Tolentino vs Secretary of Finance

Political Law Origination of Revenue Bills EVAT Amendment

by Substitution
Tolentino et al is questioning the constitutionality of RA 7716
otherwise known as the Expanded Value Added Tax (EVAT) Law.
Tolentino averred that this revenue bill did not exclusively
originate from the House of Representatives as required by
Section 24, Article 6 of the Constitution. Even though RA 7716
originated as HB 11197 and that it passed the 3 readings in the
HoR, the same did not complete the 3 readings in Senate for
after the 1
st
reading it was referred to the Senate Ways & Means
Committee thereafter Senate passed its own version known as
Senate Bill 1630. Tolentino averred that what Senate could have
done is amend HB 11197 by striking out its text and substituting
it w/ the text of SB 1630 in that way the bill remains a House Bill
and the Senate version just becomes the text (only the text) of
the HB. Tolentino and co-petitioner Roco [however] even
signed the said Senate Bill.
ISSUE: Whether or not EVAT originated in the HoR.
HELD: By a 9-6 vote, the SC rejected the challenge, holding that
such consolidation was consistent with the power of the Senate
to propose or concur with amendments to the version originated
in the HoR. What the Constitution simply means, according to
the 9 justices, is that the initiative must come from the HoR.
Note also that there were several instances before where Senate
passed its own version rather than having the HoR version as far
as revenue and other such bills are concerned. This practice of
amendment by substitution has always been accepted. The
proposition of Tolentino concerns a mere matter of form. There
is no showing that it would make a significant difference if
Senate were to adopt his over what has been done.

Norse Management Co. vs National Seamen Board
Facts: Napoleon B. Abordo, the deceased husband of private
respondent Restituta C. Abordo, was the Second Engineer of
M.T. "Cherry Earl" when he died from an apoplectic stroke in the
course of his employment with petitioner NORSE MANAGEMENT
COMPANY (PTE). The M.T. "Cherry Earl" is a vessel of
Singaporean Registry. In her complaint for compensation
benefits filed before the National Seamen Board, private
respondent alleged that the amount of compensation due her
from petitioners should be based on the law where the vessel is
registered. Petitioners contend that the law of Singapore should
not be applied in this case because the National Seamen Board
cannot take judicial notice of the Workmen's Insurance Law of
Singapore instead must be based on Boards Memeorandum
Circular No. 25. Ministry of Labor and Employment ordered the
petitioner to pay jointly and severally the private respondent.
Petitioner appealed to the Ministry of Labor but same decision.
Hence, this petition.

Issue: Whether or not the law of Singapore ought to be applied
in this case.

Held: The SC denied the petition. It has always been the policy of
this Board, as enunciated in a long line of cases, that in cases of
valid claims for benefits on account of injury or death while in
the course of employment, the law of the country in which the
vessel is registered shall be considered. In Section 5(B) of the
Employment Agreement between petitioner and respondents
husband states that In the event of illness or injury to Employee
arising out of and in the course of his employment and not due
to his own willful misconduct, EMPLOYER will provide employee
with free medical attention. If such illness or injury incapacitates
the EMPLOYEE to the extent the EMPLOYEE's services must be
terminated as determined by a qualified physician designated by
the EMPLOYER and provided such illness or injury was not due in
part or whole to his willful act, neglect or misconduct
compensation shall be paid to employee in accordance with and
subject to the limitations of the Workmen's Compensation Act of
the Republic of the Philippines or the Workmen's Insurance Law
of registry of the vessel whichever is greater. Finally, Article IV of
the Labor Code provides that "all doubts in the implementation
and interpretation of the provisions of this code, including its
implementing rules and resolved in favor of labor.

American Airlines vs Court of Appeals 327 scra 482
Contract of Carriage
Private respondent Amadeo Seno purchased from Singapore
Airlines in Manila conjunction tickets. In Geneva, the petitioner
decided to forego his trip to Copenhagen, and go straight to New
York, private respondent exchanged the unused portion of the
conjunction ticket from International Air Transport Association
clearing house in Geneva. Private respondent filed an action for
damages before the RTC of Cebu for the alleged embarrassment
and mental anguish he suffered at the Geneva Airport when the
petitioners security officers prevented him from boarding the
plane, detained him for about an hour and allowed him to board
the plane only after all the passengers have boarded.
ISSUE: Whether or not the Philippine courts have jurisdiction
over the action for damages.
HELD: The Supreme Court ruled that the case was properly filed
in the Philippines. It held that the petitioner acted as an agent of
the Singapore Airlines under IATA rules and as an agent of the
principal carrier the petitioner may be held liable under contract
of carriage in Manila.

UNITED AIRLINES vs. UY
Facts: On October 13, 1989, respondent, a passenger of United
Airlines, checked in together with his luggage one piece of which
was found to be overweight at the airline counter. To his utter
humiliation, an employee of petitioner rebuked him saying that
he should have known the maximum weight allowance per bag
and that he should have packed his things accordingly. Then, in a
loud voice in front of the milling crowd, she told respondent to
repair his things and transfer some of them to the light
ones. Respondent acceded but his luggage was still overweight.
Petitioner billed him overweight charges but its employee
reused to honor the miscellaneous charges under MCD which he
offered to pay with. Not wanting to leave without his luggage, he
paid with his credit card. Upon arrival in manila, he discovered
that one of his bags had been slashed and its contents stolen.
In a letterdated October 16, 1989, he notified petitioner of
his loss and requested reimbursement. Petitioner paid for
his loss based on the maximum liability per
pound. Respondent considered the amount grossly inadequate.
He sent two more letters to petition but to no avail. On June 9,
1992, respondent filed a complaint for damages against
petitioner Airline. Petitioner moved to dismiss the complaint
invoking the provisions of Article 29 of the Warsaw
Convention.Respondent countered that according to par. 2 of
Article 29, the method of calculating the period of limitation
shall be determined by the law of the court to which the case is
submitted.

Issues:
1) Does the Warsaw Convention preclude the operation of the
Civil Code and other pertinent laws?
2) Has the respondents cause of action prescribed?

Held: 1) No. Within our jurisdiction we have held that the
Warsaw Convention can be applied, or ignored, depending on
the peculiar facts presented by each case. Convention provisions
do not regulate or exclude liabilities for other breaches of
contract by the carrier or misconduct of its officers and
employees, or for some particular or exceptional type of
damage. Neither may the Convention be invoked to justify the
disregard of some extraordinary type of damage. Neither may
the Convention be invoked to justify the disregard of some
extraordinary sort of damage resulting to a passenger and
preclude recovery therefore3 beyond the limits et by said
convention. Likewise, we have held that the Convention does not
preclude the operation of the Civil Code and other pertinent
laws. It does not regulate, much less exempt, the carrier from
liability for damages for violating the rights of its passengers
under the contract of carriage, especially if willful misconduct on
the part of the carriers employees is found or established.

2) No. While his 2nd cause of action (an action for damages
arising from theft or damage to property or goods) is well within
the bounds of the Warsaw convention, his 1st cause of
action (an action for damages arising from the misconduct of the
airline employees and the violation of respondents rights as
passengers) clearly is not.

The 2-yr limitation incorporated in Art. 29 of the Warsaw
Convention as an absolute bar to suit and not to be made subject
to the various tolling provisions of the laws of the forum,
forecloses the application of our own rules on interruption of
prescriptive periods. (Art. 29, par. 2 was indented only to let
local laws determine whether an action shall be deemed
commenced upon the filing of a complaint.) Since, it is
indisputable that respondent filed the present action beyond the
2-yr time frame his 2nd cause of action must be barred.
However, it is obvious that respondent was forestalled from
immediately filing an action because petitioner gave him the
runaround, answering his letters but not giving in to his
demands. True, respondent should have already filed an action
at the first instance when petitioner denied his claims but the
same could only be due to his desire to make an out-of-court
settlement for which he cannot be faulted. Hence, despite the
express mandate of Article 29 of the Warsaw Convention that an
action for damages should be filed within 2 years from the arrival
at the place of destination, such rule shall not be applied in the
instant case because of the delaying tactics employed by
petitioner airlines itself. Thus, respondents 2nd cause of
action cannot be considered as time barred.

Korean Airlines v. CA
Facts:
Juanito Lapuz was contracted for employment in Saudi Arabia
through Pan Pacific Recruiting Services, Inc. He was supposed to
leave via Korean Airlines, but was initially listed as a chance
passenger. According to Lapuz, he was allowed to check in and
was cleared for departure. When he was on the stairs going to
the airplane, a KAL officer pointed at him and shouted, Down!
Down! and he was barred from taking the flight. When he asked
for another booking, his ticket was cancelled. He was unable to
report for work and so he lost his employment. KAL alleged that
the agent of Pan Pacific was informed that there are 2 seats
possibly available. He gave priority to Perico, while the other
seat was won by Lapuz through lottery. But because only 1 seat
became available, it was given to Perico. The trial court adjudged
KAL liable for damages. The decision was affirmed by the Court
of Appeals, with modification on the damages awarded.
Issues:
(1) Whether there is already a contract of carriage between KAL
and Lapuz to hold KAL liable for breach of contract
(2) Whether moral and exemplary damages should be awarded,
and to what extent
Held:
(1) The status of Lapuz as standby passenger was changed to
that of a confirmed passenger when his name was entered in the
passenger manifest of KAL for its Flight No. KE 903. His clearance
through immigration and customs clearly shows that he had
indeed been confirmed as a passenger of KAL in that flight. KAL
thus committed a breach of the contract of carriage between
them when it failed to bring Lapuz to his destination. A contract
to transport passengers is different in kind and degree from any
other contractual relation. The business of the carrier is mainly
with the traveling public. It invites people to avail themselves of
the comforts and advantages it offers. The contract of air
carriage generates a relation attended with a public duty.
Passengers have the right to be treated by the carrier's
employees with kindness, respect, courtesy and due
consideration. They are entitled to be protected against personal
misconduct, injurious language, indignities and abuses from such
employees. So it is that any discourteous conduct on the part of
these employees toward a passenger gives the latter an action
for damages against the carrier. The breach of contract was
aggravated in this case when, instead of courteously informing
Lapuz of his being a "wait-listed" passenger, a KAL officer rudely
shouted "Down! Down!" while pointing at him, thus causing him
embarrassment and public humiliation. The evidence presented
by Lapuz shows that he had indeed checked in at the departure
counter, passed through customs and immigration, boarded the
shuttle bus and proceeded to the ramp of KAL's aircraft. In fact,
his baggage had already been loaded in KAL's aircraft, to be
flown with him to Jeddah. The contract of carriage between him
and KAL had already been perfected when he was summarily and
insolently prevented from boarding the aircraft.
(2) The Court of Appeals granted moral and exemplary damages
because:
a. The findings of the court a quo that the defendant-
appellant has committed breach of contract of carriage
in bad faith and in wanton, disregard of plaintiff-
appellant's rights as passenger laid the basis and
justification of an award for moral damages.
b. In the instant case, we find that defendant-appellant
Korean Air Lines acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner when it
"bumped off" plaintiff-appellant on November 8, 1980,
and in addition treated him rudely and arrogantly as a
"patay gutom na contract worker fighting Korean Air
Lines," which clearly shows malice and bad faith, thus
entitling plaintiff-appellant to moral damages.
c. Considering that the plaintiff-appellant's entitlement to
moral damages has been fully established by oral and
documentary evidence, exemplary damages may be
awarded. In fact, exemplary damages may be awarded,
even though not so expressly pleaded in the complaint.
By the same token, to provide an example for the
public good, an award of exemplary damages is also
proper.
A review of the record of this case shows that the injury suffered
by Lapuz is not so serious or extensive as to warrant an award of
P1.5 million. The assessment of P100,000 as moral and
exemplary damages in his favor is, in our view, reasonable and
realistic.

PACIFIC CONSULTANTS INTERNATIONAL ASIA, INC. AND JENS
PETER HENRICHSEN, PETITIONERS, VS. KLAUS K. SCHONFELD,
RESPONDENT.
FACTS
Respondent is a Canadian citizen and was a resident of New
Westminster, British Columbia, Canada. He had been a
consultant in the field of environmental engineering and water
supply and sanitation. Pacicon Philippines, Inc. (PPI) is a
corporation duly established and incorporated in accordance
with the laws of the Philippines. The primary purpose of PPI was
to engage in the business of providing specialty and technical
services both in and out of the Philippines. It is a subsidiary of
Pacific Consultants International of Japan (PCIJ). The president of
PPI, Jens Peter Henrichsen, who was also the director of PCIJ,
was based in Tokyo, Japan.
On January 7, 1998, Henrichsen transmitted a letter of
employment to respondent in Canada, requesting him to accept
the same and affix his conformity thereto. Respondent made
some revisions in the letter of employment and signed the
contract. He then sent a copy to Henrichsen. The letter of
employment contains among others a stipulation which states:
Any question of interpretation, understanding or fulfillment of
the conditions of employment, as well as any question arising
between the Employee and the Company which is in
consequence of or connected with his employment with the
Company and which can not be settled amicably, is to be finally
settled, binding to both parties through written submissions, by
the Court of Arbitration in London.
Respondent arrived in the Philippines and assumed his position
as PPI Sector Manager. He was accorded the status of a resident
alien.
As required by Rule XIV (Employment of Aliens) of the Omnibus
Rules Implementing the Labor Code, PPI applied for an Alien
Employment Permit (Permit) for respondent before the
Department of Labor and Employment (DOLE).
On May 5, 1999, respondent received a letter from Henrichsen
informing him that his employment had been terminated
effective August 4, 1999 for the reason that PCIJ and PPI had not
been successful in the water and sanitation sector in the
Philippines. However, on July 24, 1999, Henrichsen, by electronic
mail, requested respondent to stay put in his job after August 5,
1999, until such time that he would be able to report on certain
projects and discuss all the opportunities he had developed.
Respondent continued his work with PPI until the end of
business hours on October 1, 1999.
Respondent filed with PPI several money claims, including
unpaid salary, leave pay, air fare from Manila to Canada, and
cost of shipment of goods to Canada. PPI partially settled some
of his claims (US$5,635.99), but refused to pay the rest.
On December 5, 2000, respondent filed a Complaint for Illegal
Dismissal against petitioners PPI and Henrichsen with the Labor
Arbiter. In his Complaint, respondent alleged that he was illegally
dismissed; PPI had not notified the DOLE of its decision to close
one of its departments, which resulted in his dismissal; and they
failed to notify him that his employment was terminated after
August 4, 1999. Respondent also claimed for separation pay and
other unpaid benefits. He alleged that the company acted in bad
faith and disregarded his rights.
Petitioners filed a Motion to Dismiss the complaint on the
following grounds: (1) the Labor Arbiter had no jurisdiction over
the subject matter; and (2) venue was improperly laid. It averred
that respondent was a Canadian citizen, a transient expatriate
who had left the Philippines. He was employed and dismissed by
PCIJ, a foreign corporation with principal office in Tokyo, Japan.
Since respondents cause of action was based on his letter of
employment executed in Tokyo, Japan dated January 7, 1998,
under the principle of lex loci contractus, the complaint should
have been filed in Tokyo, Japan. Petitioners claimed that
respondent did not offer any justification for filing his complaint
against PPI before the NLRC in the Philippines. Moreover, under
Section 12 of the General Conditions of Employment appended
to the letter of employment dated January 7, 1998, complainant
and PCIJ had agreed that any employment-related dispute
should be brought before the London Court of Arbitration. Since
even the Supreme Court had already ruled that such an
agreement on venue is valid, Philippine courts have no
jurisdiction.
The Labor Arbiter rendered a decision granting petitioners
Motion to Dismiss. The Labor Arbiter found, among others, that
the January 7, 1998 contract of employment between
respondent and PCIJ was controlling; the Philippines was only
the duty station where Schonfeld was required to work under
the General Conditions of Employment. PCIJ remained
respondents employer despite his having been sent to the
Philippines. Since the parties had agreed that any differences
regarding employer-employee relationship should be submitted
to the jurisdiction of the court of arbitration in London, this
agreement is controlling.
On appeal, the NLRC agreed with the disquisitions of the Labor
Arbiter and affirmed the latters decision in toto.
Respondent then filed a petition for certiorari under Rule 65 with
the CA. The CA found the petition meritorious. Applying the four-
fold test of determining an employer-employee relationship, the
CA declared that respondent was an employee of PPI. On the
issue of venue, the appellate court declared that, even under the
January 7, 1998 contract of employment, the parties were not
precluded from bringing a case related thereto in other venues.
While there was, indeed, an agreement that issues between the
parties were to be resolved in the London Court of Arbitration,
the venue is not exclusive, since there is no stipulation that the
complaint cannot be filed in any other forum other than in the
Philippines. It ordered the remand of the case to the Labor
Arbiter for disposition of the merits of the case.
ISSUE
Whether or not the Philippine Labor Arbiter can take cognizance
over the case notwithstanding what was stated in the
Employment Contract?
RULING
The settled rule on stipulations regarding venue, as held by this
Court in the vintage case of Philippine Banking Corporation v.
Tensuan, is that while they are considered valid and enforceable,
venue stipulations in a contract do not, as a rule, supersede the
general rule set forth in Rule 4 of the Revised Rules of Court in
the absence of qualifying or restrictive words. They should be
considered merely as an agreement or additional forum, not as
limiting venue to the specified place. They are not exclusive but,
rather permissive. If the intention of the parties were to restrict
venue, there must be accompanying language clearly and
categorically expressing their purpose and design that actions
between them be litigated only at the place named by them.
In the instant case, no restrictive words like only, solely,
exclusively in this court, in no other court save ,
particularly, nowhere else but/except , or words of equal
import were stated in the contract. It cannot be said that the
court of arbitration in London is an exclusive venue to bring forth
any complaint arising out of the employment contract.
Petitioners contend that respondent should have filed his
Complaint in his place of permanent residence, or where the PCIJ
holds its principal office, at the place where the contract of
employment was signed, in London as stated in their contract. By
enumerating possible venues where respondent could have filed
his complaint, however, petitioners themselves admitted that
the provision on venue in the employment contract is indeed
merely permissive.
Petitioners insistence on the application of the principle of
forum non conveniens must be rejected. The bare fact that
respondent is a Canadian citizen and was a repatriate does not
warrant the application of the principle for the following
reasons:
First. The Labor Code of the Philippines does not include forum
non conveniens as a ground for the dismissal of the complaint.
Second. The propriety of dismissing a case based on this
principle requires a factual determination; hence, it is properly
considered as defense.
Third. In Bank of America, NT&SA, Bank of America International,
Ltd. v. Court of Appeals, this Court held that:
x x x [a] Philippine Court may assume jurisdiction over the case if
it chooses to do so; provided, that the following requisites are
met: (1) that the Philippine Court is one to which the parties may
conveniently resort to; (2) that the Philippine Court is in a
position to make an intelligent decision as to the law and the
facts; and, (3) that the Philippine Court has or is likely to have
power to enforce its decision. x x x
Admittedly, all the foregoing requisites are present in this case.
WHEREFORE, the petition is DENIED.