with a high sense of
vigilance to weed out from the Judiciary the undesirable judges and inefficient or undeserving court
personnel, any acts taken in that direction should be unsullied by any taint of insincerity or self-interest.

Facts:
Atty. Juan S. Dealca entered his appearance in a Criminal Case presided by complainant Judge Jose L.
Madrid. Atty. Dealca moved that the Criminal Case be re-raffled to another Branch of the RTC
considering the adverse incidents between the incumbent Presiding Judge and the undersigned, where
he does not appear before the incumbent Presiding Judge, and the latter does not also hear cases
handled by the undersigned. Judge Madrid denied Atty. Dealcas motion to re-raffle. Consequently,
Judge Madrid filed a letter complaint in the Office of the Bar Confidant citing Atty. Dealcas unethical
practice of entering his appearance and then moving for the inhibition of the presiding judge on the
pretext of previous adverse incidents between them. The Court referred the matter to the IBP. The Court
dismissed for its lack of merit the administrative complaint against Judge Madrid, but referred to the IBP
for investigation, report and recommendation the propensity of Atty. Dealca to file administrative or
criminal complaints against judges and court personnel whenever decisions, orders or processes were
issued adversely to him and his clients. The IBP reported that Atty. Dealca filed by himself 5 cases as
counsel for the complainants against court officers, judges and personnel. All these cases are
precipitated by the adverse ruling rendered by the court against the clients of the respondent that instead
of resorting to the remedies available under the Rules of Procedure, respondent assisted his clients in
filing administrative and criminal case against the judges and personnel of the court. All these
documentary evidence are helpful in determining the PROPENSITY of the respondent as a member of
the bar in resorting to harassment cases instead of going through the procedures provided for by the
Rules of Court in the event of adverse ruling, order or decision of the court. The IBP Commissioner found
Atty. Dealca guilty of violating the Lawyers Oath and the Code of Professional Responsibility (CPR) by
filing frivolous administrative and criminal complaints; and recommended that he be suspended from the
practice of law for one year. The IBP Board of Governors modified the recommendation and dismissed
the administrative complaint for its lack of merit.

Issue/s:
1. Whether or not Atty. Dealca filed frivolous administrative and criminal complaints against judges and
court personnel in violation of the Lawyers Oath and the CPR
2. Whether or not Atty. Dealca is guilty of unethical practice in seeking the inhibition of Judge Madrid

Ruling/Ratio:
1. Yes. Atty. Dealca must guard against his own impulse of initiating unfounded suits. Although the
Court always admires members of the Bar who are imbued with a high sense of vigilance to weed out
from the Judiciary the undesirable judges and inefficient or undeserving court personnel, any acts
taken in that direction should be unsullied by any taint of insincerity or self-interest. It is for that
reason that Atty. Dealcas complaint against Judge Madrid has failed our judicious scrutiny, for the
Court cannot find any trace of idealism or altruism in the motivations for initiating it. Instead, Atty.
Dealca exhibited his proclivity for vindictiveness and penchant for harassment, considering that, as
IBP Commissioner Hababag pointed out, his bringing of charges against judges, court personnel and
even his colleagues in the Law Profession had all stemmed from decisions or rulings being adverse
to his clients or his side. The Lawyers Oath is a source of obligations and duties for every lawyer,
and any violation thereof by an attorney constitutes a ground for disbarment, suspension, or other
disciplinary action. These are not mere facile words, drift and hollow, but a sacred trust that must be
upheld and keep inviolable. As a lawyer, therefore, Atty. Dealca was aware of his duty under his
Lawyers Oath not to initiate groundless, false or unlawful suits. The duty has also been expressly
embodied in Rule 1.03, Canon 1 of the CPR. Moreover, Atty. Dealca must be mindful of his mission
to assist the courts in the proper administration of justice. He disregarded his mission because his
filing of the unfounded complaints, including this one against Judge Madrid, increased the workload of
the Judiciary. Although no person should be penalized for the exercise of the right to litigate, the right
must nonetheless be exercised in good faith. Atty. Dealcas bringing of the numerous administrative
and criminal complaints against judges, court personnel and his fellow lawyers did not evince any
good faith on his part, considering that he made allegations against them therein that he could not
substantially prove, and are rightfully deemed frivolous and unworthy of the Courts precious time and
serious consideration. Atty. Dealca was apparently referring to the minute resolutions the Court could
have promulgated in frequently dismissing his unmeritorious petitions. His arrogant posturing would
not advance his cause now. He thereby demonstrated his plain ignorance of the rules of procedure
applicable to the Court. The minute resolutions have been issued for the prompt dispatch of the
actions by the Court. Whenever the Court then dismisses a petition for review for its lack of merit
through a minute resolution, it is understood that the challenged decision or order, together with all its
findings of fact and law, is deemed sustained or upheld, and the minute resolution then constitutes
the actual adjudication on the merits of the case. The dismissal of the petition, or its denial of due
course indicates the Courts agreement with and its adoption of the findings and conclusions of the
court a quo. The requirement for stating the facts and the law does not apply to the minute resolutions
that the Court issues in disposing of a case.

2. Yes. Atty. Dealca violated Canon 11 and Rule 11.04 of the CPR. Lawyers are licensed officers of the
courts empowered to appear, prosecute and defend the legal causes for their clients. As a
consequence, peculiar duties, responsibilities and liabilities are devolved upon them by law. Verily,
their membership in the Bar imposes certain obligations upon them. Atty. Dealcas averment that
Judge Madrid did not hear cases being handled by him directly insinuated that judges could choose
the cases they heard, and could refuse to hear the cases in which hostility existed between the
judges and the litigants or their counsel. Such averment, if true at all, should have been assiduously
substantiated by him because it put in bad light not only Judge Madrid but all judges in general. Yet,
he did not even include any particulars that could have validated the averment. Nor did he attach any
document to support it. It was incumbent upon Atty. Dealca to establish by clear and convincing
evidence the ground of bias and prejudice in order to disqualify Judge Madrid from participating in a
particular trial in which Atty. Dealca was participating as a counsel. The latters bare allegations of
Judge Madrids partiality or hostility did not suffice. As such, Atty. Dealca clearly contravened his
duties as a lawyer as expressly stated in Canon 11 and Rule 11.04. On a final note, it cannot escape
our attention that this is not the first administrative complaint to be ever brought against Atty. Dealca.
In Montano v. IBP, we reprimanded him for violating Canon 22 and Rule 20.4, Canon 20 of the CPR,
and warned him that a repetition of the same offense would be dealt with more severely. Accordingly,
based on the penalties the Court imposed on erring lawyers found violating Canon 1, Rule 1.03, and
Canon 11, Rule 11.04 of the Code, we deem appropriate to suspend Atty. Dealca from the practice of
law for a period one year.

LAWYERS OATH; DUTY TO THE CLIENT

Henry Samonte vs. Atty. Gines Abellana


A.C. No. 3452, June 23, 2014

Doctrine: A lawyer who willfully resorts to any falsehood in order to mislead the courts or his clients on
the status of their causes exhibits his unworthiness to remain a member of the Law Profession. This is
because he is always expected to be honest and forthright in his dealings with them. He thereby merits
the condign sanction of suspension from the practice of law, if not disbarment.

Facts:
Complainant Samonte brought this administrative complaint against respondent Atty. AbelJana who had
represented him as the plaintiff in a Civil Case. In the administrative complaint, Samonte enumerated the
serious acts of professional misconduct by Atty. Abellana, to wit:
1. Falsification of documents, when Atty. Abellana made it appear that he had filed the Civil Case on June
10, 1988, conformably with their agreement, although the complaint was actually filed on June 14, 1988;
2. Dereliction of duty, when Atty. Abellana failed to: (a) file the reply vis--vis the answer with
counterclaim, with his omission having delayed the pre-trial of the case; (b) inform the trial court
beforehand that Samonte could not be available on a scheduled hearing, thereby incurring for the
plaintiffs side an unexplained absence detrimental to Samonte as the plaintiff; and (c) submit an exhibit
required by the trial judge, only to eventually submit it three months later;
3. Gross negligence and tardiness in attending the scheduled hearings; and
4. Dishonesty for not issuing official receipts for every cash payments made by Samonte for his court
appearances and his acceptance of the case.

Atty. Abellana denied the charge of falsification of documents, clarifying that the actual filing of the
complaint could be made only on June 14, 1988 instead of June 10, 1988 because Samonte had not
given enough money to cover the filing fees and other charges. The IBP Commission on Bar Discipline
found Atty. Abellana negligent in handling certain aspects of his clients case and recommended the
disbarment of Atty. Abellana, observing that apart from his negligent handling of portions of the civil case,
said respondent has shown a facility for utilizing false and deceitful practices as a means to cover-up his
delay and lack of diligence in pursuing the case of his client. The IBP Board of Governors, albeit adopting
the findings of the IBP Investigating Commissioner, suspended Atty. Abellana from the practice of law for
one year.

Issue:
Whether or not the suspension of Atty. Abellana should be upheld
Ruling/Ratio:
Yes. A lawyer who willfully resorts to any falsehood in order to mislead the courts or his clients on the
status of their causes exhibits his unworthiness to remain a member of the Law Profession. This is
because he is always expected to be honest and forthright in his dealings with them. He thereby merits
the condign sanction of suspension from the practice of law, if not disbarment. In his dealings with his
client and with the courts, every lawyer is expected to be honest, imbued with integrity, and trustworthy.
These expectations, though high and demanding, are the professional and ethical burdens of every
member of the Philippine Bar, for they have been given full expression in the Lawyers Oath that every
lawyer of this country has taken upon admission as a bona fide member of the Law Profession. By the
Lawyers Oath is every lawyer enjoined not only to obey the laws of the land but also to refrain from doing
any falsehood in or out of court or from consenting to the doing of any in court, and to conduct himself
according to the best of his knowledge and discretion with all good fidelity as well to the courts as to his
clients. It is by no means a coincidence; therefore, that honesty, integrity and trustworthiness are
emphatically reiterated by the CPR. Atty. Abellana abjectly failed the expectations of honesty, integrity
and trustworthiness in his dealings with Samonte as the client, and with the RTC as the trial court. He
resorted to outright falsification by superimposing 0 on 4 in order to mislead Samonte into believing
that he had already filed the complaint in court on June 10, 1988 as promised, instead of on June 14,
1988, the date when he had actually done so. Atty. He continued misleading Samonte in explaining his
mishandling of the latters civil case. Worse, he also foisted his dishonesty on the Court no less. The
finding on Atty. Abellanas neglect in the handling of Samontes case was entirely warranted. He admitted
being tardy in attending the hearings of the civil case. He filed the formal offer of evidence in behalf of his
client way beyond the period to do so, a fact that he could not deny because the RTC Judge had himself
expressly noted the belated filing in the order issued in the case. In the motion for reconsideration that he
filed in the IBP Board of Governors, Atty. Abellana challenged the sufficiency of the proof presented
against him by Samonte. In disciplinary proceedings against lawyers, clearly preponderant evidence is
required to overcome the presumption of innocence in favor of the respondent lawyers. Preponderant
evidence means that the evidence adduced by one side is, as a whole, superior to or has greater weight
than that of the other. The complainants evidence preponderantly established the administrative sins of
Atty. Abellana. The falsehoods committed by Atty. Abellana, being aimed at misleading his client and the
Court to bolster his unworthy denial of his neglect in the handling of the client's case, were unmitigated.
Still, the Court must not close its eyes to the fact that Atty. Abellana actually finished presenting his
client's case; and that the latter initiated the termination of Atty. Abellana's engagement as his counsel
only after their relationship had been tainted with mistrust. Thus, we determine the proper sanction. For
Atty. Abellana, therefore, suspension from the practice of law for six months with warning of a more
severe sanction upon a repetition suffices.

LAWYERS OATH; RULE 1.01, CANON 1; RULE 7.03, CANON 7, CPR

Benjamin Ong vs. Atty. William Delos Santos


A.C. No. 10179 (Formerly CBD 112985), March 04, 2014

Doctrine: Every lawyer is an officer of the Court. He has the duty and responsibility to maintain his good
moral character. In this regard, good moral character is not only a condition precedent relating to his
admission into the practice of law, but is a continuing imposition in order for him to maintain his
membership in the Philippine Bar. Any gross misconduct that puts his moral character in serious doubt
renders him unfit to continue in the practice of law.

Facts:
According to complainant Ong, Atty. Delos Santos asked him to encash his postdated check inasmuch as
he was in dire need of cash. To reassure Ong that the check would be funded upon maturity, Atty. Delos
Santos bragged about his lucrative practice and his good paying clients. Convinced, Ong handed to Atty.
Delos Santos the amount of P100,000 in exchange for the latters postdated check. However, the check
was dishonored upon presentment for the reason that the account was closed. Ong demanded immediate
payment to Atty. Delos Santos, but the latter just ignored him. When efforts to collect remained futile, Ong
brought a criminal complaint for estafa and for violation of BP 22. Ong also brought this disbarment
complaint against Atty. Delos Santos in the IBP. The IBP Bar Commissioner stated that Ong had
sufficiently established the existence of the dishonored check. He recommended that Atty. Delos Santos
be held liable for violating Canon 1, Rule 1.01 and Canon 7, Rule 7.03 of the CPR. The IBP Board of
Governors adopted and approved the findings of IBP Commissioner.

Issue:
Whether or not Atty. William F. Delos Santos shall be held administratively liable

Ruling/Ratio:
Yes. We agree with the findings of the IBP but modify the recommended penalty. Every lawyer is an
officer of the Court. He has the duty and responsibility to maintain his good moral character. In this
regard, good moral character is not only a condition precedent relating to his admission into the practice
of law, but is a continuing imposition in order for him to maintain his membership in the Philippine Bar.
Any gross misconduct that puts his moral character in serious doubt renders him unfit to continue in the
practice of law. BP Blg. 22 has been enacted in order to safeguard the interest of the banking system and
the legitimate public checking account users. The effects of the issuance of a worthless check transcends
the private interests of the parties directly involved in the transaction and touches the interests of the
community at large. The mischief it creates is not only a wrong to the payee or holder, but also an injury
to the public. Being a lawyer, Atty. Delos Santos was well aware of the objectives and coverage of BP
Blg. 22. If he did not, he was nonetheless presumed to know them, for the law was penal in character and
application. His issuance of the unfunded check involved herein knowingly violated BP Blg. 22, and
exhibited his indifference towards the pernicious effect of his illegal act to public interest and public order.
He thereby swept aside his Lawyers Oath that enjoined him to support the Constitution and obey the
laws. He also took for granted the express commands of the CPR, specifically Canon 1, Rule 1.01 and
Canon 7, Rule 7.03. Moreover, in issuing the dishonored check, Atty. Delos Santos put into serious
question not only his personal integrity but also the integrity of the entire Integrated Bar. It cannot be
denied that Ong acceded to Atty. Delos Santos request for encashment of the check because of his
complete reliance on the nobility of the Legal Profession. Accordingly, Atty. Delos Santos was guilty of
serious misconduct, warranting appropriate administrative sanction. Noting that the criminal complaint
charging him with the violation of BP Blg. 22 was already dismissed, and that he already repaid to Ong
the full amount of P100,000, both of which are treated as mitigating circumstances in his favor, we find
the recommendation of the IBP Board of Governors to suspend him from the practice of law for a period
of three years harsh. Thus, we reduce the penalty to suspension from the practice of law to six months.

DISBARMENT OF LAWYERS

Heinz Heck vs. City Prosecutor Casiano Gamotin Jr,


A.C. No. 5329, March 18, 2014

Doctrine: A lawyer like the respondent is not to be sanctioned for every perceived misconduct or wrong
actuation. He is still to be presumed innocent of wrongdoing until the proof arrayed against him
establishes otherwise. It is the burden of the complainant to properly show that the assailed conduct or
actuation constituted a breach of the norms of professional conduct and legal ethics. Otherwise, the
lawyer merits exoneration.

Facts:
Heck filed a criminal case for unjust vexation against Cabrera but the case was dismissed. Cabrera
countered with two criminal cases against Heck one charging the latter with illegal possession of
firearms and the other with unlawful incrimination of an innocent person. Atty. Adaza represented Cabrera
in both cases. The OCP initially dismissed the first case for insufficiency of evidence, but Atty. Adaza
moved for the reconsideration of the dismissal which was granted by the respondent. Heck challenged
the order of the respondent. Heck claimed that the respondent scheduled a meeting at his office to be
attended by Heck, his lawyer, his wife and Atty. Adaza. However, Atty. Adaza did not attend the meeting.
Heck alleged, however, that Atty. Adaza and the respondent held their own separate private meeting,
for which reason Heck questioned the propriety of the private meeting and the possibility of connivance
between the respondent and Atty. Adaza. Heck went to the respondents office to pick up documents
supposedly promised to him. But he was denied the documents. He further alleged that Prosecutor
Gamotin, Jr. furiously KICKED the chair who was holding the door to his office open, sending the chair
flying onto the other chairs at his conference table. Heck then asked why the respondent was still
entertaining Atty. Adaza despite his having been already suspended from the practice of law by the
Supreme Court. It appears that Heck had filed administrative complaints against the respondent in the
DOJ as well as in the Office of the Ombudsman. The records were first referred to the Office of the Court
Administrator, then to the Office of the Bar Confidant (OBC) for evaluation of the merits of the disbarment
case against the respondent. The OBC observed that although there was no clear, convincing and
satisfactory evidence of misconduct as to warrant the penalty of disbarment, the respondents conduct
should be sanctioned; that his act of privately entertaining Atty. Adaza and his brother, as well as allowing
his office to be used for a meeting even in his absence raised doubt on his integrity; that the respondents
reaction to Hecks tirade against the countrys justice system, particularly the respondents retort that
Heck should go back to his country if he did not believe in the Philippine authorities, constituted decorum
that was so unbecoming of a lawyer.

Issue:
Whether or not City Prosecutor Gamotin should be disbarred

Ruling/Ratio:
No. We consider that the evidence adduced by the complainant insufficient to warrant the disbarment of
the respondent. A lawyer like the respondent is not to be sanctioned for every perceived misconduct or
wrong actuation. He is still to be presumed innocent of wrongdoing until the proof arrayed against him
establishes otherwise. It is the burden of the complainant to properly show that the assailed conduct or
actuation constituted a breach of the norms of professional conduct and legal ethics. Otherwise, the
lawyer merits exoneration. To begin with, the holding of the meeting between Atty. Babarin, Hecks
counsel, and Atty. Adaza in the respondents office was not suspicious or irregular, contrary to the
insinuation of Heck. We are not unmindful of the practice of some legal practitioners to arrange to meet
with their opposing counsels and their clients in the premises of the offices of the public prosecutors or in
the courthouses primarily because such premises are either a convenient or a neutral ground for both
sides. Secondly, we cannot sanction the respondent for having angrily reacted to Hecks unexpected
tirade in his presence. The respondent was not then reacting to an attack on his person, but to Hecks
disrespectful remark against Philippine authorities in general. Lawyers may be expected to maintain their
composure and decorum at all times, but they are still human, and their emotions are like those of other
normal people placed in unexpected situations that can crack their veneer of selfcontrol. The Court will
not permit the respondents good record to be tarnished by his having promptly reacted to Hecks remark.
Lastly, Heck complains that the respondent still entertained Atty. Adaza despite the latter having been
already suspended from the practice of law. The respondent explains, however, that he had no personal
knowledge of Atty. Adazas suspension and that such information was not properly disseminated to the
proper offices. We are inclined to believe the respondents explanation. We believe that the respondent
was not yet aware of the suspension at that time. It was possible that at the occasion when Atty. Adaza
appeared before the respondent, his suspension had not yet attained finality, or that the order of
suspension had not yet been known to the respondent. Accordingly, it will be unjustified to hold the
respondent liable for allowing Atty. Adaza to practice law and to represent his client in the OCP.