SAN BEDA COLLEGE OF LAW 2016 CENTRALIZED BAR OPERATIONS J. VELASCO CASES (Political Law, Labor Law, Civil Law and Taxation Law) Executive Committee Over-all Chairperson Chairperson for Academics Chairperson for Hotel Operations Vice-Chair for Operations Vice-Chair for Secretariat Vice-Chair for Finance Vice-Chair for Electronic Data Processing Vice-Chair for Logistics Vice-Chair for Membership MARIA REGGIELEENE S, DIONISIO LYAN DAVID M. JUANICO TYRONE LEWIS D, ONG DANIEL P. ANG JEFFERSON B. FERNANDEZ LARISA G. BELO EROL STEPHEN B. PISEC PATRICK STEPHEN M, CUA, MAICAH MARIE A, PAMFILO Subject Chairs Political Law Labor Law Civil Law Taxation Law Commercial Law Criminal Law Remecial Law Legal and Judicial Ethies ALDRIN JAMES L. GUANZON MARITONI B, MOLINA, RICHARD ARMAND C. ANGELES DANIEL RADJIT D. PINEDA CARL RON F. VILLAMIL CARMELA J. LUNA, APRIL JOY G. ONG HANNA NAZRIA S. MACAPINTAL Content and Lay-out Editors EDRESE GRACE AGUIRRE MA, PATRICIA YSABEL AMORES BOENVEL M, CASTILLO ARMAND ARNE LIBERATO. JAMAICA IDA PALCE JOSE MANUEL, PENIAFLOR DOROTHY JEAN ACLAN PAM LOUIESE CHUA ENIKA MARIE GARCIA (CHRISTINE INTAL ELMO SAN DIEGO, JR. DANIKA MARIE SANTOS “For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath (Matthew 25:28)" Lourdes De La Cruz v. Court of Appeals, G.R. No. 138442, December 6, 2006 “Good judgment comes trom experience, and often experience comes from bad judgment.” Domingo Realty v. Court of Appeals, G.R. No. 126236, January 26, 2007VELASCO CASES POLITICAL LAW RIGHT TO PRIVACY IS NOT A DEFENSE IF POSTS ON SOCIAL NETWORKING SITES ARE NOT SET TO PRIVATE Rhonda Ave Vivares and Spouses Margarita and David Suzara v. St, Theresa's College, Mylene Rhoza Escudero ‘and John Does: GR. No, 202686, September 29, 2014 FACTS: In a Petition for Review on Certorari under Rule 45 ofthe Rules of Court fled before the SC, petitioners, who are Parents of students of St. Theresa's College (STC), assailed the Dacision of the RTC, which dismissed their pation for the issuance of a writ of habeas data. The RTC ruled: 1) that STC's act of gathering the photos of the students from ther Facebook account was for a legal purpose, which was to implement its policies and rules on discipline, and that 2) since the students uploaded their photos online without prvacy restrictions, they are deemed to have lost ther right to arivaey some way, NNenita Julia Daluz (Julia) and Julienne Vida Suzara (Julienne), both minors, were graduating high schoo! students trom STC. After attending a beach party where they were in undergarments, Angela Tan (Angela) Uploaded their pictures or Facebook. Mylene Escudero (Escudero), a computer teacher in STC, saw on Facebook that ula end Julienne drank hard liquor, smoked cigarettes, and wore sheer clothing that showed the entirely of their brassieros. Escudero alse discovered that any Facebook User could view the phates, Escudera showed the photos to STC's Discipline Charge for appropriate action, STC then found the students to have violated the Student Handbook. Sr Celeste Ma. Pursima Pe (Sr. Burisima) informed the parents of the students that they are barred fom joining the commencement exercises in March 2012. Dr, Armenia Tan (Angela's mather) filed a Petiion for Injunction and Damages, to which Rhonda Ave Vivares (uila's motner) intervened, the RTC issued a TRO aliowing the students to attend the graduation ceremony, Despite the TRO, Sr. Purisima stil bared the students from attending said event. Petitoners thereatter fied the Peition for the Issuance of a Writ of Habeas Dala Pelitioners contended: 1) that the privacy setting oftheir children's Facebook accounts was set at "Friends Only’, thus, have a reasonable expectation of privacy which must be respected; and 2) thatthe photos accessed belong to the gis and cannot be used and repreduced without their eonsent. (On the other hand, respondents argued: 1) that there can be no violation of ther right to privacy as there is no reasonable expectation of privacy on Facebook; and that 2) the photos were not confined to the minors’ Facebook friends a6 the public can also have access to them. ISSUE: Was there an actual or threatened violation ofthe right to privacy in the life, liberty, or security of the minors involved in the present case which jusifies the Issuance of @ wrt of habeas Gala? HELD: No, there is no actual or threatened violation of the right to privacy in the life, liberty, or security of the minors. According to the case of United Stales v. Gines-Perez, ‘a person who places a photograph on the Internat precisely intends to forsake and renounce all privacy rights to such imagery, pafticulary under circumstances such as here. where the Defendant did not employ protective measures or devices that would have controlled access to the Web page or the photograph ise Since Escudere's students were able to sae the uploaded photos, such fact already disproves the petitioners’ contention ‘hat only Jula, Julienne and Angela could view the photos. Not one of petitioners disputed Escudero's sworn account that her students, who are the minors’ Facebook “fiends', showed her the photos using their awn Facebook accounts. This nly shows that Angela did not change the privacy Settings of the photos, thus, allowing Julia Julenne and Angela's friends, or even the puble at large to vew them, Moreover, seting s posts privacy to “Friends Only" is not an assurance that any Facebook user cannot view the post. The Facebook friend of tne person who posted such content can share it or tag his other Facebook friends, making the post viewable by multiple users. If the user intends fo make the post available to a limited numnber of Facabock users, the User ‘Must customize the privacy settings ar select the “Only Me” option. Therefore, cespondents did not make an actual or threatened violation ofthe right to privacy inthe Ie, liberty or security of the minors. IN THE EXERCISE OF POLICE POWER AND THE GENERAL WELFARE CLAUSE, PROPERTY RIGHTS OF INDIVIDUALS MAY BE SUBJECTED TO RESTRAINTS AND BURDENS IN ORDER TO FULFIL THE OBJECTIVES OF THE GOVERNMENT. Crisostomo B. Aquino vs. Municipality Of Malay, Aklan G.R.No. 211366, September 29, 2014VELASCD CASES FACTS: In a Petition for Review on Certiorari under Rule 45, petitioner Crisostomo Aquino, the president and chief executive oficer of Boracay Island West Cove, assailed the decision of tne CA denying his Pelion for Certiorat for nat being the proper remedy to question the issuance and implementation of Executive Order No. 10, Senes of 2011 (EO 10), Crdering the demoition of his hotel establishment Petitioner's application for zoning compliance and building permit covering the construction of an addtional three-storey hotel over parcel of land covered by a Forest Land Use Agreement for Tourism Purposes (FLAGT) were denied by ne Municipal Zoning Administrator on the ground that the proposed construction site was within the °no bud cone’ demarcated in a Municipal Ordinance. Thereatter, the respondent issued a 1) Cease and Desist Order enjoining ine expansion of the resort, and 2) EO 10 ordering the ciosure and demoition of Boracay West Cove's hotel EO 10 wos Batially implemented on June 10, 2011, Also, respondents demolished the improvernents invoguced by Boracay West Cove, Petitioner alleged that the order was issued and executed with grave abuse of discretion. Though he admitted that he failed to secure the necessary permits, clearances, and exemptions before the construction, expansion, and operation of Boracay Wet Cove's hotel in Malay, Aklan, he argued thal judicial proceedings should fst be conducted pelors he Fespondent mayor could order the demoition of the company's establishment. Moreover, he argued that the fact that it was issued & FLAgT constitutes sufficient authorization from the DENR to proceed with the construction of the tree: storey hotel (On the other hand, respondents argued thatthe demolition needed no court order because the municipal mayor has the ‘express power under the Local Government Code (LGC) to order the ramoval of ilegally constucted buildings, And the issuance of 2 FLAQT did not prelude the Municipality from imposing additonal bullding requirements over such forestianas, Issues: (1) Whether or not respondent mayor can order the demolition ofthe company’s establishment without a court order (2) Whether or not forestiands managed by the DENR may be subject lo municipal laws RULING: (2) Yes, Sec. 444 (b)(3)(W) of the LGC empowers the mayor to ofder the closure and removal of ilegally constructed establishments for fang fo secure the necessary permits Under the L6G, the Sanggunian does not have the power to authorize the extrajudicial condemnation and destruction of a nuisance per aocidens; however the SC ruled that the LGU may nevertheless properly order the hotel's demolition without {due hearing thereon in a tribunal In the present case, the hotel was demolished not exacty because itis a nulsancs but because it faled to comply with the legal requirements pror to constuction, In the exercise of police power and the general welfare clause provided in the Constitution, property rights of individuals may be subjected to resirinis and burdens in order to full the objectives ofthe government Hence, there was no grave abuse of discretion on the pat of respondent mayor. (2) Yes, & must be noted that forestiands, although under the management of the DENR, are not exempt from the temtoral application of municipal laws, for local government units legitimately exercise the powers of government over their defined teritoral junscition. Hence, aside from complying withthe provisions in the FLAgT granted by the DENR, it was incumbent on petitioner to likewise comply with the no buld zone restriction under municipal ordinance ADMINISTRATIVE ISSUANCE CANNOT AMEND A LEGISLATIVE ACT Grande vs. Antonio GR No, 206248, February 18, 2014 FACTS: The present case is brought before the SC through a Petition for Review an Cartiorari under Rule 45, assaiing the decision of the Court of Appeals allowing the change of sumame of Pettioner Grace Grande's children from “Grande! to Antonio" Respondent Patricio Antoni lived together with Petitioner Grace Grande, who has two (2) sons on her previous marriage but were not expressly recognized by Antonio as his own In the Record of Bre ofthe children. Antonio fled a Petition for Judie’! Approval of Recognition with Prayer to take parental authority, physical custody, and correcton/change of ‘Sumame of minors in the RFC when their relationship becomes eventually Sour ‘The Regional Trial Court rendered a decision allowing the change of sumame of the children from “Grande” to “Antonio ‘emong others. The Court of Appeals affirmed the decisionVELASCO CASES Piitioner contends that ticle 176 of the Family Code, as amended by R.A. 9255 provides thatthe illegitmate child may use the sumame of the father in case his or her flition is expressly recagnized by the father through the record of birth ‘appearing in the civil register or when an admission in 2 public dacument or private handwritten instrument is made by the father. Thus, being permissive in character, it may not be invoked by a father to compel the use by his ilagitimate chidren of his surname without the consent of the mother Respondent on the other hand argues the mandatory use of the father's sumame upon his recognition of his legitimate children, citing the Implementing Rules and Regulations (IRR) of RA $258, ISSUE: Can the father compel the change of the illegiimate child's surname into his sumame following the mandatory tone of the IRR RA 62557 RULING: No, the father cannot compe! the change ofthe ilegitimate child's sumame into his sumame, The hornbook rule {is that an administrative issuance cannot amend a legislative act. The implementing rules and regulations of @ law cannot ‘extend the law or expand its coverage, as the power to amend or repeal a stalute is Vested in the Legisiature. Thus, shy siscrepancy between the basic law and an implementing rule or regulation will be resolved in favor of the law, because the law cannot be broadened by a mere administrative issuance — an administrative agency certainly cannot amend an act of Congress. ‘Att 176 gives illegitimate chidren the right to decide if they want to use the surname of thei father or not. Its not the father (herein respondent) or the mother (herein petitoner) who is granted by law the right to dictate the euename of their iegitimate children Hence, the change of the illegitimate chiidren’s sumame to their father's surname cannot be allowed IN A PLEBISCITE FOR THE CONVERSION OF COMPONENCT CITY INTO A HIGHLY-URBANIZED CITY, ALL POLITICAL UNITS DIRECTLY AFFECTED ALLOWED TO PARTICIPATE Aurelio M. Umali vs. Commission on Elections, Julius Ceasar V. Vergara, and the City Government of Cabanatuan GR_No. 203974, April 22, 2014 FACTS: In 2 Petton for Certiorari and Prohibition before the SC, petitioner Aurelio M. Umal, governor of Nueva Ecija seals the minute resolutions promulgated ay the pubic respondent Commission on Elections (COMELEC) resolving that pletiscite for the conversion of Cabanatuan City from a component city into @ highly-urbanized city (HUC) shal be Participated only by the registered residents of the sad city and not by all poltical units directly affected by it The Sangguniang Panglungsod of Cabanatuan City passed a resolution requesting to declare the conversion of Cabanatuan Gity from a component city of Nueva Ecija into an HUC. The President issued Prociamation No. 418, Series ‘of 2012 proclaiming Cabanstuan City as an HUC subject to “ratification in a plebiscite by the qualified voters therein, 25, provided for in Sec. 453 of the Local Government Cade of 1991." The COMELEC then acted on the proclamation and Ieeued a Minute Resolution resolving that only those ragistered rasidents of Cabanatuan City should participate in the plebiscite Pettioner Ural led @ Motion for Reconsideration arguing that the plebiscte shall be participated by all potical units ‘rectly affected by the conversion and not ust by the registered residents of the component city to be ungraded because fhe pivase “qualified voters therein’ used in Sec. 453 of the LGC should be interpreted with Sec. 10, Art X of the Constitution. He ciaims that while the conversion in question does not involve the creation of a new or cissolution of an esting ely. the spirit of the Constitutional provision calls for the people of the local government unit (LGU) directly erected fo vote inthe plebiscite whenever there is @ material change in their rights and responsiilies and will cau material changes not only inthe poltical and economic rights ofthe city but also ofthe province as a whole, nus all LGUs rectly affected by the conversion should participate Private respondent Vergara, City Mayor of Cabanatuan, interposed an opposition contending that Seo. 10. At. X of the Constitution does not apply to conversions and that Sac, 453 42 couched in such a way that only the quelifiec voters of Gabanatuan City shall be allowed to vote n a plebiscite, COMELEC denied the Motion or Reconsideration, ISSUE: Can qualified voters of the entire province of Nueva Ecija participate in the plebiscite called for the conversion of ‘Cabanatuan City from a component city into an HUC? RULING: YES, qualified voters of the entre province of Nueva Ecija can participate in the plebiscite called for the Conversion of Gabanatuan City from a component city into an HUC. Art 10, Sec. X of the Constitution provides that ‘No province, city, municipality or barangay may be created, divided, merge, abolshed, or its boundary substantially altered ‘except in accordance withthe citeria established in the LGC and subject to the approval by a majoiy ofthe votes cast in 2 plebiscite inthe poltical units directly affected.” Basic isthe rule in statutory construction that a law should be construed in natmony with and not in violation of the Constitution. To construe the phrase “by the qualiied voters therein® in Sec.VELASCO CASES 453 of the LGC in its plain meaning will clash with the explicit provision of the Constitution thatthe voters in the “political Units directly affected” shall participate in the plebiscite. Thus in order fo avoid conflict, such phrase is to be Wreated {0 ‘mean the qualifed voters not only inthe city proposed to be converted to an HUG but alsa the Voters of the polieal units rectly affected by such conversion Only the political units that are “direct affected” by the change should be allowed to partcinate inthe plebiscite — that i, the LGU or LGUs whose boundaries are to be altered and whose politcal rghts and economy would be affected ‘Athough Sec. 10, At. X of the Constitution does nol explicitly provide for the conversion into an HUC under See. 453 of ‘he LGC, it's nevertheless considered that tne conversion of a component city into an HUG constitutes substantial alteration of boundaries. The phrase ‘substantial alteration of boundaries” is not limited to the mere physical change or ‘geographical configuration of an LGU but also to its politcal boundaries connoting a modification af the demarcation line between poltical subdivisions. Thus, Sec. 453 of the LGC is within the ambit ofthe said constitutional provision requiing for the partcipation in a plebiscte of al political units directly affected ‘The province of Nueva Ecija wil be affected economically since the severance and conversion of Cabanatuan City into an HUC wil resuit in the reduction of the Internal Revenue Allotment (IRA) to the province. In the poilical aspect, the provincial government's administrative supervision over the local government affcials of the cty will be revoked and wil also lose the power to review executive orders issued by the cily mayor, and to approve resolutions and ordinances enacted by the city counci As to the substantial alteration of boundaries, the province will inevitably suffer a corresponding decrease in tertory. In view of these changes in economie and polticl rights, the entire province certainy stands to be directly affected by the conversion of Cabanatuan City into an HUC, ‘Therefore, all the qualified voters in Nueva Ecija should then be allowed to participate in the plebiscite called for thet purpose. ‘AN INVOLUNTARY INTERRUPTION IN A TERM CANNOT BE CONSIDERED AS ONE TERM FOR PURPOSES OF ‘COUNTING THE THREE-TERM THRESHOLD. ‘Mayor Abolardo Abundo Sr. v. COMELEC and Ernesto R. Vega GR No. 201716, January 8, 2013, FACTS: In a Petition for Certirari under Rule 65, petitioner Abelardo Abundo, Sr. (Abundo) sought to nullity the fesolution of the COMELEC affirming the ruling of the RTC of Virac, Catanduanes declaring Abundo as ineligible. under the three-term limit rule, fo run in the 2010 elections for the position of, and necessanly to sit as, Mayor of Viga, Catanduanes, Petitioner served 2s mayor in 2001, 2004, and 2007. For the term 2004-2007, however, the municipal board of Ccanvassers intially prociaimed Jose Torres (Torres) as winner. It was only when Abunda won in his election protest ‘against Torres did he essume as mayor in May 9, 2006 or just a litle over a year remaining for the 2004-2007 term. In the 2010 election, Abundo again fied his candidacy for the same position and eventually won, An election protest and ‘an action fer quo warranto were filed against him grounded on the three-term limit rue ‘The RTC ruled that the 2004-2007 term constitutes @ complete and full service of Abundo's second term as mayor and ‘considered 2s @ service for one full term within the contemplation ofthe three-term limit rue, Abundo maintained that both the RTC and COMELEC erred in considering him to have served full three terms by including the 2004-2007 term, ISSUE: Is the service of a term less than the full three years by an elected official arising fom his being declared as the duly elected official upon an election protest considered as fll service of the term for the purposes of the application of the three consecutive term limit for elective local officials? RULING: No, the Supreme Court stated thatthe consecutiveness of the continuous mayorship of Abundo was effectively broken during the 2004-2007 term when he was intially deprived tite to and was dsallowed to serve and occupy tha office to which he was eventually declared winner. The three term limit rule for elective local officals is found in Section 8, Article X ofthe Constitution which proves that “the term of office of elective local ofcals, except tarangay officials, which shall be determined by law, shall be three years and no such offical shal serve for more than three consecutive terms. Voluntary renunciation of the office for any length of time shall not be considered as an interruption inthe continuity of his service for the full erm for which he was elected.” Ths rue is reiterated in Sec. 43 (b) of the Local Government Gode which provides that ‘no local elective acai shall serve for more than three consecutive terms in te same positon.” ‘The requisites of nese Constitutional and statutory rules must concur: (7) That the oficial concerned has been elected for three consecutive terms in the same local government post; and 16 SBC Contralized.VELASCO CASES (2) That he has fully served three consecutive terms, Hence, in finding that Abundo was effectively relegated to being an ordinary constituent, thus interrupting his term, while his election protest was pending for the 2004 election, the Supreme Court reversed’ the COMELEC and RTC and declared Abundo eligible forthe positon of Mayor of Viga, Catanduenes in the May 10, 2040 elections. PRESERVATION OF THE INTEGRITY OF THE BALLOTS MUST BE PROVED FOR THE REVISION COUNT TO BE CONSIDERED IN ELECTION PROTESTS JAIME C. REGIO vs. COMMISSION ON ELECTIONS and RONNIE C.CO GR. No, 204828, December 3, 2013 Facts: This peton for cerforar fled before the SC under Rule 64, in relation to Rule 65, seeks to nullity and set aside the Resolution of the Commission on Elections En Banc, Petitioner Jaime C. Regio (Regio) and arivate respondent Ronnie C. Co (Co), among other candidates, ran in the October 25, 2010 barangay elections in Barangay 206, Zone 29, District lof the City of Manila for the position of Punong Barangay. ‘After the counting and canvassing of the votes from seven (7) clustered precincts in the adverted barangay, Regio, was Proclaimed winner for the contested post of Punong Barangay. Co then filed an elaction protest betore the MeTC aiming, averring among others, thatthe elections were tainted with regularties. During the preliminary conference, the trial court alowed the revision of ballots.Per the report of the revision commit, the number of votes obtained by both Candidates in the contested precincts, indicated a substantial recovery on the part of CO with 321 votes as against 232 voles for Regio. On this basis, the COMELEC En Banc declared Co as the duly elected Punong Barangay. Vita to the Banc’ disposition is its finding that the ballots subjected to revision were genuine During the presentation of evidence, Co limited his otter to the revision committee report, showing that he gamered the highest number of votes. Regia, on the other hand, denied that the elections were tainted with iregularties and he Presented witnesses to substantiate said statement. He claimed that the resulls of the revision are products of pos! elections operations, as the ballots ware tampered with, switched, and altered drastically to change the resuls of the elections. Issue: Did Co successfully discharge the burden of proving the integily ofthe ballots subjected to revision? Held: No, Co did not discharge the burden of proving the integrity of the ballots subjected to revision. In Rosel vs COMELEC, the Supreme Court summarized the standards to be observed in an election contest predicated on the theory that the election retums do not accurately reflect the wil ofthe voters due to alleged irragulastes in the appreciation ond ‘counting of ballots. These guiding standards are: (1) The ballots cannot be used lo overturn the official count as reflected in the election retums uniess itis fst shown affimatively that the ballots have been preserved with a care which precludes the opportunity of tampering and suspicion of change, abstraction or substitution; (2) The burden of proving that the integrity ofthe ballots has been preserved in such a manner ison the protestant Following the Rosal Ruling, primacy is given to the offeial results of the canvassing, even in cases where there is a discrepancy between such results and the results ofthe revision proceedings. Its only when the protestant has successfully discharged the burden of proving that the re-countad ballots are te very same ones counted during the revision proceedings, wil the court or the Commission, 2s the case may be, consider the revision resulls, {tis wel to note thatthe respondent Co did not present any testimonial evidence to prove thatthe election paraphernalia ‘inside the protested ballot boxes had been preserved. He mainly relied onthe repart of the revision commilise. There wes no independent, direc or indirect, evidence to prove the preservation ofthe ballots and other election paraphernalia With fo independent evidence to speak of, respondent Co cannot simply rely on the report af the revision committee. and from ‘here conclude that the report itself is proof of the preservation of the ballots. What he needs to provide is evidence independent of the revision proceedings. Without any such evidence, the Court or tha COMELEC, 2s the case may be. ‘wil be constrained to honor the presumption that the data and information supplied by the members of the Boards of Erection Inspectors in the accountable forms are true and correct. The duly of the protestee in an election contest > provide evidence of actual tampering or any lketiiooa arses only when the protestant has frst successfully discharge the burden or providing that the ballots have been secured fo prevent tampering or susceptbilty of charge. abstraction or Substitution, Such need to present proof of tampering did nat arse since protastant himself faled to provide evidence of the integnty ofthe ballots, Hence, Co cid not successfully discharge the burden of proving the Integrity ofthe ballots subjected to revision GOVERNMENT SHOULD NOT RETAIN EXPROPRIATED LAND IF THE GENUINE PUBLIC NECESSITY FOR ALLOWING THE EXPROPRIATION OF A PRIVATE LAND CEASES Do Ouano v. The Republic of the Philippines GR No, 168770; February 9, 207%VELASCO CASES FACTS: The present case was brought before the SC through Petition for Review on Certiorar! under Rule 48 where petttoners sought to nulify the Decision ofthe CA, affirming the Order of the RTC in Cabu City, compeling the RP andior the MCIAA to reconvey to the uanos a parce of Ian, ‘The National Aiport Corporation (NAC), MCIAAS predecessor agency, plans to expand the Lahug Airport in Cebu City, prompting it to mest and negotiate with the owners ofthe propertias siuated around the sirport. The NAC assured them that they could repurchase their respective lands should the Lahug Aifport expansion project do not push through or ence the Lahug Airport closes or its operations transferred to Mactan-Cebu Airport. Some of the landowners accepted the assurance and executed deeds of sale with aright of -epurchase. Others, however, refused to sell because the purchase Dice offered was viewed as way below market value, forcing the hand of the Republc, represented by the then Civil Aeronautics Administration (GAA), as successor agency of the NAC, to file a complaint for the expropriation of said lols, ‘whieh the CFI of Cebu rendered in favor of the Repub At the end of 1881, Lahug Airport completely ceased operations, Mactan Airport having opened to accommodate incoming and outgoing commercial fights. This development prompted the former lot owners to formally demand from the {government that they be allowed to exercise thetr promised right to repurchase. The demands went unheetled. , Thus, this case ISSUE: Whether or not the landowners are entiled to reacquire the expropriated lands on the ground of abandonment of the public use of said properties and on the basis of an allaged verbal promise or assurance of some NAC officials that subject properties wil be returned if the alrport project would be abandoned? RULING: Yes, the Court ruled thatthe landowners are entitled to reacquire the expropriated lands. Public use, as an eminent domsin concept, includes any use that is of usefulness, ullity, or advantage, or what is productive of general benefit ofthe public. If the genuine public necessity, the very reason or condition for allowing the expropriation ofa private land, ceases or disappears, then there is ne more cogent paint for the governments retention of the expropriated land, ‘The MCIAA andlor its predecessor agency had not actually used the lots subject ofthe final decree of expropriation for the purpose they were orginally taken by the government, fr the Lahug Airport had bean closed and abandoned, ‘Therefore, given the circumstances, equity and justice demand the reconveyance by MCIAA of the litigated lands in question tothe petitioners. In the same token, justice and fair play also dictate that the petitioners return to MCIAA what ‘ney received as just compensation for the expropriation of thelr respective properties plus legal interest, ‘THE NON-PAYMENT OR INSUFFICENT PAYMENT OF THE APPEAL FEE TO THE COMELEC CASH DIVISION DOES NOT RESULT IN THE OUTRIGHT DISMISSAL OF THE APPEAL Mateo Nollen, Jr. v. Commission on Elections and Susana Caballes GR.No, 187835; January 11, 2009 FACTS: In a Potion for Cortiorari under Rule 64 in relation to Rule 65, pettioner Mateo Nolen, J. (Nollen) seoks to rulify before the SC the Order of respondent COMELEC First Division and the Resolution of the COMELEC Banc denying his appeal for his fallure to pay the appeal fee Petitioner Nolen and respondent Susana Cabales were candidates for punong barangay of Gibange, Sariaya, Quezon in the 2007 barangay elections. Nollen garnered 456 votes and Caballes obtained 448 votes. Nollen was aventualy declared the punong barengay-elect Dissalisfied with tne result, Cabales instituted an election protest with the MTC in Sariaya, Quezon. The MTC then rendered a decision dectaring Caballes as punong barangay-elec with 456 votes. Nolen then fled his notice of appeal and paid the appeal fee of P1,000.00 to the MTC. The COMELEC Furst Divsion dismissed Nollen’s appeal for his flue to pay the appeal fee of P3,000.00. Pettioner nonetheless voluntarily paid the remeining 3,200.00 appesl fee on a later date Nolen fied 2 motion for reconsideration praying fr liberal interpretation of the COMELEC Rules of Procedure. He also slated that: 1) his payment of the P1,000.00 appeal ‘ee was sufficient to perfect his appeal, and 2) the payment of the ‘additional amount of P3,000.00 as appeal fee and 2 ballif fee of P200.00 would amount to a denial of his right to due process, (On the other hand, the COMELEC En Banc denied Nolen’s motion for reconsideration on the ground that while he timely filed his notice of appeal and simultaneously paid the P7,000.00 appeal fee with the MTC, the appeal would be deemed duly registered and docketed only upon full payment ofthe fling fee tothe COMELEC. ISSUE: Was it proper for the COMELEC to dismiss Nollen's appeal from the MTC and then denying his motion for reconsideration when he did not pay the appeal fee on time?VELASCO CASES RULING: No, i was not proper forthe COMELEC to dismiss Nollen’s appeal from the MTC and then denying his motion for reconsideration on the ground that he did nat pay the appeal fee on time In the case of Aguiar v. COMELES, the SC stated thal the payment of the PY,000.00 appeal fee within fve (5) days from the promulgation of the RTO or MTC decision technically perfects the appeal from the tal cours decision, The inadequate payment or non-payment ofthe fling fee of P3,200.00 does not automaticaly dismiss ths appeal. In the instant case, although Nolen failed to pay the fling fee on time, he nonetheless voluntary paid the remaining 9,200.00 appeal fee on October 6, 2008. Thus, the SC gave him credit for remiting the amount of 3,200.00, which ‘palying extent rules and prevailing jurisprudence, cannot be considered as having been belatedly paid. Hence, his petition should be given due course, ‘Therefore, it was not proper for the COMELEC to dismiss Nollen's appesl from the MTC and then denying his motion for reconsideration on the ground that he did not pay the appeal fee on time LANDOWNERS ARE ENTITLED TO WITHDRAW THE AMOUNT DEPOSITED IN THEIR BEHALF PENDING THE FINAL RESOLUTION OF THE CASE INVOLVING THE FINAL VALUATION OF HIS PROPERTY Land Bank of the Philippines vs. DARAB and Heirs of Vieente Adaza, et.al. GR No, 183279, January 25, 2010 FACTS: In a pettion under Rule 48 before the Supreme Court (SC), pettioner Land Bank (LBP) challenges the decision of the GA affirming the orders of the ARAB that granted private respondents Heirs of Adaza's Moton to wltrcraw ‘amendes valuation The Adazas own a 359-hectare tract of land, 278.4092 hectares of which are sultable for compulsory acquisition under CARP. Petitioner assigned the said hectares an aggregate value of Php786,654 46 but the respondents considered the Valuation very low and rejected the offer. DAR then subdivided the property into smaller lots end, in December 1932 distributes them to identified beneficiaries, A new recomputed valuation was submitted by the peiiioner on 2003 ‘amounting to P3,426, 163.80. The respondents sil find the new valuation low which prompted them to file an eppeal before DARAB. Pending resolution oftheir appeal, the -espondents interposed a Motion fo Withdraw Amended Valiston Seeking the release to them of the amount representing the difference between the intial valuation and the second valuation. LBP contested the legally of the respondents’ claim, ISSUE: Can private respondents seek the release ofthe amount of the difference between the inital and second valuation pending appeal? HELD: YES. Under the CARP Law, the landowners are ented to withdraw the amount deposited in thei behalf pending the final resolution of the final valuation of his property. As aptly observed by the DARAB, there is no way that such ‘amended valuation would go down as itis the landowners who have exhibited apposition tothe valuation. ‘The concept of just compensation contemplates just and timely paymant:t embraces not only the correct determination of {he amount to be paid to the landowner, but also the payment of the land within a reasonable time from is taking. Without prompt paymant, compensation cannol be considered “just” for the owner is made to suffer the consequence of being immediately deprived of his land while being made to wat for years before actually receiving the amount necessary ‘0 cope with his loss, ‘The length of time that the Adazas have been deprived of their property without receiving thelr just due on a rather simple Issue of just compensation wil sufice to justify the exercise by DARAB of ks discretion to alow execution pending sppea! Jn Apo Fruits Corporation v. Court of Appeals, the court said that allowing the taking of the landowners’ property nd leaving them empty-handed while government withholds compensation are undoubtedly oppressive Hence, landowners are entitled to withdraw the amaunt deposited in their behalf pending the final resolution COCONUT LEVY FUNDS ARE IN THE NATURE OF TAXES AND CAN ONLY BE USED FOR PUBLIC PURPOSE ‘SPECIAL FUNDS CAN ONLY BE USED FOR THE SPECIAL PURPOSE AND THE BALANCE THEREOF SHOULD REVERT BACK TO THE GENERAL FUND ANY PROPERTY PURCHASED BY MEANS OF SUCH SPECIAL FUNDS SHOULD LIKEWISE BE TREATED AS PUBLIC FUNDS OR PUBLIC PROPERTY Philippine Coconut Producers Federation, Inc. (COCOFED), et. Al vs. Salonga, et. Al GR No, 177857-581, 17 September 2009 FACTS: The present petion was brought before the SC under Rule 45 of the Rules of Court which assails certain ‘Ssuances ofthe Sanciganbayan denying petitioners plea to prove that the sequestered assets belong to coconut farmers lowing the provisional take over by the PCGG of COCOFED. 204 iVELASCO CASES In 1971, RA 6260 was enacted creating the Coconut Investment Company (CIC) to administer the Coconut Investment Fund (CIF), which, under Section 8 thereof, was to be sourced ftom a PhP 0.55 levy onthe sale af every 100 kg of coma, PhP 0.02 of which was placed at the disposition of COCOFED, Through the years, @ part of the coconut levy funds wort lrectiy or inirecty to various projects and/or was converte into differant assets or investments. of particular relovanes ig the acquisition by the UCPB, of a large block of shares af San Miguel Corporation {SMC}, Following the EDSA revolution, the Aquino administration created the PCGG to pursue i-gotien wealth: among those ‘subject for sequestration were the shares of stock in UCPB purportedly owned by more than a milion coconut farmers ‘and the SMC shaves PCGG instituted before the Sandiganbayan a recovery sult, in which the later declared that the sequestered assets belong to the Republic. Pettioners asserted thatthe Sanciganbayan’s refusal to recognize the vested rghis purportedly Created under the coconut levy laws constitutes taking of private property without due process of law ISSUE: Whether ornot the ruing ofthe Sandiganbayan is proper. HELD: Yes, there are several issues involved inthe case, the most relevant ones are hereby discussed, (1) The caconut levy funds are in the nature of taxes. It is @ public fund and cannot be used to purchase sheres of stocks tobe given for fee to private individuals ‘When a law imposes taxes or levies from the public, with the intent to give undue beneft or advantage to private persons, «the promoton of private enterprises, tat law cannot be said to satisty the requirement of public purpose. The loot trot the coconut levy funds were collected from the persons or entities in the coconut industry, does hot and carmot eniiae them to be beneficial owners or owners thereof in thelr private capacity, Parentneticaly. the Said private individosls cannot ‘own the UCPS shares of stocks so purchased using the said special funds of the government (2) The coconut levy funds, being = special fund, can only be used for the special purpose and the balance thereof should revert back to the general fund Article i, Section 25(3) a the 1967 Constitution provides that “All money collected on any tax levied for a special purpose Shall De eated as a special fund and peid out for such purpose only, Ifthe purpose for which a special fur wos orated has been fufiled or abandoned, the balance, if any, shal be transferred to the general funds of the Governments Thus the subsequent reciasification the coconut levy funds as a private fund to be owned by private individuals in thee private ‘capacities contravenes the Constitution The protection ofthe entice coconut industry, and even more importantly, for the consuming public provides the rationale for the creation of the coconut levy fund. The fund created and set up therein wes not especialy for the eoconet farmers but for the entire coconut industry, albet the improvement of the industry would doubtless redound to the beneft of the farmers. {@) The coconut levy funds being special public funds, it follows that any property purchased by means of such funds ‘Should likewise be treated 2s public funds or public property, subject to burdens and restrictions attached by law to 3 property. ‘Since the Coconut incusty Investment Fund (CIIF) companies and the CIIF black of SMC shares were acquired using Coconut levy funds, which have been established to be public in character it goes without saying that these acquired Corporations and assets ought to be regarded and treated as government assets. Being goverment properties, they sre accordingly owned by the Government, for the coconut industry pursuant to currently exiting laws. These shares shall belong to the Government, which shall be used only forthe benefit ofthe cocanut farmers and for the development ofthe ccoconitindusty. Thus, the Sandiganbayan did not erin declaring thatthe Coco lavy funds and the properties acquied through it belong to the Republic PRESIDENTIAL IMMUNITY NEED NOT BE CONTAINED IN THE CONSTITUTION Rubrico vs. Macapagal-Arroyo GAR .No, 183871, February 18, 2010 ACTS: In this petition for review under Rule 45 of the Rules of Court, petitioners Lourdes D. Rubrico, Jean Rubrico Agruebo, and Mary Joy Rubrico Carponel assailed the Decision of the CA excluding President Macapagal-Arroyo as 2 Fespondent in Peition for the issuance of a Writ of Amparo. ‘A petition under the Amparo Rule was commenced against Gloria Macapagal-Arroyo, Gen. Hermogenes Esperon, PiDi: ‘Gen. Ayelino Razon, Ma, Gen. Hermogenes Esperon, P/Di. Gen. Avene Razon, Maj. Darwin Sy AKA. Darwin ReyesVELASCO CASES jimmy Santana, Capt. Angelo Cuaresma, a certain Jonathan, P/Supt. Alfaro, Arsenio C. Gomez, and Oifce of Edgar B. Roquero, Arsenio C. Gomez, and the Ofice ofthe Ombudsman, ‘The ssid petion avers that Lourdes Rubrico was brought to and detained at the Femando Air Base in Lip City without charges where she suffered a week of relentless interrogation amounting to verbal abuse and mental harescmment She was released in exchange of her statement that she wil be a miltary asset Lourdes tied fo file & complaint with the Office of the Ombudsman but nothing happened. However, by separate resolutions, the GA dropped the President as respondent in the case. Petitioner claims that the 1867 Constitution has removed such presidental immunity previously enjoyed by the chief executive under the 1806 and 1873 Constitution, ISSUE: Whether or not the CA erred in excluding President Macapagal-Arroyo as a respondent in Petition for the issuance of @ Writ of Amparo. HELD: No, the CA did not er in excluding President Macapagal-Arroyo as a respondent. Settled is the doctrine that the President, during his tenure of office or actual incumbency, may not be sued in any chil or enmminal case, and there i ho need to provide fort in the Constitution or law. {wil degrade the dignity ofthe high office of the President, the Head of State, if he can be dragged into court tigations hile serving as such. Hence, the CA did not err in excluding President Macapagal-Arroyo as a respondent in Petkon for the issuance of a Writ of Amparo, 4s to the other respondents, the Court ruled that they may not be held lable under the Docttine of Command Responsibility. Command Responsibify, in its simplest terms, means the responsibilty of commanders for mes committed by subordinate members of the armed forces or other parsons subject to their contol in itermationsl ware or domestic confict. While there are several pending bils on command responsibilty. there ts stil no Philippine law thet Provides for criminal abit under that doctrine. Moreover, the Wri of Amparo was Conceived fo provide erections sep etfectve procedural relief against violations or treats of vation of the basie nights to Ife ery, and severly ol pecren the corresponding Amparo suit, however, is not an action to determine eniminal guit. Therefere, the CA did not ex a ‘excluding President Macapagal-Arroyo a8 a respondent A SPECIAL FRANCHISE DIRECTLY EMANATING FROM CONGRESS IS NOT NECESSARY IF THE LAW SPECIFICALLY AUTHORIZES AN ADMINISTRATIVE BODY TO GRANT A FRANCHISE OR TO AWARD A CONTRACT ADMINISTRATIVE AGENCY MAY EXERCISE ADMINISTRATIVE, QUASLLEGISLATIVE, AND QUASIJUDICIAL POWERS AS STATUTORILY GRANTED Francisco, Jr. v. Toll Regulatory Board GAR. No. 169910; October 19, 2010 FACTS: Petitioners Ernesto 8. Francisco, Jr. and Jose Maria O, Hizon filed a special civil action under Rule 65 of the Rules of Court. They seek to invalidate Sections 3 (a) and (d) of PD 1112, and Section 8 (b) of PD 1894. insofar as they Vested the Toll Regulatory Board (TRB), on one hand, tll operation awarding power while, onthe other hand. granting also the power to issue, mocity and promulgate tll rate charges. Peittioners contends that the TRB cannot be an awarding party of a Toll Operation Agreement (TOA) and, at the same time, be the regulator ofthe talway industry and an adjudicator of rate exactions disputes, ISSUE: May the TRE exercise the powers granted to it under Sections 3 (a) and (e) of PD 1112 and Section 8 (b) of PD 10047 RULING: Yes, he TRE may exercise the powers granted to It under Sections 3 (a), (6), and (e) of PD 1112 and Section 8 (o) of PO 1884, (1) As to the grant of franchise by the TRB under Sections 3 (a) and (e} of PO 1112 and Section 4 of PD 1894, the Court Said that frenchise, includes not only authorizations issuing directly from Congress inthe form of statute, but also those granted by administrative agencies to which the power to grant franchise has been delegated by Congress, ‘Thus, 2 special franchise directly emanating from Congress is not necessary ifthe law already specifically authorizes an ‘ministrative body to grant a franchise or to award a contract (2) Under Sections 3 (a) and (d) of PD 1112 the TRE has the power to enter into contracts for the construction, and ‘Speration of toll faites, while, on the other hand, granting it the power to issue and promulgate tol rates While under ‘Section 8 (b) of PO 1896 the TRB is granted adjucicatory ursdiction over matters involving tall rate movementsVELASCO CASES ‘The Court ssid thatthe fact that an administrative agency is exercising its administrative or executive functions (e.g ‘granting of franchises or awerding of contracts) and st the same time exercising its quastlegislatve (e.g, rulemaking) ‘and! oF quasijudicial functions (e.g, rate-fxing). does not suppor a finding of a violation of due process or the Constitution, The grant to and the exercise by an administrative agency of regulating and allowing the operation of public uiilies and, at the same time, xing the feas that they may charge thelr customers is row commonplace, It must be presumed that the Congress, in creating ssid agencies and cothing them with both adjudicative powers and contract- ‘making prerogatives, must have carefully studied such dual authority and found the same net breaching any constitutional principle or concept. ‘Therefore, the TRB may exercise ts administrative or executive, quasilegislatve, and quasijudicial functions. as statutorly granted DISTINCTIONS BETWEEN LEGISLATIVE INVESTIGATION AND COURT PROCEEDINGS Romero Il. Senator Estrada GR_No. 174106, Apnil2, 2008 FACTS: Petitioner Reghis M. Romero Il fled a petition for prohibition with application for temporary restraining order (TRO) end preliminary injunction under Rule 65 of the Rules of Court which aseails the constitutionally ofthe invitations ‘and other compulsory process that the Senate Committee on Labor, Employment, and Human Resources Davelopment (Commitee) issued in connection with its investigation on the investment of Overseas Workers Welfare Administration (QWwWA) funds in the Smokey Mountain project. Romero, 2s owner of Rl Bulder, Inc, received from the Commitee an invitation to attend ah inquity in aid of legislation ‘and shed light on any matter, within his knowledge and competence, whichis covered by the subject matter and purpose ff the inquiry, Le, the investigation of () the lability for plunder of former President Fidel V. Ramos and others for the ‘legal investment of OWWA funds in the Smokey Mountain Project and (i) the culpability of Prasident Ramos, OWWA, Agministator Wilhelm Soriano, and Romeroon the alleged loss of OWWA Funds amounting to P480 millon. Respondent ‘Senstor Jinggoy Estrads, Chairperson of the Committee, caused the service ofa subpoena ad testicandum on Romer® I directing him te appear and testty before the Commitise atts hearing Romero averred that the subject matter of the investigation is sub judice owing to the pendency of the pettion of Francisco Chavez in an ongoing case, Chavez v. National Mousing Author. Senator Estrada argued that (a) the subject matter ofthe investigation focused on the alleged dissipation of OWWWA funds and the purpose of the probe was to aid the Senate to determine the propriety of amending RA 8042 and enacting laws to protect OWWA funds in the future and, therefore, (b) the proposed resolutions were 2 proper subject of legislative inquiry. ISSUE; Is the subject matter of the Committee's inquiry ~ the OWA funds vis-8-vis the Smokey Mountain Project - may be considered as violative ofthe sub udloe rule? RULING: No, the subject matter may not be considered as violative of te sub juice rule. The sub judice rule rest Comments and disclosures pertaining to jusicial proceedings to avoid the prejudging the issue, influencing the cour. febetructng the administration of justice. A legisiatve investigation and court proceedings have diferent purposes. Courts conduct nearings or like adjudicatve procedures to sete, through the applecation ofa law, actual controversies arising between adverse litigants and involving Gemandable rights. On the other hand, inquires in aid of legislation are, infer alia, undertaken as tools to enable the legislative body to gather information and, thus, legislate wisely and effectively; and to determine whether there is a need to improve existing laws or enact new or remedial legisiation,albelt the inquiry need not result in any potentiat legislation Furthermore, an En Banc Resolution of the Supreme Court denied with finality the motion for reconsideration of Chavez, ‘as petitioner in Chavez v. NHA. The sub udlce Issue has been rendered moot and academic by the supervening issuance ff the En Banc Resolution ‘Therefore, the subject matter of the Committee's inquiry is not violative ofthe sub judice ale HOLD-OVER DOCTRINE APPLIES TO OFFICERS OF A PARTY-LIST PENDING THE ELECTION OF THEIR SUCCESSORS Dr. Sefieres v. COMELEC G.R.No. 178678, April 16, 2009 FACTS: Petitioner Dr. Hans Christian M. Sefleres filed a pettion for certiorari under Rule 65 of the Rules of Court with a prayer for a TRO andior preliminary injunction to nulify and enjoin the implementation of the COMELEC Resolution (msn lied testes |VELASCO CASES dectaring private respondent Melquiades Robles asthe President of Buhay Hayaan Yumabong (Buhay), a parylst group duly registered with COMELEC, Buhay, whose constitution provides for a three-year term for all ts party officers without re-election, participated in the 2001, 2004, end 2007 elections. Robles, Buhay’s president since 1998, signed all the required Manifostaions of Desire to Participate in the elections, including the Cerificates of Nomination of representatives, Sefleres Ikewise fled a Cerificate of Nomination and, later, a Petition to Deny Due Course to Certiicates of Nomination that Robles fied. Robles fled 2 Petiton for the recognition of Jose Villanueva as the new representative of Buhay in the House of Representatives Feplacing Sefteres who was expelled from the party and a petition for the nulification ofthe Certificate of Nomination and Certificates of Acceptance that Seferes filed. COMELEC En Banc issued a Resolution recognizing and declaring Robles 48 the president of Buhay in a hold-over capacity since no party election was held to replace him ‘Sefieres averred that he was the acting president and secratary-general of Buhay when Robles vacated the position and that the nominations which Robles made were, for lack of authority, null and void owing to the expiration of the latter's term as party president. ISSUE: Ie Robles the president of Buhay despite the expiration of his term? RULING: Yes, Robles isthe president of Buhay despite the expiration of his term, Officers and directors of a corporation helg-over after the expiration of their terms untl such time as thelr successors are elected or appointed. One who Continues with the discharge of the functions of an office after the expiration of his or her legal tem no successor having, In the meantime, been appointed or chosen is commonly regarded as a de facto officer, even where io provision is Made ‘by law for his helding-over and there is nothing to indicate the contary. By fiction of law, the acts of such de facto officer are considered valid and effectve, The voting members of Buhay duly elected Robles as party President. Although his regular term as such President ready expired, no election was held to replace him and the other original eat of officers, Further, the constitution and by- laws of Bunay do not expressly or impliedly prohibit a holc-over situation. As such, since no successor wes ever elected ‘or qualified, Robles remained the President of Buhay in @hold-over capacity. ‘Therefore, Robles and not Sefieres, is the president of Buhay in @ holé-over capacity pending the election of new officers. OBSCENITY OF SPEECH DEPENDS ON ITS ACCESSIBILITY TO CHILOREN Soriano v. Laguardia GR. No. 164785, April 29, 2008 FACTS: Peiioner Eliseo F. Soriano filed 2 petition for cartiorar and prohibition under Rule 65 of the Rules of Court Seeking to nulfy and set aside sn order end a decision of the MTRCB in connection with certain utterances he made in his television show. Ang Dating Daan, to wit “Lehitimong anak ag demonyo: sinungating (Gago ke talaga Michael, masahol ka pa so putang batae o di ba. Yung putang babae ang gumagana ‘eg coon yung baba, (sto) kay Michael ang gumagana ang itaas, 0 di ba! O, masahol pa so pulang ‘S2bee yen. Sabi ng lola ko masahol pa sa pulang babae yan. Sobra ang kasinungalingan ng mga emonyong to." Michael M. Sandoval, an iglesia NV Cristo (INC) minister who fet directly alluded to in Sorlano's remarks and eight (8) ‘ner INC members fled affidavi-complaints against Soriano with the MTRCB. The MTRCB preventvely suspended the showing of Ang Dating Daan program for twenty (20) days. After the preliminary investigation, MTRCB imposed a penalty fof tree (3) months suspension to Soriano fram his program Soriano averred that the MTRCB Decision to suspend him from hosting the show violates his freedom of speech and ‘xpression guaranteed under Section 4, Article Il of the Constituton, He aszerted thet his utterance is @ protected form of speech ISSUE: Is the preventive suspension order, as well asthe decision of the MTRCB, an unconsttutional abridgement ofthe freedom of speech and expression? RULING: No, neither the order nor the decision is unconstitutional, The Court ruled that Freedom of speech is not ‘absolute It may be regulated to serve important public interest, some forms of speech not being arctected Unprotected speech or low-value expression refers to libelous statements, abscenity oF pomography. false or misleading advertisement, insuling or fighting words, i.e, those which by their very utterance infictinury or tend to incite. an immediate breach of peace and expression endangering national securVELASCO CASES Miter v. California held that patently ofensive utterance would come within the pale of the term obscenity should it appeal to the prurient interest of an average listener applying contemporary standards. The problem wih the chalersed Statements is that they were uttered in @ TV program that is rated G or fer general viewership, and in @ aime alot sot would likely reach even the eyes and ears of citren, ‘The average child may not have the adult's grasp of Sgures of speech, and may lack the understanding that language ‘may be color, and words may convey more than the lteral meaning. The wotds Soriano used were, by any coco orm, clearly not sultable for chidren. Where a language is categorized as indecent. as in Soriand's utterances, on a general patronage rated TV program, it may be readily proserbed as unprotected speech. Soriane's utlerance is obscene ‘2190, an unprotected form of speech, Hence, the preventive suspension order, as well as the decision of the MTRCB, is nat an unconstitutional abridgement of the freedom of speach and expression, NEIGHBORHOOD, INTENT, AND IDEM SONANS RULE MAY BE USED IN APPRECIATION OF CONTESTED BALLOTS Ernesto Batalla v. Commission on Elections GRR No, 184268, September 15, 2008, Facts: In a Pettion for Cortiorari under Rules 65 in Relation to Rule 64 of the Rules of Court, peltioner Emesto Batalia (Batali) assails the Order of the Commission on Electons (Comelec) First Division dismissing his. apoeal trom the February 12, 2008 Decision ofthe Municipal Circuit Trial Court (MOTO), Bacacay, Albay. in Election Case No. B-2007-> ‘and the Order ofthe Comelec En Bane danying his motion for reconsideration Private respondent Teodoro Bataler(Batale), a candidate for the poston of Punong Barangay fed an election protest before the Municipal Circuit Tal Court (MCTC) against petitoner who was also a candidate for he same pouton. Duras the count, Botalla garnered 113 votes while Bataller garnered 108 votes. Consequently, Batala was recieimed the Punong Barangay winner. Respondent claimed miseppreciation of seven (7) balls. The MCTC granted the petton in favor of respondent, ofthe seven ballots protested, the trial court appreciated five of them in favor of Bataller by applying the neighborhood and intent rules, there deciaring that both Bataller and Batalla have gamered equal number of verse ‘This was affmed by both COMELEG frst division and COMELEG £n Banc Petitioner Batalla contend thatthe five ballots should be considered as stray votes. He argues: (1) that, inthe fst Dalit, the contested name Teodoro is writen on the line for Punang Barangay. but the sumame is not discemable, (3) thet, the second balit, the name written seems to be “tododer” and cannot be equated lo Teodoro, thus, kom sonane rate i inapplicable, (3) that. inthe third ballot the real intention of the voter cannot be determined: (4) tha, in the fourth ballot, the name Teodoro stall writen on the space for the candidates for kagawad, and with thal for Punong Barangay wes left biank: and (6) that, in the fifth Ballot the writing isnot legible, Jssus: Does the neighborhood rule, intent rule, or idem sonans rule applicable in appreciation of ballots? Held: Yes tie neighborhood rie, intent rule, or idem sonans rule is applicable in appreciation of ballots. The intent rule Means fat the appreciation of palo, the objective should be to ascertain and carry Into effect the intention of the voles & could be determined with ceasonable certainty. The neighborhood rule states that where @ candidate ie not watien in the proper space in the ballot, but is preceded by the name of the offce for which he is a cancivate, the vote should be counted as valid for the said candidate, dem sanas means “ofthe same sound” In this case, the fist ballot indicates the name Teodoro which is sufficient to appreciate the vote for that candidate although the sumame is not aiscemnable. Applying the intent rule, the vote can be counted in favor of Batali. In the second ballet, the name “todeder’ does nol sound like Teadoro, thus, it cannot be appreciated. The third ballot can be appreciated because it quite distinct and legible. The fourth ballot can be properly appreciated applying the neighborhood doctrine. However, the fith allot cannot be counted because the name ig nt found on or near any line corresponding 12 the offices of the Funong barangay or kagawad, hence, neighboricod and intent rules is inapplicable, Hence, except forthe ith ballot, the neighborhood rule, intent rule, or idem sonans rule is applicable in appreciation of ballots BUY-BUST OPERATION AS A LEGITIMATE FORM OF ENTRAPMENT UNDER WARRANTLESS ARREST PEOPLE OF THE PHILIPPINES v. SPO3 SANGKI ARA y MIRASOL ot. a GR No. 185011; December 23, 2609, Facts: In an appeal from the December 13, 2007 Decision of the Court of Appeals, accused-appellants SPO3 SANGK! AA y WIRASOL. MIKE TALIB y MAMA, and JOROAN MUSA y BAYAN, questioned their conviction for violation of RA 18165 or ine Comprehensive Dangerous Drugs Act of 2002.VELASCO CASES ‘The above-named accused were arrested by virtue of a buy-bust operation after receiving information from a confidential informant who came to the Heinous Crime Investigation Section (HCIS) of the Davao City Police, The tral Court hele That the prosecution was able to establish the quantum of proof showing the guilt of accused-appeliants beyond reasonable oubt_t further ruled thatthe intercept operation conducted by the buy-bust team was vald. The CA effimed the rang of the RTC. Thus, this appeal Pettoners asserted that their arrest was without probable cause and in violation of ther constitutional rights. They claim that the buy-bust team had more than a month to apply for an arrest warrant yet failed fo do $0. They questioned the valicty ofthe buy-bust operation and there was no marked maney presented to back up thew claims. Also, they argued that since the markings on the seized items were only made at the police station, there is a great possibilty trat hese were replace, ‘Issue: Is the buy-bust operation a legitimate method for the arrest ofthe accused without a warrant? Held: Yes, the buy-bust operation isa legitimate method forthe arrest ofthe aécused without a warrant. Owing tothe special circumstances surrounding the drug trade, a buy-bust operation has long been held as @ legitimate method of Catching offenders. It is @ form of entrapment employed as an effective way of apprehending @ criminal in tne oct of commission ofan offense, In the prosecution for the sale of dangerous drugs, the absence of marked money does not create hiatus in the {evidence forthe prosecution as long as the sale of dangerous drugs is adequately proved and the drug subject of the ‘fansaction is presented in court. In this case, itis unavailing then to argue thatthe operatives had to fil secure a warrant of rest given thatthe objective of the operation was to apprehend the accused-appeliants in flagrante delcto, The legal Sele of shabu has been established by presenting the same to court although the marked money Wes not presented. ‘Therefore, the buy-bust operation was valid showing to be a legitimate form of entrapment PRESS FREEDOM MUST BE DONE CONSISTENT WITH GOOD FAITH AND REASONABLE CARE Tulfo vs. People of the Philippi: GR.No. 161032, September 16, 2008, FACTS: In a petition for review on certiorari under Rule 46 before the SC, petitioners Erwin Tulfo and ethers assail the decision of the RTC and CA finding them guity beyond reasonable doubt ofthe crime of ibe ‘Alty. Carls Ding So ofthe Bureau of Customs (BOC) fed 4 separate informations with the RTC of Pasay City charging Petitioner Tullo as authoriwrter, Susan. Cambri as managing edltar, Rey Salao as national editor, Jocelyn Garcia ety editor, and Philip Pichay, 2s president of the Cario Publishing House, Inc, of the daly tabloid Rlemate with the enme of bel in connection with the publication of the articles in the column Diract Hit. In the said column, complainant was indicated 2s extorionist, a comupt public offcial, smuggler and having legally acquired wealth, with the object of estroying the reputation ofthe petitioner, discrediting and ridiculing him before the bar of public opinion, Jip fis defense pettioner claims that the subject artces fall under qualifedly privilege communication and that the ‘resumption of mace does not apply, ISSUE: Should the assailed articles qualify as privileged communication? HELD: No, the assailed articles cannot qually as privileged communication In order that the publication of a report of an official proceeding may be considered privileged, the folowing conditions ‘must exist (1) That iti fair and true report of a judicial, legslatve, oF other offeial proceedings which are not of Confidential nature, or a statement, report or speech delivered in said pracaedings, or of any other act performed by 2 Public officer in the exercise of his functions; (2) thet itis made in good faith; and tat its without any comments or Femarks. ‘The mere fact that the subject of an article Is a public official or @ matter of public interest does not mean it is a fair Commentary within the scope of qualified privileged communication, which would automaticaly exclude the author from Tabi Tulfo failed to satisfy the requirement that the report must be true and fair, as he did not do research before making his allegations, and ithas been shown that hs allegations are baseless. Although falsity ofthe articles does not prove malice, the existence of press freedom must be done “consistent wih good faith and reasonable care" This was clearly bandoned ty Tulfo when he wrote the subject artcies. This is no case of mere error or honest mistake, but a case of Jouraiist abaicating his responsibly to very his story and instead misinferming the publ Hence, the arcies cannot be considered as privilegedVELASCO CASES PRIVILEGE SPEECH COVERED BY PARLIAMENTARY IMMUNITY NOT ACTIONABLE CRIMINALLY OR IN A DISCIPLINARY PROCEEDING UNDER THE RULES OF COURT Pobre vs. Santiago AC. No, 7393; August 25, 2008 FACTS: Respondent Senator Miriam Defensor-Santiago asked the Supreme Court for the dismissal of the sworn lettericomplaint for disbarment or disciplinary action made by complainant Antero J, Pobre addressed thereto. Pobre argued that the statements of respondent in her speech delivered on the Senate floor showed disrespect to then Chief Justice Artemio Panganiban and the other members of the Court, and thus, constituted cirect contempt. In her comment, respondent not denying to have made the statements invoked provision on parliamentary immumty under Article 6, Section 11 of the Consttution. She contends thatthe said statements were part ofa speech she delvered inthe tlscharge of her duty as member of Congrass or ts committee Respondent claimed thst her purpose was to bring out inthe open controversial anomalies in governance with a view to {uture remedial legislation because of the unjust act of the Judicial Bar Council (JBC). She averred that JC sent public invitations for nomination in the positon of Chief Justice only to inform falar the applicants that only incumioent justices of the Supreme Court would qualify for nomination. ISSUE: Wes respondent's privilege speech covered by the provision on patliomentary immunity actionable in a iscilinary proceeding under the Rules of Court? HELD: No, cespondent’s privilege speech is not actionable criminally or in 2 cisciplinry proceeding under the Rules of Court Inthe case of Osmofa, Jr. v. Pendatun, the Court explained the import of Article 6, Section 11 ofthe Constitution, which provides, “A Senator or Member of the House of Representative shall, in all offenses punishable by not more than sik ‘years imprisonment, be privileged from arrest while the Congress isin session, No member shall bo questioned nov be held liable in any other place for any speech or debate in the Congress or in any committee thereof However, o the Court, respondent violated Canon 8, Rule 8.01 and Canon 11 of the Code of Professional Responsibility. But since the factual and legal circumstances deter the Imposition of disciplinary sanctions on respondent, the Coutt ‘eminds her the duty to respect the Court ana its members, and that the periamentary non accountabity thus granted #0 members of Congress is not to protect them against prosecutions for their own benefit but to enable them, as the people's representatives, to perform the functions of thar office without fear of being made responsible before tre cours ‘or other forums outside the congressional hall Henoe, respondent's privilege spesch being covered by the provision on parliamentary immunity, the sworn Jettericomplaint for disbarment or disciplinary action was cismissed AUTOMATION CONTRACT DOES NOT CONSTITUTE A WHOLESALE ABDICATION OF THE COMELEC’S ‘CONSTITUTIONAL MANDATE FOR ELECTION LAW ENFORCEMENT Roque vs. COMELEC ‘GR No. 188456; September 10, 2009 FACTS: In 3 petition for certorar, prohibiton and mandamus with prayer for a restraining order andlor preliminary injunction, petitioners, as taxpayers and citizens, sought to nulfy before the SC, respondent COMELEC’s award of the 2010 Elections Automation Project (automation project) ta the joint venture of Tatl Information Management Corporation (Tim) sné Smartmatic International Corporation (Smertmatic) and to permanently enjoin the signing ofthe Contractor ts implementation, and to compel disclosure of the terms of the Contract and other agreements between the Provider and its subcontractors, Pursuant to R.A, $369 amending the frst automated election law, R.A. 8436, it authorized the COMELEC to use an ‘automated election system or systems in the same election in different provinces. However, during the May 2007 elections, the COMELEC did not use any automated election system. Later on 2009, respondent with TIM and Smartmatic signed the Contract for the automated tallying and recording of votes cast nationwide for May 2010 elections to which the former vould lease 82,200 optical scanners and related equipment, and hire the ancilary services ofthe Provider, Peiitoners claimed that the COMELEC-Smartmatic-TiM Corporation automation contract sin violation of the Constitution, for it consttutes a wholesale abdication ofthe pol body's constitutional mandate for election law enforcement ISSUES: Whether or not the COMELEC-Smartmatic-TIM Corporation automation contract conétittes 8 wholesale _bcieation of the COMELEC’s constitutional mandate for election law enforcement 2046VELASCO CASES RULING: No, the COMELEC-Smartmatic-TIM Corporation aulomation contract does not constitute @ wholesale abdication of the COMELEC's constitutional mandate for election law enforcement ‘The function of the COMELEC under the Constitution ané the Omnibus Election Code relates to the enforcement and ‘administration ofall laws and regulations relating to the conduct of elections to public office to ensure a free, orderly and honest electoral exercise ‘On the other hand, the role of Smartmatic TIM Corporation is basicaly to supply the goods necessary forthe automation project, such as but not limites to the PCOS machines, PCs, electronic trensmission devices and related equipment, both hardware and software, and the technicel services periaining to their operation, As lessees of tie goods and the back-up ‘equipment the corporation and its operators would provide assistance with respect to the machines to be used by the COMELEC which, a the end ofthe day, wll be conducting the election thru its personnel and whoever it deputizes, ‘Thus, there is no abdication of the COMELEC's constitutional mandate for election law enforcement SUBMISSION OF FORMAL OFFER OF EVIDENCE, INCLUDING THE EVIDENCE ITSELF, WITHIN THE PRESCRIBED PERIOD CONSTITUTED SUBSTANTIAL COMPLIANCE WITH THE REQUIREMENT THAT ‘OBJECTIONS BE REDUCED INTO WRITING Hector T. Hipe v. COMELEC GAR. No. 181828; October 2, 2008 Facts: In a Petition for Certiorari and Prohibition under Rule 64, in relation to Rule 65, petiioner seeks to nulify and enjoin the implementation of the January 30, 2008 Resolution issued by the Commission on Elections (COMELEC) En Banc, ‘which affimed the July 11, 2007 Resolution issued by its Second Division. Petitioner Hector T. Hipe (Hipe) and respondent Ma. Cristina L. Vicencio (Vicencio) were candidates for the mayorslty postin Catubig, Norther Samar in the May 14, 2007 elections. Respondent Vicencio petitioned forthe exclusion of seven election returns on the grounds thal they were prepared under duress, threats, intimidation or coercion; and that the ‘electon was marred by massive vote buying, widespread coercion, terorism, thests, and intimidation, preventing voters from voting, 39 thatthe said returns cid not reiect the wil ofthe electorate. The Municipal Board of Canvassers (MBOC) fied in favor of Vicencio, Thereatter, pettioner Hipe fled his Verified Appeal with the COMELEC, arguing thatthe writen petition to exclude the election retums was fled out of time, The Second Division of COMELEC dismissed the appeal for being fled out oftime. The COMELEC En Banc denied petitioner's mation for reconsideration Petitioner Hipe contends thatthe written petition to exclude the election returns was fled beyond the prescribed time or almost 24 hours after the oral pettion to exclude was manifested by the counsels of respondent Vicencio; hence, the latters objections were raised aut of time. Hipe contends that the writen cbjectons wore fed only at May 16, 2007 at 6:40 p.m. and submited the documentary evidence in support ofthe protest at 2:45 p.m. only on the folowing day. Issue: Does the respondents submission of his formal offer of evidence, including the evidence itself, within the prescribed period constitute substantial compliance with the requirement that objections be reduced into writing? Held: Yes, while respondent fale to submit his written objections, respondents’ submission of his formal offer of evidence, ‘eluding the evidence iself, within the prescribed period constituted substantial compliance with the fequrement hat objections be reduced into writing, In Marabur v. COMELEC, the Court held that while respondent failes fo submit hs writen objections, respondents submission of his formal offer of evidence, including the evidence itse finn the prescribed period constituted substanti| compliance with the requirement that objections be reduced into ‘toting Tecnnicalttes and procedural Dariers should nt be allowed to stand in the way if they constitule an obstacle to the determination ofthe electorates’ true will the choice of is elective officials. Jn this case, the records reveal that respondent Vieencio manifested her oral objections on May 15, 2007 at around 7:00 pm, fled the writen objections on May 16, 2007 at 6:40 p.m. and submitted the documentary evidence in support of the protest at 2:45 p.m, only onthe folowing day. Hence, while respondent failed to submit his wniten objections, respondents’ submission of his formal offer of evidence, including the evidence itself, within the prescrbed period consttuted substantial compliance with the requirement that bjections be reduced into writing MANDATORY DRUG TESTING UNDER RA 9166 IS VIOLATIVE OF THE CONSTITUTION FOR IT ADDS ANOTHER REQUIREMENT TO THE EXCLUSIVE QUALIFICATIONS TO BE A MEMBER OF THE SENATE Social Justice Society v. Dangerous Drugs Board and Philippine Drug Enforcement Agency GR.No. 157870, November 3, 2008 FACTS: These are three (3) consolidated petiions for certiorari and prohibition under Rule 65, assalling the ‘onstttionalty of Section 36 of RA 9166 or the Comprehensive Dangerous Drugs Act of 2002 as itequires mandatoryVELASCO CASES drug testing of cancidates for puble ofc, states of secondary and teary schools, offcers and employees of public and private offices, and persons charged before the prosecutor's office with cstiain atferece Fettoner Acuiino Pimentel. said mandatory crug testing imposes an additonal qualification for Senators beyond that wien are provided by the Constitution. No provision in the Constitution authorizes the Congress or he Concrete expand the qualification requirements of candidates for senator, Social Justice Society contended that Section 36()(d) and (g) of RA 9165 are consitutonally infirm as they constitute undue delegation of legislative power when they give unbridled discretion to schools and employers fo corer a snes ofa testing. I also velates the equal protection clause as it can be used to harass a student or empoyen deemed undesirable tlre ae erceeeina. J, 95a lizen and taxpayer, maintained tha the provision which requires al persons charged before the prosecutors offes witha criminal offense having an Imposeblepenally of mprsonment of not ess Maren es Tea anyone (1) day shall undergo a mandatory drug test, should be struck down as unconsiiutional for niongine on ty Constitutional nght to privacy and the right against unreasonable searches and selsures, Issues: (2) Is Sec. 36 (9) of RA 9165 and COMELEC Resolution Ne. 6486 unconstitutional for this imposes an additional {qualification for candidates for senator? Clare Beraaranns (0) (and (G) of Sec. 38, RA 9165 unconsttuioal for these paragraphs vilate the ight to Brivacy and the right agains! unreasonadle searches and seizure? HELD: CMe po 201 RA 2185 is unconstitutional for i infringes Secion 3 Art. VI of the Constitution that defines the Qualification for one aspiring to run for and serve a senator, ‘The Court held that it is basic that ia law of an administrative rule violates any norm of the Constitution, that isuance is null and void and has 1 eacKour futher stated that the same unmistakably requires a candidate for senator to be certified iega/-drug clean, ‘obviously 2s a pre-condition to the validity of a certificate of candidacy for senator of, with like effect 6 sendin tone oted upon and. if proper, be procaimed senstor-elect, adding thatthe assaled provision of the law and fo Genie toe Resolution add another layer to what the 1987 Constitution, at the minimum, requires for membership in the Sencie ence, Section 36 (g) of RA 9185 is unconstitutional forit adds another requirement to the quaficatone of members ve Senate (2) Sec. 36 paragraph () and (a) of RA 8165 requring mandatory drug testing of students and officials and employees of Public ond private offices are constitutonal, The Court stated that until a more effective method is conceptualized and pat in motion, a random drug testing of students in secondary and terbary schools is nat anly acceptable But may ever oe ‘Necessary ifthe safety and interest ofthe student population, doubtess a legitimate concer of he government ere to be Promoted and protected. Section 36 () is unconstitutional ort violates the right to privacy and unreasonable searches and seizures, The operative concepts in the mandatory drug testing are "randomness" and “suspiionless” In the case of persone charges way & rime before the prosecutor's office, a mandatory drug testing can never be random or susptioniess Wre wene randomness and Being suspiionless are antithetical o their being made defendants in a criminal complain. They are nol ‘randomly pickes; nether are they beyond suspicion. When persons suspected of commiting a ime are charged, they are singled out and are impeded against their wil, To impose mandatory drug testing on the accused is e blatant attemra to hamess a medica test a5 a tool fr criminal prosecution, contrary tothe stated objecives of RA 9165. Drug tecling ‘his case would violate person's right to privacy guaranteed under See. 2, All ofthe Constitution DUE PROCESS IN AN ADMINISTRATIVE CONTEXT DOES NOT REQUIRE TRIAL TYPE PROCEEDINGS SIMILAR ‘TO THOSE IN COURTS OF JUSTICE Equitable PCI Banking Corporation, et. al. v. RCAC Capital Corporation GAR. No. 182248; December 18, 2008 FACTS: This Paton for Review on Crtiorar under Rule 45 seeks the reversal ofthe Orders ofthe RTC of Makati City, ‘The assailed Orders confirmed the Partial Award rendered by the Intemational Chamber of Commerce Intemational Coctt ‘9 Arbitration (ICC-ICA) and denied pettioners motion for reconsideration, Eesiores ineress in Bankard. To expedite the purchase, RCBC agreed to cisperse wth the conduct of @ due diigence | _28dion the financial status of BankaraVELASCO CASES ‘As required by the SPA. ROBC deposited, as downpayment, 20% of tha purchase price in an escrow account after which ‘twas given ful management and operational control of Banksrd, and eventually paid the balance ol the contract price Thereafter, RCBC informed petitioners of ts having overpaid the purchase price ofthe subject shares, claiming that there was an overstatement of valuation of accounts. Thus, RCBC claimed that petitioners violated thelr warranty as celers Following unsuccessful attempts at setlement, RCBC, in accordance withthe SPA, fled a Request for Arbitration wth the ICC-ICA charging Bankard for deviating from, contravening and not folowing generally accepted sccounting principles {nd practices in maintaining their books, and prayed forthe rescission of he SPA. resttution of the purchaes price, and payment of actual damages Petitioners fled an Answer denying the allegations and claiming that the period for fling ofthe assorted claim had alcoady lapsed by force ofthe SPA and that RCAC is not entitled to rescission having had ample opportunity and reasonable tine to fle a claim against pettioners, being gully of laches, ‘Atbtrtion inthe IGC-ICA proceeded after the formation ofthe arbitration tribunal, ICC-ICA rendered a Paral Award. oth parties fled suit with the RTC. The tral court issued the firs assailed order confirming the Partial Award and denying the agverted separate mations to vacate and to suspend and inhibit. From the assailed orders, petiioners came dreety ty this Cour through this pettion for review, ISSUE: Was there a violation of due process on the part of ICC-ICA for admiting in suinmary the evidence presented by RCBC and not providing EPCIB the opportunity to cross-examine the former's winesses? HELD: No, there was no violation of due process ‘The essence of due process is the opportunity to be heard. What the law prohibits is not the absence of previous notice but the absolute absence thereof and the lack of opportunity ta be heard. Accordingly, due process in an admintstve Context does not requis tial type proceedings similar to those in courts of justice. Where an opportunity lo be heard either through eral arguments or through pleadings is accorded, there is no denial of procedural ue provens, fp the case at bar, the petitioners were afforded the opportunity to refute the summaries and pieces of evidence submited ‘by RCEC, which became the bases of the experts opinion, This is supported by the events, which eulmineted in the issuance of the challenged Partial Award, unequivocally demonstrate ample opportunity for pettioners to. verly and examine RCBC’s summaries, accounting records, and reports. The pleadings reveal that REBC granted. petitoners Fequests for production of documents and accounting records. ‘As regards petitioners claim that is right to due process was violated when they were allegedly denied the right to crass examine RCBC's witnesses, Sec. 15 of RA 876 or the Arbitration Law substantially provides that the a-birators shal be the sole judge of the relevancy and materiality ofthe evidence offered or produced, and shall not be bound to conform to the Rules of Court pertaining to evidence. The well-settled rule is that adminisvative agencies exercising quasijudicial powers shall not be fettered by the ric technicalities of procedure, abet they ae, at ali imes required, to achere to the basic concepts of fic play. Thus, where = party has had the opportunity to cross-examine a witness but failed to avail himself of, he necessarily forels the righ ross-examine and the testimony gen on clrect examination ofthe witness will Be received or allowed to cemsin the record. The right to cross-examine Is not an indispensable aspect of due process. ‘A SPEEDY TRIAL IS ONE FREE FROM VEXATIOUS, CAPRICIOUS AND OPPRESSIVE DELAYS People of the Philippines v. Roger Mendoza y Dela Cruz GAR. No, 180801, December 24, 2008 FACTS: This is an appeal from the decision of CA modifying the decision of the RTC of Muntinlupa agjudging the accused Rager Mendaza guity of rape Mendoza was brought tothe police station and appellant was charged with molesting AAA, who, however, did not say _2nything atthe police station: it was her mother who answered al he questions of the police investigator. He was charged ‘wit fingering the sexual organ of AAA, He denied the accusation, asserting that he oid not touch the child, being outede ‘heir house on the day in question watching men doing road repair work. Accused-appelant stated that while he has been delained since April 26, 2000, his arraignment came only on March 2, 2001 and the prosecution started to present its evidence only on May 8, 2001. To compound matters, the prosecution was ‘ot deemed to have terminated its presentation of evidence unbl April 14, 2004, Accused-appeliont thus argues that theVELASCO CASES delays attending his case should have been enough for the tial court to have dismissed it on account ofthe violation of bis right to speedy trial, 'SSUE: Was the right of the accused to speedy trial violated on account af the delay inthe arraignment, presentation and termination of evidence? HELD: NO. There was no violation of Roger Mendoza’ right to speedy tri ‘The right fo speedy tral, as an adjunct to the right ofall persons to @ speedy disposition oftheir cases before judicial and Guasijusicial bodies, requires that court proceedings should be conducted according to fixed rules and must be fies fom vexatious, capricious. and oppressive delays. The same right may also be considered violated when unjuctiice ostponements ofthe tral are asked for and secured; or wien without Cause or justfiable motive, along period of tine i allowed to elapse without the parties having their case tried None af these circumstances are, to us, present in the instant case. While perhaps there might have been delays, _accused-appeliant does not state in some detail what or who caused the delays, or whether these are ofthe veetious or ‘oppressive kind. Hence, the right to speedy tral was not violated EXPROPRIATION OF PRIVATE PROPERTY MUST BE FOR PUBLIC PURPOSE Barangay Sindalan, San Fernando, Pampanga vs. Court of Appeals, GIR. No, 150840; March 22, 2007 FAGTS: This case is a petition for review on certiorari under Rule 45 on the decision and resolution of the GA, which Feversed and set aside the order of the RTC of San Femando Pampanga. In effect, the CA dismissed tne complaint for ‘eminent demain Pursuant to a barangay council resolution, pettioner Brgy. Sindalan of San Feriando Pampanga, as represented by its Bray. Captain Ismael Gutierrez, sought to convert a portion of the private respondents’ (Spouses Jose Masioto Il ana Patricia Sindayan) land into Brgy. Sindalan's feeder ‘oad by filing a Complaint for Eminent Domain against responcest ‘spouses who are the registered avmners ofthe same parcel of land subject of expropraion, Peiiioners deemed it necessary 1o exproprate said portion of land as such lots would contibute greatly to the general ‘fare ofthe people resicing therein in terms of social, economic, cultural and health development aspects, amor other things. On the otner hand, respondents alleged that the expropriation oftheir property was for private use for the benefit ot the homeowners of Davsan Il Subdivision. They contended that petitioner deliverately cried the name of Davsan Subdivision ond, instead, stated that the expropriation was for the benefit of the residents of Silo Paraiso in order ta >nceal the fact that the access road being proposed to be buill across the respondents’ land was to serve a privately. ‘owned subdivision and those who would purchase the los of said subdivision, ‘The GA, reversing the RTC decision alowing the expropriation, maintained that Purok Paraiso, supposedly amang the beneficiaries ofthe expropriation, is in realty Davsan Ii Subdivision as per the testimony of pettioners’ own witness, ISSUE: Is the taking ofthe tang ofthe respondents by the pettoners for pubic purpose? HELD: No, the taking ofthe land of the respondents by the petitioners was not for public purpose or use. The exercise of the power of eminent domain is sanctioned by Artie Il, Section 9 of the Constitution, that prvate property shall not be taken for public use without just compensation The feeder road has not been shown that the other residents of Barangay Sindalan, San Fernando, Pampanga will be benefited by the contemplated road to be constructed on the lot of respondents spouses Jose Magioto Il and Patricia Sindayan. While the number of people who use o: can use the property is no! determinative of whether of no! i Constitutes pubic use or purpose, it reveals that the intended use of respondents’ lt Is confined solely lo the Daves ‘Subdivision residents and is not exercisable in common. The intended expropriation of private property for the benett of 2 private individual is clearly proscribed by the Constitution, declaring that it should be for public use or purpose ‘Therefore, the expropriation of the property by the petitioner isnot for public use but for a privately-owned subdivision. REPATRIATION UNDER RA 8171 OF A PARENT WHO HAD RENOUNCED HIS PHILIPPINE CITIZENSHIP DUE TO POLITICAL OR ECONOMIC REASONS WILL ALSO BENEFIT HIS MINOR CHILDREN. anie Arellano Tabasa v. Court of Appeals R. No, 125793, August 29, 2006 "TS: Petitioner Joevanie Arellano Tabasa was a natural-bor citizen of the Philippines. In 1968, when petitioner was, n (7) years old, his father, Rodolfo Tabasa, became a naturalized citizen of the United States, By denvative Saturalization (citizenship derived from that of anather as fforn a person who holds citizenship by vitue of naturalization Betitoner also acquired American citizenship. 6.VELASCO CASES In 1996, pettoner arrived inthe Philippines but he was brought te the Bureau of Immigration and Deportation Detention Center in Mania because bis passport has already expired. He is considered an undocumented and undesirable alien ‘and may be summarly deported. The BID ordered gettioner's deportation to his county of origin, the United States, on the ground that 2 standing warrant for several federal charges has been issued against him In 1996, the petkioner filed before the CA a Petiton for Habeas Corpus with Preliminary Injunction on the ground that he hrad legally and successfully acquired—by repatriation—his Filpina cilzenship as provided in RA 8171. Thereafter, the petitioner filed 2 Supplemental Peition alleging that ne had acquired Flipino citizenship by repatriation in accordance with RA 8171, and that because he is row a Filipino ciizen, he cannot be deported or detained by the BID. Peltioner thaorizas that he could be repatriated under RA 8171 because he is @ child ofa natural-torn Filipino, and that he lost his Phiippine ‘ilizenship by derivative naturalization when he was stil a minor. ISSUE: Did he validly reacquire Philippine citizenship under RA 81717 HELD: No. the Supreme Court ruled that the only persons entitled to repatiation under RA 8171 are the following: (2) Filipino wornen who lost their Philppine citizenship by marriage to aliens, and (b) Natural-born Filipinos including their ‘minor children who lost ther Phlppine citzenship on account of politcal or economic necessity, In the case at bar, there is no dispute that petiioner was a Filpino at birth. In 1968, while he wes stil a minor, his father was naturalized as an American citizen; and by derivatve naturalization, pettioner acquired U.S. citzenship. Petitioner row wants us fo believe that he is entied to automatic repavation as a child of natural-bor Flipinos who left the county {due ta politcal or economic necessity, This is absurd. Petitioner was no longer a minor atthe time of his "repatiation” on June 13, 1996. The privilege under RA 8171 belongs to children who are of minor age at the time of the fling of the petition for repatriation. Jn sum, petitioner is not qualified to avail himself of repatriation under RA 8171. However, he can possibly reacquira Philipine citizenship by avaling of the Citzenship Retention and Re-acquisition Act of 2003 (Republic Act No. 8225) by simply taking an oath of allegiance to the Republic ofthe Philppines.VELASCO CASES LABOR LAW PROOF BEYOND REASONABLE DOUBT NOT REQUIRED IN ORDER TO VALIDLY DISMISS A MANAGERIAL. EMPLOYEE ON THE GROUND OF BREACH OF TRUST Wesleyan University Philippines v. Nowella Reyes GR. No. 208321; July 30, 2014 FACTS: In 3 pettion under Rule 45 before the SC, petitioner Wesleyan University Philppines (WUP) challenged the decisions ofthe CA and the RTC finding it quity for ilegally dismissing respondent Nowella Reyes (Reyes) Reyes served as WUP's University Treasurer. It was discovered thal there were regulates in the encashment of checks by its Treasury Department. Thus, an explanation was asked from Reyes but finding i unsalistacory, the Universtiy Director terminated her employment on the ground af loss of trust and confidence. Petitioner contended that respondent was a highly confidential employee who handled signifcant amounts of money 2s University Treasurer. Thus, the iregularites attibuted to her in the performance of her duties justly her diemiseal eines ‘she exercises the Principle of Command or Superior Responsibly as a managerial personne In her defense, respondent claimed that the charges against her were based on mere suspicion and speculations which were unsupported by evidence. ISSUE: Is proof beyond reasonable doubt necessary to validly dismiss a managerial employee on the ground of breach of trust? Was there a valid dismissal? RULING: No, proof beyond reasonable doubt is not necessary to dismiss a managerial employee on the ground of breach Of trust. The mere existence of a basis for believing that such managerial employee has broached the trust of he employer would suffiee for his dismissal Loss of trust snd confidence, as a just cause for termination of employment under Art 297 ofthe Labor Code, is premised the fact that an employee concerned holds a positon where greater trust Is placed by management, The Ge hoc istinguished the application of this ground between menageral employees and rank-and-fle personnel, With respecte Fank-and:-fle personnel, proof af involvement in the alleged events in question is required, and mere accusavons oy the employer wil not be sufficient. On the other hang, fo: managerial employees, the mere exislence of a basis for baigvng ‘that such managerial employee has breached the trust of his emmployer sulfices Here, Reyes is a managerial employee. It would be unfair to require pettioner to retain an officer who was not trustworthy in the handling and custody of University funds, Hence, proof beyond reasonable doubt is no longer necessary to valid dismiss Reyes on the ground of breach of trist PLACEMENT OF THE EMPLOYEE ON A FLOATING STATUS SHOULD NOT LAST FOR MORE THAN 6 MONTHS; AFTER 6 MONTHS, THE EMPLOYEE SHOULD BE RECALLED FOR WORK OR FOR A NEW ASSIGNMENT, OTHERWISE, HE IS DEEMED CONSTRUCTIVELY TERMINATED Exocet Security and Allied Services Corporation andlor Ma. Teresa Marcelo v. Armando D. Serrano ‘GR No. 198538; September 29.2014 FACTS: in 2 Pettion for Review on Certorari under Rule 45 before the SC, pettioner Exocet Security and Allied Services Corporation (Exocet) challenged the decision of the CA finding it guily for constructively dismissing respondent Arman: Serrano (Serrano), Exocet assigned Serano as “close-in” securty personnel for one of JG Summit's corporate officers. Eventually, Serrano was relieved from his duties prompting him to report back to Exccet. However, sk (6) months had lapsed and yet respondent was not given any reassignment. Thus, he fied a complaint for constructive dismiseal Forts defense, Exocet denied dismissing Serrano. It alleged thatthe latter no longer reported for duty assignment as VIP security and demanded to be reassigned to another cient. Nonetheless, Serrano was assigned to general securty service. Exccet maintained that was Serrano who deciined the assignment and refused to report for immediate duty On the other hand, Serrano claimed that he was constructively dismissed since Exocet failed to re-assign him within sic (6) months after placing him on ‘floating status" ISSUE: Wes respondent constructively dismissed for being placed on “foating status” for more than six (8) months? RULING: No, respondent was not constructively dismissed by Exocet “The SC ruled in Sebuquero v. NLRC that the placement of the employes on a floating status should not last for more than 2 (6) months. If after six (6) months, the employee is not recalled for work of for a new assignment, he is deemed terminated.VELASCO CASES tn accordance with the aforementioned rung, the Department of Labor and Employment (DOLE) issued Department Order No, 14, Series of 2001 (D0 14-01). Section 65, in relation to Sec. 9.3, of which states that the lack cf eerace assignment for a continuous period of six (6) months is an authorized cause for the termination of the employee, wine then entitled to @ separation pay equivelent to half month pay for every year of service Here, petitioner Exocet made an offer to Serrano to go back to work. However, respondent refused the assignment fr the ‘eason thatthe position offered to him was not he secur detall he desired—although such sesignmentald nor neces demotion in rank or diminution In salary, pay, benetits or pavleges. Hence, petitioner is guity of nether ilegal diemizsal nor constructive dismissal SEAFARERS ARE ENTITLED TO SICKNESS ALLOWANCE UNTIL HE IS DECLARED FIT TO WORK OR THE DEGREE OF PERMANENT DISABILITY HAS BEEN ASSESSED, WHICH PERIOD SHALL NOT EXCEED 120 DAYS, WON THE SICKNESS IS WORK-RELATED IS IMMATERIAL IN DETERMINING ENTITLEMENT TO. SiGkneGe BENEFITS ‘Transocean Ship Management (Phils), Inc., et. al. v, Inocencio 8. Vedad GR.Nos, 194490.01; March 20, 2013, FACTS: In consolidated Peitions for Review on Coriorari via Rule 46, Petitioners Transocean Ship Management, Carlos Salinas and General Marine Services Corporation (Petitoners) assall the decisions of the CA and Laber Arbor La) granting reszondent Seaman Inocencio B. Vedas (Inocencio) full permanent lata disabilty benefits, sickness allowance and reimbursement for medical expenses, Respondent Inacencio was a seafarer employed by the Petitioners onboard M/V Invicta. Before the expiration of his 10- month contract, Inecencio was repatriated for what appeared to be tonsils. Upon reporting to the cormpany designated ‘doctor, it was found that inocencio was suffering from cancer ofthe right tonsil for which it was advised that he rosid undergo treatment at an estimated cost of PhP 600.000, which petitioners obliged themselves to shoulder, Hawever te ttestment was never completed as the peitioners failed to provide the necessary amount As such, Inocenclo Wess Complaint befare the LA for permanent total disabilty benefits, sickness allowance and reimbursement for medical expenses, Issues: (7) Are petitoner-empioyers liable to pay Inocencio sickness allowance? (2) Is inacencio's cancer considered 2 work-related liness that would ante him to permanent total disabilty benefits? (3) Ace petitoner-empioyers lable for tne reimbursement ef respondent's medical expenses? RULING: (1) Yes. Ince entitled to sickness allowance, POEA Memorandum Circular No. 09, Series of 2000 states that upon sign-of from the vessel for medical treatment, the Seafarer is entitled to sickness allowance equivalent to his besic wage untl (A) he fs declared fi to work or (B) the degree of permanent dsabilty has been assessed by the company-designated physician. In no case shail the period exceed one hundred twenty (120) days, Here, Inocencio got il while on board MV invicta, for which ha was treated at a foreign port where the ship docked. Since he was not cured, he was repatriated before the end of contract. Its immaterial that is sickness was later medicals Geclared as not work-related. Hence, Inacencio is entitled to receive sickness allowance from his repatriation for medical treatment, whichis equivalent tohis basic wage for 2 period not exceeding 120 days, (2) No, Inocencio' illness isnot work~elated, hence, he isnot entitled to permanent dsabilty benefits. ln ofder to avail the disabilty benefits, (A) the disease must be frst classified as an occupational disease or (B) the Claimant must prove by substantial evidence that the liness was developed or aggravated by work lated causes Tonsil cancer is not included in the list of occupational diseases. Thus, the burden les on Inccencio to prove by substantial evidence that his cancer was developed or aggravated by work-related causes, which he failed ta de. Yience he isnot ented o permanent disability benefits (2) Yes, pettioners must honor ther obligation, Having obliged themselves to shoulder the medical treatment of Inocencio, they must be held answerable to said ebigation. Hence, it is only proper that pettioners reimburse Inocenclo for his ‘medical expenses because. they -Scknouledged offering to shoulder these tothe extent of PnP 500,000.VELASCO CASES REINSTATEMENT, AS A LABOR LAW CONCEPT, MEANS THE ADMISSION OF AN EMPLOYEE BACK TO WORK PREVAILING PRIOR TO HIS DISMISSAL; AN ILLEGAL DISMISSAL SUIT IS INCONSISTENT WITH THE CHARGE OF ABANDONMENT Alexander B. Banares v. Tabaco Women's Transport Service Cooperative GAR. No. 197363; Apri 1, 2013 FACTS: In this Petition for Review on Cerfiorarl under Rule 45, Alexander B. Baares (Banares) questioned the CA's decision, which stated that Tabaco Women’s Transport Service Cooperative (TAWTRASCO) properly reinstated the former. Petitioner Banares was the general manager of respondent TAWTRASCO Cubao Branch until his services were ‘terminated, which led the former to fle a complaint for legal dismissal and payment of monetary claims ‘The Labor Arbiter (LA) ruled in favor of Banares and ordered TAWTRASCO to reinstate the former, TAWTRASCO initially did not want fo reinstate Banares due to strained relations but they eventually reached a compromise agreement wherein Banares was reinstated in the company's Virac office where he was tasked to discharge menial duties, TAWTRASCO. withheld peitioner’s customary boarding house privilege and did not provide him with a formal ofice space. Moreover, te \Virac offce was not conducive for work and even less for lodging Petitioner no longer reported for work because he claimed that he was being exposed to inhumane and degrading treatment. He also fled a second case for nonpayment of salaries and withnolding of privileges before the LA. Eaares laimed that he was constructively dismissed, while TAWTRASCO on the other hand insisted that Banares abandoned hs work Issues: (1) Was there a proper and genuine reinstatement of Banares as general manager? (2) Was there abandonment on the part of Banares? RULING: (1) No, the “reinstatement” of Banares as general manager of TAWTRASCO was nota real, bona fide reinstatement ‘The Labor Code provides that an employee ented to reinstatement ‘shall either be admitted back to work under the ‘seme terms and condtions prevailing prior to his dismissal or separation Here, the assignment of Banares to the Virac terminal with duties and responsibilities not befting @ general manager of 2 transport company partook of the nature of a demotion. The boarding house privilege being an established bent ought to have been granted him if areal and authentic reins‘atement to his former position as general manager is to be posiiga Henee, there was no real and bona fide reinstatement. (2) No, there was no abandonment on the part of Banares, Jurisprudence provides that the fling of an legal dismissal sults inconsistent with the charge of abendonment, for an ‘employee who takes steps fo protest his dismissal cannot by logic be said to have abandoned his work. Dias stented beck, but requires to work under conditions crafted to cause unnecessary hardship to or "ested by him In fact, tis for this reason thatthe llegal dismissal case was file. (OF RESIGNATION WITH THE FILING OF A COMPLAINT FOR ILLEGAL DISMISSAL ‘Blue Angel Manpower and Security Services, Inc. v. CA and Romel Castillo, Wilson Ciriaco, Gary Garces and ‘Chesterfield Mercader GR No. 161196, July 28, 2008, FACTS: Blue Angel, 2 messengerial and security agency, hired private respondents Rome! Castilo (Castile). Wilson Giniaco (Ciriaco), Gary Garces (Garces), and Chesterfield Mercader (Mercader) as securty guards and detailed ther ot the Notions! College of Business and Arts (NCBA), Castillo and Mercader, later joined by Cirlaco and Garces, fled a complaint for ilegal deductions and other money claims ‘against Blue Angel. They ister amended their complaint lo include ilagal dismissal Blue Angel denied the charges of illegal dismissal. t alleged thet the four (4) complaining guards had, while on guard duty, commited several infractions. When summoned fo explain their side, only Castilo, Ciraco, and Garces showed up, while Mercader was already considered on AWOL. Moreover, Castilo, Criaco, and Garces pleaded that they be allowed {o resign instead of being subjected to investigation. The three (3) then tendered their pro-forma leters of resignation followed by handwritten resignation letters in the nature of quitlaims. ISSUE: Did the respondents freely and voluntary resign as shown by the two sets of resignation letters? RULING: No, the respondents did nat freely and voluntarily resign.VELASCO CASES \Well-entrenched isthe rule that resignation is inconsistent withthe fing of a complaint for legal dlmissal, To cansttute ‘esignation, the resignation must be unconditional wth the intent to operate as such. There must be clear intention Io relinquish the positon, The execution of the resignation letters was undisputed, but the fact that private respondents fled a complaint fr ilegal ismissal rom employment against Blue Angel completely negate the claim that private respondents voluntaly resignea In this case, private respondents actively pursued their llegal dismissal case against Blue Angel such that they Cano be Said to have voluntary resigned ftom thelr jobs, ‘The respondents, not having freely and voluntarily resigned, thelr dismissal was therefore illegal COCKPIT MASIADORS (BET-TAKERS) AND SENTENCIADORS (REFEREES) ARE AKIN TO INDEPENDENT CONTRACTORS, HENCE, NO EMPLOYER-EMPLOYEE RELATIONSHIP EXISTS; LIBERAL INTERPRETATION OF ALLOWANCE OF AN APPEAL DESPITE THE LATE FILING OF THE BOND REQUIREMENT ‘Somblante vs. Court of Appeals GAR. No. 198426; August 15, 2011 FACTS: Sembiante and Pilar fled a complaint for illegal cismissal against respondentspouses Vicente and Maria Luisa Loot (Sps. Loot), owners of the cockpit Gallara de Mandaue (cockpi), Semblante and Plar worked respectively oe ‘masiadors (bettaker) and sentenciadors (referee) inthe cockpit. One day, they were denied enty to the cockpit upon instructions of respondents and were informed ofthe immediate termination of ther services, Petitioners have the following contentions: 1) they are employees of respondents because they receive week salaries for their services; 2) their work schedules depend upon the situation in the cockpl; and) they have beer iseuee identification cards, which they use when they repor for duty Respondents opposed petitioners’ averments and alleged that: 1) petitoners are associates of their independent contractors; 2) pettoners have no regular working hours and are free to decide if they would report Yor wore on ary ockrighting day; 3) they can go to any cocknt areas to work; 4) the dentfication cards were issued to indicate thet they ate free from paying the entrance fee; and 6) they receive their compensation through arriba (a percentage deducted tree the total bets) Petioners’ main contention is that both the NLRC snd CA erred when it entertained an appeal, which was not perfected for the failure of respondents to post a bond. Respondents, on the otter hand, argued that their appeal wee mertonous warranting the relaxation of the rules inthe interest of justice, Issues: (1) Ate masiadors (bettaker) and santenciadors (referee) considered employees who can fle a complaint fo ilegal sismissal? (2)|s posting of the bond necessary for the perfection of the appeal? HELD: (1) No, masiadors (bet-toker) and sentenciadors (referee) are akin to independent contractors and cannet therefore be considered 2s employees, Tobe an employee, the relationship between the employer and the employee must pass the four-fold test, which requires: 4) the selection and engagement of the employee; 2) the payment of wages; 3} the power of dismissal and 4) the power {0 control the employee's conduct, whichis the most important element Here, the respondents ig not personally select tne petiioners to work for them. The petitioners receive their ‘compensation through the emibe and performed their functions as masiador and sentenciador free from direction ad Control ofthe respondent. Due to the peculiarly of the game af cockighting, petitioners conducted their work based on their expertise in interpreting messages by mere gestures, Respondents, not being petitioners’ employers, could never have cismissed, legally or illegal, peitioners, since respondents were without power or preragative o do so in the fst place (2) Yes, the posting of @ bond together with the appeal is indispensable to perfect the same but the rule is not without exceptions, ‘Art 223 ofthe Labor Code on appeal provides in part that in case of @ judgment involving a monetary award, an apes! by the employer may be perfected only upon the posting of @ cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed fromm, 4a exception to this rule is the substantive rights of respondents to be free from an unwarranted burden of answering for sn legal cismissal for which they are not responsible, Here, te strict implementation ofthe rules on appeals must give way to the factual and legal realty as culled ‘rom the facts of each case because the primary objective of law isto dispense justice and equi,VELASCO CASES ‘THE FILING OF NOTICE OF STRIKE AND CONDUCT OF STRIKE-VOTE ARE MANDATORY REQUIREMENTS Magdala Multipurpose and Livelinood Cooperative and Sanlor Motors Corporation v. Kilusang Manggagewa ng LGS, Mageala Multipurpose and Livelihood Cooperative (KMLMS) G.R.Nos. 191138-39, October 19, 2011 FACTS: KMLMS js the union operating in Magdala. Respondent filed @ notice of sirke on March § and conducted its sirike-vote on April 8, However, KMLMS only acquired legal personality when its registration as an independent labor organization was granted on April§ by the DOLE. On May 6, KMLMS, now a LLO staged a stnke where several prohisted and ilegal acts were commited by its participaing members, namely, interference By obstructing the fee ingress 10 or ress from pettioners compound, coercion and intimidation, Petitioners filed their Petton to Declare the Strike May 6 illegal before the NLRC-RAB on the ground of lack of valid notice of strike, ineffective conduct ofa stike vote and commission of prohibited and legal acts. Pelticners prayed inet the officers and members of respondent who participated inthe ilegal strike and committed proniited and ilegel octviiog be declared to have lost or forfeited their employment status. It likewise prayed ‘or a paral modifestion of the CA Decision by declaring additional 72 similarly erring KMLMS members to have lost the'r employment, The GA retised to declare all the union members who are similar situated as having lost their employment status, Respondents argued that they did not commit any ilegal stike because they are legitimate labor organization and complied with the valid requirements on strike. They futher argued that the 72 other union members cantot be decleres {have lost their employment because they are not identifiable and not similarly situated as those union members who have previously declared to have lost thelr employment status Issue: (7) Was the strike committed legal? (2) Can the employees be declared to have forfeted their employment status? HELD: (1 Yes, the May 6 strike was tlegal for failure to comply with the requisites ofthe Labor Code. Art, 263 (¢), (6) and (f) (now Art. 278) of the Labor Code and Rule XXII, Book V of the Omnibus Rules provide that the filing of notes of stke and the conduct of the strke-vote report are mandatory requirements fo comply wth tne rules oo legal strike Here, there is no question that the May 6, 2002 strike was legal, rst, because when KMILMS filed the notice of strike on March 5, 2002, it had not yet acquired legal personality and, thus, could not legally represent the evertual union and ie members. Second, similarly when KMLMS conducted the strke-vota on April 8, 2002, there was sill no union to epes of since KMLMS only acquired legal personality as an independent LLO only on Apri 8, 2002 or ihe day after i conducted the stike-vote Hance, the May 6 strike is illegal for non-compliance with provisions of lav. (2) Yes, the employees can be validly terminated, Ast, 284 of the Code draws s substantial distinction of the consequences of an illegal stike between union officers and ‘mere members of the union. For union officers, knowingly participating in an legal srke is a valid ground for termination Of their employment. But for union members who participated in strike, their employment may be terminated only f they committed prohibited and llega acts during the sirke and there is substantial evidence or proof of their participation, '= ‘that they are clearly identified to have committee such prohibited and illegal acts. Consequently, the termination of employment ofthe 14 union offcers is proper. As for the members who paticipated in the May 6 strke and commited prohibited and illegal acts of interference by obstructing the free ingress to or egress from Pettioners compound, coercion and intimidation, the forfelture of thelr employment is also proper, Petitoners have ‘substantially proved the identty of 72 other union members who committed prohibited and ilegel acis during the May 3 ‘legal strike by photographs and eyewitnesses presented by the pettoner. It was also sufficiently supported by polce Dotter certifications, criminal complaint for grave coercion, an affidavits of several workers and & propristor. WITHDRAWAL OF UNION MEMEBERS WILL NOT CAUSE THE CANCELLATION OF REGISTRATION OF THE UNION FOR AS LONG AS THE MANDATORY MINIMUM REQUIREMENT OF THE 20% MEMBERSHIP OF RANK- AND-FILE EMPLOYEES IS MAINTAINED Eagle Ridge Golf & Country Club v. CA and Eagle Ridge Employees Union (EREU) G.R No. 178989, March 18, 2010 FACTS: Pettioner had 112 rank-and-fie employees, and herein respondent Eagle Ridge Employees Union (EREU or Union) consisted of atleast 20% of Eagle Ridge's rank-and-fia employees, The DOLE RO IV granted the application for Registration of respondent union, The union fled a pettion for certification election with Eagle Ridge. The latter oppose the peitton and fied a pettion for cancellation of the union's registration due to misrepresentation, false statement ot ‘sus in connection with the adoption ofits consitution and by-laws, the numerical composition of the Union, and theVELASCO CASES election ofits officers, Eagle Ridge alleged that the EREU declared in i application for registration having 30 members, when the minutes of ts organizational meeting showed it only had 26 members. Furthermore, there was also a diserepancy between the certicaton issued by the Union secretary and president that 25 members actually ratfied the constitution and by lane and the fact that 26 members affxed their signatures on the documents, making one signature a forgery. i auton Petitioner contended that six (6) employees who attended the organizational meeting had manifested the Gears withdraw from the union through their Sinumpaang Salaysay. The withdrawal of the five (6) reduced the rion ‘membership to 20 or 21, either of which Is below the mandatory minimum 20% membership requirement under ar 2d (6) (now Art. 240) of the Labor Code. Respondent EREU alleged that discrepancies are nt real because before fling ofits application, four (4) addtional employees joined the union, thus raising the union membership to 30 members; that the understatement by ane (1) member who ratified the constitution and by-laws was a typographical error, which does not make i either grave or ‘malicious warranting the cancellation of the union's registration, and thatthe retraction of S union members should not be siven any credence. ISSUE: Was there compliance with the mandatory minimum requirement of 20% membership of rank-and.fle employees in order to register 8s 2 valid union? HELD: Yes, the mandatory minimum requirement of 20% membership ofthe rank-and-file employees was complied with ‘Ast. 234 (c) (now Art 240) ofthe Labor Code provides that a legitimate labor organization must comprise at least 20% of ail the employees in the bargaining unit where it seeks to operate. Any seeming infmiy in the application and somission 9{ union membership, most especialy In cases of independent labor unions, must be viewed in favor of valid memnbeschin, ‘The right of empioyees to se-organization and membership in a union must not be trarmmelad by undve alffcutios Here, 20% of 112 rank-and-file employees in Eagle Ridge would require a union membership of at least 22 employees (112 x 208 = 22.4), When the EREU filed its application for registration, there were clearly 20 union members. Thus wren {he certicate of registration was granted, there is no dispute that the Union complied with the mandatoy 2% membership requirement. With the withdrawal of six union members, there is sill complance wi the. mordatery ‘membership requirement under Art. 234(c) of the Code, for the remaining 24 union members constiute more than fre 20% membershia requirement of 22 employees. Where the company seeks the cancellation of a union's registration during the pendency of a petition for certification election, the same grounds invoked to cancel should not be used to bar the cerifcaton election A certification election is the most expeditious and fairest made of ascertaining the wil af a collective Bargaining unit as tos choice of ts exclusive representative, INABILITY OF A WORKER TO PERFORM HIS JOB FOR MORE THAN 120 DAYS CONSTITUTES TOTAL PERMANENT DISABILITY Oriental Shipmanagement Co., Inc. v. Romy B. Bastol GR No, 186289, June 29, 2010 FACTS: In a Petition for Review on Certiorar under Rule 45 of the Rules of Cauit, petitioner Oriental Shipmanagement Go. nc (OSGI) assaiis the Decision and the Resolutions of the CA which annulled ond ‘set aside the Decision = Resolution ofthe NLRC and reinstated the Decision af the Labor Arbiter (LA) nding that respondent Romy Bastol (Bo Senile to disabilty indemnity and that the LA need not conduct formal hearings. Peltier OSCI is @ domestic manning agency engaged in the recruitment and placement of Filipino seafarers abroad SCI hired Bastol as bosun and was deployed on board tha vessel MV Felicta In 1996. On February 17, 1097, while on board the vessel, Bastol suffered chest pains and cold clammy perspiration. He was repatiated due to his llness on March 7, 1997. LUpon his repatriation on March 7, 1997, Bastol was treated by company-designated physician Dr. Achilles Peralta (Peralta) who disgnoses him with TIC Ischemic Heart Disease and Myocardial Infection, and found him unft for sea duty ‘on March 8 and Apri 1, 1997. Thereafter, he was confined at the Metropolitan Hospital under company-designated physician Dr. Robert Lim (Lim) for almost a month, Le., from April 10, 1997 until May 7, 1997. Or. Lim Fuleg that Bastol suffered from Coronary Artery Disease (CAD). After confinement, Dr, Lim treated him untl October 28, 1997. Threats, Bastol had regular laboratory and medical examinations with the company-designated physician, Unsatisfied with the medical treatment, respondent consulted with Or. Ettan R. Vicaldo (Vicaldo) for a second opinion which diagnosed him to be suffering from CAD and Extensive Anteriorseptalmia with tie corresponding remark. For Disability, Impediment Grade 1 (120%), Basiol tried to enter into a settlement with OSCI, however, such request was not acted upon, compeling him to fle a Complaint before the Labor Arbiter for: (a) medical cisablty benefit (Grade 1) of USD 60,000, (b ilaess slowance until fhe is deemed fit 0 work again; (c) medical bonofts forthe treatment of his aliment: (4) moral damages of PnP 109,000,VELASCO CASES {and (e)attomeys fee of 10% ofthe total monetary award. SCI countered that Bastol isnot ented to his indemnity claims for disability benefits, among others, on account of non compliance with the requirements ofthe 1994 revised Standard Employment Contract (SEC) by fang to properly submit himself for treatment and examination by the company-designated physician who ts the only one authored te set the degree of disability, They further maintained that the company-designated physician was nat given ample opportanty to Properly test Bastols ailment and did not have sufficient chance to assess and determine his dlsablity grade, 'SSUE: Is Bastol entitled to the permanent total disability benefit athough disabilty rating was given by a physician who is not designatad by the company as provided in the SEC? HELD: Yes. Basiol is entitled to the permanent total disability benefit notwithstanding the fect that the finding of entitlement was not made by a company-cesignated physician, ‘The law defines permanent disability as the inablity of a worker to perform his job for more than 120 days, regardless of \whether or nat he loses the use of any part of his body. In Philimare, Inc. v. Suganob, the SC held evidence of this inability to work for such number of days will not be countered even by @ contrary dectaration of finess to work by a company, designates physician 'n this case, Bastol was not only under the treatment of company-designated physicians for over seven months, but it is ‘kewise undisputed that he had net been employed as bosun for said time. In al these seven months and 20 days ot treatment, Bastol was not employed at his usual job 25 bosun, In fat, Bastol was never able te work as bosun thoreetioe on account of his poor health, Thus, the deciaration by Dr. Vicaldo of Basto's disability as Disebilly impediment Grade 1 Degree (120%) constituting total permanent disabilty for approximately 260 days merely echoed what the law provides Moreover, Bastol had the right to seek medical treatment other than the company-designated physician after the lapse of the 120-day considering that said physician, within the maximum 120-day period stipulated in the SEC neither deciored him fit to work or gave the assessment ofthe degree of his permanent dsabilty which he is incumbent to Jo, EMPLOYER'S COMPLIANCE IN GOOD FAITH WITH THE DUTY TO BARGAIN COLLECTIVELY DOES NOT CONSTITUTE UNFAIR LABOR PRACTICE; LEGITIMACY OF A BARGAINING GROUP STANDS UNLESS COUNTER-EVIDENCE Is PRESENTED BY THE ASSAILING GROUP TO THE EMPLOYER. UST Faculty Union v. UST GR. No, 180802; Apri 7, 2009 FACTS: In a Petition for Review on Certioran under Rule 45, petitoner USTFU challenged the decision of the CA which affmed the LA's decision that employer University of Santo Tomas (UST) is not quity of unfair labor practice (ULF), ‘A convocation conducted by the then incumbent president of the USTFU Atty. Manito (Marifo) was attended by its ‘members without the participation of the members of the UST administration, During the said event, an election for Officers of the USTFU was conducted by the group where Gil Gamilla (Gamila) was elected as president. As a result two (2) groups were claiming to be the UST Facully Union; the Gamila Group and the Mario Group. Meanwhile, te Gama, ‘Group through 2 letter informed Fr. Rolando De La Rosa that ts members were the newly elecied officers and directors of UST In acditon to the leer. 2 document was aiso submitted which provided the ist of names of the newiy elecied ffcials. Respondent recognized the Gamila Group as the new officers and directors of the USTFU. forthwith, a new CBA ‘agreement was entered into. The Mario Group failed to inform the UST administration about election of officers neld oy the Gamila Group During the tel, pettioner alleged that respondents are quily of ULP when its Detachment Commander led @ group of people in the padiocking ofthe door leading to the USTFU. Petitioner claims that respandent employer favor Gamila and ‘hat they tolerated his performance of an uniaw! ac ISSUE: Did respondent's dealings wih the USTFU through the Gamilla Group constitute ULP? RULING: No, UST did not commit ULP by dealing with the USTFU through the Gamila Group based on its reliance on ‘he document informing that ts members were the nemly elected officers and dlectors of USTFU, At, 248 of the Labor Code states that “It shall be unlawful for an employer to commit any of the following unfair labor Practice: x x x (g) To violate the duty to bargain collectively as prescribed by this Code.” AS stated by the said provision Tespondent was obligated to deal with the USTFU as the recognized representative of the bargaining unit, through the Gamilia Group. Respondent's failure fo negotiate withthe USTFU would have constitited ULP. Furthermore, eis not he duty of respondents to inquire into the vaity of the election of the Gamila Group, Such issue is propery an inra-union Controversy subject to the jurisdiction of the med-arbiter of the DOLE, Having been shown evidence to suppor the legitimacy of the Gamilla Group with no counter-evidence from the Marino Group, respondent had to recognize the former ‘group and negotiate with iVELASED CASES ‘Thus, the acts of the respondent in support of the USTEU as the lagitimate representative of the bargaining unit, albeit through the Gamila Group, cannot be considered as ULP. UIABLITY OF SECURITY AGENCY TO AN ESTABLISHMENT IS CO-TERMINOUS WITH THEIR AGREEMENT: SECURITY GUARDS REMAINING AT POST AFTER TERMINATION OF AGREEMENT BETWEEN ESTABLISHMENT AND SECURITY AGENCY UNDER INSTRUCTIONS OF THE EMPLOYER CONSTITUTES AN EMPLOYER- EMPLOYEE RELATIONSHIP Locsin v Philippine Long Distance Company GR. No, 185251; October 2, 2009 FACTS: A Security Services Agreement (agreement) was entered into between respondent Philippine Long Distance ‘Telephone Company (PLOT) and the Security and Safety Corporation of the Philippines (SSCP) whereby SSCP would rovide PLOT armed security guards. Among the security guards are peltioners Locsin and Tomaquin. After the termination of the Agreement, pettioners, remained at their post under an alleged instruction by PLOT representatives ‘and were informed that ther salaries would be coursed through SSCP as per agreement witn PLOT. Petiioners were then asked not to repor for work, hence, the fling of the complaint for llagal ciemissal and recovery of money ciaims suct ee ‘overtime pay, premium pay and service incentive leave pay. ‘The LA found that petiioners are indeed employees of PLOT and as such, are ented to separation pay and back wages, The NLRC affirmed the decision of the LA in foto. The Mation for Reconsideration was also denied by ne NLRC "On ‘appeal to the CA, the NLRC decision was set aside. The CA did not find any employer-employee telatonship after ‘plying the so-called four-fold test. Respondent denied the allegations of the petoners. It does not state the reason why they have fo vacate their posts. PLOT insisted that they cid not know whi the petitonars remained at thei posts. Furthermore, it hypothesized that SSCP was paying petitoners salaries while securing respondent's premises desple the termination of thelr Agreement. Issue: (1) Was respondent's instruction for pettioners to remain at their posts after termination of service agreement sufficient to esstabish an employer-employee relationship? (2) Wes respondents failure o observe due process requitements constitute illegal dismissal RULING: (1) Yes, the Instruction given by respondent to the petitioners for the lattes’ continued service sufficiently established an ‘empioyer-employee relationship as tis indicative of aright of contr. In the determination of whether an employer-employee relationship exsts between two parties, the SC applies the four- {old test to determine the existence of the elements of such relationship, to wit (a) the selection and engagement of the ‘employee; (b) the payment of wages; (c) the power of dismissal, and (d} the employer's power fo contal the employee's conduct not only as tothe result of te work to be done but also as to the means and methods by which the sama isto be ‘accomplished. OF these four (4) elements, contralis the most importent Here, respondent having the power of control over petitioners must be considered as petitioners’ employer— from the termination of the Agreement onwards—as this was the only me that any evidence of control was exhibited by respondent over pettioners (2) Yes there having been established an employar-employee relationship, the petitioners are entitles to the rights and Senefits of employees of respondent, including due process requirements in the termination of their services, Having failed to do so, respondents guity of ilegal dismissal Hence, the SC affirms the LA's decision and the NLRC resolution finding an employer-employee relationship. ENGAGEMENT IN RECRUITMENT OR PLACEMENT ACTIVITIES BY THREE OR MORE PERSONS, INDIVIDUALLY ‘OR AS A GROUP WITHOUT A LICENSE/ AUTHORITY IS SUFFICIENT TO ESTABLISH ILLEGAL RECRUITMENT IN LARGE SCALE People v. Bartolome GR.No, 129486; July 4, 2008 FAGTS: In an orginal action, the Office of the Provincial Fiscal of Cavite fled separate four (4) Informations, for ilega! Fecrutment and four (4) for estafa against accused-appelant Gloria Bartolome (Bartolome) and Lidela’ Capawan (Cepawan). Bartolome and Capawan falsely represented themselves to have the capacity to recruit workers abroad. Without obtaining the requisite license andior authority from DOLE, for a fee they promised employment in Bahrain to Fe Rollon (Fe) Relando Rolion (Rolando), Raymundo Dimatulac (Cimatulac), Esperanza Buhay (Buhay). Only Bartolome was breught lunder the jurisdiction of the RTC, Capawan being at largeVELASCO CASES ‘Buhay testified that upon being assured of the genuineness ofthe offer, paid a placement fee for which she was given @ pre-signed receipt. Dimatulac, on the other hand, testified that he was given a run around about his departure for Bahrain as janitor and after being persuaded, paid processing and placement fees. Fe and Reynaldo after paying the fees were given piane ticke’s photocopy. During trial, the private complainants were positive and categorical in ther testimonies, ‘They had no motive to testify felsely against accused-appellant. ‘Accused-appellant denied the accusations against her. She assailed the credibly of the four (4) private complainants ‘and the adequacy of the'r evidence. She further insisted that Capawen, confederated with a Thai national, was the illegal rectiter. ISSUE: Is the accused-appellantguity of illegal recruitment in large scale? RULING: Yes, the accused-appellat is guity of legal recruitment in large scale, egal recruitment is committed when two (2) elements concur: Fist, the offender does not have the required license or ‘authority to engage in the recruitment and placement of workers, Second, the offender undertook (1) recrutment and Placement activity defined under Article 12(b) of the Labor Cod oF (2) any prohibited practice under Art, 34 of the same Code. tliegal recruitment is qualified into large scale, when three or more persons, indlvidually of as group, are viclimized. Article 13 (b) of the Labor Code defines recruitment and placement as any act of canvassing, enlisting, contracting transporting, utiizing, hiring or procuring workers, snd includes referals, contract services, promising or advertising for ‘employment, locally or abroad, whether for profit or not: Provided, that any person or entity which, in any manner, offers oF promises for 2 fee employment to two or more persons shall be deemed engaged in recruitment and placement [All the elements are present, First, accused-appellant do not have any license to recruit or engage in placement activities {and second, accused-anpeliant recruited at least four (4) persons atthe same place and at about the same time. ‘Therefore, the SC affims the CA Decision convicting accused-appeliant guity of legal recruitment in a large scale and sentenced her fo if imprisonment and to pay ane of one hundred thousand pasos (PhP 100,000) COMPANY POLICY AND CBAs GOVERN THE TERMS AND CONDITIONS OF EMPLOYMENT IN PAL, NOT THE IVIL SERVICE LAW AND RULES Paloma v. Philippine Airlines, Inc. GR Nos. 148415 & 156764; July 14, 2008 FACTS: in a petition for raviow under Rule 48, pettioner Ricardo Paloma (Paloma) seeks to nullity and set aside the CA Amended Decision which limited his accrued sick leave credits to 162 days despite the application of EO 1077 which does ‘ot limit the number of days of vacation and sick leaves that an employee may accumulate, Paloma worked as Philippine Airlines Senior VP for Finance, PAL was privatized before his resignation. Paloma was paid his separationretirement pay and sccrued vacation leave pay. For the benefits thus received, Paloma signed a Release and Quitcisim document witn @ reservation for a claim for futher leave benefits. The leave benefits refer to his 450-day accrued sick leave credits which PAL allegedly only paid equivalent to 18 days. Petitioner anchored his ciaim on EO 1077 entitled Revising the Computation of Creaitable Vacation and Sick Leaves of Government Officers and Employees Pettionsr maintained that he comes within the coverage of EO 1077 which became effective before his resignation, and {= fine when the applicable constitutional provision on the coverage of the chil service made no distinction between ‘GOCCs wer orginal charters and those without, Ike PAL which was incorporated under the Corporation Code, __BSised that be eamed the bulk of his sick leave credits under the aegis of the 1973 Constitution when PAL was stl (govemment-contolled corporation PAL on the other hand asserted having paid all of Paloma’s commutable sick leave credits due him pursuant to company policy made applicable to PAL officers. The company leave policy grants its employee a graduated sick leave with pay up $250 cays. Subject to qualifcatons, credits in excess of 230 days shall be commutable to cash at the employee's option ISSUE: Did EO 1077 govern petitioner's entitlement to sick leave benefits and commutation of eredtable benefits? RULING: No, itis not EO 1077 but PAL’s company policy which governs patiioner’sentitement to sick leave benefits and the computation and commutation of creditable benefits. Inthe decided case of Phi, Air Lines Employees’ Assn. the SC stated that “the Civl Service Law has not bean actually applied to PAL." Further, as held in National Service Corporation v. National Labor Relations Commission, the Issue of ‘whether or not @ glven GOCC falls within the ambit of the civil service subject, vis-é-vis disputes respecting terms and Conditions of employment, to the jurisdiction ofthe Civil Serviee Commission or the NLRC. as the case may be. To borrow from the 1988 NASECO ruling, itis the 1987 Consttution, which delimits the coverage of the civil service, that should ‘govern this case because ts the Consttuton in place at the time the case was decided, even if, incidentally, the cause of ‘ction accrued during the effectivity of the 1973 Constitution. (canes ite cee elVELASCO CASES {t appears that Paloma had, as of 1990, more than 290 days of accrued sick leave credits. Falowing company policy, Paloma was deemed to have forfeited the monetary value of his leave credits in excess of the 230-day celing, Thus, PAL. is correct in contending that Paloma had received whatever was due on the commutation of his accrues sick leave efeats in excess of the 230 days limit, “Therefore, the petition is dismissed forlack of merit ENTITLEMENT TO SEPARATION PAY OF LEGALLY SEPARATED EMPLOYEE, Central Philippines Bandag Retreaders, Inc.,v. Prudenelo J. Diasnes GR No. 183607; July 14, 2008, FACTS: This is @ petition for review on certiorari under Rule 45 ofthe CA Decision which reinstated the NLRC Decision, ‘hus restoring the award of separation pay to respondent Prudence J. Diasnes (Diasnes) Disnes was the technical service representative of Central Philippines Bandag Retreaders, Inc. (Bandag), Diasnes’ work performance started to deteriorate as his absences and tardiness also became more frequent Thus, he received a nstice 1 appear before the Employee Adjudication Commitee (Committe) to resolve the matter After the meeting, the committee agreed that Diasnes be relieved for three (3) months and after such, he may opt on etter ta return to work with ‘nother postion of function, or retire and receive a seperetionretrement pay. However, Diasnes did not aval of any of the options, but requested a transfer to Cebu City which was granted. His attendance and punctuality were likewise very Poor. Thereafter, he was terminated on the grounds of habitual tardiness and absenteeism amounting to serous misconduct, Diasnes fled a complaint with the NLRC for illegal dismissal and other monetary claims such 26 seperation pay. Sandag claims that separation pay should not be granted based solely on the recommendation made by ts committee 2s Such was merely an offer which Diasnes did not accept Diasnes ‘tates that, given his exemplary service with the company for ten (10) years, the ends of social and compassionate justice would best be sewed i he is awaided separation pay er fnancial assistance. The CA granted the award of separation pay ISSUE: Is Diasnes entitled to separation pay? RULING: No, Diasnes isnot entitles to separation pay In San Miguel Corporation v. Lao, the Court held thet the award of separation pay is authorized inthe situations dealt wth in An. 263 (now Art. 298) and Art 264 (now At. 290) of the Labor Code, but notin terminations of employment based on instances enumerated in Art. 262 (now At. 296). In some cases, separation pay or financal assistance may be extended ‘5 a measure of social justice, Labor aducicotory ofcials and the CA, however, must demur the award of separation Day based on social justice when an employee's dismissal is based on serious misconduct or wilful disobedience, gross and habitual neglect of duty fraud or wilful breach of trust, or commission of a crime against the person ofthe employer oc is immesiate family grounds under Art 262 ofthe Labor Code that sanction dismissals of employees. The. (2608 of fhe Commies recommending the grant to Diasnes of separation pay in case he opts to rete or voluntarily yess merely m the nature of an offer. Thus, the committee's recommendation cannot be 2 basis far an ey It iso cannot be awarded based on social justice since the cause for the lermination of his ‘Smrounis fo gross and habitual neglect of his duties. His repeated and continuous absences without prot ‘Pequest fines exemply his utter cisregard for his employment and his employer's interest. ‘issnes is not entitled to separation pay. ACQUISITION AND LOSS OF UNION MEMBERSHIP AND THE DETERMINATION OF QUALIFICATION ANO DISQUALIFICATION OF MEMBERS IN THE UNION ARE MATTERS INTERNAL TO THE UNION SS. Ventures International, inc, v.$.S. Ventures Labor Union (SSVLU) and Dir. Hans Leo Cacdae, in His capacity {5 Director of the Bureau of Labor Relations (BLR) GR No. 181680; July 23, 2008 FACTS: This is @ petition for review on certiorari under Rule 45, essaling the decision of the CA which dismissed the petition of $8. Ventures intemational, nc, (Ventures) as well as ts mation for reconsideration of the same ‘Ventures i inthe business of manufacturing sports shoes while S., Ventures Labor Union (Union) is labor organization fegistered with the DOLE. The Union filed with DOLE a petiton for certification election in behalf of the rank-and-file employees of Ventures. There were 642 signatures, 82 of which belong fo terminated Ventures employees, appeared on the basic documents supporting the petition, Ventures filed a Petition to Cancel the Union's certfcate of registration for grounds supported by Art. 239 (a) (now Ar. 247) of the Labor Code, namely: (a) that the Union deliberately and maliciously included the names of more or less 82 ‘former employees no longer connected with Ventures in its ist of members who attended the organizational meeting and in the adcptioniatiication of its constitution and by-laws; (b) the Union forged the signatures of these 62 farmerVELASCO CASES employees; and (c) that the Union's application for raistration was net supported by at least 20% of the rank-and-file employees of Ventures, Since more or less 82 of the 500 signatures were forged or invalid, then the remaining val signatures would only be 418, which is very much shor ofthe 439 minimum required by the Lebor Code, In its Answer with Motion to Dismiss, the Union alleged thatthe said 82 employees were qualified Union members since the one-year prescriptive period to question their dismissal had nat yet lapsed: and it had complied with ihe 0% meniber ‘registration requirement since it had 542 members. On appeal, the CA cismissed Ventures’ petition. Hence, ths petition for review under Rule 45 'SSUE: Did the Union perpetrate fraud, forgery, misrepresentation and misstatements in connection wth the adoption and ‘atiication of ts constitution and by-laws such thet there is @ ground far the cancsliation ofits registration? RULING: No, the Union gid not perpetrate fraud, forgery, misrepresentation and misstatements in connection with the ‘adoption and ratification ofits constitution and by-laws. Hence, no ground existe for the cancelation of te registration ‘To be 2 ground for the cancellation of the registration of the legtimate labor organization according to Art. 29a) (now Art. 247) of the Labor Code, the fraud and mistepresentation must be grave and compeling enough to vilate the consect of 2 majority of union members, Here, the relevancy of the 82 Individuals’ active participation in the Union's organizational meeting and the signing ‘ceremonies thereafter comes in enly for purposes of determining whether or net the Union, even without the 82, wou sal ‘meet what Art. 234(c) (Art. 240) of the Labor Cade requires to be submitteg, to wit “Art 234. xxx (c) The names of ay ‘members comprising atleast twenty percent (20%) of all he employees inthe bargaining unt where i seeke ts ooeate = In ts union records on fie with this Bureau, respondent union submited the names of 642 members. This number eosly compled with the 20% requirement. be it 1,928 or 2,202 employees in the establishment. Even subtracting the 82 employees from §42 leaves 460 union members, stil within 440 or 20% of the maximum total of 2.208 ranean onc employees. Also, the procedure for acquiring or losing union membership and the determination of who are qualtfod tr isquaifie to be members are matters intemal tothe Union and flow from its ight to selt-organvzation. ‘Therefore, $.S. Ventures Labor Union shall remain in the roster of legitimate labor organization, PROJECT EMPLOYEES WHO ARE REPEATEDLY HIRED BECOME REGULAR EMPLOYEES Equipment Technical Services etal. v. Court of Appeals, GAR. No, 157680; October 8, 2008, FACTS: Equipment Technical Services (ETS) is primarily engaged in the business of sub-contracting plumbing works of ‘on-going building constructions. Among its clents was Uniwide Sales, Ine. (Uniwide). Dequito was the manager of ETS (On various occasions involving different projects, ET'S hired the services of private respondents, Alex Albino, Rey Alina Julius Abanes, Miguel Alinab, Christopher Biol, Nelson Catong, Renato Dulot, Flare Pacundo, Marcela Gamas, Reynalso Lima, Sammy Mesagal, Emest Padi, and Conrado Sulibaga, as pipe fiers, plumbers,” threaders. ETS experienced financial dificult when Uniwide failed to pay for the plumbing work, As a result, ETS was anly able to fa] is employees 13th month pay equivalent to two (2) weeks salary. Private respondents brought their case before the MIG Later tho (2) other cases were filed against ETS for ilegal cismissal and payment of money claims when the ‘Complainants thetest were refused work in another ETS projec, ie. Richvlle project, allegedly because they refused ts Sin individual employment contracts with ETS. The three (3) cases were consoldated before the labor arbiter Private respondents claimed to be regular employees of ETS and that they were illegally dismissed. ETS, on the other hand, alleged, that private respondents were its contractua/project employees and were nat ilegally dismissed ISSUE: Are private respondents project employees considering the fact that they were hired on various occasions involving dtterent projects? RULING: No. The private respondents are regular employees. The principal test for determining whether an employee is properly characterized as project employee, is whether oF not the project employee was assigned to carry out a specific project or undertaking, the duration and scope of which were Specified at the time the employees were engaged fer that project. For regular employees. Art 200 (now Art. 205) of he Labor Code, provides that “an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or ade of the employer. excopt where ‘he employment has been fixed for a specific project or undertaking the completion or termination of which has been determined atthe time of the engagement ef the employee x x" Here, nota single writen contract of employment fixing the terms of employment for the duration ofthe Univide project. or ‘ny ater project, was submitted by ETS despite the latter's allegations that private respondents were merely contractia) Employees. Moreover, I private respondents were indeed employed as project employees, petitioners shouls have had Submitted = report of termination every time their employment was terminated owing to the completion of each plumbingVELASCO CASES project, Their continuous rehiing took them out from the scope of workers coterminus with specific projects and had made them regular employees. Therefore, private respondenis are regular employees and were legally dismissed, NOTE: The 2008 decision of the SC penned by Justice Velasco for Tongko v. Manulife (G.R, No. 167622) was reconsidered by the SC in 2011. The 2011 decision penned by Justice Brion isthe one provided below. CONTROL OF AN INSURANCE COMPANY (PRINCIPAL) OVER THE INSURANCE AGENT (AGENCY) IS NOT THE SAME AS CONTROL OF EMPLOYER OVER THE EMPLOYEE FOR THE LABOR LAW TO APPLY OVER INSURANCE AGENTS ‘Tongko vs. Manulife GAR. No, 187822, January 25, 2011 Brion, J. FACTS: This is a mation for reconsideration of the 2010 Resolution of the SC which reversed the Court's decision in 2008. Petitioner Gregorio V. Tongko (Tongko) was & manager of respondent Manufacturer's Life Insurance Co, (Manulife) trom +1983 unti his Agency Agreement was terminated in 2001, He began as an insurance agent for Manulfe in 1977 ‘Manulife later inated plans for expansion for which evaluations of all agents were conducted. Dus to same unfounded allegations of the Tongko and a review of his performance, he was deemed unfl to be part of the expansion, Hence, an ‘iagal dismissal ease was filed by the Tongko, “Tongko asserts that the control provided in Labor Law was manifested by the respondent when the later set objectives and sales taigets regarding the production, recrulment and training programs, and avaluates agents under the Supervision of the patiioner, ‘The Labor Arbiter (LA) found no employer-employee relationship and dismissed the case. The National Labor Relations ‘Commission (NLRC) reversed the LA decision. The Court of Appeals (CA) reversed the NLRC decision. The Supreme Court (SC), in 2008, upheld the existence of the employer-empioyee relationship but reversed such in iis 2010 decision ‘and held thatthe Insurance Code shall apply instead of the Labor Cade. Hence, this motion for reconsideration. Issues: (1) Whether the Labor Code or the Insurance Code should apply. (2) Whether an employer-employee relationship exists. HELD: (71) The application ofthe Insurance Code does not negate the application of labor laws and jurisprudence. ‘The SC stressed that its ruling inthis case is not about which law has primacy over the other and that there should be able to reconcile these laws, it is merely declared that where the law makes it mandatory for a company to exercise Control over its agents, the complainant in an legal dismissal case cannot rely on these legally prescribed control devices 26 indicators of an employer-employee relationship. The consideration of the Insurance Code and Civil Code provisions ‘does not negate the application of labor laws and jurisprudence. (2) No employer-employse relationship exists for failure to satisfy the control test ‘Contr! ever the performance of the task of one providing service both with respect to the means and manner, and the fesuts of the service isthe primary element in determining whether an employment relationship exists. There are builtin ‘ements of contol specific fo an insurance agency, which do not amount to the elements of contol that characterize an ‘employment relationship gaverned by the Labor Code. The Insurance Code provides definite parameters in the way en ‘agent negotiates for the sale of the company’s insurance products, his collection activities and his delivery of the insurance contract or policy. In addition, the Civil Code defines an agent as 9 person who binds himself to da something in Sehaif of another, with the consent or authorty of the later. Article 1887 of the Cuil Code also provides that in the ‘execution of the agency, the agent shall act in accordance withthe instructions of the principal. Here, Tongko failed to show that the eontral Manulife exercised over him was the contrel required to exist in an employer: employee relationship. Manulfe's contol fell short of this norm and carried only the characteristic of the relationship between an insurance company and its agents, as defined by the Insurance Code and by the law of agency under the Civil Code SECRETARY OF LABOR HAS THE DISCRETION TO IMPOSE PAYROLL REINSTATEMENT WHEN HE ASSUMED JURISDICTION OVER LABOR DISPUTES (Nuwhrain-Apl-iuf) Dusit Hotel Nikko Chapter v. CA J Nuwhrain-Dusit Hotel Nikko Chapter v. Secretary of Labor and Employment GAR. No, 183942/ G.R. No. 166295; November 11, 2008VELASCO CASES FACTS: Petitioner Union Dusit Hotel Nikko Chaptar (Union) is the certified bargaining agent of the regular rank-and-file ‘employees of Dust Hotel Nikko (Hotel). The Union submited is CBA negotiation proposals tothe Hotel, The parties faied to arrive at mutually acceptable terms and conditions. The Union fed a Note of Ske on the gfound of the bargaiing deadlock with the NCMB, concliation hearings were conducted which proved unsuccessful Thereafter, the Unicy Conducted a Stike Vote wherein it was decided thatthe Union would wage a ske The Union held a general assembly at its office located in the Hotes basement, where some members sported closely ‘roped hair or cleanly shaven heads. The next day. more male Union members came to work sporting the same hat style, The Hotel prevented these workers from entering the premises claiming thal they violated the Hote's Grooming Standards. In view ofthe Hotes acton, the Union staged a picket outsde the Hotel premises, The Hotel issued notes Union members, preventively suspending them, The Secretary then assumed jurisdiction over the labor dispute snd certified the case to the NLRC for compulsory arbitration. ‘Therein, the Hotel is given the option, in lieu of actual reinstatement, to merely reinstate the diemissed oF ‘suspended workers in the payroll i light ofthe special circumstances attendant to thei reinstatement. 'SSUE: Does the Secretary have discretion to impose “payroll” reinstatement when he assumes jurisdiction over labor disputes? RULING: Yes, the Secretary has the discretion to impose “payrol' reinstatement when he assumes jurisdiction over labor disputes | was setted that in assumption of jurisdiction cases, the Secretary should impose actual reinstatement in accordance wth the intent ond spirit of At. 263 (g ofthe Labor Code. However, this one is subject to exceptions. Inthe case et bert 's obviously impracticable for the Hotel to actully reinstate the employees who saved their heads or cropped treir Nat Because this was exactly the reason they were prevented from working in the first place. Payrol rinstatemant, most ‘specially inthis case, would have been the only avenue where further incidents and damages could be avoies, ILLEGAL RECRUITMENT IN LARGE SCALE IS MALUM PROHIGITUM; GOOD FAITH IS NOT A DEFENSE People v. Valenciano y Dacuba GAR. No. 180926; December 10, 2008 FACTS: This is an appeal from the Decision CA which upheld the Decision of the RTC which convicted Lourdes Valenciano (Valenciano) of the crime of liegal Recruitment in Large Seale Valenciano, claiming to be an employee of Midale East International Manpower Resources, Inc. (Office), went to the houses of De Luna, De Villa, Dele Cuesta, and Candelaria to recruit as factory workers in Talwan ‘After payments were made, Valenciano brought the prospective workers tothe office, where they were made to fll out ‘pplication forms for their employment as factory workers in Taian, The complainants were Intteduced to. Romes Teresita, and Rommel, whom Valenciano made to appear as the owners of the employment agency. She ascured the Prospective workers that they could leave for Taiwan within one month from the fling of ther applications. During the Period materal, they have net yet found employment as factory workers in Taiwan Matern ws then charged with ilegal recuitment, In her defense, she claims that she was an ordinary employee of Mile East International Manpower Resources, Inc., where her other co-accused were the owners and managers, that ‘had she promised employment in Talwan, this promise was made in the performance of her cutios as 9 clerk ‘company 2nd that she has no knowledge of the criminal intent of her co-accused, ISSUE: Is good faith a defense in illegal recruitment in large scale? HELD: No, good faith is nota defense inilegal recruitment in large scale, legal recruitment in large scale is malum prohibitur, not malum in se. Good faith is not a defense. An employee of 3 ‘company or corporation engaged in illegal recruitment may be held liable as principal, together with his employer, if tis showin thatthe employee actively and consciously paticipated in legal recruitment ‘As tested to by he complainants, accused-appellant was among those who met and transacted with them regarcing the job placement offers. In some instances, she made the effor to go to their houses fo recrut them, She ever gave ‘ssurances that they would be able to find employment abroad and leave for Taiwan aftr the fling of their applicat one Accused-appeliant was clearly engaged in recruitment activities, notwithstanding her gratuitous protestation that her sctions were merely dane in the course of her employment as a clerk. Hence, accused-appeliant cannot claim to be merely folowing the dictates of her employers and use good faith as 2 shield against ciminal abil. AVERBAL APPRAISAL OF THE CHARGES AGAINST THE EMPLOYEE IS A BREACH OF THE PROCEDURAL DUE PROCESSVELASCO CASES King of Kings Transport Inc. v. Mamae GR. No, 168208; June 28, 2007, ACTS: This is a plea for review under Rule 45 af the Decision of the CA which affirmed the dismissal of bus conductor Santiago ©. Mamac (Mamac] from pelitioner King of Kings Transport, Ine. (KKTI), but ordered the bus company fo pay full backwages for violation ofthe twin-notice requirement and 13th-month pay. Petitioner KKTI is @ corporation engaged in public transportation and managed by Cla Dela Fuente and Melissa Lim, Respondent Memac was hired as bus conductor of ptisoner company. (Once an iregulaty is discovered, the company issues an “rregularty Report against the employee, indicating the nature ‘and details ofthe irregularity. Upon audit it was discovered that respondent daclared several sold tickets as returned tickets causing KKT! to lose an income of P&90. While no ietegulanty report was prepared, KKTI neveriiless asked respondent to explain the discrepancy. Respondent explained that during that day's tip, the windshield of the bus ‘assigned to them was smashed; end they had to cut shart the Wp in order to immediately report the matte to the police He was then informed through a verbal communication that his services will be terminated due to the kregulaniies that Were discovered. Later, respondent received a letter terminating his employment. ISSUE: Is 8 verbal appraisal of the charges against the employee a breach ofthe procedural due process? HELD: Yes, a verbal appraisal ofthe charges against the employee isa breach ofthe procedural due process The Labor Code provides that the first writen notice to be served on the employees should contain the specific causes or rounds for termination against them, and a directive that the employees ara given the opportunity to submit their writen explanation within @ reasonable period. The notice should contain a delaled narration ofthe facts and circumstances thet will serve as basis for the charge against the employees, A general description of the charge will nol sufice. Lastly, the notice should specifically mention which company rules, if any, are violated andlor which among the grounds under Art 282 are being charged against the employees Respondent was not issued @ writen notice charging him of committing an infraction. Even assuming that petitioner KKTI was able to furnish respondent an irregularity Report notifying him of his offense, such would not comply with the requirements ofthe law because it contained merely 2 general description ofthe charges against him, lg Agabon v. NLRC, if the sismissal is done without due process, the employer should indemnity the employee with nominal damages. Thus, fer non-compliance with the due process requirements in the termination of respondents ‘employment, petitioner KKT! is sanctioned to pay respondent the amount of thity thousand pesos (P30,000) as demages, REQUIREMENTS UNDER THE LABOR CODE ARE MANDATORY AND FAILURE TO COMPLY WITH THEM WOULD RENDER THE STRIKE ILLEGAL Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. NLRC GRR. Nos. 158786 & 188789; October 19, 2007 FACTS: in the instant petition under Rule 45, Toyota Motor Philippines Corporation Warkers Association (Union) and ts ismissed offcers and members seek to set aside the Decision of the CA which affirmed the Decision of the NLRC Micro Sales Operation Network ve. NLRC, the Court held that “Far wilul gisobedience to be 2 valid cause for Giemissa, the following elements should concur. (1) the employee's assailed conduct must have been wif, that is Ccheractorized by 2 wrongful perverse attude; and (2) the order violated must have been reasonable, lawful, made known to he employee and must pertain tothe duties which he had been engaged to discharge In the case at bar, petitioner failed to show thatthe order of the Company which was violated was part of Gran's duty as 2 computer specialist EDI should have provided copy of company policy, Gran's job description, or any document to ‘show that Dally Activity Reports were required for submission by employees, more particularly by 3 Computer specialist (3) No, in Agabon vs. NLRC, this court ruled that employees must be glven two (2) notices before their employment could be terminated: (1) A first notice to apprise the employee of their fault and (2) 8 record to communicate that their ‘employment is being terminated In fang to furnish Gran of the notice apprising him of the charges against him, consequently, Gran was not afforded due process making his dismissal ilegal RETRENCHMENT; LOSSES SOUGHT TO BE PREVENTED MUST BE SUBSTANTIAL, SERIOUS, ACTUAL AND REAL Andrada v. NURC GAR. No. 173231; December 28, 2007VELASCO CASES FACTS: Peltioners were hired as architects, draftsmen, operators, engineers and surveyars of Subic Legends Resorts ‘and Casino Ine, (Legend) on various projects AA retrenchment occurred due to the completion of several of is projects and the aboltion of the Personnel and ‘Administrative Department of the Project Development Division. Curiously on the same day. the Labor and Employment Center ofthe Subic Bay Metropolitan Authority advertised that Legends Int! Resorts inc. was in need of employees for positions similar to those vacated by pettioners Petitioners fied a complaint for ilegal dismissal. The respondents claimad management prerogative and that compnants voluntary signed quiciaims, The NLRC and the CA found their dismissal fom employment a be with just ‘cause due to retrenchment. ISSUE: Was there a valid dismissal due to retrenchment? HELD: No, there was no valid dismissal due to retrenchment. Retrenchment is an exercise of management prerogative to terminate the employment of ts employees in mass, o either ‘minimize of prevent losses, or when the Company is about to clase or cease operations for causes not due to buemnecs losses. In Ariola vs. Phiex Mining Corp,, the Court ruled that the losses sought to be prevented must be substantia serious, sctual & real, or if only expected are reasonably imminent as perceived objectively and in good faith by the employer. In the case atthe ber, Legend failed to show its nancial condition to justfy its retrenchment program I faled to submit ‘ucled financial statements regarding its financial ecndiion. Therefore, the petitioners are ilegally dismissed. “INTEREST OF SUBSTANTIAL JUSTICE” DOES NOT AUTOMATICALLY COMPEL SUSPENSION OF PROCEDURAL RULES Datkoku Electronics Phils, Inc. v. Raza GAR. No. 181688; June 5, 2609, FACTS: Thisis a petiton for review under Rule 45 wherein petioner Daikoku Electronics Phils (Daikoku) seeks to assail the decision ofthe CA aismissing the appeal ofthe petitioner for failure to comply with the rules on timeliness Intl, the LA and the NLRC ruled that Daikoku committed acts which constitute ilegal dismissal against Raza. Oa is part, Daikoku only fied its motion for reconsideration of tha NLRC. decision seventeen (17) days after the receipt of the ‘Same with an invocation that the motion should be accepted for the intaast of substantial justice". However, the NLRC ‘ismissed Daikoku's motion for failure to perfect i n the manner and formalities prescribed by law. Dalkoku went to the CA via a petition for certiorari, to assail the NLRC Resolution. The CA anchorad its denial of Daikoku's petition on the Premise that Osikoku's motion fer reconsideration was filed out of time and that there is no compeling reason for the relaxation of procedural ules, ISSUE: Should the procedural rules be relaxed on the ground of substantial justice? HELD: No. The relaxation for procedural rules cannot be made without any valid reason proffered for or underpinning i ‘To merit iberaliy. pettioner must show reasonable cause in justifying its non-compliance with the rules and must convines the Cour thatthe outright dismissal ofthe pation would defeat the administration of substantive juste Section 15, Rule Vil of the NLRC 2005 Rules of Procedure pertinently provides that a motion for reconsidaration should be filed within ten (10) calander days from receipt of decision, resolution or order ‘Applying the same, Daikoku had ten (10) calendar days from the day it received the NLRC resolution within which to fle 2 ‘motion for reconsideration, As it were, Daikoku fied its motion for reconsideration of the NLRC resolution on the 17th day from its receipt of the said resolution. The motion for reconsideration was undoubtedly fled out of time, as tne determines For this reason, the petition to accept Daikoku’s Motion for Reconsideration should be denied ‘A MOTION TO REDUGE BOND MUST INCLUDE A REASONABLE AMOUNT OF CASH OR SURETY BOND TO HAVE SUSPENSION OF THE PERIOD OF APPEAL Rosales v. New A.N.J.H. Enterprises & N.H. Oil Mill Corporation, et al. GR. No, 203355; August 18, 2015 FACTS: This is a Petition for Review on Certorari under Rule 45 of the Rules of Court assalling the Decisions of the CA and the NLRC.VELASCO CASES Respondent New ANJH is a sole proprietorship owned by respondent Noel. Petitioners are its former employees who worked as machine operators, divers, helpers, lead and boiler men. Because of the alleged cessation of operations of New ANJH, Respondent Corporation terminated their services, Petoners received their respective, separation pays, signed the corresponding check vouchers and executed Quitclaims and Release. Petitioners, however, fled a complaint for illegal sismissal ‘The Executive LA found that pettioners had been ilegally dismissed and ordered their reinstatement and the payment petitioners ful backwages. Respondents filed appeal Also, they posted 60% of the award upon fling 3 Motion to Reduce Bond, ‘The NURG denied respondents’ Motor to Reduce Bond and dismissed their appeal for non-perfection. Respondents fied their Motion for Reconsideration with Motion to Admit Additional Appeal Cash Bond with corresponding payment of ‘additonal cash bond. With this, the NLRC reversed its earlier Decision and reinstated the appeal. This wae affirmed by the CA, ISSUE: Should the Court grant the Motion to Reduce Bond filed by respondents, HELD: Yes. The Court must grant the Motion to Reduce Bond filed by respondents In labor cases, an appeal from a decision involving 2 monetary award may be perfected only upon the posting of cash or ‘surely bond. It should be notec, however, thatthe posting of a provisional cash or surely bond equivalent to fen percent (30%) of the monetary award exclusive of damages and attomey’s fees subject of the appeal is suticient provided. (1) {here Is meritorious ground, and (2) a bond ina reasonable amount is pasted. Compliance with the conditions shal sufice to suspend the running ofthe 10-day reglementary periad to perfect an appeal from the LA's dacision tothe NLRC. In this case, the NLRC had reconsidered its original positon and dactarad that the 60% bond was reasonable given the ‘ments ofthe justieation provided by respondents in their Motion to Reduce Bond, as supplemented by their Mation for Reconsideration with Motion to Admit Additonal Appeal Cash Bond. This is in accord with the guidelines established in MeBumie v. Ganzon, where the SC declared that the posting of s provisional cash or surety bond equivalent to ten Percent (10%) ofthe monetary award subject ofthe appeal is suffcient provided that there is meritorious ground therefor Furthermore, it must be noted that the respondents have eventually posted the ful amount of the award ordered by the laoor arbiter. Thus, given the absence of grave abuse of discretion on the part ofthe NLRC and the affirmation of the CA of the reasonableness ofthe motions and the amount of bond posted, there is no ground for the SC lo reverse the CA's finging that the appeal had been perfected.VELASCO CASES CIVIL LAW AN ESTIMATED PERIOD IS NOT CONSIDERED AS FIXED INTHE CONTEXT OF ART. 1193 OF THE NEW CIVIL cope Rowena R. Salonte v. Commission on Augit, ot al GR No, 207348; August 19, 2014 FACTS: This is 3 Petition for Review filed under Rule 64 assailing the Decision end Resolution of the Commission on ‘Ausit (COA). The assailed issuances affirmed the disallowance of payment of P7,084,835.42 to F-F. Cruz and Co. (FF. Cruz) holding that Is not the lawful owner of the subject facies, The City of Mandaue and F.F. Criz entered into a Contract of Reclamation wherein the latter, in consideration of etined land sharing formula stipulated, agreed to undertake the reclamation of foreshore and submerged lands in that iy. Paragraph 15 of the contrac stale that "The project is estimated to be completed in six (6) years." Subsequent, the City of Mandaue and F.F. Cruz executed a Memorandum of Agreement (MOA), allowing the latter to construct structures {and facilities on a parcel of land owned by the city. Pertinent, par. 5 of the MOA states that upon the completion of the project, all improvements uit by FF. Cruz to the portion of the parcel of and owned by the City of Mandaue shall belong fo the later. Later on, the facilities buit by F.F. Cruz had to be demolished to give way to the road widening project of the city. In return, FF. Cruz wil receive the subject amount in compensation. Subsequently, several iregulaiies in the road ‘widening project were reported. Respondent COA thereafter disalowed the payinent made to FF. Cruz because the later ‘was allegealy no longer the owner of said facilties ate time of the payment. “The Ruling of COA stated that the MOA clearly indicates that said improvements would be owned by the City upon completion of the project in six (8) years. However, the payments were made after the lapse of said period when the projact had not yet been completed. Hance, FF. Cruz was already in delay and thal the improvements now properly Betong fo the Cty. In ebutal,Solante maintains thal as long as the Project has not yet been turned over, the ownership ofthe said improvements would not be acquired by the Ci Issues: (1) Did FF, Cruz incurin delay? (@)Is FF. Cruz the lawl owner of sai improvements? RULING: (1) No, FF. Cruz did not incur in delay, Article 1193 of the Civil Code provides, “Obligations for whose fulfilment a cay Certain has been fixed, shall be demandable only when the day comes. A day certain is understood to be that which ‘must necessary come, athough it may not be known when.” A plain reading of the Contract af Reciamation reveals thatthe sbx (6)-year period provided for project completion, or, with fie eHect termination of the contract was @ mere estimate and cannot be considered a period or a “day certain’ in the Context of Article 1199, Paragraph 16 of the Contract of Reclamation cleary states that “The project is ESTIMATED to be Completes in six (6) years.” In other words, the lapse of six () years did not, by itself, make the obligation to fnish the Geoes cemandable, in such a way a8 to put FF. Cruz in a state of actionable delay. The Contract species thet the sxx [Byers netics was only an estimate ofthe project completion, It was not a fixed period. Hence, there wes not delay yet. (2) Yes. FF. Cruz was not in delay and untl the project is completed, ownership of the structures properly belongs to them. The MOA states thatthe structures bull by FF. Cruz on the property ofthe city wil belong to the latter only upon the completion of the project. Cleary, the completion of the project has yet to be fulfled. Hence, F.F. Cruz is still he ‘owner ofthe structures FAILURE TO INQUIRE BEYOND THE TITLE’S FACE WHEN CIRCUMSTANCES RAISE SUSPICION CANNOT AFFORD THE PROTECTION OF LAW ACCORDED TO BUYERS IN GOOD FAITH Enriqueta M. Locsin v. Bornardo Hizon, etal GR. No, 204369; September 17, 2014 FACTS: Ths is @ Petition for Review on Cortioran under Rule 48 challenging the decision of the CA which reversed the ruling of the RTC. The RTC held that the respondents Bernardo Hizon (Bemardo), Carlos Hizon (Carlos), and Spouses ‘lose Manuel and Lourdes Guevara (Spouses Guevara) are purchasers In good fath and for value of the subject property ‘owned by petitioner Enriqueta Locsin (Locsin). Locsin owned a lot which was occuple by Billy Aceron (Aceron). There is a pre-existing compromise agreement between the two. Loter, Locsin discovered that ane Marylou Bolos (Boios) canceled Locsin’s TCT and secured a new one in her {favor by registering @ Dsed of Absolute Sale allegedly executed by Locsin. Bolos later sold the land to Bernardo but twasVELASCO CASES registered under his son’s name, Carlos, Locsin then sent a letter to Caros requesting forthe return of the said property since her signature in he alleged sale wes forged, Subsequent, Carlos sold the subject property to Spouses Guevara, Carlos’ sister and brother-in-law, Spouses Guevara then appoinied Bemardo as their counsel and id not Interfere with the case. This prompled Locsin to fle the present During trial, Locsin maintained that although Bolos' certificate of le was free from liens and encumbrances on its face, Bernardo knew and admitted having knowledge of Aceron's lot possession as well as the compromise agreement between Locsin and Aceron when he purchased the land, Locsin argues that Bernard's stubborn refusal to inquire bbayond the face of Bolo's tite amounts to lack of prudence in protecting himself against possible defects, which does not ‘make him an innocent purchaser for value. For their par, respondents insist that they are not required to check on the validity ofthe sale from which they derived ther tle. According to ther, their knowledge of Aceron's possession cannot be the basis for an alagation of bad faith ISSUE: Are the respondents purchasers in good faith and for value? RULING: No, the respondents are not innocent purchasers for value of the subject property. As defined by the Court in FRufloe v. Burgos, an innocent purchaser for value is one who buys the property of another without notice that some other [berson has a right to or interest i, and who pays a full and far price at the time of the purchase or before receWving any notice of another person's claim. As such, a defective tite may be a source of a completely legal and valid tie, provided ‘atthe buyer is an innocent third person who, in good fath relied on the correctness of the tite. Complementing this is the Miror Doctrine which statas that in dealing with registered land, every person may safely rely on the face of the title ‘and not obliged to inquire beyond i. However, the SC enunciated in Sandoval v. CA that an exception to this is when the buyer has actual knowledge ofthe facts and circumstances that would impel a reasonably prudent man to inquire into the stalus of the property. In the prasent case, Bernardo knew Bolo's possible defect of tle and acted as agent for Carlos in purchasing the property. Hence, consistent with the rule that principal is chargeable and bound by the knowledge of his agent, it flows that Carios also knew of such circumstance. Hence, they should have inquired beyond Bolos' tite to protect their interests. It is also highly improbable for spouses Guevara not to have knowledge of Locsin's claim of ownership at the time the land was allegedly sold to them since they are relatives of Bernardo and Catios. Spouses Guevara did not even bother to acquaint themselves with the developments of the case, but appointed Bernardo to settle the matter instead ‘This is a strong incicaton of lack of interest in protecting their rights as innocent purchasers. Ergo, all these circumstances show that respondents are not purchasers in good faith and for value because they filed to ‘exercise the necessary level of prudence of a Bona fide buyer ‘THE LOCAL GOVERNMENT UNIT CAN ISSUE DEMOLITION ORDERS WITHOUT COURT ODER IN THE EXERCISE OF ITS POLICE POWER EVEN IF THE PROPERTY TO BE DEMOLISHED IS NOT A NUISANCE PER SE Grigostomo B. Aquino v. Municipality of Malay, Aklan, etal GR No. 211366; September 29, 2014 FACTS: This is a Pettion for Review on Cortorari challenging the Decision and the Resolution of the CA denying Crisostome Aquine’s (Aquina) Petiton for Certioran for not being the proper remedy to queston the issuance and implementation of £.0. No, 10 of the municipal government of Malay, Aklan (Fespondent) which ordered the demolition of his hotel establishment. Aquino isthe president of Boracay Island West Cove Management Philippines, Inc. (Boracay West Cove). The company ‘applied fer 2 zoning compliance with the respondent. The sald application carried with it @ building permit issued by DENR in favor of the company as its location is covered by a Forest Land Use Agreement for Tourism Purposes (FLAgT). The Municipal Zoning Adminstrator, however, denied the pettoner’s application on the ground that the proposed site was within the “ne build zone" demareatad in the municipal ordinance. The petitaner appealed to the Office ofthe Mayor Sut fo action was ever taken by the latter. Meanwhile, Boracay West Cove continued its operations and expandea ‘Subsequently, the respondent Issued E.0. 10 ordering the demolition of Boracay West Cove for non-compliance wit the ‘municipal ordinance. During tal, the petitioner argued tha the hotel cannot summarly be abated because itis not a nuisance per se, given the hundred milion peso-worth of capital infused in the venture. Furthermore, the petitioner aiso contended that the Fespondents should have fst secured @ court arder before proceeding with the demolition, In rebuttal, respondents frgued that the demolition needed no court order because the municipal mayor has the express power under the Local Government Code (LGC) to order tha removal of ilegaly constructed buidings. Issues: (7) Is the hotel establishment a nuisance per se and thus can be summarily abated?” 20$6 SBC Centralized Bar OperationsVELASCO CASES (2) Should judicial proceedings be conducted first before the LGU can order the closure and demolition of the property in ‘uestion? RULING: (1) No, the hotel establishment is not a nuisance per se. A nuisance per se is generally defined as an act, occupation, or structure, which is @ nuisance at all imes and under any circumstances, regardless of location or euttounding, Here, tie merely the hote's particular incidents location—and not its inherent quaities that rendered it a nuisance, Otherwise stated, had it not been constructed in the no bulld zone, Boracay West Cove could have secuted the necestary permis without issue. However, even if the hotel is not a nuisance per se, iis stil a nuisance per accidans, (2) No, the LGU can property order the closure and demolition ofthe property. Generally, LGUs have no power to declare 2 particular thing as a nuisance unless such a thing is a nuisance per se. Despite the hotels classification as a nuisance ‘er accidens, however, the LGU may nevertheless property order the hotel's demotion, This is because, in the exercise Of police power and the generel weifare clause, property rights of individuals may be subjected to restraints and burdese in order to ful the objectives of the government, COURTS MAY REDUGE THE IMPOSED RATES IN THE PENALTY CLAUSE OF THE CONTRACT BY REASON OF ITS EXORBITANCE AND BEING UNCONSCIONABLE MCMP Construction Corp. v. Monark Equipment Corp. GR.No. 201001; November 10, 2074 FACTS: This is a petition for review on certiorari under Rule 45 seeking the reversal of the Decision and Resolution issued by the GA affirming the RTC's decision which ordered MCMP Construction Corp (MCMP) 40 pay Manark Equipment Corp, (Monark) the amounts in aispute MCMP leased heavy equipment from Monsrk for various periods that was covered by @ Rental Equipment Contract. n the fulfilment of tne contract, Monerk delivered five pieces of heavy equipment to the project site of MCMP in various places ‘evidenced by invoices and document acknowledgment receipts. it was stated in the invoice that the credit sales ave Bayable within 30 days from the date of invoice wherein the customer agrees to pay an interest of 24% on all the ‘amounts, 2 collection fee of 1% compounded monthly, 2% monthly penalty charge for late payment, and e sum eat 25% of any amount due as attorney's fees in case of sult. MCMP failed to pay the renal fees notwithstanding the lapse ot the 30-day period indicated inthe invoices. Monark demanded payments and MCMP paid partially. Manark trereatier flea ‘a suitor a sum of money with the RTC. Inthe course ofthe case, the Court noticed that the tial court imposed upon MCMP the rates agreed upon in the penlty clause of their contract. Such rates ware found to be exorbitant and unconscionable rates, ISSUE: May the Courts reduce rates imposed in the penalty clause ofthe contract between MCMP and Monark by reason ofits exorbitance and being unconscionable? RULING: Yes, the Courts may reduce the imposed rates in the penalty clause, Art. 12289 ofthe Civil Code provides that the judge may equitably reduce the penalty when the principal obligation has been party or iregularly complied with Furthermore, the cours, notwithstanding the absence of performance, may also reduce the penalty if # is iniquitous or unconscionable. In tis case, the interest and penalty charges imposed upon MCMP are considered to be iniquitous, unconscionable, end therefore void. The Court found 24% interast per annum to be exorbitant and not commensurate tothe contracts efficacy. Thus, applying Art, 1229 of the Civil Code, the Courts may valcly reduce the interest rates imposed by Monark against MCNP for being iniquitous and unconscionable ‘AMENDMENTS IN A PUBLISHED PETITION WHICH INVOLVE ONLY A REDUCTION OF THE ORIGINAL AREA NO LONGER REQUIRE A REPUBLICATION Republic ofthe Philippines v. Apostolita San Mateo, etal. GR. No. 203860; November 10, 20°4 FACTS: This is ¢ Pettion for Review on Certorar seeking to reverse and set aside the Decision of the CA affirming the Decision of the RTC which ordered the registration ofthe ttle over the subject loti the name of Apostolta San Mateo et al. (Respondents), ‘The respondents fied @ petition for registration of ttle over a parcel of land before the RTC. They aver thatthe land used {2 be owned by their grandfatner and a predecessor indnterest. The land was eventually nheried by Crisanta, Amador, ‘and Juanito. Amador and Juanito mortgaged their snare to Crisanta and failed to sele their obligations. The respective widows of Juanito and Amador thereafter executed waivers of rights in favor of the respondents, the hei of Crisanta, A hearing was inital set and a notice was posted in several public places and was published ina newspaper In theVELASCO CASES meantime, Land Registration Authority (LRA) reduces the area of the property to rectify a discrepancy in the technical ‘eserition and to conform tothe cadastral mapping. The RTC granted the pettion for registration. The Republic of the Philippines (Republic) contended that the RTC did not acquire jurisdiction over the case as the notice of hearing flied to include the names of all the owners. However, the CA rejected it ruling that the proceedings for registration of tile is an action in rem and not in personam, thus, and personal notice to all claimants of the ras ie not necessary to give court jurisdicbon. The publication ofthe petiton is sutcient to vest the trial court with juriscetion, ISSUE: Did the tial court validly grant the petition notwithstanding the non-inclusion of all he claimants in the case and the absence of republication of notice because of a technical amendment? RULING: Yes, the tril court validly granted the pettion. Section 23 of PD 1529 provides that there shall be @ notice of intial hearing of the application for land registration through publication, maiing and posting. In addition, in Republic v. CA land Heirs of Luis Ribaya, the Supreme Court held that amendments in a petition that de nol invaive an addltion but only & reduction ofthe original area that was published no longer require a republication. In this case, there was propor publication of the Notice of Initial Hearing, slong with the technical description of the property. Since it is an action in rorn, the publication ofthe notice is sufficent notice to all claimants to the property. Tne ‘amendment of the technical description ofthe property whichis @ reduction in size does not require republication because ne amended area was already included during the frst publication, The amendment ofthe area was not a result of any Substantial amendment in the property to be coveres by the pettion for registration but was done to conform to the cadastral mapping. ‘Therefore, the bial court validly granted the petition of registration as there was a valid publication and notice of hearing, ‘A PURPORTED CONTRACT OF SALE WHERE THE VENDOR REMAINS IN PHYSICAL POSSESSION OF THE LAND, AS LESSEE OR OTHERWISE, INDICATES AN EQUITABLE MORTGAGE ‘Sps. Felipe Solitarios and Julla Torda v. Sps. Gaston Jaque and Lilla Jaque GIR No. 198882, November 12, 2014 FACTS: This is a petition for review under Rule 45 fled by the pettioners, Spouses Felipe Solaris and Julia Torda, against the respondents, Spouses Gaston and Lila Jaque, The paiiioners are seeking tha cevereal of the CA's decision which ejected the RTC's decision that the contract between the parties constituted an equitable mortgage, According to the respondents, they purchased a lot from the petitioners in stages. They intially bought half of the ft sllegedly evidenced by a notarized Deed of Sale. Later, the pettioners mortgaged tothe respondents the other half ofthe lot to secure a loan. When the petitioners failed to pay their oan, the respondents did not foreclose the mortgage. The respondents supposedly bought the lot direct from the pettioners to offset the loan amount against tne purchase price they agreed upon, ‘The petitioners explained that they merely mortgaged the lt to the respondents, and that the deed of sale was fictitious 4s thet signatures were forged. On the other hand, the respondents claimed that the propery was sold and that despite the sale, they allowed the petitoners to retain possession of the lt, subject to the condition that the latter wil equi ‘Gelwera portion ofthe property's produce. “The pettioners denied the allegations and subsequently instituted a case with the RTC to declare the contract null anc wie Issues: (1) Did the parties enter into a contract of absolute sale of the lot in question? (2} Does the transfer ofthe subject property constitute @ pactumm commissorium? HELD: (7) No, the transaction between the parties is actualy one of equitable mortgage. Under Article 1602(0) of the Civil Code, 2 purported contract of sale where the vendor remains in physical possession of the land, as lessee or otherwise, indicates an equitable mortgage. “There is sufficient basis to presume thatthe transection between the parties was that of an equitable mortgage and that the petitioners never wanted to sell the same to the respondents. It was never denied by respondents tnat the petitioners have remained in possession of and exercised acts of ownership over the said ot even after the purported absolute sale ofthe same. Thus, thera was no absolute sale, but only an equitable mortgage ofthe lot in question (2) Yes, the transfer of the subject property is @ pactum commissorium. Under Art. 2088 of the Civil Code, the creditor Cannot appropriate the things given by way of pledge or mortgage, or dispose of them. The only right of a mortgagee in case of non-payment of debt secured by mortgage would be to foreclose the mortgage and have the encumberedVELASCO CASES property sold to satisfy the outstanding indebtedness. The mortgagor's default does not operate to automatically vest on fhe mortgagee the ownership of the encumbered property, for any such effect is against public policy. The respondents {id not aval themselves of the remedy of foreclosure or buy the ft in an auction sale after the petioners failed to pay. Thus, the Court cannot allow the transfer of ownership ofthe lotto the respondents as it would amount to condoning the prohibited practice of pactum comissorum. ‘SUBSEQUENT TRANSFER OF THE PROPERTY IN A CONTRACT DOES NOT BAR THE RESCISSION OF SAID CONTRACT IF IT IS IN THE HANDS OF A THIRD PARTY WHO ACTED IN BAD FAITH Bank of the Philippine Islands vs. Vicente Victor Sanchez GR.No, 179518, November 19, 2014 FACTS: These are consolidated Pettions for Review on Certiorari under Rulo 46 ofthe Rules of Court assailing Decision ‘and Resolution of the CA ordering the cancellation of TCT 383697 in respondents Transamerican Sales and Exposition, Inc's (TSE!) name and the reinstatement of TCT 156254 in the names of the Sanchezes. “The Sanchezes entered into an agreement with Garcia (doing business in the name of TSEl) to sell their parcel of land ‘and agreed that Garcia shail pay the purchase price in cash once the propery is vacated. The Sanchezes entrusted to ‘Garcia the owner's copy of TCT because it was agreed that he shal take care of alle documentations necessary for the transaction Immediately after tne property was vacated, Garcia took possession and began constructing townhouses wihout the Sanchezes’ knowledge and consent. It was subsequently foun out by the Sanchezes that Garcia/TSEI were seling the said townhouses. Garcia were able to sell many of the units to cfferent individuals and entities, and even mortgaged the property. Sanchezes fied before the RTC a complain for rescission, restitution and damages with TRO. The purchasers and mortgagee who are the intervenors inthis case were found by the court to be in bed faith, On the ther hand, the Senchezes were held to be in good faith and not negligent. ISSUE: Would the subsequent transfer ofthe property bar the rescission of the contract? HELD: No, the subsequent transfer of the property would not bar the rescission ofthe contract. Under Article 4494 of the wil Code, rescission is available to a party in a reciprocal oblgaton where one party fails to comply with it AS an ‘Sxoepiion fo this rule, Article 1386 provides that rascission shal no take place if the subject matter ofthe prior agreement is already in the hands of a third party wno old not actin bad faith Here, the failure of Garcia TSE! to pay the consideration forthe sale ofthe property ented the Sanchezes to rescind the ‘Agreement. And in view of the finding thal the intervenors acted in bad fath in purchasing the propery from Garcia, the ‘Subsequent transfer in their favor did not and cannot bar rescission. Hence, the subsequent transfer ofthe property would not bar the rescission of the contract inthis case. |AN EXTRAJUDICIAL FORECLOSURE BASED ON ERRONEOUS COMPUTATION OF UNPAID OBLIGATION IS vor Spe. Tagumpay N. Albos and Aida C. Albos v. Sps. Nestor M. Embisan and lluminada A. Embisan GRNo. 210831 Nov. 26, 2014 FACTS: In 2 potion for Review on Certioran under Rule 45 of the Rules of Cour, the petitoners, Spouses Tagumpsy Gre sa Altos, sought the reversal and the setting aside of the decision of the CA, which upheld the RTC decision fezercng the vaisity of the extraudicial foreclosure sale of the property which the petifoners mortgaged to the respondents, Spouses Nestor and lluminada Embisan. “The peitioners entered into @ contract of Loan with Real Estate Mortgage with the respondents for a certain amount upon sinich 2 monthly interest of 9% was imposed. The petitioners failed to settle the obligation despite several extensions, The ‘Ricccents agcwed to the third extension on the condition that the 5% interest thereon shall be compounded. The Sipulaton, however, was not reduced into wring. Due to the fallure of the petfioners to settle the indebtedness, the Fesponderts proceeded with the extrajudicial foreclosure of the property where they emerged as the highest bidders at the auction sale “Subsequently, the petitioners filed a complaint for the annulment ofthe Loan with Real Estale Mortgage before the RTC. which the later dismissed for lack of mart Before the Supreme Cour, the petitioners alleged thatthe lower court erred in Considering the compounded 5% interest, as the same was not slipulated in wing and was excessive, exorbitant and Sppressive, On this premise, the petitioners averred that the foreclosure proceedings should be nullified on the ground ‘fat the amount unpaid obligation, which includes the interest, is erroneous. Meanwhile, the respondent argued that the petitioners agreed to pay the compounded interest in exchange for extending the payment period fora third time. 2016 SBC Centralized Bar OperationsVELASCO CASES ISSUE: Is the extra-judicial foreclosure ofthe mortgaged property null and void on the basis ofthe erroneous computation of interest? HELD: Yes, the extra juccial foreclosure should be dectared as null and vois. According to Article 1958 ofthe Civil Cosa, fo interest snail De due unless ithas Deen expressly stipulated in writing. Furthermore, it has been consistently held that an interest rate whetner it may be simple or compounced, written or verbal shal be void ifthe same is exorbitant. In the case at bar, the compounding of the 5% interest is void, a it was not expressly stipulated in the terms of the Contract. Furthermore, the imposition of an unconscionable rate of Interest on a money debt, even if knowingly and Voluntariy assumed, is immoral and unjust. It is tantamount to an iniquitous deprivation of propery. Thus, since the Spouses were not given an opportuni to sel their debt at the correct amount and without the inigutous interest Imposed, no foreclosure proceedings may be instifuted. A judgment ordering a foreclosure sale is conditioned upon a finding on the correct amount ofthe Unpaid obligation and the fallue ofthe debtor to pay the said amount. In ths case, t has not yet been shown that the spouses had already failed to pay the correct amount of the debt and, therefore, = foreclosure sale eannet be conducted in order to answer for the unpaid debt A PETITION FOR RECONSTITUTION OF LOST OR DESTROYED OCT REQUIRES, AS A CONDITION PRECEDENT, THAT AN OCT HAS INDEED BEEN ISSUED Republic of the Philippines v. Helrs of Spouses Donato Sanchez and Juana Meneses GR. No. 212388; December 10, 2014 Velasco, Jr, J FACTS: This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the reversal and seting aside of the Decision and Resolution of the CA. Respondents fled an amended petition for reconstitution of Original Cerificate of Title (OCT) that covered Lot No. 854 of the Cadastral Survey of Dagupan, pursuant to RA No, 26 or An Act Providing @ Special Procedure for the Reconstitution of Torrens Certificates of Tite Lost or Destroyed, The tial court issued an Order, giving due course thereto and ordered the requisite publication thereof, among others, Meanwhile, the Administrator of the Land Registration Authority (LRA) requested the trial court, which the later granted, to requice respondents to submit certain documents, ‘The LRA submited ite Report pertaining ta the legality ofthe reconstitution sought in favor of respondents. However, the trial court rendered its Decision cismissing the pettion for lack of sufficient evidence, ruling that RA No. 28 oniy applies in cases where the issuance of the OCT sought to be reconstituted has bean established, only that twas lost or destroyed, ‘While acknowledging the existence of Decree No, 418121 which was issued forthe lat subject of the case, the trial court nevertheless held that there is no established proof inat OCT No, 45361 was issued by vitua of said Decree, -Aggrieved, respondents moved for reconsideration of the above Decision. The CA reversed the ruling of the vial court on ‘appeal and directed the reconstitution of OCT No. 45361 in favor of herein respondents, ISSUE: Is RA No, 26 only applicable in cases where the Issuance of the OCT sought to be reconstituted had been | establishes? HELD: Yes, RA No. 26 is only applicable in casas where the issuance af the OCT sought to be reconstituted had been ‘established Jt is well to emphasize that a petition for reconstitution of lost or destroyed OCT requires, as a condition precedent, that an (CT has indeed been issued, for obvious reasons, Section 15 of RA No. 28 provides that before a certficate of ttle which ‘has been lost or destroyed may be reconstituled, it must fst be proved by the claimants that said certificate of ttle was ‘stil in force at the time it was lost or destroyed, among others. J the case at ber, the OCT which respondents seek to be reconstituted is no longer in force, rendering the procedure, i! ted, a mere supertuity. The Cour agrees with the thal court that no clear and convincing proof has been adduces (OCT No, 45361 was issued by Virtue of Decree No. 418121 ‘iE the respondents stil insist on the reconstitution of OCT No. 45361, the proper procedure is to fle @ petition for the “cancelation and re-issuance of Decree No. 418121 following the opinion of then LRA Administrator THE RIGHT TO DECIDE WHETHER THE ILLEGITIMATE CHILDREN WILL USE THEIR FATHER'S SURNAME SLONGS TO THE CHILDREN, NOT THE PARENTS: M. Grande v. Patricio T. AntonioVELASCO CASES FACTS: In a petton for review under Rule 45 before the SC, Grace Grande (Grande) assails the decision of the CA, directing the Civil Registrar to enter the surname Antonio as the surname of her minor chitdren in their respective certificates of lve bith Grace Grande and Patricio Antonio (Antonio) had two ilegitimate children: Andre Lewis and Jerard Patrick who were not recognized by Antonio as his own in their Records of Birth. When the partes’ relationship turned sour, Grande lft for the United States with the two children. This prompted Antonio to fle a Petition for Judicial Approval of Recognition with Prayer for Correction/Change of Surname of Minors, ‘The CA held that the lagal consequence of the recognition made by Antonio that he Is the father of the minors, taken in Conjunction with the universally protected bestinterest-otthe-chid-clause, compels the use by the children of the surname “ANTONIO” Grande assalls the order of the appellate court insofar as it decreed the change of the minors’ surname to “Antonio pesiting that Article 176 of the Family Code as amended by R.A. No, 8225, couched as tis in permissive language, may Not be invoked by a father to compel the use by his legitimate children of his sumame without the consent of theit rather ISSUE: May 2 father compel his legitimate children to use his surname upon his recognition oftheir ilation” HELD: No, the general rule is that an illegitimate child shall use the surname of his or her mother. The exception provided! by R.A, No. $225 is, in case his or her filation is expressly recognized by the father through the record of birth appearing In the civil register de when an admission in 2 public document or private handwritten instrument is made by the father ‘ticle 176 of the Family Code gives the llegiimate children the right to decide i they want to use the sumame of the father or nat I is pot the father or the mother who is granted by law the right to dictate the suimame of their ilegtimate chien ‘Therefore, Antonio's position that the court can order the minors fo use his surname has ne lagal basis. The Court has, time and again, rebuffed the ides thatthe use ofthe father's surame serves the best interest of the minor chid, Thus, the Court orde’s vie remanding of the case to the RTC for the sole purpose of determining the sumame to be chosen by Andre Lewis and Jerard Patrick ALTHOUGH A CONTRACT IS THE LAW BETWEEN THE PARTIES, THE PROVISIONS OF POSITVE LAW WHICH REGULATE CONTRACTS ARE DEEMED WRITTEN THEREIN. ‘Surviving Heirs of Alfredo Bautista vs. Francisco Lindo et. a GR. NO. 208232, Mareh 10, 2014 FACTS: Alfredo Bautista, petitoners’ predecessor, inherited in 1983 a free-patent land covered by an Original Cerificate Of Tite (OCT). Subsequent, he subdivided the’ property and sold it to several vendees, herein respondents, via a notarized deed of absolute sale where Transfer Certiicates of Tile (TCTs) were issued in favor ofthe vendees. Three (3) Years afer the sale, Bautista fled 2 complaint for repurchase against respondents before the RTC ef Lupan, Davao rental anchoring his cause of action on Section 119 of CA 141, otherwise known as the “Public Land Act” which provides that ‘Telvery conveyance of land acquired under the free patent or homestead provisions, when proper, shall be Subject to repurchase by the applicant, his widow, or legal heirs, within a period of fve (5) years from the date of the conveyance Petitioners sought the enforcement of their right to repurchase the subject property under Secton 119 of CA 141 Respondents argued that there i no stipulation in the contract which grants the petitioners the right to repurchase. ISSUE: Can Bautista repurchase the subject property pursuant fo Section 119 of CA 141 even if there is no stipulation of repurchase under the contract? HELD: Yes, Bautista may repurchase the subject propery, The Supreme Court held that while the deeds of sale do nct explicitly contain the stipulation thatthe sale is subject to repurchase by the applicant within a period of five (5) years from, the date of conveyance pursuant to Seo. 118 of CA 741, sil, such legal provision is deemed integrated and made part of the deed of sale as prescribed by law. It is basic tht the law is deemed written into every contract Although a contract is the law between the parties, the provisions of positive law which regulate contracts are deemed written therein and shall limit and govern the relations between the partes. Jn this case, although the repurchase is nat expressly stipulated, Bautista may seek to enforce it as tis deemed writen into every contract. Hence, Bautista may repurchase the subject property even such stipulation is not written in the contact.VELASCO CASES ‘Applying this rue, it tums out thatthe Canadian corporation owns more than 60% ofthe equiy interests of pettioners, Hence, the latter are disqualified to participate in the exploration, development and ullizaton af the Philppine’s natural ‘SELF-ADJUDICATION IS ONLY WARRANTED WHEN THERE IS ONLY ONE HEIR; THERE IS A SIMULATED CONTRACT WHEN THE PARTIES HAD NO INTENTION TO TRANSFER THE OWNERSHIP, OF WHATEVER EXTENT, OVER THE PROPERTY Avelina Abarientos Rebusqulllo, et. a. v. Spouses Domingo, et. al. G.R.No. 204028; June 4, 2014 FACTS: Petitioners Avatina and Salvador Orosco (Salvador) fled a Complaint for annuiment and revocation of an Affidavit of Selt-Adjudication and a Deed of Absolute Sale before the RTC. Avelina was one of the children of Eulalia Avarientos (Eulalio) and Victoria Vilareal (Victoria). Eula died intestaa, survived by his wife Victoria, six (6) leglmets chien, and one (1) illegitimate child. His wife Victoria eventually died ‘intestate. On his death, Eulsho left behind on untitled parce! of land in Legazpi Clty ‘n 2001, Avelina was supposedly made to sign two (2) documents by her daughter Emelinda Rebusquilo-Gualvez (Emetinda) and her son-in-law Domingo Gualvez (Domingo), respondents in this case, on the pretext that tre documents were needed to facilitate the tiling of the lot. It was only in 2008 that Avalina realized thal what she signed was a7 Alfidavit of Sel-Adjudication and 2 Deed of Absolute Sale in favor of respondents. Avelina saught the intersontion of the RTC to declare nul and void the two dacuments, In their answer, respondents admitted that the execution of the Affidavit of SeitAdjudication and the Deed of Sale was iptended to facilitate the tiling of the subject property. After tal, the RTC rendered its Decision, annuling the Affidavit ot Sel-Adjudication and the Deed of Absolute Sale executed by Avelina. Respondents appealed and the appellate court reversed and set aside the Decision of the RTC. ISSUE: Were the Self Adjudication and Deed of Absolute Sale executed by Avelina valid notwithstanding the fact that there were other hes? HELD: No, both the Affidavit of SeltAdjudication and the Deed of Absolute Sale are void The second sentence of Section 1, Rule 74 of the Rules of Court is patenty clear that selfadjudication is only warranted wien there is only one heir ‘As adrritted by respondents, Avelina was not the sole heir of Eulalo. In fact. pettoner Salvador is one ofthe co-heirs by ‘ight of representation of his mathe. Inlike manner, the Deed of Absolute Sale executed by Avelina in favor of respondents was correcty nulfied and voided bby the RTC, pursuant fo Arties 1345 and 1346 of the Civil Code which provide that there is a simulated contract when the partes fad no intention to Bound at all ‘Aueine was notin the rght positon to sell and transfer the absolute ownership ofthe subject property to respondents. As She was not the sole her of Eulalio and her Affidavit of SelfAcjudication is void, the subject property is stl subjec: Parton. Avelna, in fine, id not have the absolute ownership of the subject propery but only an aiguot portion. What sre ‘ould have transfered to respondents was only the ownership of such aliquot portion. I is apparent from the admissions of respondents and the records of this case that Avsina had no intention to transfer the ownership, of whatever extet ‘ver the property to respondents. Hence, the Deed of Absolute Sale is nothing more than @ simulated contract, Therefore, the Affidavit of SelrAdjudication and the Deed of Absolute sale are not valid THERE IS CO-OWNERSHIP WHENEVER THE OWNERSHIP OF AN UNDIVIDED THING OR RIGHT BELONGS TO DIFFERENT PERSONS Vilma Quintos et.al v. Pelagia | Nicolas et.al GR.No. 210252, June 16, 2014 FACTS: This is Petition for review on Cortorari under Rule 45 fled by petioners Vilma Quintos, Florencia Dancel ang Catalin Ibarra challenging the Decision and Resoltion of the CA which affirmed the RTC decision that the pettioners ‘and the spouses Recto and Rosemarie Candelaro (spouses Candelaro) are co-owners of the subject property ‘The petitioners and the respondents are siblings. When their parents passed away, they left their ten (10) children ‘ownership aver the subject property. Thereafter, the respondent siblings sold ther 7!10 undivided share over the property in favor oftheir co-respondents, the spouses Candelario, in whose names a certificate title covering the said portion was ‘sued. The respondent siblings also entered into a lease agreement with Avico Lending Investor Co. without ny ‘jection from the petitioners,VELASCO CASES Subsequently, the pettoners fled a complaint for Quieting of Tile and Damages against the respondents wherein they alleged that they received the subject property when the properties were distributed during their parents’ ifetime. They likewise averred that they have been in adverse, open, continuous, and uninterrupted possession ofthe property for over four decades and are thus entitled to equitable tile. On the other hand, the respondents argued thatthe petitoners’ cause ‘of action was already barred by estoppel when one of the pelttaners offered to buy the 7/10 undivided share of tre respondent siblings. They point out that this is an acmicsion on the pat ofthe pettoners that the property is not entiely theirs ISSUE: Is there 2 co-ownership between the petitioners and respondent spouses Candelario? HELD: Yes, there is @ co-ownership between the petitioners and respondents. Article 484 of the New Civil Code provides ‘hat there is co-owmership whenever the ownership o! an undivided thing or right belongs to diferent persons, In the case at bar, the petitioners falled to prove that they are the absolute owners of the property in question. Theic ‘alleged open, continuous, exclusive, and uninterrupted possession of the subject property is belied by the fact that Fespondent siblings entered info a Contract of Lease over the subject lot withaut any objection from the petitioners Unfortunataly, pettoners inthis case falled to discharge the burden imposed upon them in proving legal or equitable ile over the parcel of land in issue. Therefore, al ten (10) siblings inherited the subject propery from thei parents, and after the respondent siblings sold thelr aliquot share to the spouses Candelario, petitioners and respondent spouses became co-owners of the same. RELIANCE ON THE MARRIAGE CONTRACT AND THE TESTIMONIES OF THE WITNESSES WITHOUT PRESENTING THE ACTUAL MARRIAGE LICENSE 00 NOT PROVE THE EXISTENCE OF SUCH LICENSE, Syed Azhar Abbas v. Gloria Goo Abbas GIR. No. 183896; January 30, 2013 FACTS: This is a Petition for Review on Cartorar under Rule 45 of the 1897 Rules of Civil Procedure, questioning the Decision of the CA dismissing the petton for dectaration of nulity of marriage between petiioner and respandent. Peittoner Syed, a Pakistani citizen, fled a petition for the declaration of nullity of marriage alleging the absence of a mariage license. He contends that he wes told that he was going to undergo some ceremony at his mother in.iaw’s Fesidence in the Philippines but was not fad ofthe nature of sald caremony. During the ceremony he and Glona signed 3 document. He claimed that he did not know thal the ceremony was a marriage until Gloria told him later Further, he testified that he did not go to Carmona, Cavite to apply for @ marriage license, and that he had never resided in that area, Petitoner also presented several winesses to suppor his contentions, According to the Municipal Civil Registrar of Carmona, Cavite, the marriage license number appearing in the marriage contract was the number of another mariage license issued to & certain Arindo Getalado and Myra Mablangan, Thus, no marriage license appear to have been issued to pattioner and respondent Respondent on the other hand, presented the marrage contract bearing ther signatures as proof. She and her mothe Sought the help of Atty. Sanchez in securing @ mariage license, and asked him to be one of the sponsors Gloria testfied {et she and Syed were married on January 9, 1993 at thelr residence. She further tested that she has 2 daughter with Syed. Glona also stated that she and Syed had already been married on August 8, 1992 in Taiwan, but that she did not krow if said marrage had been celebrated under Muslim res, because the one who celebrated their marriage Was Chinese, and those around them at the ime were Chinese. ISSUE: Were the pieces of evidence presented by respondent enough to prove that there was a valid marriage license? HELI license, 0, the pieces of evidence presented by respondent were not enough to prove the existence of a valid marriage Article 3 of the Family Code provides that one of the formal requisites of marriage is 8 valid marriage license. Article 4 of the same Code provides that absence ef any ofthe formal or essential requisites shall render the mariage void ab iio Respondent Gloria failed to present the actual marriage ioense, or @ copy thereof, and relied on the marriage contract as Well asthe testimonies of her witnesses to prove the existence of said license. The certification issued by the civil registar that there was no mariage license enjoyed probative value, as his duty was to maintain records of data relative fo the issuance of a marriage icense. As to the motive of Syed in seeking fo annul his marriage ta Gloria, tne Court ruled that ‘may well be that his motives are less than pure, that he seaks to evade a bigamy suit. Be that as t may. the same does ot make up forthe failure ofthe respondent to prove that they had a valid marriage license, given the weigh of evidence presented by petitioner. The lack of a valid marriage icense cannot be aliibuted to him, as twas Gloria wha look stops 0 procure the same. The law must be applied, Hence, as the marrage license, a formal requisite, is clearly absent the ‘mariage of Gioria and Syed is void ab intoVELASCO CASES CUSTODY OVER MINOR CHILD IS NOT PERMANENT AND UNALTERABLE. Geoffrey Beckett v. Judge Ologario R, Sarmiento, Jr. AM. No, RTJ-12-2326; January 30, 2013 FACTS: Complainant Geoffrey Beckett (Geoffrey) instituted the instant complaint charging respondent Judge Olegario R. Sarmiento, Jr. (Judge Sarmiento) of the ATC of Cebu City with gross ignorance of the law, manifest partaly and dereliction and neglect of duty allegedly committed for granting Eltesa Densing-Beckett (Ekesa) provisional custody over Geoffrey Becket, Jr. (Geoffrey J). Geotrey, an Austraian national, wes previously maried to Etesa, a Filipina, and out af the marriage, Geoffrey Jr. was bom. n'a subsequent case belwean Geoffrey and Ekesa, Judge Sarmiento rendered a judgment based on the ‘compromise agreement entered by the parties wheraby Geoffrey shall have full and permanent custexy over Geoffey, Jt subject the uisitoial rights of Eteea When Eitess flied to return the chile to Geotrey on the date agreed upon after the latter consented to have Geotrey, J: slay withthe former fora few waeks, Geotrey fied a petition against Eltesa for vilaton of RA No, 7610 which ease was ‘gain rafled to the sala of Judge Sarmiento. During the proceedings, Geottrey, J. displayed hysterical conduct inside the courtroom, not wanting to let go of Etesa and acting as though his father, Geoftey, was a lola stranger. Judge Sarmients issued an order giving Etesa provisional custody aver Geotfrey Jr ISSUE: Did the respondent judge err when he issued an order giving provisional custody to Eltesa despite the earlier judgment granting Geoffrey fll and permanent custody over Geoffrey, Jr? HELD: No, the grant of custody fs not permanent and unaiterable and can always be re-examined and adjusted. Under Ar, 213 of the Family Coda, the well-settled rule is that no chilé under seven (7) years of age shail be not be separcted ffom tne mother, uniess the court finds compeling reasons to order otherwise. And if aleady over 7 years of age, the chila's choice as to which of his parents he prefers to be under custody shall be respected, unless the parent chosen roves to be unit ‘The matter of custody is not permanent and unalterable. Ifthe parent who was given custody suffers a future character change and becomes unfit, the matter of custody can always be re-examined and adjusted. Ta be sure, the welfare, the best interests, the Benefit and the good of the child must be determined as of the time that ether parent is chosen to be the custodian, Geoffrey, J, at the time when he persistenlly refused to be turned over to his falner, was already over seven (7) years of age. AS such, he was very much capable of decising, based on his past experiences, with whom he wanted to stay ‘Therefore, Judge Sarmiento is not lable for gross ignorance of the law. For clearly, absent any evidence to the contrary Georey, JF. chose to live with his mother fora reason, which respondent judge, consistent with the promotion of the Dest Interest ofthe chia ‘THERE IS NO RELATIONSHIP BY AFFINITY BETWEEN THE BLOOD RELATIVES OF ONE SPOUSE AND THE BLOOD RELATIVES OF THE OTHER Johnwell W. Tiggangay v. Judge Marcelino K. Wacas. ‘AM. OCA IPI No, 08-3243-RTJ; April 1, 2013, FACTS: This is 2 complaint by Johnwell Tiggangay (Tiagangay), charging respondent Judge Marcelino Wacas (Judge Wacas) with Impropsety and Partalty for not inhibiting himself in the hearing of an electoral protest case pending before him. During the 2007 election, Tiggangay ran for 2 mayoralty position but lost to Rhustom Dagadag (Oagadag) Tiggangay fled fan electoral protest and the case wes raffled to the sala of respondent Judge Wacas who ruled in favor of Dagadag, COMELEC armed the RTC decision. Tiggangay then fled a lettercomplaint charging Judge Wacas with impropriety and Partially. He allaged that Judge \Wacas is Dagadag's second cousin by afinty because the former's aunt is married to the latter's uncle, The relationship notwithstanding, Judge Waces did not inhibit himself from hearing said electoral case. On the other hand, Judge Wacas denied being related by arity to Dagadag, ISSUE: Are Dagadag and respondent judge Wacas relatives by afirity? HELD: No, Dagadag and respondent judge Wacas are not relaives by ality. Affinity denotes the relation that one spouse has to the blood relatives of the other spouse. It's a relationship by marriage or @ familial relaion resulting fram marriage. Relationship by affniy refers to a relation by virtue of a legal bond such as marriage. Affily may also De defined 2s the relation which one spouse because of marriage has to blood relatives cf the ather. Indeed, there is noVELASCO CASES affiity between the blood relatives of one spouse and the blood relatives of the other. husband is related by affinity to his wife's brother, but not tothe wife of his wife's brother. There is no affinity between the husband's brather and the wife's sister. Inthe instant case, Judge Wacas is related to his aunt by consanguinity in the thitd degree, it folows by vitue of the mariage of his aunt to the uncle of Dagadag that Judge Wacas is the nephew-in-law of the urele of Dagadag, 12.3 relationship by affinity in the third degree. But Judge Wacas is not related by affity tothe blood relates of the uncle of Dagacag as they are not his in-laws and, thus, are not related in any way to Dagadag, ln lke manner, Dagadg ie te nephew-indaw of the aunt of Judge Wacas but is not related by affinity to the blood relatives of Judge Wacas’ aunt, like Judge Wacas. In short, there is no relationship by affinity between Judge Wacas and Dagadag as they are not inious of teach other. ‘Therefore, there is no relationship by affinity between Judge Wacas and Dagdag as they are not in-laws of each other REAL ESTATE MORTGAGE CANNOT BE RESCINDED WHEN THE THIRD PARTY IN WHOSE FAVOR IT WAS EXECUTED ACTED IN GOOD FAITH AND WITHOUT FRAUD. ‘Samuel Lee, etal. v. Bangkok Bank Public Company, Lt GAR. No, 173349, February 8, 2011 FAGTS: Midas Diversified Export Corporation (MDEC) and Manila Home Textile, Inc, (MHI) entered into two separate Gresit Line “Agreements (CLAs) with respondent Bangkok Bank Puble Company. Ltd. (Bangkok Bank). MDEC was likewise granted a loan facility by Asiatrust Development Sank, Inc. (Asiatrust). MDEC and MHI are owned and controled by the pettioner Lee family Eventually, MDEC defaulted in the payment of is loan with Asiatust As a consequence, the latter requested that a Real Estate Mortgage (REM) over the properties of Samuel Lee in Antipolo be executed as addtional collateral forthe loan Thereater, = new deed of mortgage was signed by the spouses Lee. This deed was annotated on the ties of the Properties, However, before the annotation of the REM, the sald properties were already the subject of a preliminaly attachment which was not annotated on the title of te properties. Bangkok Bank instituted an action to recaver the loans extended to MDEC and Mil under the guarantees. Bangkok Bank later ciscovered that the spouses Lee had executed 3 REM over the subject Antipolo properties in favor of Asisrust. nd that the REM was previously annotated on the tiies, Asiatrust thereafter foreciosed the subject morigaged Anvipolo Properties and won as the highest bidder at the auction sale, purchasing the said properties. Believing that the REM and the foreclosure sale were fraudulent, Bangkok Bank did not redeem the subject properties, Consequently, the TCTs covering the subject prosertes were consolidated in the name of Asiatust Subsequenty, Bangkok Gank fled a case before the RTC forthe rescission of the REM aver the subject propertes as it was entered into in fraud of the creditors ISSUES: (i) et the REM executes in feud ofthe spouses Lee's cractors? (2) Steed he action for rescission be granted? HELD: (9) No The oresumption of fraud under Art 1387 of the Cll Code does not apply inthe present case. The presumption of fraud established under Art. 1287 does not apply to registered lands if "the judgment or atlachment rade is not aso registered” In ths case, the prior writ of preliminary attachment was not annotated onthe titles ofthe properties, Even assuming that Art 1367 of the Code applies, he execution of a mortgage is not contemplated within the meaning of “alienation by onerous ttle” under the said provision. Under Ar. 1387 of the Code, fraud is presumed only n allenatons. bby onerous title of @ person against whom a judgment or atfachment has been issued, This term is “particulary applied to absolute conveyances of real property” and must involve a “complete transfer from one person to ancther" Therefore, & ‘mortgage is nat contemplated inthe term “alienation” that would make the presumption of fraud under Art 1387 apply. (2) No. In allowing rescission in case of an alienation by oneraus tite, the thd person who received the property onveyed should likewise be a party to the fraud. As clarified by Art. 1386{2) of the Code, so long as the person whois Ia ‘egal possession ofthe propery did not actin bad faith, rescission cannot take place. Thus, in all Instances, as tothe third person in legal possession of the questioned property, good fath is presumed, Asiatrust, being a third person in good faith, should not be automatically presumed to have acted fraudulently by the mere execution of the REM over the subject Antipolo properties, there being no evidence of fraud or bad faith. Even pushing further to say that the REM was executed by the spouses Lee to defraud creditors, the REM cannot be rescinged 2nd ‘Shall therefore stand as Asiatrust acted in good feith and without any badge ef fraud. Considering that the totaly ofVELASCO CASES circumstances clearly manifests the want of fraud and bad faith on the part of the parties to the REM in question, ‘consequently it cannot be rescinded 'SOLIDARY LIABILITY CANNOT BE PRESUMED BUT MUST BE ESTABLISHED BY LAW OR CONTRACT Eusebio Gonzales v. Phillppine Commercial and International Bank, etal. GAR. No. 160257, February 23, 2011 FACTS: This is Petition for Review on Cortorari under Rule 45 from the Decision of the CA, which denied Eusebio Gonzeles’ (petitioner) appeal from the Decision of the RTC. The RTC found justification for respondent Philippine Commercial and international Bank's (PCIB) dishonor of the petitioner's check and found the latter soliday liable with the ‘spouses Jose and Jocelyn Panilio (spouses Panilio) forthe three promissory notes they executed in favor of PCI. Philippine Commercial and Intemational Bank (PCI®) granted a credit line to petitioner Eusebio Gonzsles (Gonzales). Gonzales drew trom said credit line through the issuance of check. At the institution of the instant case, Gonzales had 2 Foreign Currency Deposit (FCD) with PCIE. Gonzales and his wife along with spouses Paniilo and Gonzales obtained a total of tree loans amounting to P1,800,000 covered by three (3) promissory notes. A Real Estate Morigage (REM) over a parcel of land was executed to secure the loans. Notably, the promissory notes speciied, among others, the solidary fabiliy of Gonzales and the spouses Peniio for the payment ofthe ioans. However, twas the spouses Panillo who received the loan proceeds, Panllio defaulted in paying the monthly interest dues of the loans. In the meantime, Gonzales issued a check for 250,000 drawn against the credit line but sald check was dishonored by PCIB dve to the termination by PCIB of the credit line forthe unpaid interest dues from the loans. PCIB alsa froze the FCD account of Gonzales. Thereafter, several demand letters were sent to Gonzales with the threat of egal action. Gonzeles thru his counsel, wrote PCIB that the actual borrowers were the spouses Panilio and he never benefited from the proceeds ofthe loans, Nevertheless, the RTC found Gonzales soldarly lable with the spousas Paniiio on the three Promissory notes relative to the outstanding REM loan. The CA affirmed the RTC's decision ISSUE: Is Gonzales solidally lable forthe three (3) promissory notes he made with spouses Panliio even though the proceeds were received solely by spouses Panliio? HELD: Yes, Gonzales is liable for the loans covered by the above promissory notes, Article 1207 of the Civil Code pertinently states that “there is solidary labilty only when the obligation expressly so states, or when the obligation requires solar." Soliary lability cannot be presumed but must be established by law or contract, In the instant case, Gonzales, as accommodation party, is immediately, equally, and absolutely bound with the spouses Panllio on the promissory notes which indubltably stipulated soldary ably forall he borrowers. This is true even though the proceeds were received solely by the spouses Peril, JUDGEMENT BASED ON AGREEMENT TO TERMINATE ACTION IS FINAL AND EXECUTORY ‘Alexander S. Gaisano v. Benjamin C. Akol GR_No. 183840, June 15, 2011 FACTS. This is a Petition for Review on Cortiorari under Rule 46 which seeks to nullify and set aside the decision of the Court of Appeals, which reversed the decision of the Regional Trial court dismissing the respondent Benjamin Ako!'s (kel) complaint fr recovery ofthe share of stocks. On Apri 14, 201, the parties Alexander Gaisanop (Gaisano) and Akal intl filed an Agreement to Terminate Action duly signed by them and their respective counsels, waiving any and all of ther claims atising out of or necessarily connected with this case and its originating cases, to wit ‘a, Civl Case No, 2006-010 for recovery of shares of stock and damages where respondent was the plaintiff and which case was dismisses by the Branch 17 of the Regional Trial Cour of Cagayan de fo City, D.CAG.R. SP No. 02271-MIN, 21st Division of the Court of Appeals fled by respondent as the petitioner ina Peiiion for Review from the aforementioned dismissal of his case by the Regional Trial Court. The respondent was awarded by the Court of Appeals with the contested shares of stock. The settioment is forthe sole purpose of buying peace, reestablishing goodwill and limiting egal expenses and costs andlor avoids futher protracted, tedious and expensive litigation and isin no way an admission of fault or labilty onthe part ofthe partes for any wrongful acts 2016 SBC Centralized Bar OperationsVELASCO CASES ISSUE: Is the Agreement fo Terminate Action valid and binding between the parties? HELD: Yes. A compromise agreement is @ contract whereby the parties make reciprocal concessions, avoid itigation, or Put an end to one already commenced. Its vality depencs on its fulllment of the requisites and princiles of contacts Aictates by law, is tems and conditions being not contrary to law, morals, ood customs, pube policy and pulblic order ‘A scrutiny ofthe aforequoted agreement reveals that it's @ compromise agreement sanctioned under Article 2028 of tne Civil Coda. Its terms and conditions are not contrary to law, morals, good customs, pubic policy and public order. Hence, Judgment can be valily rendered thereon, NOVATION IS NEVER PRESUMED St, James College of Paranaque, et.al. v. Equitable PCI Bank GR.No. 170441 August 9, 2010, FACTS: Peiiioner-spouses Torres owned and operated St, James Callege. Philippine Commercial and International Bank (CIB) granted the Pattioners a credit ine facility secured by real estate morigage. PCIB merged with Equitable Bank and as subsequent called Equitable PC! Bank Petitioners defaulted in the payment ofthe loan, Respondent proposed a restructuring package, but, petitioners faled to pay the stipulated annual amortization which was ‘2areed upon in the counter-proposal. Respondent sent a demand letter fo the peiiioners requiring them to settle their obligation. Petitioners tendered a partial payment which was accepted by the Respondent ‘The Respondent again sent another demand lett to the petitioners but to no avail. Pettioners tendered another check for parts! payment to EPCIB which was again accepted by the bank but with a reminder that such payment is without prejusice tothe bank's rights considering the overdue nature of the loan, Petitonars issued a Stop Payment Order forthe Second check arguing that EPCIB cannot unilaterally decide that it did not approve of petitoners" proposal for restructuring of ther loan after receiving payment. ISSUE: Is there novation of the contract as shown by the acceptance ofthe partial payments? HELD: No. There was no novation of contract. Novation is never presumed: that which arises from a purported ‘modification in the terms and conditions of the obligation must be clear and express. For novation to exist the partes concerned must agree to @ new contract among others, In thls case, te parties didnot unequivocally declare, lel alone agree, that tne obligation had been modified as to the terms of payment by the partial payments of the bigation “Therefore, novation does not exit inthis case. ‘THE AGENT MUST ACT WITHIN THE SCOPE OF HIS AUTHORITY FOR IT TO BE VALID Pacific Rehouse Corp. et.al. v. EIB Securities Inc. GARNo, 184036 October 13, 2070 FACTS: Pettioner Pacific Rehouse Corporation bought Kuok Properties, Inc. (KPP) and DMC! shares of stock through Prsppine Stock Exchange. These shares were acquired through their broker, Respondent EIB Securties. Both petitioner ‘20s respondent agreed to sell KPP shares with an option on the part ofthe petitioner to buy back the KPP shares within 130 days Pettioner decided not to reacquire the KPP shares. Without the consent of the pettioner. respondent sold the DMC! shares of stock for a lesser value and the proceeds were used by respondent to buy back the KPP shares Respondent argued that under Section 7 of SDAA, “The client agrees that all monies and/or secures andior all other properties of the Client in the Company's custody or control held from time to time be subject to general lien in favor of Company forthe discharge ofall or any indebtedness ofthe Client tothe Company.” Peiitioner demanded that DMC! shares be transferred to Westlink Global Equities Inc. but Respondent could net comply because said DMC! shares were sold without authorization. RTC ruled in favor of the petitioners on the ground that respondent went beyond is authority n seling DMC! shares in order to buy back KPP shares. CA revoked RTC decision ISSUE: Whether or not, Respondent as agent has the authori to sell OMCI shares, HELD: No. The agent does not have the authority to sell DMI share. Asicle 1861 of the Civil Code provides that the agent must act within the scope of his authonty, Section 7 of the SDAA does not apply to petitioners’ obligation to third-party purchasers of KPP shares and certainly EIB could not use said provision for the repurchase of the KPP shares. The rght to sell or dispose of the properties of petitioners by El® is ‘unequivocally confined tothe payment of the obligations and libiltis of peitioners to EIB and no other. indubitably the sale of the DMC! shares made by EIB is null and void for lack of authorly to do s0, for pettioners never gave thei onsent or permission ofthe sale.VELASCO CASES CONSENT OF THE CREDITOR IS INDISPENSABLE TO EFFECT A VALID NOVATION. Land Bank of the Philippines vs. Alfredo Ong GR. No. 180755, November 24, 2010 FACTS: This is an appeal from the CA's decision affiming the RTC which ruled in favor of petitioner Alfredo Ong ordering Land Bank of the Philippines (LBP) to return the amount paid by Alfredo with interest at.12% per annum ‘computed trom the fling of the complaint. ‘Spouses Jonnson and Evangeline Sy obtained a loan from LBP secured by three (2) residential ots, ve (5) cargo trucks, ‘and a warehouse. When the Spouses Sy could no longer pay ther loan, they sold three (2) of their mortgaged parcels of [and for Php 160,000 to Spouses Atego and Angelina Ong, Evangeline's parents, under @ Deed of Sale with Assumption Of Mortgage. Despte complying with the requirements provided by the LBP such as paying pat of the principal and “ipdating due or accrued interests en the loan, Alec's application for assumption of mortgage was not approved by the LBP. Later on, LAP foreclosed the mortgage of Spouses Sy. Thus, Alireda brought an action for damages against LEP. because the latter did not eeluin the amount paid by him even after demand. RTC ruled in Alfredo's favor on the ground of novation and ordered LEP to ratur the amount wih 12% interest per annum. CCA agreed with the RTC and found that although LEP was not bound by the Deed of Sale wih Assumption of Mortgage, Afredo and LAP's active preparations for Allfedo's assumption of mortgage essentially novated the agreement. LBP, on the other nand claimed that there was no novation because the subsitution of debtors was made without is consent thus, it was not bound to recognize the eubstiution and recourse should have been made with the Spouses Sy pursuant to Art 1236 of the Civ Cose. ISSUE: Is there novation ofthe loan agreement even if there was no consent from LBP despite its active preparations for ‘Alfredo's assumpton of morgage? HELD: NONE. There was no novation in the contract between the parties because not ail the elements of novation are (resent Art. 1293 of the Civil Code provides that novation which consists in substtuting @ new debtor inthe place of the Grginal one may be made even without the knowledge or against the wil ofthe later, but NOT without the consent of the ease In the case at bar, since the substiution of debtors was made without the consent of LBP itis therefore not bound to ‘recognize the substation of the debtors, LBP gio not intervene in the contract between Spouses Sy and Spouses Ong ‘and didnot expressly give its consent to the substitution Hence, there was no novation of the loan agreement CADASTRAL CASE AND QUIETING OF TITLE CASE CAN PROCEED INDEPENDENTLY. Heire ofthe late Jose de Luzuriaga, et al. vs. Republic of the Philippines. GIR. Nos. 168646 and 16908, June 30, 2009, FACTS: This case involves two petitions under Rule 45 interposed by peitioners assaling CA's decision of reversing the TC's ruling which granted the judicial confirmation of incomplete tte over Lot, No. 1524 in favor of the late Jose Ds Luzuriaga, St. pettioners’ predecessor. CA also remanded the case to the vial court for reception of evidence to determine whether the RTC's Decision confirming the tite ofthe late Luzuriaga, Sr. over Lot 1624 wil result in a double ting ofthe subject lt Petitioners fled a cadastral case for the Application for the Registration of Tile aver Lot No, 1524, with complete technica) Gescrption ofthe lot and a survey plan duly approved. The application was amended to state “thatthe parcel of land in Question be ordered recistered and that an erginal Certifcate of Tite be Issued in the name of the late Jose R. Oe [zurage, Sr" The amended application was not published. Subsequent, tial court granted the application and issued (OCT. No, RO-58 in the name of De Luzuriaga, Sr. Meanwhile, Dr. Antonio A, Lizares, Co., nc. (DAALCO) fled a Complaint against petitioners before the RTC for Queting Of Tile, Annulment ang Cancelation of OCT No, RO-58 claiming that Is predecessor-in-interest, Antonio Lizares, was the Fegistered, lawful and absolute owner of Lot No. 1624 as evidenced by @ TCT issued by the Registor of Deeds. The Republic also fled a Petition for Relief from the judgment granting the application of petioners stating that such judgment Tesulted in double siting of the lot because the same lot was already covered by a title in the name of Lizares. The Republic also claimed that the RTC eid not acquire juriscicton over the cadastral case because the amended application ‘was not pubished Issues: (1) Can a Cadastral Case and Quieting of Tite Case proceed independently? (2) Did the RTC acquire jurecievion over the cadastral case even ifthe amended application was not published” 2016 SBC c: Bar OperationsVELASCO CASES HELD: (1) YES. A cadastral casa and quicting of tite case can proceed independently. When two (2) cases involve different Causes of action, each individual case can proceed independently. In the case at bar, the cause of action of the Republic's petition for reli from judgment of double tiling of the subject lot is diferent from DAALCOs quest for quieting of tile DAALCO basicaly seeks to nullify the issuance of OCT No, RO-56 in the name of the De Luzuriaga hits, while the Republics petition assails the grant of ownership to De Luzuriaga, Sr. over a parcel of land duly registered in te name of Lizares, who thereafter transferred the ttle to his heirs or assigns. In fine, both actions may proceed independent, albeit ‘2 consolidation of both cases Would be ideal fo obviate multiplet of suts (2) YES, the RTC acquired jurisdition over the cadastral case. Where the Identiy and area of the claimed property are ‘ot the Subjects of amendment but other collateral matters, a new publication is not needed. Its only essential in case ‘any additonal terrtory or change in the area of the claim is included in the amendment Otherwise, the cadastral court ‘does not acquire jurisdiction over the additional or amended caim. Jn the case at bar, there is no dispute that due publication was made for LotNo. 1524, its idently and area. The ‘amendment in peiioner’s application did not ater the area and identty ofthe subject lat nor added any tertary. Thus, no new publication is required ‘Since ne naw publication is required in the case at bar, the RTC validly acquired jurisdiction over the cadastral case. JUDICIAL CONFIRMATION OF IMPERFECT TITLE MAY PROSPER EVEN WHEN THE SUBJECT PROPERTY HAS. ONLY BEEN DECLARED AS ALIENABLE § YEARS PRIOR TO APPLICATION FOR REGISTRATION, Republic ofthe Philippines v. iglesia ni Kristo GIR. No. 180087; June 30, 2008 FACTS: This is a Peon for Review on Cortiorari under Rule 45 whereby the Republic ofthe Philippines assaiis the CA decision which affirmed the MCTC decision granting the Application for Registration of Tie of respondent INC over parcel of land the latter purchased and continually possesses for a period over 40 years but was only declared as Benable for five (5) years before it was applied for registration, Respondent INC flled an application for registration of ttle over a parcel of tand it acquired and continuously possesses for over 40 years before the MCTC Pacay-Curimao, Peilioner Republic fled ts opposition to the application on the Ground thatthe subject lot was certfied as alienable and disposable by the government only five (5) years before INC fled iis application. Thus, citing the case of Republic v. Herbiefo, INC’s possession fall short of the 30-year period required under Section 48(b) of Commonwealth Act No. 147, or Public Land Act. MCTC, acting as cadastral cour, granted INC'S ‘applcation which was affirmed by the CA in foto, INC countered that as decided in Republic v. CA and Nagul, what is mevely required by Sec. 14(1) of Presidential Decree No, (PD) 1528, otherwise known as the Property Registration Decree, is that the property sought to oe registered is already alienatle and disposable 2 the time of the application for registration of tite is fled ISSUE: May a judicial confirmation of imperfect tite prosper when the subject properly has been declared as alierable ‘only five (5) years before it was applied for registration? HELD: Yes, the judicial confirmation of imperfect tile mey prosper even when the subject property has been declares as alienable only fve years before itwas appled for registration, ‘The Court upheld the Waguit case and ruled that the move reasonable interpretation of Sec, 14(1) of PO 1528 is that it merely requires the property sought to be registered a8 already alienaole and disposable at the time the application for registfaton of tile is fled, The Court abandoned tha Herbieto ruling which ruled that reckoning of the possession of an applicant for judicial confirmation of imperfect tile is counted from the date when the lot was classified as alienable and disposable, and possession before such date is inconsequential and must be excluded in the computation ofthe period of possession. In the. case at bar, the established possession of INC of the subject lot for more than 40 years warrants judicial confirmation of imperfect tite even when the subject property has been dectared alienable for only five years, LAND PURCHASED ON INSTALLMENT BEFORE THE MARRIAGE BUT FULLY PAID DURING THE MARRIAGE IS PRESUMED CONJUGAL PROPERTY ‘Spouses Lita De Leon and Fellx Rio Tarrosa v. Anita B. De Leon GIR. No, 185083; July 23, 2009, 2016 SBC Centralized Bar OperationsVELASED CASES FACTS: This is a Petition for Review on Cortorar under Rule 45 seeking to set aside the decision of CA which affrmed With modification the judgment of RTC that the parcel of land purchased in instaiment by the husband while sil single but fully paid during marriage is a conjugal propery. Bonifacio De Leon, while stil single, purchased from Peoples Homesite end Housing Corporation (PHC) a parcel of land through Conditional Contract to Sell. The right of ownership aver the land was transferred to Bonifacio two (2) years, ‘after his marriage to Respondent Anita De Leon upon full payment. He then sold the propery to petttoners Spouses Lita De Leon and Felix Rio Tarrosa without the consent of Anita Alter Bonifacio died, Anita and her ehildren filed a reconveyance suit before the RTC, which ruled in their favor on the Ground that Spouses Tarosa failed to overthrow the legal presumption that the subject parcel of land was conjugal Spouses Tarrosa claimed that the land forms part ofthe exclusive property of Bonifacio since the same was registered Under his name alone ISSUE: Is the land purchased on instalment before marriage, where some installments were paid during the marriage, conjugal propery? HELD: Yes, the land purchased on installment before martiage, where some installments were paid during the marrage is conjugal property. ‘Aticie 160 of the Family Code provides that all property ofthe marrage is presumed to belong to the conjugal partnership Linless itis proved that I pertain exclusively to the husband or the wife. For this presumption to arise, itis not necessary fo prove tnat the property was acquired with funds of the partnership. Only proof of acquistion during the mariage is heeded to raise the presumption thal the propery is conjugal. Such presumption is rebuttable only with strong, clear, Celegorical, and convincing evidence. There musi be clear evidence of the exclusive ownership of one of the Spouses. and te burden of proof rests upon the party asserting it Pettioners’ argument that the disputed lot was Bonifacio's exclusive property, since it wes registered solely in his name, is ntenable. The mere registration of a property in the name of one spouse does not destroy its conjugal nature. What is ‘material is the time when the property was acquire. In the case at bar, ownership over what was once a PHHEC lot ang ‘ceveres by the PHHC-anifacio Conditional Contract to Sell was only transferred during the marriage of Bonifacio anc Aaita Hence, the land is presumed to be conjugal property LACK OF CONSIDERATION AND VITIATED CONSENT DUE TO FRAUD AVOID A CONTRACT ‘Sps. Ramon Lequin and Virginia Lequin v. Sps. Raymundo Vizconde and Salome Lequin Vizconde GR No. 177710, October 12, 1890 FACTS: Petitioners filed with the RTC a complaint for Declaration of Nulty of Contract, Sum of Money and Damages “The RTC grantes the petition, deciaring the contract null and void and ordering respondents to return to petitioners the cum they Rave paid in the declared simulated deed of sale wlth interest plus damages. The CA reversed the decision of he RTC. but lmewse ordered the return of the sum of money to petitioners. Hence, Sps. Lequin filed this Pettion for Review on Certiorariunder Rule 45. Pettone's bought 2 ot from one Cerito de Leon which was negotiated by Raymundo. In between the lot and the road is 2 ‘éfed up canal bought by Respondents from de Leon but they represented to peiiioners that what they bought was the it eacent to petitoners’, which ls eeally part of the lot bought by petitioners. Respondents allowed petitioners to construct, their house On a portion of the adjacent lot. “The parties entered into a contract of sale where it was made to appear that respondents paid petitioners, as tileholders, for the purchase of the remaining portion of the adjacent fa. In truth, it was petitoners who paid respondents for the portion ofthe lot where their house was built, believing that the latter own such portion. When petitioners tied to develop {he dred up canel, respondents objected by ciaiming ownership. At such time, pettioners learned that they owned the lat claimed by respondents and the lot sold to respondents was only the dries up cenal Petitioners contended that respondents employed fraud and machinations to induce them to enter info the contract of sale ISSUE: Whether the contract of sale is void fr lack of consideration HELD: Yes, the contract of sale is void, Consideration and consent are essential elements in a contrac of sale. Whe party's consent to a contract of sale is vilated or where there is lack of consideration due to a simulated price, the contract fs nul and void ab initio. 2016 SBC Centralized Bar OperationsVELASCO CASES ‘Actual fraud ie present inthis case. There was deception on the part of Raymundo when he misrepresented to petitioners tat the lot he bought fom de Leon is separate and distinct from the one bought by petitoners. The pettioners were ‘convinced to enter into the contract of sale and pay fo: the lot which they actually own inthe frst place. Thare was fraud in the execution of the contract used on petitioners which affected their consent folowing the concealment of such material fact ‘though the contract of sale states that respondents paid petitioners for a portion of the lot, the court found that respondents made no such payment. The contract of sale lacked the essential element of consideration. The price purportedly paid as indicated in the contract of sale was simulated for no payment was actually made, Hence, the contract of sale Is null and void ab iio. ACTION TO VINDICATE RIGHT OVER PROPERTY BY A PERSON IN POSSESSION OF PROPERTY IMPRESCRIPTIBLE UNTIL POSSESSION DISTURBED Aqualab Philippines, Inc, v. Helrs of Marcelino Pagobo ‘GR No, 182573, October 5, 2008 FACTS: The case involves two (2) lots that used to form part of Lot 6727 owned by respondents’ great grandfather. A Homestead Patont issued on Oscember 18, 1969 covered Lot 6727. The subject lots were subsequently sold to one Tarcela de Espina, wno secured a TCT over the lots on Apri 21, 1970. The lots, thereafter acquired by one Rene Espina, were then soi to Anthony Gaw Kache, who In tum sold the lots io Aquala Philippines, Inc. (Aqualab) Respondent Heirs of Marcelino, filed an action for, among others, Reconveyance against Aqualab. On August 10, 1994, respondents alleged in their complaint that Aqualab has cisturbed their peaceful occupation of subject lots sometime in 1991 by claiming ownership and forcily entering the subject lots; and that Aqualab entered into fraudulent transaction of the lots despite knowledge by them and their predecessore-ininterest thatthe lots cannot be alienated within 25 years from the issuance ofthe homestead patent. The RTC, upon & Motion to Dismiss fled by Aqusla on the ground of prescription, dismissed the complaint. The ATC ruled that an action for reconveyance of tite due to fraud is susceptible to prescription either within four or 10 years. The CCA reversed the order of cismissal by the RTC. Hence, peitoner fled this Petition fer Review on Ceoran under Rule 45, ISSUE: Whether the action forreconveyance has prescribed, HELD: No, the action has not yet prescribed ‘An action for annulment of tite or reconveyance basad on fraud is imprescriptible where the plant is in possession of the property subject of the acts. The prescriptive period for the reconveyance of fraudulently registered real property is 10, yeats, reckoned from the date ofthe issuance of the cerificate of tie, I the plalntit is notin possession. One who isin ‘Sctusl possession of 2 piece of land on a claim of ownership thereof may wait until his possession is disturbed or his tile I stocked before taking steps to vindicate his right In such @ case, an action for reconveyance, if nonetheless fied, Mes be i fhenature ofa sut for quieting of tile, an action that is imprescriptble. Respondents were in possession until 1991, and until such possession is disturbed, the prescriptive period does not run ‘Since respondents fied theic complaint in 1084, or three years after their possession was allegedly disturbed, itis clear that prescription has not set in, elther due to fraud or constructive Lust Hence, the scion for reconveyance is not barred by prescrition. LITERAL OR PLAIN MEANING RULE APPLIES TO COMPROMISE AGREEMENTS; SUBSEQUENT COMPROMISE AGREEMENT INCONSISTENT WITH A PRIOR CONTRACT BETWEEN THE PARTIES CONSTITUTES NOVATION Adtiatico Consortium, Inc. et al. v8 Land Bank of the Philippines GR No, 187838, December 23, 2009 FACTS: Pottioners Adriatico Consortium, inc. (ACI), Primary Really Corporation (PRC) and Benito Cu-Uy-Gam, the new President of ACI, and Respondent Land Bank of the Philippines (Land Bank) entered into @ Partal Compromise Agreement after petiloners filed a Petiton for Deciaration of Nullly and Spectfic Performance, among others. The Regional Trial Court (RTC) issued a Parial Decision approving the Compromise Agreement. Because of an alleged vialation of the compromise agreement on respondents par, peltioners fled a Mation for Execution. The RTC granted the Motion, directing respondents to suspend al actions against petitioner pursuant to the agreement. Respondent fled a Peition for Certiorari and Prohibition with the Court of Appeals (CA). The CA granted the petition and the RTC's Order granting the Motion for Execution was set aside. Hence, petitioners fled this Pettion for Review on Cariorar under Rule &VELASCO CASES \Witiam A. Siy, the former president of ACI, applied for loan with Land Bank forthe construction of buildings owned by [ACI on lands belonging to PRC. A Mortgage Trust Indenture (WTI) was created as securly, wherein Land Bank was Constituted as trustee of the mortgaged lands and buldings. Without the knowledge of other ACI offcials, Siy included ‘IV. Willams Reaty and Development Corporaton (JWWROC), a majority-owned corporation of Siy, as borrower. ACI Subsequently paid in fll the amounts of the loan. ACI requested the cancellation of the MTI but Land Bank refused, Saying it never received any payment. ACI discovered that Siy did not remit the payments. Moreover, petitioners were obliged to pay the maturing obligations of JWWRDC, In See, § of the Partial Compromise Agreement, ACI agreed, among others, to pay and actually paid to Land Bank the ‘amount due. It algo states that the parties agree to suspend all acions against each other with respect tothe labilties of SWWRDG. Land Bank, however, thereafter informec ACI that ihe JVWROC loans were included in a public auction of ts ‘sesets, Petitioners viewed this as a violation of the compromise agreement. Petitioners contend that respondent’ act of selling the receivables during the Itigation violates its obligations under the Paria! Compromise Agreement. They maintain that the sale falls under the term action as found in the Partial Compromise Agreement Respondent argues thatthe Partial Compromise Agreement aimed to suspend only legal actions against each other with respect to the JVWROG loans, and that such transfer cannot be consirued es an action against petitioners. This is in ‘ccordance with the transferabilly clause in the loan agreement with JVWROC. which provides that Land Bank nas the legal autnorty to encumber, assign, transfer or sell any night which it may have under the Loan Agreement. Issues: (G1) Whether the term “All Actions" found in Sec. 5 ofthe Partial Compromise Agreement is broad enough to cover all acts in relation tothe subject loans, and is not limited only to legal actions. {2} Whether the Partial Compromise Agreament entered info by pettioners and Land Bank consttutes as an implied ‘madifieatary novation or amendment o the Loan Agreement. HELD: (+) Yes, the term “All Actions” found in See. 5 of the Partial Compramise Agreement is broad enough to cover all acts in relation to the JVWROC loans, and is not imitad oniy fo legal actions. As such, Land Bank's act of seling the racewvables is a violation of the terms of the Partial Compromise Agreement In the construction and interpretation of a compromise agreement, the Court is guided by the fundamental and cardinal rule that the intention of the parties is to be ascertained from the contract and effect should be given to that intention. It must be construed s0 as fo giv effect fo al the provisions ofthe contract and must be Interpretae according to the plain and ordinary meaning of ts words, ‘The provisions of the compromise agreement show that the parties intentionally used the word action in its plain and ordinary sense. Had the parties intended otherwise, they would have writen a specific word to pertain to legal actions and fot ust the word actions alone Thus, any act made by any of the parties with regard to the subject loans falls under the (generally accepted meaning of the word action, including the seling and transfer to a third party. (2) Yes, the Court finds thatthe Partial Compromise Agreement entered into by petitioners and Land Bank constitutes 25 {2s implied mosificatory novation or amendment to the Loan Agreement. Novation is the extinguishment of an obligation 6 the substtuton or Cnange of the obligation by a subsequent one which extinguishes or modifes the fist, ether by Ghengng the object or principal conditions, or by substiuting another in place of the debtor, or by subrogating a thira [Person inthe rights ofthe crector, By entering into the Partial Compromise Agreement and agreeing to suspend all actions, Land Bank effectively waived all tS nhs regarsing the JVWRDC loans, including is right to assigh under the Loan Agreament, Hence, Land Bank's act of Seling the cecelvables violated the terms of the Compromise Agreement and the subsequent transfer was not in accordance with he Loan Agreement. DIVORCE DECREE OBTAINED IN A FOREIGN COUNTRY IS VALID AND EFFECTIVE IN THE PHILIPPINES Maria Rebecca Makapugay Bayot v. Court of Appeals GR. No. 183876; Novernber 7, 2008, FACTS: In 1979, Vicente and Rebecca were mares in Mandaluyong City evidenced by a Marriage Certificate identifying Rebecca as an American citizen born in Agana, Guam, USA. They had a daughter named Al, In 1996, Rebecca inated divorce proceedings in the Dominican Republic which was subsequently granted and resulted to the dissolution of the mariage, thereby allowing them to remarry after completing the legal requirements. In 1991, Rebecca fied a petiion before the Muntinlupa City RTC for the dectaration of absolute nulity of marriage on the ground of Vicente's alleged psychological incepacty and the dissolution of the conjugal partnership of gains with application for support pendente ite forher and Aix: Rebecca also prayed that Vicente be ordered to pay a permanent monthly suppor for their daughter Vicente fled @ Motion to Dismiss on the grounds of lack of cause of action and that the petition is barred by the prior 2016 SB tionsVELASCO CASES Judgment of divorce. Rebecca interposed that the divorce decree obtained is not valid as she is a Filipino citizen by the force of he affimation by the Secretary of Justice in 2000 ISSUE: Is the divorce decree obtained in Dominican Repubilc valid and effective in the Philippines? HELD: Yes, the divorce decree obtained in the foreign country is valid and can be given effect in the Philippines, Paragraph 2, Article 26 of the Family Code provides that where a marriage between a Fllpino citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capaciating him or her to remarry, the Filipino spouse shall Ikewise have capacity to remarry under Philippine law. In Republic v. Orbecico Il. the ‘Supreme Court spelled out the twin elements for the applcablity of this provision, thus: (1) There is a valid marriage that has been celebrated between a Fiipino citizen and a foreigner. and (2) a valid divorce is obtained abroad by the alien spouse capacitating him or her to remarry. The reckoning point is not the citizenship of the parties at the time of the Celebration of the marriage, but their citizenship at the time a valid cvorce is obtained abroad by the alien spouse ‘capacitating tne latter to remarry. Both elements obtain in the instant case. Rebecca was stil an American citizen when the divorce decree was obtained land the divorce decree allowed Rebecca and Vicente to remarry after complying with legal requirements. Thus, the decree can be given effect in the Philippines, ‘A CONTINUING SURETYSHIP INCLUDES OBLIGATIONS ENTERED INTO AFTER THE EXECUTION OF THE ‘SURETY DEED $0 LONG AS IT IS WITHIN THE DESCRIPTION OR CONTEMPLATION OF THE CONTRACT Gateway Electronics Corporation and Geronimo B. Delos Reyes v. Asianbank Corp. G.R-No. 172041; December 18, 2008 FACTS: This petition for review under Rule 45 which seeks to nulty and set side the decision of the CA holding thatthe obligation of pettioner Geronimo B. delos Reyes, ur. (Geronimo) asa surety includes the Dollar Promissory Note Geronimo was the president of Gateway Electronics Corporation (Gateway), Geronimo executed a deed of suretyshin for Gateway in favor of respondent Asianbank Corporation (Aslanbank) in order secure a loan package. The deed provides that Geronimo shall pay such notes, drafts, overcrats and other credit obligations on which the Gateway may now be indebted or may hereafter become indebted to the Asianbank, together with all interests, penalty and other bank charges 22s may accrue thereon. Asianbank approved a loan package in favor of Gateway consisting of Domestic Bills Purchased Line and Credit Line. Three (3) years after the execution of the surety deed, the loan package was consolidated with ‘another loan package, Dollar Promissory Note. Gateway intially made payments but evantually defaulted. Asiantank filed with the RTC a complaint for a sum of money against Gateway and Geronimo. Geronimo argued that the deed of suretyship he executed does rot cover the Dolar Promissory Note. The RTC rendered judgment In favor of Gateway. ISSUE: Should Geronimo be hel liebe forthe Dollar Promissory Note under his deed of suretyship? HELD: Yes. Geronimo should be held lable for the Dollar Promissory Note under his deed of suretyship. In Dio vs. Cour {Gf Appeais, the SC ciscussed that a continuing guaranty is one which is not limited to a single transaction, but which Contempiates a future course of dealing, covering a series of transactions, generally for an indefinite time or unt revores Its prospective in its operation and is generally intended to provide securlty with respect to future transactions withn certain ims, and contemplates a succession of liabillas, for which, as they accrue, the guarantor becomes liable, By ( nature, a continuing suretyship covers current and future loans, provided that, with respect to future loan transactions, they are, to borrow from Difo, ‘within the description or contemplation ofthe contract of quaranty: Here, the Deed of Suretyship Geronimo signed envisaged a continuing suretyship when, by the express terms of the deed, he warranted payment ofthe loan package, Evidently, under the deed of suretyship, Geronimo undertook to secure all obligations obtained under tne Domestic Bils Purchased Line and Omnibus Credit Lie, without any specification 2s 10 the period of the loan. Hence Geronimo's obligation as a surety covers also the Dollar Promissory Note even if it was ‘executed three (3) years after the deed of suretyship. ‘A PARTY INVOKING THE DOCTRINE OF ESTOPPEL MUST HAVE BEEN MISLEAD TO ONE'S PREJUDICE Equitable PC! Banking Corporation v. RCBC Capital Corporation GR No, 182248; December 18, 2008 FACTS: Petiioners Equitable PC! Bank, Inc. (EPCIB) and the individual shareholders of Bankard, Inc. (Bankard), as sellers, and respondent RCBC Capital Corporation, as buyer, executed a Share Purchase Agreement (SPA) for tre purchase of the EPCIBSs interests in Bankard. The pettioners warranted thatthe financial stalemenis of the Bankard are fair and accurate, and complete in al material respects, and have been prepared in accordance with generally accepted ‘Sccounting principles consistent folowed throughout the period Indleated. RCBC eventually paid the contract price. 2016 SBC Centralized Bar OperationsVELASCO CASES | Subsequently, RCBC informed the patiioners ofits having overpaid the purchase price af the subject shares, claiming that there was an overstatement of valuation of accounts resulting in the overpayment Thus, RCBC claimed that patiioners violated their warranty, as sellers, ‘The patiioners and cespondent resorted to arbitration to settle the case. Tne arbitation court ruled in favor of the respondents. twas confirmed by the RTC, prompting the pettoners to file a case before the Supreme Court ‘The petitioners argue that RCBC already knaw the racording of the Bankard accounts before it paid the balance of the purchase price and could no longer challenge the financial statements of Bankard. They claim, that RCBC had ful control Of the operations of Bankard and that CBC's audit team had reviewed the accounts. Thus, RBC is now precluded from ‘denying the falmess and accuracy of said accounts since it did not seek price reduction in accordance with the SPA ISSUE: Was the respondent estopped from questioning the financial condition of Bankard? HELD: No, respondent is not estopped frorn questioning the financial condition of Bankard. The elements of estoppel pertaining to the party estopped are: (1) conduct which amounts to a false representation or concealment of malarial facts, or, atleast, which calculated to convay the impression thatthe facts are otherwise than, and inconsistent with, those which the party Subsequently attempts to assert; (2) intention, or atleast expectation, that such conduct shall be acted Upon by the other party; and (3) knowledge, actual or constructive, ofthe actual facts. In his case, the frst element of estoppel is missing as there has been no misrepresentaton on the part of the respondent that it consigered Bankara's account to be in order. The second element is also missing as the respondents dig not ‘mislead the petitioners into believing that it waived any claim of violation of warranty. The third element of estoppel is also ‘missing as fespondent i stil on the process of verying the correctness of Bankara's account prior to ts presenting ts claim of overvaluation to petitioners. Hence, the respondent is not estopped from questioning the financial condition of Banka. MERE NON-INCLUSION OF A PARTY DOES NOT NULLIFY A COMPROMISE AGREEMENT Domingo Realty, Inc. v. Court of Apes GR_NO. 128236; January 26, 2007 FACTS: In a Petiion for Review on Gertirari under Rule 45, petitioners Domingo Really Inc., and Ayala Stee! Manufacturing Co. nc, seek the reversal ofthe decision of the CA which annulled the lower court's decision based on the Compromise Agreement (Agreement) among the petiioners, respondent Antonio M. Acero (Acar), and defendant Luis Recato Dy (Dy) ne civil case. The petioners fled @ complaint against Acero and David Vietorio (Vietorio) for the recovery of three parcels af land, Acero alleged that he merely leased the land from his co-defendant Victorio, who, in tum, claimed to own the property on whieh the nollow blocks factory of Acero stood. Thereafter, the peiiioners and the Acero entered into a compromise ‘agreement which provides, among others, thal the Acero would vacate the premises, ‘The RIC rendered a decision adopting and approving the Agreement. However, Acero filed mation nullifying the compromise agreement, claiming that the RTC’s order authorizing the petitoner's survey plan would violate the ‘Agrcement since the whole area he occupied would be adjudged as owned by Domingo Realty, Inc. This was dismisses bby the RTC. Aggrieved, the respondent fled a petiion for certiorari before the CA. On the premise that Victoro, the ‘lleged lessor of Acero, was not @ party to the Compromise Agreement and for having vague object, the CA granted the petton, ISSUE: Can the CA nulify the Compromise Agreement based norvinclusion of Victorio? HELD: No. The CA was unable to cite a law or jurisprudence that supports the annulment of a compromise agreement ‘one af the parties in a case Is not inclided in the settiement. The only legal effect of the non-inclusion of a party in a ‘compromise agreement is that said party cannot be ound by the terms of the agreement. The Compromise Agreement shall however be valid and binding as to the parties who signed thereto. Therefore, mere non-inclusion of a perty cannot rulify a validly executed compromise agreement REGISTERED PROPERTY COULD NOT BE ACQUIRED THROUGH ADVERSE POSSESSION ‘Samahan ng Masang Pilipino sa Makati, Inc. vs. Bases Conversion Development Authority GR No. 142255, January 26, 2007 FACTS: In a petition for the Issuance of 2 Temporary Restraining Order and Injunction, members of petitioner SMPMI seek to prohibit respondent Bases Conversion Development Autnorty (BCDA) from evicting them from their houses in Fort Bonifacio, i aa aaVELASCO CASES ‘The members of SMPMI alleges that Fort Bonifacio is covered by TCT Tile No. 2288 in the name of the USA and thereby asserts the illegal of the imminent eviction, as the land which petitioner's members are occupying is stil owned by the USA end not by the Philippine Government In its Comment, BCDA asserts ownership of Fort Bonifacio through Republic Act 7227, maintaining that TCT No. 2288 in the name of the USA was cancelled by TCT No. 61824 issued on Seplember 1, 1958 in the name of the Repubiie of the Philipines. SCDA asserts that the ownership of the Metro Manila camp lots in question is transferred to BCDA by the President in 1995 and specificaly earmarked the land for vital and important government infrastructure projects. BCDA further argues that SMPMI oF its members have not shown ownership aver the lols they are occupying that are to be ‘accorded protection pursuant to Rule 68 of the 1987 Revised Rules of Chil Procedure on preliminary injunction, ISSUE: Was the petitioner able to amply justify ts possession over the land in litigation through adverse possession? HELD: NO. petitioner was not able to amply justify its possession aver the land in tigation through adverse possession Prescription does not apply ifthe subject land is covered by 2 Torrens Title, as in the case at bar. Moreover, the equitable ‘remedy of laches has not been proven to have accrued in favor of the members of pettioner for them to be accorded better right of possession of the subject lots. Laches is evidentiary in nature and cannot be established by mere allegations in the pleasings. As iti, in he instant case, laches hae nat even been alleged, much less proves As aptly showed and proved by BCDA, Fort Bonifacio is no longer owned by the USA but by the Republic of the Philippines, which has conveyed, ceded, and passed its ownership, use and administration lo SCDA pursuant to RA 7227. As such, petitioners members had taken possession of the government land by ilegal means without any lea! basis and hence, cannot claim adverse possession of public land. lt hes been consistent held that registered propenty 0uld not be acquired through adverse possession, Hence, petitioners are not entitled to maintain possession of the land in itigation, A VALID CONSIGNATION MUST BE MADE WITHIN THE REQUIRED PERIOD OR WITHIN A REASONABLE TIME THEREAFTER BE, San Diego Ine v. Rosarlo T. Alzul GRR No. 169501, June 8, 2007 ACTS: In this Petition for Review on Ceriorari under Rule 48, petitioner questions the Decision of the CA reversing the Resolution of the Office of the President and granting to respondent the right to pay the balance of the purchase price within five (5) days from receipt of the decision despite the lapse ofthe orginal period given to respondent Respondent purchased from pettioner four (4) subdivision tots through installment. Subsequently, respondent then assigned all her rights under the Contract to Sel to Wilson P. Yu. ‘When Yu failed to pay the amounts due under the conditional deed, respondent paid the instalments due and ‘commenced an action for rescission of the conditional deed of assignment against Yu. Thereafter, the subject lots were old to spauses Ventura who were allegedly surprised to find an annotation of lis pendens in their ovmners duplicate‘. ‘Spouses Ventura then filed an action for Quleting of Tile with Prayer for Cancellation of Annotation and Damages before the RTC of Maabon which ruled in ther favor. The decision of te RTC was reversed by the CA and the SC. However, n 2 Resolution, the SC ordered respondent to pay the purchase price of the properties within a non-exlendile period of 30 ‘days from enty of judgment dated July 12, 1996, Respondent tried to serve payment upon petitioner an August 28, August 30 and September 28, 1996, On all these dates, petitoner allegedly reused to accept payment fram respondent. Respondent fled an action for consignation and specific performance against petitioner before the HLURB. The HLURB tismissed the complain, stating thatthe consignation is inatfective and void for having been done long after the expiration of tie nonvextendible period set by the SC. ISSUE: Was respondent able to successfully make a valid consignation even beyond the non-extendible period set by the sc? HELD: NO. respondent was not able to make a valid consignation. Consignation isthe act of depositing the thing due with the court or judicial authoriies whenever the creditor cannot accept or refuses to accept payment, and generally ‘requires 2 prior tender of payment. A valid consignation is made when the amount is consigned with the court within Ire ‘required period or within a reasonable time therealter, 2018 socVELASCO CASES The non-compliance with the Resolution of the SC is fatal to respondent's action for consignation and specific performance, Unfortunately, respondent failed to etfect such full payment of the balance of the purchase price for the ‘subject properties. It must be borne in mind that a mere tender of payment isnot enough to extinguish an obligation Hence, respondent was not able to make a valid consignation. CUSTODY OF MINORS BELOW SEVEN (7) YEARS OLD IS GIVEN TO THE MOTHER UNLESS FOUND UNSUITABLE OR GROSSLY INCAPABLE OF CARING FOR HER MINOR CHILD Agnes Gamboa Hirech ve. CA and Franklin Hirseh GR No. 174486 July 11, 2007 FACTS: Franklin Harvey Hirsch (respondent) and Agnes Gambos-Hirsch (petitioner) are martied and established their conjugal dweling in Boracay Island, They have 2 daughter named Simone. The couple started to have martal problems 2s the peitioner wanted to stay in Makati City, while the respondent insisted that they stay in Boracay Island. One day, the petitioner asked for money and for the respondent's permission for her to bring their four (4) year old-daughter to Makati City for a brief vacation. The respondent readily agreed. but soon thereafter discovered that neither petitioner nor their daughter Simone would be coming back to Boracay. ‘The respondent then fled a petition for habeas corpus before the CA for the petitioner to produce Simone in court. CA isaued a Resolution which provides that a writ of Rabeas corpus be issued ordering that Simone be brought aofore said the court. After a series of hearings and presentation of evidence, the CA granted the respondent joint custody with Agnes oftheir minor chil. ‘The patiioner then filed @ Motion for Reconsiseraton ofthis Decision which was denied, Hence, this petiton fr certorar “which seaks to set aside the decision af the CA arguing thal the CA committed grave abuse of aiscretion amounting tO lack or excess of jurisiction, ISSUE: Did the CA act with grave abuse of discretion when it granted joint custody of the minor child ta both parents in Utter cisregard ofthe provisions ofthe Family Code aso minors seven (7) years af age and below? HELD: Yes, The CA acted with grave abuse of discretion when it granted joint custody ofthe minor child to both parents The Convention on the Rights of the Child provides thatthe best interests of the child shall be a primary consideration, ‘The Child and Youth Welfare Code, in the same way, unequivocally provides that in all questions regarding the care and custody, among others, ofthe chill his/her welfare shall be the paramount consideration ‘The so-called “tender-age presumption" under Aricle 213 of the Family Code may be overcome only by compelling ‘evidence of the mother's unfiness. The mother is deciared unsultabe to have Custody of her chien in one or more of the following instances: neglect, abandonment, unemployment. immorality, habitual drunkenness, drug addiction, matteatment of the chid, insanity, or afficton with 2 communicable disease. Here, the mother was nat shown to be Unsuitable or grossly incapable of caring for her minor child. All told, no compelling reason has been adduced to wrench the chils from the mothers custocy, RECLAIMED LANDS TRANSFERRED TO THE NHA AUTOMATICALLY CLASSIFIED AS LANDS OF THE PRIVATE DOMAIN OR PATRIMONIAL PROPERTIES OF THE STATE Francisco |. Chavez v. National Housing Authority GR. No 164527. August 16, 2007 FACTS: Poitioner Francisco Chavez (Chavez), in his capacity as taxpayer seeks, to declare null and void the Joint \enture Agreement (JVA) between the Respondents National Housing Authority (NHA) and Rll Buider’s Ine (RB!) for being unconstitutional and invalid, and to enjoin respondents from implementing andor enforcing the said project and ther agreements related thereto. (On March 1, 1988, then President Corazon C. Aquino issued Memorandum Order No. 161 (MO 161). Pursuant to this, NHA prepared the feasibly studies which resulted in the formulation of the Smokey Mountain Development Plan and Reclamation ofthe Area Across R-10 or the Smokey Mountain Development and Reclamation Project (SMDRP) ‘The land area covered by the Smokey Mountain dumpsite was conveyed to the NHA as well asthe area to be reclaimed cross R-10. New San Jose Builders, Inc. and RBI ware the top two contractors (On October 7, 1982, President Ramos authorized NHA to enter into a JVA with RBI, Proclamation No. 485 inereased the proposed area for reclamation across R-10 ffom 40 heclares to 79 hectares. On Seplember 1, 1884, pursuant to PPraclamation No. 39, the DENR issued Special Patent No. 3501 convaying in favor of NHA an area of 211,975 square ‘meters covering the Smokey Mauntain Dumpsite | iieiii einesVELASCO CASES ‘The land rectamation was completed in August 1996. Sometime later in 1996, pursuant likewise to Proclamation No. 39, the DENR issued Special Patent No. 3698 conveying in favar of NHA an additional 390,000 square meter area. After some time, the JVA was terminated. RBI demanded the payment of just compensation forall accomplishments and costs Ingurred in developing the SMDRP plus a reasonable rate of retum. In a Memorandum of Agreement (MOA) executed by NHA and Rl, both parties agreed to terminate the JVA and other subsequent agreements, which stipulated, among thers, that unpaid balance may be paid in cash, bonds or through the conveyance of properties or any combination thereat ISSUES: 4. Gan RBI acquire reclaimed foreshore and submerged land areas because they are allegedly inalienable lands of the publ domain? 2. Gan RBI acquire recizimed lands when there was no decteration that said lands are no longer needed for public use? 3. Is RBI, being a private corporation, barred by the Constitution to acquire the subject lands? HELD: 1. Yes. The reclaimed lands across R-10 were classified alienable and disposable lands of public domain of the State First, there were three presidential proclamations classifying the reclaimed lands across R10 as alnable or disposable hence open to disposition or concession. Spacial Patents Nos. 3591, 3592, and 9598 issued by the DENR classifieg the reclaimed areas as alienable and disposable. ‘Admittedly, it cannot be said that MO 415, Proclamations Nos. 39 and 465 are explicit decarations thatthe lands to be recisimed are classified as alienable and disposable. In line withthe ruling in Chavez v. PEA, the court held that MO 415, ‘and Proclamations Nos. 39 and 485 cumlatvely and joint taken together with Special Patent Nos. 3591, 3592. and 13598 more than satsfy tre requirement in PEA that [here must be a law or presidential proclamation officially elassiying these reclaimed lands as aienable or disposable and open to disposition or concession." 2. Yes, Even if there was no explicit declaration that the lands are no longer needed for public use or public service, there ‘was however an implicit executive deciaration that the reciaimed areas R-10 are not necessary anymore for public use oF public service. President Aquino through MO 415 conveyed the same to the NHA partly for housing project and related ‘commercialindustial development intended for disposition to and enjoyment of certain beneficiaries and not the public in {general and party as enabling component to fnance the project Also, President Ramos, in issuing Proclamation No. 29, declared, though Indirecty, thatthe reciaimed lands of the Smokey Mountain project are no longer required for public use or service. In addition, President Ramos issued Prociamation No, 465 increasing the area to be reclaimed from forty (40) hectares to seventy-rine (78) hectares, elucidating that said lands are undoubtedly set aside for the beneficiaries of SMDRP and not the pubic. 3, No. When Proclamations Nos. 39 and 465 were issued, inallenable lands covered by said proclamations were Converted to allenable and cisposabie lands of public domain, When the tiles to the reclaimed lands were transferred to the NHA, said slienable and disposable lands of public domain were automatically classified as lands of the private domsin or patrimonial properties of the Stale because the NHA is an agency NOT tasked to dispose of alienable or isposabie lands of public domain, The only way if can transfer the reclaimed land in conjunction with ils proeats and 10 Sitsin ts goals is when itis automatically convertec to patrimonial properties ofthe Stale, Being patrimonial or prvate Properties of the State, then it has the power to sell the same to any qualified person—under the Constitution, Flpino (izens 25 private corporations, 60% of which is owned by Flipino ciizens tke REI, Hence, RBI is not Garred to own the subject ots LAND TRANSFERS MADE IN VIOLATION OF PD 27 AND RELEVANT MEMORANDA ARE VOID Josephine A. Taguinod and Vie A. Agulla vs. Court of Appeals GR No. 184654, September 14, 2007 FACTS: Then President Ferdinand E. Marcos promulgated PD 27 for the emancipation of tonant-armers from private agricultural lands they til that are primariy devoted to rice and corn, Pursuant to PD 27, the Department of Agrarian Reform (DAR) launched Operation Land Transfer (OLT) to implement and enforce the law's provisos of transferring ‘ownership to qualifed tenant-farmers or farmer-beneficiares, with the landowner having retention of not mare than seven (7) hectares of agricultural land ‘When OLT was launched, Salud Alvarez Aguila was tha registered owner ofthe disputed lots with Transfer Certificates of Tile (TCT) Nos. 7-12368 and T-65348, with an aggregals area of 10.4496 hectares, being 7.8262 hectares and 2.6234 hectares, respectively, both under the Registry of Deeds of Isabela, Cagayan. TCT No. T-12368 emanated from Original Certificate of Tite (OCT) No, 13423 which was Issued on January 11, 1936 based on a homestead patent issued on December 18, 1835. On the other hand, TCT No, T-65348 was derived from TCT No, T-36200-A which cancslled OCT No, :2965. OCT No. [-2965 was issued on May 27, 1935 on the basis of a homestead patent issued on June 27, 1935,VELASCO CASES ‘Subsequenty, the 7.8262-hectare lot covered by TCT No. T-12968 was traneferred to and registered in the name of petitoner Vie A. Aguia (who was then 14 years old) under TCT No, T-90872 dated January 19, 1976: while the other 2.6234-hectare lt under TCT No. T-65348 was transfarred to petitoner Josephine A. Taguinod, Both disputed lols were placed under the coverage of the OLT pursuant fo PD 27. On January 26, 1976, or shorty after the transfer ofthe subject lot covered by TCT No. 90872 to pettoner Vic A. Aguila, Salud Aguila, on behalf of then minor Petitioner Aguiia, fled a notarized application for retention, Much later, on October 24, 1984, when he was already of age, petitioner Aguila fled a leter-protest for exclusion or exemption from the OLT of his landholding covered by TCT No. T- 90872. Similarly, after ecquirng the subject lot covered by TCT No, T-65384, petitioner Taguinod fled her June 24, 1966 letier protest with the Team Leader of the OAR, Santiago, Isabela, seeking exclusion or exemption from the OLT of her lanaholding ISSUE: Is the transfer of properties to Vie valid? HELD: No. The DAR Secretary issued MC No. 2, series of 1973, dated June 18, 1973, and MC No. 2-A, dated June 19, 1978, which amended the former, with the expict prosccption and prohibition, among others, a follows: No act shall be done to undermine or subvert the intent and provisions of Presidential Decrees, Letters of instructions, Memoranda and Directives, such as the following andlor similar acts f) Transferring ownership to tenanted roe andor com lands after October 21, 1972, except tothe actual tenantfarmers or tilers but in strict conformity to the provisions of Presidential Decree No, 27 and the requirements ofthe DAR, Based on the above provisos. itis indubitabe thatthe transfer by Salud Aguila of the subject lot covered by TCT No. T- 90872 (vice TCT No, T-12368) was clearly in violation of the above cited Memoranda, It was done in order to cimounwvent the law and to remove the properties outside the coverage ofthe law. Consequently, the transfer is null and vols, and the ownership reverts to Salus Aguila WHILE AN ACTION TO RECOVER LANDS OF PUBLIC DOMAIN IS GENERALLY IMPRESCRIPTIBLE, SAID RIGHT CAN BE BARRED BY LACHES OR ESTOPPEL Estate of Yujuico vs. Republic of the Philippines GR. No, 188661, October 28, 2007 FACTS: In 1973, Fermina Castro fied an application for the registration and confirmation of her tle over a parcel of land ‘An Original Certificate of Tile was issued to Fermina as a result, In 1874, the land was then sold to Jesus S. Yujuco. In 1877, PD 1085 was issued converying the land reclaimed inthe foreshore and offshore of the Manila Bay tothe Property of Public Estates Authonty (PEA). The PEA also acquired ownership of other parcels of land along the Manila Bay coast, some of which were subsequently sold to the Manila Bay Development Corporation (MBDC), which in turn leased portions to Uniwide Holdings, inc ‘The PEA undertook the construction ofthe Manila Coastal Road, As this was being planned, Jesus Yujuica (petitioner) ‘discovered that the road directly overlapped their property, and that they owned a portion ofthe land sold y the PEA to MBDC. Thereafter, PEA and patiioner executed a Deed of Exchange of Real Property, pursuant to the compromise agreement which was approved by RTC Paranaque, in order to settle the issue. A TCT was issued in favor of the pettoners. In 200%, the Republic, 28 years later, fled Complaint for Annulment and Canceliation of Decree in the RTC Paranaque on the ground that the said property atthe time of survey was sill a portion of Manila Bay. RTC dismissed the petition on the ground of res judicata, ‘The CA however reversed the said decision on appeal. According to the CA, res judicata does not apply to lands of public domain, nor does possession of the land automatically divest the land of its public character. Hence this petition for certiorari ISSUE: May equitable estoppel be invoked against pubic authors. HELD: Yes. Equitable estoppel may be invoked against public authorities when as in this case, the lot was alteady alienated to innocent buyers for value and the goverment did not undertake any act to contest the tile for an Unreasonable length of time. Considering that innocent purchaser for value Yujuica bought the lot in 1874, and more than 27 years had elapsed betore the action for reversion was fled, then said action is now barced by laches, 2016 S8C Contalized Bar OperationsVELASCO CASES ‘While the general rule is that an action to recover lands of public domain is imprescriptibie, said ght can be barred by laches or estoppel, Section 32 of PD 1592 recognized the rights of an innocent purchaser for value over and above the interests of the government. Hence, Equitable Estoppel may be invoked against the public authorities in this case, ‘A CONTRACT ENTERED BY AN AUTHORIZED PERSON ON BEHALF ON ANOTHER IS BINDING ON THE LATTER Filipinas Systems, Inc. vs MRT Develapment Corporation G.R, Nos, 167829-30, November 13, 2007 FAGTS: Metro Rail Transit Development Corporation (MRTDC) Is the owner of MRT-3 North Triangle Development Project. It engaged Parsons Interpro JV (PIJV) fo act as the Project Management Team (PMT) to supervise and monitor the MRT project. PLIV was a joint venture company composed of two companies. Each of these companies appointed 3 representative as project managers to supervise the project Directly under them was Davia Sampson, Who. Woe designated as the Area Construction Manager, taskec to monitor the day-to-day activities onthe site. “There were six contractors who submited their respective bids for the construction, Subsequently, it was awarded to the pettioner Filipinas Systems, Inc. (FSI). In the coutse of the construction, there were several change orders issued by MRTOC to FSI. Thereafter, FSI sent several letters to MRTOC requesting an extension to complete he project as @resut ofthe change orders, twas ostensibly approved by Oavid Sampson, This extended the life ofthe project for several days, Upon completion, FSI asked for the early completion bonus, finishing the project earlier than the amended deadline MRTDC refused on the ground that David Sampson was not the Project Manager and was not authorized to issue change corde in behalf of MRTOC. ISSUE: Does David Simpson have the authority to change the orders of the MRTDC.? HELD: Yes. While the general rule is one cannot be bound to a contract entered into by another person, there are exceptions, such as when the contracting person was authorized to enter a contract on behalf of another or whon such contract was ratified, es enunciated in the Civil Code: “Aricle 1317, No one may contract in the name of another without being authorized by the latter, or unless he has by law a right to cepresent him. A contract entered into in the name of ‘another by ene who has no authority or legal representation, or who has ected beyond his powars shall be unenforceable unless tis rated. expressly or impliedly, by the person on whose behalfit has been executed, before itis revoked by the ‘ther contracting party." Here, David Sampson was the representative or agent of PN who was engaged as the Project Manages by MRTOC. However, the relationship between MRTOC and PIV cannot be stietly characterized as a contract cf agency. The practice in the construction industry is that the Project Manager exercises discretion on technical matters involving the ‘construction work, such as change orders. This is because owners ofthe Project are oftentimes not technically sued t> ‘oversee the construction work and hire professional project managers precisely to oversee the day-to-day operations on the construction site and to exercise professional judgment when expedient Veriy, David Sampson was authorized to order changes in the Contract Work ae well as binding MRTDC toi. ADMINISTRATIVE RULES AND REGULATIONS MUST BE PUBLISHED IF THEIR PURPOSE IS TO IMPLEMENT EXISTING LAW PURSUANT TO A VALID DELEGATION National Electrification Administration v. Vietoriano 8. Gonzaga GR No, 158761; December 4, 2007 FACTS: This is @ Petition for Review under Rule 45 assaling the Decision and Resolution of the CA which dismisses the ‘appeal of National Elecrifation Administration (NEA) regarding the valiily of the Electric Cooperative Election Code (EceC), Vietoriano Gonzaga (Gonzaga) filed his Certificate of Candidacy for membership inthe Board of Directors of Zamboanga dei Sur I Electric Cooperative Inc. (ZAMSURECO). Howaver, the screening committee disqualified Gonzaga because fis ‘spouse was a councilor in Diplahan, Zamboanga De! Sur. Based on the ECEC, promulgated by NEA, a candidate whose ‘spouse occupies an elective government positon higher than Berangay Caplain is prohibited to run as tector of an electric cooperative. The by-laws of ZAMSURECO, on the other hand, did not provide such prohibition, Gonzaga contended that the ECEC was null and void because it was not published. ZAMSURECO only fle the code With the UP Law Center but it offered no proof of publication in the Oficial Gazette or in a newspaper of general Eroulation. The RTC also required NEA to comment if the ECEC were indeed published in any newspaper of general reulation but failed to do so. Because of this failure io comment, the RTC rendered ECEC ta be null and void, ISSUE: Is ECEC null and void because of lacking the requirement of publication?VELASCD CASES RULING: Yes, it is null and void 2s it was not published in the Official Gazette or any newspaper of general circulation, ‘Aicle 2 of the Civil Code provides that laws shall take effect ater 15 days folowing the completion oftheir publication in the Oficial Gazette or ina newspaper of general ciculation in the Philipines. Moreover, in Taftada v. Tuvera, the Court fled that administrative rules and regulations must also be published I their purpose isto enforce or implement existing Taw pursuant also to a valid delegation, Lastly, Sec. of the Administrative Code of 1987 provides that every agency shall fle with the UP Law Center 3 certified copies of every rule adopted by it. Although ZAMSURECO complied with the requirements of fing the ECEC with the UP Lew Center, it wes not published in the Official Gazette or in a newspaper of general circulation, The ECEC was issued by NEA pursuant to its rule-making ‘authority. It applies to al electric cooperatives in the country and not merely an internal memorandum, interpretative Fegulation, instruction to subordinates. Hence, ECEC is rendered null and void forthe lack of publication, COURTS MAY DECIDE WHETHER A RESCISSION MADE UNILATERALLY WAS OR WAS NOT CORRECT IN LAW Philippine Lolsure and Retiremont Authority v. Court of Appeals G.R.No, 158303; December 19, 2007 FACTS: This isa Petition for Cortorar under Rule 48 seeking to reverse the Decision of the CA wiich affirmed the ruling Of the RTC ordering Petitoner Philippine Leisure and Retirement Authority (PLRA) to reinstate Memorandum of ‘Agreement (MOA) between the partes. PLRA and P.R.A, Members Association Foundation, inc. (PRAMA) entered into @ MOA where the principal members of the former are required to become PRAMA members and pay the annual membership fee. Itwas agreed that PLRA shall collect the membership fees of its members and transmit itto PRAMA. Later, PLRA sent PRAMA a letter tothe effec that ifwould continue fo calect PRAMA’s membership fees for a five percent (5%) service fee hased on total collections. Such ‘was protested and contested by PRAMA. The parties tried to reconcile their records to ascertain the correct membership fees that must be transmitted to PRAMA. PRLA accused PRAMA of sowing seeds of discontent and suspicion among PLRA's principal retirees. and of breach of the MOA. Consequently, the PLRA Board of Trustess resolved to terminate the MOA. PRAMA instituted @ complaint before the Wal court alleging that the termination of the MOA was llegal and PLRA had yet to remit all membership fee collections. PRLA, for ils part, argues that courts cannot compel a party to execute anclor renew a contract which was siready rescinded inthe exarcisa ofits management prerogatives, Issue: May the court interfere withthe decision of corporation in unilaterally rescinding a contract? RULING: Yes. Courts may interfere witn corporation's decision to rescind a contract. The right to rescind is provided for in Article 1161 of tne Civil Code, which states: “The power to rescind obligations is implied in reciprocal ones, in case one of the ‘obigors should not comply with what is incumbent upon him. Xx The court shall decree the rescission claimed, uniess there be just cause authorzing the fking of @ periad.” In University of the Philppines v. De Los Angeles, the Court ‘Sressed and explained that “the party who deems the contract violated may consider it resolved or rescinded. and ac ecordinly. winout previous court action, but t proceeds at its own risk. For itis only the final judgment of the Comesponding cour tat will and finally settle whether the action taken was or wes not correct in ew." While PLRA may have the right to rescind the MOA, treat the contract as cancelled, and communicate the rescission #9 RAMA, tne cancellation of the MOA is stil subject io jusicial scrutiny, should the cancellation be contested and brought fo court In the instant case, PRAMA judicially questioned the unilateral rescission by PLRA, and the trial court stil has to determine whether the unilateral rescission was justified ‘As such, PLRA Is wrong to say that the courts may nat interfere with its decision to rescind. ‘A PERSON OCCUPYING PROPERTY AT ANOTHER'S TOLERANCE HAS THE RECIPROCAL OBLIGATION TO VACATE THE SAME UPON DEMAND Lourdes Do La Cruz v. Court of Appeals GAR. No. 138442 December 6, 2008 FACTS: The case is a petition for review under Rule 45 seeking to reverse the decision of the CA. The CA set aside the ruling of the RTC and reinstated the decision of the MeTC in favor of respondent Melba Tan Te (Tan Te) and ordered pettioner Lourdes De la Cruz (De la Cruz) to vacate the propery in dispute De la Cruz was one of the lessees ofa lot owned by the Reyes family. She paid the rentals religiously for 40 years, unt a fire diverged which destroyed the property. After the incident, De la Cruz returned to the premises end re-established thet ‘dweling, despite the repeated demands of the Reyeses to vacate the same. Later on, the property was sold to Tan Te, and the attr likewise ordered the petitioner to vacate thect 2018 SBC CenVELASCO CASES Because of De la Cruz's repeated refusal to vacate, Tan Te filed an ejection case against her. Tan Te contended that the ejection sult was proper considering that Oe la Cruz illegally possessed the property and that the latter's continuous possession of the property was only out of Tan Te's generosity. On the other hand, De la Cruz averred that she was a Fent-paying tenant and thus protected by law. ISSUE: Is the respondent entied tothe possession o the property? HELD: Yes. the respondent is entitled to the possession of the property. It has been held that in possession by tolerance, Upon the faure of the tenant to settle her obligations, the landlord may either terminate the contract, thus converting It 2 an illegal possession; or give the tenant the credit fr the payment ofthe rents and allow him to continue indefinitely inthe possession of the property. However, the landlord has the discretion to elect the contract of tenancy to be broken and sue the occupant for possession and damages. In the case, the continuous possession of the property by De la Cruz was out of the generosity ofthe respondent, and the Iatier should be mindful of the implied obligation for her to vacate the premises upon demand. The breach of this obigaton was committed when she refused tO vacate the premises upon written demand sent fo her. She ost the right to possess the property by reason of such; thus, Tan Te enlied fo regain the possession of the propery BIOLOGICAL PARENTS OF THE LEGALLY ADOPTED EMPLOYEE ARE CONSIDERED AS SECONDARY BENEFICIARIES UNDER THE ECP Bernardina P. Bartolome v. Social Security System and Scanmar Maritime Services, Inc. GR. No. 192531; November 12, 2014 FACTS: This Appeal, fled under Rule 43 of the Rules of Court, seeks to annul the decision of the Employees ‘Compensation Commission (ECC), dectaring that pettioner Bemardina Bartolome (Bernardina) isnot @ beneficiary of the deceased employee under the Labor Code of the Philippines as amended John Coicol (John) was employed as electician by Scanmar Maritime Services, Ine., on board the vessel Maersk Danville. He was enrolled under the government's Employees’ Compensation Pragram (ECP), Unfortunately. an accident securred on board the vessel whereby steel plates fell on Joha, which led to his untimely death. Thus, pelitoner Beinardina, John's biological mother and, allegedly, sole remaining beneficiary, fed a claim for death benofits under PO (626 with the Social Secunty System (SSS). However, the SSS denied the claim, stating that she wes no longer Considered as the parent of John since the latter was legally adopted by Comelio Colcol (Cofnalio) who passed evay 2 years afer the adoption Both the SSS and ECC ruled against Berardina, stating thatthe rights which previously belong tothe biological parent of the adopted child shall now be upon the adopting parent. Hence, the adoptive father ofthe deceased has the right to fle the claim and not Bemardina, ISSUE: Are the biological parents of the legally adopted employee considered as secondary Deneficieries and thus, ‘entitle to receive the Benefits under the ECP? HELD: Yes, Semardina s ented to the benefits under the ECP. ‘Art $84 of the New Civil Code provides that in case ofthe desth of an adopted child laaving no children or descendants, nis parents and relatives by consanguinity and nat by adoption, shall be his legal hers. It's apparent thatthe biological parents retain their rights of succession to the estate af their child who was the subject af adoption, While the benefits arising from tne death of an SSS covered emplayee do not form part of the estate ofthe adopted child the Civil Code provision on legal or intestate succession at least reveals the policy on the rights ofthe biological parents ‘and those by adoption vis-@-vs the right to receive benefits fram the adopted. In the same way tnat certain nights st attach by virtue of the blood relation, so too should certain obligations, which the SC rules to include the exercise of parental authori in the event of the untimely passing oftheir minor offspring’s adoptive parent Here, Cornatio's desth at the time of John's minority resulted in the restoration of petitioner's parental authority over the adopted child Since the parent by adoption already died, the death benefits under the Employees’ Compensation Program shall accrue Solely to nerein petioner, John's sole remaining beneficiary. RULE ON DOUBLE SALE APPLIES ONLY WHERE THE SAME PROPERTY IS VALIDLY SOLD TO DIFFERENT VENOEES Carmelita Fudot v. Cattleya Land, Ine, GR.No. 171008, September 13, 2007 2016 SBC Centralized Bar OperationsVELASCO CASES FACTS: This is petition filed by Carmelita Fudot (Fudot) which sesks to nulfy the Decision and Resolution of the CA declaring respondent Cattleya Land, inc. (Cattleya) 2s having a better right over a parcel of land. The CA rejected the TC's decision that Cailleya had recorded in good faith the deed of sae in Its favor ahead of Fudot. “The property in question is one of the © lols which Cattleya purchased from spouses Troadio and Asuncion Tecson (Spotses). the Register of Deeds refused to annotate the purchase on the iles because of an existing notice of tachment However, the attachment was eventually canoolled and tiles to six of the nine lots were issued Subsequently, Fudet registered before the Register of Deeds the owner's copy ofthe tie of the subject property together with a deed of sale purportedly executed by the Spouses in her favor. Cattleya fed @ complaint for quieting of tile andlor recovery of ownership against Fudot. Asuncion intervened, claiming that her signature in Fudot's deed of sale was a forgery thus, the said deed is null and voi, Fudot, on her par, alleges thatthe Spouses had sold to her the property and delivered to her the owner's copy ofthe tile but the Register of Deeds refused to register the same because the property was sill under attachment, She argues that the rule on double sale is applicable. ISSUE: Does Cattleya have the better right over the subject property? HELD: Yes, Cattleya has a better right to the subject property because in the frst place. there is no double sale to speak of, Article 1544 of the Civil Cade, which provides the rule on double sale, applies oniy to a situation where the sare propery is valily sold to cifferent vendees. Furthermore, it has been held that between two transactions concerning the Same parcel of land, the registered transaction prevails over the earlier unregistered right In this ease, there is only one sale to advert to, that between the Spouses and Catleya. The tial cour declared the sale between the Spouses and Fudot to be invalid as it bears the forged signature of Asuncion. Cattleya was able to register the sale in its favor. Without a doubt, Cattleya had acquired a better tie to the propertyVELASCO CASES TAXATION LAW THE TAX PRIVILEGE OF PAL GRANTED UNDER A SPECIAL LAW IS NOT REVOKED BY RA $334, AMENDING SEC. 131 OF TAX CODE Commissioner of Internal Revenue v. Philippine Airis, Inc. GRR. Nos. 212536-37, August 27, 2014 FACTS: This is a Petition for Review on Certiorar under Rule 48 assailing and seeking to set aside the decision of Court of Tax Appeals (CTA) en banc which granted the claim of respondent Philippine Airines Inc. (PAL) for refund of excise taxes it pai Presidentis| Decree 1690 grants PAL a franchise to operate sir transport services domestically and internationally, Sec. 13 thereof grants PAL a tax privilege since it provides that PAL shall pay elther basic corporate income lax or franchise fax based on revenues and/or the rate defined in the provision, whichever is lower and the taxes thus paid under either scheme shall be in liev ofall ather taxes, duties and other foes. Subsequently, Republic Act No. 9334 took aact, amending See. 131 ofthe Tax Code, deciaring thatthe provision of any special or general law tothe contrary notwithstanding, the importation of x xx eigarettes, distilled spits, fermented lauors ‘and wines x x x, even if destined for tax and duty-free shops, shall be subject to all applicable taxes, dues, charges, Including excise taxes due thereon” Pursuant to said amendment, PAL was assessed excise taxes on its importation of cigarettes and aleoholic drinks for its commissary supplies used in its international fights. PAL paid the amounts under protest and thereafter fled ‘administrative claims for refund before the Bureau of intemal Revenue forthe alleged excise faxes it erroneously pad. Petitioners Commissioner of Internal Revenue (CIR) and Commissioner of Customs contended that PAL's tax exemption lunder PD 1590 had been revoked by Congress wien, via RA 9334, it amended Section 131 of the Tax Code, On the ‘ther hand, PAL contends that its exemption granted under a special law has not been withdravm since RA 9394 is 3 general aw, ISSUE: Is the tax privilege granted to PAL, as provided under PD 1590, revoked by RA 93347 HELD: No, the tax privilege of PAL provided under PD 1590 has not been revoked by Sec. 6 of RA £334. It is a basic Principle that a later lav, general in terms and not expressly repealing or amending a prior special law, will not ordinarily affect the special provisions of such earlier statute, As the Court held in CIR v. PAL (2009), "That the Legisiature chose not to amend or repeal PD 1590 even after PAL was privatized reveais the intent ofthe Legislature to let PAL continue to enjoy, ae a private corporation, the very same rights and privileges under the terms and conditions states in said charter. Moreover, noteworthy is the fact that PD 1580 = 3 ‘Special lav, which governs the franchise of PAL. Between the provisions under PD 1680 2s against the provisions under the Tax Code, as amended by RA 9334, which i a genera iw. the former necessary prevails, Hence, the tax privilege of PAL not being revoked by RA 9334, respondent PAL is entitled to refund of excise taxes it erroneously paid. TRANSACTION SUBJECT TO DONOR’S TAX DESPITE ABSENCE OF DONATIVE INTENT; JURISDICTION OF CTA INCLUDES APPEAL FROM THE SECRETARY OF FINANCE’S REVIEW OF BIR RULING Philippine American Life and General Insurance Company v. Secretary of Finance and Commissioner of Internal Revenue GAR. No. 210987, November 24, 2014 FACTS: This is a Petition for Review on Certiorar under Rule 45 seeking for the reversal of the Resolutons of the CA, \hich dismissed outrighty, the appeal of petitioner Philippine American Lite and General Insurance Company (Philamlife) from the review of respondent Secretary of Finance (SOF) afrming BIR Ruling 918-12. for lack of jurisdetion Nlding that the same belonged to the Court of Tax Appeals (CTA) pursuant to Sec.7(a)(1) of Republle Act No. 1125 (RA 1125). Philamife sold its shareholdings in Philam Care to ST! Investments, Inc. the highest bidder. Ater the sale and payment of necessary taxes, Prilemite fled an application for tax clearance with the BIR to faciltate the transfer of shares. The BIR. informed Philamlife the need to secure a BIR Ruling on the sale due to potential donor's tax lability Respondent Commissioner on Internal Revenue (CIR), through BIR Ruling No. 015-12, denied Philamife’s request and found Imposabie donor's tax lability on the pice aliference, Enlamife asserted that the transaction is not subject to donor's tax for the folowing reasons: (1) that there was no \Gonaive intent (2) that the shares were sold at thar fair market valueVELASCO CASES money's worth in an open bidding procass; and (3) that as long as the transaction conducted is at arm's length, a sala for less than an adequate consideration is not subject to donor's tax. Philamlife also averred that the CTA no has jurisdiction fn the ruling of the SOF, in the exercise of the latter's power of review under Sec. 4 of NIRC. The petitoner invoked British American Tabacco v. Camacho wherein the Court ruled that where the validity ofa rule or regulation issued by the ‘administrative agency is assaled, the regular courts have jurisdiction to pass upon the same. “The CIR found that the selling price ofthe shares sold was lower than their book value and consequently held thatthe price diference is deemed a gift subject to 30% donor's tax pursuant to Section 100 of National Internal Revenue Code (NIRC). The SOF further countered that Philamlife commitiad a fatal ertor for falure to appeal the SOF's ruling to the (Ofice ofthe President (OP) as provided under Sec. 17 of At Vil ef the Constitution ISSUES: 1 Is the price diference in Phitamife's sale of shares subject to donors tax? 2 Does the CTA have jurisdietion onthe ruling of SOF in ts exercse of power of review under Sec.4 of NIRG?, HELD: 1. Yes, the price dltference in Philamife’s sale of shares is subject to donor's tax ‘The absence of donative intent, if that be the case, does not exempt the sales of stock transaction from donar’s tax since Sec. 100 of the NIRC categorically states that the amount by which the fair market velue of the property exceeded the value of the consideration shal be deemed a git In the case at bar, the seling price ofthe shares sold was lower than their book value and the price difference is deemed gift Thus, even ifthere is no actual donation, the difference in price Is subject to donor's tax 2. Yes, the CTA has jurisdiction on the ruling of the SOF in is exercise of power of review. The appellate power of the CTA includes certiorari, as can be implied from Sec.1, Art. Vill of the Constitution which provides that judicial power includes the power to determine whether there has been a grave abuse of discretion ‘mounting 0 lack or excess of jurisdiction. Through its power of cortorai, CTA has the authority to rule on the valisty of = pariculer administrative rule or regulation so long as it's within ts appellate jurscition. In the case at bar, the petition involved an issue on the taxabiliy of the transaction, the jurisdiction of which propesly pertains to the CTA under Sec. 7 of RA 282. Hence, it can now rule not only on the propriety af an assessment cr tax treatment ofa certain transaction, but also on the valcty ofthe revenue regulation or revenue memorandum circular on Which the said assasement is based ‘TAX COLLECTION CASE VERSUS COLLECTION FOR MONEY Philippine British Assurance Company, inc. v. Republic of the Philippines GR.No, 185586 February 2, 2010 FAGTS: This Petition for Review on Certoral under Fle 45 seeks to reverse and set aside the Resolutions of he Court of Appeals (CA) Petitioner Philppine Britsh Assurance Company, Inc. is an insurance company duly organized and existing under ang by virtue of the laws of the Republic of the Philippines. Pettioner issues customs bonds tots clients in favor ofthe Bureau of Customs (BOG). These bonds secure the release of imported goods in ofder that the goods may be released from the ‘BOC without prior payment of the corresponding customs cuties and taxes, Under these bonds, petitioner and its cients jointly and severally bind themselves to pay the BOC the face value of the bonds, in the event that the bonds expire without ether the imported goods being re-exported or the proper duties and taxes being paid The Republic, represented by the BOC, fled a complaint against peitioner for collection of money with damages. It was alleged in the complaint that petitoner had outstancing unliquidated customs bonds with the BOC. The trial court issued 2 Decision finding the petitioner lable to the Republic of the Philippines for unpaidlunlquidated customs bonds plus egal interest. Peiioner filed a motion for reconsideration which the Wal court denied. Petitioner appealed fo CA which issued the frst assailed resolution cismissing the case for lack of jurisdiction. Petitioner, thus, fled a Motion for Reconsideration hich was denied by the CA in ts second assailed Resolution. ISSUE: Did the CA committed serious error of law when it ruled that i has no jursdicton over the appeal and the same lies with the Cour of Tax Appeals (CTA) because the instant case isa tax collection case? HELD: Yes. The original complaint fled withthe trial court was in the nature ofa collection case, purportedly to collect on ‘the obligation of petitioner by vite of the bonds executed by iin favor of respondent, essentially a contractual obligation ‘As petitioner cortecty points out, an action to collect on a tond used to secure the payment of taxes is not a tax caliection ‘case, but rather a simple case for enforcement ofa contractual liabilty. La SE Cotrnlne ak QnscatioasVELASCO CASES Gated on the decided case of Republic ofthe Philippines v. Xavier Gun Trading, the present actions by the government are forthe forfeiture ofthe bonds in question. Although the subject matter of said bonds are internal revenue taxes, it ‘cannot be denies that upon the execution of said bonds, the taxpayer, at principal and the bondsman, as surely, ‘assumed a new and entirely distinct obligation and became subject to an ently different kind of liailty. The new lability was voluntary and contractual In addition, it must be stressed that even the BOC dis not consider the case as one for tax collaction. The BOC instituted ‘2 complaint against petitioner for collection of money before the trial court. Moreover, the BOC did not follow the procedure inthe proper prosecution ofa tax collection case. This may only be explained withthe fact thatthe BOC itself {id not consider the action that it instituted as @ tax collection case. Hence, appoliate jurisdiction over the petition property lies with the CA and not the CTA, OFF-LINE AIR CARRIER SUBJECT TO INCOME TAX ON INCOMES DERIVED WITHIN THE PHILIPPINES, South African Airways v. Commissioner of Internal Revenue GR. No. 180386 February 10,2016 FACTS: This is a Pettion for Review on Certiorari under Rule 45 to the Supreme Coutt, seeking the reversal of the ecielon of the Court of Tax Appeals (CTA) En Banc afiring the decision of the CTA First Divsion which denieg Petitioner South Afican Aways’ ciaim for refund oft claimed erroneously paid tax. Petitioner, @ foreign corporation, is an intemational air carier having no landing rights in the country but has a general sales agent in the Philppines, Aerotel Limited Corporation (Aerotel). Aerotel sells passage documents for pettioner ot. line fights for the carrage of passengers and cargo belween ports or points outside the territorial jurisdiction of the Philippines. In 2000, petitoner fled separate quarter and annual income tax reluns for its oftine flights Subsequently, petitioner filed with the Bureau of Internal Revenue, @ claim for the refund of the amount of P1,727,768.38 ‘as erroneously paid tax on Gross Philippine Billings (SPB), Such claim was unheeded. Thus, petitioner fled a Petition for Review with the CTA for the refund of the abovementioned amount. CTA First Division denied therr petition, and further ruled that ethough the petitoner is not lable to pay tax on iis GPB under Section 28(4)(3)a) of the National Internal Revenue Code (NIRC}, its lable to pay a tax of 32% on its income derived from the sales of passage document in the Philippines, Thereafter, petitioner fed Petiton for Review before the CTA En Bane reilerating ite claim for a refund but the same denied their petition. ‘On appeal, pettoners contend that with the new defniton of GPB, itis no longer liable since it does not maintain fights to ‘or from the Philippines. Petitioner further posits the view that due to the non-applicablty of Sec. 26(4)(3}a) toi, itis precluded from paying any other income tax for its sale of passage documents inthe Philippines. ISSUE: Are offine fights considered as income within the Philippines, hence, subject to Income Tax of 32%? HELD: Yes. Offine fights sales are subject to Income Tax. In Commissioner of intemal Revenue v. British Overseas ‘Ainvays Corporation, his Court ruled that ofttine ar cariars having general sales agents in the Philippines are engaged in of doing business in the Philippines and that their income from sales of passage documents here is income trom within the Philippines. Thus, in that case, we held the offline air carrier lable forthe 32% tax on its taxable income. Moreover ‘See. 28(A)(1) of the 1967 NIRC is a general rule that resident foreign corporations are liable for 32% tax on all income ‘rom sources witin the Philippines. Sec. 28(A)(3) is an exception to this general rue. In the Instant case, the general rue is that resident foreign corporations shall be lable for a 32% income tax on their income from within the Philippines, except for resident fareign corporations that are intemational carriers that dere income from carriage of persons, excess baggage, ca:go and mail originating from the Philippines which shall be faxed at 2'412% of their GPB. Pelitioner, being an Intemational carrier wih no fights originating from the Philippines, does not fl Under the exception To reiterate, the correct interpretation ofthe above provisions is that, if an international ir carve maintains fights to and fom the Philippines, i shall be taxed at the rate of 2 1/2% of is GPS, while intemational air carners that do not have fights to and from the Philippines but nonetheless ear income from other actives In the country willbe axed at the rete (0f 32% of such income. GOVERNMENT INSURANCE SERVICE SYSTEM (GSIS) IS A GOVERNMENT INSTRUMENTALITY GRANTED EXEMPTION FROM PAYMENT OF ALL KINDS OF TAXES AND FROM LEVY OF ITS PROPERTIES. GSIS v. City Treasurer and City Assessor of the City of Manila, GIR. No, 186242, December 23, 2008 FACTS: Petiioner GSIS filed 2 petition for review under Rule 45 when the RTC declared valid the assessment made on the subject real properties by respondent City Treasurer of Manila, Pettioner GSIS owns two (2) parcels of land— the Katigbak property and the Concepcion-Arraceros property. The Katigbak property has, since November 1991, been lessed to end accupied by Manis Hotel Corporation (MHC); and the L___ case iilE GOS Samtemices fae fuscationsROARS centmtee mec oeerten VELASCO CASES Concepcion-Arraceros property is partly occupied by GSIS and partly occupied by the MeTC of Manila, Respondent City “Treasurer of Manila made a tax assessment on pettioner, holding that real property taxes are due on the aforementioned properties for years 1992-2002. The assessment contained 2 warning that the subject properties will be sold at 2 public auction should the unpaid taxes remain unseltied. GSIS then fled a peiton for certiorari and prohibition bafore the RTC. Claiming exemption from all kinds of taxes pursuant to R.A. No. €291 or The GSIS Act of 1997. GSIS alleges that both its old charter (P.D. No. 1148) and present charter (RLA. No. 8291), exempt the agency and its properties from all forms of taxes and assessments, inclusive of really 'ax. On the other hand, respondents argue that GSIS may net successtuly resist the city’s notioas and warrants of levy on the basis of ts exemption under R.A, No. £8281, as real property taxation is governed by R.A. No, 7160 or the Local Goverment Code (LGC), Issues: 41s petitioner exempt from the payment of real property taxes? 2.|s petitioner exempt from the payment of real property taxes on the property itleased to a taxable entity? 3. Are petitioner's real properties exempt from warrants of levy and from tax sale for non-payment of real property taxes? HELD: 1. Yes, petitioner GSIS is exempt from real property taxes, Sec. 199 of the LGC indeed withdrew the full tax exemption granted to GSIS under P.D. No. 1146. However, under Sec. 39 of R.A. No, 8281, which was enacted in 1997, the full tax exemption privilege of GSIS was restored. In addition, said ‘Section provided for conditions which shall be met in order for an express repeal of a subsequent law to be valid, to wit (1) The repealing clause must expressly, specifically, and categorcally revoke or repeal Sec. 39; and (2) a provision is ‘enacted to substitute of replace the exemption referred to herein as an aseental factor fo maintain or protect the solvency ofthe fund. ‘Thus, it was held tha: (1) Pursuant to Sec. 33 of P.O. No, 1148, GSIS enjoyed tax exemption from real estate taxes, until the LGC took effec: (2) FLA. No. €281 restored in 1997 the tax exempt status of GSIS; and (3) If any real estate taxis due to the City oF Manila it's only forthe interim periog, or from 1962 to 1996, to be precise, 2. Yes, GSIS is exempt fr 1m the payment of real property taxes of properties leased to taxable entities, Sec. 234(a) of the LGC exempts from real esiate taxes real property owned by the Republic, unless the beneficial use of the propery is, for consideration, transferred to taxable person. This exemption, however, must be read in relation with See. 133(0) of the LGC, which prohibits LGUs from imposing taxes or fees of any kind on the national government, its agencies, and instrumentalties GSIS, 2s 2 government instrumentally, is nota taxable juridical person. GSIS, however, ost in a sense that status with respect to the Katigbak property when it contracted its beneficial use to MHC, a taxable person, Thus, the assessment avering 1962 to 2002 over the Katigbak property is valid, However, in the Tesfate Estate of Concordia T. Lim v. City of Mania (1990), i has been ruled thatthe unpaid tax attaches to the property and is chargeable against the taxable person lho had actual or Beneficial use and possession ofl regardless of whether or not he s the owner “Thus, being in possession and having actual use of tne Katigbak property since November 1981, MHC, and not GSIS, is lable for the realty taxes assessed over the Katigbak property from 1982 fo 2002 3. Yes, Peitioner GSIS' real properties are exempt from warrants of levy and from tax sale for non-payment of real Property taxes, A valid tax levy presupposes 2 corresponding tax billy. Furthermore, the 3® paragraph of Sec. 39 of RA No. 8291 Slates that “The funds andor the properties referred to herein as well as the beneflis, sums or monies corresponding to the benefits under this Act shall be exempt from attachment, garishmant, execution, levy or other processes issued by the courts, quasi-judicial agencies or administrative bodies "Also, throughout GSIS life under tee diferent charters, ta need to ensure the solvency of GSIS fund has always been legislative concem, a concem expressed in the tax ‘exempting provisions, ‘Therefore, the subject GSIS properties are exempt from any at processes, ment, garnishment, execution, levy, or otner legalVELASCO CASES ‘THE TWO-YEAR PRESCRIPTIVE PERIOD FOR CLAIM OF REFUND OR TAX CREDIT OF UNUTILIZED INPUT VAT RECKONS FROM THE CLOSE OF THE TAXABLE QUARTER WHEN THE RELEVANT SALES WERE MADE ‘Commissioner of internal Revenue v. Mirant Pagbilao Corporation, GR.No. 172429 September 12, 2008 FAGTS: Petitioner Commissioner of intemal Revenue (CIR) filed a petition for raview under rule 45 seeking to set aside the decision of the CA granting respondent Mirant Pagbllao Corporation (MPC) entiiment to zero-rated VAT for sales {0 2 tax exempt entity and a tax refuncieresit forts unutized input VAT In 1986, MPC is @ domestic frm engaged in the generation of power which it sells to the National Power Corporation (NPC), an ‘ently exempt trom all taxes under its charter. For the Construction of the elactncal and mechanical equipment portion of its Pagbiiao, Quezon plant, MPC secured the services of Mitsubishi Corporation MPC fled an application for Effective Zero Rating on December 1, 1997 on the belief that is sale of power generation services to NPC is zero-rated for VAT purposes. Peiitioner CIR issued @ VAT Ruling stating that the supply of electricity by MPC to the NPC, shall be subject fo the zero percent (0%) VAT. MPC opted not fo pay the VAT component of the progress tilings from Mitsubishi for the period covering April 1993 to September 1996. It was only on April 14, 1988 that MPC paid Mitsubishi such VAT component. On August 25, 1998, MPC, while awating approval of ts application aforestated, fled its quarterly VAT return for the second quarter of 1998 where it reacted an input VAT of Php48,003,047.62. which includes the VAT component from Mitsubishi. MPC then fied on December 20, 1999 an administrative claim for refund of unutiized input VAT. The BIR. Commissioner failed to act on MPC's claim for refund. Hence, MPC went to the CTA and then to the CA which then granted MPC's claims for tax refund or credit ISSUE: Was respondent MPC's claim for refund or tax credit of ts input VAT payments fied within the prescriptive period, ‘and thus should be approved? HELD: No. The claim for refund or tax er provided by law fer such claim. for the crecitable input VAT payment made by MPC wes fled beyond the period See. 112 (A) of the NIRC provides that unutilized input VAT payments must be claimed within two years reckoned from the close of the taxable quarter when the relavant saies were made pertaining tothe input VAT regardless of whether sad tax was paid or not. Prescriptive period commences from the close of the taxable quarter when the sales were made and ‘ot fom the ime the input VAT was paid nor from the ie the official receipt was issued. ‘The last crecitable input VAT due fr the period covering the progress biling of September 6, 1996 is the third quarter of 4896 ending on September 30, 1996. Any claim for unutlized creditable input VAT refund or tax ereait for said quarter prescribed two years after September 30, 1996 or, tobe precise, on September 30, 1998, Consequentiy, MPC’s claim fr refund or tax credit fled on December of 1989 had already prescribed, PNP.CIDG CAN EFFECT SEARCH AND SEIZURE WHEN AUTHORIZED BY THE BUREAU OF CUSTOMS Raul Basilio D. Boac, etal. v. People of the Phillippines GIR No. 180587 November 7, 2008 FACTS: This isa petition for certiorari under Rule 45 which seeks to reverse the decision ofthe Sandiganbayan finding petitioners guity of violating Section 2203 of the Tariff and Customs Code of the Philipines (TCCP) A motion for feconsideration was denied. Peiitoners Raul Boa: (Zoac), Ramon Goiong, Casar Beltran (Beltran), Roger Basadie and Benjamin Afonso are members ofthe Phiippine National Poice-Criminal Investigation and Detection Group (PNP-CIDG) Beltran allegedly informed Boac that the Bureau of Cusloms (BOC) released three container vans with contrebends consigned to Japan Trak surplus (Kakiage Surplus). The patlioners, upon the ocder of Bose, but without the authonty fiom the BOC, lagged down the subject container vans. ‘Ally. Lourdes V. Mangaoang, then Customs District Collector of Cagayan de Oro City, prepared a letter of protest ‘addressed io Boac but twas ignored; hence, she filed the instant case Petitioners claim that (a) they did not violate the TCCP because they only witnessed the search and seizure of the Container vans by the Customs Police: and (b) the police's authority to canduct search, seizure and arrest, f necessary, 's ‘no longer exclusively vested on the Collector of Customs by vitue of Republic Act No. (RA) 6975 or DILG Act of 1880, ‘The Sandiganbayan convicted the petitioners and ruled that they needed 2 written authority from the Commissioner of Customs or District Collector in order to conduct searches, seizures and afrestsVELASCO CASES ISSUE: Are the petioners gully of violating the provisions of the TCCP when they flagged down the container vans without prior authority from the Collector of Customs? HELD: No, the petitioners are not gully of violating the provisions of the TCCP when they flagged down the container vans without prior authority from the Collector of Customs. Under Section 2203 of the TCCP, officers generally fempowered by law to effect Searches, seizures and arrests when authorized by the BOC, can enforce tariff and customs laws, Likewise, under RA 6975, the Criminal Investigation Unit of the PNP shall undertake the monitoring, investigation land prosecution of ll crimes involving economic sabotage, ‘The petitioners were investigating a possible connivance of smugglers with some customs personnel. Smuggling, @ crime Involving economic sabotage, is within the powers of the PNP-CIDG to monitor and investigate. Should the PNP suspect ‘of anything, it should coordinate with the BOC and obtain the writen authority from the Collector of Customs to conduct ‘searches, Seizures, orarests. While there was no such coordination iniiated by the PNP-CIDG, nevertheless, petiioners ‘cannot 6@ convicted under the TCCP since there is no evidence that they actually searched the container vans. ‘Thus, the petitoners are not gully of violating the provisions of the TCCP when they flagged down the container vans without prior authori from the Collector of Customs. NO DISTINCTION ON TAX EXEMPTION PRIVILEGE OF PAGCOR ‘The Commisioner of Internal Revenue v. Acesite Hotel Corporation GR No, 147295 February 18, 2007 FACTS: This isa Petition for Review on Cortorar under Rule 45 which seeks to reverse the decision of Court of Appeals (CA) affirming the decision of the Court of Tax Appeals (CTA) finding Aceste Hotel Corporation (Acesite) entitled to 2 ratund of VAT payments Acesite, the owner and operator of the Helday Inn Manila Pavilion Hotel, leases areas ofthe hotel premises to PAGCOR for casino operations and caters food and beverages to PAGCOR's casino patrons through the hotel restaurant cutlets Acesite incurred VAT amounting to P30 milion from its rental income and sale of food and beverages to PAGCOR, Acesite tried to shift the said taxes to PAGCOR by incorporating it in the amount assessed to PAGCOR but the later refused to pay the taxes on account of ts tax exempt status. Acesite paid the VAT to the Commissioner of Internal Revenue (CIR). ‘Acesite belatedly arrived atthe conclusion that its transaction with PAGCOR was subject o 2aro rate as it was rendered to 2 tax-exempt entity. Hence, Aceste fled an administrative claim for refund with the CIR but was denies. Acesie fled petition with the CTA which ruled in its favor. Upon appeal by petitioner, the CA affirmed in foto the decision of the CTA ISSUE: Is PAGCOR's tax exemption privilege includes the indirect tax of VAT to entile Acesite to zero percent (0%) VAT rate? HELD: Yes, PAGCOR is also exempt from indirect taxes, tke VAT. A close scrutiny of Section 13 (2) (0) of P.O. 1888, the charter creating PAGCOR, clearly gives PAGCOR a blanket ‘exemption to taxes with no distination on whether the taxes are director indirect. Although the law does not specifically mention PAGCOR’s exemplion from indirect taxes, PAGCOR is undoubtedly exempt from such taxes because the law ‘exempts from taxes persons or entlias contracting with PAGCOR in casino operations, Although, differently worded, he provision clearly exempts PAGCOR from indirect taxes. Infact, I goes one step further by granting tax exempt status to persons dealing with PAGCOR in casino operations ‘Therefore, while it was proper for PAGCOR not to pay the 10% VAT charged by Acesite, the latter is not lable for the payment oft as its exempt in this particular transaction by operation of law to pay the indirect tax. Such exemption falls Within tne former Section 102 (b) (3) ofthe 1977 Tax Code, as amended (now Sec. 108 [b] [3] of R.A. 8424), ‘THE OWNER OF REAL PROPERTY MAY EXERCISE RIGHT OF REDEMPTION EVEN BEYOND THE PRESCRIBEO PERIOD OF ONE YEAR UNDER PD 464 igan Bay Manufacturing Corporation v. Dy GIR. Nos. 140836 & 140907 June 8, 2007 FACTS: This is a Petition for Review on Certiorari under Rule 45 seeking to set aside the decision and resolution of the Court of Appeals (CA) denying petitioner's Motion for Reconsideration, Petitioners ligan Bay Manufacturing Corp. (1BMC) and United Coconut Oil Mils (UNICOM) owns parcel of land wherein its ol mils were constructed. Respondent Henry Dy was one of the suppliers that provided electrical and construction supplies for the said ol mil. | nsnnanonsinsieaeiaesinstteensertetnsaitiet essedVELASCO CASES Because of petitioners’ delinquency in paying its reel estate taxes, the disputed lot was levied, On November 9, 1988 a public auction sale was conducted and respondent was the highest bidder. On the same day, he registered the catiicate Of sale withthe Register of Deeds. Thereafter, petitioners paid the redemption price within one (1) year. ‘Thus, on November 2, 1989, the provincial treasurer issued a Certficate of Redemption in favor of petioners. (On November 27, 1989, the provincial treasurer allegedly informed petitoners of an additonal redemption price, However, re evidence was shown that pelitonere received such information, Because of petitioners’ deficiency in additonal redemption payment, espondent requested that a final deed of sale be executed in his favor pursuant to sec. 80 of PD 484 ("Enacting a Real Property Tax Code’). The provincial treasurer denied such request ‘Thereafter, respondent fled 2 case for Mandamus with Damages before the Regional Trial Court (RTC). RTC ruled ‘against respondent, arguing that herein petitioners redeemed the property witin the time allowed under sac. 78 of PD ‘484, whichis one year from the date ofthe registration of sale ofthe property. On appeal to CA, the latter ruled that there \was no valid redemption due to petitioners failure to pay the additional amount demanded by the provincial treasurer “Thus, tis petion for review, ISSUE: Was there a valid redemption despite deficiency in petitioners’ redemption payment? HELD: Yes, there was a valid redemption despite deficiency n petitioners’ redemption payment. The applicable law is PD 404. Sec. 78 of PD 464 provides forthe redemption of real property after the sale on execution due to tax delinquency. AS provided therein, the period within which the redemptioner may exercise hiner right of redemption is t year from the date of registration ofthe sale, In this case, the delinquency sale was conducted on November 8, 1988, when Henry Dy emergad as the highest bidder. On the same day, Henry Dy registered a Certificate of Sale with the Register of Deeds. UNICOM then exercised its right to redeem on November 2, 1989; therefore, UNICOM had exercised its right to redeem the property within the 1 year redemption period. The Provincial Treasurers letters’ which were submilled as evidence to prove that there was 3 deficiency in UNIGOM's redemption payment, did not prove that UNICOM recelved such letters; thus, there was Substantial compliance of the requirements of the law. In Comet v. Court of Appeals, the Court allowed partes in several cases to perfect thelr ight of redemption even beyand the presoribed period Inthe light ofthe established policy to aid rather than to defeat the right of redemption the redemption made by UNICOM was upheld, ESTABLISHMENT BUILT BY HOSPITALS TO HOUSE ITS ACCREDITED DOCTORS NOT CLASSIFIED AS "COMMERCIAL" FOR ASSESSMENT PURPOSES City Assessor of Cebu City v. Association of Benevola De Cebu, Inc. GR. No, 152804 June 8, 2007 FACTS: This is @ Pettion for Review on Certiorari under Rule 45 assaling the Decision of the Court of Appeals (CA), whicn affrmed the Decision of the Central Board of Assessment Appeals (CBAA) and its Resolution denying the Motion for Reconsideration fled by petitioner Cebu City Assessor (City Assessor). The CBAA upheld tne Decsion ofthe Local Board of Assessment Appeals, which overtumed the 35% assessment rate of the City Assessor and ruled that respondent Association of Benevola De Cebu, Inc. (ABC) is entiled to a 10% assessment rate for ts Medical Arts Center buiaing ABC is a non-stock, non-profit arganizaion and the owner of Chang Hua Hospital (CHH}), ABC constructed CHH Medical ‘Aris Center (CHHMAC) to be used as clinics of iis accredited doctors paying rentals. The City Assessor assessed CHHMAC as "commercial and used the 36% assessment level for commercial buildings instead of the 10% assessment level currenty imposed for CHH and its eoparate buldings fr Dietary and Records department ‘The City Assessor argued that CHHMAC is a separate bulging, located 100 meters away frorn CHH, and hence not an ‘extension nor an integral part of CHH, Petitioner further argued that the bulding Is principally and actually used 33 Ciinics/spaces for rent fo doctors from which respondent derives income from i, and thus classiied as "commercial based fon Sec. 10 of Local Assessment Regulations No. 1-92 issued by the Department of Finance (DOF) which considers the ‘ctual use of real property as basis for is assessment, Finally, petitioner asserted that while private clinics are considered fs facilites, they are not incidental to nor reasonably necessary to the hospital asthe istter can sil function without them [ABC contended thal CHHMAC is actually, direct, and exclusively part af CHH and that itis similarly stated with the buildings housing its Dietary and Records department which are completely separate from CHH but are imposed the 10% special assessment level. Finally, ABC argued that atthough not indispensable, CHHMAC is incidental and reasonably ‘ecessary tothe hospital's operations.VELASCO CASES ISSUE: Should the CHHMAC buling be classified as “commercial” subject to the 35% assessment rate? RULING: No, CHHMAC is not a commercial buliding subject fo the 35% assessment rate Under Sec. 6.3 of DOH Adm. Order No. 8-A and the "1989 Revised Rules and Regulations", tertiany hospitals must have 2 pool of physicians in various medical fields in order to maintain its classification as such. Sec. 216 in relation to Sec 248 of the Local Government Code provides that all lands, dullings, and other improvements thereon actually, directiy ‘and exclusively used for hospitals shal be classified a: special. “The Fequirement under Sec. 6.3 af DOH A.O, No. 6E-A is precisely the function of CHHMAC. Those physicians holding lnics in CHAMAC carry out and full their role in the hospitals services to is patients. The fact that they are holding Office in a separate building does not take away the nature and essence of thelr services to the overall operation of CHK, ‘The difference would ie # CHHMAC is open to non-accredited docioss, which is wanting in this case. The CHHMAC facil, while seemingly not indispensable, is definitely incidental to and reasonably necessary for the operations of CHH “Therefore, being an integral part of CHH, the same assessment level of 10% in line with City Tax Ordinance LXX of Gebu Citys applicable. Furthermore, CHEMAC is not operated primarily for profit. ‘Therefore, CHHMAC should not be classified as a commercial building and should not be subjected to the 35% assessment rate, ‘TCC ARE IMMEDIATELY VALID AND EFFECTIVE AFTER THEIR ISSUANCE AND IS NOT SUBJECT TO A SUSPENSIVE CONDITION Pilipinas Shall Petroleum Corporation v. CIR GAR. No. 172598 December 21, 2007 FACTS: This case Is a Petition for Review on Certiorari under Rule 45 assailing the decision of the Court of Tax Appeals (CTA) En Banc which upheld respondent's assessment against petitioner for deficiency excise taxes for the taxable years 11802 and 1994 to 1997, reversing the decision ofthe CTA Division, Bureau of intemal Revenue (BIR) sent a collection letter for deficiency excise tax to Pettioner Pilipinas Shell Petroleum Corporation (PSPC}, the Philippine subsidiary of Shel, amounting to P1,706,028,008.06 for the taxable years 1892 and 11964 to 1997, inclusive of delinquency surcharges and interest. These tax deficiencies were already paid by PSPC with the Tax Credit Certieates (TCCs) kt acquired from BOl-ragistered companios. The BIR alleged that PSPC is not a {qualified transferee of sald TCs. Petitioner protasted the oallection letter but was denied by te BIR, Because of the alleged inaction by the BIR, PSPC fied a petition for review before the Court of Tax Appeals (CTA). The CTA ruled that the use of the TCCs wes legal end valid, and that the respondents attempt to collect alleged delinquent taxes anc penalties fram PSPC without an assessment constiutes a denial of due process, The respondent then elevated the case fo the Court of Appeals which, to this day is stil pending resolution. Despite the pendency of the case, the PSPC was informed of the cancellation ofthe fist batch of TCC transferred to PSPC. PSPC received an assessment lator from the respondent for the excise tax deficiencies, surcharges, and interest based on the first batch of cancelled TCC. PSPC was enstrained to file another pettion for review before the CTA, ‘The CTA Division ruled in far ofthe petitioner stating thatthe respondent failed to prove with convincing evidence that the 760s transferred to PSPC were fraudulently issued. The CTA En Banc held that the TCCs carry a suspensive condition hati, thei issuance was subject to post aualt inorder to determine if the holder is indeed qualifies to use it ISSUE: Are the TCCs subject to a suspensive concition of post-audlt in order to determine that the holder is qualified to use it? HELD: No, the Supreme Court held that @ TCC cannot be subject to a suspensive condition as it contrary to its nature. A TEC is an undertaking by the goverment through the IR or DOF, acknowledging that a taxpayer is entilad to a certain amount of tax exedlt from an avarpayment of income taxes, a direct benefit granted by law or other sources and instances Granted by law such as on specifc unused input taxes and excise taxes on certain goods. As such, tax cred is transferable in accordance with pertinent laws, rules and regulations. Hence, TCs are immediately valid and affective after their issuance. ‘TAX CREDIT IS NOT TAX REFUND Commisioner of Internal Revenue v. Bicolandia Drug Corporation GRR No. 148083 July 21,2006 FACTS: R.A 7432 which granted senior citzens 2 20% discount from all establishments relative to the use of transportation services, hotels and similar lodging establishments, restaurants and recreation centers and purchase of ‘mesicines anywhere in the country. The law also provided that the private establishments giving the discount to senior tiizens may elaim the cast as tax credit. In compliance with the law, the Bureau of Intornal Revenue (BIR) Issued Reverue Regulations No, 2-04 (R.R. 2-64)VELASCO CASES Respondent Bicolandia Orug Corporation, a corporation engaged in the business of retaling pharmaceutical products Under the business style of Mercury Drug, granted the 20% ssles discount to qualified senior citzens purchasing their fedicines in compliance with R.A, No. 7432, Respondent treated this discount as a deducton from its gross income in ‘compliance with R.R. 2-94, which implemented R.A. No. 7432. Respondent filed a claim for tax refund or credit with the Appellate Division of the BIR because is net losses for the year 1995 prevented it from benefiting from the treatment of sales discounts as a deduction from gross sales during the said taxable year. It alleged that petitioner Commissioner of intemal Revenue erred in treating the 20% sales discount given to senior Citizens as deduction from its gross income for income tax purposes or other percentage tax purposes rathar than as a fax credit. Respondent appealed to the Court of Tax Appeals (CTA) in order to toll the running of two year prescriptive peviod to fle a claim for func. CTA declared thatthe provisions of R.A, No, 7432 would prevail over Secon 2() of R-R 5°94, whose ‘defintion of tax cred deviated from the Intendment of the law, and as a resul, partially granted the respondents claim fora refund. On appeal. the Court of Appeals (CA) madified the decision of the CTA as the law provided for @ tax credit, not a tax refund, ISSUE: Did CA erred in holding that the 20% sales discount granted to qualifed senior citizens by the respondent pursuant to R.A, No. 7432 may be claimed as a tax credit, instead of @ deduction from gross income or gross sales? HELD: No, Under RR, 2-94, the tax crasit is the amount representing the 20% discount granted to a qualified senior citizen by all establishments, which discount shall be deducted by the said establishments from their gross income for income tax purposes and from their gross sales for value-added tax or other percantage tax purposes. It equated tax Credit with tax daduetion, CA expressly recognized the differences between a tax credt and a tax refund, and stated that the same ara not synonymous with each other, which is why it modified the ruling of the CTA, RAR, 2-94 is stl subordinate to R.A. No. 7432, and in cases of conflict, the implementing rule will not prevail over the law it seeks to implement. R.R, 2-24 is null and void for failing to conform to the law it sought to implement, must be ruled then that under R.A. No, 7432, which was effective atthe lime, respondent is ented to is claim of a tax creat, and the ruling of the CA must be affrmed. Under A.R. No. 42008, only the actual amount of the discount granted or = sales discount rot exceeding 20% ofthe gross selling price can be deducted from the gross income, nei cf value added tax, if applicable, fr income tax purposes, and from gross sales or gross receipts of the business enterprise concemed, for VAT or obher percentage tex purposes. Under tne new law, there s no lax credit fo speak of, only deductions, but as it was RLA. No. Fas in force at the time this case arose, this law controls the result inthis paticular case, fer which reason the pettion must fi