CASE DIGEST

ARTURO M. DE CASTRO vs. JUDICIAL AND BAR COUNCIL (JBC) G. R. No. 191002. March 17, 2010.

FACTS: This case is based on multiple cases field with dealt with the controversy that has arisen from the forthcoming compulsory requirement of Chief Justice Puno on May 17, 2010 or seven days after the presidential election. On December 22, 2009, Congressman Matias V. Defensor, an ex officio member of the JBC, addressed a letter to the JBC, requesting that the process for nominations to the office of the Chief Justice be commenced immediately. In its January 18, 2010 meeting en banc, the JBC passed a resolution which stated that they have unanimously agreed to start the process of filling up the position of Chief Justice to be vacated on May 17, 2010 upon the retirement of the incumbent Chief Justice. As a result, the JBC opened the position of Chief Justice for application or recommendation, and published for that purpose its announcement in the Philippine Daily Inquirer and the Philippine Star. In its meeting of February 8, 2010, the JBC resolved to proceed to the next step of announcing the names of the following candidates to invite to the public to file their sworn complaint, written report, or opposition, if any, not later than February 22, 2010. Although it has already begun the process for the filling of the position of Chief Justice Puno in accordance with its rules, the JBC is not yet decided on when to submit to the President its list of nominees for the position due to the controversy in this case being unresolved. The compiled cases which led to this case and the petitions of intervenors called for either the prohibition of the JBC to pass the shortlist, mandamus for the JBC to pass the shortlist, or that the act of appointing the next Chief Justice by GMA is a midnight appointment. A precedent frequently cited by the parties is the In Re Appointments Dated March 30, 1998 of Hon. Mateo A. Valenzuela and Hon. Placido B. Vallarta as Judges of the RTC of Branch 62, Bago City and of Branch 24, Cabanatuan City, respectively, shortly referred to here as the Valenzuela case, by which the Court held that Section 15, Article VII prohibited the exercise by the President of the power to appoint to judicial positions during the period therein fixed. 

ISSUES: 1. Whether or not the petitioners have legal standing.

2. Whether or not there is justiciable controversy that is ripe for judicial determination.

3. Whether or not the incumbent President can appoint the next Chief Justice.

4. Whether or not mandamus and prohibition will lie to compel the submission of the shortlist of nominees by the JBC. 

HELD:1.Petitioners have legal standing because such requirement for this case was waived by the Court. Legal standing is a peculiar concept in constitutional law because in some cases, suits are not brought by parties who have been personally injured by the operation of a law or any other government act but by concerned citizens, taxpayers or voters who actually sue in the public interest.” But even if, strictly speaking, the petitioners “are not covered by the definition, it is still within the wide discretion of the Court to waive the requirement and so remove the impediment to its addressing and resolving the serious constitutional questions raised.” 

2. There is a justiciable issue. The court holds that the petitions set forth an actual case or controversy that is ripe for judicial determination. The reality is that the JBC already commenced the proceedings for the selection of the nominees to be included in a short list to be submitted to the President for consideration of which of them will succeed Chief Justice Puno as the next Chief Justice. Although the position is not yet vacant, the fact that the JBC began the process of nomination pursuant to its rules and practices, although it has yet to decide whether to submit the list of nominees to the incumbent outgoing President or to the next President, makes the situation ripe for judicial determination, because the next steps are the public interview of the candidates, the preparation of the short list of candidates, and the “interview of constitutional experts, as may be needed.” The resolution of the controversy will surely settle – with finality – the nagging questions that are preventing the JBC from moving on with the process that it already began, or that are reasons persuading the JBC to desist from the rest of the process. 

3.Prohibition under section 15, Article VII does not apply to appointments to fill a vacancy in the Supreme Court or to other appointments to the judiciary. The records of the deliberations of the Constitutional Commission reveal that the framers devoted time to meticulously drafting, styling, and arranging the Constitution. Such meticulousness indicates that the organization and arrangement of the provisions of the Constitution were not arbitrarily or whimsically done by the framers, but purposely made to reflect their intention and manifest their vision of what the Constitution should contain. As can be seen, Article VII is devoted to the Executive Department, and, among others, it lists the powers vested by the Constitution in the President. The presidential power of appointment is dealt with in Sections 14, 15 and 16 of the Article. Had the framers intended to extend the prohibition contained in Section 15, Article VII to the appointment of Members of the Supreme Court, they could have explicitly done so. They could not have ignored the meticulous ordering of the provisions. They would have easily and surely written the prohibition made explicit in Section 15, Article VII as being equally applicable to the appointment of Members of the Supreme Court in Article VIII itself, most likely in Section 4 (1), Article VIII. 

4.Writ of mandamus does not lie against the JBC. Mandamus shall issue when any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act that the law specifically enjoins as a duty resulting from an office, trust, or station. It is proper when the act against which it is directed is one addressed to the discretion of the tribunal or officer. Mandamus is not available to direct the exercise of a judgment or discretion in a particular way.  For mandamus to lie, the following requisites must be complied with: (a) the plaintiff has a clear legal right to the act demanded; (b) it must be the duty of the defendant to perform the act, because it is mandated by law; (c) the defendant unlawfully neglects the performance of the duty enjoined by law; (d) the act to be performed is ministerial, not

discretionary; and (e) there is no appeal or any other plain, speedy and adequate remedy in the ordinary course of law.

Caltex Vs. Palomar (Case Digest) G.R. No. L-19650

Facts: In 1960, the petitioner, Caltex (Philippines) Inc., launched a promotional scheme called "Caltex Hooded Pump Contest" which calls for participants to estimate the actual number of liters a hooded gas pump of each Caltex Station will dispense within a specific period. Such contest is open to all motor vehicle owners and/or licensed drivers. There is no required fee or consideration, and there is no need for the contestants to purchase the products of Caltex.  The forms are available upon request at each Caltex Station and there is a sealed can where accomplished entry stubs may be deposited.  Then, seeing the extensive use of mails for publicizing and transmission of communication purposes, Caltex sent representatives to the postal authorities for advance clearing for the use of mails for the contest.  But then, the Postmaster  General, Enrico Palomar, denied the request of Caltex in view of Sections 1954 (a), 1982 and 1983 of the Revised Administrative Code. The aforesaid sections prohibits the use of mail conveying any information concerning non-mailable schemes, such as lottery, gift enterprise, or similar scheme. Consequently, Caltex invoked a judicial intervention by filing a petition of declaratory relief against the Postmaster General, ordering the Postmaster General to allow the petitioner to use the mails to bring the contest to the attention of the public and that the aforesaid contest is not violative of the Postal Law.

Issue:Whether or not the scheme proposed by Caltex is within the coverage of the prohibitive provisions of the Postal Law inescapably requires an inquiry into the intended meaning of the words used therein.

Held:No. Caltex may be granted declaratory relief, even if Enrico Palomar simply applied the clear provisions of the law to a given set of facts as embodied in the rules of the contest.  For, construction is the art or process of discovering and expounding the meaning and intention of the authors of the law with respect to its application to a given case is not explicitly provided for in the law.

In this case, the prohibitive provisions of the Postal Law inescapably required an inquiry into the intended meaning of the words used therein.  Also, the Court is tasked to look beyond the fair exterior, to the substance, in order to unmask the real element that the law is seeking to prevent or prohibit.Published: January 28, 2011   

Source: http://www.shvoong.com/law-and-politics/law/2108497-caltex-vs-palomar-case-digest/#ixzz2XQAjw19Q

[G.R. No. 153866.  February 11, 2005]

COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. SEAGATE TECHNOLOGY (PHILIPPINES), respondent.

D E C I S I O NPANGANIBAN, J.:

Business companies registered in and operating from the Special Economic Zone in Naga, Cebu -- like herein respondent -- are entities exempt from all internal revenue taxes and the implementing rules relevant thereto, including the value-added taxes or VAT.  Although export sales are not deemed exempt transactions, they are nonetheless zero-rated.  Hence, in the present case, the distinction between exempt entities and exempt transactions has little significance, because the net result is that the taxpayer is not liable for the VAT.  Respondent, a VAT-registered enterprise, has complied with all requisites for claiming a tax refund of or credit for the input VAT it paid on capital goods it purchased.  Thus, the Court of Tax Appeals and the Court of Appeals did not err in ruling that it is entitled to such refund or credit.

The Case

Before us is a Petition for Review under Rule 45 of the Rules of Court, seeking to set aside the May 27, 2002 Decision of the Court of Appeals (CA) in CA-GR SP No. 66093.  The decretal portion of the Decision reads as follows:“WHEREFORE, foregoing premises considered, the petition for review is DENIED for lack of merit.

The Facts

The CA quoted the facts narrated by the Court of Tax Appeals (CTA), as follows:“As jointly stipulated by the parties, the pertinent facts x x x involved in this case are as follows:

1.  [Respondent] is a resident foreign corporation duly registered with the Securities and Exchange Commission to do business in the Philippines, with principal office address at the new Cebu Township One, Special Economic Zone, Barangay Cantao-an, Naga, Cebu;

2.  [Petitioner] is sued in his official capacity, having been duly appointed and empowered to perform the duties of his office, including, among others, the duty to act and approve claims for refund or tax credit;

3.  [Respondent] is registered with the Philippine Export Zone Authority (PEZA) and has been issued PEZA Certificate No. 97-044 pursuant to Presidential Decree No. 66, as amended, to engage in the manufacture of recording components primarily used in computers for export.  Such registration was made on 6 June 1997;

4.  [Respondent] is VAT [(Value Added Tax)]-registered entity as evidenced by VAT Registration Certification No. 97-083-000600-V issued on 2 April 1997;

5.  VAT returns for the period 1 April 1998 to 30 June 1999 have been filed by [respondent];

6.  An administrative claim for refund of VAT input taxes in the amount of P28,369,226.38 with supporting documents (inclusive of the P12,267,981.04 VAT input taxes subject of this Petition for Review), was filed on 4 October 1999 with Revenue District Office No. 83, Talisay Cebu;

7.  No final action has been received by [respondent] from [petitioner] on [respondent’s] claim for VAT refund.“The administrative claim for refund by the [respondent] on October 4, 1999 was not acted upon by the [petitioner] prompting the [respondent] to elevate the case to [the CTA] on July 21, 2000 by way of Petition for Review in order to toll the running of the two-year prescriptive period.“For his part, [petitioner] x x x raised the following Special and Affirmative Defenses, to wit:

1.  [Respondent’s] alleged claim for tax refund/credit is subject to administrative routinary investigation/examination by [petitioner’s] Bureau;

2.  Since ‘taxes are presumed to have been collected in accordance with laws and regulations,’ the [respondent] has the burden of proof that the taxes sought to be refunded were erroneously or illegally collected x x x;

3.  In Citibank, N.A. vs. Court of Appeals, 280 SCRA 459 (1997), the Supreme Court ruled that:

“A claimant has the burden of proof to establish the factual basis of his or her claim for tax credit/refund.”

4.  Claims for tax refund/tax credit are construed in ‘strictissimi juris’ against the taxpayer.  This is due to the fact that claims for refund/credit [partake of] the nature of an exemption from tax.  Thus, it is incumbent upon the [respondent] to prove that it is indeed entitled to the refund/credit sought.  Failure on the part of the [respondent] to prove the same is fatal to its claim for tax credit.  He who claims exemption must be able to justify his claim by the clearest grant of organic or statutory law.  An exemption from the common burden cannot be permitted to exist upon vague implications;

5.  Granting, without admitting, that [respondent] is a Philippine Economic Zone Authority (PEZA) registered Ecozone Enterprise, then its business is not subject to VAT pursuant to Section 24 of Republic Act No. ([RA]) 7916 in relation to Section 103 of the Tax Code, as amended.  As [respondent’s] business is not subject to VAT, the capital goods and services it alleged to have purchased are considered not used in VAT taxable business.  As such, [respondent] is not entitled to refund of input taxes on such capital goods pursuant to Section 4.106.1 of Revenue Regulations No. ([RR])7-95, and of input taxes on services pursuant to Section 4.103 of said regulations.

6.  [Respondent] must show compliance with the provisions of Section 204 (C) and 229 of the 1997 Tax Code on filing of a written claim for refund within two (2) years from the date of payment of tax.’“On July 19, 2001, the Tax Court rendered a decision granting the claim for refund.”

Ruling of the Court of Appeals

The CA affirmed the Decision of the CTA granting the claim for refund or issuance of a tax credit certificate (TCC) in favor of respondent in the reduced amount of P12,122,922.66.  This sum represented the unutilized but substantiated input VAT paid on capital goods purchased for the period covering April 1, 1998 to June 30, 1999.

The appellate court reasoned that respondent had availed itself only of the fiscal incentives under Executive Order No. (EO) 226 (otherwise known as the Omnibus Investment Code of 1987), not of those under both Presidential Decree No. (PD) 66, as amended, and Section 24 of RA 7916.  Respondent was, therefore, considered exempt

only from the payment of income tax when it opted for the income tax holiday in lieu of the 5 percent preferential tax on gross income earned.  As a VAT-registered entity, though, it was still subject to the payment of other national internal revenue taxes, like the VAT.

Moreover, the CA held that neither Section 109 of the Tax Code nor Sections 4.106-1 and 4.103-1 of RR 7-95 were applicable.  Having paid the input VAT on the capital goods it purchased, respondent correctly filed the administrative and judicial claims for its refund within the two-year prescriptive period.  Such payments were -- to the extent of the refundable value -- duly supported by VAT invoices or official receipts, and were not yet offset against any output VAT liability.

Hence this Petition.Sole Issue

Petitioner submits this sole issue for our consideration:“Whether or not respondent is entitled to the refund or issuance of Tax Credit Certificate in the amount of P12,122,922.66 representing alleged unutilized input VAT paid on capital goods purchased for the period April 1, 1998 to June 30, 1999.”

The Court’s Ruling

The Petition is unmeritorious.

Lambino Vs. Comelec Case Digest Lambino Vs. Comelec 

G.R. No. 174153

Oct. 25 2006

Facts: Petitioners (Lambino group) commenced gathering signatures for an initiative petition to change the 1987 constitution, they filed a petition with the COMELEC to hold a plebiscite that will ratify their initiative petition under RA 6735. Lambino group alleged that the petition had the support of 6M individuals fulfilling what was provided by art 17 of the constitution. Their petition changes the

1987 constitution by modifying sections 1-7 of Art 6 and sections 1-4 of Art 7 and by adding Art 18. the proposed changes will shift the present bicameral- presidential form of government to unicameral- parliamentary. COMELEC denied the petition due to lack of enabling law governing initiative petitions and invoked the Santiago Vs. Comelec ruling that RA 6735 is inadequate to implement the initiative petitions. 

Issue: 

Whether or Not the Lambino Group’s initiative petition complies with Section 2, Article XVII of the Constitution on amendments to the Constitution through a people’s initiative. 

Whether or Not this Court should revisit its ruling in Santiago declaring RA 6735 “incomplete, inadequate or wanting in essential terms and conditions” to implement the initiative clause on proposals to amend the Constitution. 

Whether or Not the COMELEC committed grave abuse of discretion in denying due course to the Lambino Group’s petition. 

Held: According to the SC the Lambino group failed to comply with the basic requirements for conducting a people’s initiative. The Court held that the COMELEC did not grave abuse of discretion on dismissing the Lambino petition. 

1. The Initiative Petition Does Not Comply with Section 2, Article XVII of the Constitution on Direct Proposal by the People 

The petitioners failed to show the court that the initiative signer must be informed at the time of the signing of the nature and effect, failure to do so is “deceptive and misleading” which renders the initiative void. 

2. The Initiative Violates Section 2, Article XVII of the Constitution Disallowing Revision through Initiatives 

The framers of the constitution intended a clear distinction between “amendment” and “revision, it is intended that the third mode of stated in sec 2 art 17 of the constitution may propose only

amendments to the constitution. Merging of the legislative and the executive is a radical change, therefore a constitutes a revision. 

3. A Revisit of Santiago v. COMELEC is Not Necessary 

Even assuming that RA 6735 is valid, it will not change the result because the present petition violated Sec 2 Art 17 to be a valid initiative, must first comply with the constitution before complying with RA 6735 

Petition is dismissed.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-15385             June 30, 1960

ALEJANDRA BUGARIN VDA. DE SARMIENTO, plaintiff-appellee, vs.JOSEFA R. LESACA, defendant-appellant.

Juan R. Arbizo for appellee.Pastor de Castro for appellant.

BAUTISTA ANGELO, J.:

On December 31, 1949, plaintiff filed a complaint in the Court of First Instance of Zambales praying for the rescission of the contract of sale executed between her and defendant for failure of the latter to place the former in the actual physical possession of the lands she bought.

After issues were joined, the parties submitted the case for decision upon the following stipulation of facts: that on January 18, 1949, plaintiff bought from defendant two parcels of land for P5,000; that after the sale, plaintiff tried to take actual physical possession of the lands but was prevented from doing so by one Martin Deloso who claims to be the owner thereof; that on February 1, 1949, plaintiff instituted an action before the Tenancy Enforcement Division of the Department of Justice to oust said Martin Deloso from the possession of the lands, which action she later abandoned for reasons known only to her; that on December 12, 1949, plaintiff wrote defendant asking the latter either to change the lands sold with another of the same kind and class or to return the purchase price together with the expenses she had incurred in the execution of the sale, plus 6 per cent interest; and that since defendant did not agree to this proposition as evidenced by her letter dated December 21,1949, plaintiff filed the present action.

On April 11, 1957, the trial court rendered judgment declaring the deed of sale entered into between plaintiff and defendant rescinded, and ordering the latter to pay the former the sum of P5,000, representing the purchase price of the lands, plus the amount of P50.25 which plaintiff spent for the execution and registration of the deed of sale, with legal interest on both sums from January 18, 1949. Defendant, in due time, appealed to the Court of Appeals, but the case was certified to us on the ground that the questions involved are purely legal.

The issue posed by appellant is whether the execution of the deed of sale in a public document (Exhibit A) is equivalent to delivery of possession of the lands sold to appellee thus relieving her of the obligation to place appellee in actual possession thereof.

Articles 1461 and 1462 of the old Civil Code provide:

ART. 1461. The vendor is bound to deliver and warrant the thing which is the subject-matter of the sale.

ART. 1462. The thing sold shall be deemed delivered when the vendee is placed in the control and possession thereof.

If the sale should be made by means of a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the subject-matter of the contract unless the contrary appears or is clearly to be inferred from such instrument.

From the above it is clear that when a contract of sale is executed the vendor is bound to deliver to the vendee the thing sold by placing the vendee in the control and possession of the subject-matter of the contract. However, if the sale is executed by means of a public instrument, the mere execution of the instrument is equivalent to delivery unless the contrary appears or is clearly to be inferred from such instrument.

The question that now arises is: Is there any stipulation in the sale in question from which we can infer that the vendor did not intend to deliver outright the possession of the lands to the vendee? We find none. On the contrary, it can be clearly seen therein that the vendor intended to place the vendee in actual possession of the lands immediately as can be inferred from the stipulation that the vendee "takes actual possession thereof ... with full rights to dispose, enjoy and make use thereof in such manner and form as would be most advantageous to herself." The possession referred to in the contract evidently refers to actual possession and not merely symbolical inferable from the mere execution of the document.

Has the vendor complied with this express commitment? she did not. As provided in Article 1462, the thing sold shall be deemed delivered when the vendee is placed in the control and possession thereof, which situation does not here obtain because from the execution of the sale up to the present the vendee was never able to take possession of the lands due to the insistent refusal of Martin Deloso to surrender them claiming ownership thereof. And although it is postulated in the same article that the execution of a public document is equivalent to delivery, this legal fiction only holds true when there is no impediment that may prevent the passing of the property from the hands of the vendor into those of the vendee. This is what we said in a similar case:

The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is considered to be delivered when it is placed "in the hands and possession of the vendee." (Civ. Code, art. 1462.) It is true that the same article declares that the execution of a public instrument is equivalent to the delivery of the thing which is the object of the contract, but in order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have such control over the thing sold that, at the moment of the sale, its material delivery could have been made. It is not enough to confer upon the purchaser the ownership and right of possession. The thing sold must be placed in his control. When there is no impediment whatever to prevent the thing sold passing into the tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is sufficient. But if, notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and material tenancy of the thing and make use of it himself or through another in his name, because such tenancy and enjoyment are opposed by the interposition of another will, then fiction yields to reality — the delivery has not been effected. (Addison vs. Felix and Tioco, 38 Phil., 404; See also Garchitorena vs. Almeda, 48 Off. Gaz., No., 8, 3432; 3437)

The next question to resolve is: Can plaintiff rescind the contract of sale in view of defendant's failure to deliver the possession of the lands?

We are inclined to uphold the affirmative. While defendant contends that rescission can be availed of only in the cases enumerated in Articles 1291 and 1292 of the old civil Code and being a subsidiary remedy (Article 1294) it can only be resorted to when no other remedy is available, yet we agree with plaintiff's contention that this action is based on Article 1124 of the same Code, which provides:

Art 1124. The right to resolve reciprocal obligations, in case one of the obligors should fail to comply with that which is incumbent upon him, is deemed to be implied.

The person prejudiced may choose between exacting the fulfillment of the obligation or its resolution with indemnity for losses and payment of interest in either case. He may also demand the resolution of the obligation even after having elected its fulfillment, should the latter be found impossible.

Undoubtedly in a contract of purchase and sale the obligation of the parties is reciprocal, and, as provided by the law, in case one of the parties fails to comply with what is incumbent upon him to do , the person prejudiced may either exact the fulfillment of the obligation or rescind the sale. Since plaintiff chose the latter alternative, it cannot be disputed that her action is in accordance with law.

We agree with the trial court that there was no fraud in the transaction in question but rather a non-fulfillment by the plaintiff-appellee C.N. Hodges of his obligation, as vendor, to deliver the things, which were the subject-matter of the contract, to the defendant-appellant Alberto Granada, as purchaser thereof (article 1461, Civil Code), and place them in the latter's control and possession (article 1462, Civil Code) which was not done. Inasmuch as the obligations arising from the contract of purchase and sale, Exhibit A, which was entered into by the plaintiff-appellee and the defendant-appellant, are reciprocal and the former had failed to comply with that which was incumbent upon him, the latter has the implied right to resolve them, and he may choose between exacting from the vendor the fulfillment of the obligation or its resolution with indemnity for damages and payment of interest in either case (article 1124, Civil Code). Inasmuch as the defendant-appellant had chosen to rescind the aforesaid contract of purchase and sale in his cross-complaint, there arose the necessity on the part of the plaintiff-appellee, to return the purchase price with interest thereon, and on the part of the defendant-appellant, to restore the things which were the subject-matter thereof, in case he had received them (article 1295, Civil Code). (Hodges vs. Granada, 59 Phil., 429, 432; See also Pabalan vs. Velez, 22 Phil., 29; Addison vs. Felix and Tioco, supra; Rodriguez vs. Flores, 43 Off. Gaz., No. 6, 2247.)

Wherefore the decision appealed from is affirmed, with costs against defendant-appellant.

San Miguel Corporation vs CA Case Digest San Miguel Corporation vs. Court of Appeals 

G.R. No. 146775

January 30, 2002

Facts: On 17 October 1992, the Department of Labor and Employment conducted a routine inspection in the premises of San Miguel Corporation in Sta. Filomena, Iligan City. In the course of the inspection, it was discovered that there was underpayment by SMC of regular Muslim holiday

pay to its employees. DOLE sent a copy of the inspection result to SMC and it was received by and explained to its personnel officer Elena dela Puerta. 

SMC contested the findings and DOLE conducted summary hearings on 19 November 1992, 28 May 1993 and 4 and 5 October 1993. Still, SMC failed to submit proof that it was paying regular Muslim holiday pay to its employees. Hence, Director IV of DOLE Iligan District Office issued a compliance order directing SMC to consider Muslim holidays as regular holidays and to pay both its Muslim and non-Muslim employees holiday pay within thirty (30) days from the receipt of the order. SMC appealed but it was dismissed.

Issue: Whether or not the employees are entitled with regular Muslim holiday pay. 

Ruling: The employees are entitled to regular Muslim holiday pay. Muslim holidays are provided under Articles 169 and 170, Title I, Book V, of Presidential Decree No. 1083, otherwise known as the Code of Muslim Personal Laws, which states: Official Muslim holidays. — The following are hereby recognized as legal Muslim holidays: 

(a) 'Amun Jadîd (New Year), which falls on the first day of the first lunar month of Muharram; 

(b) Maulid-un-Nabî (Birthday of the Prophet Muhammad), which falls on the twelfth day of the third lunar month of Rabi-ul-Awwal, 

(c) Lailatul Isrâ Wal Mi'râj (Nocturnal Journey and Ascension of the Prophet Muhammad), which falls on the twenty-seventh day of the seventh lunar month of Rajab: 

(d) 'Îd-ul-Fitr (Hari Raya Puasa), which falls on the first day of the tenth lunar month of Shawwal, commemorating the end of the fasting season; and 

(e) 'Îd-ul-Adhâ (Hari Raya Haji),which falls on the tenth day of the twelfth lunar month of Dhû'l-Hijja. 

Art. 170 provides the provinces and cities where officially observed. — (1) Muslim holidays shall be officially observed in the Provinces of Basilan, Lanao del Norte, Lanao del Sur, Maguindanao, North Cotabato, Iligan, Marawi, Pagadian, and Zamboanga and in such other Muslim provinces and cities as may hereafter be created; (2) Upon proclamation by the President of the Philippines, Muslim holidays may also be officially observed in other provinces and cities. 

The foregoing provisions should be read in conjunction with Article 94 of the Labor Code, which provides: Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers; (b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; 

However, there should be no distinction between Muslims and non-Muslims as regards payment of benefits for Muslim holidays. The Court reminds the respondent-appellant that wages and other emoluments granted by law to the working man are determined on the basis of the criteria laid down by laws and certainly not on the basis of the worker's faith or religion. 

At any rate, Article 3(3) of Presidential Decree No. 1083 also declares that ". . . nothing herein shall be construed to operate to the prejudice of a non-Muslim." In addition, the 1999 Handbook on Workers' Statutory Benefits states considering that all private corporations, offices, agencies, and entities or establishments operating within the designated Muslim provinces and cities are required to observe Muslim holidays, both Muslim and Christians working within the Muslim areas may not report for work on the days designated by law as Muslim holidays.

Eurotech Industrial Technologies, Inc. v. Edwin Cuizon and Erwin Cuizon

G.R. No. 167552 April 23, 2007Chico-Nazario, J.

FACTS:

Eurotech is engaged in the business of importation and distribution of various European industrialequipment. It has as one of its customers Impact Systems Sales which is a sole proprietorship ownedby Erwin Cuizon.

Eurotech sold to Impact Systems various products allegedly amounting to P91,338.00. Cuizonssought to buy from Eurotech 1 unit of sludge pump valued at P250,000.00 with Cuizons making adown payment of P50,000.00. When the sludge pump arrived from the United Kingdom, Eurotechrefused to deliver the same to Cuizons without their having fully settled their indebtedness toEurotech. Thus, Edwin Cuizon and Alberto de Jesus, general manager of Eurotech, executed a Deedof Assignment of receivables in favor of Eurotech.

Cuizons, despite the existence of the Deed of Assignment, proceeded to collect from Toledo PowerCompany the amount of P365,135.29. Eurotech made several demands upon Cuizons to pay theirobligations. As a result, Cuizons were able to make partial payments to Eurotech. Cuizons’ totalobligations stood at P295,000.00 excluding interests and attorney’s fees.

Edwin Cuizon alleged that he is not a real party in interest in this case. According to him, he wasacting as mere agent of his principal, which was the Impact Systems, in his transaction with Eurotechand the latter was very much aware of this fact.

ISSUE:

Whether or not Edwin exceeded his authority when he signed the Deed of Assignment thereby binding himself personally to pay the obligations to Eurotech

HELD:

No.

Edwin insists that he was a mere agent of Impact Systems which is owned by Erwin and that his status as such is known even to Eurotech as it is alleged in the Complaint that he is being sued in his capacity as the sales manager of the said business venture. Likewise, Edwin points to the Deed of Assignment which clearly states that he was acting as a representative of Impact Systems in said transaction.

Art. 1897. The agent who acts as such is not personally liable to the party with whom he contracts, unless he expressly binds himself or exceeds the limits of his authority without giving such party sufficient notice of his powers.

In a contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another with the latter’s consent. Its purpose is to extend the personality of the principal or the party for whom another acts and from whom he or she derives the authority to act. The basis of agency is representation, that is, the agent acts for and on behalf of the principal on matters within the scope of his authority and said acts have the same legal effect as if they were personally executed by the principal.

elements of the contract of agency: (1) consent, express or implied, of the parties to establish the relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a representative and not for himself; (4) the agent acts within the scope of his authority

An agent, who acts as such, is not personally liable to the party with whom he contracts. There are 2instances when an agent becomes personally liable to a third person. The first is when he expresslybinds himself to the obligation and the second is when he exceeds his authority. In the last instance,the agent can be held liable if he does not give the third party sufficient notice of his powers. Edwindoes not fall within any of the exceptions contained in Art. 1897.

In the absence of an agreement to the contrary, a managing agent may enter into any contracts thathe deems reasonably necessary or requisite for the protection of the interests of his principalentrusted to his management.

Edwin Cuizon acted well-within his authority when he signed the Deed of Assignment. Eurotechrefused to deliver the 1 unit of sludge pump unless it received, in full, the payment for ImpactSystems’ indebtedness. Impact Systems desperately needed the sludge pump for its business sinceafter it paid the amount of P50,000.00 as downpayment it still persisted in negotiating with Eurotech which culminated in the execution of the Deed of Assignment of its receivables from Toledo Power Company. The significant amount of time spent on the negotiation for the sale of the sludge pump underscores Impact Systems’ perseverance to get hold of the said equipment.

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Aggrieved by the adverse ruling of the trial court, petitioner brought the matter to the Court of Appeals which, however, affirmed the 29 January 2002 Order of the court a quo. The dispositive portion of the now assailed Decision of the Court of Appeals states:

WHEREFORE, finding no viable legal ground to reverse or modify the conclusions reached by the public respondent in his Order dated January 29, 2002, it is hereby AFFIRMED.24

Petitioner’s motion for reconsideration was denied by the appellate court in its Resolution promulgated on 17 March 2005. Hence, the present petition raising, as sole ground for its allowance, the following:

THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT RESPONDENT EDWIN CUIZON, AS AGENT OF IMPACT SYSTEMS SALES/ERWIN CUIZON, IS NOT PERSONALLY LIABLE, BECAUSE HE HAS NEITHER ACTED BEYOND THE SCOPE OF HIS AGENCY NOR DID HE PARTICIPATE IN THE PERPETUATION OF A FRAUD.25

To support its argument, petitioner points to Article 1897 of the New Civil Code which states:

Art. 1897. The agent who acts as such is not personally liable to the party with whom he contracts, unless he expressly binds himself or exceeds the limits of his authority without giving such party sufficient notice of his powers.

Petitioner contends that the Court of Appeals failed to appreciate the effect of ERWIN’s act of collecting the receivables from the Toledo Power Corporation notwithstanding the existence of the Deed of Assignment signed by EDWIN on behalf of Impact Systems. While said collection did not revoke the agency relations of respondents, petitioner insists that ERWIN’s action repudiated EDWIN’s power to sign the Deed of Assignment. As EDWIN did not sufficiently notify it of the extent of his powers as an agent, petitioner claims that he should be made personally liable for the obligations of his principal.26

Petitioner also contends that it fell victim to the fraudulent scheme of respondents who induced it into selling the one unit of sludge pump to Impact Systems and signing the Deed of Assignment. Petitioner directs the attention of this Court to the fact that respondents are bound not only by their

principal and agent relationship but are in fact full-blooded brothers whose successive contravening acts bore the obvious signs of conspiracy to defraud petitioner.27

In his Comment,28 respondent EDWIN again posits the argument that he is not a real party in interest in this case and it was proper for the trial court to have him dropped as a defendant. He insists that he was a mere agent of Impact Systems which is owned by ERWIN and that his status as such is known even to petitioner as it is alleged in the Complaint that he is being sued in his capacity as the sales manager of the said business venture. Likewise, respondent EDWIN points to the Deed of Assignment which clearly states that he was acting as a representative of Impact Systems in said transaction.

We do not find merit in the petition.

In a contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another with the latter’s consent.29 The underlying principle of the contract of agency is to accomplish results by using the services of others – to do a great variety of things like selling, buying, manufacturing, and transporting.30 Its purpose is to extend the personality of the principal or the party for whom another acts and from whom he or she derives the authority to act.31 It is said that the basis of agency is representation, that is, the agent acts for and on behalf of the principal on matters within the scope of his authority and said acts have the same legal effect as if they were personally executed by the principal.32 By this legal fiction, the actual or real absence of the principal is converted into his legal or juridical presence – qui facit per alium facit per se.33

The elements of the contract of agency are: (1) consent, express or implied, of the parties to establish the relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a representative and not for himself; (4) the agent acts within the scope of his authority.34

In this case, the parties do not dispute the existence of the agency relationship between respondents ERWIN as principal and EDWIN as agent. The only cause of the present dispute is whether respondent EDWIN exceeded his authority when he signed the Deed of Assignment thereby binding himself personally to pay the obligations to petitioner. Petitioner firmly believes that respondent EDWIN acted beyond the authority granted by his principal and he should therefore bear the effect of his deed pursuant to Article 1897 of the New Civil Code.

We disagree.

Article 1897 reinforces the familiar doctrine that an agent, who acts as such, is not personally liable to the party with whom he contracts. The same provision, however, presents two instances when an agent becomes personally liable to a third person. The first is when he expressly binds himself to the obligation and the second is when he exceeds his authority. In the last instance, the agent can be held liable if he does not give the third party sufficient notice of his powers. We hold that respondent EDWIN does not fall within any of the exceptions contained in this provision.

The Deed of Assignment clearly states that respondent EDWIN signed thereon as the sales manager of Impact Systems. As discussed elsewhere, the position of manager is unique in that it presupposes the grant of broad powers with which to conduct the business of the principal, thus:

The powers of an agent are particularly broad in the case of one acting as a general agent or manager; such a position presupposes a degree of confidence reposed and investiture with liberal

powers for the exercise of judgment and discretion in transactions and concerns which are incidental or appurtenant to the business entrusted to his care and management. In the absence of an agreement to the contrary, a managing agent may enter into any contracts that he deems reasonably necessary or requisite for the protection of the interests of his principal entrusted to his management. x x x.35

Applying the foregoing to the present case, we hold that Edwin Cuizon acted well-within his authority when he signed the Deed of Assignment. To recall, petitioner refused to deliver the one unit of sludge pump unless it received, in full, the payment for Impact Systems’ indebtedness.36 We may very well assume that Impact Systems desperately needed the sludge pump for its business since after it paid the amount of fifty thousand pesos (P50,000.00) as down payment on 3 March 1995,37 it still persisted in negotiating with petitioner which culminated in the execution of the Deed of Assignment of its receivables from Toledo Power Company on 28 June 1995.38 The significant amount of time spent on the negotiation for the sale of the sludge pump underscores Impact Systems’ perseverance to get hold of the said equipment. There is, therefore, no doubt in our mind that respondent EDWIN’s participation in the Deed of Assignment was "reasonably necessary" or was required in order for him to protect the business of his principal. Had he not acted in the way he did, the business of his principal would have been adversely affected and he would have violated his fiduciary relation with his principal.

We likewise take note of the fact that in this case, petitioner is seeking to recover both from respondents ERWIN, the principal, and EDWIN, the agent. It is well to state here that Article 1897 of the New Civil Code upon which petitioner anchors its claim against respondent EDWIN "does not hold that in case of excess of authority, both the agent and the principal are liable to the other contracting party."39 To reiterate, the first part of Article 1897 declares that the principal is liable in cases when the agent acted within the bounds of his authority. Under this, the agent is completely absolved of any liability. The second part of the said provision presents the situations when the agent himself becomes liable to a third party when he expressly binds himself or he exceeds the limits of his authority without giving notice of his powers to the third person. However, it must be pointed out that in case of excess of authority by the agent, like what petitioner claims exists here, the law does not say that a third person can recover from both the principal and the agent.40

As we declare that respondent EDWIN acted within his authority as an agent, who did not acquire any right nor incur any liability arising from the Deed of Assignment, it follows that he is not a real party in interest who should be impleaded in this case. A real party in interest is one who "stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit."41 In this respect, we sustain his exclusion as a defendant in the suit before the court a quo.

WHEREFORE, premises considered, the present petition is DENIED and the Decision dated 10 August 2004 and Resolution dated 17 March 2005 of the Court of Appeals in CA-G.R. SP No. 71397, affirming the Order dated 29 January 2002 of the Regional Trial Court, Branch 8, Cebu City, is AFFIRMED.

Let the records of this case be remanded to the Regional Trial Court, Branch 8, Cebu City, for the continuation of the proceedings against respondent Erwin Cuizon.

American Home v Chua G.R. No. 130421. June 28, 1999 C.J. Davide

Facts:

Chua obtained from American Home a fire insurance covering the stock-in-trade of his business. The insurance was due to expire on March 25, 1990.

On April 5, 1990, Chua issued a check for P2,983.50 to American Home’s agent, James Uy, as payment for the renewal of the policy. The official receipt was issued on April 10. In turn, the latter a renewal certificate. A new insurance policy was issued where petitioner undertook to indemnify respondent for any damage or loss arising from fire up to P200,000 March 20, 1990 to March 25, 1991.

On April 6, 1990, the business was completely razed by fire. Total loss was estimated between P4,000,000 and P5,000,000. Respondent filed an insurance claim with petitioner and four other co-insurers, namely, Pioneer Insurance, Prudential Guarantee, Filipino Merchants and Domestic Insurance. Petitioner refused to honor the claim hence, the respondent filed an action in the trial court.

American Home claimed there was no existing contract because respondent did not pay the premium. Even with a contract, they contended that he was ineligible bacue of his fraudulent tax returns, his failure to establish the actual loss and his failure to notify to petitioner of any insurance already effected. The trial court ruled in favor of respondent because the respondent paid by way of check a day before the fire occurred and that the other insurance companies promptly paid the claims. American homes was made to pay 750,000 in damages.

The Court of Appeals found that respondent’s claim was substantially proved and petitioner’s unjustified refusal to pay the claim entitled respondent to the award of damages.

American Home filed the petition reiterating its stand that there was no existing insurance contract between the parties. It invoked Section 77 of the Insurance Code, which provides that no policy or contract of insurance issued by an insurance company is valid and binding unless and until the premium thereof has been paid and the case of Arce v. Capital Insurance that until the premium is paid there is no insurance.

Issues:

1. Whether there was a valid payment of premium, considering that respondent’s check was cashed after the occurrence of the fire

2. Whether respondent violated the policy by his submission of fraudulent documents and non-disclosure of the other existing insurance contracts

3. Whether respondent is entitled to the award of damages.

Held: Yes. No. Yes, but not all damages valid. Petition granted. Damages modified.

Ratio:

1. The trial court found, as affirmed by the Court of Appeals, that there was a valid check payment by respondent to petitioner. The court respected this.

The renewal certificate issued to respondent contained the acknowledgment that premium had been paid.

In the instant case, the best evidence of such authority is the fact that petitioner accepted the check and issued the official receipt for the payment. It is, as well, bound by its agent’s acknowledgment of receipt of payment.

Section 78 of the Insurance Code explicitly provides:

An acknowledgment in a policy or contract of insurance of the receipt of premium is conclusive evidence of its payment, so far as to make the policy binding, notwithstanding any stipulation therein that it shall not be binding until the premium is actually paid.

2. Submission of the alleged fraudulent documents pertained to respondent’s income tax returns for 1987 to 1989. Respondent, however, presented a BIR certification that he had paid the proper taxes for the said years. Since this is a question of fact, the finding is conclusive.

Ordinarily, where the insurance policy specifies as a condition the disclosure of existing co-insurers, non-disclosure is a violation that entitles the insurer to avoid the policy. The purpose for the inclusion of this clause is to prevent an increase in the moral hazard. The relevant provision is Section 75, which provides that:

A policy may declare that a violation of specified provisions thereof shall avoid it, otherwise the breach of an immaterial provision does not avoid the policy.

Respondent acquired several co-insurers and he failed to disclose this information to petitioner. Nonetheless, petitioner is estopped from invoking this argument due to the loss adjuster’s admission of previous knowledge of the co-insurers.

It cannot be said that petitioner was deceived by respondent by the latter’s non-disclosure of the other insurance contracts when petitioner actually had prior knowledge thereof. The loss adjuster, being an employee of petitioner, is deemed a representative of the latter whose awareness of the other insurance contracts binds petitioner.

3. Petitioner is liable to pay the loss. But there is merit in petitioner’s grievance against the damages and attorney’s fees awarded. There was no basis for an award for loss of profit. This cannot be shouldered by petitioner whose obligation is limited to the object of insurance.

There was no fraud to justify moral damages. Exemplary damages can’t be awarded because the defendant never acted in a reckless manner to claim insurance. Attorney’s fees can’t be recovered as part of damages because no premium should be placed on the right to litigate.

What is STATUTE?ranging facts illustrative of the condition and resources of a state. The subject is sometimes divided into (1) historical statistics, or facts which illustrate the former con- dition of a state; (2) statistics of population; (3) of revenue; (4) of trade, commerce, and navigation; (5) of the moral, social, and physical condition of the people. Wharton.

What is an act?

The term encompasses not only physical acts—such as turning on the water or purchasing a gun—but also refers to more intangible acts such as adopting a decree, edict, law, judgment, award, or determination. An act may be a private act, done by an individual managing his or her personal affairs, or it may be a public act, done by an official, a council, or a court. When a bill is favorably acted upon in the process of legislation, it becomes an act.

Legislation (or "statutory law") is law which has been promulgated (or "enacted") by a legislature or other governing body, or the process of making it. (Another source of law is judge-made law or case law.) Before an item of legislation becomes law it may be known as a bill, and may be broadly referred to as "legislation" while it remains under consideration to distinguish it from other business. Legislation can have many purposes: to regulate, to authorize, to proscribe, to provide (funds), to sanction, to grant, to declare or to restrict.

A bill is a proposed law under consideration by a legislature.[1] A bill does not become law until it is passed by the legislature and, in most cases, approved by the executive. Once a bill has been enacted into law, it is called an act or a statute.

Case Digest: Casco Philippine Chemical Co., Inc. vs. Gimenez and Mathay G.R. No. L-17931                 28 February 1963

Ponente: Concepcion, J.

FACTS:

On July 1, 1959, pursuant to Republic Act No. 2609 (Foreign Exchange margin Fee Law), the Central Bank of the Philippines fixed a uniform margin fee of 25% foreign exchange transactions.  Petitioner Casco Philippine Chemical Co., Inc., a manufacturer of resin glues, had bought foreign exchange for the importation of urea and formaldehyde – raw materials for the said glues – and were thus paying for the margin fees required.

Relying upon Resolution No. 1529 of the Monetary Board of the said bank declaring that the separate importation of urea and formaldehyde is exempt from the said fee, the petitioner sought for a refund of the margin fees that had been paid.  This was denied by the Auditor of the said Bank stating that the claim was not in accord with the provisions of section 2, paragraph XVIII of R.A. 2609.

ISSUE: Whether “urea” and “formaldehyde” are exempt by law from the payment of the aforesaid margin fee

HELD/RULING:

“Urea” and “formaldehyde” is not exempt from law.

The pertinent portion of Section 2 of Republic Act No. 2609 reads:

The margin established by the Monetary Board pursuant to the provision of section one hereof shall not be imposed upon the sale of foreign exchange for the importation of the following:

XVIII. Urea formaldehyde for the manufacture of plywood and hardboard when imported by and for the exclusive use of end-users. (Emphasis provided.)

Urea formaldehyde is different from urea and formaldehyde, the former being a finished product.  It is well settled that the enrolled bill – which uses the term “urea formaldehyde” instead of “urea and formaldehyde” – is conclusive upon the courts as regards the tenor of the measure passed by Congress and approved by the President.  The courts cannot speculate that there had been an error in the printing of the bill as this shall violate the principle of separation of powers.  Shall there have been any error in the printing, the remedy is by amendment or curative legislation, not by judicial decree.

EUFROCINO M. CODILLA, SR. vsHON. JOSE DE VENECIA, ROBERTO P. NAZARENO, in their official capacities as Speaker and Secretary-General of the House of Representatives, respectively, and MA. VICTORIA L. LOCSIN

Facts:

Petitioner garnered the highest votes in the election for representative in the 4th district of Leyte as against respondent Locsin. Petitioner won while a disqualification suit was pending. Respondent moved for the suspension of petitioner’s proclamation. By virtue of the Comelec ex parte order, petitioner’s proclamation was suspended. Comelec later on resolved that petitioner was guilty of soliciting votes and consequently disqualified him. Respondent Locsin was proclaimed winner. Upon motion by petitioner, the resolution was however reversed and a new resolution declared respondent’s proclamation as null and void. Respondent made his defiance and disobedience to subsequent resolution publicly known while petitioner asserted his right to the office he won.

Issues:

1.     Whether or not respondent’s proclamation was valid.

2.     Whether or not the Comelec had jurisdiction in the instant case.

3.     Whether or not proclamation of the winner is a ministerial duty.

HELD:

1.     The respondent’s proclamation was premature given that the case against petitioner had not yet been disposed of with finality. In fact, it was subsequently found that the disqualification of the petitioner was null and void for being violative of due process and for want of substantial factual basis. Furthermore, respondent, as second placer, could not take the seat in office since he did not represent the electorate’s choice.

2.      Since the validity of respondent’s proclamation had been assailed by petitioner before the Comelec and that the Comelec was yet to resolve it, it cannot be said that the order disqualifying petitioner had become final. Thus Comelec continued to exercise jurisdiction over the case pending finality. The House of Representatives Electoral Tribunal does not have jurisdiction to review resolutions or decisions of the Comelec. A petition for quo warranto must also fail since respondent’s eligibility was not the issue.

3.     The facts had been settled by the COMELEC en banc, the constitutional body with jurisdiction on the matter, that petitioner won. The rule of law demands that its (Comelec’s) Decision be

obeyed by all officials of the land. Such duty is ministerial. Petitioner had the right to the office which merits recognition regardless of personal judgment or opinion.

Case Digest: Primicias vs Municipality of Urdaneta Facts:

On February 8, 1965, Primicia was driving his car within the jurisdiction of Urdaneta when he was found violating Municipal Order 3, Series of 1964 for overtaking a truck. The Courts of First Instance decided that from the action initiated by Primicias, the Municipal Order was null and void and had been repealed by Republic Act 4136, the Land Transportation and Traffic Code

Issues:

1. Whether or not Municipal Order 3 of Urdaneta is null and void2. Whether or not the Municipal Order is not definite in its terms or ambiguous.

Held:

1. Municipal Order 3 is null and void as there is an explicit repeal in RA 4136 and as per general rule, the later law prevails over an earlier law and any conflict between a municipal order and a national law must be ruled in favor of the statute.2. Yes, the terms of Municipal Order 3 was ambiguous and not definite. “Vehicular Traffic” is not defined and no distinctions were made between cars, trucks, buses, etc.

Appealed decision is therefore AFFIRMED.