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Xerxes Abadiano v. Spouses Martir (July

31, 2008)

Subject: Property, Evidence1

Facts: Inocentes Banares and the heirs of

his wife, Feliciana Villanueva executed an

Agreement of Partition dated June 1, 1922

over Lot No. 1318. The lot was partitionedand distributed to the following: (1)

Demetrio Banares (Lot No. 1318-A), (2)

Ramon and David Abadiano –grandchildren

of Inocentes and Feliciana (Lot No. 1318-B)

and (3) Amando Banares (Lot No. 1318-C).

The partition is embodied in a notarized

Deed of Partition. In 1923, an Original

Certificate of Title (OCT) No. 20641 was

issued in the name of the spouses. In 1939,

David Abadiano, who was absent during theexecution of the Agreement of Partition,

executed a Deed of Confirmation

acknowledging and ratifying the document

of partition. OCT No. 20641 was

administratively reconstituted in 1962 and in

lieu thereof, OCT No. RO-8211 was issued

over Lot No. 1318, still in the name of the

spouses. The Agreement of Partition and the

Deed of Confirmation were annotated at the

back of the OCT. In 1957, Demetrio sold his

share to his son Leopoldo. The latter then

filed a petition praying for confirmation of

the Agreement and the Deed of Confirmation

and the Deed of Sale between him and his

father, and for the issuance of a new title

over the property. The Court ordered the

issuance of a Transfer Certificate of Title

(TCT) in the name of Leopoldo, Amando, and

Ramon and David. Petitioner insists that this

is the valid and subsisting title over the

property and there was no other sale toanyone.

Respondents allege however that prior to

the issuance of the TCT, Ramon for himself

and on behalf of David, had already sold

their rights and interests over Lot No. 1318-

1 I won’t be discussing evidence. Wala akong

karapatan. The case touches on Rule 130,

Section 3

C to Victor Garde, as evidenced by a

notarized document of sale (Compra Y

Venta) dated June 3, 1922. They further

allege that from the time of sale, Victor

Garde and his heirs were in continuous,

public, peaceful and uninterrupted

possession and occupation in the concept of

an owner of the Lot. Victor’s heirs sold thesame to Jose Garde who in turn sold it to

Lolita Martir in 1979. Alleging that the

Abadianos entered the property and

harvested sugarcane from it, the spouses

filed an Action to Quiet Title and/or Recovery

of Possession with Damages in 1982. The

trial court ruled for the Martirs, holding that

the spouses and their predecessors-in-

interest have been in possession of the

property for 60 years and the Abadianos

therefore were guilty of laches. CA affirmed.

Hence, this Petition for Review on Certiorari.

Issue: WON the petitioner is guilty of laches

Held: No. Under the Property Registration

Decree, no title to registered land in

derogation of the title of the registered

owner shall be acquired by prescription or

adverse possession. Nonetheless, even if a

Torrens title is indefeasible and

imprescriptible, the registered landowner

may lose his right to recover the possession

of his registered property by reason of

laches. Laches has been defined as

neglect or omission to assert a right,

taken in conjunction with lapse of time

and other circumstances causing

prejudice to an adverse party. The four

basic elements are: 1) conduct on the part

of the defendant, or of one under whom he

claims, giving rise to the situation of whichcomplaint is made and for which the

complaint seeks a remedy; 2) delay in

asserting the complainant’s rights, the

complainant having had knowledge or notice

of the defendant’s conduct and having been

afforded an opportunity to institute suit; 3)

lack of knowledge or notice on the part of

the defendant that the complainant would

assert the right on which he bases his suit;



and 4) injury or prejudice to the defendant in

the event relief is accorded to the

complainant or the suit is not held to be

barred.

Petitioner had reasonable ground to believe

that the property, being still in the name of

his predecessor in interest, continued to be

theirs, especially considering that the

annotation of the purported sale was done

only in 1982. That the petitioner and his co-

heirs waited until the death of Amando to try

and occupy the land is understandable since

any action may sow dissent within the

family. In determining whether a delay

in seeking to enforce a right

constitutes laches, the existence of a

confidential relationship between the

parties is an important circumstancefor consideration, a delay under such

circumstances not being so strictly

regarded as where the parties are

strangers to each other. The doctrine of

laches is not strictly applied between

near relatives, and the fact that parties

are connected by ties of blood or

marriage tends to excuse an otherwise

unreasonable delay. In addition, several

other factors militate against the finding of laches on the part of the petitioner: a) no

annotation was made of Compra Y Venta on

the OCT or the TCT; b)neither respondents

nor any of their predecessors in interest

participated in any of the proceedings for

the issuance of the OCT or the TCT; and c)

the TCT bears out that the fact that the

purported Compra Y Venta was annotated

thereon only in 1982. It is most telling that

respondents, have themselves failed to have

the same property transferred in their name

or even only to have the sale annotated on

the title of the property.

Accessories Specialist Inc., a.k.a. Arts

21 Corporation vs. Alabanza

July 23, 2008

Nachura, J.

Labor Law. Promissory estoppel may arise

from the making of a promise, even though

without consideration, if it was intended that

the promise should be relied upon, as in fact

it was relied upon, and if a refusal to enforce

it would virtually sanction the perpetration

of fraud or would result in other injustice.

The principle of promissory estoppel is arecognized exception to the three-year

prescriptive period enunciated in Article 291

of the Labor Code.

Labor Law. The posting of a bond is

indispensable to the perfection of an appeal

in cases involving monetary awards from the

decision of the Labor Arbiter. The filing of the

bond is not only mandatory but also a

jurisdictional requirement that must be

complied with in order to confer jurisdictionupon the NLRC.

Facts:

On September 27, 2002, respondent

Alabanza filed a complaint against

petitioners Arts 21 and Hashimoto for and in

behalf of her husband for non-payment of

salaries, separation pay and 13th month pay.

Respondent’s husband was the Vice-President, Manager and Director of Arts 21

and had been with the company from 1975

to 1997. He was compelled by the owner,

Hashimoto, to file his involuntary resignation

on October 17, 1997 on the ground that Arts

21 allegedly suffered losses. Respondent’s

husband demanded payment of his money

claims upon resignation but was told that

rank and file employees will be paid first and

thus waited for his turn. Respondent’s

husband made several demands but Arts 21

just kept on assuring him that he will be paid

his money claims. Respondent’s husband

died on August 5, 2002 with his claims still

unpaid.

Petitioners invoke Art. 291 of the

Labor Code and contend that respondent’s

husband voluntarily resigned in October,

1997, thus the cause of action has already



prescribed since the case was filed in 2002

only, beyond the three-year-period within

which money claims should be filed.

The Labor Arbiter rendered a decision

ordering petitioner to pay respondent over

P4M. Petitioners filed an appeal along with a

motion to reduce bond, attaching receipts

for cash bond amounting to P290K and

appeal fee for P170.00. The motion was

denied and petitioners were given 10 days

within which to file the required bond.

Petitioners filed a motion for reconsideration

which the NLRC denied ordering the

dismissal of the appeal for non-perfection

thereof due to non-compliance with the bond

requirement. The resolution became final

and executory and a writ of execution was

issued by the Labor Arbiter upon motion byrespondent. Petitioners filed a petition for

certiorari with the Court of Appeals praying

for the issuance of a TRO and a writ of

preliminary injunction. The petition was

dismissed.

Issue No. 1:

WON the cause of action of

respondent has already prescribed/

Held: NO.

Ratio:

Based on the findings of facts of the

Labor Arbiter, it was petitioner Arts 21 which

was responsible for the delay in the

institution of the complaint. When

petitioner’s husband filed his resignation he

immediately asked for the payment of his

money claims. However, the management of Arts 21 promised him that he would be paid

immediately after the claim of the rank-and-

file employees had been paid. Jones relied

on this representation.

Promissory estoppel may arise from

the making of a promise, even though

without consideration, if it was intended that

the promise should be relied upon, as in fact

it was relied upon, and if a refusal to enforce

it would virtually sanction the perpetration

of fraud or would result in other injustice.

The principle of promissory estoppel is a

recognized exception to the three-year

prescriptive period enunciated in Article 291

of the Labor Code.

In order to make out a claim of

promissory estoppel, a party bears the

burden of establishing the following

elements: (1) a promise was reasonably

expected to induce action or forbearance;

(2) such promise did, in fact, induce such

action or forbearance; and (3) the party

suffered detriment as a result. All the

requisites are present in this case. The

Court, therefore, finds ample justification not

to follow the prescriptive period imposed

under Art. 291 of the Labor Code. Greatinjustice will be committed if respondent’s

claims will be brushed aside on a mere

technicality, especially when it was

petitioner’s own action that prevented

respondent from interposing the claims

within the required period.

Issue No. 2:

WON the posting of the complete

amount of the bond in an appeal from thedecision of the Labor Arbiter to the NLRC is

an indispensable requirement for the

perfection of the appeal despite the filing of

a motion to reduce the amount of the appeal

bond.

Held: YES.

Ratio:

Article 223 of the Labor Codemandates that in case of a judgment of the

Labor Arbiter involving a monetary award,

an appeal by the employer to the NLRC may

be perfected only upon the posting of a 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

from.



The posting of a bond is indispensable

to the perfection of an appeal in cases

involving monetary awards from the decision

of the Labor Arbiter.

The filing of the bond is not only

mandatory but also a jurisdictional

requirement that must be complied with in

order to confer jurisdiction upon the NLRC.

Non-compliance therewith renders the

decision of the Labor Arbiter final and

executory. This requirement is intended to

assure the workers that if they prevail in the

case, they will receive the money judgment

in their favour upon the dismissal of the

employer’s appeal. It is intended to

discourage employers from using an appeal

to delay or evade their obligation to satisfy

their employees’ just and lawful claims.

The failure of petitioners to comply

with the requirement of posting a bond

equivalent in amount to the monetary award

is fatal to their appeal. Section 6 of the New

Rules of Procedure of the NLRC mandates,

among others, that no motion to reduce

bond shall be entertained except on

meritorious grounds and upon the posting of

a bond in a reasonable amount in relation to

the monetary award. The NLRC has full

discretion to grant or deny their motion to

reduce the amount of the appeal bond. The

finding of the NLRC that petitioners did not

present sufficient justification for the

reduction thereof is generally conclusive

upon the Court absent a showing that the

denial was tainted with bad faith.

Furthermore, appeal is not a

constitutional right, but a mere statutoryprivilege. Parties who seek to avail

themselves of it must comply with the

statutes or rules allowing it.

Petition DENIED.

Associated Bank (United Overseas Bank

[Phils.] v. Spouses Pronstroller

(July 14, 2008)

Subjects: Agency and Partnership,

Torts and Damages

Facts: In 1988, the spouses Vaca executed a

real estate mortgage in favor of petitioner

bank over their parcel of land in Quezon City.

For failure of the spouses Vaca to pay theirobligation, the subject property was sold at

public auction with the petitioner as the

highest bidder. TCT was issued to petitioner

The spouses Vaca however commenced an

action for the nullification of the real estate

mortgage and the foreclosure sale

Petitioner filed a petition for a writ o

possession. The cases reached the SC, which

eventually decided that the petitioner has a

right to possess the property.

During their pendency however, the

petitioner advertised the property for sale

The spouses Pronstroller offered to purchase

the property. Said offer was made through

Atty. Soluta, Jr., the bank’s VP, Corporate

Secretary and a member of its Board of

Directors. Respondents paid P750th or 10%

of the purchase price. Petitioner, through

Atty. Soluta, and respondents executed a

Letter-Agreement containing the terms andconditions of the sale. One of the terms was

that the Pronstrollers have to make 10%

deposit and balance of P6.75M to be

deposited under escrow agreement. This

was modified by another letter-agreement

which allowed the spouses to pay the

balance of the purchase price after the SC

resolution of the cases.

By the end of 1993, petitioner reorganized

its management and the new management

discovered that the spouses failed to pay the

balance of the purchase price. The bank

then rescinded the sale and suggested that

spouses come up with a new proposal. The

parties failed to reach an agreement and the

spouses informed the bank that they would

be enforcing their second Letter-Agreement

Petitioner countered that it was not aware of

the existence of such agreement and Atty



Facts

The controversy commenced with the filing

of an ejectment complaint by petitioner

Ayson against respondent-spouses Paragas

on the basis that petitioner is the registered

owner of the property being occupied by therespondent-spouses who, according to

petitioner, are just occupying the said land

through the latter’s tolerance without rent.

MTCC decided in favor of petitioner. RTC

affirmed the MTCC Decision. During the

pendency of the appeal with the RTC,

respondent-spouses filed against petitioner a

complaint for declaration of nullity of Deed

of Sale, in effect questioning OWNERSHIP.

Respondent Felix Paragas (husband) allegedthat Ayson’s father made him sign a Deed of

Absolute Sale over Maxima’s (wife) property

under threat that Felix will be incarcerated.

RTC rendered its decision in favor of

respondent-spouses declaring the Deed of

Absolute Sale as an equitable mortgage.

Issue 1

WON the decision of the court in the

ejectment case where ownership was raised

as defense by the Spouses Paragas, is

conclusive on the issue of ownerhip such

that the complaint for declaration of nullity

of Deed of Sale by the respondent-spouses is

barred.

Decision 1

No. Action by the respondent-spouse is not

barred.

Ratio 1

It must be remembered that in ejectment

suits the issue to be resolved is merely the

physical possession over the property, i.e.

possession de facto and not possession de

jure, independent of any claim of ownership

set forth by the party-litigants. Should the

defendant in an ejectment case raise the

defense of ownership in his pleadings and

the question of possession cannot be

resolved without deciding the issue o

ownership, the issue of ownership shall be

resolved only to determine the issue of

possession. The judgment rendered in such

an action shall be conclusive only with

respect to physical possession and shall in

no wise bind the title to the realty o

constitute a binding and conclusiveadjudication of the merits on the issue of

ownership. Therefore, such judgment shal

not bar an action between the same parties

respecting the title or ownership over the

property, which action was precisely

resorted to by respondent-spouses in this

case.

Issue 2

WON the Deed of Absolute Sale is an

equitable mortgage.

Decision 2

Yes. It is an equitable mortgage; hence, the

property is still under the ownership of the

spouses.

Ratio 2



The Civil Code enumerates the cases in

which a contract, purporting to be a sale, is

considered only as a contract of loan

secured by a mortgage as per Article 1604 in

relation Article 1602. In this case, the

evidence before the RTC had established

that the possession of the subject property

remained with respondent-spouses despite

the execution of the Deed of Absolute Sale.

Issue 3

WON the Deed of Absolute Sale was

executed through fraud, making the saidcontract merely voidable, and the action to

annul voidable contracts based on fraud

prescribed in four (4) years from the

discovery of fraud.

Decision 3 and Ratio 3

An equitable mortgage is a voidablecontract. As such, it may be annulled within

four (4) years from the time the cause of

action accrues. This case, however, not only

involves a contract resulting from fraud, but

covers a transaction ridden with threat,

intimidation, and continuing undue influence

which started when petitioner’s father Thus,

the four-year period should start from the

time the defect in the consent ceases.

Philippine Veterans Bank vs Monillas

Nachura – 2008

Topic: Effects of Prior Registration of

Mortgage shall Prevail over the Belated

Annotation of a Lis Pendens.

Benjamin Monillas executed a deed of sale of

his share over the property to his brother,

Ireneo. Ireneo then caused the transfer of

the title in his name. Ireneo mortgaged

twenty-two (22) lots to petitioner Philippine

Veterans Bank (PVB). Benjamin Monillas filed

for the nullification of the deed of sale and

for the recovery of the property, which the

RTC decided on his favor; hence, he filed for

the declaration of the nullity of the titles

issued in PVB's name. He caused the

annotation of notices of lis pendens relating

to the said case on the titles of the lots

While the case remained pending, PVB

foreclosed the mortgage, PVB was the

highest bidder Benjamin Monillas,

The RTC ruled against PVB. The RTC

rationalized that while the annotation of the

notices of lis pendens succeeded the

registration of the mortgage, still the effect

of the notices was that PVB acquired

knowledge of an impediment against its

interest, and as a matter of fact, PVB ignored

the notices and slept on its rights, as it did

not intervene in the said civil case.

Issue

WON the prior registered mortgage and the

already concluded foreclosure proceedings

should prevail over the subsequent

annotation of the notices of lis pendens on

the lot titles.

Decision

Prior registered mortgage of PVB and the

foreclosure proceedings already conducted

prevail over Benjamin Monilla's subsequent



annotation of the notices of lis pendens on

the titles to the property.

Ratio

A prior registration of a lien creates a

preference; hence, the subsequent

annotation of an adverse claim cannot

defeat the rights of the mortgagee, or the

purchaser at the auction sale whose rights

were derived from a prior mortgage validly

registered. A contrary rule will make a prior

registration of a mortgage or any lien

nugatory or meaningless.

Bank of the Philippine Islands v.

Spouses Royeca

(July 21, 2008)

Subject: Obligations and Contracts

Facts : In 1993, spouses Royeca executed

and delivered to Toyota Shaw, Inc. apromissory note for P577,008 payable in 48

equal monthly installments. It provides for a

penalty of 3% for every month or fraction of

a month that an installment remains unpaid.

To secure the payment of said promissory

note, the spouses executed a Chattel

Mortgage in favor of Toyota over a certain

motor vehicle. Toyota assigned the interest

over the Chattel with Far East Bank and Trust

Company (FEBTC) which eventually merged

with BPI. The bank claimed that the spouses

failed to pay 4 monthly amortizations and

made formal demands. The respondents

refused to pay on the ground that they have

paid their obligation by issuing 8 postdated

checks in different amounts. FEBTC then

filed a complaint for replevin and damages.

The spouses filed a counterclaim for

damages. They averred that they were in

good faith since they did not receive any

notice from the drawee banks or from FEBTC

that these checks were dishonored. MeTC

ruled for the spouses. On appeal the RTC

reversed, holding for the BPI. The CA ruled

for the spouses and reinstated the MeTC

decision.

Issues: WON tender of checks constitutes

payment

Held: No. Settled is the rule that

payment must be in legal tender. A

check is not legal tender and, therefore,

cannot constitute a valid tender of payment.

Since a negotiable instrument is only a

substitute for money and not money, the

delivery of such an instrument does not, by

itself, operate as payment. Mere delivery

of checks does not discharge the

obligation under a judgment. The

obligation is not extinguished and

remains suspended until the payment

by commercial document is actually

realized.

To establish their defense, the respondents

therefore had to present proof, not only that

they delivered the checks to the petitioner,but also that the checks were encashed. The

respondents failed to do so. As a general

rule, one who pleads payment has the

burden of proving it. Even where the plaintiff

must allege non-payment, the general rule is

that the burden rests on the defendant to

prove payment, rather than on the plaintiff

to prove non-payment. The debtor has the

burden of showing with legal certainty that

the obligation has been discharged by

payment.

Corinthian Gardens Association vs

Spouses Tanjangcos and Spouses

Cuasos

June 27, 2008

Nachura, J.

Torts and Damages:

* (ELEMENTS/REQUISITES)



In every tort case filed under

Article 2176, plaintiff has to prove by

a preponderance of evidence:

(1) the damages suffered by

the plaintiff;

(2) the fault or negligence of

the defendant or some other person

for whose act he must respond;and

(3) the connection of cause and

effect between the fault or negligence

and the damages incurred.

* (DEFINITION)

A negligent act is an

inadvertent act; it may be merely

carelessly done from a lack of

ordinary prudence and may be

one which creates a situation

involving an unreasonable risk

to another because of the expectable

action of the other, a third person, an

animal, or a force of nature. A

negligent act is one from which an

ordinary prudent person in the

actor's position, in the same or

similar circumstances, would foresee

such an appreciable risk of harm

to others as to cause him not to do

the act or to do it in a morecareful manner.

* (TEST)

The test to determine the

existence of negligence in a particular

case may be stated as follows: Did

the defendant in committing the

alleged negligent act use that

reasonable care and caution which

an ordinary person would have used

in the same situation?

Facts:

Tanjangcos owned joined lots in

Corinthian Gardens. Spouse Cuasos,

on the other hand, own a lot adjacent

to the former’s.

Before the Cuasos constructed their

house, it was surveyed by De Dios

Realty (surveyor) as per

recommendation of the petitioner

association. Later on, the petitioner

approved the plans made by CB Paras

Construction (builder). Corinthian

conducted periodic ocular inspections

in order to determine compliance with

the approved plans pursuant to theManual of Rules and Regulations of

Corinthian (MRRC). Unfortunately,

after construction, the perimeter

fence of the Cuasos’ encroached upon

the Tanjangcos’ lot.

Issue:

Whether Corinthian was negligent

under the circumstances and, if so, whether

such negligence contributed to the injury

suffered by the Tanjangcos.

Decision:

Corinthian is negligent. Its approval of

the plan is tainted with negligence.

Ratio:

Petitioner is found negligent under the

TEST. The MRRC provides that no newconstructions can be started without the

approval of the petitioner association. Thus,

it is reasonable to assume that

Corinthian, through its representative, in the

approval of building plans, and in the

conduct of periodic inspections of on-

going construction projects within the

subdivision, is responsible in insuring

compliance with the approved plans,

inclusive of the construction of perimeter

walls.

Corinthian’s failure to prevent the

encroachment of the Cuasos’

perimeter wall into Tanjangcos’

property – despite the inspection

conducted – constitutes negligence

and, at the very least, contributed to

the injury suffered by the

Tanjangcos.



NB

1. The court here categorized the case

as falling under tort. Take note that

there are discussions regarding

similarity or difference of a QD and a

tort. (just thinking out loud)

2. This is another case where the court

ruled using Article 2176 despite the

fact that there is an existing

contractual obligation between the

parties. (just a thought to ponder on)

April 30, 2008

G.R. No. 140944

RAFAEL ARSENIO S. DIZON, IN HISCAPACITY AS THE JUDICIALADMINISTRATOR OF THE ESTATE OF THEDECEASED JOSE P. FERNANDEZ v. COURT OF TAX APPEALS ANDCOMMISSIONER OF INTERNAL REVENUE

Ponente

Justice Nachura

Subject

Estate Taxation – Allowable Deductions,Date-of-Death Valuation Principle

Facts

Jose P. Fernandez died in November 7, 1987. Thereafter, a petition for the probate of hiswill was filed. The probate court appointedAtty. Rafael Arsenio P. Dizon as administratorof the Estate of Jose Fernandez.

An estate tax return was filed later on whichshowed ZERO estate tax liability. BIRthereafter issued a deficiency estate taxassessment, demanding payment of Php66.97 million as deficiency estate tax. Thiswas subsequently reduced by CTA to Php37.42 million. The CA affirmed the CTA’sruling, hence, the instant petition.

The petitioner claims that in as much as thevalid claims of creditors against the Estateare in excess of the gross estate, no estatetax was due. On the other handrespondents argue that since the claims ofthe Estate’s creditors have been condonedsuch claims may no longer be deducted fromthe gross estate of the decedent.

Issue

Whether the actual claims of creditors maybe fully allowed as deductions from thegross estate of Jose despite the fact that thesaid claims were reduced or condonedthrough compromise agreements enteredinto by the Estate with its creditors

Decision

YES.

Ratio

Following the US Supreme Court’s ruling inIthaca Trust Co. v. United States, the Courtheld that post-death developments are notmaterial in determining the amount odeduction. This is because estate tax is atax imposed on the act of transferringproperty by will or intestacy and, becausethe act on which the tax is levied occurs at a

discrete time, i.e., the instance of death, thenet value of the property transferred shouldbe ascertained, as nearly as possible, as ofthe that time. This is the date-of-deathvaluation rule.

The Court, in adopting the date-of-deatvaluation principle, explained that:

• First. There is no law, nor do we

discern any legislative intent in outax laws, which disregards the date-

of-death valuation principle andparticularly provides that post-deathdevelopments must be considered indetermining the net value of theestate. It bears emphasis that taxburdens are not to be imposed, nopresumed to be imposed, beyondwhat the statute expressly and clearlyimports, tax statutes being construedstrictissimi juris against thegovernment.



• Second . Such construction finds

relevance and consistency in ourRules on Special Proceedings whereinthe term "claims" required to bepresented against a decedent's estateis generally construed to mean debtsor demands of a pecuniary naturewhich could have been enforced

against the deceased in his lifetime,or liability contracted by the deceasedbefore his death. Therefore, theclaims existing at the time of deathare significant to, and should be madethe basis of, the determination of allowable deductions.

EZTINOZO vs. CA

• FEBRUARY 12, 2008

• NACHURA, J.

• SUBJECT AREA: Rule 45; Rule 65

• NATURE: Petition for Certiorari under

Rule 65

• FACTS: Petitioner was charged with

the crime of estafa. It was alleged thatpetitioner represented herself to thecomplainants that she was the ownerof a recruitment agency and that shewas recruiting workers to be sentabroad. She asked from thesecomplainants the payment of placement and processing feestotaling P15,000.00. Complainantswere promised that they would bedeployed by July 1986. However,private complainants never left thecountry.

• In her defense, she contended that

she was merely an agent of the realrecruiter, a certain Fe CorazonRamirez, and the money she receivedfrom the Complainants was remittedto Ramirez.

• The RTC found her guilty of sevencounts of estafa. The petitioner

appealed the case to the CA. The CAaffirmed the ruling of the RTC.

• On May 30, 2001, within the 15-day

reglementary period to file a motionfor reconsideration or a petition foreview, petitioner filed with theappellate court a Motion for Extension

of Time to File a Motion forReconsideration. On June 28, 2001the CA denied the said motionpursuant to Rule 52, Section 1 of theRules of Court and Rule 9, Section 2 ofthe Revised Internal Rules of the Courtof Appeals (RIRCA).

• Petitioner then filed a Motion for

Reconsideration of the June 28, 2001Resolution of the CA. The appellatecourt denied the same, on August 17

2001.

• Hence, this instant Petition for

Certiorari under Rule 65.

• ISSUE: WON petition for certiorar

under Rule 65 is the proper remedy.

• HELD: It was not the proper remedy

The petitioner should have filed iunder Rule 45.

• RATIO: Section 1 of Rule 45 of the

Rules of Court expressly provides thata party desiring to appeal bycertiorari from a judgment or finaorder or resolution of the CA may filea verified petition for review oncertiorari. Petition for certiorarunder Rule 65 lies only when the

judgment or final order warendered without or in excess of

jurisdiction, or with grave abuseof discretion and where there isno appeal or plain, speedy andadequate remedy in the ordinarycourse of law.

• In this case, appeal by certiorari was

available to petitioner. There was nograve abuse of discretion committedby the CA in its decision. The CAcorrectly denied petitioner’s Motionfor Extension of Time to File a Motionfor Reconsideration. The rule is thatthe 15-day reglementary period fo



appealing or filing a motion forreconsideration or new trial cannot beextended, except in cases before theSupreme Court, as one of last resort,which may, in its sound discretiongrant the extension requested Thisrule also applies even if the motion isfiled before the expiration of the

period sought to be extended.

• DISPOSITVE: Petition for Certiorari

dismissed

FAR EAST BANK & TRUST COMPANY,Petitioner, - versus - GOLD PALACE

JEWELLERY CO., as represented by JudyL. Yang, Julie Yang-Go and Kho SoonHuat, Respondent

• FACTS: Samuel Tagoe, a foreigner,purchased from Gold Palace (SMNorth) jewelries worth PHP258,000.00. As payment, he offered aforeign draft issued by the UnitedOverseas Bank of Malaysia addressedto Land Bank, and payable to GoldPalace for PHP 380,000.00. Judy Yang,the assistant GM of Gold Palaceinquired from Far East Bank (SMNorth) regarding the draft’s nature.

The teller told her that it was similar

to a manager’s check but advised herto not release the jewelry until thedraft has been cleared. Following theadvice, Yang Issued a cash invoice to

Tagoe & told him that the jewelrieswould be released when the draft hadbeen cleared. Julie Yang-Go, themanager of Gold Palace, depositedthe draft in the company’s accountwith Far East Bank SM North. Thelatter presented it for clearing to LBP,the drawee bank, who cleared the

same. United Overseas account withLBP was debited and Gold Palace’saccount with Far East was creditedwith the amount stated in the draft.

The pieces of jewelry were thenreleased to Tagoe and because theamount in the draft was more thanthe value of the goods, a check forPHP 122,000 was issued to him. Itwas encashed by Tagoe.

• 3 weeks after, LBP informed Far East

that the amount in the foreign draft

had been materially-altered from PHP

300.00 to PHP 380,000.00 and that

they will be returning it. Far East thus

refunded the amount paid by LBP

Thus, Far East had to see

reimbursement from Gold Palace butthey were only able to debit PHP

168,053.37, which was done without a

prior written notice to Gold Palace as

they only informed them by phone

They thus demanded the difference of

PHP 211,946.64 from Gold Palace. As

the latter did not respond favorably

Far East instituted a civil case for sum

of money and damages. Gold Palace

denies the allegations in the

complaint and claims as their defense

that the subject foreign draft has been

cleared and it was not they who

caused the alteration. The RTC ruled

in favor of Far East but this was

reversed by the CA as Far East failed

to undergo the proceedings on the

protest and thus, Far East could not

charge Gold Palace on its secondary

liability as an indorser. It further said

that the drawee bank had cleared thecheck and its remedy should be

against the part responsible for the

alteration.

• ISSUE: WHETHER OR NOT FAR

EAST BANK COULD PROCEED

AGAINST GOLD PALACE.

• HELD: No.

• RATIO: The acceptor, by acceptingthe instrument, engages that he wil

pay it according to the tenor of his

acceptance. This provision applies

with equal force in case the drawee

pays a bill without having previously

accepted it. His actual payment of the

amount in the check implies not only

his assent to the order of the drawer

and a recognition of his corresponding



obligation to pay the aforementioned

sum, but also, his clear compliance

with that obligation. Actual payment

by the drawee is greater than his

acceptance, which is merely a

promise in writing to pay. The

payment of a check includes its

acceptance.

• Unmistakable herein is the fact thatthe drawee bank cleared and paid thesubject foreign draft and forwardedthe amount thereof to the collectingbank. LBP was liable on its paymentof the check according to the tenor of the check at the time of payment,which was the raised amount. Thus,LBP could no longer repudiate thepayment it erroneously made to a due

course holder. Gold Palace was not aparticipant in the alteration of thedraft, was not negligent, and was aholder in due course—it received thedraft complete and regular on its face,before it became overdue and withoutnotice of any dishonor, in good faithand for value, and absent anyknowledge of any infirmity in theinstrument or defect in the title of theperson negotiating it.

• This construction and application of

the law is in line with the sound

principle that where one of two

innocent parties must suffer a loss,

the law will leave the loss where it

finds it. It further reasserts the

usefulness, stability and currency of

negotiable paper without seriously

endangering accepted banking

practices. Banking institutions can

readily protect themselves against

liability on altered instruments either

by qualifying their acceptance or

certification, or by relying on forgery

insurance and special paper which will

make alterations obvious. The drawee

bank, in most cases, is in a better

position, compared to the holder, to

verify with the drawer the matters

stated in the instrument.

• Thus, considering that, in this case

Gold Palace is protected by Section 62

of the NIL, its collecting agent, Fa

East, should not have debited the

money paid by the drawee bank from

respondent company’s account. When

Gold Palace deposited the check with

Far East, the latter, under the terms of

the deposit and the provisions of the

NIL, became an agent of the former

for the collection of the amount in the

draft. The subsequent payment by the

drawee bank and the collection of the

amount by the collecting bank closed

the transaction insofar as the drawee

and the holder of the check or his

agent are concerned, converted thecheck into a mere voucher, and, as

already discussed, foreclosed the

recovery by the drawee of the amount

paid. This closure of the transaction is

a matter of course.

• As the transaction in this case had

been closed and the principal-agent

relationship between the payee and

the collecting bank had already

ceased, the latter in returning the

amount to the drawee bank was

already acting on its own and should

now be responsible for its own

actions. Neither can petitioner be

considered to have acted as the

representative of the drawee bank

when it debited respondent’s account

because, as already explained, the

drawee bank had no right to recover

what it paid. Likewise, Far Eastcannot invoke the warranty of the

payee/depositor who indorsed the

instrument for collection to shift the

burden it brought upon itself. This is

precisely because the said

indorsement is only for purposes o

collection which, under Section 36 of

the NIL, is a restrictive indorsement. It



did not in any way transfer the title of

the instrument to the collecting bank.

• CA ruling is affirmed to the extent that

Far East could not debit Gold Palace’s

account. Its remedy is not against

Gold Palace but against the drawee-

bank or the person responsible for the

alteration.

Title: Fermin v. PeopleDate: 28 March 2008Ponente: J. NachuraSubject/Topic: Criminal Law, Libel

Facts:

•

Cristy Fermin is the publisher andBogs Tugas is the editor-in-chief of Gossip Tabloid

• The June 14, 1995 headline and lead

story of the tabloid says that it isimprobable for Annabelle Rama to goto the US should it be true that she isevading her conviction in an estafacase here in the Philippines for sheand husband Eddie have moreproblems/cases to confront there. Thiswas said to be due to their, especially

Annabelle's, using fellow Filipinos’money, failure to remit proceeds tothe manufacturing company of thecookware they were selling and notbeing on good terms with the latter.

• Annabelle and Eddie filed libel casesagainst Fermin and Tugas before RTCof QC, Br. 218.

• RTC: Fermin and Tugas found guilty of

libel.

• CA: Tugas was acquitted on account of

non-participation but Fermin'sconviction was affirmed.

• Fermin's motion for reconsideration

was denied hence, this petition. Sheargues that she had no knowledgeand participation in the publication of the article, that the article is notlibelous and is covered by thefreedom of the press.

Issue: WON Cristy Fermin is guiltyof libel?

Held/Ratio: YES.

• Proof of knowledge of and

participation in the publication isnot required, if the accused hasbeen specifically identified as“author, editor, or proprietor” or

“printer/publisher” of thepublication.

o Petitioner was not only the

“publisher,” but also the“president” and“chairperson.”

Petitioner’s criminal guiltshould be affirmedwhether or not she hadactual knowledge andparticipation.

• The elements of libel were

present.

o Evident imputation of thecrime of malversation(converting money for personause), of vices or defects forbeing fugitives from the law(evading prosecution inAmerica) and of being awastrel

o Attribution made publiclyGossip Tabloid had anationwide circulation.

o The victims were identifiedand identifiable.

o The article reeks of malice, as

it tends to cause the dishonordiscredit, or contempt of thecomplainants.

Malice in law - thearticle was malicious initself; the imputationswere false.

Malice in fact - therewas motive to talk ilagainst complainantsduring the electoracampaign as Fermin is aclose friend of Eddie'sopponent in theCongressional race

• While complainants are considered



public figures for being personalitiesin the entertainment business, mediapeople do not have the unbridledlicense to malign their honor anddignity by indiscriminately airingfabricated and malicious comments,whether in broadcast media or inprint, about their personal lives.

Note: CA erred in acquitting Tugas, hebeing the editor-in-chief. But the SCcannot reinstate the ruling of the trialcourt convicting Bogs Tugas becausewith his acquittal by the CA as that would run afoul of his constitutional right against double jeopardy.

Fernandez v. Comelec and Rodriguez

June 30, 2008; Nachura

Election Law; Appelate jurisdiction of

Comelec

Facts:

July 15, 2002 SK elections of Barangay

Pandan del Sur, Pandan, Catanduanes, resp.

Rodriguez won as SK chairman over pet.Fernandez. Fernandez filed a protest in the

MCTC of Pandan. On January 12, 2004, MCTC

declared Fernandez as the winner and

ordered her proclamation. Rodriguez

appealed to Comelec, which, on Dec. 4,

2006 reversed the MCTC decision. Motion for

recon was denied, so Fernandez went to SC

arguing that that the Comelec has no

appellate jurisdiction over contests involving

SK officials decided by trial courts of limited

jurisdiction.

Issue: WON Comelec has jurisdiction.

Held: YES.

The Constitution [Art. IX-C, Sec. 2(2)] vests

in the COMELEC appellate jurisdiction over

all contests involving elective barangay

officials decided by trial courts of limited

jurisdiction. Construed in relation to the

provision in RA 7160 [LocGovCode] that

includes in the enumeration of barangay

officials the SK chairman,[Sec. 387(a)] theconstitutional provision indeed sanctions the

appellate review by the COMELEC of election

protests involving the position of SK

chairman, as in the instant case. Hence, we

find nothing improper in the COMELEC’s

assumption of jurisdiction over respondent’s

appeal.

Petitioner’s reliance on our ruling in Mercado

v. Board of Election Supervisors[1995] that

contests involving the SK chairman do notfall within Section 252 of the Omnibus

Election Code and paragraph 2, Section 2,

Article IX-C of the Constitution, is misplaced.

The doctrine therein, as we explained in the

much later Marquez v. Commission on

Elections[1999], is no longer controlling.

Thus, the present rule is that trial courts of

limited jurisdiction have exclusive original

jurisdiction over election protests involving

barangay officials, which include the SK chairman, and that the COMELEC has the

exclusive appellate jurisdiction over such

protests [Batoy v. Judge Calibo, Jr., 445 Phil.

547, 553-554 (2003); Beso v. Aballe, 382

Phil. 862, 870 (2000)].

Note: SC also dismissed the case as moot

and academic. By the time the case reached

the SC, the term of office of the SK chair

already expired. The discussion on Comelec

jurisdiction is for the guidance of the benchand bar.

Ferrer v. Ombudsman

[COL. ARTURO C. FERRER (RET.), petitioner

vs. HON. OFFICE OF THE OMBUDSMAN

ROMEO G. DAVID, Former Administrator

JOEMARI D. GEROCHI, Administrato



National Food Authority (NFA), FRANCISCO G.

CORDOBA, JR., chairman, PBAC, MARCELINO

B. AGANA IV, EVANGELINE V. ANAGO,

BENJAMIN D. JAVIER, and CELIA Z. TAN,

Members, PBAC, respondents]

Aug. 6, 2008; Nachura

Ombudsman jurisdiction/authority

Facts:

The National Food Authority (NFA) needed

security services nationwide. The

Prequalification, Bids and Awards Committee

(PBAC) was tasked to undertake the pre-

qualification of prospective bidders, etc. Thebidding was held in June 1994, and among

the bidders were Odin Security Agency

(owned by petitioner) and Metroguard and

Protective Security Agency of the Philippines

(Metroguard) and Davao Security and

Investigation Agency, Inc. (DASIA).

Metroguard and DASIA were admittedly

“sister” agencies. Having perceived a

collusion between DASIA and Metroguard,

the other participating bidders, includingOdin, protested. NFA sought opinion of the

Office of the Govt. Corp. Counsel (OGCC),

which stated that bid proposal of both

Metroguard and DASIA should be rejected for

being collusive. Consequently, the bids of

the two agencies were rejected by NFA.

DASIA went to RTC, which ruled that the

rejection of DASIA’s bid invalid and illegal, in

violation of its right to due process. David

and Cordoba of NFA appealed to CA, but

during the pendency of the appeal,

respondents proceeded to award the

security service contracts to both

Metroguard and DASIA (kasi binding pa yung

ruling ng RTC na kasali sila sa bidding; at ok

din ung bids nila). This prompted petitioner

to file on August 23, 1996 a Complaint-

Affidavit against respondents before the

Office of the Ombudsman, but it was

dismissed outright for lack of merit based on

the Evaluation Report of Graft Investiation

Officer (GIO) Gruta dated October 25, 1996

The said report was approved by then

Ombudsman Aniano A. Desierto on

November 27, 1996. Petitioner went to SC

on the following:

Issues:

1. Whether or not petitioner’s complaint

(OMB-0-96-1986) may be dismissed

on the basis of a resolution in another

complaint (OMB-0-96-1552) filed by

another complainant (Eugenio M

Revita).

Petitioner contends that in issuing the

questioned Evaluation Report, GIO Gruta

failed to consider the merits of his complaint

but simply adopted the Resolution of GIO

Ginez-Jabalde in OMB-0-96-1552 which is

tantamount to a violation of his right to due

process. We disagree.

The prerogative as to whether or not a

complaint may be given due course belongs

exclusively to the Office of the Ombudsman,

through its assigned investigation officer

who in this case was GIO Gruta. It is

apparent that GIO Gruta had carefullystudied the complaint which, indeed, raised

the very same arguments as in OMB-0-96-

1552 pertinent to the alleged collusion

between Metroguard and DASIA in the very

same public bidding held by NFA on June 21,

1994 and the purported unwarranted

benefits given to these security agencies by

respondents when they were awarded the

security service contracts for the NFA areas

of operations said agencies tendered their

bids for. Concurring with the

recommendation of GIO Ginez-Jabalde in

OMB-0-96-1552 to dismiss the complaint

similarly approved by then Ombudsman

Desierto, does not necessarily indicate that

GIO Gruta did not exercise her independent

judgment in this case in concluding that the

complaint lodged by petitioner lacks merit

To conduct a preliminary investigation when

deemed unnecessary as the same issues



being raised had already been resolved

would be superfluous.

2. Whether or not the decision of the

RTC-Davao, Br. 17, in Civil Case No.

23, 531 may be validly used as the

basis by respondents for the award of

the contracts for security services in

favor of Metroguard and DASIA,

notwithstanding the pendency of the

appeal of the decision with the Court

of Appeals, and despite the opinion of

the OGCC that Metroguard and DASIA

must be disqualified from the public

bidding on the ground of collusion

between them.

It bears mentioning that the Decision of the

RTC, Branch 17, Davao City already passedupon the opinions of the OGCC and ruled

that there was no collusion between

Metroguard and DASIA. Since the CA had

not reversed and set aside the decision of

the RTC, Branch 17, Davao City at the time

GIO Gruta reviewed petitioner’s complaint

for alleged violation of Section 3(e) and (g)

of R.A. No. 3019, the RTC Decision remained

controlling. Thus, GIO Gruta was correct in

dismissing the charge for lack of merit.

3. Whether or not the Office of the

Ombudsman has no authority to

investigate charges of violation of

Republic Act 5487, otherwise known

as the Private Security Agency Law, to

determine the criminal liability of

respondents.

The jurisdiction of the Office of the

Ombudsman to investigate and prosecute

criminal cases pertains to violations of R.A.

No. 3019, as amended, R.A. No. 1379, as

amended, R.A. No. 6713, Title VII, Chapter II,

Section 2 of the Revised Penal Code, and

such other offenses committed by public

officers and employees in relation to office.

On the other hand, in R.A. No. 5487, it is the

Philippine National Police (PNP) that

exercises general supervision over the

operation of all private detective and

watchman security guard agencies. It has

the exclusive authority to regulate and to

issue the required licenses to operate

security and protective agencies. In this

case, in the absence of a declaration from

the PNP that a violation of the said law was

committed by Metroguard and DASIA, the

act of the NFA officials in awarding thesecurity service contracts to the said

agencies after a showing that their bids were

the most advantageous to the government is

presumed to be valid.

Verily, the Court has almost always adopted

and quite aptly, a policy of non-interference

in the exercise of the Ombudsman’s

constitutionally mandated powers. The

Ombudsman has the power to dismiss a

complaint outright without going through apreliminary investigation. To insulate the

Office of the Ombudsman from outside

pressure and improper influence, the

Constitution, as well as R.A. No. 6770, saw fit

to endow that office with a wide latitude of

investigatory and prosecutory powers

virtually free from legislative, executive, or

judicial intervention. If the Ombudsman

using professional judgment, finds the case

dismissible, the Court shall respect suchfindings unless tainted with grave abuse of

discretion. The Ombudsman has discretion

to determine whether a criminal case, given

its attendant facts and circumstances

should be filed or not. It is basically his

judgment call.

FIGUEROA vs. PEOPLE OF THE

PHILIPPINES

JULY 14, 2008

NACHURA, J.



SUBJECT AREA: Estoppel by laches

NATURE: Petition for review on certiorari

FACTS: Petitioner was charged with the

crime of reckless imprudence resulting in

homicide. The RTC found him guilty. In his

appeal before the CA, the petitioner, for the

first time, questioned RTCs jurisdiction on

the case.

The CA in affirming the decision of the RTC,

ruled that the principle of estoppel by laches

has already precluded the petitioner from

questioning the jurisdiction of the RTC—the

trial went on for 4 years with the petitioner

actively participating therein and without

him ever raising the jurisdictional infirmity.

The petitioner, for his part, counters that the

lack of jurisdiction of a court over the

subject matter may be raised at any time

even for the first time on appeal. As undue

delay is further absent herein, the principle

of laches will not be applicable.

Hence, this petition.

ISSUE: WON petitioner’s failure to raise the

issue of jurisdiction during the trial of this

case, constitute laches in relation to thedoctrine laid down in Tijam v. Sibonghanoy,

notwithstanding the fact that said issue was

immediately raised in petitioner’s appeal to

the CA

HELD: No.

RATIO: Citing the ruling in Calimlim vs

Ramirez, the Court held that as a genera

rule, the issue of jurisdiction may be raised

at any stage of the proceedings, even on

appeal, and is not lost by waiver or by

estoppel.

Estoppel by laches may be invoked to

bar the issue of lack of jurisdiction only

in cases in which the factual milieu is

analogous to that of Tijam v

Sibonghanoy.

Laches should be clearly present for

the Sibonghanoy doctrine to be

applicable, that is, lack of jurisdiction musthave been raised so belatedly as to warrant

the presumption that the party entitled to

assert it had abandoned or declined to

assert it.

In Sibonghanoy, the party invoking lack of

jurisdiction did so only after fifteen years

and at a stage when the proceedings had

already been elevated to the CASibonghanoy is an exceptional case because

of the presence of laches.

In the case at bar, the factual settings

attendant in Sibonghanoy are not present

Petitioner Atty. Regalado, after the receipt of

the Court of Appeals resolution finding her

guilty of contempt, promptly filed a Motion

for Reconsideration assailing the said court’s jurisdiction based on procedural infirmity in

initiating the action. Her compliance with

the appellate court’s directive to show cause

why she should not be cited for contempt

and filing a single piece of pleading to that

effect could not be considered as an active

participation in the judicial proceedings so

as to take the case within the milieu of

Sibonghanoy. Rather, it is the natural fear to



disobey the mandate of the court that could

lead to dire consequences that impelled her

to comply.

The petitioner is in no way estopped by

laches in assailing the jurisdiction of the RTC,

considering that he raised the lack thereof inhis appeal before the appellate court. At

that time, no considerable period had yet

elapsed for laches to attach.

DISPOSITIVE: Petition for review on

certiorari is granted. Criminal case is

dismissed.

Flourish Maritime Shipping vs.

Almanzor

March 14, 2008

Nachura, J.

Labor Law. The choice of which amount to

award an illegally dismissed overseas

contract worker, i.e., whether his salaries for

the unexpired portion of his employmentcontract, or three (3) months’ salary for

every year of the unexpired term, whichever

is less, comes into play only when the

employment contract concerned has a term

of at least one (1) year or more.

Facts:

Respondent Almanzor entered into a

two-year employment contract with

petitioner Flourish Maritime Shipping asfisherman and was deployed to Taipei,

Taiwan. While on board, he was given an

instruction which he did not understand and

therefore was unable to obey. The master of

the vessel struck him and refused his

requested medical assistance. Respondent

was repatriated to the Philippines but was

not redeployed as promised, thus the

complaint for illegal dismissal, payment for

the unexpired portion of his employment

contract, earned wages, moral and

exemplary damages plus attorney’s fees.

Petitioners Flourish Maritime Shipping

and Uy contended that respondent

voluntarily resigned and that the same did

not comply with the grievance machinery

and arbitration clause embodied in the

employment contract.

The Labor Arbiter rendered a decision

in favour of respondent, awarding him six

months of his monthly pay (3months for

every year of the unexpired term). On

appeal, the NLRC affirmed in toto the Labor

Arbiter’s findings. The Court of Appeals, on

petition for certiorari, modified the NLRC

decision by increasing the monetary awarddue respondent. The Court of Appeals

awarded respondent the unexpired portion

of the first year (11 months and 4 days) and

3 months for the unexpired second year, for

a total of 14 months and 4 days.

Issue No. 1:

WON respondent was illegally

dismissed from employment.

Held: YES.

Ratio:

Petitioners, as concluded by the Labor

Arbiter, failed to adduce any convincing

evidence to establish its claim that

respondent voluntarily residned from

employment. Likewise, the NLRC held that

petitioners failed to show that respondent

was not physically fit to perform work due to

his old age. Neither was it proved that the

employment contract indeed provided a

grievance machinery. Both labor tribunals

correctly concluded, as affirmed by the

Court of Appeals, that respondent was not

redeployed for work, in violation of their

employment contract. Perforce, the

termination of respondent’s services is

without just or valid cause.



Issue No. 2:

WON the award made by the Court of

Appeals was contrary to law.

Held: YES.

Ratio:

Section 10 of R.A. 8042 provides:

Section 10. Money Claims. – x xx

x x x x

In case of termination of overseas employment without just,valid or authorized cause as definedby law or contract, the worker shall beentitled to the full reimbursement of

his placement fee with interest attwelve percent (12%) per annum, plushis salaries for the unexpired portionof his employment contract or forthree (3) months for every year of theunexpired term, whichever is less.

x x x x.

The correct interpretation of this

provision was settled in Marsaman Manning

Agency Inc. v. NLRC where this Court held

that “the choice of which amount to awardan illegally dismissed overseas contract

worker, i.e., whether his salaries for the

unexpired portion of his employment

contract, or three (3) months’ salary for

every year of the unexpired term, whichever

is less,” comes into play only when the

employment contract concerned has a term

of at least one year or more.

The employment contract involved in

the instant case covers a two-year period

but the overseas contract worker actually

worked for only 26 days prior to his illegal

dismissal. Thus, the three months’ salary

rule applies. Respondent, therefore, is

entitled to six (6) months’ salary as correctly

held by the Labor Arbiter and affirmed by

the NLRC.

Galero vs. CA

Facts:

1. Resident Ombudsman for Phil.PortsAuthority-Port Management Office(PPA-PMO) received two anonymousletters.

2. The first letter alleged that SecurityGuard Geocadin was receivingcompensation from PPA in spite of thefact that Geoacadin is assigned in andis also receiving salary fromNAPOCOR.

3. Second letter alleged that Mr. Elizalde(Port Manager of PPA) and Mr. Galero(acting Port Police DivisionCommander) was receiving shares inthe salaries of ghost employees likeGeocadin in PPA.

4. Resident Ombudsman Caigoyrecommended the filing of criminaand administrative complaint againstGalero for dishonesty, falsification ofpublic documents and causing undueinjury to the government. Complaintagainst Elizalde however is dismissedfor insufficient evidence.

5. Office of the Ombudsman for Visayasfound Galero guilty and recommendedGalero’s dismissal from serviceforfeiture of benefits and perpetua

disqualification from holding publicoffice.6. CA affirmed the decision of the Office

of the Ombudsman Visayas.

Issue: Whether or not Galero is

administratively liable

Held: Yes but only for simple neglect of

duty.

Ratio:

1. That Geocadin is security guard oPPA-PMO assigned to inspectequipment at different PPA stationswas sufficiently established by therecords. He is therefore not a ghostemployee. Hence, nothing was



falsified and Galero is not dishonest incertifying the DTR of Geocadin.

2. There was also no showing in therecords that Galero was in conclusionwith Geocadin in defrauding thegovernment, hence Galero cannot be

said to have intended to cause undueinjury to the Government.

3. Galero however is guilty of simpleneglect in failing to implementmeasures which could have preventedGeocadin from defrauding thegovernment.

4. Simple neglect of duty is defined as

the failure to give proper attention toa task expected from an employeeresulting from either carelessness orindifference.

5. In this case, had Galero performed thetask required of him, that is, tomonitor the employees’ attendance,he would have discovered that indeedMr. Geocadin was dividing his timebetween PPA and Napocor. Though

not required to know every detail of his subordinates’ whereabouts, Galeroshould have implemented measuresto make sure that the governmentwas not defrauded. As he wasrequired to sign Mr. Geocadin’s DTR,Galero should have verified thetruthfulness of the entries therein.

6. Indeed, Galero neglected his dutywhich caused prejudice to the

government in that Mr. Geocadin waspaid twice for his services.

7. These facts, taken together, aresufficient to make Galero liable forsimple neglect of duty, but insufficientto make him answer for charges of dishonesty and falsification of document.

Title: Luces v. DamoleDate: 14 March 2008Ponente: J. NachuraSubject/Topic: Criminal Law, Estafa

Facts:

• Petitioner Luces and respondent

Damole agreed that Luces would selthe P.O. cards issued by the latter tothe former's customers. Luces wouldget her commission therefrom in theform of marked up prices. Petitionefurther agreed that she would holdthe P.O. cards as trustee of the privatecomplainant with the obligation toremit the proceeds of the sale thereofless the commission, and before suchremittance, to hold the same in trustfor the latter. Lastly, petitioner

undertook to return the unsold POcards.

• Initially, petitioner complied with her

obligations, but later she defaulted inremitting the proceeds. Some P.Ocards were even used by petitionerherself and her relatives, but they didnot pay the corresponding price, norremitted the proceeds.

• Damole filed a civil case for collection

of money and a criminal case forestafa.

1. Petitioner - found guilty oviolation of Article 315(1) (b)(through misappropriation orconversion).

2. CA affirmed the RTC decisionbut with modification on thepenalty.

• Damole filed a petition before the SC

arguing that the CA erred inconvicting her and that she is onlyliable civilly and not criminally.

Issue: WON Luces is criminallyliable for estafa?

Held/Ratio: YES.

The elements of estafa throughmisappropriation or conversion (Article315(1) (b)) were present.

1. That the money, goods or other personal property is received by the



offender in trust, or on commission, or for administration, or under any other obligation involving the duty to deliver or return the same.

o It was established that petitioner

received from the privatecomplainant the subject POcards to be sold by the former

on commission, as evidenced bytheir Trust Receipt Agreements

2. That there be misappropriation or conversion of such money or property by the offender or denial on his part of such receipt .

o Using or disposing of P.O. cards

by Luces for her and herrelatives’ own personal purposeand benefit, constitutes breachof trust, unfaithfulness and

abuse of confidence.o The failure of LUCES to account

for them establishes the felonyof estafa through abuse of confidence by misappropriationor conversion.

3. That such misappropriation orconversion or denial is to the prejudice of another

1. Damole was deprived of herright to enjoy the proceeds of

the sale as a result of petitioner’s unauthorized useof the PO cards.

4. That there is a demand made by theoffended party on the offender.

o In spite of repeated demands

made upon Luces by Damole,she has failed and refused tocomply with her obligation.

The civil case filed by the

Damole is not a prejudicialquestion. The issues weredifferent.

• Civil case - Damole’s right to recover

from Luces the amount representingthe value of the P.O. cards allegedlyembezzled by the latter.

• Criminal case - WON Luces’ failure to

account for the proceeds of the sale of P.O. cards and/or to return the unsold

P.O. cards as Damole’s trusteeconstitutes estafa under Art. 315 par1 (b) of the RPC.

MATA vs AGRAVANTE

August 6, 2008

Nachura, J.

TORTS AND DAMAGES:

* DEFINITION

Article 19 which contains what

is commonly referred to as the

principle of abuse of rights, is

not a panacea for all human

hurts and social grievances.

The object of this article is to

set certain standards which

must be observed not only inthe exercise of one’s rights but

also in the performance of

one’s duties.

STANDARDS (A19)

Act with justice, Give everyone

his due, and Observe honesty and

good faith.

* DEFINITION

Article 21 refers to acts contra

bonos mores

ELEMENTS

(1) an act which is legal; (2) but

which is contrary to morals,

good custom, public order or

public policy; and (3) is done

with intent to injure.

* The common element under

Articles 19 and 21 is that the

act complained of must beintentional, and attended with

malice or bad faith.

* There is no hard and fast

rule which can be applied to

determine whether or not the

principle of abuse of rights may

be invoked. The question of

whether or not this principle



has been violated, depends on

the circumstances of each

case.

Facts

Mata owns a security agency.

Respondents were former security

gurads who filed a complaint in the

NLRC for non-payment of salaries and

wages. They then subsequently filed

an affidavit complaint with the PNP,

copies were then sent to various

offices including the Office of the

President and the DPWH, petitioner’s

biggest client.

Issue

Whether or not respondents

furninshing of copies to the PNP,

DPWH etal was tainted with bad faith

and hence liable for damages.

Decision

Respondents not liable. There was nomalicious intent to injure petitioner’s

good name and reputation. The

respondents merely wanted to call the

attention of responsible government

agencies in order to secure

appropriate action upon an erring

private security agency and obtain

redress for their grievances.

Ratio

In filing the letter-complaint with the

Philippine National Police and

furnishing copies thereof to seven (7)

other executive offices of the national

government, the defendants-

appellants may not be said to be

motivated simply by the desire to

“unduly prejudice the good name and

reputation” of plaintiff-appellee. Such

act was consistent with and a rational

consequence of seeking justice

through legal means for the alleged

abuses defendants-appellants

suffered in the course of their

employment.

The act of furnishing copies was

merely to inform said offices of the

fact of filing of such complaint, as is

usually done by individual

complainants seeking official

government action to address their

problems or grievances.

In the absence of proof that there was

malice or bad faith on the part of the

respondents, no damages can be

awarded.

MERALCO vs WILCON BUILDERS

SUPPLY, INC.

June 30, 2008

Nachura, J.

TORTS AND DAMAGES:

* RIDJO DOCTRINE (Ridjo Tape

vs CA)Public utility has the imperative

duty to make a reasonable

and proper inspection of its

apparatus and equipment to

ensure that they do not

malfunction. Its failure to

discover the defect , if any,

considering the length of time,

amounts to inexcusable

negligence; its failure to make

the necessary repairs and

replace the defective electric

meter installed within the

consumer’s premises limits the

latter’s liability.

Defect may be inherent,

intentional or unintentional,

which therefore covers

tampering, mechanical defects

and mistakes in the



computation of the consumers’

billing

Facts

Wilcon Builders is a registered

customer of MERALCO. In 1991,

MERALCO’s inspectors did a routineinspection of the electric meters of

Wilcon. Allegedly, the meters were

found to have been tampered.

Meralco seized the meters and later

informed Wilcon of the tampering and

was demanding s certain sum

representing the unregistered electric

consumption.

Wilcon, for its part, said that the

reason for the abrupt decrease in their

consumption was the breaking down

of their 7.5 ton air-conditioning unit in

1986.

Issue

Whether or not MERALCO is negligent

applying the Ridjo Doctrine.

Decision

MERALCO is negligent. Public service

companies which do not exercise prudence

in the discharge of their duties shall be

made to bear the consequences of such

oversight.

Ratio

According to the petitioner, there was

a sudden drop in respondent’s electric

consumption during the last quarter of 1984. If this contention were true, the

moment a sudden drop of electric

consumption was reflected in its records,

petitioner should have conducted an

immediate investigation to make sure

that there was nothing wrong with the

meter, especially because, by its own

account, the subject meter had a history of

previous tampering.

We cannot sanction a situation

wherein the defects in the electric meter are

allowed to continue indefinitely until

suddenly the public utilities concerned

demand payment for the unrecorded

electricity utilized when, in the first place,

they should have remedied the situation

immediately. If we turn a blind eye onMERALCO’s omission, it may encourage

negligence on the part of public

utilities, to the detriment of the consuming

public.

Novicio vs People

GR No 163331

Date: August 29, 2008

Petitioner: Arellano Novicio

Respondent: People of the Philippines

Nature: Petition for Review On

Certiorati (Rule 45)

for the reversal of the CA

decision

Facts:

o The incident took place on Sept 24,

1998 in Bacong San Luis, Aurora.o Mario Mercado was already drinking

with his friends when Arellano Novicioarrived.

o (MERCADO’S VERSION)Novicio drew a

gun, pointed it at Mercado, andthreatened him. When Mercado was

about to stand, Novicio shot him.Mercado ran and hid as Novicioattempted to shoot him for a secondtime.

o (NOVICIO’S VERSION) Mercado loudly

exclaimed lies and fabricationsintended to provoke Novicio. WhenNovicio asked him to stop, Mercadogot mad. Mercado drew his gun andpointed it at Novicio. Novicio tried to



wrest the gun and a scuffle ensued. The gun fired accidentally.

o Novicio was charged with the crime of

frustrated homicide, since all theacts of execution that would havecaused the death of Mercado if not forthe timely and effective medicalattention given to him.

Issue (1) : WON Novicio acted in

self-defense.

Held: No.

Ratio: There was no unlawful

aggression on the part of Mario to justify Novicio’s

act of shooting him.

No reason to depart from

the findings of RTC and CA.

Issue (2): WON there was intent to

kill.

Held: Yes.

Ratio: Intent to kill is

manifested in the act of

using the lethal weapon,

attempting to shoot the

victim for a second time,

and the seriousness of the injury sustained.

Decision: Petition denied.

TITLE OF THE CASE: OLIVEROS V. SISON

DATE OF PROMULGATION: March 14

2008

SUBJECT AREA: Civil Procedure

KEY DOCTRINES/CONCEPTS: Gross

Ignorance of the Law; Indirect

Contempt

FACTS:

Before the SC is a Motion for Partia

Reconsideration filed by Judge Dionisio CSison seeking the reversal the SC decision

finding him guilty of gross ignorance of the

law and fined P1,000. Judge Sison failed to

abide by the requirements under the

Revised Rules on Civil Procedure in citing

complainant spouses Arleen and Lorna

Oliveros for indirect contempt. As gleaned

from the resolution, the contempt charge

was not filed as a separate and independent

petition from the principal action pending

before the court. Also, the warrant of arrest

was issued on the same day that the motion

for contempt was made in a hearing in which

the complainant spouses failed to appear.

Complainant spouses Oliveros filed a petition

for certiorari before the CA questioning the

contempt order. Subsequently, they filed

the present administrative case with the SC

They failed to inform the SC of the petition

for certiorari pending before the CA.

ISSUE 1: WON JUDGE SISON IS GUILTY

OF GROSS IGNORANCE OF THE LAW

DECISION: Yes.



RATIO:

Rule 71 of the Revised Rules on Civil

Procedure explicitly sets out the

requirements for instituting a complaint forindirect contempt.

SEC. 4. How proceedings

commenced . – Proceedings for

indirect contempt may be

initiated motu proprio by the

court against which the

contempt was committed by an

order or any formal chargerequiring the respondent to

show cause why he should not

be punished for contempt.

In all other cases, charges for

indirect contempt shall be

commenced by a verified

petition with supporting

particulars and certified truecopies of documents or papers

involved therein, and upon full

compliance with the

requirements for filing initiatory

pleadings for civil actions in the

court concerned. If the

contempt charges arose out of

or are related to a principal

action pending in court, the

petition for contempt shall

allege that fact but said petition

shall be docketed, heard and

decided separately, unless the

court in its discretion orders the

consolidation of the contempt

charge and the principal action

for joint hearing and decision.

Good faith in situations of fallible discretion

inheres only within the parameters of

tolerable misjudgment and does not apply

where the issues are so simple and the

applicable legal principle evident and basic

as to be beyond permissible margins of

error. When the law is so elementary, not to

know it constitutes gross ignorance of thelaw.

Moreover, complainants should have been

given the opportunity to be heard and to

defend themselves against the contempt

charge, involving as it does such a dire

consequence as imprisonment for six

months. The undue haste in disposing of the

motion for contempt deprived complainantsof one of man’s most fundamental rights

the right to be heard.

ISSUE 2: WON COMPLAINANT SPOUSES

OLIVEROS MAY BE HELD LIABLE FOR

CONTEMPT FOR NOT DISCLOSING THE

PETITION FOR CERTIORARI INVOLVING

THE SAME ISSUE PENDING BEFORE THE

CA

DECISION: Yes

RATIO:

Complainants themselves admitted that

they failed to inform this Court of the

petition they filed before the CA within five

days after they “learn[ed] that the same or

similar action or claim has been filed or is

pending,” as provided by the Rules. They

however, argue that they were not aware of

such requirement. While that may have been

true, their argument becomes untenable



when seen in the light of their subsequent

actions. The Verification/Certification of the

Petition for Certiorari before the CA clearly

shows that both complainants signed the

same. Thus, they are presumed to have read

its contents. This should have already made

them aware of the requirement to inform the

Court of the filing of the case before the CAconsidering that in the latter case, they are

praying for the nullification of the very same

Order for which they were seeking

administrative sanctions against respondent

Judge before this Court. Thus, there appears

a real possibility that the pernicious effect

sought to be prevented by the rules

requiring the Certification against Forum

Shopping would arise. Accordingly, the

complainants could be held liable for

contempt of this Court.

Orozco v CA

August 13, 2008 J. Nachura

Subject Area: employer-employeerelationship, control test, economic realitytest

Facts: Orozco was a columnist of PDI whosecolumn was discontinued. She is now suingfor illegal dismissal as an employee.

Issue: (In the first place) WON a columnist isan employee of the newspaper.

Decision: No.

Ratio:Control Test - The main determinant of theee-er relationship is whether the rules set bythe er are meant to control not just theresults of the work but also the means andmethods to e used by the hired party inorder to achieve the results.Petitioner was engaged as a columnist forher talent, skill, experience, and uniqueviewpoint as a feminist advocate. How sheutilized all these in writing her column wasnot subject to dictation. Any rules imposedon her as to length of articles, time of submission, etc. are merely general

guidelines dictated by the nature of thenewspaper business itself.

Economic Reality Test – This is especiallyappropriate when there is no writtenagreement, as in this case. The benchmarkis the economic dependence of the workeron the employee.

Petitioner’s main occupation is not ascolumnist but as women’s rights advocate,and she also contributes articles to otherpublications.

Magalang vs. CAFebruary 26, 2008

J. Nachura

Subject area: CivPro, decisions – final andexecutor; effect, decisions – coordinate

courtsFacts: Magalang filed for illegal dismissal.NLRC rendered a decision, denied Motion forReconsideration of Magalang who filed anappeal with the CA 9th Division; denied MFRof employer who filed an appeal with the CA4th Division. CA 9th Division promulgateddecision first, no appeal made. 4th Divisionsubsequently rendered inconsistent decision

Issue: WON the decision of the 4 th Division isvalid

Decision: No.

Ratio:Various divisions of the CA are, in a sense,coordinate courts, and pursuant to the policyof judicial stability, a division of theappellate court should not interfere with thedecision of other divisions.

Further, no appeal was interposed againstthe 9th Division’s decision; therefore, it

already attained finality. When a decisionbecomes final and executor, the court loses

jurisdiction and not even an appellate courtwill have the power to review the said

judgment. Just as the losing party has theprivilege to file an appeal within theprescribed period, so does the winner havethe correlative right to enjoy the finality of the decision.



TITLE OF THE CASE: PARISCHA V. DON

LUIS DISON REALTY

DATE OF PROMULGATION: March 14,

2008

SUBJECT AREA: Corporation Law, Civil

Procedure, Obligations and Contracts

KEY DOCTRINES/CONCEPTS: Standing

to Sue of a Corporation; Capacity to

Sue of an Officer on Behalf of a

Corporation; Unlawful Detainer

FACTS:

Respondent Don Luis Dison Realty, Inc. and

petitioners Parischa executed two Contracts

of Lease whereby the former, as lessor,

agreed to lease to the latter Units 22, 24, 32,

33, 34, 35, 36, 37 and 38 of the San Luis

Building located at Ermita, Manila.Petitioners, in turn, agreed to pay monthly

rentals.

Petitioners paid the monthly rentals until

May 1992. After that, however, petitioners

refused to pay the rent. Petitioners assert

that their refusal to pay the rent was

justified because of the internal squabble in

respondent company as to the personauthorized to receive payment. Also,

petitioners alleged that they were prevented

from using the units rented. Petitioners

eventually paid their monthly rent for

December 1992 in the amount of

P30,000.00, and claimed that respondent

waived its right to collect the rents for the

months of July to November 1992 since

petitioners were prevented from using some

of the units. However, they again withheld

payment starting January 1993 because of

respondent’s refusal to turn over Rooms 36

37 and 38.

A complaint for ejectment was filed by

private respondent through itsrepresentative, Ms. Bautista, before the

MeTC.

The MeTC considered petitioners’ non

payment of rentals as unjustified. The court

held that mere willingness to pay the rent

did not amount to payment of the obligation

The court did not give credence t

petitioners’ claim that private respondentfailed to turn over possession of the

premises. The court, however, dismissed

the complaint because of Ms. Bautista’s

alleged lack of authority to sue on behalf of

the corporation.

The RTC of Manila reversed and set aside the

MeTC Decision. It adopted the MeTC’s

finding on petitioners’ unjustified refusal topay the rent, which is a valid ground for

ejectment. It, however, it upheld Ms

Bautista’s authority to represent respondent

notwithstanding the absence of a board

resolution to that effect, since her authority

was implied from her power as a genera

manager/treasurer of the company.

The CA affirmed the RTC Decision budeleted the award of attorney’s fees.

ISSUE 1: WON RESPONDENT COMPANY

HAS STANDING TO SUE



DECISION: Yes

RATIO:

Although the SEC suspended and eventually

revoked respondent’s certificate of

registration on February 16, 1995, records

show that it instituted the action for

ejectment on December 15, 1993.

Accordingly, when the case was

commenced, its registration was not yet

revoked. Besides, the SEC later set aside its

earlier orders of suspension and revocation

of respondent’s certificate, rendering the

issue moot and academic.

ISSUE 2: WON MS. BAUTISTA HAS

CAPACITY TO SUE IN BEHALF OF THE

COMPANY

DECISION: Yes

RATIO:

A corporation has no powers except those

expressly conferred on it by the Corporation

Code and those that are implied from or are

incidental to its existence. In turn, a

corporation exercises said powers through

its board of directors and/or its duly

authorized officers and agents. Physical

acts, like the signing of documents, can be

performed only by natural persons duly

authorized for the purpose by corporate by-

laws or by a specific act of the board of

directors. Thus, any person suing on behalf

of the corporation should present proof of

such authority.

Although Ms. Bautista initially failed to show

that she had the capacity to sign the

verification and institute the ejectment case

on behalf of the company, when confronted

with such question, she immediately

presented the Secretary’s Certificate

confirming her authority to represent the

company. There is ample jurisprudence

holding that subsequent and substantia

compliance may call for the relaxation of the

rules of procedure in the interest of justice

In Novelty Phils., Inc. v. Court of Appeals,

the Court faulted the appellate court for

dismissing a petition solely on petitioner’s

failure to timely submit proof of authority to

sue on behalf of the corporation. In Pfizer,

Inc. v. Galan, we upheld the sufficiency of apetition verified by an employment specialist

despite the total absence of a board

resolution authorizing her to act for and on

behalf of the corporation. Lastly, in China

Banking Corporation v. Mondragon

International Philippines, Inc, we relaxed the

rules of procedure because the corporation

ratified the manager’s status as an

authorized signatory. In all of the above

cases, we brushed aside technicalities in theinterest of justice. This relaxation of the

rules applies only to highly meritorious

cases, and when there is substantia

compliance.

ISSUE 3: WON THE DENIAL OF THE

MOTION TO INHIBIT CA JUSTICE RUBEN

REYES IS PROPER

DECISION: Yes

RATIO:



First, the motion to inhibit came after the

appellate court rendered the assailed

decision, that is, after Justice Reyes had

already rendered his opinion on the merits of

the case. It is settled that a motion to inhibit

shall be denied if filed after a member of the

court had already given an opinion on the

merits of the case, the rationale being that“a litigant cannot be permitted to speculate

on the action of the court x x x (only to)

raise an objection of this sort after the

decision has been rendered.”

Second, it is settled that mere suspicion that

a judge is partial to one of the parties is not

enough; there should be evidence to

substantiate the suspicion. Bias andprejudice cannot be presumed, especially

when weighed against a judge’s sacred

pledge under his oath of office to administer

justice without regard for any person and to

do right equally to the poor and the rich.

There must be a showing of bias and

prejudice stemming from an extrajudicial

source, resulting in an opinion on the merits

based on something other than what the

judge learned from his participation in the

case.

ISSUE 4: WON THE PETITIONERS MAY

BE VALIDLY EJECTED FROM THE LEASED

PREMISES

DECISION: Yes

RATIO:

Unlawful detainer cases are summary in

nature. In such cases, the elements to be

proved and resolved are the fact of lease

and the expiration or violation of its terms.

Specifically, the essential requisites o

unlawful detainer are: 1) the fact of lease by

virtue of a contract, express or implied; 2)

the expiration or termination of the

possessor’s right to hold possession; 3

withholding by the lessee of possession of

the land or building after the expiration ortermination of the right to possess; 4) letter

of demand upon lessee to pay the rental or

comply with the terms of the lease and

vacate the premises; and 5) the filing of the

action within one year from the date of the

last demand received by the defendant.[49]

It is undisputed that petitioners and

respondent entered into two separatecontracts of lease involving nine (9) rooms of

the San Luis Building. Records, likewise

show that respondent repeatedly demanded

that petitioners vacate the premises, but the

latter refused to heed the demand; thus

they remained in possession of the

premises. The only contentious issue is

whether there was indeed a violation of the

terms of the contract.

This issue involves questions of fact, the

resolution of which requires the evaluation of

the evidence presented. The MeTC, the RTC

and the CA all found that petitioners failed to

perform their obligation to pay the stipulated

rent. It is settled doctrine that in a civi

case, the conclusions of fact of the tria

court, especially when affirmed by the Court

of Appeals, are final and conclusive, and

cannot be reviewed on appeal by the

Supreme Court.

Petitioners’ justifications are belied by the

evidence on record. As correctly held by the

CA, petitioners’ communications to

respondent prior to the filing of the

complaint never mentioned their alleged

http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/136409.htm#_ftn49

http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/136409.htm#_ftn49



same prior to their assignment as security

for the loan; and (2) that respondent is not a

resident of the Philippines.

The trial court granted the application and

issued the writ ex parte after PCIB posted a

Php 18.7M bond, issued by PrudentialGuarantee & Assurance Inc. Also, the bank

deposits of Alejandro with RCBC were

garnished. Alejandro, through counsel,

voluntarily submitted to the jurisdiction of

the court.

Subsequently, Alejandro filed a motion to

quash the writ contending that the

withdrawal of his unassigned deposits wasnot fraudulent as it was approved by PCIB.

He also alleged that petitioner knew that he

maintains a permanent residence at Calle

Victoria, Ciudad Regina, Batasan Hills,

Quezon City, and an office address in Makati

City at the Law Firm Romulo Mabanta

Buenaventura Sayoc & De los Angeles,

where he is a partner. In both addresses,

petitioner regularly communicated with him

through its representatives. Respondentadded that he is the managing partner of

the Hong Kong branch of said Law Firm; that

his stay in Hong Kong is only temporary; and

that he frequently travels back to the

Philippines.

The trial court issued an order quashing the

writ and holding that the withdrawal of

respondent’s unassigned deposits was notintended to defraud petitioner. It also found

that the representatives of petitioner

personally transacted with respondent

through his home address in Quezon City

and/or his office in Makati City. It thus

concluded that petitioner misrepresented

and suppressed the facts regarding

respondent’s residence considering that it

has personal and official knowledge that for

purposes of service of summons

respondent’s residence and office addresses

are located in the Philippines.

With the denial of PCIB’s motion for

reconsideration, it elevated the case to the

CA via a petition for certiorari. The petitionwas dismissed for failure to prove that the

trial court abused its discretion in issuing the

aforesaid order. PCIB filed a motion fo

reconsideration but was denied. On petition

with the SC, the case was dismissed for late

filing. PCIB filed a motion for

reconsideration but was likewise denied

with finality on March 6, 2000.

Complaint for damages (SECOND CASE

AND CASE BEFORE THE COURT)

Meanwhile, on May 20, 1998, Alejandro filed

for damages in the amount of P25 Million on

the attachment bond posted by Prudentia

Guarantee & Assurance, Inc. on account of

the wrongful garnishment of his deposits

He presented evidence showing that his

P150,000.00 RCBC check payable to his

counsel as attorney’s fees, was dishonored

by reason of the garnishment of his depositsHe also testified that he is a graduate of the

Ateneo de Manila University in 1982 with a

double degree of Economics and

Management Engineering and of the

University of the Philippines in 1987 with the

degree of Bachelor of Laws. Respondent

likewise presented witnesses to prove that

he is a well known lawyer in the business

community both in the Philippines and in

Hong Kong.

The trial court awarded damages t

Alejandro in the amount of P25 Million

without specifying the basis thereof. It also

denied petitioner’s motion for

reconsideration.



PCIB elevated the case to the CA which

affirmed the findings of the trial court. It

held that in claiming that respondent was

not a resident of the Philippines, petitioner

cannot be said to have been in good faith

considering that its knowledge of

respondent’s Philippine residence and office

address goes into the very issue of the trialcourt’s jurisdiction which would have been

defective had respondent not voluntarily

appeared before it. The CA, however,

reduced the amount of damages awarded to

petitioner and specified their basis: P2M as

nominal damages; P5M as moral damages;

and P1M as attorney’s fees, to be satisfied

against the attachment bond under

Prudential Guarantee & Assurance, Inc.

Both parties moved for reconsideration. The

CA denied PCIB’s motion for reconsideration

but granted that of Alejandro’s by ordering

PCIB to pay additional P5M as exemplary

damages.

ISSUE 1: WON THE COURT CAN PASS

UPON THE ISSUES OF PROPRIETY OF

THE ISSUANCE OF A WRIT OF

ATTACHMENT, MISREPRESENTATION BY

PCIB AND RESIDENCE OF ALEJANDRO

DECISION: No.

RATIO:

The ruling of the trial court that PCIB is not

entitled to a writ of attachment because

Alejandro is a resident of the Philippines,

that his act of withdrawing his deposits with

petitioner was without intent to defraud, and

that PCIB misrepresented that Alejandro was

residing out of the Philippines, is now

beyond the power of this Court to review,

having been the subject of a final and

executory order. The rule on conclusiveness

of judgment precludes the relitigation of a

particular fact or issue in another action

between the same parties even if based on a

different claim or cause of action. The judgment in the prior action operates as

estoppel as to those matters in issue o

points controverted, upon the determination

of which the finding or judgment was

rendered. Hence, the issues of

misrepresentation by petitioner and the

residence of respondent for purposes o

service of summons can no longer be

questioned by petitioner in this case.

ISSUE 2: WON PCIB IS LIABLE FOR

DAMAGES FOR THE IMPROPER

ISSUANCE OF THE WRIT OF

ATTACHMENT AGAINST ALEJANDRO

DECISION: Yes.

RATIO:

PCIB is barred by the principle of

conclusiveness of judgment from

invoking good faith in the application

for a writ of attachment in order to

avoid liability for damages

The trial court settled in its final order the

two grounds invoked by PCIB for the

issuance of a writ for preliminary

attachment. Contrary to the assertions of

PCIB, Alejandro is a resident of the

Philippines, and he did not withdraw his

deposits from PCIB with intent to defraud



creditors. Firstly, in the hearings of the

motion, and oral arguments of counsels

before the SC, it appeared that PCIB

personally transacted with Alejandro mainly

through the latter’s Metro Manila residence,

either in Alejandro’s home address in

Quezon City or his main business address at

the ROMULO MABANTA BUENAVENTURASAYOC & DELOS ANGELES in Makati. Thus

PCIB could not deny personal and official

knowledge that Alejandro’s residence for

purposes of service of summons is in the

Philippines. Secondly, the amount

withdrawn by Alejandro from PCIB was not

part of his peso deposits assigned with the

bank to secure the loan. Proof that the

withdrawal was not intended to defraud PCIB

as creditor is that plaintiff approved and

allowed said withdrawals. Moreover, the

tenor of the final order of the trial court

which quashed the writ evidently considers

PCIB to have acted in bad faith by resorting

to a deliberate strategy to mislead the court.

Thus, PCIB cannot again invoke good faith in

the present case since such issue was

already aired and squarely ruled upon in the

first case. Similarly, in the case of Hanil

Development Co., Ltd. v. Court of Appeals,

the Court debunked the claim of good faithby a party who maliciously sought the

issuance of a writ of attachment, the bad

faith of said party having been previously

determined in a final decision which voided

the assailed writ.

Discussion on when attachment is

proper as a means for the court to

acquire jurisdiction (over the res, not over the non-resident defendant)

The circumstances under which a writ of

preliminary attachment may be issued are

set forth in Section 1, Rule 57 of the Rules of

Court, to wit:

SEC. 1. Grounds upon

which attachment may issue. —

At the commencement of the

action or at any time before

entry of judgment, a plaintiff or

any proper party may have the

property of the adverse party

attached as security for thesatisfaction of any judgment

that may be recovered in the

following cases:

f) In an action

against a party who resides out

of the Philippines, or on whom

summons may be served by

publication.

The purposes of preliminary attachment are

(1) to seize the property of the debtor in

advance of final judgment and to hold it for

purposes of satisfying said judgment, as in

the grounds stated in paragraphs (a) to (e)

of Section 1, Rule 57 of the Rules of Court; or

(2) to acquire jurisdiction over the action by

actual or constructive seizure of the propertyin those instances where personal o

substituted service of summons on the

defendant cannot be effected, as in

paragraph (f) of the same provision.

Corollarily, in actions in personam, such as

the case for collection of sum of money

summons must be served by personal o

substituted service, otherwise the court wilnot acquire jurisdiction over the defendant

In case the defendant does not reside

and is not found in the Philippines (and

hence personal and substituted service

cannot be effected), the remedy of the

plaintiff in order for the court to

acquire jurisdiction to try the case is to

convert the action into a proceeding in

rem or quasi in rem by attaching the



property of the defendant. The service

of summons in this case (which may be

by publication coupled with the sending

by registered mail of the copy of the

summons and the court order to the

last known address of the defendant),

is no longer for the purpose of

acquiring jurisdiction but forcompliance with the requirements of

due process.

Discussion on the propriety of issuing a

writ of attachment / proper mode of

service in the case of a resident

temporarily out of the Philippines

PCIB seeks to nuance its argument by saying

that it considers Alejandro a resident

temporarily out of the Philippines such that

attachment is still a proper and available

remedy.

However, the SC held that where thedefendant is a resident who is temporarily

out of the Philippines, attachment of his/her

property in an action in personam, is not

always necessary in order for the court to

acquire jurisdiction to hear the case.

Section 16, Rule 14 of the Rules of

Court reads:

Sec. 16. Residents

temporarily out of the

Philippines. – When an action is

commenced against a

defendant who ordinarily

resides within the Philippines,

but who is temporarily out of it,

service may, by leave of court,

be also effected out of the

Philippines, as under the

preceding section.

The preceding section referred to in theabove provision is Section 15 which provides

for extraterritorial service – (a) persona

service out of the Philippines, (b) publication

coupled with the sending by registered mai

of the copy of the summons and the court

order to the last known address of the

defendant; or (c) in any other manner which

the court may deem sufficient.

In Montalban v. Maximo, the Court held that

substituted service of summons (under

the present Section 7, Rule 14 of the Rules of

Court) is the normal mode of service of

summons that will confer jurisdiction on the

court over the person of residents

temporarily out of the Philippines. Meaning

service of summons may be effected by (a)

leaving copies of the summons at the

defendant’s residence with some person of

suitable discretion residing therein, or (b) by

leaving copies at the defendant’s office or

regular place of business with some

competent person in charge thereof. Hence

the court may acquire jurisdiction over an

action in personam by mere substituted

service without need of attaching the

property of the defendant.

The rules on the application of a writ o

attachment must be strictly construed in

favor of the defendant. For attachment is

harsh, extraordinary, and summary in

nature; it is a rigorous remedy which

exposes the debtor to humiliation and

annoyance. It should be resorted to only

when necessary and as a last remedy.



In the instant case, it must be stressed that

the writ was issued by the trial court mainly

on the representation of petitioner that

respondent is not a resident of the

Philippines. Obviously, the trial court’s

issuance of the writ was for the sole purpose

of acquiring jurisdiction to hear and decide

the case. Had the allegations in thecomplaint disclosed that respondent has a

residence in Quezon City and an office in

Makati City, the trial court, if only for the

purpose of acquiring jurisdiction, could have

served summons by substituted service on

the said addresses, instead of attaching the

property of the defendant. The

misrepresentation of petitioner that

respondent does not reside in the Philippines

and its omission of his local addresses was

thus a deliberate move to ensure that the

application for the writ will be granted.

In light of the foregoing, the Court of

Appeals properly sustained the finding of the

trial court that petitioner is liable for

damages for the wrongful issuance of a writ

of attachment against respondent.

Discussion on damages

Anent the actual damages, the Court of

Appeals is correct in not awarding the same

inasmuch as the respondent failed to

establish the amount garnished by

petitioner. It is a well settled rule that one

who has been injured by a wrongful

attachment can recover damages for the

actual loss resulting therefrom. But for suchlosses to be recoverable, they must

constitute actual damages duly established

by competent proofs, which are, however,

wanting in the present case.

Nominal damages may be awarded to a

plaintiff whose right has been violated or

invaded by the defendant, for the purpose of

vindicating or recognizing that right, and not

for indemnifying the plaintiff for any loss

suffered by him. Its award is thus not for the

purpose of indemnification for a loss but for

the recognition and vindication of a right. In

this case, nominal damages is prope

considering that the right of respondent to

use his money has been violated by itsgarnishment. The amount of nomina

damages must, however, be reduced from

P2 million to P50,000.00 considering the

short period of 2 months during which the

writ was in effect as well as the lack o

evidence as to the amount garnished.

The award of attorney’s fees is proper when

a party is compelled to incur expenses to lifta wrongfully issued writ of attachment. The

basis of the award thereof is also the

amount of money garnished, and the length

of time respondents have been deprived of

the use of their money by reason of the

wrongful attachment. It may also be based

upon (1) the amount and the character of

the services rendered; (2) the labor, time

and trouble involved; (3) the nature and

importance of the litigation and business in

which the services were rendered; (4) the

responsibility imposed; (5) the amount of

money and the value of the property

affected by the controversy or involved in

the employment; (6) the skill and the

experience called for in the performance of

the services; (7) the professional character

and the social standing of the attorney; (8)

the results secured, it being a recognized

rule that an attorney may properly charge a

much larger fee when it is contingent thanwhen it is not. All the aforementioned

weighed, and considering the short period of

time it took to have the writ lifted, the

favorable decisions of the courts below, the

absence of evidence as to the professiona

character and the social standing of the

attorney handling the case and the amount

garnished, the award of attorney’s fees



should be fixed not at P1 Million, but only at

P200,000.00.

The courts below correctly awarded moral

damages on account of petitioner’s

misrepresentation and bad faith; however,

we find the award in the amount of P5Million excessive. Moral damages are to be

fixed upon the discretion of the court taking

into consideration the educational, social

and financial standing of the parties. Moral

damages are not intended to enrich a

complainant at the expense of a defendant.

They are awarded only to enable the injured

party to obtain means, diversion or

amusements that will serve to obviate the

moral suffering he has undergone, by reasonof petitioner’s culpable action. Moral

damages must be commensurate with the

loss or injury suffered. Hence, the award of

moral damages is reduced to P500,000.00.

Considering petitioner’s bad faith in securing

the writ of attachment, we sustain the award

of exemplary damages by way of example or

correction for public good. While as ageneral rule, the liability on the attachment

bond is limited to actual (or in some cases,

temperate or nominal) damages, exemplary

damages may be recovered where the

attachment was established to be

maliciously sued out. Nevertheless, the

award of exemplary damages in this case

should be reduced from P5M to P500,000.00.

TITLE OF THE CASE: PEOPLE V.

TERRADO

DATE OF PROMULGATION: July 14, 2008

SUBJECT AREA: Criminal Procedure

KEY DOCTRINES/CONCEPTS: Specia

Civil Action for Certiorari in Crimina

Cases; Double Jeopardy

FACTS:

Accused Joseph Terrado was charged with

Carnapping under Republic Act 6538

otherwise known as the “Anti-Carnapping Act

of 1972.” According to the Information, the

accused carted away a motorized tricycle

after threatening the driver with a fan knife

The accused was arraigned and pleaded not

guilty to the crime charged.

The defense claimed that the accuse

merely borrowed the tricycle from its driver

Dalmacio. However, when accused was

about to return the same, he hit a stone, lost

control of the tricycle and bumped a tree

Three persons came and helped him bring

the tricycle back to the roadside. The

accused returned the tricycle at around11:00 pm of the same day to the Spouses

Garcia, owners of the tricycle. The defense

did not deny that the tricycle, when

returned, was damaged and, in fact, the

accused voluntarily paid the amount o

P8,000.00 as partial remuneration for the

repair of the tricycle.

The trial court acquitted accused Terrado forfailure of the prosecution to establish intent

to take the tricycle and intent to gain from

the same. Thus, the court held that the

prosecution failed to prove the guilt of the

accused beyond reasonable doubt.

The prosecution filed a Motion fo

Reconsideration which the trial court denied



Aggrieved, the complainants come to this

Court via a Petition for Certiorari seeking to

annul and set aside the decision

ISSUE 1: WON THE PUBLIC

RESPONDENT IN RENDERING THE

QUESTIONED DECISION ACTED WITHGRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK OF JURISDICTION.

DECISION: No.

RATIO:

The special civil action for certiorari is

intended for the correction of errors of

jurisdiction or grave abuse of discretion

amounting to lack or excess of jurisdiction.

Its principal office is to keep the inferior

court within the parameters of its jurisdiction

or to prevent it from committing such a

grave abuse of discretion amounting to lack

or excess of jurisdiction.

By grave abuse of discretion is meant such

capricious and whimsical exercise of

judgment as is equivalent to lack of

jurisdiction. The abuse of discretion must be

grave as where the power is exercised in an

arbitrary or despotic manner by reason of

passion or personal hostility and must be so

patent and gross as to amount to an evasion

of positive duty or to a virtual refusal to

perform the duty enjoined by or to act at all

in contemplation of law.

While petitioner alleges grave abuse of

discretion amounting to lack or excess of

jurisdiction, the imputation is premised on

the averment that the trial court reached its

conclusions based on speculation, surmises

and conjectures. As alleged by the

petitioners, the accused forcibly took the

vehicle from the complainant’s driver and

the public respondent acquitted the accused

for alleged failure to meet the element of

intent to gain. Specifically, the allegations

delve on the misapprehension of facts by thetrial court.

As a rule, factual matters cannot be

normally inquired into by the Supreme Court

in a certiorari proceeding. The present

recourse is a petition for certiorari unde

Rule 65. It is a fundamental aphorism in law

that a review of facts and evidence is not

the province of the extraordinary remedy ofcertiorari, which is extra ordinem – beyond

the ambit of appeal.

At least, the mistakes ascribed to the tria

court are not errors of jurisdiction correctible

by the special civil action for certiorari, but

errors of judgment, which is correctible by a

petition for review on certiorari under Rule

45 of the Revised Rules of Court. The merefact that a court erroneously decides a case

does not necessarily deprive it of

jurisdiction. Thus, assuming arguendo tha

the trial court committed a mistake in its

judgment, the error does not vitiate the

decision, considering that it has jurisdiction

over the case.

In our jurisdiction, availment of the remedyof certiorari to correct an erroneous acquitta

may be allowed in cases where petitioner

has clearly shown that the public respondent

acted without jurisdiction or with grave

abuse of discretion amounting to lack o

excess of jurisdiction. However, and more

serious than the procedural infraction, if the

petition merely calls for an ordinary review

of the findings of the court a quo, we would



run afoul of the constitutional right against

double jeopardy. Such recourse is

tantamount to converting the petition for

certiorari into an appeal, which is proscribed

by the Constitution, the Rules of Court and

prevailing jurisprudence on double jeopardy.

Verdicts of acquittal are to be regarded as

absolutely final and irreviewable. Thefundamental philosophy behind the principle

is to afford the defendant, who has been

acquitted, final repose and to safeguard him

from government oppression through the

abuse of criminal processes.

[G.R. No. 178884, June 30, 2008]

RICARDO P. PRESBITERO, JR., JANET

PALACIOS, CIRILO G. ABRASIA,ARMANDO G. ALVAREZ, NENITO A.

ARMAS, RENE L. CORRAL, JOEMARIE A.

DE JUAN, ENRILICE C. GENOBIS,

WILLIAM A. PRESBITERO AND REYNO N.

SOBERANO, PETITIONERS, VS.

COMMISSION ON ELECTIONS, ROMMEL

YOGORE, GLORY GOMEZ, DAN YANSON,

JOENITO DURAN, SR., LUCIUS BODIOS

AND REY SUMUGAT, RESPONDENTS.

FACTS: The MCTC Valladolid-San Enrique-

Pulupandan, Negros Occidental ordered the

municipal election officer (EO) of Valladolid

to include the names of 946 individuals in

the list of qualified voters of the said

municipality for the May 2007 elections.

Prompted by the advice of COMELEC Manila

that decisions of trial courts of limited

jurisdiction in inclusion/exclusion cases

attain finality only after the lapse of five

days from receipt of notice sans any appeal

therefrom, the acting provincial election

supervisor (PES), directed the EO on May 13,

2007 not to comply with the MCTC order.

Thus, the said 946 were disallowed by the

board of election inspectors to vote. These

946 moved for the issuance of a TRO to

prevent the Municipal Board of Canvassers

from canvassing the election returns & from

proclaiming the winning candidates for the

local positions in the municipality. Such was

granted. However, the MBOC continued

canvassing & proclaimed the winning

candidates. Presbitero et al thus filed before

the COMELEC a pet. for declaration of failure

of election and the holding of a specia

election because 946 voters weredisenfranchised, the Election Officer of the

municipality (also the ef-officio chair of the

MBOC) was abruptly replaced, the # of

voters was unusually low, no less than 2,000

supporters of petitioners failed to vote as

their names were missing from the list of

voters, the MBOC defied the TRO, and the

acting provincial election supervisor and

acting election officer threated & coerced

the vice-chair & member-secretary of the

MBOC to continue w/ the canvassing & the

proclamation.

ISSUE: WHETHER OR NOT THERE WAS A

FAILURE OF ELECTION.

HELD: NO. THERE WAS NO FAILURE OF

ELECTION.

RATIO: A failure of election may be declared

only in the three instances stated in Section

6 of the OEC: the election has not been

held; the election has been suspended

before the hour fixed by law; and the

preparation and the transmission of the

election returns have given rise to the

consequent failure to elect, meaning nobodyemerged as the winner. Furthermore, the

reason for such failure of election should be

force majeure, violence, terrorism, fraud or

other analogous causes. Finally, before the

COMELEC can grant a verified petition

seeking to declare a failure of election, the

concurrence of 2 conditions must be

established, namely: (1) no voting has taken

place in the precincts concerned on the date



fixed by law or, even if there was voting, the

election nevertheless resulted in a failure to

elect; and (2) the votes cast would affect the

result of the election.

In the instant case, it is admitted by the

petitioners that elections were held in the

subject locality. Also, the private

respondents and four of the petitioners won

in the elections and were proclaimed as the

duly elected municipal officials. There is

nothing in the records from which the Court

can make even a slim deduction that there

has been a failure to elect. Absent any proof

that the voting did not take place, the

alleged disenfranchisement of the 946

individuals and 2,000 more supporters of the

petitioners cannot even be considered as abasis for the declaration of a failure of

election. Had petitioners been aggrieved by

the allegedly illegal composition and

proceedings of the MBOC, then they should

have filed the appropriate pre-proclamation

case contesting the aforesaid composition or

proceedings of the board, rather than

erroneously raising the same as grounds for

the declaration of failure of election. On the

TRO issued by the MCTC and the subsequent

defiance thereof by the MBOC, suffice it to

state that the propriety of suspending the

canvass of returns or the proclamation of

candidates is a pre-proclamation issue that

is solely within the cognizance of the

COMELEC.[21] In sum, petitioners have not

adduced any ground which will warrant a

declaration of failure of election.

TITLE OF THE CASE: SALVADOR V. MAPA

DATE OF PROMULGATION: November

28, 2007

SUBJECT AREA: Civil Procedure;

Criminal Law

KEY DOCTRINES/CONCEPTS: Specia

Civil Action for Certiorari (Rule 65) vs

Petition for Review on Certiorari (Rule

45); Prescription; Ex Post Facto Laws

FACTS:

On October 8, 1992 then President Fidel V

Ramos issued Administrative Order No. 13

creating the Presidential Ad Hoc Fact-Finding

Committee on Behest Loans. Behest loans

are loans granted by government banks or

GOCC at the behest, command, or urging by

previous government officials to thedisadvantage of the Philippine government

The Committee was tasked to inventory al

behest loans and determine the courses of

action that the government should take to

recover these loans.

By Memorandum Order No. 61 dated

November 9, 1992, the functions of the

Committee were expanded to include alnon-performing loans which shall embrace

behest and non-behest loans. Said

Memorandum also named criteria to be

utilized as a frame of reference in

determining a behest loan

Several loan accounts were referred to the

Committee for investigation, including the

loan transactions between MetalsExploration Asia, Inc. (MEA), now Philippine

Eagle Mines, Inc. (PEMI) and the

Development Bank of the Philippines (DBP)

The Committee determined that they bore

the characteristics of behest loans, as

defined under Memorandum Order No. 61

because the stockholders and officers of

PEMI were known cronies of then President

Ferdinand Marcos; the loan was under-



collateralized; and PEMI was

undercapitalized at the time the loan was

granted.

Consequently, Atty. Orlando L. Salvador,

Consultant of the Fact-Finding Committee,

and representing the PCGG, filed with theOmbudsman a sworn complaint for violation

of Sections 3(e) and (g) of Republic Act No.

3019, or the Anti-Graft and Corrupt Practices

Act, against the respondents Mapa, Jr. et. al.

The Ombudsman dismissed the complaint on

the ground of prescription. It stressed that

Section 11 of R.A. No. 3019 as originally

enacted, provides that the prescriptiveperiod for violations of the said Act (R.A.

3019) is ten (10) years. Moreover, the

computation of the prescriptive period of a

crime violating a special law like R.A. 3019 is

governed by Act No. 3326 which provides

that prescription shall begin to run from the

day of the commission of the violation of

law, and if the same be not known at the

time, from the discovery thereof and the

institution of the judicial proceedings for itsinvestigation and punishment. Corollary

thereto, the Supreme Court in the case of

People vs. Dinsay, C.A. 40 O.G. 12th Supp.,

50, ruled that when there is nothing which

was concealed or needed to be discovered

because the entire series of transactions

were by public instruments, the period of

prescription commenced to run from the

date the said instrument were executed.

In the case at bar, the loans were entered

into by virtue of public documents (e.g.,

notarized contracts, board resolutions,

approved letter-request) during the period of

1978 to 1981. Records show that the

complaint was referred and filed with the

Ombudsman on October 4, 1996 or after the

lapse of more than fifteen years from the

violation of the law. Therefore, the offenses

charged had already prescribed.

Also pointed out was that the Presidential Ad

Hoc Committee on Behest Loans was

created on October 8, 1992 under

Administrative Order No. 13. SubsequentlyMemorandum Order No. 61, dated

November 9, 1992, was issued defining the

criteria to be utilized as a frame of reference

in determining behest loans. Accordingly, i

these Orders are to be considered the bases

of charging respondents for alleged offenses

committed, they become ex-post facto laws

which are proscribed by the Constitution.

The Committee filed a Motion fo

Reconsideration, but the Ombudsman

denied it on July 27, 1998.

ISSUE 1: WON THE PRESENT PETITION

FOR REVIEW ON CERTIORARI SHOULD

BE DISMISSED FOR BEING THE WRONGREMEDY IN ELEVATING THE CASE TO

THE SC.

DECISION: No.

RATIO:

A petition for review on certiorari under Rule

45 is not the proper mode by which

resolutions of the Ombudsman in preliminary

investigations of criminal cases are reviewed

by the SC. The remedy from the adverse

resolution of the Ombudsman is a petition

for certiorari under Rule 65.



However, though captioned as a Petition for

Review on Certiorari, the SC treated the

petition as one filed under Rule 65 since a

reading of its contents reveals that petioner

imputes grave abuse of discretion to the

Ombudsman for dismissing the complaint.

The averments in the complaint, not the

nomenclature given by the parties,determine the nature of the action.

ISSUE 2: WON THE CRIME

DEFINED BY SEC. 3(e) AND (g) OF

R.A. 3019 HAS ALREADY

PRESCRIBED

DECISION: No

RATIO:

It is well-nigh impossible for the State

to have known the violations of R.A.

No. 3019 at the time the questionedtransactions were made because the

public officials concerned connived or

conspired with the beneficiaries of the

loans. Thus, the prescriptive period

should be computed from the

discovery of the commission thereof

and not from the day of such

commission.

ISSUE 3: WON ADMINISTRATIVE

ORDER NO. 13 AND

MEMORANDUM ORDER NO. 61

ARE EX-POST FACTO LAW[S].

DECISION: No.

RATIO:

The SC did not sustain the Ombudsman’

declaration that Administrative Order No. 13

and Memorandum Order No. 61 violate theprohibition against ex post facto laws fo

ostensibly inflicting punishment upon a

person for an act done prior to their issuance

and which was innocent when done.

The constitutionality of laws is presumed. To

justify nullification of a law, there must be a

clear and unequivocal breach of the

Constitution, not a doubtful or arguableimplication. Furthermore, the Ombudsman

has no jurisdiction to entertain questions on

the constitutionality of a law. The

Ombudsman, therefore, acted in excess of

its jurisdiction in declaring unconstitutiona

the subject administrative and

memorandum orders.

In any event, the SC held that AdministrativeOrder No. 13 and Memorandum Order No. 61

are not ex post facto laws.

An ex post facto law has been defined as

one — (a) which makes an action done

before the passing of the law and which was

innocent when done criminal, and punishes

such action; or (b) which aggravates a crime

or makes it greater than it was whencommitted; or (c) which changes the

punishment and inflicts a greater

punishment than the law annexed to the

crime when it was committed; or (d) which

alters the legal rules of evidence and

receives less or different testimony than the

law required at the time of the commission

of the offense in order to convict the

defendant. This Court added two (2) more to



the list, namely: (e) that which assumes to

regulate civil rights and remedies only but in

effect imposes a penalty or deprivation of a

right which when done was lawful; or (f) that

which deprives a person accused of a crime

of some lawful protection to which he has

become entitled, such as the protection of a

former conviction or acquittal, or aproclamation of amnesty.

The constitutional doctrine that outlaws an

ex post facto law generally prohibits the

retrospectivity of penal laws. Penal laws are

those acts of the legislature which prohibit

certain acts and establish penalties for their

violations; or those that define crimes, treat

of their nature, and provide for theirpunishment. The subject administrative and

memorandum orders clearly do not come

within the shadow of this definition.

Administrative Order No. 13 creates the

Presidential Ad Hoc Fact-Finding Committee

on Behest Loans, and provides for its

composition and functions. It does not mete

out penalty for the act of granting behest

loans. Memorandum Order No. 61 merely

provides a frame of reference for

determining behest loans. Not being penal

laws, Administrative Order No. 13 and

Memorandum Order No. 61 cannot be

characterized as ex post facto laws.

Title of the Case: Sps Santos v Heirs of LustreAugust 6, 2008 NACHURA

CivPro: forum shopping, prescription

Facts:

Lustre owned a lot which she mortgaged &

later on sold to Natividad Santos who

subsequently sold it to her son Froilan for

which a TCT was issued in his name.

Lustre’s heirs Macaspac & Maniquiz filed w/

RTC of Gapan, Nueva Ecija a Complaint for

Declaration of the Inexistence of Contract,

Annulment of Title, Reconveyance and

Damages against Froilan Santos.

Lustre’s other heirs filed a Complaint for

Annulment of Transfer Certificate of Title and

Deed of Absolute Sale against spouses

Santos, Froilan Santos, R Transport Corp,

Cecilia Macaspac with the same RTC.

Macaspac was impleaded as defendant in

the 2nd case because she refused to join the

other heirs as plaintiffs.

Alleging that the plaintiffs’ right of action for

annulment of the Deed of Sale and TCT had

long prescribed and was barred by laches,

petitioners filed a Motion to Dismiss, also on

the ground of litis pendentia.

The RTC denied the Motion to Dismiss. They

then filed a petition for certiorari with theCourt of Appeals (CA) which dismissed the

petition for lack of merit.

Issue #1: Was there forum shopping

Decision: No

Ratio:

Forum shopping exists when the elements oflitis pendentia are present or when a final

judgment in one case will amount to res

judicata in the other. Its elements are

identity of the subject matter, identity of the

causes of action and identity of the parties

in the two cases. There is substantial

identity of parties when there is a

community of interest between a party in

the first case and a party in the second case.



There is no forum shopping because there is

no identity of parties because the plaintiff in

the 1st case (Macaspac) does not, in fact,

share a common interest with the plaintiffs

in the 2nd case.

Plaintiffs in both cases are the heirs of

Lustre; they are therefore co-owners of the

property. However, the fact of being a co-

owner does not necessarily mean that a

plaintiff is acting for the benefit of the co-

ownership when he files an action respecting

the co-owned property. Co-owners are not

parties inter se in relation to the property

owned in common. The test is whether the

“additional” party, the co-owner in this case,

acts in the same capacity or is in privity with

the parties in the former action. [28]

Macaspac filed the 1st case seeking the

reconveyance of the property to her, and not

to Lustre or her heirs. This is a clear act of

repudiation of the co-ownership which would

negate a conclusion that she acted in privity

with the other heirs or that she filed the

complaint in behalf of the co-ownership. In

contrast, respondents were evidently acting

for the benefit of the co-ownership when

they filed the 2nd case wherein they prayed

that TCT Lustre be reinstated, or a new

certificate of title be issued in her name.

Issue #1: Does prescription or laches apply?

Decision: No

Ratio:

The action for reconveyance on the ground

that the certificate of title was obtained by

means of a fictitious deed of sale is virtually

an action for the declaration of its nullity,

which does not prescribe. Moreover, a

person acquiring property through fraud

becomes, by operation of law, a trustee of

an implied trust for the benefit of the real

owner of the property. An action for

reconveyance based on an implied trust

prescribes in ten years. And in such case,

the prescriptive period applies only if thereis an actual need to reconvey the property

as when the plaintiff is not in possession of

the property. Otherwise, if plaintiff is in

possession of the property, prescription does

not commence to run against him. Thus,

when an action for reconveyance is

nonetheless filed, it would be in the nature

of a suit for quieting of title, an action that is

imprescriptible.

It follows then that the respondents’ present

action should not be barred by laches.

Laches is a doctrine in equity, which may be

used only in the absence of, and never

against, statutory law. Obviously, it cannot

be set up to resist the enforcement of an

imprescriptible legal right.[39]

Title of the Case: Tabuada v Hon Ruiz June 27, 2008 NACHURA

SpecPro: non-contentious nature of special

proceedings, compromise/amicable

settlement

Facts:

In the proceedings for the settlement of theintestate estate, trial court issued the

following Order:

In view of the strong manifestation of the

parties herein and their respective counsel

that they will be able to raise (sic) an

amicable settlement, finally, on or before 25

December 2004, the Court will no longer be

setting the pending incidents for hearing as



the parties and their counsel have assured

this Court that they are going to submit a

“Motion for Judgment Based On An Amicable

Settlement” on or before 25 December

2004.

The RTC, invoking Section 3,[5] Rule 17, of the Rules of Court, terminated the

proceedings on account of the parties’

failure to submit the amicable settlement

and to comply with its Order.

Issue #1: Was the termination of the case

premature?

Decision: Yes

Ratio:

While a compromise agreement or an

amicable settlement is very strongly

encouraged, the failure to consummate one

does not warrant any procedural sanction,

much less provide an authority for the court

to jettison the case. The case should not

have been terminated or dismissed by the

trial court on account of the mere failure of the parties to submit the promised amicable

settlement and/or the Motion for Judgment

Based On An Amicable Settlement. Given

the non-contentious nature of special

proceedings[11] (which do not depend on

the will of an actor, but on a state or

condition of things or persons not entirely

within the control of the parties interested),

its dismissal should be ordered only in the

extreme case where the termination of the

proceeding is the sole remedy consistent

with equity and justice, but not as a penalty

for neglect of the parties therein.

The third clause of Section 3, Rule 17, which

authorizes the motu propio dismissal of a

case if the plaintiff fails to comply with the

rules or any order of the court,[13] cannot

even be used to justify the convenient,

though erroneous, termination of the

proceedings herein. The RTC, in its Order,

neither required the submission of the

amicable settlement or the aforesaid Motion

for Judgment, nor warned the parties that

should they fail to submit the compromise

within the given period, their case would bedismissed. Hence, it cannot be categorized

as an order requiring compliance to the

extent that its defiance becomes an affront

to the court and the rules. And even if it

were worded in coercive language, the

parties cannot be forced to comply, for, as

aforesaid, they are only strongly

encouraged, but are not obligated, to

consummate a compromise. An order

requiring submission of an amicable

settlement does not find support in our

jurisprudence and is premised on an

erroneous interpretation and application of

the law and rules.

MAYOR JOSE UGDORACION, JR. vCOMMISSION ON ELECTIONS andEPHRAIM M. TUNGOLApril 18, 2008, NACHURA

PUB OFF

• Acquisition of a permanent residentstatus abroad constitutes an abandon-ment of domicile and residence in thePhilippines. Thus, the “green card”status in the USA is a renunciation of one’s status as a resident of the Phil-ippines.

• Domicile is the place where one actu-

ally or constructively has his perman-ent home, where he, no matter wherehe may be found at any given time,eventually intends to return (animus

revertendi) and remain (animus man-endi).

• Domicile is classified into (1) domicile

of origin, which is acquired by everyperson at birth; (2) domicile of choice,which is acquired upon abandonmentof the domicile of origin; and (3) domi-cile by operation of law, which the lawattributes to a person independentlyof his residence or intention.



FACTS Jose Ugdoracion and Ephraim Tungol wererival mayoralty candidates in Albuquerque,Bohol in the May 2007 elections. Tungol fileda petition to cancel Ugdoracion’s Certificateof Candidacy contending that the latter’sdeclaration of eligibility for Mayor

constituted material misrepresentation; thathe is actually a “green card” holder or apermanent resident of the US. It appearsthat Ugdoracion became a permanent USresident on September 26, 2001 and wasissued an Alien Number by the USINS.Ugdoracion, on the other hand, presentedthe following documents as proof of hissubstantial compliance with the residencyrequirement: (1) a residence certificate; (2)an application for a new voter’s registration;and (3) a photocopy of Abandonment of

Lawful Permanent Resident Status. COMELECcancelled Ugdoracion’s COC and removedhis name from the certified list of candidatesfor Mayor. His motion for recon was denied.Hence, the petition imputing grave abuse of discretion to the COMELEC.

ISSUE #1Whether there is material misrepresentationwhich is a valid ground for the cancellationof Ugdoracion’s COC

DECISION YES

RATIOSection 74, in relation to Section 78 of theOmnibus Election Code, requires that thefacts stated in the COC must be true, andany false representation therein of amaterial fact shall be a ground forcancellation thereof, thus:

SEC. 74. Contents of certificateof candidacy. — The certificateof candidacy shall state thatthe person filing it isannouncing his candidacy forthe office stated therein andthat he is eligible for said office;if for Member of the BatasangPambansa, the province,including its component cities,highly urbanized city or district

or sector which he seeks torepresent; the political party towhich he belongs; civil status;his date of birth; residence; hispost office address for allelection purposes; hisprofession or occupation; thathe will support and defend the

Constitution of the Philippinesand will maintain true faith andallegiance thereto; that he willobey the laws, legal orders, anddecrees promulgated by theduly constituted authorities;that he is not a permanentresident or immigrant to aforeign country; that theobligation assumed by his oathis assumed voluntarily, withoutmental reservation or purpose

of evasion; and that the factsstated in the certificate of candidacy are true to the bestof his knowledge.

x x x x

SEC. 78. Petition to deny duecourse to or cancel a certificateof candidacy. – A verifiedpetition seeking to deny duecourse or to cancel a certificate

of candidacy may be filed byany person exclusively on theground that any materialrepresentation containedtherein as required underSection 74 hereof is false. Thepetition may be filed at anytime not later than twenty-fivedays from the time of the filingof the certificate of candidacyand shall be decided, after duenotice and hearing not later

than fifteen days before theelection.

The false representation contemplated bySection 78 of the Code pertains to materialfact, and is not simply an innocuous mistakeA material fact refers to a candidate’squalification for elective office such as one’scitizenship and residence. Aside from therequirement of materiality, a false



representation under Section 78 mustconsist of a “deliberate attempt to mislead,misinform, or hide a fact which wouldotherwise render a candidate ineligible.”

Section 74 specifically requires a statementin the COC that the candidate is “not apermanent resident or an immigrant to a

foreign country.” Ugdoracion explicitly statedin his COC that he had resided inAlbuquerque, Bohol before the May 2007elections for 41 years. Even if Ugdoracionmight have been of the mistaken belief thathe remained a resident of the Philippines, hehid the fact of his immigration to the USAand his status as a “green card” holder.

Although Ugdoracion have won the electionas Mayor of Albuquerque before, it does notsubstitute for the specific requirements of

law on a person’s eligibility for public officewhich he lacked, and does not cure hismaterial misrepresentation which is a validground for the cancellation of his COC.

ISSUE #2Whether Ugdoracion lost his domicile of origin

DECISION YES

RATIOResidence, in contemplation of election laws,is synonymous to domicile. Domicile is theplace where one actually or constructivelyhas his permanent home, where he, nomatter where he may be found at any giventime, eventually intends to return (animusrevertendi) and remain (animus manendi).

Domicile is classified into (1) domicile of origin, which is acquired by every person at

birth; (2) domicile of choice, which isacquired upon abandonment of the domicileof origin; and (3) domicile by operation of law, which the law attributes to a personindependently of his residence or intention.

We are guided by three basic rules: (1) aman must have a residence or domicilesomewhere; (2) domicile, once established,remains until a new one is validly acquired;

and (3) a man can have but one residence ordomicile at any given time.

The general rule is that the domicile of originis not easily lost; it is lost only when there isan actual removal or change of domicile, abona fide intention of abandoning the formerresidence and establishing a new one, and

acts which correspond with such purpose. Inthe instant case, however, Ugdoracion’sacquisition of a lawful permanent residentstatus in the US amounted to anabandonment and renunciation of his statusas a resident of the Philippines; itconstituted a change from his domicile of origin, which was Albuquerque, Bohol, to anew domicile of choice, which is the USA.

Title of the Case: Unlad v Dragon

June 27, 2008 NACHURA

ObliCon: jurisdiction, rescission

Facts: The parties entered in a Memorandum

of Agreement: respondents as controlling

stockholders of the Rural Bank shall allow

Unlad Resources to subscribe to a minimum

of P480, 000 common or preferred non-

voting shares of stock with a total par valueof P4.8 M and pay up immediately P1.2M for

said subscription; that the respondents,

upon the signing of the said agreement shall

transfer control and management over the

Rural Bank to Unlad Resources. The

respondents complied with their obligation

but the petitioners did not, thus respondents

filed a Complaint for rescission of the

agreement and the return of control and

management of the Rural Bank from

petitioners to respondents, plus damages.

RTC declared the MOA rescinded &ordered to

immediately return control and management

over the Rural to respondents. Petitioners

appealed to the CA which dismissed the

appeal for lack of merit.

Petitioners contend that the issues court are

intra-corporate in nature and are, therefore,

beyond the jurisdiction of the trial court.



They point out that respondents' complaint

charged them with mismanagement and

alleged dissipation of the assets of the Rural

Bank.

Issue #1: Does RTC have jurisdiction over

the case?

Decision: Yes

Ratio:

The main issue in this case is the rescission

of the Memorandum of Agreement. This is to

be distinguished from respondents'

allegation of the alleged mismanagement

and dissipation of corporate assets by the

petitioners, which is based on the prayer forreceivership over the bank. The two issues,

albeit related, are obviously separate, as

they pertain to different acts of the parties

involved. The issue of receivership does not

arise from the parties' obligations under the

Memorandum of Agreement, but rather from

specific acts attributed to petitioners as

members of the Board of Directors of the

Bank. Clearly, the rescission of the

Memorandum of Agreement is a cause of

action within the jurisdiction of the trial

courts, notwithstanding the fact that the

parties involved are all directors of the same

corporation.

The petitioners insist that the trial court had

no jurisdiction over the complaint because

the issues involved are intra-corporate in

nature. This point has been rendered moot

by RA 8799, also known as the SecuritiesRegulation Code, which took effect in 2000,

transferred jurisdiction over such disputes to

the RTC.

Issue #2: Has the action prescribed?

Decision: No

Ratio:

Petitioners contend that the action for

rescission has prescribed under Article 1398

of the Civil Code, which provides: The action

to claim rescission must be commenced

within 4 years. This is an erroneous

proposition. Article 1389 specifically refers

to rescissible contracts as, clearly, this

provision is under the chapter entitled"Rescissible Contracts."

Article 1389 applies to rescissible contracts,

as enumerated and defined in Articles 1380

and 1381. The "rescission" in Article 1381 is

not akin to the term "rescission" in Article

1191 and Article 1592. In Articles 1191 and

1592, the rescission is a principal action

which seeks the resolution or cancellation of

the contract while in Article 1381, the action

is a subsidiary one limited to cases of

rescission for lesion as enumerated in said

article.

The prescriptive period applicable to

rescission under Articles 1191 and 1592, is

found in Article 1144, which provides that

the action upon a written contract should be

brought within ten years from the time the

right of action accrues.

Article 1381 sets out what are rescissible

contracts, to wit:

Article 1381. The following contracts are

rescissible:

(1) Those which are entered into by

guardians whenever the wards whom they

represent suffer lesion by more than one-

fourth of the value of the things which are

the object thereof;

(2) Those agreed upon in representation of absentees, if the latter suffer the lesion

stated in the preceding number;

(3) Those undertaken in fraud of creditors

when the latter cannot in any other manner

collect the claims due them;

(4) Those which refer to things under

litigation if they have been entered into by

the defendant without the knowledge and

approval of the litigants or of competent



the contract, together with their fruits, and

the price with its interest; consequently, it

can be carried out only when he who

demands rescission can return whatever he

may be obligated to restore.

Neither shall rescission take place when the

things which are the object of the contractare legally in the possession of third persons

who did not act in bad faith.

In this case, indemnity for damages may be

demanded from the person causing the loss.

This Court has consistently ruled that this

provision applies to rescission under Article

1191:

[S]ince Article 1385 of the Civil Codeexpressly and clearly states that "rescission

creates the obligation to return the things

which were the object of the contract,

together with their fruits, and the price with

its interest," the Court finds no justification

to sustain petitioners' position that said

Article 1385 does not apply to rescission

under Article 1191.[15]

Rescission has the effect of "unmaking a

contract, or its undoing from the beginning,and not merely its termination."[16] Hence,

rescission creates the obligation to return

the object of the contract. It can be carried

out only when the one who demands

rescission can return whatever he may be

obliged to restore. To rescind is to declare a

contract void at its inception and to put an

end to it as though it never was. It is not

merely to terminate it and release the

parties from further obligations to eachother, but to abrogate it from the beginning

and restore the parties to their relative

positions as if no contract has been made.[17]

Accordingly, when a decree for rescission is

handed down, it is the duty of the court to

require both parties to surrender that which

they have respectively received and to place

each other as far as practicable in his

original situation. The rescission has the

effect of abrogating the contract in all

parts.[18]

Clearly, the petitioners failed to fulfill their

end of the agreement, and thus, there was

just cause for rescission. With the contract

thus rescinded, the parties must be restoredto the status quo ante, that is, before they

entered into the Memorandum of

Agreement.



Primer on the SC Decision in Neri vs. Senate Committee

April 3, 2008 in CuRReNT IsSues Primer on the Supreme Court Decision inNeri vs. Senate Committee and its Implications

IN GENERAL:

What is the case of Neri vs. Senate Committee?

This case is about the Senate investigation of anomalies concerningthe NBN-ZTE project. During the hearings, former NEDA head RomuloNeri refused to answer certain questions involving his conversationswith President Arroyo on the ground they are covered by executiveprivilege. When the Senate cited him in contempt and ordered hisarrest, Neri filed a case against the Senate with the Supreme Court.On March 25, 2008, the Supreme Court ruled in favor of Neri and

upheld the claim of executive privilege.

What is “executive privilege”?

It is the right of the President and high-level executive branchofficials to withhold information from Congress, the courts and thepublic. It is a privilege of confidentiality which applies tocertain types of information of a sensitive character that would beagainst the public interest to disclose. Executive privilege isbased on the constitution because it relates to the President’seffective discharge of executive powers. Its ultimate end is topromote public interest and no other.

Is executive privilege absolute?

No. Any claim of executive privilege must be weighed against otherinterests recognized by the constitution, like the state policy of full public disclosure of all transactions involving public interest,the right of the people to information on matters of public concern,the accountability of public officers, the power of legislativeinquiry, and the judicial power to secure evidence in deciding cases.

Did the revocation by the President of E.O. 464 on March 6, 2008diminish the concept of executive privilege?

No. Executive privilege may still be invoked despite the President’srevocation of E.O. 464 because it is based on the constitution.

ON THE CONTENTS OF THE SUPREME COURT DECISION:

What events led to the filing of the case before the Supreme Court?

On April 21, 2007, the DOTC and Zhing Xing TelecommunicationsEquipment (ZTE), a corporation owned by the People’s Republic of

http://en.wordpress.com/tag/current-issues/

http://en.wordpress.com/tag/current-issues/



China, executed a “Contract for the Supply of Equipment and Servicesfor the National Broadband Network Project” (NBN-ZTE Contract) worthUS$329,481,290.00 (around PhP 16B). The project sought to providelandline, cellular and internet services in government officesnationwide and was to be financed through a loan by China to thePhilippines. President Arroyo witnessed the contract signing inChina.

After its signing, reports of anomalies concerning the project (e.g.,bribery, “overpricing” by US$ 130M, “kickback commissions” involvingtop government officials, and loss of the contract) prompted theSenate, through the Committees on Accountability of Public Officersand Investigations (Blue Ribbon), Trade and Commerce, and NationalDefense and Security, to conduct an inquiry in aid of legislation.

The inquiry was based on a number of Senate resolutions and inconnection with pending bills concerning funding in the procurementof government projects, contracting of loans as developmentassistance, and Senate concurrence to executive agreements.

In one of the hearings held on Sept. 26, 2007, former NEDA Director

General Romulo Neri testified that President Arroyo initially gaveinstructions for the project to be undertaken on a Build-Operate-

Transfer (BOT) arrangement so the government would not spend moneyfor it, but eventually the project was awarded to ZTE with agovernment-to-government loan from China. He also said that thenCOMELEC Chairman Benjamin Abalos, the alleged broker in the project,offered him PhP 200M in exchange for NEDA’s approval of the project.Neri testified that when he told President Arroyo of the bribe offer,she told him not to accept it. But Neri refused to answer questionsabout what he and the President discussed after that, invokingexecutive privilege since they concerned his conversations with thePresident. The Senate required him to appear again and testify on

November 20, 2007. On November 15, 2007, Executive Secretary EduardoErmita wrote the Senate Committees and asked that Neri’s testimony onNovember 20, 2007 be dispensed with because he was invoking executiveprivilege “by Order of the President” specifically on the followingquestions:

a. Whether the President followed up on the NBN project?b. Were you dictated to prioritize the ZTE?c. Whether the President said to go ahead and approve theproject after being told about the alleged bribe?

When Neri failed to appear on November 20, 2007, the Senate required

him to show cause why he should not be cited in contempt. Neriexplained that he thought the only remaining questions were those heclaimed to be covered by executive privilege and that should there benew matters to be taken up, he asked that he be informed in advanceof what else he needs to clarify so he could prepare himself.

On Dec. 7, 2007, Neri questioned the validity of the Senate’s showcause order before the Supreme Court. On January 30, 2008, theSenate cited Neri in contempt and ordered his arrest for his failureto appear in the Senate hearings. On February 1, 2008, Neri asked theSupreme Court to stop the Senate from implementing its contempt



order, which the Court granted on Feb. 5, 2008. The Supreme Courtalso required the parties to observe the status quo prevailing beforethe issuance of the contempt order.

What reasons were given for the claim of executive privilege?

Executive Secretary Ermita said that “the context in which executiveprivilege is being invoked is that the information sought to be

disclosed might impair our diplomatic as well as economic relationswith the People’s Republic of China.” Neri further added thathis “conversations with the President dealt with delicate andsensitive national security and diplomatic matters relating to theimpact of the bribery scandal involving high government officials andthe possible loss of confidence of foreign investors and lenders inthe Philippines.”

What issues were considered by the Supreme Court in resolving thecase?

The Supreme Court said there were two crucial questions at the core

of the controversy:

a. Are the communications sought to be elicited by the threequestions covered by executive privilege?b. Did the Senate Committees commit grave abuse of discretion inciting Neri in contempt and ordering his arrest?

How did the Supreme Court resolve these issues?

The Supreme Court first recognized the power of Congress to conductinquiries in aid of legislation. The Court said that the powerextends even to executive officials and the only way for them to be

exempted is through a valid claim of executive privilege.

On the first question, the Supreme Court said that the communicationssought to be elicited by the three questions are covered by thepresidential communications privilege, which is one type of executiveprivilege. Hence, the Senate cannot compel Neri to answer the threequestions.

On the second question, the Supreme Court said that the SenateCommittees committed grave abuse of discretion in citing Neri incontempt. Hence, the Senate order citing Neri in contempt andordering his arrest was not valid.

What are the types of executive privilege?

a. state secrets (regarding military, diplomatic and othersecurity matters)b. identity of government informersc. information related to pending investigationsd. presidential communicationse. deliberative process

In what cases is the claim of executive privilege highly recognized?



The claim of executive privilege is highly recognized in cases wherethe subject of inquiry relates to a power textually committed by theconstitution to the President, such as the commander-in-chief,appointing, pardoning, and diplomatic powers of the President.Information relating to these powers may enjoy greaterconfidentiality than others.

What specifically are the executive privileges relating todeliberations or communications of the President and other government officials?

These are the presidential communications privilege and thedeliberative process privilege.

How are the presidential communications privilege and thedeliberative process privilege distinguished?

The presidential communications privilege applies to decision-makingof the President. It pertains to “communications, documents or other

materials that reflect presidential decision-making and deliberationsand that the President believes should remain confidential”.

The deliberative process privilege applies to decision-making of executive officials. It includes “advisory opinions, recommendationsand deliberations comprising part of a process by which governmentaldecisions and policies are formulated.”

Unlike the deliberative process privilege, the presidentialcommunications privilege applies to documents in their entirety, andcovers final and post-decisional materials as well as pre-deliberative ones.

Moreover, congressional or judicial negation of the presidentialcommunications privilege is always subject to greater scrutiny thandenial of the deliberative process privilege.

What is the type of executive privilege claimed in this case?

The type of executive privilege claimed in this case is thepresidential communications privilege.

Is there a presumption in favor of presidential communications?

Yes. Presidential communications are “presumptively privileged”. The presumption is based on the President’s generalized interest inconfidentiality. The privilege is necessary to guarantee the candorof presidential advisors and to provide the President and those whoassist him with freedom to explore alternatives in the process of shaping policies and making decisions and to do so in a way manywould be unwilling to express except privately.

The presumption can be overcome only by mere showing of public needby the branch seeking access to presidential communications.



Who are covered by the presidential communications privilege?

Aside from the President, the presidential communications privilegecovers senior presidential advisors or Malacanang staff whohave “operational proximity” to direct presidential decision-making.

What are the elements of the presidential communications privilege?

The following are the elements of the presidential communicationsprivilege:

a. The protected communication must relate to a “quintessentialand non-delegable presidential power”.b. The communication must be authored or “solicited andreceived” by a close advisor of the President or the Presidenthimself. The advisor must be in “operational proximity” with thePresident.c. The privilege is a qualified privilege that may be overcomeby a showing of adequate or compelling need that would justify thelimitation of the privilege and that the information sought is

unavailable elsewhere by an appropriate investigating agency.

What are examples of “quintessential and non-delegable presidential powers” which are covered by the presidential communications privilege?

The privilege covers only those functions which form the core of presidential authority. These are functions whichinvolve “quintessential and non-delegable presidential powers” suchas the powers of the president as commander-in-chief (i.e., to callout the armed forces to suppress violence, to declare martial law, orto suspend the privilege of the writ of habeas corpus), the power to

appoint officials and remove them, the power to grant pardons andreprieves, the power to receive ambassadors, and the power tonegotiate treaties and to enter into execute agreements.

Are the elements of the presidential communications privilege present in this case?

Yes. The communications elicited by the three questions are coveredby the presidential communications privilege because:

a. First, the communications relate to the power of thePresident to enter into an executive agreement with other countries.

b. Second, the communications are received by Neri, who as aCabinet member can be considered a close advisor of the President.c. Third, the Senate Committees have not adequately shown acompelling need for the answers to the three questions in theenactment of a law and of the unavailability of the informationelsewhere by an appropriate investigating authority.

Does the grant of the claim of executive privilege violate the right of the people to information on matters of public concern?

No, for the following reasons:



a. Neri appeared before the Senate on Sept. 26, 2007 and wasquestioned for 11 hours. He also expressed his willingness to answermore questions from the Senators, except the three questions.b. The right to information is subject to limitation, such asexecutive privilege.c. The right of Congress to obtain information in aid of legislation cannot be equated with the people’s right to

information. Congress cannot claim that every legislative inquiry isan exercise of the people’s right to information.

Was the claim of executive privilege properly invoked by thePresident in this case?

Yes. For the claim to be properly invoked, there must be a formalclaim by the President stating the “precise and certain reason” forpreserving confidentiality. The grounds relied upon by ExecutiveSecretary Ermita are specific enough, since what is required is onlythat an allegation be made “whether the information demanded involvesmilitary or diplomatic secrets, closed-door Cabinet meetings, etc.”

The particular ground must only be specified, and the followingstatement of grounds by Executive Secretary Ermita satisfies therequirement: “The context in which executive privilege is beinginvoked is that the information sought to be disclosed might impairour diplomatic as well as economic relations with the People’sRepublic of China.”

What reasons were given by the Supreme Court in holding that it waswrong for the Senate to cite Neri in contempt and order his arrest?

a. There was a legitimate claim of executive privilege.b. The Senate’s invitations to Neri did not include the possible

needed statute which prompted the inquiry, the subject of inquiry,and the questions to be asked.c. The contempt order lacked the required number of votes.d. The Senate’s rules of procedure on inquiries in aid of legislation were not duly published.e. The contempt order is arbitrary and precipitate because theSenate did not first rule on the claim of executive privilege andinstead dismissed Neri’s explanation as unsatisfactory.

IMPLICATIONS OF THE SUPREME COURT DECISION:

Who has the burden of showing whether or not a claim of executive

privilege is valid?

Executive privilege is in derogation of the search for truth.However, the decision recognized Presidential communications aspresumptively privileged. Hence, the party seeking disclosure of theinformation has the burden of overcoming the presumption in favor of the confidentiality of Presidential communications.

This presumption is inconsistent with the Court’s earlier statementin Senate vs. Ermita (April 20, 2006) that “the presumption inclinesheavily against executive secrecy and in favor of disclosure”. It



is also inconsistent with constitutional provisions on transparencyin governance and accountability of public officers, and the right of the people to information on matters of public concern.

Does the decision expand the coverage of executive privilege?

Yes, the decision expands the coverage of executive privilege in atleast two ways:

a. The decision explained that the presidential communicationsprivilege covers communications authored or “solicited and received”by a close advisor of the President or the President himself. Thismeans that the privilege applies not only to communications thatdirectly involve the President, but also to communications involvingthe President’s close advisors, i.e., those in “operationalproximity” with the President. There is no definitionof “operational proximity”, so it is not clear how far down the chainof command the privilege extends. This expansion of the coverage of the privilege means that information in many areas of the executivebranch will become “sequestered” from public view.

b. The decision also stated that the presidential communicationsprivilege applies to documents in their entirety, and covers finaland post-decisional materials as well as pre-deliberative ones. Thismeans that the privilege protects not only the deliberative or adviceportions of documents, i.e., communications made in the process of arriving at presidential decisions, but also factual material orinformation concerning decisions already reached by the President.

How will the decision affect other investigations?

The decision makes it easy for the President to invoke executive

privilege, since what is required is only that an allegation bemade “whether the information demanded involves military ordiplomatic secrets, closed-door Cabinet meetings, etc.” This ineffect will enable the use of executive privilege to hide misconductor crime. According to Fr. Bernas, S.J., the implication of theruling is that once the “presidential communications privilege” isinvoked, no evidence is needed to support it even if there are validreasons for disclosing the information sought. “This wouldrevolutionize the doctrine in a manner that can affect all otherinvestigations. This can, for instance, hamper effective use of the… writ of amparo and writ of habeas data. It can also crippleefforts to battle official corruption ….”

In particular, what is the effect of the decision on the Senate’spower to conduct inquiries in aid of legislation?

The decision severely limits the Senate’s power of legislativeinquiry and its ability to investigate government anomalies in aid of legislation. The decision encroaches upon matters internal to theSenate as an institution separate from and co-equal to other branchesof government.

The decision, for instance, requires the Senate to give its questions



in advance of its hearings. But this is a requirement applicableonly to the question hour and not to inquiries in aid of legislation. Moreover, it is impractical, since follow-up questionsof Senators will be difficult to anticipate.

The decision also requires the Senate to publish its rules of procedure on legislative inquiries every three years. But theSenate traditionally considered as a continuing body. Senate

committees continue to work even during senatorial elections. Bytradition and practice, the Senate does not re-publish its rules. Torequire publication of its rules every three years is unnecessary andinconsistent with its tradition and practice.

Did the Supreme Court ruling establish a doctrine on executive privilege?

No. Although the vote is 9 – 6 in favor of upholding the claim of executive privilege, two of the nine Justices concurred merely in theresult, while one Justice argued not on the basis of executiveprivilege. Hence, only six out of the nine Justices explained their

votes in favor of the claim of executive privilege. Six out of atotal of 15 Justices do not establish a doctrine.

Can the Senate continue with its investigations despite the SupremeCourt ruling?

The decision does not stop the Senate from continuing with itsinvestigations and from undertaking other inquiries, although thegovernment has already declared that officials will not appear unlessthe Senate rules are first published. Should Neri (and otherofficials) appear, the Senate can ask him questions other than thethree questions. But Neri may again invoke executive privilege on

other questions, which could result in another case before theSupreme Court, and the cycle may be repeated again and again. Such asituation, particularly where there appears to be a pattern of concealment in government activities, will ultimately be harmful topublic interest.

Prepared by: ATTY. CARLOS P. MEDINA, JR. Ateneo Human Rights Center March 30, 2008

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