January 2014 Philippine Supreme Court Decisions on Commercial Law

Corporations; liability of corporate officers. As a general rule, the officer cannot be held personally
liable with the corporation, whether civilly or otherwise, for the consequences his acts, if acted for
and in behalf of the corporation, within the scope of his authority and in good faith. Rodolfo Laborte,
et al. v. Pagsanjan Tourism Consumers Cooperative, et al., G.R. No. 183860, January 15, 2014.
Banks; degree of diligence. Being a banking institution, DBP owed it to Guaria Corporation toexercise
the highest degree of diligence, as well as to observe the high standards of integrity and performance
in all its transactionsbecause its business was imbued with public interest. The high standards were
also necessary to ensure public confidence in the banking system. Development Bank of the
Philippines (DBP) v. Guaria Agricultural and Realty Development Corporation, G.R. No. 160758.
January 15, 2014.

January 2014 Philippine Supreme Court Rulings on Political Law

Absence of motion of reconsideration; effect of. The omission of the filing of a motion for
reconsideration poses no obstacle for the Courts review of its ruling on the whole case since a
serious constitutional question has been raised and is one of the underlying bases for the validity or
invalidity of the presidential action. If the President does not have any constitutional authority to
discipline a Deputy Ombudsman and/or a Special Prosecutor in the first place, then any ruling on the
legal correctness of the OPs decision on the merits will be an empty one. In other words, since the
validity of the OPs decision on the merits of the dismissal is inextricably anchored on the final and
correct ruling on the constitutional issue, the whole case including the constitutional issue remains
alive for the Courts consideration on motion for reconsideration. Emilio A. Gonzales III v. Office of the
President, etc., et al./Wendell Bareras-Sulit v. Atty. Paquito N. Ochoa, Jr., et al., G.R. No. 196231/G.R.
No. 196232, January 28, 2014.
Congress; power to determine modes of removal from office of public officers; must be consistent
with the core constitutional principle of independence of the Office of the Ombudsman. The intent of
the framers of the Constitution in providing that all other public officers and employees may be
removed from office as provided by law, but not by impeachment in the second sentence of Section
2, Article XI is to prevent Congress from extending the more stringent rule of removal only by
impeachment to favoured public officers. Contrary to the implied view of the minority, in no way can
this provision be regarded as blanket authority for Congress to provide for any ground of removal it
deems fit. While the manner and cause of removal are left to congressional determination, this must
still be consistent with constitutional guarantees and principles, namely: the right to procedural and
substantive due process; the constitutional guarantee of security of tenure; the principle of
separation of powers; and the principle of checks and balances. The authority granted by the
Constitution to Congress to provide for the manner and cause of removal of all other public officers
and employees does not mean that Congress can ignore the basic principles and precepts established
by the
Constitution. Emilio A. Gonzales III v. Office of the President, etc., et al./Wendell BarerasSulit v. Atty. Paquito N. Ochoa, Jr., et al., G.R. No. 196231/G.R. No. 196232, January 28, 2014.
Constitutional bodies; concept of independence. The independence enjoyed by the Office of the
Ombudsman and by the Constitutional Commissions shares certain characteristics they do not owe
their existence to any act of Congress, but are created by the Constitution itself; additionally, they all
enjoy fiscal autonomy. In general terms, the framers of the Constitution intended that these
independent bodies be insulated from political pressure to the extent that the absence of
independence would result in the impairment of their core functions. The deliberative
considerations abundantly show that the independent constitutional commissions have been
consistently intended by the framers to be independent from executive control or supervision or any
form of political influence. At least insofar as these bodies are concerned, jurisprudence is not scarce
on how the independence granted to these bodies prevents presidential interference. Emilio A.
Gonzales III v. Office of the President, etc., et al./Wendell Bareras-Sulit v. Atty. Paquito N. Ochoa, Jr., et
al., G.R. No. 196231/G.R. No. 196232, January 28, 2014.
Gross negligence; concept of; not present when Deputy Ombudsman reviews a case for nine days.
Gross negligence refers to negligence characterized by the want of even the slightest care, acting or
omitting to act in a situation where there is a duty to act, not inadvertently but wilfully and
intentionally, with a conscious indifference to consequences insofar as other persons may be affected.
In case of public officials, there is gross negligence when a breach of duty is flagrant and palpable.
The Deputy Ombudsman cannot be guilty of gross neglect of duty and/or inefficiency since he acted
on the case forwarded to him within nine days. The OPs ruling that Gonzales had been grossly
negligent for taking nine days, instead of five days as required for Hearing Officers, is totally

baseless.Emilio A. Gonzales III v. Office of the President, etc., et al./Wendell Bareras-Sulit v. Atty.
Paquito N. Ochoa, Jr., et al.,G.R. No. 196231/G.R. No. 196232, January 28, 2014.
Impeachment; concept of. Impeachment is the most difficult and cumbersome mode of removing a
public officer from office. It is, by nature, a sui generis politico-legal process that signals the need for
a judicious and careful handling as shown by the process required to initiate the proceeding; the oneyear limitation or bar for its initiation; the limited grounds for impeachment; the defined
instrumentality given the power to try impeachment cases; and the number of votes required for a
finding of guilt. Emilio A. Gonzales III v. Office of the President, etc., et al./Wendell Bareras-Sulit v.
Atty. Paquito N. Ochoa, Jr., et al., G.R. No. 196231/G.R. No. 196232, January 28, 2014.
Judicial power; issuance of protection orders is in pursuance of the Courts authority to settle
justiciable controversies or disputes involving rights that are enforceable and demandable before the
courts of justice or the redress of wrongs for violations of such rights. The provision in R.A. 9262
allowing the issuance of protection orders is not an invalid delegation of legislative power to the court
and to barangay officials to issue protection orders. Section 2 of Article VIII of the 1987 Constitution
provides that the Congress shall have the power to define, prescribe, and apportion the jurisdiction
of the various courts but may not deprive the Supreme Court of its jurisdiction over cases
enumerated in Section 5 hereof. Hence, the primary judge of the necessity, adequacy, wisdom,
reasonableness and expediency of any law is primarily the function of the legislature. The act of
Congress entrusting us with the issuance of protection orders is in pursuance of our authority to settle
justiciable controversies or disputes involving rights that are enforceable and demandable before the
courts of justice or the redress of wrongs for violations of such rights. Ralph P. Tua v. Hon. Cesar A.
Mangrobang, Presiding Judge, Branch 22, RTC, Imus, Cavite; and Rossan Honrado-Tua, G.R. No.
170701. January 22, 2014.
Just compensation; determination of just compensation is fundamentally a judicial function. In the
exercise of the Courts essentially judicial function of determining just compensation, the RTC-SACs
are not granted unlimited discretion and must consider and apply the enumerated factors in R.A. No.
6657 and the DAR formula (in AO 5-98) that reflect these factors. These factors and formula provide
the uniform framework or structure for the computation of the just compensation for a property
subject to agrarian reform. When acting within the parameters set by the law itself, the RTC-SACs,
however, are not strictly bound to apply the DAR formula to its minute detail, particularly when faced
with situations that do not warrant the formulas strict application; they may, in the exercise of their
discretion, relax the formulas application to fit the factual situations before them. They must,
however, clearly explain the reason for any deviation from the factors and formula that the law and
the rules have provided.Land Bank of the Philippines v. Yatco Agricultural Enterprises, G.R. No.
172551, January 15, 2014.
Just compensation; fair market value of the expropriated property is determined as of the time of
taking. The time of taking refers to that time when the State deprived the landowner of the use
and benefit of his property, as when the State acquires title to the property or as of the filing of the
complaint, per Section 4, Rule 67 of the Rules of Court. Land Bank of the Philippines v. Yatco
Agricultural Enterprises, G.R. No. 172551, January 15, 2014.
Justiciable question; definition of. A justiciable question is one which is inherently susceptible of being
decided on grounds recognized by law, as where the court finds that there are constitutionallyimposed limits on the exercise of the powers conferred on a political branch of the government. Our
inquiry is limited to whether such statutory grant of disciplinary authority to the President violates the
Constitution, particularly the core constitutional principle of the independence of the Office of the
Ombudsman. Emilio A. Gonzales III v. Office of the President, etc., et al./Wendell Bareras-Sulit v. Atty.
Paquito N. Ochoa, Jr., et al., G.R. No. 196231/G.R. No. 196232, January 28, 2014.
Ombudsman; investigative and disciplinary powers; scope. The Ombudsmans broad investigative
and disciplinary powers include all acts of malfeasance, misfeasance, and nonfeasance of all public
officials, including Members of the Cabinet and key Executive officers, during their tenure. To support
these broad powers, the Constitution saw it fit to insulate the Office of the Ombudsman from the
pressures and influences of officialdom and partisan politics and from fear of external reprisal by
making it an independent office. Emilio A. Gonzales III v. Office of the President, etc., et al./Wendell
Bareras-Sulit v. Atty. Paquito N. Ochoa, Jr., et al., G.R. No. 196231/G.R. No. 196232, January 28, 2014.
Ombudsman; powers and functions. Under Section 12, Article XI of the 1987 Constitution, the Office
of the Ombudsman is envisioned to be the protector of the people against the inept, abusive, and
corrupt in the Government, to function essentially as a complaints and action bureau. This
constitutional vision of a Philippine Ombudsman practically intends to make the Ombudsman an
authority to directly check and guard against the ills, abuses, and excesses of the bureaucracy. As the
Ombudsman is expected to be an activist watchman, the Court has upheld its actions, although not
squarely falling under the broad powers granted it by the Constitution and by R.A. No. 6770, if these
actions are reasonably in line with its official function and consistent with the law and the

Constitution.Emilio A. Gonzales III v. Office of the President, etc., et al./Wendell Bareras-Sulit v. Atty.
Paquito N. Ochoa, Jr., et al., G.R. No. 196231/G.R. No. 196232, January 28, 2014.
Private lands acquired for agrarian reform; primary jurisdiction. The Land Bank of the Philippines is
primarily charged with determining land valuation and compensation for all private lands acquired for
agrarian reform purposes. But this determination is only preliminary. The landowner may still take the
matter of just compensation to the court for final adjudication. Thus, we clarify and reiterate: the
original and exclusive jurisdiction over all petitions for the determination of just compensation under
R.A. No. 6657 rests with the RTC-SAC. But, in its determination, the RTC-SAC must take into
consideration the factors laid down by law and the pertinent DAR regulations. Land Bank of the
Philippines v. Yatco Agricultural Enterprises, G.R. No. 172551, January 15, 2014.
Public officer; discourtesy in the performance of official duties. As a public officer and trustee for the
public, it is the ever existing responsibility of respondent sheriff to demonstrate courtesy and civility
in his official actuations with the public. Based on the transcript of the altercation, it is readily
apparent that respondent has indeed been remiss in the duty of observing courtesy in serving the
public. He should have exercised restraint in dealing with the complainant, instead of allowing the
quarrel to escalate into a hostile encounter. The balm of a clean conscience should have been
sufficient to relieve any hurt or harm respondent felt from complainants criticisms in the performance
of his duties. On the contrary, respondents demeanor tarnished the image not only of his office but
that of the judiciary as a whole, exposing him to disciplinary measure. Atty. Virgillo P. Alconera v.
Alfredo T. Pallanan, A.M. No. P-12-3069, January 20, 2014.
Public officer; making untruthful statements. The charge of making untruthful statements must fail.
While the statements mentioned in respondents complaint-affidavit were not reflected in the
transcript submitted by the complainant, this actuality is not conclusive evidence that such event did
not take place. As claimed by respondent, complainants clerk was only able to record a part of the
argument. We cannot then discount the probability that there is more to the argument than what was
caught on video and there remains the possibility that what respondent narrated and what
complainant recorded both actually transpired. Atty. Virgillo P. Alconera v. Alfredo T. Pallanan, A.M.
No. P-12-3069, January 20, 2014.
Section 8(2) of RA 6770; constitutional; the Office of the Special Prosecutor is not constitutionally
within the Office of the Ombudsman; not entitled to the independence the Office of the Ombudsman
enjoys under the Constitution. The Court resolved to maintain the validity of Section 8(2) of R.A. No.
6770 insofar as the Special Prosecutor is concerned. The Court does not consider the Office of the
Special Prosecutor to be constitutionally within the Office of the Ombudsman and is, hence, not
entitled to the independence the latter enjoys under the Constitution. Emilio A. Gonzales III v. Office
of the President, etc., et al./Wendell Bareras-Sulit v. Atty. Paquito N. Ochoa, Jr., et al., G.R. No.
196231/G.R. No. 196232, January 28, 2014.
Section 8(2) of RA No. 6770; unconstitutional; vesting of disciplinary authority in the President over
the Deputy Ombudsman; violation of the independence of the Ombudsman. In more concrete terms,
we rule that subjecting the Deputy Ombudsman to discipline and removal by the President, whose
own alter egos and officials in the Executive department are subject to the Ombudsmans disciplinary
authority, cannot but seriously place at risk the independence of the Office of the Ombudsman itself.
Section 8(2) of R.A. No. 6770 intruded upon the constitutionally-granted independence of the Office of
the Ombudsman. By so doing, the law directly collided not only with the independence that the
Constitution guarantees to the Office of the Ombudsman, but inevitably with the principle of checks
and balances that the creation of an Ombudsman office seeks to revitalize. What is true for the
Ombudsman must equally and necessarily be true for her Deputies who act as agents of the
Ombudsman in the performance of their duties. The Ombudsman can hardly be expected to place her
complete trust in her subordinate officials who are not as independent as she is, if only because they
are subject to pressures and controls external to her Office. This need for complete trust is true in an
ideal setting and truer still in a young democracy like the Philippines where graft and corruption is still
a major problem for the government. For these reasons, Section 8(2) of R.A. No. 6770, providing that
the President may remove a Deputy Ombudsman, should be declared void. Emilio A. Gonzales III v.
Office of the President, etc., et al./Wendell Bareras-Sulit v. Atty. Paquito N. Ochoa, Jr., et al., G.R. No.
196231/G.R. No. 196232, January 28, 2014.
Special Prosecutor; structural relationship with the Ombudsman; the Special Prosecutor is by no
means an ordinary subordinate but one who effectively and directly aids the Ombudsman in the
exercise of his/her duties, which include investigation and prosecution of officials in the Executive
Department. Congress recognized the importance of the Special Prosecutor as a necessary adjunct of
the Ombudsman, aside from his or her deputies, by making the Office of the Special Prosecutor and
organic component of the Office of the Ombudsman and by granting the Ombudsman control and
supervision over that office. This power of control and supervision includes vesting the Office of the
Ombudsman with the power to assign duties to the Special Prosecutor as he or she may deem fit.
Even if the Office of the Special Prosecutor is not expressly made part of the composition of the Office

of the Ombudsman, the role it performs as an organic component of that Office militates against a
differential treatment between the Ombudsmans Deputies, on one hand, and the Special Prosecutor
himself, on the other. What is true for the Ombudsman must be equally true, not only for her Deputies
but, also for other lesser officials of that Office who act directly as agents of the Ombudsman herself
in the performance of her duties. Emilio A. Gonzales III v. Office of the President, etc., et al./Wendell
Bareras-Sulit v. Atty. Paquito N. Ochoa, Jr., et al., G.R. No. 196231/G.R. No. 196232, January 28, 2014.

January 2014 Philippine Supreme Court Rulings on Remedial Law

Civil Procedure
Action to annul judgment or final order; jurisdiction. In 1981, the Legislature enacted Batas Pambansa
Blg.129 (Judiciary Reorganization Act of 1980). Among several innovations of this legislative
enactment was the formal establishment of the annulment of a judgment or final order as an action
independent from the generic classification of litigations in which the subject matter was not capable
of pecuniary estimation, and expressly vested the exclusive original jurisdiction over such action in
the CA. The action in which the subject of the litigation was incapable of pecuniary estimation
continued to be under the exclusive original jurisdiction of the RTC, which replaced the CFI as the
court of general jurisdiction. Since then, the RTC no longer had jurisdiction over an action to annul the
judgment of the RTC, eliminating all concerns about judicial stability. To implement this change, the
Court introduced a new procedure to govern the action to annul the judgment of the RTC in the 1997
revision of the Rules of Court under Rule 47, directing in Section 2 thereof that [t]he annulment may
be based only on the grounds of extrinsic fraud and lack of jurisdiction. Pinausukan Seafood HouseRoxas Blvd., Inc. v. Far East Bank and Trust Cp., now Bank of the Philippine Islands, et al., G.R. No.
159926, January 20, 2014.
Action to annul judgment or final order; lack of jurisdiction; types. Lack of jurisdiction on the part of
the trial court in rendering the judgment or final order is either lack of jurisdiction over the subject
matter or nature of the action, or lack of jurisdiction over the person of the petitioner. The former is a
matter of substantive law because statutory law defines the jurisdiction of the courts over the subject
matter or nature of the action. The latter is a matter of procedural law, for it involves the service of
summons or other process on the petitioner. A judgment or final order issued by the trial court
without jurisdiction over the subject matter or nature of the action is always void, and, in the words of
Justice Street in Banco Espaol-Filipino v. Palanca (37 Phil 949 [1918]), in this sense it may be said to
be a lawless thing, which can be treated as an outlaw and slain at sight, or ignored wherever and
whenever it exhibits its head. But the defect of lack of jurisdiction over the person, being a matter of
procedural law, may be waived by the party concerned either expressly or impliedly. Pinausukan
Seafood House-Roxas Blvd., Inc. v. Far East Bank and Trust Cp., now Bank of the Philippine Islands, et
al.,G.R. No. 159926, January 20, 2014.
Action to annul judgment or final order; nature. The Court has expounded on the nature of the
remedy of annulment of judgment or final order in Dare Adventure Farm Corporation v. Court of
Appeals (681 SCRA 580, 586-587 [2012]), viz:
A petition for annulment of judgment is a remedy in equity so exceptional in nature that it may be
availed of only when other remedies are wanting, and only if the judgment, final order or final
resolution sought to be annulled was rendered by a court lacking jurisdiction or through extrinsic
fraud. Yet, the remedy, being exceptional in character, is not allowed to be so easily and readily
abused by parties aggrieved by the final judgments, orders or resolutions. The Court has thus
instituted safeguards by limiting the grounds for the annulment to lack of jurisdiction and extrinsic
fraud, and by prescribing in Section 1 of Rule 47 of the Rules of Court that the petitioner should show
that the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies are no
longer available through no fault of the petitioner. A petition for annulment that ignores or disregards
any of the safeguards cannot prosper. x x x
The objective of the remedy of annulment of judgment or final order is to undo or set aside the
judgment or final order, and thereby grant to the petitioner an opportunity to prosecute his cause or
to ventilate his defense. If the ground relied upon is lack of jurisdiction, the entire proceedings are set
aside without prejudice to the original action being refiled in the proper court. If the judgment or final
order or resolution is set aside on the ground of extrinsic fraud, the CA may on motion order the trial
court to try the case as if a timely motion for new trial had been granted therein. The remedy is by no
means an appeal whereby the correctness of the assailed judgment or final order is in issue; hence,
the CA is not called upon to address each error allegedly committed by the trial court. Pinausukan
Seafood House-Roxas Blvd., Inc. v. Far East Bank and Trust Cp., now Bank of the Philippine Islands, et
al.,G.R. No. 159926, January 20, 2014.

Action to annul judgment or final order; prescriptive period. The third requirement sets the time for
the filing of the action. The action, if based on extrinsic fraud, must be filed within four years from the
discovery of the extrinsic fraud; and if based on lack of jurisdiction, must be brought before it is
barred by laches or estoppel. Pinausukan Seafood House-Roxas Blvd., Inc. v. Far East Bank and Trust
Cp., now Bank of the Philippine Islands, et al., G.R. No. 159926, January 20, 2014.
Action to annul judgment or final order; requisites. The first requirement prescribes that the remedy is
available only when the petitioner can no longer resort to the ordinary remedies of new trial, appeal,
petition for relief or other appropriate remedies through no fault of the petitioner. This means that the
remedy, although seen as a last remedy, is not an alternative to the ordinary remedies of new trial,
appeal and petition for relief. The petition must aver, therefore, that the petitioner failed to move for
a new trial, or to appeal, or to file a petition for relief without fault on his part. But this requirement to
aver is not imposed when the ground for the petition is lack of jurisdiction (whether alleged singly or
in combination with extrinsic fraud), simply because the judgment or final order, being void, may be
assailed at any time either collaterally or by direct action or by resisting such judgment or final order
in any action or proceeding whenever it is invoked, unless the ground of lack of jurisdiction is
meanwhile barred by laches.
The second requirement limits the ground for the action of annulment of judgment to either extrinsic
fraud or lack of jurisdiction.
Not every kind of fraud justifies the action of annulment of judgment. Only extrinsic fraud does. Fraud
is extrinsic, according to Cosmic Lumber Corporation v. Court of Appeals (265 SCRA 168, 180 [1996]),
where the unsuccessful party has been prevented from exhibiting fully his case, by fraud or
deception practiced on him by his opponent, as by keeping him away from court, a false promise of a
compromise; or where the defendant never had knowledge of the suit, being kept in ignorance by
the acts of the plaintiff; or where an attorney fraudulently or without authority connives at his defeat;
these and similar cases which show that there has never been a real contest in the trial or hearing of
the case are reasons for which a new suit may be sustained to set aside and annul the former
judgment and open the case for a new and fair hearing.
The third requirement sets the time for the filing of the action. The action, if based on extrinsic fraud,
must be filed within four years from the discovery of the extrinsic fraud; and if based on lack of
jurisdiction, must be brought before it is barred by laches or estoppel.
The fourth requirement demands that the petition should be verified, and should allege with
particularity the facts and the law relied upon for annulment, as well as those supporting the
petitioners good and substantial cause of action or defense, as the case may be. The need for
particularity cannot be dispensed with because averring the circumstances constituting either fraud
or mistake with particularity is a universal requirement in the rules of pleading. The petition is to be
filed in seven clearly legible copies, together with sufficient copies corresponding to the number of
respondents, and shall contain essential submissions, specifically: (a) the certified true copy of the
judgment or final order or resolution, to be attached to the original copy of the petition intended for
the court and indicated as such by the petitioner;
(b) the affidavits of witnesses or documents supporting the cause of action or defense; and (c) the
sworn certification that the petitioner has not theretofore commenced any other action involving the
same issues in the Supreme Court, the CA or the different divisions thereof, or any other tribunal or
agency; if there is such other action or proceeding, he must state the status of the same, and if he
should thereafter learn that a similar action or proceeding has been filed or is pending before the
Supreme Court, the CA, or different divisions thereof, or any other tribunal or agency, he undertakes
to promptly inform the said courts and other tribunal or agency thereof within five days
therefrom.Pinausukan Seafood House-Roxas Blvd., Inc. v. Far East Bank and Trust Cp., now Bank of
the Philippine Islands, et al., G.R. No. 159926, January 20, 2014.
Appeal; trial courts factual findings as affirmed by CA are binding on appeal. To start with,
considering that the Court of Appeals (CA) thereby affirmed the factual findings of the RTC, the Court
is bound to uphold such findings, for it is axiomatic that the trial courts factual findings as affirmed
by the CA are binding on appeal due to the Court not being a trier of facts. Development Bank of the
Philippines (DBP) v. Guaria Agricultural and Realty Development Corporation,G.R. No. 160758.
January 15, 2014.
Appeal by certiorari under Rule 45; covers questions of law only; exceptions. The Court has
consistently held that as a general rule, a petition for review under Rule 45 of the Rules of Court
covers questions of law only. The rule, however, admits of exceptions, subject to the following
exceptions, to wit: (1) when the findings are grounded entirely on speculations, surmises, or
conjectures; (2) when the inference made is manifestly mistaken, absurd, or impossible; (3) when
there is a grave abuse of discretion; (4) when the judgment is based on misappreciation of facts; (5)
when the findings of fact are conflicting; (6) when in making its findings, the same are contrary to the

admissions of both appellant and appellee; (7) when the findings are contrary to those of the trial
court; (8) when the findings are conclusions without citation of specific evidence on which they are
based; (9) when the facts set forth in the petition as well as in the petitioners main and reply briefs
are not disputed by the respondent; and (10) when the findings of fact are premised on the supposed
absence of evidence and contradicted by the evidence on record. Rodolfo Laborte, et al. v. Pagsanjan
Tourism Consumers Cooperative, et al.,G.R. No. 183860, January 15, 2014
Appeal by certiorari under Rule 45; effect of failure to file motion for reconsideration within 15-day
reglementary period. The Court emphasized that the 15-day period for filing a motion for new trial or
reconsideration is non-extendible. Hence, the filing of a motion for extension of time to file a motion
for reconsideration did not toll the 15-day period before a judgment becomes final and
executory.Rivelisa Realty, Inc., represented by Ricardo P. Venturina v. First Sta. Clara Builders
Corporation, represented by Ramon A. Pangilinan, as President,G.R. No. 189618. January 15,
2014.
Appeal by certiorari under Rule 45; factual questions may not be raised. Well entrenched in this
jurisdiction is the rule that factual questions may not be raised before this Court in a petition for
review on certiorari as this Court is not a trier of facts.
Thus, it is settled that in petitions for review on certiorari, only questions of law may be put in issue.
Questions of fact cannot be entertained.
A question of law exists when the doubt or controversy concerns the correct application of law or
jurisprudence to a certain set of facts, or when the issue does not call for an examination of the
probative value of the evidence presented, the truth or falsehood of facts being admitted. A question
of fact exists when the doubt or difference arises as to the truth or falsehood of facts or when the
query invites calibration of the whole evidence considering mainly the credibility of the witnesses, the
existence and relevancy of specific surrounding circumstances as well as their relation to each other
and to the whole, and the probability of the situation.Eastern Shipping Lines, Inc. v. BPI/MS Insurance
Corp., and Mitsui Sumitomo Insurance Co., Ltd.,G.R. No. 193986, January 15, 2014.
Appeal by certiorari under Rule 45; factual findings of trial court, when affirmed by CA, are binding on
Supreme Court. Considering that the factual findings of the trial court, when affirmed by the CA, are
binding on the Court, the Court affirms the judgment of the CA upholding Eduardos exercise of the
right of repurchase. Roberto could no longer assail the factual findings because his petition for review
on certiorari was limited to the review and determination of questions of law only. A question of law
exists when the doubt centers on what the law is on a certain set of undisputed facts, while a
question of fact exists when the doubt centers on the truth or falsity of the alleged facts. Whether the
conditions for the right to repurchase were complied with, or whether there was a tender of payment
is a question of fact.Roberto R. David, represented by his Attorney-in-Fact Atty. Proceso M. Nacino v.
Eduardo C. David, acting through his Attorney-in-Fact Edwin C. David,G.R. No. 162365. January 15,
2014.
Appeal by certiorari under Rule 45; scope of review limited. Anent the correct amount of surety bond,
it is well to emphasize that our task in an appeal by petition for review on certiorari is limited, as a
jurisdictional matter, to reviewing errors of law that might have been committed by the CA. The
allegations of incorrect computation of the surety bond involve factual matters within the competence
of the trial court. LZK Holdings and Development Corporation v. Planters Development Bank,G.R. No.
187973, January 20, 2014.
Appeal by certiorari under Rule 45; scope of review. At the outset, it must be pointed out that the
petitioners assignment of errors calls for the Court to again evaluate the evidence to determine
whether there was a partition of the property and whether the 1/3 portion of the southern half was
sold to the respondent spouses. These clearly entail questions of fact which are beyond the Courts
ambit of review under Rule. Theresita, Juan, Asuncion, Patrocinia, Ricardo, and Gloria, all surnamed
Dimaguila v. Jose and Sonia A. Monteiro,G.R. No. 201011, January 27, 2014.
Ejectment; immediate execution of judgment; requisites for stay. The ruling in Chua v. Court of
Appeals (286 SCRA 437, 444-445 [1998]) is instructive on the means of staying the immediate
execution of a judgment in an ejectment case, to wit:
As a general rule, a judgment in favor of the plaintiff in an ejectment suit is immediately executory,
in order to prevent further damage to him arising from the loss of possession of the property in
question. To stay the immediate execution of the said judgment while the appeal is pending the
foregoing provision requires that the following requisites must concur: (1) the defendant perfects his
appeal; (2) he files a supersedeas bond; and (3) he periodically deposits the rentals which become
due during the pendency of the appeal. The failure of the defendant to comply with any of these
conditions is a ground for the outright execution of the judgment, the duty of the court in this respect
being ministerial and imperative. Hence, if the defendant-appellant perfected the appeal but failed

to file a supersedeas bond, the immediate execution of the judgment would automatically follow.
Conversely, the filing of a supersedeas bond will not stay the execution of the judgment if the appeal
is not perfected. Necessarily then, thesupersedeas bond should be filed within the period for the
perfection of the appeal.
In short, a judgment in favor of the plaintiff in an ejectment suit is immediately executory, but the
defendant, to stay its immediate execution, must: (1) perfect an appeal; (2) file a supersedeas bond;
and (3) periodically deposit the rentals becoming due during the pendency of the appeal. Herminia
Acbang v. Hon. Jimmy Luczon, Jr., et al.,G.R. No. 164246, January 15, 2014.
Execution; Terceria; when proper. The right of a third-party claimant to file a terceria is founded on his
title or right of possession. Corollary thereto, before the court can exercise its supervisory power to
direct the release of the property mistakenly levied and the restoration thereof to its rightful owner,
the claimant must first unmistakably establish his ownership or right of possession thereon.
In Spouses Sy v. Hon. Discaya (260 Phil. 401 [1990]) we declared that for a third-party claim or a
terceria to prosper, the claimant must first sufficiently establish his right on the property:
[A] third person whose property was seized by a sheriff to answer for the obligation of the judgment
debtor may invoke the supervisory power of he court which authorized such execution. Upon due
application by the third person and after summary hearing, the court may command that the
property be released from the mistaken levy and restored to the rightful owner or possessor. What
said court can do in these instances, however, is limited to a determination of whether the sheriff has
acted rightly or wrongly in the performance of his duties in the execution of judgment, more
specifically, if he has indeed taken hold of property not belonging to the judgment debtor. The court
does not and cannot pass upon the question of title to the property, with any character of finality. It
can treat of the matter only insofar as may be necessary to decide if the sheriff has acted correctly or
not. It can require the sheriff to restore the property to the claimants possession if warranted by the
evidence. However, if the claimants proofs do not persuade the court of the validity of his title or
right of possession thereto, the claim will be denied.
Magdalena T. Villasi v. Filomena Garcia, substituted by his heirs, namely, Ermelinda H. Garcia, et
al.,G.R. No. 190106, January 15, 2014.
Execution of judgments; Immediate execution in Small Claims cases. Section 23 of the Rule of
Procedure for Small Claims Cases states that the decision shall immediately be entered by the Clerk
of Court in the court docket for civil cases and a copy thereof forthwith served on the parties. A.L.
Ang Network, Inc. v. Emma Mondejar, accompanied by her husband, Efren Mondejar,G.R. No.
200804. January 22, 2014.
Execution of judgments; rationale. It is almost trite to say that execution is the fruit and end of the
suit. Hailing it as the life of the law, ratio legis est anima, this Court has zealously guarded against
any attempt to thwart the rigid rule and deny the prevailing litigant his right to savour the fruit of his
victory. A judgment, if left unexecuted, would be nothing but an empty triumph for the prevailing
party. Magdalena T. Villasi v. Filomena Garcia, substituted by his heirs, namely, Ermelinda H. Garcia,
et al.,G.R. No. 190106, January 15, 2014.
Grave abuse of discretion; concept. To be sure, grave abuse of discretion arises when a lower court or
tribunal patently violates the Constitution, the law or existing jurisprudence. Here, while the RTC had
initially issued a writ of possession in favor of Sps. Marquez, it defied existing jurisprudence when it
effectively rescinded the said writ by subsequently granting Sps. Alindogs prayer for injunctive
relief.Spouses Nicasio C. Marquez and Anita J. Marquez v. Spouses Carlito Alindog and Carmen
Alindog,G.R. No. 184045. January 22, 2014.
Grave abuse of discretion; concept. It is settled doctrine that there is grave abuse of discretion when
there is a capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, such
as where the power is exercised in an arbitrary or despotic manner by reason of passion or personal
hostility, and it must be so patent and gross so as to amount to an evasion of positive duty or to a
virtual refusal to perform the duty enjoined or to act at all in contemplation of law. Ralph P. Tua v.
Hon. Cesar A. Mangrobang, Presiding Judge, Branch 22, RTC, Imus, Cavite; and Rossan HonradoTua,G.R. No. 170701. January 22, 2014.
Judicial power; issuance of protection orders. Section 2 of Article VIII of the 1987 Constitution provides
that the Congress shall have the power to define, prescribe, and apportion the jurisdiction of the
various courts but may not deprive the Supreme Court of its jurisdiction over cases enumerated in
Section 5 hereof. Hence, the primary judge of the necessity, adequacy, wisdom, reasonableness and
expediency of any law is primarily the function of the legislature. The act of Congress entrusting us
with the issuance of protection orders is in pursuance of our authority to settle justiciable
controversies or disputes involving rights that are enforceable and demandable before the courts of
justice or the redress of wrongs for violations of such rights. Ralph P. Tua v. Hon. Cesar A.

Mangrobang, Presiding Judge, Branch 22, RTC, Imus, Cavite; and Rossan Honrado-Tua, G.R. No.
170701. January 22, 2014.
Judgments; enforceability of money judgments. It is a basic principle of law that money judgments are
enforceable only against the property incontrovertibly belonging to the judgment debtor, and if the
property belonging to any third person is mistakenly levied upon to answer for another mans
indebtedness, such person has all the right to challenge the levy through any of the remedies
provided for under the Rules of Court. Magdalena T. Villasi v. Filomena Garcia, substituted by his
heirs, namely, Ermelinda H. Garcia, et al.,G.R. No. 190106, January 15, 2014.
Judgments; Law of the case; concept. Law of the case has been defined as the opinion delivered on a
former appeal, and means, more specifically, that whatever is once irrevocably established as the
controlling legal rule of decision between the same parties in the same case continues to be the law
of the case, whether correct on general principles or not, so long as the facts on which such decision
was predicated continue to be the facts of the case before the court.
The doctrine of law of the case simply means, therefore, that when an appellate court has once
declared the law in a case, its declaration continues to be the law of that case even on a subsequent
appeal, notwithstanding that the rule thus laid down may have been reversed in other cases. For
practical considerations, indeed, once the appellate court has issued a pronouncement on a point that
was presented to it with full opportunity to be heard having been accorded to the parties, the
pronouncement should be regarded as the law of the case and should not be reopened on remand of
the case to determine other issues of the case, like damages. But the law of the case, as the name
implies, concerns only legal questions or issues thereby adjudicated in the former
appeal. Development Bank of the Philippines (DBP) v. Guaria Agricultural and Realty Development
Corporation,G.R. No. 160758. January 15, 2014.
Judgments; remedies of third person claiming property taken by sheriff. Section 16, Rule 39
specifically provides that a third person may avail himself of the remedies of either terceria, to
determine whether the sheriff has rightly or wrongly taken hold of the property not belonging to the
judgment debtor or obligor, or an independent separate action to vindicate his claim of ownership
and/or possession over the foreclosed property. However, the person other than the judgment debtor
who claims ownership or right over levied properties is not precluded from taking other legal
remedies to prosecute his claim. Magdalena T. Villasi v. Filomena Garcia, substituted by his heirs,
namely, Ermelinda H. Garcia, et al.,G.R. No. 190106, January 15, 2014.
Jurisdiction; concurrence of jurisdiction and hierarchy of courts. To be sure, the Court, the Court of
Appeals and the Regional Trial Courts have concurrent jurisdiction to issue a writ of certiorari. Such
concurrence of jurisdiction, however, does not give a party unbridled freedom to choose the venue of
his action lest he run afoul of the doctrine of hierarchy of courts. Instead, a becoming regard for
judicial hierarchy dictates that petitions for the issuance of writs of certiorari against first level courts
should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals,
before resort may be had before the Supreme Court. A.L. Ang Network, Inc. v. Emma Mondejar,
accompanied by her husband, Efren Mondejar,G.R. No. 200804. January 22, 2014.
Jurisdiction; Justiciable question; definition. The Court clarified, too, that the issue of whether a
Deputy Ombudsman may be subjected to the administrative disciplinary jurisdiction of the President
(concurrently with that of the Ombudsman) is a justiciable not a political question. A justiciable
question is one which is inherently susceptible of being decided on grounds recognized by law, as
where the court finds that there are constitutionally-imposed limits on the exercise of the powers
conferred on a political branch of the government. Emilio A. Gonzales III v. Office of the President,
etc., et al./Wendell Bareras-Sulit v. Atty. Paquito N. Ochoa, Jr., et al.,G.R. No. 196231/G.R. No.
196232, January 28, 2014.
Jurisdiction; Small Claims cases. Hence, considering that small claims cases are exclusively within the
jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts in Cities, Municipal Trial Courts, and
Municipal Circuit Trial Courts, certiorari petitions assailing its dispositions should be filed before their
corresponding Regional Trial Courts. This petitioner complied with when it instituted its petition for
certiorari before the RTC which, as previously mentioned, has jurisdiction over the same. A.L. Ang
Network, Inc. v. Emma Mondejar, accompanied by her husband, Efren Mondejar,G.R. No. 200804.
January 22, 2014.
Motions; motion to extend time to file motion for reconsideration prohibited in all courts except in the
Supreme Court. While a motion for additional time is expressly permitted in the filing of a petition for
review before the Court under Section 2, Rule 45 of the Rules of Court, a similar motion seeking to
extend the period for filing a motion for reconsideration is prohibited in all other courts. This rule was
first laid down in the case of Habaluyas Enterprises v. Japzon (226 Phil. 144 [1986]) wherein it was
held that:

Beginning one month after the promulgation of this Resolution, the rule shall be strictly enforced that
no motion for extension of time to file a motion for new trial or reconsideration may be filed with the
Metropolitan or Municipal Trial Courts, the Regional Trial Courts, and the Intermediate Appellate Court.
Such a motion may be filed only in cases pending with the Supreme Court as the court of last resort,
which may in its sound discretion either grant or deny the extension requested.
Rivelisa Realty, Inc., represented by Ricardo P. Venturina v. First Sta. Clara Builders Corporation,
represented by Ramon A. Pangilinan, as President,G.R. No. 189618. January 15, 2014.
Motion for reconsideration; effect of non-filing. At the outset, the Court noted that Gonzales and Sulit
did not file a motion for reconsideration of the Supreme Courts September 4, 2012 Decision; only the
Office of the President, through the OSG, moved for the reconsideration of our ruling reinstating
Gonzales.
This omission, however, poses no obstacle for the Courts review of its ruling on the whole case since
a serious constitutional question has been raised and is one of the underlying bases for the validity or
invalidity of the presidential action.
If the President does not have any constitutional authority to discipline a Deputy Ombudsman and/or
a Special Prosecutor in the first place, then any ruling on the legal correctness of the OPs decision on
the merits will be an empty one. In other words, since the validity of the OPs decision on the merits
of the dismissal is inextricably anchored on the final and correct ruling on the constitutional issue, the
whole case including the constitutional issue remains alive for the Courts consideration on motion
for reconsideration. Emilio A. Gonzales III v. Office of the President, etc., et al./Wendell Bareras-Sulit v.
Atty. Paquito N. Ochoa, Jr., et al.,G.R. No. 196231/G.R. No. 196232, January 28, 2014.
Pleadings; Defense and objections not pleaded either in motion to dismiss or in answer are deemed
waived; exceptions. Significantly, the Rule requires that such a motion should be filed within the time
for but before filing the answer to the complaint or pleading asserting a claim. The time frame
indicates that thereafter, the motion to dismiss based on the absence of the condition precedent is
barred. It is so inferable from the opening sentence of Section 1 of Rule 9 stating that defense and
objections not pleaded either in a motion to dismiss or in the answer are deemed waived. There are,
as just noted, only four exceptions to this Rule, namely, lack of jurisdiction over the subject
matter; litis pendentia; res judicata; and prescription of action. Failure to allege in the complaint that
earnest efforts at a compromise has been made but had failed is not one of the exceptions.Heirs of
Dr. Mariano Favis, Sr., represented by their co-heirs and attorneys-in-fact, Mercedes A. Favis and
Nelly Favis-Villafuente v. Juana Gonzales, her son Mariano Favis, all minors represented herein by
their parents, Sps. Mariano Favis and Larcelita D. Favis,G.R. No. 185922, January 15, 2014.
Pleadings; Failure to allege compromise efforts in complaint not jurisdictional defect. Why the
objection of failure to allege a failed attempt at a compromise in a suit among members of the same
family is waivable was earlier explained in the case of Versoza v. Versoza (135 Phil. 84, 94 [1968]), a
case for future support which was dismissed by the trial court upon the ground that there was no
such allegation of infringement of Article 222 of the Civil Code, the origin of Article 151 of the Family
Code. While the Court ruled that a complaint for future support cannot be the subject of a
compromise and as such the absence of the required allegation in the complaint cannot be a ground
for objection against the suit, the decision went on to state thus:
The alleged defect is that the present complaint does not state a cause of action. The proposed
amendment seeks to complete it. An amendment to the effect that the requirements of Article 222
have been complied with does not confer jurisdiction upon the lower court. With or without this
amendment, the subject-matter of the action remains as one for support, custody of children, and
damages, cognizable by the court below.
To illustrate, Tamayo v. San Miguel Brewery, Inc., allowed an amendment which merely corrected a
defect in the allegation of plaintiff-appellants cause of action, because as it then stood, the original
complaint stated no cause of action. We there ruled out as inapplicable the holding in Campos Rueda
Corporation v. Bautista, that an amendment cannot be made so as to confer jurisdiction on the court
xxx
Therefore, the rule on deemed waiver of the non-jurisdictional defense or objection is wholly
applicable to respondent. If the respondents as parties-defendants could not, and did not, after filing
their answer to petitioners complaint, invoke the objection of absence of the required allegation on
earnest efforts at a compromise, the appellate court unquestionably did not have any authority or
basis to muto proprio order the dismissal of petitioners complaint. Heirs of Dr. Mariano Favis, Sr.,
represented by their co-heirs and attorneys-in-fact, Mercedes A. Favis and Nelly Favis-Villafuente v.
Juana Gonzales, her son Mariano Favis, all minors represented herein by their parents, Sps. Mariano
Favis and Larcelita D. Favis,G.R. No. 185922, January 15, 2014.

Pleadings; motu proprio dismissal. Section 1, Rule 9 provides for only four instances when the court
may motu proprio dismiss the claim, namely: (a) lack of jurisdiction over the subject matter; (b) litis
pendentia; (c) res judicata; and (d) prescription of action.
Specifically in Gumabon v. Larin (422 Phil. 222, 230 [2001]), cited in Katon v. Palanca, Jr. (481 Phil.
168, 180 [2004]), the Court held:
x x x [T]he muto proprio dismissal of a case was traditionally limited to instances when the court
clearly had no jurisdiction over the subject matter and when the plaintiff did not appear during trial,
failed to prosecute his action for an unreasonable length of time or neglected to comply with the rules
or with any order of the court. Outside of these instances, any motu proprio [sic] dismissal would
amount to a violation of the right of the plaintiff to be heard. Except for qualifying and expanding
Section 2, Rule 9, and Section 3, Rule 17, of the Revised Rules of Court, the amendatory 1997 Rules of
Civil Procedure brought about no radical change. Under the new rules, a court may muto
proprio dismiss a claim when it appears from the pleadings or evidence on record that it has no
jurisdiction over the subject matter; when there is another cause of action pending between the same
parties for the same cause, or where the action is barred by a prior judgment or by statute of
limitations. x x x.
Heirs of Dr. Mariano Favis, Sr., represented by their co-heirs and attorneys-in-fact, Mercedes A. Favis
and Nelly Favis-Villafuente v. Juana Gonzales, her son Mariano Favis, all minors represented herein by
their parents, Sps. Mariano Favis and Larcelita D. Favis,G.R. No. 185922, January 15, 2014.
Preliminary injunction; improper where act sought to be enjoined is already consummated. Case law
instructs that injunction would not lie where the acts sought to be enjoined had already become fait
accompli (meaning, an accomplished or consummated act). Hence, since the consummation of the
act sought to be restrained had rendered Sps. Alindogs injunction petition moot, the issuance of the
said injunctive writ was altogether improper. Spouses Nicasio C. Marquez and Anita J. Marquez v.
Spouses Carlito Alindog and Carmen Alindog,G.R. No. 184045. January 22, 2014.
Res judicata; conclusiveness of judgment. Under the principle of conclusiveness of judgment, the
right of Planters Bank to a writ of possession as adjudged in G.R. No. 167998 is binding and
conclusive on the parties.
The doctrine of res judicata by conclusiveness of judgment postulates that when a right or fact has
been judicially tried and determined by a court of competent jurisdiction, or when an opportunity for
such trial has been given, the judgment of the court, as long as it remains unreversed, should be
conclusive upon the parties and those in privity with them.
All the elements of the doctrine are present in this case. The final judgment in G.R. No. 167998 was
rendered by the Court pursuant to its jurisdiction over the review of decisions and rulings of the CA. It
was a judgment on the merits of Planters Banks right to apply for and be issued a writ of possession.
Lastly, the parties in G.R. No. 167998 are the same parties involved in the present case. LZK Holdings
and Development Corporation v. Planters Development Bank,G.R. No. 187973, January 20, 2014.
Writ of possession; nature. No hearing is required prior to the issuance of a writ of possession. This is
clear from the following disquisitions in Espinoza v United Overseas Bank Phils. (616 SCRA 353) which
reiterates the settled rules on writs of possession, to wit:
The proceeding in a petition for a writ of possession is ex parte and summary in nature. It is a judicial
proceeding brought for the benefit of one party only and without notice by the court to any person
adverse of interest. It is a proceeding wherein relief is granted without giving the person against
whom the relief is sought an opportunity to be heard. By its very nature, an ex parte petition for
issuance of a writ of possession is a non-litigious proceeding. It is a judicial proceeding for the
enforcement of ones right of possession as purchaser in a foreclosure sale. It is not an ordinary suit
filed in court, by which one party sues another for the enforcement of a wrong or protection of a right,
or the prevention or redress of a wrong. LZK Holdings and Development Corporation v. Planters
Development Bank,G.R. No. 187973, January 20, 2014
Other Proceedings
Barangay Protection Order (BPO); Function of Punong Barangay purely executive in nature. The
issuance of a BPO by the Punong Barangay or, in his unavailability, by any available Barangay
Kagawad, merely orders the perpetrator to desist from (a) causing physical harm to the woman or her
child; and (2) threatening to cause the woman or her child physical harm. Such function of the
Punong Barangay is, thus, purely executive in nature, in pursuance of his duty under the Local
Government Code to enforce all laws and ordinances, and to maintain public order in the

barangay. Ralph P. Tua v. Hon. Cesar A. Mangrobang, Presiding Judge, Branch 22, RTC, Imus, Cavite;
and Rossan Honrado-Tua, G.R. No. 170701. January 22, 2014.
Extra-judicial foreclosure; ministerial duty to issue writ of possession to purchaser; exception. It is an
established rule that the purchaser in an extra-judicial foreclosure sale is entitled to the possession of
the property and can demand that he be placed in possession of the same either during (with bond)
or after the expiration (without bond) of the redemption period therefor. To this end, the Court, in
China Banking Corp. v. Sps. Lozada (579 Phil 454 [2008]), citing several cases on the matter,
explained that a writ of possession duly applied for by said purchaser should issue as a matter of
course, and thus, merely constitutes a ministerial duty on the part of the court.
The ministerial issuance of a writ of possession in favor of the purchaser in an extra-judicial
foreclosure sale, however, admits of an exception. Section 33, Rule 39 of the Rules of Court (Rules)
pertinently provides that the possession of the mortgaged property may be awarded to a purchaser in
an extra-judicial foreclosure unless a third party is actually holding the property by adverse title or
right. In the recent case of Rural Bank of Sta. Barbara (Iloilo), Inc. v. Centeno (693 SCRA 110 [2013]),
citing the case of China Banking Corp., the Court illumined that the phrase a third party who is
actually holding the property adversely to the judgment obligor contemplates a situation in which a
third party holds the property by adverse title or right, such as that of a co-owner, tenant or
usufructuary. The co-owner, agricultural tenant, and usufructuary possess the property in their own
right, and they are not merely the successor or transferee of the right of possession of another coowner or the owner of the property. Notably, the property should not only be possessed by a third
party, but also held by the third party adversely to the judgment obligor. In other words, as
mentioned in Villanueva v. Cherdan Lending Investors Corporation (633 SCRA 173 [2010]), the third
person must therefore claim a right superior to that of the original mortgagor. Spouses Nicasio C.
Marquez and Anita J. Marquez v. Spouses Carlito Alindog and Carmen Alindog, G.R. No. 184045.
January 22, 2014.
Protection Order under Section 15 of RA 9262; concept. In Garcia v. Drilon (699 SCRA 352, 401
[2013]), wherein petitioner therein argued that Section 15 of RA 9262 is a violation of the due process
clause of the Constitution, we struck down the challenge and held:
A protection order is an order issued to prevent further acts of violence against women and their
children, their family or household members, and to grant other necessary reliefs. Its purpose is to
safeguard the offended parties from further harm, minimize any disruption in their daily life and
facilitate the opportunity and ability to regain control of their life. The scope of reliefs in protection
orders is broadened to ensure that the victim or offended party is afforded all the remedies necessary
to curtail access by a perpetrator to the victim. This serves to safeguard the victim from greater risk
of violence; to accord the victim and any designated family or household member safety in the family
residence, and to prevent the perpetrator from committing acts that jeopardize the employment and
support of the victim. It also enables the court to award temporary custody of minor children to
protect the children from violence, to prevent their abduction by the perpetrator and to ensure their
financial support. The rules require that petitions for protection order be in writing, signed and
verified by the petitioner thereby undertaking full responsibility, criminal or civil, for every allegation
therein. Since time is of the essence in cases of VAWC if further violence is to be prevented, the
court is authorized to issueex parte a TPO after raffle but before notice and hearing when the life,
limb or property of the victim is in jeopardy and there is reasonable ground to believe that the order
is necessary to protect the victim from the immediate and imminent danger of VAWC or to prevent
such violence, which is about to recur. There need not be any fear that the judge may have no
rational basis to issue an ex parte order. The victim is required not only to verify the allegations in
the petition, but also to attach her witnesses affidavits to the petition. The grant of a TPO ex
parte cannot, therefore, be challenged as violative of the right to due process. Just like a writ of
preliminary attachment which is issued without notice and hearing because the time in which the
hearing will take could be enough to enable the defendant to abscond or dispose of his property, in
the same way, the victim of VAWC may already have suffered harrowing experiences in the hands of
her tormentor, and possibly even death, if notice and hearing were required before such acts could
be prevented. It is a constitutional commonplace that the ordinary requirements of procedural due
process must yield to the necessities of protecting vital public interests, among which is protection of
women and children from violence and threats to their personal safety and security. x x x
Ralph P. Tua v. Hon. Cesar A. Mangrobang, Presiding Judge, Branch 22, RTC, Imus, Cavite; and Rossan
Honrado-Tua,G.R. No. 170701. January 22, 2014.
Temporary Protection Order (TPO) under Section 15 of RA 9262; courts authority to issue ex parte.
Clearly, the court, under Section 15 of RA 9262, is authorized to issue a TPO on the date of the filing
of the application after ex parte determination that there is basis for the issuance thereof. Ex
parte means that the respondent need not be notified or be present in the hearing for the issuance of
the TPO. Thus, it is within the courts discretion, based on the petition and the affidavit attached
thereto, to determine that the violent acts against women and their children for the issuance of a TPO

have been committed. Ralph P. Tua v. Hon. Cesar A. Mangrobang, Presiding Judge, Branch 22, RTC,
Imus, Cavite; and Rossan Honrado-Tua,G.R. No. 170701. January 22, 2014.
Evidence
Admissions; contradiction. Section 4 of Rule 129 of the Rules of Court provides that an admission
made by a party in the course of the proceedings in the same case does not require proof, and may
be contradicted only by showing that it was made through palpable mistake. The petitioners argue
that such admission was the palpable mistake of their former counsel in his rush to file the answer, a
copy of which was not provided to them. This contention is unacceptable. It is a purely self-serving
claim unsupported by any iota of evidence. Bare allegations, unsubstantiated by evidence, are not
equivalent to proof. Theresita, Juan, Asuncion, Patrocinia, Ricardo, and Gloria, all surnamed Dimaguila
v. Jose and Sonia A. Monteiro,G.R. No. 201011, January 27, 2014.
Admissions; rendered conclusive through estoppel. Article 1431 of the Civil Code provides that
through estoppel, an admission is rendered conclusive upon the person making it, and cannot be
denied or disproved as against the person relying thereon. The respondent spouses had clearly relied
on the petitioners admission and so amended their original complaint for partition to one for
recovery of possession of a portion of the subject property. Thus, the petitioners are now estopped
from denying or attempting to prove that there was no partition of the property. Theresita, Juan,
Asuncion, Patrocinia, Ricardo, and Gloria, all surnamed Dimaguila v. Jose and Sonia A. Monteiro,G.R.
No. 201011, January 27, 2014.
Best evidence rule; concept and exception. Section 3(d) of Rule 130 of the Rules of Court provides
that when the subject of inquiry is the contents of a document, no evidence shall be admissible other
than the original document itself, except when the original is a public record in the custody of a public
officer or is recorded in a public office. Section 7 of the same Rule provides that when the original of a
document is in the custody of a public officer or is recorded in a public office, its contents may be
proved by a certified copy issued by the public officer in custody thereof. Section 24 of Rule 132
provides that the record of public documents may be evidenced by a copy attested by the officer
having the legal custody or the record.
Certified true copies of the cadastral map of Liliw and the corresponding list of claimants of the area
covered by the map were presented by two public officers. x x x The cadastral maps and the list of
claimants, as certified true copies of original public records, fall under the exception to the best
evidence rule. Theresita, Juan, Asuncion, Patrocinia, Ricardo, and Gloria, all surnamed Dimaguila v.
Jose and Sonia A. Monteiro, G.R. No. 201011, January 27, 2014.
Burden of proof in civil cases; quantum of evidence. Land Bank failed to prove that the amount
allegedly miscredited to Oates account came from the proceeds of the pre-terminated loans of its
clients. It is worth emphasizing that in civil cases, the party making the allegations has the burden of
proving them by preponderance of evidence. Mere allegation is not sufficient. Land Bank of the
Philippines v. Emmanuel C. Oate,G.R. No. 192371, January 15, 2014.
Hearsay rule; entries in official records as exception. As to the hearsay rule, Section 44 of Rule 130 of
the Rules of Court similarly provides that entries in official records are an exception to the rule. The
rule provides that entries in official records made in the performance of the duty of a public officer of
the Philippines, or by a person in the performance of a duty specially enjoined by law, are prima facie
evidence of the facts therein stated. The necessity of this rule consists in the inconvenience and
difficulty of requiring the officials attendance as a witness to testify to the innumerable transactions
in the course of his duty. The documents trustworthiness consists in the presumption of regularity of
performance of official duty.
Cadastral maps are the output of cadastral surveys. The DENR is the department tasked to execute,
supervise and manage the conduct of cadastral surveys. It is, therefore, clear that the cadastral map
and the corresponding list of claimants qualify as entries in official records as they were prepared by
the DENR, as mandated by law. As such, they are exceptions to the hearsay rule and are prima facie
evidence of the facts stated therein. Theresita, Juan, Asuncion, Patrocinia, Ricardo, and Gloria, all
surnamed Dimaguila v. Jose and Sonia A. Monteiro,G.R. No. 201011, January 27, 2014.
Judicial notice; discretionary notice of records of other cases. The taking of judicial notice is a matter
of expediency and convenience for it fulfills the purpose that the evidence is intended to achieve, and
in this sense, it is equivalent to proof. Generally, courts are not authorized to take judicial notice of
the contents of the records of other cases even when said cases have been tried or are pending in the
same court or before the same judge. They may, however, take judicial notice of a decision or the
facts prevailing in another case sitting in the same court if: (1) the parties present them in evidence,
absent any opposition from the other party; or (2) the court, in its discretion, resolves to do so. In
either case, the courts must observe the clear boundary provided by Section 3, Rule 129 of the Rules

of Court. Land Bank of the Philippines v. Yatco Agricultural Enterprises,G.R. No. 172551, January
15, 2014.
Offer of evidence; court considers evidence only when formally offered; exceptions. Section 34, Rule
132 of the Revised Rules on Evidence provides the general rule, to wit:
Section 34. The Court shall consider no evidence which has not been formally offered. The purpose
for which the evidence is offered must be specified.
From the above provision, it is clear that the court considers the evidence only when it is formally
offered. The offer of evidence is necessary because it is the duty of the trial court to base its findings
of fact and its judgment only and strictly on the evidence offered by the parties. A piece of document
will remain a scrap of paper without probative value unless and until admitted by the court in
evidence for the purpose or purposes for which it is offered. The formal offer of evidence allows the
parties the chance to object to the presentation of an evidence which may not be admissible for the
purpose it is being offered.
However, there are instances when the Court relaxed the foregoing rule and allowed evidence not
formally offered to be admitted. Citing People v. Napat-a and People. v. Mate the Court in Heirs of
Romana Saves, et al., v. Heirs of Escolastico Saves, et al. (632 SCRA 236 [2010]), enumerated the
requirements for the evidence to be considered despite failure to formally offer it, namely: first, the
same must have been duly identified by testimony duly recorded and, second, the same must have
been incorporated in the records of the case. In People v. Vivencio De Roxas et al. (116 Phil 977
[1962]), the Court also considered exhibits which were not formally offered by the prosecution but
were repeatedly referred to in the course of the trial by the counsel of the accused.
In the instant case, the Court finds that the above requisites are attendant to warrant the relaxation
of the rule and admit the evidence of the petitioners not formally offered. As can be seen in the
records of the case, the petitioners were able to present evidence that have been duly identified by
testimony duly recorded. To identify is to prove the identity of a person or a thing. Identification
means proof of identity; the proving that a person, subject or article before the court is the very same
that he or it is alleged, charged or reputed to be. Rodolfo Laborte, et al. v. Pagsanjan Tourism
Consumers Cooperative, et al.,G.R. No. 183860, January 15, 2014.
Preponderance of evidence; definition. Spouses Monteiro, as plaintiffs in the original case, had the
burden of proof to establish their case by a preponderance of evidence, which is the weight, credit,
and value of the aggregate evidence on either side, synonymous with the term greater weight of the
evidence. Preponderance of evidence is evidence which is more convincing to the court as worthy of
belief than that which is offered in opposition thereto. Theresita, Juan, Asuncion, Patrocinia, Ricardo,
and Gloria, all surnamed Dimaguila v. Jose and Sonia A. Monteiro,G.R. No. 201011, January 27,
2014.
Question of law distinguished from question of fact. A question of law exists when the doubt or
controversy concerns the correct application of law or jurisprudence to a certain set of facts, or when
the issue does not call for an examination of the probative value of the evidence presented, the truth
or falsehood of facts being admitted. A question of fact exists when the doubt or difference arises as
to the truth or falsehood of facts or when the query invites calibration of the whole evidence
considering mainly the credibility of the witnesses, the existence and relevancy of specific
surrounding circumstances as well as their relation to each other and to the whole, and the
probability of the situation.Eastern Shipping Lines, Inc. v. BPI/MS Insurance Corp., and Mitsui
Sumitomo Insurance Co., Ltd.,G.R. No. 193986, January 15, 2014.
Question of law distinguished from question of fact. A question of law exists when the doubt centers
on what the law is on a certain set of undisputed facts, while a question of fact exists when the doubt
centers on the truth or falsity of the alleged facts. Whether the conditions for the right to repurchase
were complied with, or whether there was a tender of payment is a question of fact.Roberto R. David,
represented by his Attorney-in-Fact Atty. Proceso M. Nacino v. Eduardo C. David, acting through his
Attorney-in-Fact Edwin C. David,G.R. No. 162365. January 15, 2014.

January 2014 Philippine Supreme Court Decisions on Civil Law

Civil Code
Bad faith cannot be presumed; it is a question of fact that must be proven by clear and convincing
evidence. It is worth stressing at this point that bad faith cannot be presumed. It is a question of fact
that must be proven by clear and convincing evidence. [T]he burden of proving bad faith rests on

the one alleging it. Sadly, spouses Vilbar failed to adduce the necessary evidence. Thus, this Court
finds no error on the part of the CA when it did not find bad faith on the part of Gorospe, Sr. Sps.
Bernadette and Rodulfo Vilbar v. Angelito L. Opinion, G.R. No. 176043. January 15, 2014.
Banks; exercise the highest degree of diligence, as well as to observe the high standards of integrity
and performance in all its transactions because its business was imbued with public interest. Being a
banking institution, DBP owed it to Guaria Corporation to exercise the highest degree of diligence, as
well as to observe the high standards of integrity and performance in all its transactions because its
business was imbued with public interest. The high standards were also necessary to ensure public
confidence in the banking system, for, according to Philippine National Bank v. Pike: The stability of
banks largely depends on the confidence of the people in the honesty and efficiency of
banks.Development Bank of the Philippines (DBP) v. Guaria Agricultural and Realty Development
Corporation,G.R. No. 160758. January 15, 2014
Common carrier; cargoes while being unloaded generally remain under the custody of the carrier. It is
settled in maritime law jurisprudence that cargoes while being unloaded generally remain under the
custody of the carrier. As hereinbefore found by the RTC and affirmed by the CA based on the
evidence presented, the goods were damaged even before they were turned over to ATI. Such
damage was even compounded by the negligent acts of petitioner and ATI which both mishandled the
goods during the discharging operations. Eastern Shipping Lines, Inc. v. BPI/MS Insurance Corp., and
Mitsui Sumitomo Insurance Co., Ltd.,G.R. No. 193986, January 15, 2014.
Common carrier; extraordinary diligence.Common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods
transported by them. Subject to certain exceptions enumerated under Article 1734 of the Civil Code,
common carriers are responsible for the loss, destruction, or deterioration of the goods. The
extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally
placed in the possession of, and received by the carrier for transportation until the same are
delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right
to receive them. Owing to this high degree of diligence required of them, common carriers, as a
general rule, are presumed to have been at fault or negligent if the goods they transported
deteriorated or got lost or destroyed. That is, unless they prove that they exercised extraordinary
diligence in transporting the goods. In order to avoid responsibility for any loss or damage, therefore,
they have the burden of proving that they observed such high level of diligence. Eastern Shipping
Lines, Inc. v. BPI/MS Insurance Corp., and Mitsui Sumitomo Insurance Co., Ltd.,G.R. No. 193986,
January 15, 2014.
Contracts; breach of contract; petitioner is guilty of breach of contract when it unjustifiably refused to
release respondents deposit despite demand; liable for damages. In cases of breach of contract,
moral damages may be recovered only if the defendant acted fraudulently or in bad faith, or is guilty
of gross negligence amounting to bad faith, or in wanton disregard of his contractual obligations.
In this case, a review of the circumstances surrounding the issuance of the Hold Out order reveals
that petitioner issued the Hold Out order in bad faith. First of all, the order was issued without any
legal basis. Second, petitioner did not inform respondents of the reason for the Hold Out. Third, the
order was issued prior to the filing of the criminal complaint. Records show that the Hold Out order
was issued on July 31, 2003, while the criminal complaint was filed only on September 3, 2003. All
these taken together lead us to conclude that petitioner acted in bad faith when it breached its
contract with respondents. As we see it then, respondents are entitled to moral
damages. Metropolitan Bank & Trust Company v. Ana Grace Rosales and Yo Yuk To, G.R. No. 183204,
January 13, 2014.
Contracts; buyer in good faith. It is settled that a party dealing with a registered land does not have
to inquire beyond the Certificate of Title in determining the true owner thereof, and in guarding or
protecting his interest, for all that he has to look into and rely on are the entries in the Certificate of
Title.
Inarguably, Opinion acted in good faith in dealing with the registered owners of the properties. He
relied on the titles presented to him, which were confirmed by the Registry of Deeds to be authentic,
issued in accordance with the law, and without any liens or encumbrances. Sps. Bernadette and
Rodulfo Vilbar v. Angelito L. Opinion, G.R. No. 176043. January 15, 2014.
Contracts; Doctrine of in pari delicto; exception. According to Article 1412 (1) of the Civil Code, the
guilty parties to an illegal contract cannot recover from one another and are not entitled to an
affirmative relief because they are in pari delicto or in equal fault. The doctrine of in pari delicto is a
universal doctrine that holds that no action arises, in equity or at law, from an illegal contract; no suit
can be maintained for its specific performance, or to recover the property agreed to be sold or
delivered, or the money agreed to be paid, or damages for its violation; and where the parties
are in pari delicto, no affirmative relief of any kind will be given to one against the other.

Nonetheless, the application of the doctrine of in pari delicto is not always rigid. An accepted
exception arises when its application contravenes well-established public policy. In this jurisdiction,
public policy has been defined as that principle of the law which holds that no subject or citizen can
lawfully do that which has a tendency to be injurious to the public or against the public
good. Domingo Gonzalo v. John Tarnate, Jr., G.R. No. 160600, January 15, 2014.
Contracts; Hold-out clause; applies only if there is a valid and existing obligation arising from any of
the sources of obligation enumerated in Article 1157. Considering that respondent Rosales is not
liable under any of the five sources of obligation, there was no legal basis for petitioner to issue the
Hold Out order.
The Hold Out clause applies only if there is a valid and existing obligation arising from any of the
sources of obligation enumerated in Article 1157 of the Civil Code, to wit: law, contracts, quasicontracts, delict, and quasi-delict. In this case, petitioner failed to show that respondents have an
obligation to it under any law, contract, quasi-contract, delict, or quasi-delict. And although a criminal
case was filed by petitioner against respondent Rosales, this is not enough reason for petitioner to
issue a Hold Out order as the case is still pending and no final judgment of conviction has been
rendered against respondent Rosales. In fact, it is significant to note that at the time petitioner issued
the Hold Out order, the criminal complaint had not yet been filed. Thus, considering that
respondent Rosales is not liable under any of the five sources of obligation, there was no legal basis
for petitioner to issue the Hold Out order. Metropolitan Bank & Trust Company v. Ana Grace Rosales
and Yo Yuk To,G.R. No. 183204, January 13, 2014.
Contracts; Mortgage; nature of mortgage. It is true that loans are often secured by a mortgage
constituted on real or personal property to protect the creditors interest in case of the default of the
debtor. By its nature, however, a mortgage remains an accessory contract dependent on the principal
obligation, such that enforcement of the mortgage contract will depend on whether or not there has
been a violation of the principal obligation. While a creditor and a debtor could regulate the order in
which they should comply with their reciprocal obligations, it is presupposed that in a loan the lender
should perform its obligation the release of the full loan amount before it could demand that the
borrower repay the loaned amount. Development Bank of the Philippines (DBP) v. Guaria Agricultural
and Realty Development Corporation, G.R. No. 160758. January 15, 2014.
Contracts; mortgagee in good faith. Assuming arguendo that the Gorospes titles to the subject
properties happened to be fraudulent, public policy considers Opinion to still have acquired legal title
as a mortgagee in good faith. As held in Cavite Development Bank v. Spouses Lim:
There is, however, a situation where, despite the fact that the mortgagor is not the owner of the
mortgaged property, his title being fraudulent, the mortgage contract and any foreclosure sale arising
therefrom are given effect by reason of public policy. This is the doctrine of the mortgagee in good
faith based on the rule that all persons dealing with property covered by a Torrens Certificate of Title,
as buyers or mortgagees, are not required to go beyond what appears on the face of the title. The
public interest in upholding the indefeasibility of a certificate of title, as evidence of the lawful
ownership of the land or of any encumbrance thereon, protects a buyer or mortgagee who, in good
faith, relied upon what appears on the face of the certificate of title.
Sps. Bernadette and Rodulfo Vilbar v. Angelito L. Opinion, G.R. No. 176043. January 15, 2014.
Sales; proof capacity of seller; difference when there is a special power of attorney and when there is
none.The strength of the buyers inquiry on the sellers capacity or legal authority to sell depends on
the proof of capacity of the seller. If the proof of capacity consists of a special power of attorney duly
notarized, mere inspection of the face of such public document already constitutes sufficient inquiry.
If no such special power of attorney is provided or there is one but there appears to be flaws in its
notarial acknowledgment, mere inspection of the document will not do; the buyer must show that his
investigation went beyond the document and into the circumstances of its execution. The Heirs of
Victorino Sarili, namely, Isabel A. Sarili, et al. v. Pedro F. Lagrosa, represented in this act by his
Attorney-in-Fact, Lourdes Labios Mojica, G.R. No. 193517, January 15, 2014.
Contracts; Principle of quantum merit; when allowed. Case law instructs that under this principle
(quantum meruit), a contractor is allowed to recover the reasonable value of the thing or services
rendered despite the lack of a written contract, in order to avoid unjust enrichment. Quantum
meruitmeans that, in an action for work and labor, payment shall be made in such amount as the
plaintiff reasonably deserves. The measure of recovery should relate to the reasonable value of the
services performed because the principle aims to prevent undue enrichment based on the equitable
postulate that it is unjust for a person to retain any benefit without paying for it. Rivelisa Realty, Inc.,
represented by Ricardo P. Venturina v. First Sta. Clara Builders Corporation, represented by Ramon A.
Pangilinan, as President, G.R. No. 189618. January 15, 2014.

Contracts; rescission; proper when there is non-performance of obligation. Article 1191. The power to
rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with
what is incumbent upon him. The injured party may choose between the fulfillment and the rescission
of the obligation, with payment of damages in either case. He may also seek rescission, even after he
has chosen fulfillment, if the latter should become impossible. Fil-Estate Properties, Inc. and Fil-Estate
Network, Inc. v. Spouses Conrado and Maria Victoria Ronquillo, G.R. No. 185798, January 13, 2014.
Contracts; void contract; effects. Under Article 1409 (1) of the Civil Code, a contract whose cause,
object or purpose is contrary to law is a void or inexistent contract. As such, a void contract cannot
produce a valid one. To the same effect is Article 1422 of the Civil Code, which declares that a
contract, which is the direct result of a previous illegal contract, is also void and inexistent. Domingo
Gonzalo v. John Tarnate, Jr., G.R. No. 160600, January 15, 2014.
Damages; moral damages; when awarded.[S]uffice it to say that the dispute over the subject
property had caused respondent serious anxiety, mental anguish and sleepless nights, thereby
justifying the aforesaid award. Likewise, since respondent was constrained to engage the services of
counsel to file this suit and defend his interests, the awards of attorneys fees and litigation expenses
are also sustained. The Heirs of Victorino Sarili, namely, Isabel A. Sarili, et al. v. Pedro F. Lagrosa,
represented in this act by his Attorney-in-Fact, Lourdes Labios Mojica, G.R. No. 193517, January 15,
2014.
Damages; moral damages; when awarded. Every person is entitled to the physical integrity of his
body. Although we have long advocated the view that any physical injury, like the loss or diminution
of the use of any part of ones body, is not equatable to a pecuniary loss, and is not susceptible of
exact monetary estimation, civil damages should be assessed once that integrity has been violated.
The assessment is but an imperfect estimation of the true value of ones body. The usual practice is
to award moral damages for the physical injuries sustained. Dr. Encarnacion C. Lumantas v. Hanz
Calapiz, represented by his parents, Hilario Calapiz, Jr. and Helita Calapiz, G.R. No. 163753. January
15, 2014.
Foreclosure; premature foreclosure; order of restoration of possession and payment of reasonable
rentals. Having found and pronounced that the extrajudicial foreclosure by DBP was premature, and
that the ensuing foreclosure sale was void and ineffectual, the Court affirms the order for the
restoration of possession to Guarifia Corporation and the payment of reasonable rentals for the use of
the resort. The CA properly held that the premature and invalid foreclosure had unjustly dispossessed
Guarifia Corporation of its properties. Consequently, the restoration of possession and the payment of
reasonable rentals were in accordance with Article 561 of the Civil Code, which expressly states that
one who recovers, according to law, possession unjustly lost shall be deemed for all purposes which
may redound to his benefit to have enjoyed it without interruption. Development Bank of the
Philippines (DBP) v. Guaria Agricultural and Realty Development Corporation, G.R. No. 160758.
January 15, 2014.
Foreclosure; purchaser in foreclosure sale may take possession of the property even before the
expiration of the redemption period. A writ of possession is a writ of execution employed to enforce a
judgment to recover the possession of land. It commands the sheriff to enter the land and give
possession of it to the person entitled under the judgment. It may be issued in case of an extrajudicial
foreclosure of a real estate mortgage under Section 7 of Act No. 3135, as amended by Act No. 4118.
Under said provision, the writ of possession may be issued to the purchaser in a foreclosure sale
either within the one-year redemption period upon the filing of a bond, or after the lapse of the
redemption period, without need of a bond.
We have consistently held that the duty of the trial court to grant a writ of possession is ministerial.
Such writ issues as a matter of course upon the filing of the proper motion and the approval of the
corresponding bond. No discretion is left to the trial court. Any question regarding the regularity and
validity of the sale, as well as the consequent cancellation of the writ, is to be determined in a
subsequent proceeding as outlined in Section 8 of Act No. 3135. Such question cannot be raised to
oppose the issuance of the writ, since the proceeding is ex parte. The recourse is available even
before the expiration of the redemption period provided by law and the Rules of Court. LZK Holdings
and Development Corporation v. Planters Development Bank, G.R. No. 187973, January 20, 2014.
Interest; legal interest; interest rate pegged at 6% regardless of the source of obligation. The resulting
modification of the award of legal interest is, also, in line with our recent ruling in Nacar v. Gallery
Frames, embodying the amendment introduced by the Bangko Sentral ng Pilipinas Monetary Board in
BSP-MB Circular No. 799 which pegged the interest rate at 6% regardless of the source of
obligation.Fil-Estate Properties, Inc. and Fil-Estate Network, Inc. v. Spouses Conrado and Maria
Victoria Ronquillo, G.R. No. 185798, January 13, 2014.

Interest; legal interest; proper rate. In Eastern Shipping, it was observed that the commencement of
when the legal interest should start to run varies depending on the factual circumstances obtaining in
each case. As a rule of thumb, it was suggested that where the demand is established with
reasonable certainty, the interest shall begin to run from the time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at
the time the demand is made, the interest shall begin to run only from the date the judgment of the
court is made (at which time the quantification of damages may be deemed to have been reasonably
ascertained).
During the pendency of this case, however, the Monetary Board issued Resolution No. 796 dated May
16, 2013, stating that in the absence of express stipulation between the parties, the rate of interest in
loan or forbearance of any money, goods or credits and the rate allowed in judgments shall be 6% per
annum. Said Resolution is embodied in Bangko Sentral ng Pilipinas Circular No. 799, Series of2013,
which took effect on July 1, 2013. Hence, the 12% annual interest mentioned above shall apply only
up to June 30, 2013. Thereafter, or starting July 1, 2013, the applicable rate of interest for both the
debited amount and undocumented withdrawals shall be 6% per annum compounded annually, until
fully paid. Land Bank of the Philippines v. Emmanuel C. Oate, G.R. No. 192371, January 15, 2014.
Interest; legal interest; rate. The legal interest rate to be imposed from February 11, 1993, the time of
the extrajudicial demand by respondent, should be 6% per annum in the absence of any stipulation in
writing in accordance with Article 2209 of the Civil Code, which provides:
Article 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs in
delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of
the interest agreed upon, and in the absence of stipulation, the legal interest, which is six per cent
per annum. First United Constructors Corporation, et al. v. Bayanihan Automotive Corporation, G.R.
No. 164985, January 15, 2014.
Interest; legal interest; when awarded. Many years have gone by since Hanz suffered the injury.
Interest of 6% per annum should then be imposed on the award as a sincere means of adjusting the
value of the award to a level that is not only reasonable but just and commensurate. Unless we make
the adjustment in the permissible manner by prescribing legal interest on the award, his sufferings
would be unduly compounded. For that purpose, the reckoning of interest should be from the filing of
the criminal information on April 1 7, 1997, the making of the judicial demand for the liability of the
petitioner. Dr. Encarnacion C. Lumantas v. Hanz Calapiz, represented by his parents, Hilario Calapiz,
Jr. and Helita Calapiz, G.R. No. 163753. January 15, 2014.
Obligations; default; borrower would not be in default without demand to pay. Considering that it had
yet to release the entire proceeds of the loan, DBP could not yet make an effective demand for
payment upon Guaria Corporation to perform its obligation under the loan. According
toDevelopment Bank of the Philippines v. Licuanan, it would only be when a demand to pay had been
made and was subsequently refused that a borrower could be considered in default, and the lender
could obtain the right to collect the debt or to foreclose the mortgage. Development Bank of the
Philippines (DBP) v. Guaria Agricultural and Realty Development Corporation, G.R. No. 160758.
January 15, 2014.
Obligations; extinguishment of obligations; compensation; requisites. Compensation is defined as a
mode of extinguishing obligations whereby two persons in their capacity as principals are mutual
debtors and creditors of each other with respect to equally liquidated and demandable obligations to
which no retention or controversy has been timely commenced and communicated by third
parties.53 The requisites therefor are provided under Article 1279 of the Civil Code which reads as
follows:
Art. 1279. In order that compensation may be proper, it is necessary:
(1) That each one of the obligors be bound principally, and that he be at the same time a principal
creditor of the other;
(2) That both debts consist in a sum of money, or if the things due are consumable, they be of the
same kind, and also of the same quality if the latter has been stated;
(3) That the two debts be due;
(4) That they be liquidated and demandable;
(5) That over neither of them there be any retention or controversy, commenced by third persons and
communicated in due time to the debtor.

The rule on legal compensation is stated in Article 1290 of the Civil Code which provides that [w]hen
all the requisites mentioned in Article 1279 are present, compensation takes effect by operation of
law, and extinguishes both debts to the concurrent amount, even though the creditors and debtors
are not aware of the compensation. Union Bank of the Philippines v. Development Bank of the
Philippines, G.R. No. 191555, January 20, 2014.
Obligations; legal compensation; requisites. Legal compensation takes place when the requirements
set forth in Article 1278 and Article 1279 of the Civil Code are present, to wit:
Article 1278. Compensation shall take place when two persons, in their own right, are creditors and
debtors of each other.
Article 1279. In order that compensation may be proper, it is necessary:
(1) That each of the obligors be bound principally, and that he be at the same time a principal
creditor of the other;
(2) That both debts consists in a sum of money, or if the things due are consumable, they be of the
same kind, and also of the same quality if the latter has been stated;
(3) That the two debts be due;
(4) That they be liquidated and demandable;
(5) That over neither of them there be any retention or controversy, commenced by third persons and
communicated in due time to the debtor.
First United Constructors Corporation, et al. v. Bayanihan Automotive Corporation, G.R. No. 164985,
January 15, 2014.
Property; builder in good faith; concept of. To be deemed a builder in good faith, it is essential that a
person asserts title to the land on which he builds, i.e. , that he be a possessor in concept of owner,
and that he be unaware that there exists in his title or mode of acquisition any flaw which invalidates
it. Good faith is an intangible and abstract quality with no technical meaning or statutory definition,
and it encompasses, among other things, an honest belief, the absence of malice and the absence of
design to defraud or to seek an unconscionable advantage. It implies honesty of intention, and
freedom from knowledge of circumstances which ought to put the holder upon inquiry. The Heirs of
Victorino Sarili, namely, Isabel A. Sarili, et al. v. Pedro F. Lagrosa, represented in this act by his
Attorney-in-Fact, Lourdes Labios Mojica, G.R. No. 193517, January 15, 2014.
Property; ownership; accession; accessory follows the principal; exception. While it is a hornbook
doctrine that the accessory follows the principal, that is, the ownership of the property gives the right
by accession to everything which is produced thereby, or which is incorporated or attached thereto,
either naturally or artificially, such rule is not without exception. In cases where there is a clear and
convincing evidence to prove that the principal and the accessory are not owned by one and the
same person or entity, the presumption shall not be applied and the actual ownership shall be upheld.
In a number of cases, we recognized the separate ownership of the land from the building and
brushed aside the rule that accessory follows the principal. Magdalena T. Villasi v. Filomena Garcia,
substituted by his heirs, namely, Ermelinda H. Garcia, et al., G.R. No. 190106, January 15, 2014.
Quasi-contracts; Unjust enrichment. Unjust enrichment exists, according to Hulst v. PR Builders, Inc.,
when a person unjustly retains a benefit at the loss of another, or when a person retains money or
property of another against the fundamental principles of justice, equity and good conscience. The
prevention of unjust enrichment is a recognized public policy of the State, for Article 22 of the Civil
Code explicitly provides that [e]very person who through an act of performance by another, or any
other means, acquires or comes into possession of something at the expense of the latter without just
or legal ground, shall return the same to him. Domingo Gonzalo v. John Tarnate, Jr., G.R. No. 160600,
January 15, 2014.
Sales; Article 1599 of the Civil Code; recoupment; definition of; when entitled. Recoupment
(reconvencion) is the act of rebating or recouping a part of a claim upon which one is sued by means
of a legal or equitable right resulting from a counterclaim arising out of the same transaction. It is the
setting up of a demand arising from the same transaction as the plaintiffs claim, to abate or reduce
that claim.
The legal basis for recoupment by the buyer is the first paragraph of Article 1599 of the Civil Code,
viz:

Article 1599. Where there is a breach of warranty by the seller, the buyer may, at his election:
(1) Accept or keep the goods and set up against the seller, the breach of warranty by way of
recoupment in diminution or extinction of the price;
xxxx
First United Constructors Corporation, et al. v. Bayanihan Automotive Corporation, G.R. No. 164985,
January 15, 2014.
Sales; sale of a piece of land or any interest therein is through an agent; authority of the agent shall
be in writing; otherwise, the sale shall be void. The due execution and authenticity of the subject SPA
are of great significance in determining the validity of the sale entered into by Victorino and Ramon
since the latter only claims to be the agent of the purported seller (i.e., respondent). Article 1874 of
the Civil Code provides that [w]hen a sale of a piece of land or any interest therein is through an
agent, the authority of the latter shall be in writing; otherwise, the sale shall be void. In other words,
if the subject SPA was not proven to be duly executed and authentic, then it cannot be said that the
foregoing requirement had been complied with; hence, the sale would be void. The Heirs of Victorino
Sarili, namely, Isabel A. Sarili, et al. v. Pedro F. Lagrosa, represented in this act by his Attorney-inFact, Lourdes Labios Mojica, G.R. No. 193517, January 15, 2014.
SPECIAL LAWS
Section 23 of Presidential Decree No. 957; non-forfeiture of payments. Section 23 of Presidential
Decree No. 957, the rule governing the sale of condominiums, which provides: No installment
payment made by a buyer in a subdivision or condominium project for the lot or unit he contracted to
buy shall be forfeited in favor of the owner or developer when the buyer, after due notice to the
owner or developer, desists from further payment due to the failure of the owner or developer to
develop the subdivision or condominium project according to the approved plans and within the time
limit for complying with the same. Such buyer may, at his option, be reimbursed the total amount
paid including amortization interests but excluding delinquency interests, with interest thereon at the
legal rate. Fil-Estate Properties, Inc. and Fil-Estate Network, Inc. v. Spouses Conrado and Maria
Victoria Ronquillo,G.R. No. 185798, January 13, 2014.
Section 6 of Presidential Decree No. 1594; right of assignment and subcontract. There is no question
that every contractor is prohibited from subcontracting with or assigning to another person any
contract or project that he has with the DPWH unless the DPWH Secretary has approved the
subcontracting or assignment. This is pursuant to Section 6 of Presidential Decree No. 1594, which
provides that [T]he contractor shall not assign, transfer, pledge, subcontract or make any other
disposition of the contract or any part or interest therein except with the approval of the Minister of
Public Works, Transportation and Communications, the Minister of Public Highways, or the Minister of
Energy, as the case may be. Approval of the subcontract shall not relieve the main contractor from
any liability or obligation under his contract with the Government nor shall it create any contractual
relation between the subcontractor and the Government. Domingo Gonzalo v. John Tarnate, Jr., G.R.
No. 160600, January 15, 2014.
Family law; conjugal property; all property of the marriage is presumed to be conjugal, unless it is
shown that it is owned exclusively by the husband or the wife. There is a presumption that all
property of the marriage is conjugal, unless it is shown that it is owned exclusively by the husband or
the wife; this presumption is not overcome by the fact that the property is registered in the name of
the husband or the wife alone; and the consent of both spouses is required before a conjugal property
may be mortgaged. However, we find it iniquitous to apply the foregoing presumption especially since
the nature of the mortgaged property was never raised as an issue before the RTC, the CA, and even
before this Court. In fact, petitioner never alleged in his Complaint that the said property was conjugal
in nature. Hence, respondent had no opportunity to rebut the said presumption. Francisco Lim v.
Equitable PCI Bank, now known as Banco De Oro Unibank, Inc., G.R. No. 183918. January 15, 2014.
Family law; exclusive property of spouse; when the property is registered in the name of a spouse
only and there is no showing as to when the property was acquired by said spouse, this is an
indication that the property belongs exclusively to said spouse. Article 160 of the Civil Code provides
as follows: All property of the marriage is presumed to belong to the conjugal partnership, unless it be
proved that it pertains exclusively to the husband or to the wife.
The presumption applies to property acquired during the lifetime of the husband and wife. In this
case, it appears on the face of the title that the properties were acquired by Donata Montemayor
when she was already a widow. When the property is registered in the name of a spouse only and
there is no showing as to when the property was acquired by said spouse, this is an indication that
the property belongs exclusively to said spouse. And this presumption under Article 160 of the Civil
Code cannot prevail when the title is in the name of only one spouse and the rights of innocent third

parties are involved. Francisco Lim v. Equitable PCI Bank, now known as Banco De Oro Unibank,
Inc., G.R. No. 183918. January 15, 2014.
Torrens system; certificate of title; a certificate of title serves as evidence of an indefeasible and
incontrovertible title to the property in favor of the person whose name appears therein. [A]
certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in
favor of the person whose name appears therein. Having no certificate of title issued in their names,
spouses Vilbar have no indefeasible and incontrovertible title over Lot 20 to support their claim.
Further, it is an established rule that registration is the operative act which gives validity to the
transfer or creates a lien upon the land. Any buyer or mortgagee of realty covered by a Torrens
certificate of title x x x is charged with notice only of such burdens and claims as are annotated on
the title. Failing to annotate the deed for the eventual transfer of title over Lot 20 in their names, the
spouses Vilbar cannot claim a greater right over Opinion, who acquired the property with clean title in
good faith and registered the same in his name by going through the legally required procedure. Sps.
Bernadette and Rodulfo Vilbar v. Angelito L. Opinion, G.R. No. 176043. January 15, 2014.
Torrens system; Torrens title; a person dealing with a registered land has a right to rely upon the face
of the Torrens certificate of title; exceptions. The well-known rule in this jurisdiction is that a person
dealing with a registered land has a right to rely upon the face of the torrens certificate of title and to
dispense with the need of inquiring further, except when the party concerned has actual knowledge
of facts and circumstances that would impel a reasonably cautious man to make such inquiry.
A torrens title concludes all controversy over ownership of the land covered by a final decree of
registration. Once the title is registered the owner may rest assured without the necessity of stepping
into the portals of the court or sitting in the mirador de su casa to avoid the possibility of losing his
land. Francisco Lim v. Equitable PCI Bank, now known as Banco De Oro Unibank, Inc., G.R. No.
183918. January 15, 2014.
Torrens title; a person dealing with a registered land has a right to rely upon the face of the Torrens
certificate of title; exception in the case of a person who buys from a person who is not the registered
owner.The general rule is that every person dealing with registered land may safely rely on the
correctness of the certificate of title issued therefor and the law will in no way oblige him to go
beyond the certificate to determine the condition of the property. Where there is nothing in the
certificate of title to indicate any cloud or vice in the ownership of the property, or any encumbrance
thereon, the purchaser is not required to explore further than what the Torrens Title upon its face
indicates in quest for any hidden defects or inchoate right that may subsequently defeat his right
thereto.
However, a higher degree of prudence is required from one who buys from a person who is not the
registered owner, although the land object of the transaction is registered. In such a case, the buyer
is expected to examine not only the certificate of title but all factual circumstances necessary for him
to determine if there are any flaws in the title of the transferor. The buyer also has the duty to
ascertain the identity of the person with whom he is dealing with and the latters legal authority to
convey the property. The Heirs of Victorino Sarili, namely, Isabel A. Sarili, et al. v. Pedro F. Lagrosa,
represented in this act by his Attorney-in-Fact, Lourdes Labios Mojica, G.R. No. 193517, January 15,
2014.
Torrens system;even if the procurement of a certificate of title was tainted with fraud and
misrepresentation, such defective title may be the source of a completely legal and valid title in the
hands of an innocent purchaser for value. It is well-settled that even if the procurement of a
certificate of title was tainted with fraud and misrepresentation, such defective title may be the
source of a completely legal and valid title in the hands of an innocent purchaser for value. Where
innocent third persons, relying on the correctness of the certificate of title thus issued, acquire rights
over the property, the court cannot disregard such rights and order the total cancellation of the
certificate. The effect of such an outright cancellation would be to impair public confidence in the
certificate of title, for everyone dealing with property registered under the Torrens system would have
to inquire in every instance whether the title has been regularly or irregularly issued. This is contrary
to the evident purpose of the law. The Heirs of Victorino Sarili, namely, Isabel A. Sarili, et al. v. Pedro
F. Lagrosa, represented in this act by his Attorney-in-Fact, Lourdes Labios Mojica, G.R. No. 193517,
January 15, 2014.
Torrens system; levy on attachment, duly registered, takes preference over a prior unregistered
sale.[T]he settled rule that levy on attachment, duly registered, takes preference over a prior
unregistered sale. This result is a necessary consequence of the fact that the [properties] involved
[were] duly covered by the Torrens system which works under the fundamental principle that
registration is the operative act which gives validity to the transfer or creates a lien upon the
land. Sps. Bernadette and Rodulfo Vilbar v. Angelito L. Opinion, G.R. No. 176043. January 15, 2014.

January 2014 Philippine Supreme Court Decisions on Labor Law

Backwages; when awarded. As a general rule, backwages are granted to indemnify a dismissed
employee for his loss of earnings during the whole period that he is out of his job. Considering that an
illegally dismissed employee is not deemed to have left his employment, he is entitled to all the rights
and privileges that accrue to him from the employment. The grant of backwages to him is in
furtherance and effectuation of the public objectives of the Labor Code, and is in the nature of a
command to the employer to make a public reparation for dismissing the employee in violation of the
Labor Code.
The Court held that the respondents are not entitled to the payment of backwages. The Court, citing
G&S Transport Corporation v. Infante (G. R. No. 160303, September 13, 2007) stated that the
principle of a fair days wage for a fair days labor remains as the basic factor in determining the
award thereof. An exception to the rule would be if the laborer was able, willing and ready to work
but was illegally locked out, suspended or dismissed or otherwise illegally prevented from working. It
is, however, required, for this exception to apply, that the strike be legal, a situation which does not
obtain in the case at bar. Visayas Community Medical Center (VCMC) formerly known as Metro Cebu
Community Hospital (MCCH) v. Erma Yballe, et al.,G.R. No. 196156, January 15, 2014
Dismissal; burden of proof on employer. The burden is on the employer to prove that the termination
was for valid cause. Unsubstantiated accusations or baseless conclusions of the employer are
insufficient legal justifications to dismiss an employee. The unflinching rule in illegal dismissal cases
is that the employer bears the burden of proof.
One of CCBPIs policies requires that, on a daily basis, CCBPI Salesmen/Account Specialists must
account for their sales/collections and obtain clearance from the company Cashier before they are
allowed to leave company premises at the end of their shift and report for work the next day. If there
is a shortage/failure to account, the concerned Salesmen/Account Specialist is not allowed to leave
the company premises until he settles the same. In addition, shortages are deducted from the
employees salaries. If CCBPI expects to proceed with its case against petitioner, it should have
negated this policy, for its existence and application are inextricably tied to CCBPIs accusations
against petitioner. In the first place, as petitioners employer, upon it lay the burden of proving by
convincing evidence that he was dismissed for cause. If petitioner continued to work until June 2004,
this meant that he committed no infraction, going by this company policy; it could also mean that any
infraction or shortage/non-remittance incurred by petitioner has been duly settled. Respondents
decision to ignore this issue generates the belief that petitioner is telling the truth, and that the
alleged infractions are fabricated, or have been forgiven. Coupled with Macatangays statement
which remains equally unrefuted that the charges against petitioner are a scheme by local CCBPI
management to cover up problems in the Naga City Plant, the conclusion is indeed telling that
petitioner is being wrongfully made to account.Jonas Michael R. Garza v. Coca-Cola Bottlers Phils.,
Inc., et al.,G.R. No. 180972. January 20, 2014.
Embezzlement; failure to remit collections. The irregularity attributed to petitioner with regard to the
Asanza account should fail as well. To be sure, Asanza herself confirmed that she did not make any
payment in cash or check of P8,160.00 covering the October 15, 2003 delivery for which petitioner is
being held to account. This being the case, petitioner could not be charged with embezzlement for
failure to remit funds which he has not collected. There was nothing to embezzle or remit because the
customer made no payment yet. It may appear from Official Receipt No. 303203 issued to Asanza
that the October 15 delivery of products to her has been paid; but as admitted by her, she has not
paid for the said delivered products. The reason for petitioners issuance of said official receipt to
Asanza is the latters concurrent promise that she would immediately issue the check covering the
said amount, which she failed to do. Jonas Michael R. Garza v. Coca-Cola Bottlers Phils., Inc., et
al.,G.R. No. 180972. January 20, 2014
Grave abuse of discretion; concept of. Having established through substantial evidence that
respondents injury was self-inflicted and, hence, not compensable pursuant to Section 20 (D) of the
1996 POEA-SEC, no grave abuse of discretion can be imputed against the NLRC in upholding LAs
decision to dismiss respondents complaint for disability benefits. It is well-settled that an act of a
court or tribunal can only be considered to be tainted with grave abuse of discretion when such act is
done in a capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction. INC
Shipmanagement, Inc. Captain Sigfredo E. Monterroyo and/or Interorient Navigation Limited v.
Alexander L. Moradas,G.R. No., January 15, 2014
Illegal strike and illegal acts during the strike; distinction between union members and union officers
in determining when they lose their employment status. The Supreme Court stressed that the law
makes a distinction between union members and union officers. A union member who merely
participates in an illegal strike may not be terminated from employment. It is only when he commits
illegal acts during a strike that he may be declared to have lost employment status. In contrast, a
union officer may be terminated from employment for knowingly participating in an illegal strike or

participates in the commission of illegal acts during a strike. The law grants the employer the option
of declaring a union officer who participated in an illegal strike as having lost his employment. It
possesses the right and prerogative to terminate the union officers from service.
NAMA-MCCH-NFL is not a legitimate labor organization, thus, the strike staged by its leaders and
members was declared illegal. The union leaders who conducted the illegal strike despite knowledge
that NAMA-MCCH-NFL is not a duly registered labor union were declared to have been validly
terminated by petitioner. However, as to the respondents who were mere union members, it was not
shown that they committed any illegal act during the strike. The Labor Arbiter and the NLRC were one
in finding that respondents actively supported the concerted protest activities, signed the collective
reply of union members manifesting that they launched the mass actions to protest managements
refusal to negotiate a new CBA, refused to appear in the investigations scheduled by petitioner
because it was the unions stand that they would only attend these investigations as a group, and
failed to heed petitioners final directive for them to desist from further taking part in the illegal strike.
The CA, on the other hand, found that respondents participation in the strike was limited to the
wearing of armbands. Since an ordinary striking worker cannot be dismissed for such mere
participation in the illegal strike, the CA correctly ruled that respondents were illegally dismissed.
However, the CA erred in awarding respondents full back wages and ordering their reinstatement
despite the prevailing circumstances. Visayas Community Medical Center (VCMC) formerly known as
Metro Cebu Commnunity Hospital (MCCH) v. Erma Yballe, et al.,G.R. No. 196156, January 15, 2014
Labor law; kinds of employment; casual employment; requisites. Casual employment, the third kind of
employment arrangement, refers to any other employment arrangement that does not fall under any
of the first two categories, i.e., regular or project/seasonal. Universal Robina Sugar Milling Corporation
and Rene Cabati, G.R. No. 186439. January 15, 2014.
Labor law; kinds of employment; fixed term employment; requisites. The Labor Code does not
mention another employment arrangement contractual or fixed term employment (or employment
for a term) which, if not for the fixed term, should fall under the category of regular employment in
view of the nature of the employees engagement, which is to perform an activity usually
necessary or desirable in the employers business.
In Brent School, Inc. v. Zamora (G.R. No. L-48494, February 5, 1990), the Court, for the first time,
recognized and resolved the anomaly created by a narrow and literal interpretation of Article
280 of the Labor Code that appears to restrict the employees right to freely stipulate with his
employer on the duration of his engagement. In this case, the Court upheld the validity of the fixedterm employment agreed upon by the employer, Brent School, Inc., and the employee, Dorotio
Alegre, declaring that the restrictive clause in Article 280 should be construed to refer to the
substantive evil that the Code itself x x x singled out: agreements entered into precisely to
circumvent security of tenure. It should have no application to instances where [the] fixed period of
employment was agreed upon knowingly and voluntarily by the parties x x x absent any x x x
circumstances vitiating [the employees] consent, or where [the facts satisfactorily show] that the
employer and [the] employee dealt with each other on more or less equal terms[.] The
indispensability or desirability of the activity performed by the employee will not preclude the parties
from entering into an otherwise valid fixed term employment agreement; a definite period of
employment does not essentially contradict the nature of the employees duties as necessary and
desirable to the usual business or trade of the employer.
Nevertheless, where the circumstances evidently show that the employer imposed the period
precisely to preclude the employee from acquiring tenurial security, the law and this Court will not
hesitate to strike down or disregard the period as contrary to public policy, morals, etc. In such a
case, the general restrictive rule under Article 280 of the Labor Code will apply and the employee
shall be deemed regular. Universal Robina Sugar Milling Corporation and Rene Cabati, G.R. No.
186439. January 15, 2014.
Labor law; kinds of employment; nature of the employment depends on the nature of the activities to
be performed by the employee. The nature of the employment does not depend solely on the will or
word of the employer or on the procedure for hiring and the manner of designating the employee.
Rather, the nature of the employment depends on the nature of the activities to be performed by the
employee, taking into account the nature of the employers business, the duration and scope of work
to be done, and, in some cases, even the length of time of the performance and its continued
existence. Universal Robina Sugar Milling Corporation and Rene Cabati, G.R. No. 186439. January 15,
2014.
Labor law; kinds of employment; project employment; requisites; length of time not controlling. A
project employment, on the other hand, contemplates on arrangement whereby the
employment has been fixed for a specific project or undertaking whose completion or termination
has been determined at the time of the engagement of the employee[.] Two requirements, therefore,
clearly need to be satisfied to remove the engagement from the presumption of regularity of

employment, namely: (1) designation of a specific project or undertaking for which the employee is
hired; and (2) clear determination of the completion or termination of the project at the time of the
employees engagement. The services of the project employees are legally and automatically
terminated upon the end or completion of the project as the employees services are coterminous
with the project. Unlike in a regular employment under Article 280 of the Labor Code, however, the
length of time of the asserted project employees engagement is not controlling as the employment
may, in fact, last for more than a year, depending on the needs or circumstances of the project.
Nevertheless, this length of time (or the continuous rehiring of the employee even after the cessation
of the project) may serve as a badge of regular employment when the activities performed by the
purported project employee are necessary and indispensable to the usual business or trade of the
employer. In this latter case, the law will regard the arrangement as regular employment. Universal
Robina Sugar Milling Corporation and Rene Cabati, G.R. No. 186439. January 15, 2014.
Labor law; kinds of employment; regular employment; requisites. Article 280 of the Labor Code
provides for three kinds of employment arrangements, namely: regular, project/seasonal and casual.
Regular employment refers to that arrangement whereby the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade of the
employer[.] Under this definition, the primary standard that determines regular employment is the
reasonable connection between the particular activity performed by the employee and the usual
business or trade of the employer; the emphasis is on the necessity or desirability of the
employees activity. Thus, when the employee performs activities considered necessary and desirable
to the overall business scheme of the employer, the law regards the employee as regular.
By way of an exception, paragraph 2, Article 280 of the Labor Code also considers as regular, a casual
employment arrangement when the casual employees engagement is made to last for at least one
year, whether the service is continuous or broken. The controlling test in this arrangement is the
length of time during which the employee is engaged. Universal Robina Sugar Milling Corporation and
Rene Cabati, G.R. No. 186439. January 15, 2014.
Labor law; kinds of employment; seasonal employment; requisites. Seasonal employment operates
much in the same way as project employment, albeit it involves work or service that is seasonal
in nature or lasting for the duration of the season. As with project employment, although the
seasonal employment arrangement involves work that is seasonal or periodic in nature, the
employment itself is not automatically considered seasonal so as to prevent the employee from
attaining regular status. To exclude the asserted seasonal employee from those classified as
regular employees, the employer must show that: (1) the employee must be performing work or
services that are seasonal in nature; and (2) he had been employed for the duration of the season.
Hence, when the seasonal workers are continuously and repeatedly hired to perform the same
tasks or activities for several seasons or even after the cessation of the season, this length of time
may likewise serve as badge of regular employment. In fact, even though denominated as seasonal
workers, if these workers are called to work from time to time and are only temporarily laid off
during the off-season, the law does not consider them separated from the service during the offseason period. The law simply considers these seasonal workers on leave until reemployed. Universal Robina Sugar Milling Corporation and Rene Cabati, G.R. No. 186439. January 15,
2014.
Overseas employment; that the entitlement of seamen on overseas work to disability benefits is a
matter governed, not only by medical findings, but by law and by contract. With respect to the
applicable rules, it is doctrinal that the entitlement of seamen on overseas work to disability benefits
is a matter governed, not only by medical findings, but by law and by contract. The material
statutory provisions are Articles 191 to 193 under Chapter VI (Disability Benefits) of the Labor Code,
in relation [to] Rule X of the Rules and Regulations Implementing Book IV of the Labor Code. By
contract, the POEA-SEC, as provided under Department Order No. 4, series of 2000 of the Department
of Labor and Employment, and the parties Collective Bargaining Agreement bind the seaman and his
employer to each other.
In the foregoing light, the Court observes that respondent executed his contract of employment on
July 17, 2000, incorporating therein the terms and conditions of the 2000 POEA-SEC which took effect
on June 25, 2000. However, since the implementation of the provisions of the foregoing 2000 POEASEC was temporarily suspended by the Court on September 11, 2000, particularly Section 20,
paragraphs (A), (B), and (D) thereof, and was lifted only on June 5, 2002, through POEA Memorandum
Circular No. 2, series of 2002, the determination of respondents entitlement to the disability benefits
should be resolved under the provisions of the 1996 POEA-SEC as it was, effectively, the governing
circular at the time respondents employment contract was executed. INC Shipmanagement, Inc.
Captain Sigfredo E. Monterroyo and/or Interorient Navigation Limited v. Alexander L. Moradas,G.R.
No., January 15, 2014
Payment of separation pay as alternative relief for union members who were dismissed for having
participated in an illegal strike is in lieu of reinstatement; circumstances when applicable. The

alternative relief for union members who were dismissed for having participated in an illegal strike is
the payment of separation pay in lieu of reinstatement under the following circumstances: (a) when
reinstatement can no longer be effected in view of the passage of a long period of time or because of
the realities of the situation; (b) reinstatement is inimical to the employers interest; (c) reinstatement
is no longer feasible; (d) reinstatement does not serve the best interests of the parties involved; (e)
the employer is prejudiced by the workers continued employment; (f) facts that make execution
unjust or inequitable have supervened; or (g) strained relations between the employer and employee.
The Court ruled that the grant of separation pay to respondents is the appropriate relief under the
circumstances considering that 15 years had lapsed from the onset of this labor dispute, and in view
of strained relations that ensued, in addition to the reality of replacements already hired by the
hospital which had apparently recovered from its huge losses, and with many of the petitioners either
employed elsewhere, already old and sickly, or otherwise incapacitated. Visayas Community Medical
Center (VCMC) formerly known as Metro Cebu Commnunity Hospital (MCCH) v. Erma Yballe, et al.,G.R.
No. 196156, January 15, 2014
Rule 45; only questions of law are allowed in a petition for review on certiorari. It is a settled rule in
this jurisdiction that only questions of law are allowed in a petition for review on certiorari. The
Courts power of review in a Rule 45 petition is limited to resolving matters pertaining to any
perceived legal errors, which the CA may have committed in issuing the assailed decision. In
reviewing the legal correctness of the CAs Rule 65 decision in a labor case, the Court examines the
CA decision in the context that it determined whether or not there is grave abuse of discretion in the
NLRC decision subject of its review and not on the basis of whether the NLRC decision on the merits of
the case was correct. Universal Robina Sugar Milling Corporation and Rene Cabati, G.R. No. 186439.
January 15, 2014.
Rule 45; the Courts jurisdiction in a Rule 45 petition is limited to the review of pure questions of law;
exceptions. The Courts jurisdiction in cases brought before it from the CA via Rule 45 of the Rules of
Court is generally limited to reviewing errors of law. The Court is not the proper venue to consider a
factual issue as it is not a trier of facts. This rule, however, is not ironclad and a departure therefrom
may be warranted where the findings of fact of the CA are contrary to the findings and conclusions of
the NLRC and LA, as in this case. In this regard, there is therefore a need to review the records to
determine which of them should be preferred as more conformable to evidentiary facts. INC
Shipmanagement, Inc. Captain Sigfredo E. Monterroyo and/or Interorient Navigation Limited v.
Alexander L. Moradas,G.R. No., January 15, 2014.
Section 20 (B) of the 1996 POEA-SEC; an employer shall be liable for the injury or illness suffered by a
seafarer during the term of his contract; exception. The prevailing rule under Section 20 (B) of the
1996 POEA-SEC on compensation and benefits for injury or illness was that an employer shall be
liable for the injury or illness suffered by a seafarer during the term of his contract. To be
compensable, the injury or illness must be proven to have been contracted during the term of the
contract. However, the employer may be exempt from liability if he can successfully prove that the
cause of the seamans injury was directly attributable to his deliberate or willful act as provided under
Section 20 (D) thereof, to wit:
D. No compensation shall be payable in respect of any injury, incapacity, disability or death of the
seafarer resulting from his willful or criminal act, provided however, that the employer can prove that
such injury, incapacity, disability or death is directly attributable to seafarer.
Hence, the onus probandi falls on the petitioners herein to establish or substantiate their claim that
the respondents injury was caused by his willful act with the requisite quantum of evidence. INC
Shipmanagement, Inc. Captain Sigfredo E. Monterroyo and/or Interorient Navigation Limited v.
Alexander L. Moradas,G.R. No., January 15, 2014
Substantial evidence; concept of. In labor cases, as in other administrative proceedings, only
substantial evidence or such relevant evidence as a reasonable mind might accept as sufficient to
support a conclusion is required. To note, considering that substantial evidence is an evidentiary
threshold, the Court, on exceptional cases, may assess the factual determinations made by the NLRC
in a particular case.
The Court ruled that NLRC had cogent legal bases to conclude that petitioners have successfully
discharged the burden of proving by substantial evidence that respondents injury was directly
attributable to himself. Records bear out circumstances which all lead to the reasonable conclusion
that respondent was responsible for the flooding and burning incidents. While respondent
contended that the affidavits and statements of the vessels officers and his fellow crew members
should not be given probative value as they were biased, self-serving, and mere hearsay, he
nonetheless failed to present any evidence to substantiate his own theory. Besides, as correctly
pointed out by the NLRC, the corroborating affidavits and statements of the vessels
officers and crew members must be taken as a whole and cannot just be perfunctorily dismissed

as self-serving absent any showing that they were lying when they made the statements therein. INC
Shipmanagement, Inc. Captain Sigfredo E. Monterroyo and/or Interorient Navigation Limited v.
Alexander L. Moradas,G.R. No., January 15, 2014

January 2014 Philippine Supreme Court Decisions on Tax Law

Court of Tax Appeals; findings of fact. The Court will not lightly set aside the conclusions reached by
the CTA which, by the very nature of its function of being dedicated exclusively to the resolution of
tax problems, has accordingly developed an expertise on the subject, unless there has been an abuse
or improvident exercise of authority. Factual findings made by the CTA can only be disturbed on
appeal if they are supp1ied by substantial evidence or there is a showing of gross error or abuse on
the part of the CTA. In the absence of any clear and convincing proof to the contrary, the Court must
presume that the CTA rendered a decision which is valid in every respect. Commissioner of Internal
Revenue v. Toledo, Power, Inc., G.R. No. 183880, January 20, 2014.
Refund; solutio indebiti; elements. There is solutio indebiti when: (1) Payment is made when there
exists no binding relation between the payor, who has no duty to pay, and the person who received
the payment; and (2) Payment is made through mistake, and not through liberality or some other
cause. Solutio indebiti does not apply in this case because there exists a binding relation between
petitioner and the CIR, the former being a taxpayer obligated to pay VAT and the payment of input
tax was not made through mistake since petitioner was legally obligated to pay for that liability. The
entitlement to a refund or credit of excess input tax is solely based on the distinctive nature of the
VAT system. At the time of payment of the input VAT, the amount paid was correct and proper. CBK
Power Company Limited vs. Commissioner of Internal Revenue, G.R. No. 198729-30, January 15,
2014.
Value-added tax; refund of input value-added tax;; prescriptive period for judicial and administrative
claims. Under Section 112 of the National Internal Revenue Code (NIRC), it is only the administrative
claim for refund of input value-added tax (VAT) that must be filed within the two-year prescriptive
period; the judicial claim need not fall within the two-year prescriptive period. Subsection (A) of the
said provision states that any VAT-registered person whose sales are zero-rated may, within two
years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax
credit certificate or refund of creditable input tax due or paid attributable to such sales. The phrase
within two (2) years x x x apply for the issuance of a tax credit certificate or refund refers to
applications for refund/credit filed with the Commissioner of Internal Revenue (CIR) and not to
appeals made to the Court of Tax Appeals (CTA). This is apparent in the first paragraph of subsection
(D) of the same provision which states that the CIR has 120 days from the submission of complete
documents in support of the application filed in accordance with Subsections (A) and (B) within
which to decide on the claim. Commissioner of Internal Revenue vs. Mindanao II Geothermal
Partnership, G.R. No. 191498, January 15, 2014.
Value-added tax; refund of input value-added tax; prescriptive period; reckoning point for two-year
prescriptive period. The doctrine in the case of Atlas Consolidated Mining and Development
Corporation vs. Commissioner of Internal Revenue, which held that claims for refund or credit of input
VAT must comply with the two-year prescriptive period under Section 229, should be effective only
from its promulgation on June 8, 2007 until its abandonment on September 12, 2008 in the case
ofCommissioner of Internal Revenue vs. Mirant Pagbilao Corporation. The Atlas doctrine was limited
to the reckoning of the two-year prescriptive period from the date of payment of the output VAT. Prior
to theAtlas doctrine, the two-year prescriptive period for claiming refund or credit of input VAT should
be governed by Section 112(A) following the verba legis rule. The Mirant ruling, which abandoned
the Atlasdoctrine, adopted the verba legis rule, thus applying Section 112(A) in computing the twoyear prescriptive period in claiming refund or credit of input VAT. In this case, the claim for refund was
filed on October 6, 2005. Thus, it is covered by the rule prior to the advent of either Atlas or Mirant.
Therefore, the proper reckoning date as provided in Section 112(A) of the NIRC is the close of the
taxable quarter when the relevant sales were made. Commissioner of Internal Revenue vs. Mindanao
II Geothermal Partnership, G.R. No. 191498, January 15, 2014.
Value-added tax; refund of input value-added tax; prescriptive period; 30-day period also applies to
appeals from inaction. Section 112(D) of the NIRC speaks of two periods: the period of 120 days,
which serves as a waiting period to give time for the CIR to act on the administrative claim for refund
or credit, and the period of 30 days, which refers to the period for interposing an appeal with the CTA.
The 30 day period applies not only to instances of actual denial by the CIR of the claim for refund or
tax credit, but to cases of inaction by the CIR as well. The taxpayer can file the appeal in one of two
ways: (1) file the judicial claim within thirty days after the Commissioner denies the claim within the
120-day period, or (2) filed the judicial claim within thirty days from the expiration of the 120-day
period if the Commissioner does not act within the 120-day period.Commissioner of Internal Revenue
vs. Mindanao II Geothermal Partnership, G.R. No. 191498, January 15, 2014.

Value-added tax; refund of input value-added tax; prescriptive period; 30-day period to appeal is
mandatory and jurisdictional; exception. The 30-day period to appeal to the CTA, as provided in the
case of Commissioner of Internal Revenue vs. San Roque Power Corporation, is both mandatory and
jurisdictional. The law states that a taxpayer affected may, within thirty (30) days from the receipt of
the decision denying the claim or after the expiration of the one hundred twenty day period, appeal
the decision or the unacted claim with the CTA. However, there is an exception to this rule. Bureau of
Internal Revenue (BIR) Ruling No. DA-489-03 dated December 10, 2003 declared that a taxpayerclaimant need not wait for the lapse of the 120-day period before it could seek judicial relief with the
CTA by way of petition for review. Thus, in cases of premature filing, taxpayers can rely on the BIR
ruling from the time of its issuance, December 10, 2003 until its reversal by the Supreme Court on
October 6, 2010, when the 120+30 day periods were held to be mandatory and jurisdictional.
However, late filing is absolutely prohibited even during the time when the BIR ruling was in
force. Commissioner of Internal Revenue vs. Mindanao II Geothermal Partnership, G.R. No. 191498,
January 15, 2014.
Value-added tax; refund of input value-added tax; prescriptive period; administrative claim. The
value-added tax (VAT) law provides for a mechanism that would allow VAT-registered persons to
recover the excess input taxes over the output taxes they had paid in relation to their sales. For the
refund or credit of excess or unutilized input tax, Section 112 of the National Internal Revenue Code
(NIRC) is the governing law. Given the distinctive nature of creditable input tax, the law under Section
112(A) provides for a different reckoning point for the two-year prescriptive period, specifically for the
refund or credit of that tax only. Section 112(A) is clear that for VAT-registered persons whose sales
are zero-rated or effectively zero-rated, a claim for the refund or credit of creditable input tax that is
due or paid, and that is attributable to zero-rated or effectively zero-rated sales, must be filed within
two years after the close of the taxable quarter when such sales were made. The reckoning frame
would always be the end of the quarter when the pertinent sale or transactions were made,
regardless of when the input VAT was paid. CBK Power Company Limited vs. Commissioner of Internal
Revenue, G.R. No. 198729-30, January 15, 2014.
Value-added tax; refund of input value-added tax; prescriptive period; judicial claim. Section 112(D) of
the NIRC provides that the Commissioner of Internal Revenue (CIR) has to decide on an administrative
claim within one hundred twenty (120) days from the date of submission of complete documents in
support thereof. Thereafter, the taxpayer may appeal within 30 days from the receipt of the decision
or from the expiration of the 120-day period within which the claim has not been acted upon. Given
that the 30-day period to appeal to the Court of Tax Appeals (CTA) is dependent on the 120-day
period, compliance with both periods is jurisdictional. The period of 120 days is a prerequisite for the
commencement of the 30-day period to appeal to the CTA. CBK Power Company Limited vs.
Commissioner of Internal Revenue, G.R. No. 198729-30, January 15, 2014.
Value-added tax; refund of input value-added tax; prescriptive period; judicial claim; reckoning point
of the prescriptive period. The taxpayer can file his administrative claim for refund or issuance of tax
credit certificate anytime within the two-year prescriptive period. If he files his claim on the last day
of the two-year prescriptive period, his claim is still filed on time. The Commissioner of Internal
Revenue (CIR) will then have 120 days from such filing to decide the claim. If the CIR decides the
claim on the 120th day or does not decide it on that day, the taxpayer still has 30 days to file his
judicial claim with the Court of Tax Appeals (CTA). In other words, the taxpayer may within thirty (30)
days from receipt of the decision denying the claim or after the expiration of the one hundred twenty
day period, appeal the decision or the unacted claim with the [CTA]. Team Energy Corporation
(formerly Mirant Pagbilao Corp.) vs. Commissioner of Internal Revenue, G.R. No. 190928, January 13,
2014.
Value-added tax; refund of input value-added tax; prescriptive period; judicial claim; reckoning point
of the prescriptive period. The taxpayer can file his administrative claim for refund or issuance of tax
credit certificate anytime within the two-year prescriptive period. If he files his claim on the last day
of the two-year prescriptive period, his claim is still filed on time. The Commissioner of Internal
Revenue (CIR) will then have 120 days from such filing to decide the claim. If the CIR decides the
claim on the 120th day or does not decide it on that day, the taxpayer still has 30 days to file his
judicial claim with the Court of Tax Appeals (CTA). In other words, the taxpayer may within thirty (30)
days from receipt of the decision denying the claim or after the expiration of the one hundred twenty
day period, appeal the decision or the unacted claim with the [CTA]. Team Energy Corporation
(formerly Mirant Pagbilao Corp.) vs. Commissioner of Internal Revenue, G.R. No. 190928, January 13,
2014.
Value-added tax; refund of input value-added tax; prescriptive period; judicial claim; reckoning point
of the prescriptive period. A VAT-registered taxpayer claiming for refund or tax credit of their excess
and unutilized input VAT must file their administrative claim within two years from the close of the
taxable quarter when the sales were made. After that, the taxpayer must await the decision or ruling
of denial of its claim, whether full or partial, or the expiration of the 120-day period from the
submission of complete documents in support of such claim. Once the taxpayer receives the decision

or ruling of denial or expiration of the 120-day period, it may file its petition for review with the CTA
within thirty (30) days. The 120-30-day period in Section 112(C) of the NIRC is mandatory and its nonobservance is fatal to the filing of a judicial claim with the CTA. In the Aichi case, the Court explained
that if after the 120-day mandatory period, the CIR fails to act on the application for tax refund or
credit, the remedy of the taxpayer is to appeal the inaction of the CIR to the CTA within thirty (30)
days. The judicial claim, therefore, need not be filed within the two-year prescriptive period from the
close of the taxable quarter but has to be filed within the required 30-day period after the expiration
of the 120 day period.Team Energy Corporation (formerly Mirant Pagbilao Corp.) vs. Commissioner of
Internal Revenue, G.R. No. 190928, January 13, 2014.
Value-added tax; refund of input value-added tax; prescriptive period; judicial claim; reckoning point
of the prescriptive period; exception. The mandatory and jurisdictional nature of the 120+30-day rule
does not apply on claims for refund that were prematurely filed during the interim period from the
issuance of BIR Ruling No. DA-489-03 on December 10, 2003 to October 6, 2010 when
the Aichidoctrine was adopted. The exemption was premised on the fact that prior to the
promulgation of theAichi decision, there was an existing interpretation laid down in BIR Ruling No. DA489-03 where the BIR expressly ruled that the taxpayer need not wait for the expiration of the 120day period before it could seek judicial relief with the CTA. Since the CIR has exclusive and original
jurisdiction to interpret tax laws, taxpayers acting in good faith should not be made to suffer for
adhering to general interpretative rules of the CIR interpreting tax laws, should such interpretation
later turn out to be erroneous and be reversed by the CIR or the Court. Indeed, Section 246 of the
NIRC expressly provides that a reversal of a BIR regulation or ruling cannot adversely prejudice a
taxpayer who, in good faith, relied on the BIR regulation or ruling prior to its reversal. BIR Ruling No.
DA-489-03 is a general interpretative rule because it is a response to a query made, not by a
particular taxpayer, but by a government agency tasked with processing tax refunds and credits, that
is, the One Stop Shop Inter-Agency Tax Credit and Drawback Center of the Department of Finance.
This government agency is also the addressee, or the entity responded to, in BIR Ruling No. DA-48903. Thus, while this government agency mentions in its query to the CIR the administrative claim of
Lazi Bay Resources Development, Inc., the agency was, in fact, asking the CIR what to do in cases like
the tax claim of Lazi Bay Resources Development, Inc., where the taxpayer did not wait for the lapse
of the 120-day period. Team Energy Corporation (formerly Mirant Pagbilao Corp.) vs. Commissioner of
Internal Revenue, G.R. No. 190928, January 13, 2014.
Value-added tax; refund of input value-added tax; prescriptive period; exception. The 120+30 day
period is mandatory because the law is clear and unequivocal. Section 112 of the NIRC decrees that a
VAT-registered person, whose sales are zero-rated or effectively zero-rated, may apply for the
issuance of a tax credit or refund creditable input tax due or paid attributable to such sales within two
years after the close of the taxable quarter when the sales were made. From the date of submission
of complete documents in support of its application, the CIR has 120 days to decide whether or not to
grant the claim for refund or issuance of tax credit certificate. In case of full or partial denial of the
claim for tax refund or tax credit, or the failure on the part of the CIR to act on the application within
the given period, the taxpayer may, within 30 days from receipt of the decision denying the claim or
after the expiration of the 120-day period, appeal with the CTA the decision or inaction of the CIR.
This rule, however, is not without exception, Strict compliance with the 120+30day periods is not
necessary when the judicial claims are filed between December 10, 2003 (issuance of BIR Ruling No.
DA-489-03 which states that the taxpayer need not wait for the 120-day period to expire before it
could seek judicial relief) to October 6, 2010 (promulgation of the Aichi doctrine which declared that
the 120-+30 day periods are mandatory) All taxpayers, therefore, can rely on BIR Ruling No. DA-48903 from the time of its issuance on December 10, 2003 up to its reversal by the Court in Aichi on
October 6, 2010, as an exception to the mandatory and jurisdictional 120+30 day
periods. Commissioner of Internal Revenue v. Toledo, Power, Inc., G.R. No. 183880, January 20, 2014.
Value-added tax; refund of input value-added tax; prescriptive period; rules on the determination of
the prescriptive period for filing. In a nutshell, the rules on the determination of the prescriptive
period for filing a tax refund or credit of unutilized input VAT, as provided in Section 112 of the NIRC,
are as follows: (1)An administrative claim must be filed with the CIR within two years after the close
of the taxable quarter when the zero-rated or effectively zero-rated sales were made (2)The CIR has
120 days from the date of submission of complete documents in support of the administrative claim
within which to decide whether to grant a refund or issue a tax credit certificate. The 120-day period
may extend beyond the two-year period from the filing of the administrative claim if the claim is filed
in the later part of the two-year period. If the 120-day period expires without any decision from the
CIR, then the administrative claim may be considered to be denied by inaction (3) A judicial claim
must be filed with the CTA within 30 days from the receipt of the CIRs decision denying the
administrative claim or from the expiration of the 120-day period without any action from the CIR (4)
All taxpayers, however, can rely on BIR Ruling No. DA-489-03 from the time of its issuance on 10
December 2003 up to its reversal by this Court in Aichi on 6 October 2010, as an exception to the
mandatory and jurisdictional 120+30 day periods. Commissioner of Internal Revenue v. Toledo,
Power, Inc., G.R. No. 183880, January 20, 2014.

Value-added tax; refund of input value-added tax; invoicing requirements. The words zero-rated
must appear in the invoice covering zero-rated sales. Although the same was merely stamped and
not pre-printed in the present case, the same is sufficient compliance with the law, since the
imprinting of the word zero-rated was required merely to distinguish sales subject to 10% VAT,
those that are subject to 0% VAT (zero-rated) and exempt sales, to enable the Bureau of Internal
Revenue to properly implement and enforce the other VAT provisions of the Tax Code. Commissioner
of Internal Revenue v. Toledo, Power, Inc., G.R. No. 183880, January 20, 2014.

January 2014 Philippine Supreme Court Decisions on Legal and Judicial Ethics
Attorney; Contingent Fee. Spouses Cadavedo hired Atty. Lacaya on a contingency basis. The Supreme
Court held that spouses Cadavedo and Atty. Lacaya agreed on a contingent fee of 2,000.00 and not,
as asserted by the latter, one-half of the subject lot. The stipulation contained in the amended
complaint filed by Atty. Lacaya clearly stated that the spouses Cadavedo hired the former on a
contingency basis; the Spouses Cadavedo undertook to pay their lawyer 2,000.00 as attorneys fees
should the case be decided in their favor. Granting arguendo that the spouses Cadavedo and Atty.
Lacaya indeed entered into an oral contingent fee agreement securing to the latter one-half of the
subject lot, the agreement is void. The agreement is champertous and is contrary to public policy. Any
agreement by a lawyer to conduct the litigation in his own account, to pay the expenses thereof or
to save his client therefrom and to receive as his fee a portion of the proceeds of the judgment is
obnoxious to the law. The rule of the profession that forbids a lawyer from contracting with his client
for part of the thing in litigation in exchange for conducting the case at the lawyers expense is
designed to prevent the lawyer from acquiring an interest between him and his client. The Conjugal
Partnership of the Spouses Vicente Cadavedo and Benita Arcoy-Cadavedo (both deceased),
substituted by their Heirs, namely: Herminia, Pastora, Heirs of Fructiosa, Heirs of Raquel, Evangeline,
Vicente, Jr., and Armand, all surnamed Cadavedo, G.R. No. 173188. January 15, 2014.
Attorney; Disbarment; Deceitful and Dishonest Conduct. A Complaint for Disbarment was filed against
Atty. Solidum, Jr. The Supreme Court held that Atty. Solidum, Jr. violated Rule 1.01 of the Code of
Professional Responsibility. Conduct, as used in the Rule, is not confined to the performance of a
lawyers professional duties. A lawyer may be disciplined for misconduct committed either in his
professional or private capacity. The test is whether his conduct shows him to be wanting in moral
character, honesty, probity, and good demeanor, or whether it renders him unworthy to continue as
an officer of the court. The Supreme Court found Atty. Solidum, Jr. guilty of engaging in dishonest and
deceitful conduct, both in his professional capacity with respect to his client, Presbitero, and in his
private capacity with respect to complainant Navarro. Both Presbitero and Navarro allowed Atty.
Solidum, Jr. to draft the terms of the loan agreements. Atty. Solidum, Jr. drafted the MOAs knowing
that the interest rates were exorbitant. Later, using his knowledge of the law, he assailed the validity
of the same MOAs he prepared. He issued checks that were drawn from his sons account whose
name was similar to his without informing complainants. Further, there is nothing in the records that
will show that he paid or undertook to pay the loans he obtained from complainants. The fiduciary
nature of the relationship between the counsel and his client imposes on the lawyer the duty to
account for the money or property collected or received for or from his client. Atty. Solidum, Jr. failed
to fulfill this duty. Natividad P. Navarro and Hilda S. Presbitero v. Atty. Ivan M. Solidum, Jr., A.C. No.
9872, January 28, 2014.
Attorney; Disbarment; Gross Immoral Conduct. A Petition for Disbarment was filed against Atty. Celera
for contracting a second marriage when his first marriage with Complainant was still subsisting. The
Supreme Court held that for purposes of the disbarment proceeding, the Marriage Certificates bearing
the name of Atty. Celera are competent and convincing evidence to prove that he committed bigamy,
which renders him unfit to continue as a member of the Bar. Atty. Celera exhibited a deplorable lack
of that degree of morality required of him as a member of the Bar. He made a mockery of marriage, a
sacred institution demanding respect and dignity. His act of contracting a second marriage while his
first marriage is subsisting constituted grossly immoral conduct and are grounds for disbarment under
Section 27, Rule 138 of the Revised Rules of Court. Rose Bunagan-Bansig v. Atty. Rogelio Juan A.
Celera,A.C. No. 5581, January 14, 2014.
Attorney; Disbarment; Willful Disobedience. A Petition for Disbarment was filed against Atty. Celera for
contracting a second marriage when his first marriage with Complainant was still subsisting. Atty.
Celara failed to file a Comment despite numerous Notices from the Court, stating that he never
received such Notices. When said excuse seemed no longer feasible, Atty. Celera just disappeared.
The Supreme Court held that Atty. Celeras acts were deliberate, maneuvering the liberality of the
Court in order to delay the disposition of the case and to evade the consequences of his actions.
Ultimately, what is apparent is respondents deplorable disregard of the judicial process which this
Court cannot countenance. Atty. Celeras acts constitute willful disobedience of the lawful orders of
this Court, which under Section 27, Rule 138 of the Rules of Court is in itself alone a sufficient cause
for suspension or disbarment. Respondents cavalier attitude in repeatedly ignoring the orders of the

Supreme Court constitutes utter disrespect to the judicial institution. Atty. Celeras conduct indicates
a high degree of irresponsibility. A Courts Resolution is not to be construed as a mere request, nor
should it be complied with partially, inadequately, or selectively. Rose Bunagan-Bansig v. Atty.
Rogelio Juan A. Celera,A.C. No. 5581, January 14, 2014.
Attorney; Malpractice. A Complaint was filed against Atty. Mendoza of the Public Attorneys Office
(PAO) for violation of the attorneys oath, deceit, malpractice or other gross misconduct in office
under Section 27, Rule 138 of the Revised Rules of Court, and for violation of the Code of Professional
Responsibility. One of the charges against Atty. Mendoza which she admitted is telling her clients
Iyak-iyakan lang ninyo si Judge Martin at palalayain na kayo. Malambot ang puso noon. The
Supreme Court held that Atty. Mendoza made irresponsible advices to her clients in violation of Rule
1.02 and Rule 15.07 of the Code of Professional Responsibility. It is the mandate of Rule 1.02 that a
lawyer shall not counsel or abet activities aimed at defiance of the law or at lessening confidence in
the legal system. Rule 15.07 states that a lawyer shall impress upon his client compliance with the
laws and the principles of fairness. However, while her remark was inappropriate and unbecoming,
her comment was not disparaging and reproachful so as to cause dishonor and disgrace to the
Judiciary. Thus, she was only reprimanded and sternly warned. Edgardo Areola v. Atty. Maria Vilma
Mendoza, A.C. No. 10135, January 15, 2014.
Court Personnel; Dishonesty and Grave Misconduct. A complaint for grave misconduct was filed
against Mylene H. Dela Cruz, Clerk III of the Regional Trial Court. The Code of Conduct and Ethical
Standards for Public Officials and Employees, Republic Act 6713, enunciates the States policy of
promoting a high standard of ethics and utmost responsibility in the public service. And no other
office in the government service exacts a greater demand for moral righteousness and uprightness
from an employee than in the judiciary. The Supreme Court held that in this case, Dela Cruz failed to
live up to these exacting standards. The inculpatory acts committed by Dela Cruz are so grave as to
call for the most severe administrative penalty. Dishonesty and grave misconduct, both being in the
nature of a grave offense, carry the extreme penalty of dismissal from service with forfeiture of
retirement benefits, except accrued leave credits, and perpetual disqualification for re-employment in
the government service. This penalty is in accordance with Sections 52 and 58 of the Revised Uniform
Rules on Administrative Cases in the Civil Service. Atty. Rhea R. Alcantara-Aquino v. Mylene H. Dela
Cruz, etc., A.M. No. P-13-3141. January 21, 2014.
Court Personnel; Grave Misconduct. A Complaint for Grave Misconduct and Making Untruthful
Statements was filed against Alfredo Pallanan, Sheriff IV, assigned at the Regional Trial Court.
Complainant alleged that Pallanan should not have implemented the writ of execution in the unlawful
detainer case since there was a pending motion for reconsideration with the court. Misconduct has
been defined as a transgression of some established and definite rule of action, more particularly,
unlawful behavior or gross negligence by a public officer. The misconduct is grave if it involves any
of the additional elements of corruption, willful intent to violate the law, or to disregard established
rules, all of which must be established by substantial evidence, and must necessarily be manifest in a
charge of grave misconduct. The Supreme Court ruled that Pallanan did not commit grave
misconduct. In ejectment cases, the rulings of the courts are immediately executory and can only be
stayed via compliance with Section 19, Rule 70 of the Rules of Court. Such provision was not complied
here.
The sheriffs duty in the execution of a writ is purely ministerial; he is to execute the order of the
court strictly to the letter. He has no discretion whether to execute the judgment or not. When the
writ is placed in his hands, it is his duty, in the absence of any instructions to the contrary, to proceed
with reasonable celerity and promptness to implement it in accordance with its mandate. It is only by
doing so could he ensure that the order is executed without undue delay. This holds especially true
herein where the nature of the case requires immediate execution. Absent a TRO, an order of quashal,
or compliance with Sec. 19, Rule 70 of the Rules of Court, respondent sheriff has no alternative but to
enforce the writ. Atty. Virgillo P. Alconera v. Alfredo T. Pallanan, A.M. No. P-12-3069, January 20, 2014.
Court personnel; Simple neglect of duty. The audit of the financial transactions of Maniquis, former
Officer-in-Charge, Clerk of Court III, and that of his successor Atty. Buencamino (Atty. Buencamino),
Clerk of Court IV uncovered shortages in the books of accounts of the Metropolitan Trial Court. Mapue,
Clerk III, admitted her fault.
The Supreme Court held that the admission of Mapue of her liability does not exculpate Atty.
Buencamino from her own negligence. A clerk of court has general administrative supervision over all
the personnel of the court. The administrative functions of a clerk of court are as vital to the prompt
and proper administration of justice as his judicial duties. As custodian of court funds and revenues,
the clerk of court is primarily accountable for all funds that are collected for the court, whether
personally received by him or by a duly appointed cashier who is under his supervision and control.
Atty. Buencamino was remiss in the performance of her duties as clerk of court. Atty. Buencamino
failed to supervise Mapue and to properly manage the court funds entrusted to her, enabling Mapue
to misappropriate part of the funds. Atty. Buencaminos failure to properly supervise and manage the

financial transactions in her court constitutes simple neglect of duty. Simple neglect of duty is the
failure to give attention to a task, or the disregard of a duty due to carelessness or indifference. It is a
less grave offense punishable by suspension for one month and one day to six months for the first
offense. Office of the Court Administrator v. Atty. Mona Lisa A. Buencamino, etc., et al./Re: Report on
the financial audit conducted in the Metropolitan Trial Court etc., A.M. No. P-05-2051/A.M. No. 05-4118-MeTC. January 21, 2014.

January 2014 Philippine Supreme Court Decisions on Criminal Law and Procedure
1. Revised Penal Code
Acts of lasciviousness; elements. The elements of acts of lasciviousness under Art. 336 of the Revised
Penal Code are as follows: (1) That the offender commits any act of lasciviousness or lewdness; (2)
That it is done under any of the following circumstances: a. By using force or intimidation; or b. When
the offended party is deprived of reason or otherwise unconscious; or c. When the offended party is
under 12 years of age; and (3) That the offended party is another person of either sex. People of the
Philippines v. Bernabe Pareja y Cruz, G.R. No. 202122, January 15, 2014.
Complex crime of carnapping with homicide; when present; proof required. To prove the special
complex crime of carnapping with homicide, there must be proof not only of the essential elements of
carnapping, but also that it was the original criminal design of the culprit and the killing was
perpetrated in the course of the commission of the carnapping or on the occasion thereof. The
appellate court correctly observed that the killing of Jesus cannot qualify the carnapping into a special
complex crime because the carnapping was merely an afterthought when the victims death was
already fait accompli. Thus, appellant is guilty only of simple carnapping. People of the Philippines v.
Joel Aquino y Cendana, G.R. No. 201092, January 15, 2014.
Damages; when awarded when death occurs due to a crime. It is enshrined in jurisprudence that
when death occurs due to a crime, the following damages may be awarded: (1) civil indemnity ex
delicto for the death of the victim; (2) actual or compensatory damages; (3) moral damages; (4)
exemplary damages; and (5) temperate damages. There being no aggravating circumstance since
abuse of superior strength is absorbed in the qualifying circumstance of treachery, the award of
P75,000.00 as moral damages should be decreased to P50,000.00. Such an amount is granted even
in the absence of proof of mental and emotional suffering of the victims heirs. Pursuant to current
jurisprudence, the award of civil indemnity in the amount of P75,000.00 and exemplary damages in
the amount of P30,000.00 is correct. The amount of actual damages duly proven in court in the sum
of P60,100.00 is likewise upheld. Finally, the Supreme Court imposed interest at the rate of 6% per
annum on all damages from the date of finality of this ruling until fully paid. People of the Philippines
v. Joel Aquino y Cendana, G.R. No. 201092, January 15, 2014.
Homicide; guilt beyond reasonable doubt; non-identification and non-presentation of the weapon. The
non-identification and non-presentation of the weapon actually used in the killing did not diminish the
merit of the conviction primarily because other competent evidence and the testimonies of witnesses
had directly and positively identified and incriminated Ricardo as the assailant of Lino. Hence, the
establishment beyond reasonable doubt of Ricardos guilt for the homicide did not require the
production of the weapon used in the killing as evidence in court, for in arriving at its findings on the
culpability of Ricardo the trial court clearly looked at, considered and appreciated the entirety of the
record and the evidence. For sure, the weapon actually used was not indispensable considering that
the finding of guilt was based on other evidence proving his commission of the crime. Ricardo
Medina, Jr. y Oriel v. People of the Philippines, G.R. No. 161308, January 15, 2014.
Justifying circumstance; defense of a relative; requisites. In order that defense of a relative is to be
appreciated in favor of accused Ricardo, the following requisites must concur, namely: (1) unlawful
aggression by the victim; (2) reasonable necessity of the means employed to prevent or repel the
aggression; and (3) in case the provocation was given by the person attacked, that the person
making the defense took no part in the provocation. Like in self-defense, it is the accused who carries
the burden to prove convincingly the attendance and concurrence of these requisites because his
invocation of this defense amounts to an admission of having inflicted the fatal injury on the
victim.Ricardo Medina, Jr. y Oriel v. People of the Philippines, G.R. No. 161308, January 15, 2014.
Murder; elements. To be convicted of murder, the following must be established: (1) a person was
killed; (2) the accused killed him; (3) the killing was with the attendance of any of the qualifying
circumstances under Article 248 of the Revised Penal Code; and (4) the killing neither constitutes
parricide nor infanticide. People of the Philippines v. Joel Aquino y Cendana, G.R. No. 201092, January
15, 2014.

Personal property; concept of. In Laurel v. Abrogar, the Supreme Court (SC) reviewed the existing
laws and jurisprudence on the generally accepted concept of personal property in civil law as
anything susceptible of appropriation. It includes ownership of telephone services, which are
protected by the penal provisions on theft. SC therein upheld the Amended Information charging the
petitioner with the crime of theft against PLDT inasmuch as the allegation was that the former was
engaged in international simple resale (ISR) or the unauthorized routing and completing of
international long distance calls using lines, cables, antennae, and/or air wave frequency and
connecting these calls directly to the local or domestic exchange facilities of the country where
destined. SC reasoned that since PLDT encodes, augments, enhances, decodes and transmits
telephone calls using its complex communications infrastructure and facilities, the use of these
communications facilities without its consent constitutes theft, which is the unlawful taking of
telephone services and business. SC then concluded that the business of providing
telecommunications and telephone services is personal property under Article 308 of the Revised
Penal Code, and that the act of engaging in ISR is an act of subtraction penalized under said article.
Furthermore, toll bypass operations could not have been accomplished without the installation of
telecommunications equipment to the PLDT telephone lines.World Wide Web Corporation, et al. v.
People of the Philippines, et al./Planet Internet Corporation v. Philippine Long Distance Telephone
Company,G.R. Nos. 161106/161266, January 13, 2014.
Qualifying circumstance; treachery; when present. The essence of treachery is the sudden and
unexpected attack by the aggressor on an unsuspecting victim, depriving him of any real chance to
defend himself. Even when the victim was forewarned of the danger to his person, treachery may still
be appreciated since what is decisive is that the execution of the attack made it impossible for the
victim to defend himself or to retaliate. Records disclose that Jesus was stabbed by the group on the
lateral part of his body while he was under the impression that they were simply leaving the place
where they had a shabu session. Judicial notice can be taken that when the tricycle driver is seated
on the motorcycle, his head is usually higher or at the level of the roof of the side car which leaves his
torso exposed to the passengers who are seated in the side car. Hence, there was no way for Jesus to
even be forewarned of the intended stabbing of his body both from the people seated in the side car
and those seated behind him. Thus, the trial courts finding of treachery was affirmed. People of the
Philippines v. Joel Aquino y Cendana, G.R. No. 201092, January 15, 2014.
Rape; failure of the victim to shout or seek help do not negate rape. AAAs delay in reporting the
incidents to her mother or the proper authorities is insignificant and does not affect the veracity of
her charges. It should be remembered that accused Pareja threatened to kill her if she told anyone of
the incidents. The failure of complainant to disclose her defilement without loss of time to persons
close to her or to report the matter to the authorities does not perforce warrant the conclusion that
she was not sexually molested and that her charges against the accused are all baseless, untrue and
fabricated. Delay in prosecuting the offense is not an indication of a fabricated charge. Many victims
of rape never complain or file criminal charges against the rapists. They prefer to bear the ignominy
and pain, rather than reveal their shame to the world or risk the offenders making good their threats
to kill or hurt their victims. People of the Philippines v. Bernabe Pareja y Cruz, G.R. No. 202122,
January 15, 2014.
Rape; lust is no respecter of time or place, and rape defies constraints of time and space. The courts
take judicial notice of the interesting fact that among poor couples with big families living in small
quarters, copulation does not seem to be a problem despite the presence of other persons around
them. Considering the cramped space and meager room for privacy, couples perhaps have gotten
used to quick and less disturbing modes of sexual congresses which elude the attention of family
members; otherwise, under the circumstances, it would be almost impossible to copulate with them
around even when asleep. It is also not impossible nor incredible for the family members to be in
deep slumber and not be awakened while the sexual assault is being committed. One may also
suppose that growing children sleep more soundly than grown-ups and are not easily awakened by
adult exertions and suspirations in the night. There is no merit in appellants contention that there
can be no rape in a room where other people are present. There is no rule that rape can be
committed only in seclusion. The Supreme Court has repeatedly declared that lust is no respecter of
time and place, and rape can be committed in even the unlikeliest of places. People of the
Philippines v. Bernabe Pareja y Cruz, G.R. No. 202122, January 15, 2014.
Rape; testimonies of child victims are given full weight and credit. It is settled jurisprudence that
testimonies of child victims are given full weight and credit, because when a woman, more so if she is
a minor, says that she has been raped, she says in effect all that is necessary to show that rape was
committed. Youth and immaturity are generally badges of truth and sincerity. Here, AAAs testimony
is not only consistent and straightforward, but is further corroborated by other evidence. People of
the Philippines v. Roel Vergara y Clavero, G.R. No. 199226, January 15, 2014.
Rape; two modes of committing rape. The enactment of Republic Act No. 8353 or the Anti-Rape Law
of 1997, revolutionized the concept of rape with the recognition of sexual violence on sex-related
orifices other than a womans organ is included in the crime of rape; and the crimes expansion to

cover gender-free rape. The transformation mainly consisted of the reclassification of rape as a crime
against persons and the introduction of rape by sexual assault as differentiated from the traditional
rape through carnal knowledge or rape through sexual intercourse. Thus, under the new provision,
rape can be committed in two ways: 1. Article 266-A paragraph 1 refers to Rape through sexual
intercourse, also known as organ rape or penile rape. The central element in rape through sexual
intercourse is carnal knowledge, which must be proven beyond reasonable doubt. 2. Article 266-A
paragraph 2 refers to rape by sexual assault, also called instrument or object rape, or gender-free
rape. It must be attended by any of the circumstances enumerated in subparagraphs (a) to (d) of
paragraph 1. People of the Philippines v. Bernabe Pareja y Cruz, G.R. No. 202122, January 15, 2014.
Statutory rape; elements. Rape under Article 266-A(1)(d) is termed statutory rape as it departs from
the usual modes of committing rape. What the law punishes in statutory rape is carnal knowledge of
a woman below twelve (12) years old. Thus, force, intimidation and physical evidence of injury are not
relevant considerations; the only subject of inquiry is the age of the woman and whether carnal
knowledge took place. The law presumes that the victim does not and cannot have a will of her own
on account of her tender years; the childs consent is immaterial because of her presumed incapacity
to discern good from evil. In the case at bar, the prosecution was able to establish beyond reasonable
doubt that accused-appellant had carnal knowledge of AAA in the afternoon of September 12, 2004,
when AAA was just nine years old. People of the Philippines v. Roel Vergara y Clavero, G.R. No.
199226, January 15, 2014.
Theft; elements. For theft to be committed in this case, the following elements must be shown to
exist: (1) the taking by petitioners (2) of PLDTs personal property (3) with intent to gain (4) without
the consent of PLDT (5) accomplished without the use of violence against or intimidation of persons
or the use of force upon things. Here, petitioners WWC and Cherryll Yu only take issue with
categorizing the earnings and business as personal properties of PLDT. However, in Laurel v. Abrogar,
the Supreme Court has already held that the use of PLDTs communications facilities without its
consent constitutes theft of its telephone services and business. World Wide Web Corporation, et al.
v. People of the Philippines, et al./Planet Internet Corporation v. Philippine Long Distance Telephone
Company,G.R. Nos. 161106/161266, January 13, 2014.
2. Special Penal Laws
Dangerous Drugs Act; chain of custody; lapses in the strict compliance with the requirements of
Section 21 of R.A. No. 9165 must be explained in terms of their justifiable grounds. The Supreme
Court recognized that under varied field conditions the strict compliance with the requirements of
Section 21 of R.A. No. 9165 may not always be possible, and it ruled that under the implementing
guidelines of the said Section non-compliance with these requirements under justifiable grounds, as
long as the integrity and the evidentiary value of the seized items are properly preserved by the
apprehending officer/team, shall not render void and invalid such seizures of and custody over said
items. SC added that the prosecution bears the burden of proving justifiable cause. In the present
case, the prosecution did not bother to offer an explanation for why an inventory and photograph of
the seized evidence was not made either in the place of seizure and arrest or at the police station, as
required by the Implementing Rules in case of warrantless arrests, or why the marking of the seized
item was not made at the place of seizure in the presence of Beran. Indeed, the very identity of the
subject shabucannot be established with certainty by the testimony alone of P03 Sia since the rules
insist upon independent proof of its identity, such as the immediate marking thereof upon
seizure. People of the Philippines v. Joselito Beran y Zapanta, G.R. No. 203028, January 15, 2014.
Dangerous Drugs Act; chain of custody; mandatory nature. The chain of custody rule requires that
there be testimony about every link in the chain, from the moment the object seized was picked up to
the time it was offered in evidence, in such a way that every person who touched it would describe
how and from whom it was received, where it was and what happened to it while in the possession of
the witness, the condition in which it was received and the condition in which it was delivered to the
next link in the chain. People of the Philippines v. Joselito Beran y Zapanta, G.R. No. 203028, January
15, 2014.
Dangerous Drugs Act; chain of custody; marking of evidence in seizures covered by search warrants
distinguished from marking of evidence in warrantless seizures such as a buy-bust operation.
Concerning the marking of evidence seized in a buy-bust operation or under a search warrant, vis-avisthe physical inventory and photograph, it must be noted that there are distinctions as to time and
place under Section 21 of R.A. No. 9165. Thus, whereas in seizures covered by search warrants, the
physical inventory and photograph must be conducted in the place of the search warrant, in
warrantless seizures such as a buy-bust operation the physical inventory and photograph shall be
conducted at the nearest police station or office of the apprehending officer/team, whichever is
practicable, consistent with the chain of custody rule. It needs no elaboration that the immediate
marking of the item seized in a buy-bust operation in the presence of the accused is indispensable to
establish its identity in court. Here, none of the buy-bust team attested that they saw P03 Sia take
custody of the confiscated shabu, and later mark the sachet at the DAID-WPD office. Even granting

that P03 Sia did mark the same sachet at the precinct, breaks in the chain of custody had already
taken place, first, when he confiscated it from Beran without anyone observing him do so and without
marking the subject sachet at the place of apprehension, and then as he was transporting it to the
precinct, thus casting serious doubt upon the value of the said links to prove the corpus
delicti.Moreover, the records also show that P03 Sia submitted the sachet to the laboratory only on
the next day, without explaining how he preserved his exclusive custody thereof overnight. People of
the Philippines v. Joselito Beran y Zapanta, G.R. No. 203028, January 15, 2014.
Dangerous Drugs Act; chain of custody rule; when relaxed. There are occasions when the chain of
custody rule is relaxed such as when the marking of the seized items immediately after seizure and
confiscation is allowed to be undertaken at the police station rather than at the place of arrest for as
long as it is done in the presence of an accused in illegal drugs cases. However, even a less-thanstringent application of the requirement would not suffice to sustain the conviction in this case. There
was no categorical statement from any of the prosecution witnesses that markings were made, much
less immediately upon confiscation of the seized items. There was also no showing that markings
were made in the presence of the accused in this case. Lito Lopez v. People of the Philippines, G.R.
No. 188653. January 29, 2014.
Dangerous Drugs Act; chain of custody rule; links to be established. The links that must be
established in the chain of custody in a buy-bust situation are: first, the seizure and marking, if
practicable, of the illegal drug recovered from the accused by the apprehending officer; second, the
turnover of the illegal drug seized by the apprehending officer to the investigating officer; third, the
turnover by the investigating officer of the illegal drug to the forensic chemist for laboratory
examination; and fourth, the turnover and submission of the marked illegal drug seized from the
forensic chemist to the court.Lito Lopez v. People of the Philippines, G.R. No. 188653. January 29,
2014.
Dangerous Drugs Act; illegal possession of drugs; elements. The elements of illegal possession of
drugs are: (1) the accused is in possession of an item or object which is identified to be a prohibited
drug; (2) such possession is not authorized by law; and (3) the accused freely and consciously
possessed the said drug. P/Insp. Fajardo testified as to the recovery from the appellant of another 12
pieces of plastic sachets of shabu. After the latter was arrested, P/Insp. Fajardo stated that PO2
Trambulo conducted a body search on the appellant. This search resulted to the confiscation of 12
more plastic sachets, the contents of which also tested positive for shabu. The testimony of P/Insp.
Fajardo was amply corroborated by PO2 Trambulo, whose own account dovetailed the formers
narration of events. Both police officers also identified in court the twelve plastic sachets
of shabu that were confiscated from the appellant. People of the Philippines v. Donald Vasquez y
Sandigan, G.R. No. 200304, January 15, 2014.
Dangerous Drugs Act; illegal possession of drugs; penalties. Applying the Indeterminate Sentence
Law, there being no aggravating or mitigating circumstance in this case, the imposable penalty on
the appellant should be the indeterminate sentence of six months of arresto mayor, as minimum, to
four years and two months of prision correccional, as maximum. The penalty imposed by the Court of
Appeals, thus, falls within the range of the proper imposable penalty. No fine was imposed
considering that in Republic Act No. 6425, as amended, a fine can be imposed as a conjunctive
penalty only if the penalty is reclusion perpetua to death. People of the Philippines v. Donald Vasquez
y Sandigan, G.R. No. 200304, January 15, 2014.
Dangerous Drugs Act; illegal sale of drugs; elements. To secure a conviction for the crime of illegal
sale of regulated or prohibited drugs, the following elements should be satisfactorily proven: (1) the
identity of the buyer and seller, the object, and the consideration; and (2) the delivery of the thing
sold and the payment therefor. As held in People v. Chua Tan Lee, in a prosecution of illegal sale of
drugs, what is material is proof that the accused peddled illicit drugs, coupled with the presentation in
court of the corpus delicti. In the case at bar, the testimonies of P/Insp. Fajardo and PO2 Trambulo
established that a buy-bust operation was legitimately carried out in the wee hours of April 3, 1998 to
entrap the appellant. P/Insp. Fajardo, the poseur-buyer, positively identified the appellant as the one
who sold to her six plastic bags of shabu that were contained in a big brown envelope for the price of
P250,000.00. She likewise identified the six plastic bags of shabu, which contained the markings she
placed thereon after the same were seized from the appellant. When subjected to laboratory
examination, the white crystalline powder contained in the plastic bags tested positive
for shabu.People of the Philippines v. Donald Vasquez y Sandigan, G.R. No. 200304, January 15, 2014.
Dangerous Drugs Act; illegal sale of drugs; penalties. Article 6363 of the Revised Penal Code
mandates that when the law prescribes a penalty composed of two indivisible penalties and there are
neither mitigating nor aggravating circumstances in the commission of the crime, the lesser penalty
shall be applied. Thus, in this case, considering that no mitigating or aggravating circumstances
attended the appellants violation of Section 15, Article III of Republic Act No. 6425, as amended, the
Court of Appeals correctly affirmed the trial courts imposition of reclusion perpetua. The
P5,000,000.00 fine imposed by the trial court on the appellant is also in accord with Section 15,

Article III of Republic Act No. 6425, as amended. People of the Philippines v. Donald Vasquez y
Sandigan, G.R. No. 200304, January 15, 2014.
Dangerous Drugs Act; illegal sale or possession of drugs; the evidence of the corpus delicti must be
independently established beyond reasonable doubt. It is well-settled that in the prosecution of cases
involving the illegal sale or illegal possession of dangerous drugs, the evidence of the corpus
delicti,which is the dangerous drug itself, must be independently established beyond reasonable
doubt. InPeople v. Pagaduan, the Supreme Court ruled that proof beyond reasonable doubt in criminal
prosecution for the sale of illegal drugs demands that unwavering exactitude be observed in
establishing the corpus delicti, the body of the crime whose core is the confiscated illicit drug. The
prosecution must establish by records or testimony the continuous whereabouts of the exhibit, from
the time it came into the possession of the police officers until it was tested in the laboratory to
determine its composition, and all the way to the time it is offered in evidence. In the instant case,
from the testimony of P03 Sia it is clear that the apprehending operatives did not, immediately after
seizure and confiscation of the illegal item, physically inventory and photograph the same in the
presence of the accused, his representative or counsel, a representative from the media and the
Department of Justice, and an elected public official, notwithstanding that they were supposed to
have been conducting a planned sting operation. Worse, the prosecution did not bother to explain
why they failed to observe them, although they knew these procedures were intended to preserve the
integrity and evidentiary value of the item seized. Moreover, none of the other witnesses of the
prosecution could corroborate the culpatory narrative of P03 Sia at any of its material points to create
the successive links in the custody of the seized drug. People of the Philippines v. Joselito Beran y
Zapanta,G.R. No. 203028, January 15, 2014.
Dangerous Drugs Act; illegal sale and illegal possession of dangerous drugs; chain of custody; corpus
delicti. In both cases of illegal sale and illegal possession of dangerous drugs, the prosecution must
show the chain of custody over the dangerous drug in order to establish the corpus delicti, which is
the dangerous drug itself. The chain of custody rule comes into play as a mode of authenticating the
seized illegal drug as evidence. It includes testimony about every link in the chain, from the moment
the item was picked up to the time it is offered into evidence, in such a way that every person who
touched the exhibit would describe how and from whom it was received, where it was and what
happened to it while in the witness possession, the condition in which it was received and the
condition in which it was delivered to the next link in the chain. These witnesses would then describe
the precautions taken to ensure that there had been no change in the condition of the item and no
opportunity for someone not in the chain to have possession of the same. Indeed, it is from the
testimony of every witness who handled the evidence from which a reliable assurance can be derived
that the evidence presented in court is one and the same as that seized from the accused. This step
initiates the process of protecting innocent persons from dubious and concocted searches, and of
protecting as well the apprehending officers from harassment suits based on planting of evidence and
on allegations of robbery or theft. Lito Lopez v. People of the Philippines, G.R. No. 188653. January 29,
2014.
Dangerous Drugs Act; illegal sale and illegal possession of dangerous drugs; chain of custody; effect
of failure to mark. Failure of the authorities to immediately mark the seized drugs raises reasonable
doubt on the authenticity of the corpus delicti and suffices to rebut the presumption of regularity in
the performance of official duties. Failure to mark the drugs immediately after they were seized from
the accused casts doubt on the prosecution evidence, warranting acquittal on reasonable doubt. The
Chemistry Report, containing a description of the items seized, does not show or make any mention
of any markings made on all the items seized. As a matter of fact, during the trial, PO3 Desuasido
seemingly could not readily identify the plastic sachets he allegedly seized inside petitioners house.
The conflicting testimonies of the police officers and lack of evidence lead to a reasonable conclusion
that no markings were actually made on the seized items. Lito Lopez v. People of the Philippines, G.R.
No. 188653. January 29, 2014.
Dangerous Drugs Act; illegal sale and illegal possession of dangerous drugs; chain of custody;
marking.The rule requires that the marking of the seized items should be done in the presence of the
apprehended violator and immediately upon confiscation to ensure that they are the same items that
enter the chain and are eventually the ones offered in evidence. Marking after seizure is the starting
point in the custodial link, thus it is vital that the seized contraband is immediately marked because
succeeding handlers of the specimens will use the markings as reference. The marking of the
evidence serves to separate the marked evidence from the corpus of all other similar or related
evidence from the time they are seized from the accused until they are disposed at the end of
criminal proceedings, obviating switching, planting, or contamination of evidence. Lito Lopez v.
People of the Philippines, G.R. No. 188653. January 29, 2014.
3. Criminal Procedure
Acquittal; two kinds; different effects on the civil liability of the accused. The law recognizes two kinds
of acquittal, with different effects on the civil liability of the accused. First is an acquittal on the

ground that the accused is not the author of the act or omission complained of. This instance closes
the door to civil liability, for a person who has been found to be not the perpetrator of any act or
omission cannot and can never be held liable for such act or omission. There being no delict, civil
liability ex delicto is out of the question, and the civil action, if any, which may be instituted must be
based on grounds other than the delict complained of. This is the situation contemplated in Rule 111
of the Rules of Court. The second instance is an acquittal based on reasonable doubt on the guilt of
the accused. In this case, even if the guilt of the accused has not been satisfactorily established, he is
not exempt from civil liability which may be proved by preponderance of evidence only. The acquittal
of an accused does not prevent a judgment from still being rendered against him on the civil aspect
of the criminal case unless the court finds and declares that the fact from which the civil liability
might arise did not exist. Dr. Encarnacion C. Lumantas v. Hanz Calapiz, represented by his parents,
Hilario Calapiz, Jr. and Helita Calapiz, G.R. No. 163753. January 15, 2014.
Alibi. For alibi to prosper, accused-appellant must not only prove that he was somewhere else when
the crime was committed, he must also convincingly demonstrate the physical impossibility of his
presence at the locus criminis at the time of the incident. In the present case, however, accusedappellant himself admitted that his place of work was less than a kilometer or a mere 30-minute walk
away from his house, where AAA was raped. Given the short distance between these two places, it
was not physically impossible for accused-appellant, in the afternoon of September 12, 2004, to have
left his work for a short while to go home and commit the rape of AAA. People of the Philippines v.
Roel Vergara y Clavero, G.R. No. 199226, January 15, 2014.
Alibi; positive identification prevails over alibi. The Supreme Court has consistently assigned less
probative weight to a defense of alibi when it is corroborated by friends and relatives since it has
established in jurisprudence that, in order for corroboration to be credible, the same must be offered
preferably by disinterested witnesses. Clearly, due to his friendship with appellant, Maglaque cannot
be considered as a disinterested witness. Nevertheless, it is jurisprudentially settled that positive
identification prevails over alibi since the latter can easily be fabricated and is inherently unreliable. It
is likewise settled that where there is nothing to indicate that a witness for the prosecution was
actuated by improper motive, the presumption is that he was not so actuated and his testimony is
entitled to full faith and credit. In the case at bar, no allegation was made nor proven to show that
Jefferson had any ill motive to falsely testify against appellant. People of the Philippines v. Joel Aquino
y Cendana, G.R. No. 201092, January 15, 2014.
Civil liability; preponderant evidence of negligence. The petitioners contention that he could not be
held civilly liable because there was no proof of his negligence deserves scant consideration. The
failure of the Prosecution to prove his criminal negligence with moral certainty did not forbid a finding
against him that there was preponderant evidence of his negligence to hold him civilly liable. With the
Regional Trial Court and the Court of Appeals (CA) both finding that Hanz had sustained the injurious
trauma from the hands of the petitioner on the occasion of or incidental to the circumcision, and that
the trauma could have been avoided, the Supreme Court (SC) had to concur with their uniform
findings. Every person is entitled to the physical integrity of his body. Although the courts have long
advocated the view that any physical injury, like the loss or diminution of the use of any part of ones
body, is not equatable to a pecuniary loss, and is not susceptible of exact monetary estimation, civil
damages should be assessed once that integrity has been violated. The assessment is but an
imperfect estimation of the true value of ones body. The usual practice is to award moral damages
for the physical injuries sustained. In Hanzs case, the undesirable outcome of the circumcision
performed by the petitioner forced the young child to endure several other procedures on his penis in
order to repair his damaged urethra. Surely, his physical and moral sufferings properly warranted the
amount of P50,000.00 awarded as moral damages. Dr. Encarnacion C. Lumantas v. Hanz Calapiz,
represented by his parents, Hilario Calapiz, Jr. and Helita Calapiz, G.R. No. 163753. January 15, 2014.
Denial and alibi. The defense of alibi should be considered with suspicion and always received with
caution, not only because it is inherently weak and unreliable, but also because it is easily fabricated.
Denial and alibi constitute self-serving negative evidence which cannot be accorded greater
evidentiary weight than the positive declaration of a credible witness. AAAs positive testimony that
she was sexually ravished by accused-appellant, coupled with the appalling fact that she got
pregnant at her tender age, certainly deserve more credence and greater evidentiary weight than
that of accused-appellants uncorroborated defenses. People of the Philippines v. Roel Vergara y
Clavero, G.R. No. 199226, January 15, 2014.
Denial and improper motive. Accused Pareja sought to escape liability by denying the charges against
him, coupled with the attribution of ill motive against AAA. He claims that AAA filed these cases
against him because she was angry that he caused her parents separation. Pareja added that these
cases were initiated by AAAs father, as revenge against him. AAAs credibility cannot be diminished
or tainted by such imputation of ill motives. It is highly unthinkable for the victim to falsely accuse her
father solely by reason of ill motives or grudge. It is settled jurisprudence that testimonies of childvictims are given full weight and credit, since when a woman or a girl-child says that she has been

raped, she says in effect all that is necessary to show that rape was indeed committed. People of the
Philippines v. Bernabe Pareja y Cruz, G.R. No. 202122, January 15, 2014.
Evidence; credibility of witnesses; determination of. Verily, the issue of credibility, when it is decisive
of the guilt or innocence of the accused, is determined by the conformity of the conflicting claims and
recollections of the witnesses to common experience and to the observation of mankind as probable
under the circumstances. It has been appropriately emphasized that there is no test of the truth of
human testimony, except its conformity to the human knowledge, observation, and experience.
Whatever is repugnant to these belongs to the miraculous and is outside of judicial
cognizance. Ricardo Medina, Jr. y Oriel v. People of the Philippines, G.R. No. 161308, January 15,
2014.
Evidence; testimony of a single witnesses; when sufficient. Furthermore, settled is the rule that the
testimony of a single witness may be sufficient to produce a conviction, if the same appears to be
trustworthy and reliable. If credible and convincing, that alone would be sufficient to convict the
accused. No law or rule requires the corroboration of the testimony of a single witness in a rape
case.People of the Philippines v. Bernabe Pareja y Cruz, G.R. No. 202122, January 15, 2014.
Evidence; testimony of witnesses; assessment of the credibility of witnesses is a domain best left to
the trial court judge; exceptions. The recognized rule in this jurisdiction is that the assessment of the
credibility of witnesses is a domain best left to the trial court judge because of his unique opportunity
to observe their deportment and demeanor on the witness stand; a vantage point denied appellate
courts-and when his findings have been affirmed by the Court of Appeals, these are generally binding
and conclusive upon this Court. While there are recognized exceptions to the rule, this Court has
found no substantial reason to overturn the identical conclusions of the trial and appellate courts on
the matter of AAAs credibility. People of the Philippines v. Bernabe Pareja y Cruz, G.R. No. 202122,
January 15, 2014.
Evidence; testimony of witnesses; guidelines to determine credibility. In People v. Sanchez, the
Supreme Court (SC) enumerated the guidelines to determine the credibility of witnesses as follows:
First, SC gives the highest respect to the Regional Trial Courts (RTC) evaluation of the testimony of
the witnesses, considering its unique position in directly observing the demeanor of a witness on the
stand. From its vantage point, the RTC is in the best position to determine the truthfulness of
witnesses. Second, absent any substantial reason which would justify the reversal of the RTCs
assessments and conclusions, the reviewing court is generally bound by the lower courts findings,
particularly when no significant facts and circumstances, affecting the outcome of the case, are
shown to have been overlooked or disregarded. And third, the rule is even more stringently applied if
the Court of Appeals concurred with the RTC. People of the Philippines v. Bernabe Pareja y Cruz, G.R.
No. 202122, January 15, 2014.
Evidence; testimony of witnesses; inaccuracies and inconsistencies in a rape victims testimony are
generally expected. Since human memory is fickle and prone to the stresses of emotions, accuracy in
a testimonial account has never been used as a standard in testing the credibility of a witness. The
inconsistencies mentioned by accused Pareja are trivial and non-consequential matters that merely
caused AAA confusion when she was being questioned. The inconsistency regarding the year of the
December incident is not even a matter pertaining to AAAs ordeal. The date and time of the
commission of the crime of rape becomes important only when it creates serious doubt as to the
commission of the rape itself or the sufficiency of the evidence for purposes of conviction. In other
words, the date of the commission of the rape becomes relevant only when the accuracy and
truthfulness of the complainants narration practically hinge on the date of the commission of the
crime. Moreover, the date of the commission of the rape is not an essential element of the
crime.People of the Philippines v. Bernabe Pareja y Cruz, G.R. No. 202122, January 15, 2014.
Evidence; testimony of witnesses; police officers are presumed to have performed their duties in a
regular manner, unless there be evidence to the contrary. Credence shall be given to the narration of
the incident by prosecution witnesses especially so when they are police officers who are presumed
to have performed their duties in a regular manner, unless there be evidence to the contrary. In the
instant case, the appellant failed to ascribe, much less satisfactorily prove, any improper motive on
the part of the prosecution witnesses as to why they would falsely incriminate him. The appellant
himself even testified that, not only did he not have any misunderstanding with P/Insp. Fajardo and
PO2 Trambulo prior to his arrest, he in fact did not know them at all. In the absence of evidence of
such ill motive, none is presumed to exist. People of the Philippines v. Donald Vasquez y
Sandigan, G.R. No. 200304, January 15, 2014.
General warrant; concept of. A general warrant is defined as (a) search or arrest warrant that is not
particular as to the person to be arrested or the property to be seized. It is one that allows the
seizure of one thing under a warrant describing another and gives the officer executing the warrant
the discretion over which items to take. World Wide Web Corporation, et al. v. People of the

Philippines, et al./Planet Internet Corporation v. Philippine Long Distance Telephone Company,G.R.

Nos. 161106/161266, January 13, 2014.
Illegal warrantless arrest; when objection to must be made. Any objection, defect or irregularity
attending an arrest must be made before the accused enters his plea on arraignment. Having failed
to move for the quashing of the information against them before their arraignment, appellants are
now estopped from questioning the legality of their arrest. Any irregularity was cured upon their
voluntary submission to the trial courts jurisdiction. Be that as it may, the fact of the matter is that
the appellant was caught in flagrante delicto of selling illegal drugs to an undercover police officer in
a buy-bust operation. His arrest, thus, falls within the ambit of Section 5(a), Rule 11354 of the Revised
Rules on Criminal Procedure when an arrest made without warrant is deemed lawful. People of the
Philippines v. Donald Vasquez y Sandigan, G.R. No. 200304, January 15, 2014.
Illegal warrantless searches and seizures; exceptions. Warrantless searches and seizures have long
been deemed permissible by jurisprudence in instances of (1) search of moving vehicles, (2) seizure
in plain view, (3) customs searches, (4) waiver or consented searches, (5) stop and frisk situations
(Terry search), and (6) search incidental to a lawful arrest. The last includes a valid warrantless arrest,
for, while as a rule, an arrest is considered legitimate if effected with a valid warrant of arrest, the
Rules of Court recognize permissible warrantless arrest, to wit: (1) arrest in flagrante delicto, (2)
arrest effected in hot pursuit, and (3) arrest of escaped prisoners. People of the Philippines v. Donald
Vasquez y Sandigan, G.R. No. 200304, January 15, 2014.
Information; right to be informed of the nature and cause of the accusation against him; when
violated. The peculiar designation of time in the Information clearly violates Sec. 11, Rule 110, of the
Rules Court which requires that the time of the commission of the offense must be alleged as near to
the actual date as the information or complaint will permit. More importantly, it runs afoul of the
constitutionally protected right of the accused to be informed of the nature and cause of the
accusation against him. The Information is not sufficiently explicit and certain as to time to inform
accused-appellant of the date on which the criminal act is alleged to have been committed. The
phrase on or about the year 1992 encompasses not only the twelve (12) months of 1992 but
includes the years prior and subsequent to 1992, e.g., 1991 and 1993, for which accused-appellant
has to virtually account for his whereabouts. Hence, the failure of the prosecution to allege with
particularity the date of the commission of the offense and, worse, its failure to prove during the trial
the date of the commission of the offense as alleged in the Information, deprived accused-appellant
of his right to intelligently prepare for his defense and convincingly refute the charges against
him. People of the Philippines v. Bernabe Pareja y Cruz, G.R. No. 202122, January 15, 2014.
Probable cause; a trial judges finding of probable cause for the issuance of a search warrant is
accorded respect by reviewing courts. When a finding of probable cause for the issuance of a search
warrant is made by a trial judge, the finding is accorded respect by reviewing courts. It is presumed
that a judicial function has been regularly performed, absent a showing to the contrary. A
magistrates determination of probable cause for the issuance of a search warrant is paid great
deference by a reviewing court, as long as there was substantial basis for that determination.
Substantial basis means that the questions of the examining judge brought out such facts and
circumstances as would lead a reasonably discreet and prudent man to believe that an offense has
been committed, and the objects in connection with the offense sought to be seized are in the place
sought to be searched. World Wide Web Corporation, et al. v. People of the Philippines, et al./Planet
Internet Corporation v. Philippine Long Distance Telephone Company,G.R. Nos. 161106/161266,
January 13, 2014.
Probable cause; definition of. In the issuance of a search warrant, probable cause requires such facts
and circumstances that would lead a reasonably prudent man to believe that an offense has been
committed and the objects sought in connection with that offense are in the place to be searched.
There is no exact test for the determination of probable cause in the issuance of search warrants. It is
a matter wholly dependent on the finding of trial judges in the process of exercising their judicial
function. They determine probable cause based on evidence showing that, more likely than not, a
crime has been committed and that it was committed by the offender. World Wide Web Corporation,
et al. v. People of the Philippines, et al./Planet Internet Corporation v. Philippine Long Distance
Telephone Company,G.R. Nos. 161106/161266, January 13, 2014.
Search warrant; nature of. Petitioners contend that PLDT had no personality to question the quashal
of the search warrants without the conformity of the public prosecutor. They argue that it violated
Section 5, Rule 110 of the Rules of Criminal Procedure, which states the general rule that the public
prosecutor has direction and control of the prosecution of all criminal actions commenced by a
complaint or information. However, a search warrant is obtained, not by the filing of a complaint or an
information, but by the filing of an application therefor. Clearly then, an application for a search
warrant is not a criminal action. Accordingly, Supreme Court sustained the Court of Appeals ruling
that the conformity of the public prosecutor is not necessary before an aggrieved party moves for
reconsideration of an order granting a motion to quash search warrants. World Wide Web

Corporation, et al. v. People of the Philippines, et al./Planet Internet Corporation v. Philippine Long
Distance Telephone Company,G.R. Nos. 161106/161266, January 13, 2014.
Search warrant; the requirement of particularity in the description of things. Petitioners claim that the
subject search warrants were in the nature of general warrants because the descriptions therein of
the objects to be seized are so broad and all-encompassing as to give the implementing officers wide
discretion over which articles to seize. On the other hand, PLDT claims that a search warrant already
fulfils the requirement of particularity of description when it is as specific as the circumstances will
ordinarily allow. The Supreme Court (SC) has been mindful of the difficulty faced by law enforcement
officers in describing the items to be searched, especially when these items are technical in nature,
and when the extent of the illegal operation is largely unknown to them. Furthermore, SC also had
occasion to rule that the particularity of the description of the place to be searched and the things to
be seized is required wherever and whenever it is feasible. A search warrant need not describe the
items to be seized in precise and minute detail. The warrant is valid when it enables the police
officers to readily identify the properties to be seized and leaves them with no discretion regarding
the articles to be seized. In this case, considering that items that looked like innocuous goods were
being used to pursue an illegal operation that amounts to theft, law enforcement officers would be
hard put to secure a search warrant if they were required to pinpoint items with one hundred percent
precision. The police should not be hindered in the performance of their duties, which are difficult
enough of performance under the best of conditions, by superficial adherence to technicality or
farfetched judicial interference. World Wide Web Corporation, et al. v. People of the Philippines, et
al./Planet Internet Corporation v. Philippine Long Distance Telephone Company,G.R. Nos.
161106/161266, January 13, 2014.
Search warrant; when order quashing a search warrant can be the proper subject of an appeal. An
application for a search warrant is a judicial process conducted either as an incident in a main
criminal case already filed in court or in anticipation of one yet to be filed. Whether the criminal case
(of which the search warrant is an incident) has already been filed before the trial court is significant
for the purpose of determining the proper remedy from a grant or denial of a motion to quash a
search warrant. Where the search warrant is issued as an incident in a pending criminal case, the
quashal of a search warrant is merely interlocutory. There is still something more to be done in the
said criminal case, i.e., the determination of the guilt of the accused therein. In contrast, where a
search warrant is applied for and issued in anticipation of a criminal case yet to be filed, the order
quashing the warrant (and denial of a motion for reconsideration of the grant) ends the judicial
process. There is nothing more to be done thereafter. Here, the applications for search warrants were
instituted as principal proceedings and not as incidents to pending criminal actions. When the search
warrants issued were subsequently quashed by the Regional Trial Court, there was nothing left to be
done by the trial court. Thus, the quashal of the search warrants were final orders, not interlocutory,
and an appeal may be properly taken therefrom. World Wide Web Corporation, et al. v. People of the
Philippines, et al./Planet Internet Corporation v. Philippine Long Distance Telephone Company,G.R.
Nos. 161106/161266, January 13, 2014.
Variance doctrine; when applicable. When there is a variance between the offense charged in the
complaint or information and that proved, and the offense as charged is included in or necessarily
includes the offense proved, the accused shall be convicted of the offense proved which is included in
the offense charged, or of the offense charged which is included in the offense proved. An offense
charged necessarily includes the offense proved when some of the essential elements or ingredients
of the former, as alleged in the complaint or information, constitute the latter. And an offense charged
is necessarily included in the offense proved, when the essential ingredients of the former constitute
or form part of those constituting the latter.People of the Philippines v. Bernabe Pareja y Cruz, G.R.
No. 202122, January 15, 2014.

February 2014 Philippine Supreme Court Decisions on Civil Law

Contract law; principle of relativity. The basic principle of relativity of contracts is that contracts can
only bind the parties who entered into it, and cannot favor or prejudice a third person, even if he is
aware of such contract and has acted with knowledge thereof Where there is no privity of contract,
there is likewise no obligation or liability to speak about. Philippine National Bank v. Teresita Tan
Dee, et al., G.R. No. 182128, February 19, 2014.
Contract of sale; obligations of the parties; there is nothing in the decision of the HLURB, as affirmed
by the OP and the CA, which shows that the petitioner is being ordered to assume the obligation of
any of the respondents.In a contract of sale, the parties obligations are plain and simple. The law
obliges the vendor to transfer the ownership of and to deliver the thing that is the object of sale. On
the other hand, the principal obligation of a vendee is to pay the full purchase price at the agreed
time.Philippine National Bank v. Teresita Tan Dee, et al., G.R. No. 182128, February 19, 2014.

Contract to sell; ownership; right to mortgage the property by the owner. Note that at the time PEPI
mortgaged the property to the petitioner, the prevailing contract between respondents PEPI and Dee
was still the Contract to Sell, as Dee was yet to fully pay the purchase price of the property. On this
point, PEPI was acting fully well within its right when it mortgaged the property to the petitioner, for in
a contract to sell, ownership is retained by the seller and is not to pass until full payment of the
purchase price. In other words, at the time of the mortgage, PEPI was still the owner of the property.
Thus, in China Banking Corporation v. Spouses Lozada the Court affirmed the right of the
owner/developer to mortgage the property subject of development, to wit: [P.D.] No. 957 cannot
totally prevent the owner or developer from mortgaging the subdivision lot or condominium unit when
the title thereto still resides in the owner or developer awaiting the full payment of the purchase price
by the installment buyer. Philippine National Bank v. Teresita Tan Dee, et al., G.R. No. 182128,
February 19, 2014.
Dacion en pago; concept of.Dacion en pago or dation in payment is the delivery and transmission of
ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of
the obligation. It is a mode of extinguishing an existing obligation and partakes the nature of sale as
the creditor is really buying the thing or property of the debtor, the payment for which is to be
charged against the debtors debt. Dation in payment extinguishes the obligation to the extent of the
value of the thing delivered, either as agreed upon by the parties or as may be proved, unless the
parties by agreement express or implied, or by their silence consider the thing as equivalent to the
obligation, in which case the obligation is totally extinguished.Philippine National Bank v. Teresita Tan
Dee, et al.,G.R. No. 182128, February 19, 2014.
Co-ownership; when present.Art. 484. There is co-ownership whenever the ownership of an undivided
thing or right belongs to different persons. Art. 1078. When there are two or more heirs, the whole
estate of the decedent is, before its partition, owned in common by such heirs, subject to the
payment of debts of the deceased. Teodoro S. Teodoro, et al. v. Danilo Espino, et al., G.R. No. 189248,
February 5, 2014.
Co-ownership; right of possession.Certainly, and as found by the trial courts, the whole of Lot No.
2476 including the portion now litigated is, owing to the fact that it has remained registered in the
name of Genaro who is the common ancestor of both parties herein, co-owned property. All, or both
Teodoro Teodoro and respondents are entitled to exercise the right of possession as co-owners.
Neither party can exclude the other from possession. Although the property remains unpartitioned,
the respondents in fact possess specific areas. Teodoro Teodoro can likewise point to a specific area,
which is that which was possessed by Petra. Teodoro Teodoro cannot be dispossessed of such area,
not only by virtue of Petras bequeathal in his favor but also because of his own right of possession
that comes from his co-ownership of the property. Teodoro S. Teodoro, et al. v. Danilo Espino, et
al., G.R. No. 189248, February 5, 2014.
Alienable and disposable land; to prove that the land subject of an application for registration is
alienable, an applicant must establish the existence of a positive act of the government; annotation in
the survey plan is not sufficient. However, Cortez reliance on the foregoing annotation in the survey
plan is amiss; it does not constitute incontrovertible evidence to overcome the presumption that the
subject property remains part of the inalienable public domain. In Republic of the Philippines v. TriPlus Corporation, the Court clarified that, the applicant must at the very least submit a certification
from the proper government agency stating that the parcel of land subject of the application for
registration is indeed alienable and disposable, viz: It must be stressed that incontrovertible evidence
must be presented to establish that the land subject of the application is alienable or disposable. In
the present case, the only evidence to prove the character of the subject lands as required by law is
the notation appearing in the Advance Plan stating in effect that the said properties are alienable and
disposable. However, this is hardly the kind of proof required by law. To prove that the land subject of
an application for registration is alienable, anapplicant must establish the existence of a positive act
of the government such as a presidential proclamation or an executive order, an administrative
action, investigation reports of Bureau of Lands investigators, and a legislative act or statute. The
applicant may also secure a certification from the Government that the lands applied for are alienable
and disposable. Republic of the Philippines v. Emmanuel C. Cortez, G.R. No. 186639. February 5,
2014.
Patrimonial property; susceptible to acquisitive prescription; start of the running of the prescriptive
period.The Civil Code makes it clear that patrimonial property of the State may be acquired by private
persons through prescription. This is brought about by Article 1113, which states that [a]ll things
which are within the commerce of man are susceptible to prescription, and that [p]roperty of the
State or any of its subdivisions not patrimonial in character shall not be the object of
prescription.Nonetheless, Article 422 of the Civil Code states that [p]roperty of public dominion,
when no longer intended for public use or for public service, shall form part of the patrimonial
property of the State. It is this provision that controls how public dominion property may be
converted into patrimonial property susceptible to acquisition by prescription. After all, Article 420(2)
makes clear that those property which belong to the State, without being for public use, and are

intended for some public service or for the development of the national wealth are public dominion
property. For as long as the property belongs to the State, although already classified as alienable or
disposable, it remains property of the public dominion if when it is intended for some public service
or for the development of the national wealth. Accordingly, there must be an express declaration by
the State that the public dominion property is no longer intended for public service or the
development of the national wealth or that the property has been converted into patrimonial. Without
such express declaration, the property, even if classified as alienable or disposable, remains property
of the public dominion, pursuant to Article 420(2), and thus incapable of acquisition by prescription. It
is only when such alienable and disposable lands are expressly declared by the State to be no longer
intended for public service or for the development of the national wealth that the period of acquisitive
prescription can begin to run. Such declaration shall be in the form of a law duly enacted by Congress
or a Presidential Proclamation in cases where the President is duly authorized by law. Republic of the
Philippines v. Emmanuel C. Cortez,G.R. No. 186639. February 5, 2014.
Sale; warranties of sellers.Indeed, this Court is convinced from an examination of the evidence and
by the concurring opinions of the courts below that Bignay purchased the property without
knowledge of the pending Civil Case No. Q-52702. Union Bank is therefore answerable for its express
undertaking under the December 20, 1989 deed of sale to defend its title to the Parcel/s of Land with
improvement thereon against the claims of any person whatsoever. By this warranty, Union Bank
represented to Bignay that it had title to the property, and by assuming the obligation to defend such
title, it promised to do so at least in good faith and with sufficient prudence, if not to the best of its
abilities. Bignay EX-IM Philippines, Inc. v. Union Bank of the Philippines / Union Bank of the Philippines
v. Bignay EX-IM Philippines, Inc., G.R. No. 171590 & G.R. No. 171598, February 12, 2014.
Breach of contract; gross negligence.The record reveals, however, that Union Bank was grossly
negligent in the handling and prosecution of Civil Case No. Q-52702. Its appeal of the December 12,
1991 Decision in said case was dismissed by the CA for failure to file the required appellants brief.
Next, the ensuing Petition for Review on Certiorari filed with this Court was likewise denied due to late
filing and payment of legal fees. Finally, the bank sought the annulment of the December 12, 1991
judgment, yet again, the CA dismissed the petition for its failure to comply with Supreme Court
Circular No. 28-91. As a result, the December 12, 1991 Decision became final and executory, and
Bignay was evicted from the property. Such negligence in the handling of the case is far from
coincidental; it is decidedly glaring, and amounts to bad faith. [N]egligence may be occasionally so
gross as to amount tomalice [or bad faith]. Indeed, in culpa contractual or breach of contract, gross
negligence of a party amounting to bad faith is a ground for the recovery of Damages by the injured
party.Bignay EX-IM Philippines, Inc. v. Union Bank of the Philippines / Union Bank of the Philippines v.
Bignay EX-IM Philippines, Inc., G.R. No. 171590 & G.R. No. 171598, February 12, 2014.
Unenforceable contract; entering into a contract without or beyond authority; sale of property despite
objection of laymens committee.The Court finds it erroneous for the CA to ignore the fact that the
laymens committee objected to the sale of the lot in question. The Canons require that ALL the
church entities listed in Article IV (a) thereof should give its approval to the transaction. Thus, when
the Supreme Bishop executed the contract of sale of petitioners lot despite the opposition made by
the laymens committee, he acted beyond his powers. This case clearly falls under the category of
unenforceable contracts mentioned in Article 1403, paragraph (1) of the Civil Code, which provides,
thus: Art. 1403. The following contracts are unenforceable, unless they are ratified: (1) Those entered
into in the name of another person by one who has been given no authority or legal representation,
or who has acted beyond his powers; In Mercado v. Allied Banking Corporation, the Court explained
that: x x x Unenforceable contracts are those which cannot be enforced by a proper action in court,
unless they are ratified, because either they are entered into without or in excess of authority or they
do not comply with the statute of frauds or both of the contracting parties do not possess the
required legal capacity. x x x. Iglesia Felipina Independiente v. Heirs of Bernardino Taeza,G.R. No.
179597, February 3, 2014.
Unenforceable contract; analogous cases. Closely analogous cases of unenforceable contracts are
those where a person signs a deed of extrajudicial partition in behalf of co-heirs without the latters
authority; where a mother as judicial guardian of her minor children, executes a deed of extrajudicial
partition wherein she favors one child by giving him more than his share of the estate to the prejudice
of her other children; and where a person, holding a special power of attorney, sells a property of his
principal that is not included in said special power of attorney. Iglesia Felipina Independiente v. Heirs
of Bernardino Taeza,G.R. No. 179597, February 3, 2014.
Article 1456, Civil Code; implied trust; acquiring property through mistake. In the present case,
however, respondents predecessor-in-interest, Bernardino Taeza, had already obtained a transfer
certificate of title in his name over the property in question. Since the person supposedly transferring
ownership was not authorized to do so, the property had evidently been acquired by mistake. In Vda.
de Esconde v. Court ofAppeals, the Court affirmed the trial courts ruling that the applicable provision
of law in such cases is Article 1456 of the Civil Code which states that [i]f property is acquired
through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an

implied trust for the benefit of the person from whom the property comes. Iglesia Felipina
Independiente v. Heirs of Bernardino Taeza,G.R. No. 179597, February 3, 2014.
Constructive trust; concept of. A deeper analysis of Article 1456 reveals that it is not a trust in the
technical sense for in a typical trust, confidence is reposed in one person who is named a trustee for
the benefit of another who is called the cestui que trust, respecting property which is held by the
trustee for the benefit of the cestui que trust. A constructive trust, unlike an express trust, does not
emanate from, or generate a fiduciary relation. While in an express trust, a beneficiary and a trustee
are linked by confidential or fiduciary relations, in a constructive trust, there is neither a promise nor
any fiduciary relation to speak of and the so-called trustee neither accepts any trust nor intends
holding the property for the beneficiary. Iglesia Felipina Independiente v. Heirs of Bernardino
Taeza,G.R. No. 179597, February 3, 2014.
Constructive trust; prescriptive period.A constructive trust having been constituted by law between
respondents as trustees and petitioner as beneficiary of the subject property, may respondents
acquire ownership over the said property? The Court held in the same case of Aznar, that unlike in
express trusts and resulting implied trusts where a trustee cannot acquire by prescription any
property entrusted to him unless he repudiates the trust, in constructive implied trusts, the trustee
may acquire the property through prescription even if he does not repudiate the relationship. It is
then incumbent upon the beneficiary to bring an action for reconveyance before prescription bars the
same.An action for reconveyance based on an implied or constructive trust must perforce prescribe in
ten years and not otherwise. A long line of decisions of this Court, and of very recent vintage at that,
illustrates this rule. Undoubtedly, it is now well-settled that an action for reconveyance based on an
implied or constructive trust prescribes in ten years from the issuance of the Torrens title over the
property. It has also been ruled that the ten-year prescriptive period begins to run from the date of
registration of the deed or the date of the issuance of the certificate of title over the property, Iglesia
Felipina Independiente v. Heirs of Bernardino Taeza, G.R. No. 179597, February 3, 2014.
Surety; concept of. A surety is considered in law as being the same party as the debtor in relation to
whatever is adjudged touching the obligation of the latter, and their liabilities are interwoven as to be
inseparable. Although the contract of a surety is in essence secondary only to a valid principal
obligation, his liability to the creditor is direct, primary and absolute; he becomes liable for the debt
and duty of another although he possesses no direct or personal interest over the obligations nor
does he receive any benefit therefrom. Trade and Investment Development Corporation of the
Philippines (Formerly Philippine Export and Foreign Loan Guarantee Corporation) v. Asia Paces
Corporation, et al., G.R. No. 187403. February 12, 2014.
Surety; solidary debtor. The fundamental reason therefor is that a contract of suretyship effectively
binds the surety as a solidary debtor. This is provided under Article 2047 of the Civil Code which
states: By guaranty a person, called the guarantor, binds himself to the creditor to fulfill the
obligation of the principal debtor in case the latter should fail to do so. If a person binds himself
solidarily with the principal debtor, the provisions of Section 4, Chapter 3, Title I of this Book shall be
observed. In such case the contract is called a suretyship. Thus, since the surety is a solidary debtor,
it is not necessary that the original debtor first failed to pay before the surety could be made liable; it
is enough that a demand for payment is made by the creditor for the suretys liability to attach. Trade
and Investment Development Corporation of the Philippines (Formerly Philippine Export and Foreign
Loan Guarantee Corporation) v. Asia Paces Corporation, et al., G.R. No. 187403. February 12, 2014.
Surety; distinguished from guarantor. Comparing a suretys obligations with that of a guarantor, the
Court, in the case of Palmares v. CA, illumined that a surety is responsible for the debts payment at
once if the principal debtor makes default, whereas a guarantor pays only if the principal debtor is
unable to pay, viz. : A surety is an insurer of the debt, whereas a guarantor is an insurer of the
solvency of the debtor. A suretyship is an undertaking that the debt shall be paid; a guaranty, an
undertaking that the debtor shall pay. Stated differently, a surety promises to pay the principals debt
if the principal will not pay, while a guarantor agrees that the creditor, after proceeding against the
principal, may proceed against the guarantor if the principal is unable to pay. A surety binds himself
to perform if the principal does not, without regard to his ability to do so. A guarantor, on the other
hand, does not contract that the principal will pay, but simply that he is able to do so. In other words,
a surety undertakes directly for the payment and is so responsible at once if the principal debtor
makes default, while a guarantor contracts to pay if, by the use of due diligence, the debt cannot be
made out of the principal debtor. Trade and Investment Development Corporation of the Philippines
(Formerly Philippine Export and Foreign Loan Guarantee Corporation) v. Asia Paces Corporation, et
al., G.R. No. 187403. February 12, 2014.
Surety; extension given to debtor without consent of guarantor; effect of. Despite these distinctions,
the Court in Cochingyan, Jr. v. R&B Surety & Insurance Co., Inc., and later in the case of Security Bank,
held that Article 2079 of the Civil Code, which pertinently provides that [a]n extension granted to the
debtor by the creditor without the consent of the guarantor extinguishes the guaranty, equally
applies to bothcontracts of guaranty and suretyship. The rationale therefor was explained by the

Court as follows: The theory behind Article 2079 is that an extension of time given to the principal
debtor by the creditor without the suretys consent would deprive the surety of his right to pay the
creditor and to be immediately subrogated to the creditors remedies against the principal debtor
upon the maturity date. The surety is said to be entitled to protect himself against the contingency of
the principal debtor or the indemnitors becoming insolvent during the extended period. Trade and
Investment Development Corporation of the Philippines (Formerly Philippine Export and Foreign Loan
Guarantee Corporation) v. Asia Paces Corporation, et al., G.R. No. 187403. February 12, 2014.
Surety; extension given to debtor without consent of guarantor; the payment extensions granted by
Banque Indosuez and PCI Capital to TIDCORP under the Restructuring Agreement did not have the
effect of extinguishing the bonding companies obligations to TIDCORP under the Surety Bonds,
notwithstanding the fact that said extensions were made without their consent. This is because
Article 2079 of the Civil Code refers to a payment extension granted by the creditor to the principal
debtor without the consent of the guarantor or surety. In this case, the Surety Bonds are suretyship
contracts which secure the debt of ASPAC, the principal debtor, under the Deeds of Undertaking to
pay TIDCORP, the creditor, the damages and liabilities it may incur under the Letters of Guarantee,
within the bounds of the bonds respective coverage periods and amounts. No payment extension
was, however, granted by TIDCORP in favor of ASPAC in this regard; hence, Article 2079 of the Civil
Code should not be applied with respect to the bonding companies liabilities to TIDCORP under the
Surety Bonds.
The payment extensions granted by Banque Indosuez and PCI Capital pertain to TIDCORPs own debt
under the Letters of Guarantee wherein it (TIDCORP) irrevocably and unconditionally guaranteed full
payment of ASPACs loan obligations to the banks in the event of its (ASPAC) default. In other words,
the Letters of Guarantee secured ASPACs loan agreements to the banks. Under this arrangement,
TIDCORP therefore acted as a guarantor, with ASPAC as the principal debtor, and the banks as
creditors. Trade and Investment Development Corporation of the Philippines (Formerly Philippine
Export and Foreign Loan Guarantee Corporation) v. Asia Paces Corporation, et al., G.R. No. 187403.
February 12, 2014.
Deed of mortgage; effect when the authorized agent failed to indicate in the mortgage that she was
acting for and on behalf of her principal. Similarly, in this case, the authorized agent failed to indicate
in the mortgage that she was acting for and on behalf of her principal. The Real Estate Mortgage,
explicitly shows on its face, that it was signed by Concepcion in her own name and in her own
personal capacity. In fact, there is nothing in the document to show that she was acting or signing as
an agent of petitioner. Thus, consistent with the law on agency and established jurisprudence,
petitioner cannot be bound by the acts of Concepcion. Nicanora G. v. Rural Bank of El Salvador, Inc. et
al., G.R. No. 179625. February 24, 2014.
Bank; negligence of. At this point, we find it significant to mention that respondent bank has no one
to blame but itself. Not only did it act with undue haste when it granted and released the loan in less
than three days, it also acted negligently in preparing the Real Estate Mortgage as it failed to indicate
that Concepcion was signing it for and on behalf of petitioner. We need not belabor that the words as
attorney-in-fact of, as agent of, or for and on behalf of, are vital in order for the principal to be
bound by the acts of his agent. Without these words, any mortgage, although signed by the agent,
cannot bind the principal as it is considered to have been signed by the agent in his personal
capacity.Nicanora G. v. Rural Bank of El Salvador, Inc. et al., G.R. No. 179625. February 24, 2014.
Agent; liability when deed of mortgage is signed in personal capacity. Concepcion, on the other hand,
is liable to pay respondent bank her unpaid obligation under the Promissory Note dated June 11,
1982, with interest. As we have said, Concepcion signed the Promissory Note in her own personal
capacity; thus, she cannot escape liability. She is also liable to reimburse respondent bank for all
damages, attorneys fees, and costs the latter is adjudged to pay petitioner in this case. Nicanora G.
v. Rural Bank of El Salvador, Inc. et al., G.R. No. 179625. February 24, 2014.
Article 1308 of the Civil Code; principle of mutuality of contracts. The credit agreement executed
succinctly stipulated that the loan would be subjected to interest at a rate determined by the Bank
to be its prime rate plus applicable spread, prevailing at the current month. This stipulation was
carried over to or adopted by the subsequent renewals of the credit agreement. PNB thereby
arrogated unto itself the sole prerogative to determine and increase the interest rates imposed on the
Spouses Manalo. Such a unilateral determination of the interest rates contravened the principle of
mutuality of contracts embodied in Article 1308 of the Civil Code.Philippine National Bank v. Sps.
Enrique Manalo & Rosalinda Jacinto, et al., G.R. No. 174433, February 24, 2014.
Contracts; a contract where there is no mutuality between the parties partakes of the nature of a
contract of adhesion. The Court has declared that a contract where there is no mutuality between the
parties partakes of the nature of a contract of adhesion, and any obscurity will be construed against
the party who prepared the contract, the latter being presumed the stronger party to the agreement,
and who caused the obscurity. PNB should then suffer the consequences of its failure to specifically

indicate the rates of interest in the credit agreement. We spoke clearly on this in Philippine Savings
Bank v. Castillo, to wit: The unilateral determination and imposition of the increased rates is violative
of the principle of mutuality of contracts under Article 1308 of the Civil Code, which provides that
[t]he contract must bind both contracting parties; its validity or compliance cannot be left to the will
of one of them. A perusal of the Promissory Note will readily show that the increase or decrease of
interest rates hinges solely on the discretion of petitioner. It does not require the conformity of the
maker before a new interest rate could be enforced. Any contract which appears to be heavily
weighed in favor of one of the parties so as to lead to an unconscionable result, thus partaking of the
nature of a contract of adhesion, is void. Any stipulation regarding the validity or compliance of the
contract left solely to the will of one of the parties is likewise invalid. Philippine National Bank v. Sps.
Enrique Manalo & Rosalinda Jacinto, et al., G.R. No. 174433, February 24, 2014.
Interest; interest should be computed from the time of the judicial or extrajudicial demand; rule when
there is no demand. Indeed, the Court said in Eastern Shipping Lines, Inc. v. Court of Appeals that
interest should be computed from the time of the judicial or extrajudicial demand. However, this case
presents a peculiar situation, the peculiarity being that the Spouses Manalo did not demand interest
either judicially or extrajudicially. In the RTC, they specifically sought as the main reliefs the
nullification of the foreclosure proceedings brought by PNB, accounting of the payments they had
made to PNB, and the conversion of their loan into a long term one. In its judgment, the RTC even
upheld the validity of the interest rates imposed by PNB. In their appellants brief, the Spouses
Manalo again sought the nullification of the foreclosure proceedings as the main relief. It is evident,
therefore, that the Spouses Manalo made no judicial or extrajudicial demand from which to reckon the
interest on any amount to be refunded to them. Such demand could only be reckoned from the
promulgation of the CAs decision because it was there that the right to the refund was first judicially
recognized. Nevertheless, pursuant to Eastern Shipping Lines, Inc. v. Court of Appeals, the amount to
be refunded and the interest thereon should earn interest to be computed from the finality of the
judgment until the full refund has been made.Philippine National Bank v. Sps. Enrique Manalo &
Rosalinda Jacinto, et al., G.R. No. 174433, February 24, 2014.
Interest; Monetary Board Circular No. 799 reduced the interest rates from 12% per annum to 6% per
annum. Anent the correct rates of interest to be applied on the amount to be refunded by PNB, the
Court, in Nacar v. Gallery Frames and S.C. Megaworld Construction v. Parada, already applied
Monetary Board Circular No. 799 by reducing the interest rates allowed in judgments from 12% per
annum to 6% per annum. Philippine National Bank v. Sps. Enrique Manalo & Rosalinda Jacinto, et
al., G.R. No. 174433, February 24, 2014.
Interest; prospective application of Monetary Board Circular No. 799. According to Nacar v. Gallery
Frames, MB Circular No. 799 is applied prospectively, and judgments that became final and executory
prior to its effectivity on July 1, 2013 are not to be disturbed but continue to be implemented applying
the old legal rate of 12% per annum. Hence, the old legal rate of 12% per annum applied to
judgments becoming final and executory prior to July 1, 2013, but the new rate of 6% per annum
applies to judgments becoming final and executory after said date. Philippine National Bank v. Sps.
Enrique Manalo & Rosalinda Jacinto, et al., G.R. No. 174433, February 24, 2014.
Mortgagee in good faith; doctrine of. In Bank of Commerce v. San Pablo, Jr., the doctrine of mortgagee
in good faith was explained:There is, however, a situation where, despite the fact that the mortgagor
is not the owner of the mortgaged property, his title being fraudulent, the mortgage contract and any
foreclosure sale arising there from are given effect by reason of public policy. This is the doctrine of
the mortgagee in good faith based on the rule that all persons dealing with property covered by the
Torrens Certificates of Title, as buyers or mortgagees, are not required to go beyond what appears on
the face of the title. The public interest in upholding indefeasibility of a certificate of title, as evidence
of lawful ownership of the land or of any encumbrance thereon, protects a buyer or mortgagee who,
in good faith, relied upon what appears on the face of the certificate of title. Homeowners Savings
and Loan Bank v. Asuncion P. Felonia and Lydia C. De Guzman, rep. by Maribel Frias, et al., G.R. No.
189477. February 26, 2014.
Mortgagee in good faith; HSLB, as a mortgagee, had a right to rely in good faith on Delgados title,
and in the absence of any sign that might arouse suspicion, HSLB had no obligation to undertake
further investigation.When the property was mortgaged to HSLB, the registered owner of the subject
property was Delgado who had in her name TCT No. 44848. Thus, HSLB cannot be faulted in relying
on the face of Delgados title. The records indicate that Delgado was at the time of the mortgage in
possession of the subject property and Delgados title did not contain any annotation that would
arouse HSLBs suspicion. HSLB, as a mortgagee, had a right to rely in good faith on Delgados title,
and in the absence of any sign that might arouse suspicion, HSLB had no obligation to undertake
further investigation. As held by this Court in Cebu International Finance Corp. v. CA: The prevailing
jurisprudence is that a mortgagee has a right to rely in good faith on the certificate of title of the
mortgagor of the property given as security and in the absence of any sign that might arouse
suspicion, has no obligation to undertake further investigation. Hence, even if the mortgagor is not
the rightful owner of, or does not have a valid title to, the mortgaged property, the mortgagee or

transferee in good faith is nonetheless entitled to protection. Homeowners Savings and Loan Bank v.
Asuncion P. Felonia and Lydia C. De Guzman, rep. by Maribel Frias, et al., G.R. No. 189477. February
26, 2014.
Purchaser in good faith; doctrine of; duty of a prospective buyer. purchaser in good faith is defined as
one who buys a property without notice that some other person has a right to, or interest in, the
property and pays full and fair price at the time of purchase or before he has notice of the claim or
interest of other persons in the property.When a prospective buyer is faced with facts and
circumstances as to arouse his suspicion, he must take precautionary steps to qualify as a purchaser
in good faith. In Spouses Mathay v. CA, we determined the duty of a prospective buyer: Although it is
a recognized principle that a person dealing on a registered land need not go beyond its certificate of
title, it is also a firmly settled rule that where there are circumstances which would put a party on
guard and prompt him to investigate or inspect the property being sold to him, such as the presence
of occupants/tenants thereon, it is of course, expected from the purchaser of a valued piece of land to
inquire first into the status or nature of possession of the occupants, i.e., whether or not the
occupants possess the land en concepto de dueo, in the concept of the owner. As is the common
practice in the real estate industry, an ocular inspection of the premises involved is a safeguard a
cautious a nd prudent purchaser usually takes. Should he find out that the land he intends to buy is
occupied by anybody else other than the seller who, as in this case, is not in actual possession, it
would then be incumbent upon the purchaser to verify the extent of the occupants possessory rights.
The failure of a prospective buyer to take such precautionary steps would mean negligence on his
part and would thereby preclude him from claiming or invoking the rights of a purchaser in good
faith. Homeowners Savings and Loan Bank v. Asuncion P. Felonia and Lydia C. De Guzman, rep. by
Maribel Frias, et al., G.R. No. 189477. February 26, 2014.
Notice of lis pendens; definition of; purpose of. Lis pendens is a Latin term which literally means, a
pending suit or a pending litigation while a notice of lis pendens is an announcement to the whole
world that a real property is in litigation, serving as a warning that anyone who acquires an interest
over the property does so at his/her own risk, or that he/she gambles on the result of the litigation
over the property. It is a warning to prospective buyers to take precautions and investigate the
pending litigation.
The purpose of a notice of lis pendens is to protect the rights of the registrant while the case is
pending resolution or decision. With the notice of lis pendens duly recorded and remaining
uncancelled, the registrant could rest secure that he/she will not lose the property or any part thereof
during litigation. Homeowners Savings and Loan Bank v. Asuncion P. Felonia and Lydia C. De Guzman,
rep. by Maribel Frias, et al., G.R. No. 189477. February 26, 2014.
Notice of lis pendens; effect of actual knowledge of the annotated Notice of Lis Pendens. Indeed, at
the time HSLB bought the subject property, HSLB had actual knowledge of the annotated Notice of Lis
Pendens. Instead of heeding the same, HSLB continued with the purchase knowing the legal
repercussions a notice of lis pendens entails. HSLB took upon itself the risk that the Notice of Lis
Pendens leads to. As correctly found by the CA, the notice of lis pendens was annotated on 14
September 1995, whereas the foreclosure sale, where the appellant was declared as the highest
bidder, took place sometime in 1997. There is no doubt that at the time appellant purchased the
subject property, it was aware of the pending litigation concerning the same property and thus, the
title issued in its favor was subject to the outcome of said litigation. Homeowners Savings and Loan
Bank v. Asuncion P. Felonia and Lydia C. De Guzman, rep. by Maribel Frias, et al., G.R. No. 189477.
February 26, 2014.
Mortgage; mortgagor must be absolute owner of the thing mortgaged. That the mortgagor be the
absolute owner of the thing mortgaged is an essential requisite of a contract of mortgage. Article
2085 (2) of the Civil Code specifically says so: Art. 2085. The following requisites are essential to the
contracts of pledge and mortgage: x x x x (2) That the pledgor or mortagagor be the absolute owner
of the thing pledged or mortgaged. Succinctly, for a valid mortgage to exist, ownership of the
property is an essential requisite. Reyes v. De Leon cited the case of Philippine National Bank v. Rocha
where it was pronounced that a mortgage of real property executed by one who is not an owner
thereof at the time of the execution of the mortgage is without legal existence. Such that, according
to DBP v. Prudential Bank, there being no valid mortgage, there could also be no valid foreclosure or
valid auction sale. Homeowners Savings and Loan Bank v. Asuncion P. Felonia and Lydia C. De
Guzman, rep. by Maribel Frias, et al., G.R. No. 189477. February 26, 2014.
SPECIAL LAWS
P.D. No. 957; subdivision lots; a bank dealing with a property that is already subject of a contract to
sell and is protected by the provisions of P.D. No. 957, is bound by the contract to sell.Thus, in Luzon
Development Bank v. Enriquez, the Court reiterated the rule that a bank dealing with a property that
is already subject of a contract to sell and is protected by the provisions of P.D. No. 957, is bound by
the contract to sell. However, the transferee BANK is bound by the Contract to Sell and has to respect

Enriquezs rights thereunder. This is because the Contract to Sell, involving a subdivision lot, is
covered and protected by PD 957. x x x. x x x x x x x Under these circumstances, the BANK knew or
should have known of the possibility and risk that the assigned properties were already covered by
existing contracts to sell in favor of subdivision lot buyers. As observed by the Court in another case
involving a bank regarding a subdivision lot that was already subject of a contract to sell with a third
party:[The Bank] should have considered that it was dealing with a property subject of a real estate
development project. A reasonable person, particularly a financial institution x x x, should have been
aware that, to finance the project, funds other than those obtained from the loan could have been
used to serve the purpose, albeit partially. Hence, there was a need to verify whether any part of the
property was already intended to be the subject of any other contract involving buyers or potential
buyers. In granting the loan, [the Bank] should not have been content merely with a clean title,
considering the presence of circumstances indicating the need for a thorough investigation of the
existence of buyers x x x. Wanting in care and prudence, the [Bank] cannot be deemed to be an
innocent mortgagee. x x xPhilippine National Bank v. Teresita Tan Dee, et al., G.R. No. 182128,
February 19, 2014.
Section 14 of P.D. No. 1529; original registration of title to land; who may apply. Applicants for original
registration of title to land must establish compliance with the provisions of Section 14 of P.D. No.
1529, which pertinently provides that: Sec.14. Who may apply. The following persons may file in the
proper Court of First Instance an application for registration of title to land, whether personally or
through their duly authorized representatives:(1) Those who by themselves or through their
predecessors-in interest have been in open, continuous, exclusive and notorious possession and
occupation of alienable and disposable lands of the public domain under a bona fide claim of
ownership since June 12, 1945, or earlier. (2) Those who have acquired ownership of private lands by
prescription under the provision of existing laws.Republic of the Philippines v. Emmanuel C.
Cortez, G.R. No. 186639. February 5, 2014.
Section 14 of P.D. No. 1529; original registration of title to land; requisites.Section 14(1) of P.D. No.
1529 refers to the judicial confirmation of imperfect or incomplete titles to public land acquired under
Section 48(b)of C.A. No.141, as amended by P.D. No. 1073. Under Section 14(1) [of P.D. No. 1529],
applicants for registration of title must sufficiently establish first, that the subject land forms part of
the disposable and alienable lands of the public domain; second, that the applicant and his
predecessors-in-interest have been in open, continuous, exclusive, and notorious possession and
occupation of the same; and third, that it is under a bona fide claim of ownership since June 12, 1945,
or earlier. Republic of the Philippines v. Emmanuel C. Cortez, G.R. No. 186639. February 5, 2014.
Psychological incapacity; concept of; characterizations. Psychological incapacity, as a ground to
nullify a marriage under Article 36 of the Family Code, should refer to no less than a mental not
merely physical incapacity that causes a party to be truly incognitive of the basic marital covenants
that concomitantly must be assumed and discharged by the parties to the marriage which, as so
expressed in Article 68 of the Family Code, among others, include their mutual obligations to live
together, observe love, respect and fidelity and render help and support.There is hardly any doubt
that the intendment of the law has been to confine the meaning of psychological incapacity to the
most serious cases of personality disorders clearly demonstrative of an utter insensitivity or inability
to give meaning and significance to the marriage. Republic of the Philippines v. Rodolfo O. De
Gracia, G.R. No. 171557. February 12, 2014.
Psychological incapacity; emotional immaturity, irresponsibility, or even sexual promiscuity, cannot
be equated with psychological incapacity.Keeping with these principles, the Court, in Dedel v. CA,
held that therein respondents emotional immaturity and irresponsibility could not be equated with
psychological incapacity as it was not shown that these acts are manifestations of a disordered
personality which make her completely unable to discharge the essential marital obligations of the
marital state, not merely due to her youth, immaturity or sexual promiscuity. Republic of the
Philippines v. Rodolfo O. De Gracia, G.R. No. 171557. February 12, 2014.
Psychological incapacity; although expert opinions furnished by psychologists regarding the
psychological temperament of parties are usually given considerable weight by the courts, the
existence of psychological incapacity must still be proven by independent evidence. Verily, although
expert opinions furnished by psychologists regarding the psychological temperament of parties are
usually given considerable weight by the courts, the existence of psychological incapacity must still
be proven by independent evidence. Republic of the Philippines v. Rodolfo O. De Gracia, G.R. No.
171557. February 12, 2014.
Psychological incapacity; refusal to live with Rodolfo and to assume her duties as wife and mother as
well as her emotional immaturity, irresponsibility and infidelity do not rise to the level of
psychological incapacity that would justify the nullification of the parties marriage. To the Courts
mind, Natividads refusal to live with Rodolfo and to assume her duties as wife and mother as well as
her emotional immaturity, irresponsibility and infidelity do not rise to the level of psychological
incapacity that would justify the nullification of the parties marriage. Indeed, to be declared clinically

or medically incurable is one thing; to refuse or be reluctant to perform ones duties is another. To
hark back to what has been earlier discussed, psychological incapacity refers only to the most serious
cases of personality disorders clearly demonstrative of an utter insensitivity or inability to give
meaning and significance to the marriage. Republic of the Philippines v. Rodolfo O. De Gracia, G.R.
No. 171557. February 12, 2014.
Section 14 (1), Presidential Decree No. 1529; judicial confirmation of imperfect or incomplete titles to
public land; requisites. Section 14(1) of P.D. No. 1529 refers to the judicial confirmation of imperfect
or incomplete titles to public land acquired under Section 48(b) of Commonwealth Act (C.A.) No. 141,
or the Public Land Act, as amended by P.D. No. 1073. Under Section 14(1) of P.D. No. 1529, applicants
for registration of title must sufficiently establish: first, that the subject land forms part of the
disposable and alienable lands of the public domain; second, that the applicant and his predecessorsin-interest have been in open, continuous, exclusive, and notorious possession and occupation of the
same; and third, that it is under a bona fide claim of ownership since June 12, 1945, or
earlier. Republic of the Philippines v. Remman Enterprises, Inc. represented by Ronnie P.
Inocencio, G.R. No. 199310. February 19, 2014.
Proof that land is alienable and disposable; certifications insufficient. However, the said certifications
presented by the respondent are insufficient to prove that the subject properties are alienable and
disposable. In Republic of the Philippines v. T.A.N. Properties, Inc., the Court clarified that, in addition
to the certification issued by the proper government agency that a parcel of land is alienable and
disposable, applicants for land registration must prove that the DENR Secretary had approved the
land classification and released the land of public domain as alienable and disposable. They must
present a copy of the original classification approved by the DENR Secretary and certified as true
copy by the legal custodian of the records. Republic of the Philippines v. Remman Enterprises, Inc.
represented by Ronnie P. Inocencio, G.R. No. 199310. February 19, 2014.
Possession and occupation; proof of specific acts of ownership must be presented to substantiate the
claim of open, continuous, exclusive, and notorious possession and occupation of the land subject of
the application. For purposes of land registration under Section 14(1) of P.D. No. 1529, proof of
specific acts of ownership must be presented to substantiate the claim of open, continuous, exclusive,
and notorious possession and occupation of the land subject of the application. Applicants for land
registration cannot just offer general statements which are mere conclusions of law rather than
factual evidence of possession. Actual possession consists in the manifestation of acts of dominion
over it of such a nature as a party would actually exercise over his own property. Republic of the
Philippines v. Remman Enterprises, Inc. represented by Ronnie P. Inocencio, G.R. No. 199310.
February 19, 2014.
Possession and occupation; mere casual cultivation of portions of the land by the claimant does not
constitute possession under claim of ownership. Although Cerquena testified that the respondent and
its predecessors-in-interest cultivated the subject properties, by planting different crops thereon, his
testimony is bereft of any specificity as to the nature of such cultivation as to warrant the conclusion
that they have been indeed in possession and occupation of the subject properties in the manner
required by law. There was no showing as to the number of crops that are planted in the subject
properties or to the volume of the produce harvested from the crops supposedly planted thereon.
Further, assuming ex gratia argumenti that the respondent and its predecessors-in-interest have
indeed planted crops on the subject properties, it does not necessarily follow that the subject
properties have been possessed and occupied by them in the manner contemplated by law. The
supposed planting of crops in the subject properties may only have amounted to mere casual
cultivation, which is not the possession and occupation required by law. A mere casual cultivation of
portions of the land by the claimant does not constitute possession under claim of ownership. For
him, possession is not exclusive and notorious so as to give rise to a presumptive grant from the
state. The possession of public land, however long the period thereof may have extended, never
confers title thereto upon the possessor because the statute of limitations with regard to public land
does not operate against the state, unless the occupant can prove possession and occupation of the
same under claim of ownership for the required number of years. Republic of the Philippines v.
Remman Enterprises, Inc. represented by Ronnie P. Inocencio, G.R. No. 199310. February 19, 2014.

February 2014 Philippine Supreme Court Decisions on Commercial Law

Corporate officer; intra-corporate dispute. There are two circumstances which must concur in order
for an individual to be considered a corporate officer, as against an ordinary employee or officer,
namely: (1) the creation of the position is under the corporations charter or by-laws; and (2) the
election of the officer is by the directors or stockholders. It is only when the officer claiming to have
been illegally dismissed is classified as such corporate officer that the issue is deemed an intracorporate dispute which falls within the jurisdiction of the trial courts. Raul C. Cosare v. Broadcom
Asia, Inc., et al., G.R. No. 201298, February 5, 2014.

Intra-corporate dispute; illegal dismissal case. As regards the issue of jurisdiction, the Court has
determined that contrary to the ruling of the Court of Appeals (CA), it is the labor arbiter (LA), and not
the regular courts, which has the original jurisdiction over the subject controversy. An intra-corporate
controversy, which falls within the jurisdiction of regular courts, has been regarded in its broad sense
to pertain to disputes that involve any of the following relationships: (1) between the corporation,
partnership or association and the public; (2) between the corporation, partnership or association and
the state in so far as its franchise, permit or license to operate is concerned; (3) between the
corporation, partnership or association and its stockholders, partners, members or officers; and (4)
among the stockholders, partners or associates, themselves.
Settled jurisprudence, however, qualifies that when the dispute involves a charge of illegal dismissal,
the action may fall under the jurisdiction of the LAs upon whose jurisdiction, as a rule, falls
termination disputes and claims for damages arising from employer-employee relations as provided in
Article 217 of the Labor Code. Consistent with this jurisprudence, the mere fact that Cosare was a
stockholder and an officer of Broadcomat the time the subject controversy developed failed to
necessarily make the case an intra-corporate dispute.
In Matling Industrial and Commercial Corporation v. Coros, the Court distinguished between a regular
employee and a corporate officer for purposes of establishing the true nature of a dispute or
complaint for illegal dismissal and determining which body has jurisdiction over it. Succinctly, it was
explained that [t]he determination of whether the dismissed officer was a regular employee or
corporate officer unravels the conundrum of whether a complaint for illegal dismissal is cognizable
by the LA or by the RTC. In case of the regular employee, the LA has jurisdiction; otherwise, the RTC
exercises the legal authority to adjudicate.
Applying the foregoing to the present case, the LA had the original jurisdiction over the complaint for
illegal dismissal because Cosare, although an officer of Broadcom for being its AVP for Sales, was not
a corporate officer as the term is defined by law. Raul C. Cosare v. Broadcom Asia, Inc., et al., G.R.
No. 201298, February 5, 2014.

February 2014 Philippine Supreme Court Decisions on Legal and Judicial Ethics
Attorney; Notarization; Importance. An administrative case was filed against Atty. Rinen for
falsification of an Extra Judicial Partition with Sale which allowed the transfer to Spouses Durante of a
parcel of land. In Bautista v. Atty. Bernabe, the Court held that [a] notary public should not notarize a
document unless the persons who signed the same are the very same persons who executed and
personally appeared before him to attest to the contents and truth of what are stated therein. The
presence of the parties to the deed will enable the notary public to verify the genuineness of the
signature of the affiant. Notarization is not an empty, meaningless, routinary act. It is invested with
substantive public interest, such that only those who are qualified or authorized may act as notaries
public. It converts a private document into a public one, making it admissible in court without further
proof of its authenticity. Thus, notaries public must observe with utmost care the basic requirements
in the performance of their duties. Otherwise, the confidence of the public in the integrity of public
instruments would be undermined.
In this case, Atty. Rinen did not deny his failure to personally verify the identity of all parties who
purportedly signed the subject document and whom, as he claimed, appeared before him on April 7,
1994. Such failure was further shown by the fact that the pertinent details of the community tax
certificates of Wilberto and his sister, as proof of their identity, remained unspecified in the deeds
acknowledgment portion. Clearly, there was a failure on the part of Atty. Rinen to exercise the due
diligence that was required of him as a notary public exofficio. Thus, Atty. Rinens notarial
commission as revoked and he was disqualified from being commissioned as a notary public for one
year. Wilberto C. Talisic v. Atty. Primo R. Rinen, A.C. No. 8761, February 12, 2014.
Attorney; Notarization not an empty act. Complainant charged Atty. Gupana of forgeries and
falsifications in the notarization of certain documents. The Supreme Court found Atty. Gupana
administratively liable under Section 1 of Public Act No. 2103, otherwise known as the Notarial Law,
for violation of his notarial duties when he failed to require the personal presence of Candelaria
Magpayo when he notarized the Affidavit of Loss which Candelaria allegedly executed on April 29,
1994.
Under the law, the party acknowledging must appear before the notary public or any other person
authorized to take acknowledgments of instruments or documents. In this case, the jurat of the
Affidavit of Loss stated that Candelaria subscribed to the affidavit before Atty. Gupana on April 29,
1994, at Mandaue City. Candelaria, however, was already dead since March 26, 1991. Hence, it is
clear that the jurat was made in violation of the notarial law. The notarization of a document is not an

empty act or routine. A notary publics function should not be trivialized and a notary public must
discharge his powers and duties which are impressed with public interest, with accuracy and fidelity.
As a lawyer commissioned as notary public, Atty. Gupana is mandated to subscribe to the sacred
duties appertaining to his office, such duties being dictated by public policy impressed with public
interest. Thus, the Supreme Court held that Atty. Gupanas revocation of his notarial commission,
disqualification from being commissioned as a notary public for a period of two years and suspension
from the practice of law for one year are in order. Carlito Ang v. Atty. James Joseph Gupana, A.C. No.
4545. February 5, 2014.
Court Personnel; Dishonesty and Conduct Prejudicial to the Best Interest of Service. An administrative
complaint was filed against Salamanca, Clerk III of a Metropolitan Trial Court for
unauthorized/unexplained absences and other infractions: (1) failure to account for and turn over the
partial settlement amount of a civil obligation; and (2) failure to account for and turn over the
payment for legal fees she received in a case. The Supreme Court held that the acts of Salamanca
constitute dishonesty and conduct prejudicial to the best interest of the service.
Dishonesty is defined as a disposition to lie, cheat, deceive, or defraud. It implies untrustworthiness,
lack of integrity, lack of honesty, probity or integrity in principle on the part of the individual who
failed to exercise fairness and straightforwardness in his or her dealings. Conduct prejudicial to the
best interest of service, on the other hand, pertains to any conduct that is detrimental or derogatory
or naturally or probably bringing about a wrong result; it refers to acts or omissions that violate the
norm of public accountability and diminish or tend to diminish the peoples faith in the Judiciary.
However, Salamancas dishonesty does not consist of her failure to remit court funds because the
money she received from the litigants did not acquire the status of court funds as no official receipt
therefor was issued by her. While Salamancas complained acts involved technically private money,
the deceit she pulled off disrupted the publics faith in the integrity of the judiciary and its personnel.
Her conduct tarnished the image and integrity of her public office and violated the Code of Conduct
and Ethical Standards for Public Officials and Employees, Section 4(c) which commands that public
officials and employees shall at all times respect the rights of others, and shall refrain from doing acts
contrary to public safety and public interest. Executive Judge Ma. Ofelia S. Contreras-Soriano v. Clerk
III Liza D. Salamanca, Metropolitan Trial Court, Branch 55, Malabon City, A.M. No. P-13-3119. February
10, 2014.
Court Personnel; Duty to Submit Statements of Assets, Liabilities and Net Worth (SALN). Sheriff
Collado was charged with failing to disclose in her SALN for the years 2004 and 2005 certain time
deposits, among others. The Supreme Court cited Section 8 of RA 6713 which requires all public
officials and employees to accomplish and submit declarations under oath of their assets and
liabilities. The requirement of SALN submission is aimed at curtailing and minimizing the opportunities
for official corruption, as well as at maintaining a standard of honesty in the public service. With such
disclosure, the public would, to a reasonable extent, be able to monitor the affluence of public
officials, and, in such manner, provides a check and balance mechanism to verify their undisclosed
properties and/or sources of income.
The Supreme Court held that based on Section 8 of RA 6713, all other assets such as investments,
cash on hand or in banks, stocks, bonds, and the like, should be declared by the public official in his
or her SALN. In this case, however, it was established that she only declared the original amount of
her time deposits in her SALN for the years 2004 and 2005, and did not disclose the interests which
had eventually accrued on the same. Accordingly, Collado fell short of the legal requirement stated
under Section 8 of RA 6713 and thus should be held administratively liable for said
infraction. Angelito R. Marquez, et al. v. Judge Venancio M. Ovejera, etc., et al., A.M. No. P-11-2903,
February 5, 2014.
Court Personnel; Grave Misconduct. A complaint was filed against Susbilla-De Vera for soliciting
money to supposedly facilitate a legal proceeding in court. The court held Susbilla-De Vera guilty of
the most serious administrative offense of grave misconduct. To deserve the trust and confidence of
the people, Susbilla-De Vera was expected to have her dealings with the public to be always sincere
and above board. She should not lead others to believe that despite her status as a minor court
employee she had the capacity to influence the outcomes of judicial matters. Her acts did not live up
to the expectation, for the records unquestionably showed how she had deliberately and fraudulently
misrepresented her ability to assist the complainant in the adoption of her niece and nephew. Section
2, Canon 1 of the Code of Conduct for Court Personnel has enjoined all court personnel from soliciting
or accepting any gift, favor or benefit based on any or explicit understanding that such gift, favor or
benefit shall influence their official actions. The Court thus warranted her dismissal from
service.Veronica F. Galindez v. Zosima Susbilla-De Vera, A.M. No. P-13-3126, February 4, 2014.
Court Personnel; Grave Misconduct. An administrative case was filed against respondents who are
employees of the Court of Appeals for transacting with partylitigants with a pending case before
the Court of Appeals. The Supreme Court held that the court personnels act of soliciting or receiving

money from litigants constitutes grave misconduct. The sole act of receiving money from litigants,
whatever the reason may be, is antithesis to being a court employee. The Code of Conduct for Court
Personnel requires that court personnel avoid conflicts of interest in performing official duties. It
mandates that court personnel should not receive tips or other remunerations for assisting or
attending to parties engaged in transactions or involved in actions or proceedings with the judiciary.
Further, court personnel cannot take advantage of the vulnerability of partylitigants. In this case,
respondents were found guilty of grave misconduct and thus, dismissed from service with forfeiture of
retirement benefits and perpetual disqualification from holding public office in any branch or
instrumentality of the government, including governmentowned or controlled corporations. Anacleto
O. Villahermosa, Sr., et al. v. Victor Sacia, Executive Assistant IV and Efren R. Rivamonte, etc., A.M.
No. CA-14-28-P, February 11, 2014.
Judge; Notarization; Prohibition. An administrative complaint was filed against Judge Rojo for
notarizing affidavits of cohabitation of parties whose marriage he solemnized, in violation of Circular
No. 190 dated February 26, 1990. Circular No. 190 allows municipal trial court judges to act as
notaries public ex officio and notarize documents only if connected with their official functions and
duties.
The Supreme Court held Judge Rojo guilty of violating the New Code of Judicial Conduct and Circular
No. 190, and of gross ignorance of the law. Judge Rojo notarized affidavits of cohabitation, which
were documents not connected with the exercise of his official functions and duties as solemnizing
officer. He also notarized affidavits of cohabitation without certifying that lawyers or notaries public
were lacking in his courts territorial jurisdiction. As a solemnizing officer, the judges only duty
involving the affidavit of cohabitation is to examine whether the parties have indeed lived together
for at least five years without legal impediment to marry. The Guidelines does not state that the judge
can notarize the parties affidavit of cohabitation. Notarizing affidavits of cohabitation is inconsistent
with the duty to examine the parties requirements for marriage. If the solemnizing officer notarized
the affidavit of cohabitation, he cannot objectively examine and review the affidavits statements
before performing the marriage ceremony. Thus, Judge Rojo was suspended for six months from
office.Rex M. Tupal v. Judge Remegio V. Rojo, etc., A.M. No. MTJ-14-1842. February 24, 2014.

February 2014 Philippine Supreme Court Decisions on Criminal Law and Procedure
1. REVISED PENAL CODE
Aiding or abetting; Unsolicited Commercial Communications; Child Pornography. Aiding or abetting
has of course well-defined meaning and application in existing laws. When a person aids or abets
another in destroying a forest, smuggling merchandise into the country, or interfering in the peaceful
picketing of laborers, his action is essentially physical and so is susceptible to easy assessment as
criminal in character. These forms of aiding or abetting lend themselves to the tests of common sense
and human experience. If such means are adopted, self-inhibition borne of fear of what sinister
predicaments await internet users will suppress otherwise robust discussion of public issues.
Democracy will be threatened and with it, all liberties. What is more, as the petitioners point out,
formal crimes such as libel are not punishable unless consummated. In the absence of legislation
tracing the interaction of netizens and their level of responsibility such as in other countries, Section
5, in relation to Section 4(c)(4) on Libel, Section 4(c)(3) on Unsolicited Commercial Communications,
and Section 4(c)(2) on Child Pornography, cannot stand scrutiny. Jose Jesus M. Disini Jr., et al v. The
Secretary of Justice, et al, G.R. No. 203335, February 11, 2014.
Conspiracy; direct proof. While direct proof is not essential to establish conspiracy as it may be
inferred from the collective acts of the accused before, during and after the commission of the crime
which point to a joint purpose, design, concerted action, and community of interests, records are,
however, bereft of any showing as to how the particular acts of petitioners figured into the common
design of taking out the subject volume and inserting the falsified documents therein. It would be a
stretch to conclude that the act of Castro of inviting Atibula to Atienzas party, without any other proof
of Castros participation, was instrumental or, at the very least, reasonably connected to Atienza and
his own alleged participation in the above-stated crimes. Hence, the prosecutions theory of
conspiracy does not deserve any merit. Ricardo L. Atienza and Alfredo A. Castro v. People of the
Philippines, G.R. No. 188694, February 12, 2014.
Conspiracy; existence of conspiracy. A conspiracy exists when two or more persons come to an
agreement concerning the commission of a felony and decide to commit it. To determine conspiracy,
there must be a common design to commit a felony. People of the Philippines v. Javier Morilla y
Avellano,G.R. No. 189833, February 5, 2014.

Conspiracy; totality of the factual circumstances doctrine. In conspiracy, it need not be shown that
the parties actually came together and agreed in express terms to enter into and pursue a common
design. The assent of the minds may be and, from the secrecy of the crime, usually inferred from
proof of facts and circumstances which, taken together, indicate that they are parts of some complete
whole. In this case, the totality of the factual circumstances leads to a conclusion that Morilla
conspired with Mayor Mitra in a common desire to transport the dangerous drugs. People of the
Philippines v. Javier Morilla y Avellano, G.R. No. 189833, February 5, 2014.
Consummated homicide; elements. The crime of homicide is committed when: (1) a person is killed;
(2) the accused killed that person without any justifying circumstance; (3) the accused had the
intention to kill, which is presumed; and (4) the killing was not attended by any of the qualifying
circumstances of murder, or by that of parricide or infanticide. Rodolfo Guevarra and Joey Guevarra v.
People of the Philippines, G.R. No. 170462, February 5, 2014.
Cyberlibel; only the author of the libelous statement or article penalized. Cyberlibel is actually not a
new crime since Article 353, in relation to Article 355 of the Penal Code, already punishes it. In effect,
Section 4(c)(4) of R.A. 10175 or the Cybercrime Prevention Act of 2012, merely affirms that online
defamation constitutes similar means for committing libel. But the Supreme Courts acquiescence
goes only insofar as the cybercrime law penalizes the author of the libelous statement or article.
Cyberlibel brings with it certain intricacies, unheard of when the penal code provisions on libel were
enacted. The culture associated with internet media is distinct from that of print. The internet is
characterized as encouraging a freewheeling, anything goes writing style. In a sense, they are a world
apart in terms of quickness of the readers reaction to defamatory statements posted in cyberspace,
facilitated by one-click reply options offered by the networking site as well as by the speed with which
such reactions are disseminated down the line to other internet users. Jose Jesus M. Disini Jr., et al v.
The Secretary of Justice, et al, G.R. No. 203335, February 11, 2014.
Damages. The Supreme Court (SC) noted that the trial court and the Court of Appeals did not award
actual damages. In lieu thereof, the SC awarded temperate damages in the amount of P25,000.00, as
it cannot be denied that the heirs of the victim suffered pecuniary loss although the exact amount
was not proved. This award is adjudicated so that a right which has been violated may be recognized
or vindicated, and not for the purpose of indemnification. In addition, all damages awarded shall earn
interest at the rate of 6% per annum from date of finality of the judgment until fully paid. People of
the Philippines v. Wilfredo Gunda Alias Fred, G.R. No. 195525, February 5, 2014.
Frustrated homicide; elements. The crime of frustrated homicide is committed when: (1) an accused
intended to kill his victim, as manifested by his use of a deadly weapon in his assault; (2) the victim
sustained fatal or mortal wound/s but did not die because of timely medical assistance; and (3) none
of the qualifying circumstance for murder under Article 248 of the Revised Penal Code is
present.Rodolfo Guevarra and Joey Guevarra v. People of the Philippines, G.R. No. 170462, February
5, 2014.
Intent to kill. The petitioners intent to kill was clearly established by the nature and number of
wounds sustained by their victims. Evidence to prove intent to kill in crimes against persons may
consist, among other things, of the means used by the malefactors; the conduct of the malefactors
before, at the time of, or immediately after the killing of the victim; and the nature, location and
number of wounds sustained by the victim. Rodolfo Guevarra and Joey Guevarra v. People of the
Philippines, G.R. No. 170462, February 5, 2014.
Libel; elements. The elements of libel are: (a) the allegation of a discreditable act or condition
concerning another; (b) publication of the charge; (c) identity of the person defamed; and (d)
existence of malice. There is actual malice or malice in fact when the offender makes the
defamatory statement with the knowledge that it is false or with reckless disregard of whether it was
false or not. The reckless disregard standard used here requires a high degree of awareness of
probable falsity. There must be sufficient evidence to permit the conclusion that the accused in fact
entertained serious doubts as to the truth of the statement he published. Gross or even extreme
negligence is not sufficient to establish actual malice. Jose Jesus M. Disini Jr., et al v. The Secretary of
Justice, et al, G.R. No. 203335, February 11, 2014.
Murder; penalty. Under Article 248 of the Revised Penal Code, the penalty for murder is reclusion
perpetua to death. There being no other aggravating circumstance other than the qualifying
circumstance of treachery, the Court of Appeals correctly held that the proper imposable penalty
isreclusion perpetua, the lower of the two indivisible penalties. It must be emphasized, however, that
appellant is not eligible for parole pursuant to Section 3 of R.A. 9346 which states that persons
convicted of offenses punished with reclusion perpetua, or whose sentence will be reduced
to reclusion perpetua by reason of this Act, shall not be eligible for parole under Act No. 4180,
otherwise known as the Indeterminate Sentence Law, as amended. People of the Philippines v.
Wilfredo Gunda Alias Fred,G.R. No. 195525, February 5, 2014.

Political offense doctrine; concept. Under the political offense doctrine, common crimes, perpetrated
in furtherance of a political offense, are divested of their character as common offenses and assume
the political complexion of the main crime of which they are mere ingredients, and, consequently,
cannot be punished separately from the principal offense, or complexed with the same, to justify the
imposition of a graver penalty. Any ordinary act assumes a different nature by being absorbed in the
crime of rebellion. Thus, when a killing is committed in furtherance of rebellion, the killing is not
homicide or murder. Rather, the killing assumes the political complexion of rebellion as its mere
ingredient and must be prosecuted and punished as rebellion alone. Saturnino C. Ocampo v. Hon.
Ephrem S. Abando, et al, G.R. No. 176830, February 11, 2014.
Qualifying circumstance; treachery. There is treachery when the offender commits a crime against the
person, employing means, methods or forms in the execution thereof which tend directly and
specially to insure its execution, without risk to himself arising from the defense which the offended
party might make. People of the Philippines v. Wilfredo Gunda Alias Fred, G.R. No. 195525,
February 5, 2014.
Rape; conviction solely on the testimony of the victim. Appellant questions the weighty trust placed
by the trial court on the singular and uncorroborated testimony of AAA as the basis for his conviction.
On this point, the Supreme Court reminded appellant that it is a fundamental principle in
jurisprudence involving rape that the accused may be convicted based solely on the testimony of the
victim, provided that such testimony is credible, natural, convincing and consistent with human
nature and the normal course of things. People of the Philippines v. Mervin Gahi, G.R. No. 202976,
February 19, 2014.
Rape; conduct of the victim immediately following the alleged sexual assault. The conduct of the
victim immediately following the alleged sexual assault is of utmost importance in establishing the
truth or falsity of the charge of rape. In the case at bar, the actuations of AAA after the alleged rape is
totally uncharacteristic of one who has been raped. It is contrary to normal human behavior for AAA
to willingly go with her abusers mother, and worse, to live with her abusers entire family in one roof
for eight (8) days sans any attempt to escape. It goes against the grain of human experience for a
woman who has been robbed of her honor and chastity not to seize an opportunity to escape from the
clutches of her malefactor. People of the Philippines v. Felimon Patentes y Zamora, G.R. No. 190178,
February 12, 2014.
Rape; one count for each separate act of sexual assault. The appellant, citing People v. Aaron, insists
that he cannot be convicted of three (3) counts of rape despite the three (3) penetrations because he
was motivated by a single criminal intent. However, it appears from the facts that the appellant thrice
succeeded in inserting his penis into the private part of AAA. The three (3) penetrations occurred one
after the other at an interval of five (5) minutes wherein the appellant would rest after satiating his
lust upon his victim and, after he has regained his strength, he would again rape AAA. Hence, it can
be clearly inferredfrom the foregoing that when the appellant decided to commit those separate and
distinct acts of sexual assault upon AAA, he was not motivated by a single impulse, but rather by
several criminal intent. Hence, his conviction for three (3) counts of rape is indubitable. The three
insertions into AAA were in satiation of successive but distinct criminal carnality. Therefore, the
appellants conviction for three counts of rape is proper. People of the Philippines v. Manolito Lucena
y Velasquez, G.R. No. 190632, February 26, 2014.
Rape; credibility of victims testimony. It is jurisprudentially settled that when a woman says she has
been raped, she says in effect all that is necessary to show that she has been raped and her
testimony alone is sufficient if it satisfies the exacting standard of credibility needed to convict the
accused. Thus, in this jurisdiction, the fate of the accused in a rape case, ultimately and oftentimes,
hinges on the credibility of the victims testimony. People of the Philippines v. Mervin Gahi, G.R. No.
202976, February 19, 2014.
Rape; damages. Civil indemnity, which is mandatory in a finding of rape is distinct from and should
not be denominated as moral damages which are based on different jural foundations and assessed
by the court in the exercise of sound discretion. The award of moral damages, on the other hand, is
automatically granted in rape cases without need of further proof other than the commission of the
crime because it is assumed that a rape victim has actually suffered moral injuries entitling her to
such award. In addition, the award of exemplary damages is justified under Article 2230 of the Civil
Code if there is an aggravating circumstance, whether ordinary or qualifying. In this case, since the
qualifying circumstance of the use of a deadly weapon was present in the commission of the
crime. People of the Philippines v. Manolito Lucena y Velasquez, G.R. No. 190632, February 26, 2014.
Rape; elements. The elements of rape (under paragraph 1, subparagraph a of Article 266-A) are as
follows: (1) that the offender is a man; (2) that the offender had carnal knowledge of a woman; and
(3) that such act is accomplished by using force, (threat) or intimidation. People of the Philippines v.
Aurelio Jastiva, G.R. No. 199268, February 12, 2014.

Rape; elements. The elements necessary to sustain a conviction for rape are: (1) the accused had
carnal knowledge of the victim; and (2) said act was accomplished (a) through the use of force or
intimidation, or (b) when the victim is deprived of reason or otherwise unconscious, or (c) when the
victim is under 12 years of age or is demented. People of the Philippines v. Felimon Patentes y
Zamora,G.R. No. 190178, February 12, 2014.
Rape; impregnation not an element of rape. With regard to appellants first point, the Supreme Court
(SC) agreed with the statement made by the Court of Appeals that it is not absurd nor contrary to
human experience that AAA gave birth ten (10) months after the alleged sexual assault as there may
be cases of long gestations. In any event, SC dismissed appellants contention as immaterial to the
case at bar because jurisprudence reveals that impregnation is not an element of rape. It is wellentrenched in case law that the rape victims pregnancy and resultant childbirth are irrelevant in
determining whether or not she was raped. Pregnancy is not an essential element of the crime of
rape. Whether the child which the rape victim bore was fathered by the accused, or by some
unknown individual, is of no moment. What is important and decisive is that the accused had carnal
knowledge of the victim against the latters will or without her consent, and such fact was testified to
by the victim in a truthful manner. People of the Philippines v. Mervin Gahi, G.R. No. 202976, February
19, 2014.
Rape; force or intimidation need not be irresistible in rape. The force and violence required in rape
cases is relative and need not be overpowering or irresistible when applied. For rape to exist, it is not
necessary that the force or intimidation be so great or be of such character as could not be resisted
it is only necessary that the force or intimidationbe sufficient to consummate the purpose which the
accused had in mind. Further, it should be viewed from the perception and judgment of the victim at
the time of the commission of the crime. What is vital is that the force or intimidation be of such
degree as to cow the unprotected and vulnerable victim into submission. Force is sufficient if it
produces fear in the victim, such as when the latter is threatened with death. People of the
Philippines v. Manolito Lucena y Velasquez, G.R. No. 190632, February 26, 2014.
Rape; inconsistencies in the victims testimony. Anent the inconsistent statements made by AAA in
her testimony which were pointed out by appellant, the Supreme Court agreed with the assessment
made by the Court of Appeals that these are but minor discrepancies that do little to affect the
central issue of rape which is involved in this case. Instead of diminishing AAAs credibility, such
variance on minor details has the net effect of bolstering the truthfulness of AAAs accusations. A few
discrepancies and inconsistencies in the testimonies of witnesses referring to minor details and not in
actuality touching upon the central fact of the crime do not impair the credibility of the witnesses
because they discount the possibility of their being rehearsed testimony. People of the Philippines v.
Mervin Gahi, G.R. No. 202976, February 19, 2014.
Rape; penalty. The second paragraph of Art. 266-B of the Revised Penal Code, as amended, provides
that [w]henever the rape is committed with the use of a deadly weapon x x x the penalty shall
bereclusion perpetua to death. As it was properly alleged and proved that the appellant used a gun
in order to consummate his evil desires, thus, both lower courts correctly imposed upon him the
penalty of reclusion perpetua for each count of rape. People of the Philippines v. Manolito Lucena y
Velasquez, G.R. No. 190632, February 26, 2014.
Rape; physical evidence. Absence of external signs or physical injuries does not negate the
commission of rape since proof of injuries is not an essential element of the crime. And, it is also a
precept that physical evidence is of the highest order and speaks more eloquently than all witnesses
put together. In the case at bar, the prosecution failed to present any scintilla of proof to support its
claim. In fact, contrary to the prosecutions claim that AAA was dragged, tied, mauled, slapped and
boxed, the medical certificate revealed no telltale sign of the prosecutions allegations. It has to be
noted that the medical examination was conducted the day after AAAs supposed escape from
appellant. People of the Philippines v. Felimon Patentes y Zamora, G.R. No. 190178, February 12,
2014.
Rape; physical resistance not an essential element of rape. It must be borne in mind that when a rape
victim becomes paralyzed with fear, she cannot be expected to think and act coherently. Further, as
has been consistently held by this Court, physical resistance is not an essential element of rape and
need not be established when intimidation is exercised upon the victim, and, the latter submits
herself, against her will, to the rapists embrace because of fear for her life and personal safety. The
victims failure to shout or offer tenacious resistance did not make voluntary her submission to the
criminal acts of her aggressor. It bears stressing that not every rape victim can be expected to act
with reason or in conformity with the usual expectations of everyone. The workings of a human mind
placed under emotional stress are unpredictable; people react differently. People of the Philippines v.
Manolito Lucena y Velasquez, G.R. No. 190632, February 26, 2014.
Rape; sweetheart theory. For the sweetheart theory to be believed when invoked by the accused,
convincing evidence to prove the existence of the supposed relationship must be presented by the

proponent of the theory. For the [sweetheart] theory to prosper, the existence of the supposed
relationship must be proven by convincing substantial evidence. Failure to adduce such evidence
renders his claim to be self-serving and of no probative value. For the satisfaction of the Court, there
should be a corroboration by their common friends or, if none, a substantiation by tokens of such a
relationship such as love letters, gifts, pictures and the like. In the present case, although it is a
person other than the accused who is claiming to be the victims sweetheart and the father of her
child, such an assertion must nonetheless be believably demonstrated by the evidence. The defense
failed to discharge the burden of proving that AAA and Jackie Gucela had any kind of romantic or
sexual relationship which resulted in AAAs pregnancy. People of the Philippines v. Mervin Gahi, G.R.
No. 202976, February 19, 2014.
Rape; three guiding principles in rape prosecutions. The three guiding principles in rape prosecutions
are as follows: (1) an accusation of rape is easy to make, and difficult to prove, but it is even more
difficult to disprove; (2) bearing in mind the intrinsic nature of the crime, the testimony of the
complainant must be scrutinized with utmost care and caution; and (3) the evidence of the
prosecution must stand or fall on its own merits; and cannot draw strength from the weakness of the
defense. So, when a woman says that she has been raped, she says in effect all that is necessary to
show that the crime of rape was committed. In a long line of cases, the Supreme Court has held that
if the testimony of the rape victim is accurate and credible, a conviction for rape may issue upon the
sole basis of the victims testimony. This is because no decent and sensible woman will publicly admit
to being raped and, thus, run the risk of public contempt unless she is, in fact, a rape victim. People
of the Philippines v. Aurelio Jastiva, G.R. No. 199268, February 12, 2014.
Self-defense; elements. By invoking self-defense, the petitioners, in effect, admitted to the
commission of the acts for which they were charged, albeit under circumstances that, if proven,
would have exculpated them. With this admission, the burden of proof shifted to the petitioners to
show that the killing and frustrated killing of David and Erwin, respectively, were attended by the
following circumstances: (1) unlawful aggression on the part of the victims; (2) reasonable necessity
of the means employed to prevent or repel such aggression; and (3) lack of sufficient provocation on
the part of the persons resorting to self-defense. Of all the burdens the petitioners carried, the most
important of all is the element of unlawful aggression. Unlawful aggression is an actual physical
assault, or at least a threat to inflict real imminent injury, upon a person. The element of unlawful
aggression must be proven first in order for self-defense to be successfully pleaded. There can be no
self-defense, whether complete or incomplete, unless the victim had committed unlawful aggression
against the person who resorted to self-defense. Rodolfo Guevarra and Joey Guevarra v. People of the
Philippines,G.R. No. 170462, February 5, 2014.
2. SPECIAL PENAL LAWS
Dangerous Drugs Act; chain of custody rule. There are links that must be established in the chain of
custody in a buybust situation, namely: first, the seizure and marking, if practicable, of the illegal
drug recovered from the accused by the apprehending officer; second, the turnover of the illegal drug
seized by the apprehending officer to the investigating officer; third, the turnover by the investigating
officer of the illegal drug to the forensic chemist for laboratory examination; and, fourth, the turnover
and submission of the marked illegal drug seized from the forensic chemist to the court. In this case,
the prosecution established clearly the integrity and evidentiary value of the
confiscated shabu. People of the Philippines v. Glenn Salvador y Balverde, et al, G.R. No. 190621,
February 10, 2014.
Dangerous Drugs Act; chain of custody rule; marking. Appellants contention that the marking of the
seized sachets of shabu should have been made in his presence while at the scene of the crime
instead of in the police station fails to impress. It is clear from the earlier cited Sec. 21(a) of the
Implementing Rules and Regulations of R.A. 9165 that in a buy-bust situation, the marking of the
dangerous drug may be done in the presence of the violator in the nearest police station or the
nearest office of the apprehending team. Appellant should not confuse buy-bust situation from search
and seizure conducted by virtue of a court-issued warrant. It is in the latter case that physical
inventory (which includes the marking) is made at the place where the search warrant is served.
Nonetheless, non-compliance with the requirements under justifiable grounds, as long as the integrity
and the evidentiary value of the seized items are properly preserved by the apprehending
officer/team, shall not render void and invalid such seizures of and custody over said items. People of
the Philippines v. Glenn Salvador y Balverde, et al, G.R. No. 190621, February 10, 2014.
Dangerous Drugs Act; chain of custody rule; when substantial compliance is allowed. The failure of
the prosecution to show that the police officers conducted the required physical inventory and
photographed the objects confiscated does not ipso facto result in the unlawful arrest of the accused
or render inadmissible in evidence the items seized. This is due to the proviso added in the
implementing rules stating that it must still be shown that there exists justifiable grounds and proof
that the integrity and evidentiary value of the evidence have not been preserved. What is crucial is
that the integrity and evidentiary value of the seized items are preserved for they will be used in the

determination of the guilt or innocence of the accused. People of the Philippines v. Glenn Salvador y
Balverde, et al, G.R. No. 190621, February 10, 2014.
Dangerous Drugs Act; drug den. A drug den is a lair or hideaway where prohibited or regulated drugs
are used in any form or are found. Its existence may be proved not only by direct evidence but may
also be established by proof of facts and circumstances, including evidence of the general reputation
of the house, or its general reputation among police officers. In this case, this fact was proven by
none other than the testimony of PO2 Martinez, the poseur-buyer, who after buying the shabu had
told the appellant that he wanted to sniff the same to which the latter responded by requiring the
former to pay a rental fee of P10.00. The appellant, thereafter, allowed PO2 Martinez to enter his
house and directed him to proceed to one of the rooms located at the right side of the sala. Upon
entering the said room, PO2 Martinez saw three other persons already sniffing shabu. People of the
Philippines v. Vicente Rom, G.R. No. 198452, February 19, 2014.
Dangerous Drugs Act; illegal possession of drugs; elements. With regard to the offense of illegal
possession of dangerous drugs, like shabu, the following elements must be proven: (1) the accused is
in possession of an item or object that is identified to be a prohibited drug; (2) such possession is not
authorized by law; and (3) the accused freely and consciously possesses the said drug. People of the
Philippines v. Vicente Rom, G.R. No. 198452, February 19, 2014.
Dangerous Drugs Act; illegal sale of drugs; elements. In a successful prosecution for illegal sale of
dangerous drugs, like shabu, the following elements must be established: (1) the identity of the buyer
and the seller, the object, and the consideration; and (2) the delivery of the thing sold and the
payment therefor. What is material in a prosecution for illegal sale of dangerous drugs is the proof
that the transaction or sale actually took place, coupled with the presentation in court of the corpus
delicti or the illicit drug in evidence. The commission of the offense of illegal sale of dangerous drugs
merely requires the consummation of the selling transaction, which happens the moment the
exchange of money and drugs between the buyer and the seller takes place. People of the
Philippines v. Glenn Salvador y Balverde, et al, G.R. No. 190621. February 10, 2014.
Dangerous Drugs Act; illegal sale of drugs; chain of custody. To secure conviction for illegal sale of
dangerous drugs, the identity of the prohibited drug seized from the accused must be proved with
moral certainty. The prosecution must establish with such measure of certitude that the substance
bought or seized during the buy-bust operation is the same substance offered as evidence in court.
Proof of the chain of custody from the time of seizure to the time such evidence is presented in court
ensures the absence of doubt concerning the integrity of such vital evidence. This requires as a
minimum that the police mark the seized item (1) in the presence of the apprehended violator and (2)
immediately upon confiscation. People of the Philippines v. Merlita Palomares y Costuna, G.R. No.
200915, February 12, 2014.
Dangerous Drugs Act; illegal sale of drugs; chain of custody. The Supreme Court has ruled that
immediate marking could be made at the nearest police station or office of the apprehending team.
Here, however, the evidence is unclear as to where the responsible police officer marked the seized
substance and whether it was done in Merlitas presence. In fact, it is also not clear from the evidence
which police officer did the marking since P02 Mallari and P02 Flores gave conflicting testimonies on
this point.This uncertainty concerning a vital element of the crime warrants overturning the judgment
of conviction. Besides, neither P02 Mallari nor P02 Flores testified that they conducted a physical
inventory and took photos of the article that was seized from Merlita. In fact, their joint affidavit of
arrest made no mention of any inventory taking or photographing of the same. And they did not
bother at all to offer some justification for the omission. People of the Philippines v. Merlita Palomares
y Costuna, G.R. No. 200915, February 12, 2014.
Dangerous Drugs Act; illegal sale of drugs; drug pushers sell to any prospective customer, in any
place and at any time. The Supreme Court (SC) had occasion to show the unacceptability of the
contention of the appellant that the testimony of the poseur-buyer was absurd, illogical, contrary to
reason and highly incredible for no person who is engaged in an illegal transaction would leave the
door of the house open after such transaction. In case after case, SC observed that drug pushers sell
their prohibited articles to any prospective customer, be he a stranger or not, in private as well as in
public places, even in the daytime. Indeed, the drug pushers have become increasingly daring,
dangerous and, worse, openlydefiant of the law. Hence, what matters is not the existing familiarity
between the buyer and the seller or the time and venue of the sale, but the fact of agreement and
the acts constituting the sale and the delivery of the prohibited drugs. People of the Philippines v.
Vicente Rom,G.R. No. 198452, February 19, 2014.
Dangerous Drugs Act; illegal transportation of methamphetamine hydrochloride; penalty. Originally,
under Section 15 of R.A. 6425, the penalty for illegal transportation of methamphetamine
hydrochloridewas imprisonment ranging from six years and one day to twelve years and a fine
ranging from six thousand to twelve thousand pesos. Pursuant to Presidential Decree No. 1683, the
penalty was amended to life imprisonment to death and a fine ranging from twenty to thirty thousand

pesos. The penalty was further amended in Republic Act No. 7659, where the penalty was changed
to reclusion perpetua to death and a fine ranging from five hundred thousand pesos to ten million
pesos. People of the Philippines v. Javier Morilla y Avellano, G.R. No. 189833, February 5, 2014.
Dangerous Drugs Act; possession of drugs is prima facie evidence of knowledge or animus
possidendi. Definitely, the records do not show that the appellant had the legal authority to possess
the four heat-sealed plastic packets of shabu. Settled is the rule that possession of dangerous drugs
constitutesprima facie evidence of knowledge or animus possidendi sufficient to convict an accused
in the absence of a satisfactory explanation of such possession. As such, the burden of evidence is
shifted to the accused to explain the absence of knowledge or animus possidendi, which the appellant
in this case miserably failed to do. People of the Philippines v. Vicente Rom, G.R. No. 198452,
February 19, 2014.
Dangerous Drugs Act; transport defined. Morilla and Mayor Mitra were caught in flagrante delicto in
the act of transporting the dangerous drugs on board their vehicles. Transport as used under the
Dangerous Drugs Act means to carry or convey from one place to another. It was well established
during trial that Morilla was driving the ambulance following the lead of Mayor Mitra, who was driving
a Starex van going to Manila. The very act of transporting methamphetamine hydrochloride is malum
prohibitum since it is punished as an offense under a special law. The fact of transportation of the
sacks containing dangerous drugs need not be accompanied by proof of criminal intent, motive or
knowledge. People of the Philippines v. Javier Morilla y Avellano, G.R. No. 189833, February 5, 2014.
3. CRIMINAL PROCEDURE
Alibi. Alibi is an inherently weak defense because it is easy to fabricate and highly unreliable. For the
defense of alibi to prosper, the appellant must prove that he was somewhere else when the offense
was committed and that he was so far away that it was not possible for him to have been physically
present at the place of the crime or at its immediate vicinity at the time of its commission. In the case
at bar, the testimony of defense witness Filomeno Suson made known to the trial court that the
distance between the scene of the crime and the copra kiln dryer where appellant claimed to have
been working the entire time during which the incidents of rape occurred can be traversed in less
than an hour. Thus, it was not physically impossible for appellant to be at the locus criminis on the
occasion of the rapes owing to the relatively short distance. People of the Philippines v. Mervin
Gahi, G.R. No. 202976, February 19, 2014.
Alibi; physical impossibility. Physical impossibility involves the distance and the facility of access
between the crime scene and the location of the accused when the crime was committed; the
accused must demonstrate that he was so far away and could not have been physically present at
the crime scene and its immediate vicinity when the crime was committed. People of the Philippines
v. Aurelio Jastiva, G.R. No. 199268, February 12, 2014.
Alibi; when applicable as a defense. It has been held that for the defense of alibi to prosper, the
accused must prove the following: (i) that he was present at another place at the time of the
perpetration of the crime; and (ii) that it was physically impossible for him to be at the scene of the
crime during its commission. Here, appellant Jastiva utterly failed to satisfy the above-quoted
requirements. From the testimonies of the witnesses, it was shown that the distance between AAAs
farmhouse and appellant Jastivas house was only 150 meters, more or less. Certainly, 150 meters is
not too far as to preclude the presence of appellant Jastiva at the farmhouse of AAA. People of the
Philippines v. Aurelio Jastiva, G.R. No. 199268, February 12, 2014.
Circumstantial evidence; affidavit is hearsay unless affiant presented in court. Castros purported
possession and eventual return of Volume 266 was only premised upon the statement of one Nelson
de Castro (Nelson), i.e., the Sinumpaang Salaysay dated August 9, 1995, who averred that on May 18,
1995, at around 11:50 in the morning, Castro told him to pass by his office and there handed him a
bag which, as it turned out, contained the missing Volume 266. Nelson was not, however, presented
before the Regional Trial Court during trial, hence, was not subjected to any in-court examination. It is
settled that while affidavits may be considered as public documents if they are acknowledged before
a notary public (here, a public officer authorized to administer oaths), they are still classified as
hearsay evidence unless the affiants themselves are placed on the witness stand to testify thereon
and the adverse party is accorded the opportunity to cross-examine them. With the prosecutions
failure to present Nelson to affirm his statement that Castro caused the return of Volume 266, the
prosecutions evidence on the matter should be treated as hearsay and, thus, inadmissible to
establish the truth or falsity of the relevant claims. Consequently, there exists no sufficient
circumstantial evidence to prove Castros guilt. Ricardo L. Atienza and Alfredo A. Castro v. People of
the Philippines, G.R. No. 188694, February 12, 2014.
Circumstantial evidence; when sufficient for conviction. Circumstantial evidence consists of proof of
collateral facts and circumstances from which the main fact in issue may be inferred based on reason
and common experience. It is sufficient for conviction if: (a) there is more than one circumstance; (b)

the facts from which the inferences are derived are proven; and (c) the combination of all the
circumstances is such as to produce a conviction beyond reasonable doubt. To uphold a conviction
based on circumstantial evidence, it is essential that the circumstantial evidence presented must
constitute an unbroken chain which leads one to a fair and reasonable conclusion pointing to the
accused, to the exclusion of the others, as the guilty person. Stated differently, the test to determine
whether or not the circumstantial evidence on record is sufficient to convict the accused is that the
series of circumstances duly proven must be consistent with each other and that each and every
circumstance must be consistent with the accuseds guilt and inconsistent with his
innocence. Ricardo L. Atienza and Alfredo A. Castro v. People of the Philippines, G.R. No. 188694,
February 12, 2014.
Circumstantial evidence; discrepancy of accounts on the subject matter of the crimes charged. While
records show that Atienza was positively identified by Atibula as having attempted to bribe him to
take out Volume 260 of the CA Original Decisions from the Reporters Division, the fact is that the
alleged intercalation actually occurred in a different document, that is Volume 266. The discrepancy
of accounts on the very subject matter of the crimes charged dilutes the strength of the evidence
required to produce a conviction. At best, the bribery attempt may be deemed as a demonstration of
interest on the part of Atienza over said subject matter and in this regard, constitutes proof of motive.
However, it is well-established that mere proof of motive, no matter how strong, is not sufficient to
support a conviction, most especially if there is no other reliable evidence from which it may
reasonably be deduced that the accused was the malefactor. Ricardo L. Atienza and Alfredo A. Castro
v. People of the Philippines, G.R. No. 188694, February 12, 2014.
Denial; denial is a weak defense. Denial is an inherently weak defense and has always been viewed
upon with disfavor by the courts due to the ease with which it can be concocted. Inherently weak,
denial as a defense crumbles in the light of positive identification of the appellant, as in this case. The
defense of denial assumes significance only when the prosecutions evidence is such that it does not
prove guilt beyond reasonable doubt, which is not the case here. Verily, mere denial, unsubstantiated
by clear and convincing evidence, is negative self-serving evidence which cannot be given greater
evidentiary weight than the testimony of the prosecution witness who testified on affirmative
matters.People of the Philippines v. Vicente Rom, G.R. No. 198452, February 19, 2014.
Double jeopardy; elements. Double jeopardy only applies when: (1) a first jeopardy attached; (2) it
has been validly terminated; and (3) a second jeopardy is for the same offense as in the first. A first
jeopardy attaches only after the accused has been acquitted or convicted, or the case has been
dismissed or otherwise terminated without his express consent, by a competent court in a valid
indictment for which the accused has entered a valid plea during arraignment. Saturnino C. Ocampo
v. Hon. Ephrem S. Abando, et al, G.R. No. 176830, February 11, 2014.
Evidence; defense of denial versus positive identification. Denial cannot prevail against the positive
testimony of a prosecution witness. A defense of denial which is unsupported and unsubstantiated by
clear and convincing evidence becomes negative and self-serving, deserving no weight in law, and
cannot be given greater evidentiary value over convincing, straightforward and probable testimony
on affirmative matters. People of the Philippines v. Glenn Salvador y Balverde, et al, G.R. No. 190621,
February 10, 2014.
Evidence; defense of frame-up. Appellant cannot likewise avail of the defense of frame-up which is
viewed with disfavor since, like alibi, it can easily be concocted and is a common ploy in most
prosecutions for violations of the Dangerous Drugs Law. To substantiate this defense, the evidence
must be clear and convincing and should show that the buy-bust team was inspired by improper
motive or was not properly performing its duty. Here, there is no evidence that there was ill motive on
the part of the buy-bust team. In fact, appellant himself admitted that he did not know the police
officers prior to his arrest. There could therefore be no bad blood between him and the said police
officers. Moreover, there was no proof that the arresting officers improperly performed their duty in
arresting appellant and Parcon. People of the Philippines v. Glenn Salvador y Balverde, et al, G.R. No.
190621. February 10, 2014.
Evidence; fruit of the poisonous tree doctrine. The Constitution enshrines in the Bill of Rights the right
of the people to be secure in their persons, houses, papers and effects against unreasonable searches
and seizures of whatever nature and for any purpose. To give full protection to it, the Bill of Rights
also ordains the exclusionary principle that any evidence obtained in violation of said right is
inadmissible for any purpose in any proceeding. However, the interdiction against warrantless
searches and seizures is not absolute and that warrantless searches and seizures have long been
deemed permissible by jurisprudence in the following instances: (1) search of moving vehicles; (2)
seizure in plain view; (3) customs searches; (4) waiver or consented searches; (5) stop and frisk
situations (Terry search); and (6) search incidental to a lawful arrest. The last includes a valid
warrantless search and seizure pursuant to an equally warrantless arrest, for, while as a rule, an
arrest is considered legitimate if effected with a valid warrant of arrest, the Rules of Court recognizes
permissible warrantless arrest, to wit: (1) arrest in flagrante delicto; (2) arrest effected in hot pursuit;

and (3) arrest of escaped prisoners. People of the Philippines v. Vicente Rom, G.R. No. 198452,
February 19, 2014.
Evidence; testimony; momentary lapse in memory reinforces credibility of the witness. Appellants
claim that the testimony of PO2 Soriano does not deserve credence due to his failure to identify
and/or recall the markings he made on the subject specimen fails to convince. His failure to
immediately recall the markings on the specimens only show that he is an uncoached witness. Such
momentary lapse in memory does not detract from the credibility of his testimony as to the essential
details of the incident. It must also be considered that aside from the fact that police officers handle
numerous cases daily, he testified three years after appellants arrest. It is therefore understandable
that PO2 Soriano could no longer easily remember all the details of the incident. People of the
Philippines v. Glenn Salvador y Balverde, et al, G.R. No. 190621, February 10, 2014.
Evidence; testimony of the offended party in crimes against chastity. The testimony of the offended
party in crimes against chastity should not be received with precipitate credulity for the charge can
easily be concocted. Courts should be wary of giving undue credibility to a claim of rape, especially
where the sole evidence comes from an alleged victim whose charge is not corroborated and whose
conduct during and after the rape is open to conflicting interpretations. While judges ought to be
cognizant of the anguish and humiliation that a rape victim undergoes as she seeks justice, they
should equally bear in mind that their responsibility is to render justice based on the law. People of
the Philippines v. Felimon Patentes y Zamora, G.R. No. 190178, February 12, 2014.
Evidence; tests for determining the value of the testimony. The time-honored test in determining the
value of the testimony of a witness is its compatibility with human knowledge, observation and
common experience of man. Thus, whatever is repugnant to the standards of human knowledge,
observation and experience becomes incredible and must lie outside judicial cognizance. Indeed, it is
incompatible with human experience to keep a sex slave for eight (8) days in a house where the
abusers entire family, including the abusers minor nephews and nieces live. For several days that
AAA had been missing, which would have caused worry and anxiety among AAAs family members,
AAAs father, instead of reporting the matter to police authorities, went to appellants house to
discuss AAA and appellants marital plans on 7 December 1998. Clearly, this is contrary to human
logic and experience, and inconsistent with the prosecutions claim. People of the Philippines v.
Felimon Patentes y Zamora, G.R. No. 190178, February 12, 2014.
Factual findings of the Regional Trial Court, when affirmed by the Court of Appeals, entitled to great
weight and respect. Factual findings of the Regional Trial Court (RTC), when affirmed by the Court of
Appeals (CA), are entitled to great weight and respect and are deemed final and conclusive when
supported by the evidence on record. The Supreme Court (SC) found that both the RTC and the CA
fully considered the evidence presented by the prosecution and the defense, and they have
adequately explained the legal and evidentiary reasons in concluding that the petitioners are guilty of
the crimes of frustrated homicide and homicide. In the absence of any showing that the trial and
appellate courts overlooked certain facts and circumstances that could substantially affect the
outcome of the present case, SC upheld the rulings of the RTC and the CA which found the elements
of these crimes fully established during the trial. Rodolfo Guevarra and Joey Guevarra v. People of the
Philippines, G.R. No. 170462, February 5, 2014.
Factual findings of the trial court; trial courts assessment of credibility of witnesses. It is a
fundamental rule that findings of the trial court which are factual in nature and which involve the
credibility of witnesses are accorded with respect, more so, when no glaring errors, gross
misapprehension of facts, and speculative, arbitrary, and unsupported conclusions can be gathered
from such findings. The reason behind this rule is that the trial court is in a better position to decide
the credibility of witnesses having heard their testimonies and observed their deportment and
manner of testifying during the trial. The rule finds an even more stringent application where the trial
courts findings are sustained by the Court of Appeals. People of the Philippines v. Vicente Rom, G.R.
No. 198452, February 19, 2014.
Information; amendment or substitution. Section 14, Rule 110 of the Rules of Court provides that if it
appears at any time before judgment that a mistake has been made in charging the proper offense,
the court shall dismiss the original complaint or information upon the filing of a new one charging the
proper offense in accordance with Section 19, Rule 119, provided the accused shall not be placed in
double jeopardy. Thus, if it is shown that the proper charge against petitioners should have been
simple rebellion, the trial court shall dismiss the murder charges upon the filing of the Information for
simple rebellion, as long as petitioners would not be placed in double jeopardy. Saturnino C. Ocampo
v. Hon. Ephrem S. Abando, et al, G.R. No. 176830, February 11, 2014.
Information; defects in the Information should be raised in a motion to quash. Morilla primarily cites
the provision on Sec. 1(b), Rule 115 of the Rules on Criminal Procedure to substantiate his argument
that he should have been informed first of the nature and cause of the accusation against him. He
pointed out that the Information itself failed to state the word conspiracy, but was only inferred from

the words used in the Information. Even assuming that his assertion is correct, the issue of defect in
the information, at this point, is deemed to have been waived due to Morillas failure to assert it as a
ground in a motion to quash before entering his plea. Further, it must be noted that accused Morilla
participated and presented his defenses to contradict the allegation of conspiracy before the trial and
appellate courts. His failure or neglect to assert a right within a reasonable time warrants a
presumption that the party entitled to assert it either has abandoned it or declined to assert it. People
of the Philippines v. Javier Morilla y Avellano, G.R. No. 189833, February 5, 2014.
Jurisdiction; jurisdiction over falsification of public document cases. The Regional Trial Court did not
have jurisdiction to take cognizance of Criminal Case No. 01-197426 (i.e., the falsification case) since
Falsification of Public Document under Article 172(1) of the RPC, which is punishable by prision
correccional in its medium and maximum periods (or imprisonment for 2 years, 4 months and 1 day
to 6 years) and a fine of not more than P5,000.00, falls within the exclusive jurisdiction of the
Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts pursuant to Section
32(2) of B.P. 129, otherwise known as the Judiciary Reorganization Act of 1980, as amended by R.A.
7691. While petitioners raised this jurisdictional defect for the first time in the present petition, they
are not precluded from questioning the same. Indeed, jurisdiction over the subject matter is conferred
only by the Constitution or the law and cannot be acquired through a waiver or enlarged by the
omission of the parties or conferred by the acquiescence of the court. The rule is well-settled that lack
of jurisdiction over the subject matter may be raised at any stage of the proceedings. Hence,
questions of jurisdiction may be cognizable even if raised for the first time on appeal. Ricardo L.
Atienza and Alfredo A. Castro v. People of the Philippines, G.R. No. 188694, February 12, 2014.
Preliminary investigation. A preliminary investigation is not a casual affair. It is conducted to protect
the innocent from the embarrassment, expense and anxiety of a public trial. While the right to have a
preliminary investigation before trial is statutory rather than constitutional, it is a substantive right
and a component of due process in the administration of criminal justice. In the context of a
preliminary investigation, the right to due process of law entails the opportunity to be heard. It serves
to accord an opportunity for the presentation of the respondents side with regard to the accusation.
Afterwards, the investigating officer shall decide whether the allegations and defenses lead to a
reasonable belief that a crime has been committed, and that it was the respondent who committed it.
Otherwise, the investigating officer is bound to dismiss the complaint. Saturnino C. Ocampo v. Hon.
Ephrem S. Abando, et al, G.R. No. 176830, February 11, 2014.
Rule 45; questions of fact not reviewable in petitions for review. Petition for review under Rule 45
generally bars any question pertaining to the factual issues raised. The well-settled rule is that
questions of fact are not reviewable in petitions for review under Rule 45, subject only to certain
exceptions, among them, the lack of sufficient support in evidence of the trial courts judgment or the
appellate courts misapprehension of the adduced facts. The petitioners failed to convince the
Supreme Court that it should review the findings of fact in this case. Rodolfo Guevarra and Joey
Guevarra v. People of the Philippines, G.R. No. 170462, February 5, 2014.
Preliminary investigation; if respondent could not be subpoenaed. Section 3(d), Rule 112 of the Rules
of Court allows Prosecutor Vivero to resolve the complaint based on the evidence before him if a
respondent could not be subpoenaed. As long as efforts to reach a respondent were made, and he
was given an opportunity to present countervailing evidence, the preliminary investigation remains
valid. The rule was put in place in order to foil underhanded attempts of a respondent to delay the
prosecution of offenses. In this case, the Resolution stated that efforts were undertaken to serve
subpoenas on the named respondents at their last known addresses. This is sufficient for due process.
It was only because a majority of them could no longer be found at their last known addresses that
they were not served copies of the complaint and the attached documents or evidence. Saturnino C.
Ocampo v. Hon. Ephrem S. Abando, et al, G.R. No. 176830, February 11, 2014.
Warrants of arrest; definition of probable cause. Probable cause for the issuance of a warrant of arrest
has been defined as such facts and circumstances which would lead a reasonably discreet and
prudent man to believe that an offense has been committed by the person sought to be
arrested.Saturnino C. Ocampo v. Hon. Ephrem S. Abando, et al, G.R. No. 176830, February 11, 2014.
Warrants of arrest; determination of probable cause. Although the Constitution provides that probable
cause shall be determined by the judge after an examination under oath or an affirmation of the
complainant and the witnesses, the Supreme Court has ruled that a hearing is not necessary for the
determination thereof. In fact, the judges personal examination of the complainant and the witnesses
is not mandatory and indispensable for determining the aptness of issuing a warrant of arrest. It is
enough that the judge personally evaluates the prosecutors report and supporting documents
showing the existence of probable cause for the indictment and, on the basis thereof, issue a warrant
of arrest; or if, on the basis of his evaluation, he finds no probable cause, to disregard the
prosecutors resolution and require the submission of additional affidavits of witnesses to aid him in
determining its existence. Saturnino C. Ocampo v. Hon. Ephrem S. Abando, et al, G.R. No. 176830,
February 11, 2014.

February 2014 Philippine Supreme Court Decisions on Tax Law

Tax laws
National Internal Revenue Code; Doctrine of Exhaustion of Administrative Remedies. Taxpayer
submits that the requirement to exhaust the 12-day period under Section 112 (c) of the National
Internal Revenue Code prior to filing the judicial claim with the Court of Tax Appeals (CTA) is a
doctrine of exhaustion of administrative remedies and that the non-observance of the same merely
results in lack of cause of action which may be waived for failure to timely invoke the same. As the
Court opined in San Roque, a petition for review that is filed with the CTA without waiting for the 120day mandatory period renders the same void. A person committing a void act cannot claim or acquire
any right from such void act. Accordingly, taxpayers failure to comply with the 120-day mandatory
period renders its petition for review with the CTA void. It is a mere scrap of paper from which
taxpayer cannot derive or acquire any right notwithstanding the supposed failure on the part of the
Commissioner to raise the issue of non-compliance with the 120-day period in the proceedings before
the CTA First Division.Commissioner of Internal Revenue vs. Team Sual Corporation (Formerly Mirant
Sual Corporation), G.R. No. 194105. February 5, 2014
National Internal Revenue Code; excise tax; pacta sunt servanda; Section 135. Under the basic
international law principle of pacta sunt servanda, the state has the duty to fulfill its treaty obligations
in good faith. This entails harmonization of national legislation with treaty provisions. Section 135 (a)
of the National Internal Revenue Code embodies the countrys compliance with its undertakings
under the 1944 Chicago Convention on International Aviation (Chicago Convention), Article 24 (9) of
which has been interpreted to prohibit taxation of aircraft fuel consumed for international transport,
and various bilateral air service agreements not to impose excise tax on aviation fuel purchased by
international carriers from domestic manufacturers or suppliers. In the previous decision of the Court
in this case, the Court interpreted Section 135 (a) as prohibiting domestic manufacturer or producer
to pass on to international carriers the excise tax it had paid on petroleum products upon their
removal from the place of production. Thus, the Court found that there was no basis to refund the
excise taxes paid on petroleum products sold to tax-exempt international carriers as erroneously or
illegally paid tax. The Court maintains that Section 135 (a) prohibits the passing of the excise tax to
international carriers who buys petroleum products from local manufacturers/sellers such as the
respondent taxpayer. However, there is a need to reexamine the effect of denying the domestic
manufactures/sellers claim for refund of the excise taxes they already paid on petroleum products
sold to international carriers, and its serious implications on the Governments commitment to the
goals and objectives of the Chicago Convention. With the process of declining sales of aviation jet fuel
sales to international carriers on account of major domestic oil companies unwillingness to shoulder
the burden of excise tax, or of petroleum products being sold to said carriers by local manufacturers
or sellers at still high prices, the practice of tankering (i.e., carriers filling their aircraft as full as
possible whenever they landed outside a jurisdiction that imposes tax on fuel to avoid paying tax)
would not be discouraged. This does not augur well for the Philippines growing economy and the
booming tourism industry. Worse, the Government would be risking retaliatory action under several
bilateral agreements with various countries. Evidently, construction of the tax exemption provision in
question should give primary consideration to its broad implications on the countrys commitment
under international agreements. In view of the foregoing the Court held that respondent, as the
statutory taxpayer who is directly liable to pay the excise tax on its petroleum products is entitled to
a refund or credit of the excise taxes it paid for petroleum products sold to international carriers, the
latter having been granted exemption from the payment of said excise tax under Section 135 (a) of
the NIRC. Commissioner of Internal Revenue v. Pilipinas Shell Petroleum Corporation, G.R. No.
188497. February 19, 2014.
National Internal Revenue Code; value-added tax; refund of input value-added tax; prescriptive period
for judicial and administrative claims. Section 112([C]) of the National Internal Revenue Code (NIRC)
clearly provides that the Commissioner of Internal Revenue (CIR) has 120 days, from the date of the
submission of the complete documents in support of the application [for tax refund/credit], within
which to grant or deny the claim. In case of full or partial denial by the CIR, the taxpayers recourse is
to file an appeal before the CTA within 30 days from receipt of the decision of the CIR. However, if
after the 120day period the CIR fails to act on the application for tax refund/credit, the remedy of the
taxpayer is to appeal the inaction of the CIR to CTA within 30 days. In this case, the taxpayer filed an
administrative claim for refund with the Bureau of Internal Revenue on March 11, 2002 and the
petition for review with the CTA on April 1, 2002. As held by the Court in Commissioner of Internal
Revenue v Aichi Forging Company of Asia, Inc., the phrase within two years apply for the issuance
of a tax credit certificate or refund refers to applications for refund or credit filed with the CIR and
not to appeals made to the CTA.
Moreover, in Commissioner of Internal Revenue v. San Roque Power Corporation, the Court
emphasized that the 120day period that is given to the CIR within which to decide claims for

refund/tax credit of unutilized input value-added tax is mandatory and jurisdictional. The Court
categorically held that the taxpayerclaimant must wait for the 120day period to lapse, should there
be no decision fully or partially denying the claim, before a petition for review may be filed with the
CTA. Otherwise, the petition would be rendered premature and without a cause of action.
Consequently, the CTA does not have the jurisdiction to take cognizance of a petition for review filed
by the taxpayerclaimant should there be no decision by the CIR on the claim for refund/tax credit or
the 120day period had not yet lapsed. Commissioner of Internal Revenue vs. Team Sual Corporation
(Formerly Mirant Sual Corporation), G.R. No. 194105. February 5, 2014
Local Government Code; taxes vs. fees. Section 5, Article X of the 1987 Constitution provides that
[e]ach local government unit shall have the power to create its own sources of revenues and to levy
taxes, fees, and charges subject to such guidelines and limitations as the Congress may provide,
consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue
exclusively to the local government. Consistent with this constitutional mandate, the Local
Government Code (LGC) grants the taxing powers to each local government unit. Specifically, Section
142 of the LGC grants municipalities the power to levy taxes, fees, and charges not otherwise levied
by provinces. Section 143 of the LGC provides for the scale of taxes on business that may be imposed
by municipalities while Section 147 of the same law provides for the fees and charges that may be
imposed by municipalities on business and occupation. The LGC defines the term charges as
referring to pecuniary liability, as rents or fees against persons or property, while the term fee
means a charge fixed by law or ordinance for the regulation or inspection of a business or activity.
In this case, the Municipality issued Ordinance No. 18, which is entitled An Ordinance Regulating the
Establishment of Special Projects, to regulate the placing, stringing, attaching, installing, repair and
construction of all gas mains, electric, telegraph and telephone wires, conduits, meters and other
apparatus, and provide for the correction, condemnation or removal of the same when found to be
dangerous, defective or otherwise hazardous to the welfare of the inhabitant[s]. It was also
envisioned to address the foreseen environmental depredation to be brought about by these
special projects to the Municipality. Pursuant to these objectives, the Municipality imposed fees on
various structures, which included telecommunications towers. As clearly stated in its whereas
clauses, the primary purpose of Ordinance No. 18 is to regulate the placing, stringing, attaching,
installing, repair and construction of all gas mains, electric, telegraph and telephone wires, conduits,
meters and other apparatus listed therein, which included petitioners telecommunications tower.
Clearly, the purpose of the assailed Ordinance is to regulate the enumerated activities particularly
related to the construction and maintenance of various structures. The fees in Ordinance No. 18 are
not impositions on the building or structure itself; rather, they are impositions on the activity subject
of government regulation, such as the installation and construction of the structures. Since the main
purpose of Ordinance No. 18 is to regulate certain construction activities of the identified special
projects, which included cell sites or telecommunications towers, the fees imposed in Ordinance No.
18 are primarily regulatory in nature, and not primarily revenueraising. While the fees may
contribute to the revenues of the Municipality, this effect is merely incidental. Thus, the fees imposed
in Ordinance No. 18 are not taxes. Considering that the fees in Ordinance No. 18 are not in the nature
of local taxes, and petitioner is questioning the constitutionality of the same, the CTA correctly
dismissed the petition for lack of jurisdiction. Smart Communications, Inc. v. Municipality of Malvar,
Batangas, G.R. No. 20442. February 18, 2014
Tax Procedure
Rules of Court; Rule 65 and Rule 45. Petitioners availed of the wrong remedy when they filed the
special civil action for certiorari under Rule 65 of the Rules of Court with the Court in assailing the
resolutions of the Court of Appeals (CA) which dismissed their petition filed with the said court and
their motion for reconsideration of such dismissal. There is no dispute that the assailed resolutions of
the CA are in the nature of a final order as they disposed of the petition completely. It is settled that in
cases where an assailed judgment or order is considered final, the remedy of the aggrieved part is
appeal. Hence, in the instant case, petitioner should have filed a petition for review
on certiorari under Rule 45, which is a continuation of the appellate process over the original case. A
special civil action forcertiorari under Rule 65 is an original or independent action based on grave
abuse of discretion amounting to lack of excess of jurisdiction and it will lie only if there is no appeal
or any other plain, speedy and adequate remedy in the ordinary course of law. It cannot be a
substitute for a lost appeal. In accordance with the liberal spirit pervading the Rules of Court and in
the interest of substantial justice, the Court has treated a petition for certiorari as a petition for review
on certiorari, particularly (1) if the petition for certiorari was filed within the reglementary period
within which to file a petition for review on certiorari, (2) when errors of judgment are averred, and (3)
when there is sufficient reason to justify the relaxation of the rules. Considering that the present
petition was filed within the 15-day reglementary period for filing a petition for review
on certiorari under Rule 45, that an error of judgment is averred, and because of the significance of
the issue on jurisdiction, the Court deemed it proper and justified to relax the rules and treat the
petition for certiorari as a petition for review oncertiorari. The City of Manila, etc. et al. v. Hon.
Caridad H. Grecia-Cuerdo etc., et al, G.R. No. 175723. February 4, 2014

Republic Act No. 1125; Court of Tax Appeals; jurisdiction over petitions for certiorari. While it is clearly
stated that the Court of Tax Appeals (CTA) has exclusive appellate jurisdiction over decisions, orders
or resolutions of the Regional Trail Courts (RTCs) in local tax cases originally decided or resolved by
them in the exercise of their original or appellate jurisdiction, there is no categorical statement under
Republic Act No. (RA) 1125 as well as the amendatory RA 9282, which provides that the CTA has
jurisdiction over petitions for certiorari assailing interlocutory orders issued by the RTC in local tax
cases filed before it. The prevailing doctrine is that the authority to issue writs of certiorari involves
the exercise of original jurisdiction which must be expressly conferred by the Constitution or by law
and cannot be implied from the mere existence of appellate jurisdiction. Section 5 (1), Article VIII of
the 1987 Constitution grants power to the Supreme Court, in the exercise of its original jurisdiction, to
issue writs of certiorari, prohibition and mandamus. With respect to the Court of Appeals, Section 9
(1) of Batas Pambansa Blg. 129 (BP 129) gives the appellate court, also in the exercise of its original
jurisdiction, the power to issue, among others, a writ of certiorari, whether or not in aid of its
appellate jurisdiction. As to Regional Trial Courts, the power to issue a writ of certiorari, in the exercise
of their original jurisdiction, is provided under Section 21 of BP 129. While there is no express grant
of such power, with respect to the CTA, Section 1, Article VIII of the 1987 Constitution provides that
judicial power shall be vested in one Supreme Court and in such lower courts as may be established
by law and that judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine whether or not
there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government. On the strength of said constitutional provisions, it
can be fairly interpreted that the power of the CTA includes that of determining whether or not there
has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the RTC
in issuing an interlocutory order in cases falling within the exclusive appellate jurisdiction of the tax
court. It, thus, follows that the CTA, by constitutional mandate, is vested with jurisdiction to issue
writs of certiorari in these cases. The City of Manila, etc. et al. v. Hon. Caridad H. Grecia-Cuerdo etc.,
et al, G.R. No. 175723. February 4, 2014.
Republic Act No. 1125, as amended; Court of Tax Appeals; jurisdiction. Jurisdiction is conferred by
law. Republic Act No. 1125, as amended by Republic Act No. 9282, created the Court of Tax Appeals
(CTA). Section 7, paragraph (a), subparagraph (3) of the law vests the CTA with the exclusive
appellate jurisdiction over decisions, orders or resolutions of the Regional Trial Courts in local tax
cases originally decided or resolved by them in the exercise of their original or appellate jurisdiction.
The question now is whether the trial court resolved a local tax case in order to fall within the ambit
of the CTAs appellate jurisdiction This question, in turn, depends ultimately on whether the fees
imposed under Ordinance No. 18 are in fact taxes. Smart Communications, Inc. v. Municipality of
Malvar, Batangas, G.R. No. 20442. February 18, 2014

March 2014 Philippine Supreme Court Decisions on Civil Law

CIVIL CODE
Action for quieting of title; trial court had no jurisdiction to determine who among the parties have
better right over the disputed property which is admittedly still part of the public domain. Having
established that the disputed property is public land, the trial court was therefore correct in
dismissing the complaint to quiet title for lack of jurisdiction. The trial court had no jurisdiction to
determine who among the parties have better right over the disputed property which is admittedly
still part of the public domain. As held in Dajunos v. Tandayag (G.R. Nos. L-32651-52, 31 August 1971,
40 SCRA 449):
x x x The Tarucs action was for quieting of title and necessitated determination of the respective
rights of the litigants, both claimants to a free patent title, over a piece of property, admittedly public
land. The law, administration, disposition and alienation of public lands with the Director of Lands
subject, of course, to the control of the Secretary of Agriculture and Natural Resources.
In sum, the decision rendered in Civil Case No. 1218 on October 28, 1968 is a patent nullity. The lower
court did not have power to determine who (the Firmalos or the Tarucs) were entitled to an award of
free patent title over that piece of property that yet belonged to the public domain. Neither did it
have power to adjudge the Tarucs as entitled to the true equitable ownership thereof, the latters
effect being the same: the exclusion of the Firmalos in favor of the Tarucs. Heirs of Pacifico Pocido, et
al. v. Arsenia Avila and Emelinda Chua, G.R. No. 199146, March 19, 2014.
Action for quieting of title. In an action for quieting of title, the complainant is seeking for an
adjudication that a claim of title or interest in property adverse to the claimant is invalid, to free him
from the danger of hostile claim, and to remove a cloud upon or quiet title to land where stale or
unenforceable claims or demands exist. Heirs of Pacifico Pocido, et al. v. Arsenia Avila and Emelinda
Chua, G.R. No. 199146, March 19, 2014.
Action for quieting of title; two indispensable requisites. Under Articles 476 and 477 of the Civil Code,
the two indispensable requisites in an action to quiet title are: (1) that the plaintiff has a legal or
equitable title to or interest in the real property subject of the action; and (2) that there is a cloud on
his title by reason of any instrument, record, deed, claim, encumbrance or proceeding, which must be
shown to be in fact invalid or inoperative despite its prima facie appearance of validity. Heirs of
Pacifico Pocido, et al. v. Arsenia Avila and Emelinda Chua, G.R. No. 199146, March 19, 2014.

Co-ownership; Article 493 of the Civil Code; rights of a co-owner of a certain property; each one of the
co-owners with full ownership of their parts can sell their fully owned part. Article 493 of the Code
defines the ownership of the co-owner, clearly establishing that each co-owner shall have full
ownership of his part and of its fruits and benefits. Pertinent to this case, Article 493 dictates that
each one of the parties herein as co-owners with full ownership of their parts can sell their fully
owned part. The sale by the petitioners of their parts shall not affect the full ownership by the
respondents of the part that belongs to them. Their part which petitioners will sell shall be that which
may be apportioned to them in the division upon the termination of the co-ownership. With the full
ownership of the respondents remaining unaffected by petitioners sale of their parts, the nature of
the property, as co-owned, likewise stays. In lieu of the petitioners, their vendees shall be co-owners
with the respondents. The text of Article 493 says so. Raul V. Arambulo and Teresita Dela Cruz v.
Genaro Nolasco and Jeremy Spencer Nolasco, G.R. No. 189420, March 26, 2014.
Co-ownership; Article 494 of the Civil Code; partition. Article 494 of the Civil Code provides that no
co-owner shall be obliged to remain in the co-ownership, and that each co-owner may demand at any
time partition of the thing owned in common insofar as his share is concerned. Raul V. Arambulo and
Teresita Dela Cruz v. Genaro Nolasco and Jeremy Spencer Nolasco, G.R. No. 189420, March 26, 2014.
Co-ownership; Article 498 of the Civil Code; when this may be resorted to. Article 498 of the Civil
Code states that whenever the thing is essentially indivisible and the co-owners cannot agree that it
be allotted to one of them who shall indemnify the others, it shall be sold and its proceeds
accordingly distributed. This is resorted to (a) when the right to partition the property is invoked by
any of the co-owners but because of the nature of the property, it cannot be subdivided or its
subdivision would prejudice the interests of the co-owners, and (b) the co-owners are not in
agreement as to who among them shall be allotted or assigned the entire property upon proper
reimbursement of the co-owners. Raul V. Arambulo and Teresita Dela Cruz v. Genaro Nolasco and
Jeremy Spencer Nolasco, G.R. No. 189420, March 26, 2014.
Damages; actual or compensatory damages. Article 2199 of the Civil Code states that [e]xcept as
provided by law or by stipulation, one is entitled to an adequate compensation only for such
pecuniary loss suffered by him a he has duly proved. Such compensation is referred to as actual or
compensatory damages. Actual damages are compensation for an injury that will put the injured
party in the position where it was before the injury. They pertain to such injuries or losses that are
actually sustained and susceptible of measurement. Except as provided by law or by stipulation, a
party is entitled to adequate compensation only for such pecuniary loss as is duly proven. Basic is the
rule that to recover actual damages, not only must the amount of loss be capable of proof; it must
also be actually proven with a reasonable degree of certainty, premised upon competent proof or the
best evidence obtainable. International Container Terminal Services, Inc. v. Celeste M. Chua, G.R. No.
195031, March 26, 2014.
Damages; Attorneys fees; when allowed. Article 2208 of the Civil Code does not prohibit recovery of
attorneys fees if there is a stipulation in the contract for payment of the same. Thus, in Asian
Construction and Development Corporation v. Cathay Pacific SteelCorporation (CAPASCO), the Court,
citingTitan ConstructionCorporation v. Uni-Field Enterprises, Inc., noted that the law allows a party to
recover attorneys fees under a written agreement. In Barons Marketing Corporation v. Court of
Appeals, the Court ruled that attorneys fees are in the nature of liquidated damages and the
stipulation therefor is aptly called a penal clause. It has been said that so long as such stipulation
does not contravene law, morals, or public order, it is strictly binding upon defendant. The attorneys
fees so provided areawarded in favor of the litigant, not his counsel.On the other hand, the law also
allows parties to a contract tostipulate on liquidated damages to be paid in case of breach. A
stipulationon liquidated damages is a penalty clause where the obligor assumes agreater liability in
case of breach of an obligation. The obligor is bound topay the stipulated amount without need for
proof on the existence and onthe measure of damages caused by the breach. However, even if such
attorneys fees are allowed by law, the courts still have the power to reduce the same if it is
unreasonable. Mariano Lim v. Security Bank Corporation,G.R. No. 188539, March 12, 2014.
Damages; Attorneys fees; when proper. An award of attorneys fees has always been the exception
rather than the rule and there must be some compelling legal reason to bring the case within the
exception and justify the award. In this case, none of the exceptions applies. Attorneys fees are not
awarded every time a party prevails in a suit. The policy of the Court is that no premium should be
placed on the right to litigate. Even when a claimant is compelled to litigate with third persons or to
incur expenses to protect his rights, still, attorneys fees may not be awarded where no sufficient
showing of bad faith could be reflected in a partys persistence in a case other than an erroneous
conviction of the righteousness of his cause. International Container Terminal Services, Inc. v.
Celeste M. Chua, G.R. No. 195031, March 26, 2014.
Damages; moral damages. Certainly, an award of moral damages must be anchored on a clear
showing that the party claiming the same actually experienced mental anguish, besmirched
reputation, sleepless nights, wounded feelings, or similar injury. In the case herein under
consideration, the records are bereft of any proof that respondent in fact suffered moral damages as
contemplated in the afore-quoted provision of the Civil Code. The ruling of the trial court provides
simply that: [Petitioners] outright denial and unjust refusal to heed [respondents] claim for
payment of the value of her lost/damaged shipment caus[ed] the latter to suffer serious anxiety,
mental anguish and wounded feelings warranting the award of moral damages x x x. The testimony
of respondent, on the other hand, merely states that when she failed to recover damages from
petitioner, she was saddened, had sleepless nights and anxiety without providing specific details of

the suffering she allegedly went through. Since an award of moral damages is predicated on a
categorical showing by the claimant that she actually experienced emotional and mental sufferings, it
must be disallowed absent any evidence thereon. International Container Terminal Services, Inc. v.
Celeste M. Chua, G.R. No. 195031, March 26, 2014.
Damages; Nominal damages; when awarded; Network Bank did not violate any of Barics
rights.Nominal damages are recoverable where a legal right is technically violated and must be
vindicated against an invasion that has produced no actual present loss of any kind or where there
has been a breach of contract and no substantial injury or actual damages whatsoever have been or
can be shown.
Under Article 2221 of the Civil Code, 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,
not for indemnifying the plaintiff for any loss suffered. Nominal damages are not for indemnification of
loss suffered but for the vindication or recognition of a right violated or invaded.
Network Bank did not violate any of Barics rights; it was merely a purchaser or transferee of the
property. Surely, it is not prohibited from acquiring the property even while the forcible entry case
was pending, because as the registered owner of the subject property, Palado may transfer his title at
any time and the lease merely follows the property as a lien or encumbrance. Any invasion or
violation of Barics rights as lessee was committed solely by Palado, and Network Bank may not be
implicated or found guilty unless it actually took part in the commission of illegal acts, which does not
appear to be so from the evidence on record. On the contrary, it appears that Barie was ousted
through Palados acts even before Network Bank acquired the subject property or came into the
picture. Thus, it was error to hold the bank liable for nominal damages. One Network Rural Bank, Inc.
v. Danilo G. Baric,G.R. No. 193684, March 5, 2014.
Damages; Temperate damages. In the absence of competent proof on the amount of actual damages
suffered, a party is entitled to receive temperate damages. Article 2224 of the New Civil Code
provides that: Temperate or moderate damages, which are more than nominal but less than
compensatory damages, may be recovered when the court finds that some pecuniary loss has been
suffered but its amount cannot, from the nature of the case, be proved with certainty. The amount
thereof is usually left to the sound discretion of the courts but the same should be reasonable,
bearing in mind that temperate damages should be more than nominal but less than
compensatory.International Container Terminal Services, Inc. v. Celeste M. Chua, G.R. No. 195031,
March 26, 2014.
Fraud; concept of; Article 1338 of the Civil Code. According to Article 1338 of the Civil Code, there is
fraud when one of the contracting parties, through insidious words or machinations, induces the other
to enter into the contract that, without the inducement, he would not have agreed to. Yet, fraud, to
vitiate consent, must be the causal (dolo causante), not merely the incidental (dolo incidente),
inducement to the making of the contract. In Samson v. Court of Appeals (G.R. No. 108245, November
25, 1994, 238 SCRA 397), causal fraud is defined as a deception employed by one party prior to or
simultaneous to the contract in order to secure the consent of the other.
Fraud cannot be presumed but must be proved by clear and convincing evidence. Whoever alleges
fraud affecting a transaction must substantiate his allegation, because a person is always presumed
to take ordinary care of his concerns, and private transactions are similarly presumed to have been
fair and regular. To be remembered is that mere allegation is definitely not evidence; hence, it must
be proved by sufficient evidence. Metropolitan Fabrics, Inc., et al. v. Prosperity Credit Resources, Inc.
et al.,G.R. No. 154390, March 17, 2014.
Fraud; Article 1390, in relation to Article 1391 of the Civil Code; consent obtained through fraud;
action for annulment; prescriptive period. Article 1390, in relation to Article 1391 of the Civil Code,
provides that if the consent of the contracting parties was obtained through fraud, the contract is
considered voidable and may be annulled within four years from the time of the discovery of the
fraud.Metropolitan Fabrics, Inc., et al. v. Prosperity Credit Resources, Inc. et al., G.R. No. 154390,
March 17, 2014.
Mortgage; a higher degree of prudence must be exercised by the mortgagee in cases where he does
not directly deal with the registered owner of real property. In Bank of Commerce v. Spouses San
Pablo, Jr. (550 Phil. 805, 821 (2007)), the court declared that a mortgagee has a right to rely in good
faith on the certificate of title of the mortgagor of the property offered as security, and in the absence
of any sign that might arouse suspicion, the mortgagee has no obligation to undertake further
investigation.
However, in Bank of Commerce v. Spouses San Pablo, Jr. (550 Phil. 805, 821 (2007)), the court also
ruled that [i]n cases where the mortgagee does not directly deal with the registered owner of real
property, the law requires that a higher degree of prudence be exercised by the mortgagee.
Specifically, the court cited Abad v. Sps. Guimba (503 Phil. 321, 331-332 (2005)), where it held,
x x x While one who buys from the registered owner does not need to look behind the certificate of
title, one who buys from one who is not the registered owner is expected to examine not only the
certificate of title but all factual circumstances necessary for [one] to determine if there are any flaws
in the title of the transferor, or in [the] capacity to transfer the land.
Although the instant case does not involve a sale but only a mortgage, the same rule applies
inasmuch as the law itself includes a mortgagee in the term purchaser.
Thus, where the mortgagor is not the registered owner of the property but is merely an attorney-infact of the same, it is incumbent upon the mortgagee to exercise greater care and a higher degree of

prudence in dealing with such mortgagor. Macaria Arguelles and the Heirs of the Deceased Petronio
Arguelles v. Malarayat Rural Bank, Inc., G.R. No. 200468, March 19, 2014.
Mortgage; banks are enjoined to exert a higher degree of diligence, care, and prudence than
individuals in handling real estate transactions; it cannot rely merely on the certificate of
title. In Ursal v. Court of Appeals (509 Phil. 628, 642 (2005)), the court held that where the mortgagee
is a bank, it cannot rely merely on the certificate of title offered by the mortgagor in ascertaining the
status of mortgaged properties. Since its business is impressed with public interest, the mortgageebank is duty-bound to be more cautious even in dealing with registered lands. Indeed, the rule that
person dealing with registered lands can rely solely on the certificate of title does not apply to banks.
Thus, before approving a loan application, it is a standard operating practice for these institutions to
conduct an ocular inspection of the property offered for mortgage and to verify the genuineness of
the title to determine the real owners thereof. The apparent purpose of an ocular inspection is to
protect the true owner of the property as well as innocent third parties with a right, interest or claim
thereon from a usurper who may have acquired a fraudulent certificate of title thereto. Macaria
Arguelles and the Heirs of the Deceased Petronio Arguelles v. Malarayat Rural Bank, Inc., G.R. No.
200468, March 19, 2014.
1. Negligence, the Court said in Layugan v. Intermediate Appellate Court (G.R. No. L-73998,
November 14, 1988), is the omission to do something which a reasonable man, guided by
those considerations which ordinarily regulate the conduct of human affairs, would do, or the
doing of something which a prudent and reasonable man would not do, or as Judge Cooley
defines it, (t)he failure to observe for the protection of the interests of another person, that
degree of care, precaution, and vigilance which the circumstances justly demand, whereby
such other person suffers injury. In order that a party may be held liable for damages for any
injury brought about by the negligence of another, the claimant must prove that the
negligence was the immediate and proximate cause of the injury. BJDC Construction,
represented by its Manager/Proprieto Janet S. Dela Cruz v. Nena E. Lanuzo, et al., G.R. No.
161151, March 24, 2014.
Negligence; Medical negligence; four elements the plaintiff must prove by competent evidence. An
action upon medical negligence whether criminal, civil or administrative calls for the plaintiff to
prove by competent evidence each of the following four elements, namely: (a) the duty owed by the
physician to the patient, as created by the physician-patient relationship, to act in accordance with
the specific norms or standards established by his profession; (b) the breach of the duty by the
physicians failing to act in accordance with the applicable standard of care; (3) the causation, i.e.,
there must be a reasonably close and causal connection between the negligent act or omission and
the resulting injury; and (4) the damages suffered by thepatient. Dr. Fernando P. Solidum v. People of
the Philippines,G.R. No. 192123, March 10, 2014.
Negligence; Medical Negligence; standard of care of the medical profession; standard of care
observed by other members of the profession in good standing under similar circumstances.
Negligence is defined as the failure to observe for the protection of the interests of another person
that degree of care, precaution, and vigilance that the circumstances justly demand, whereby such
other person suffers injury. Reckless imprudence, on the other hand, consists of voluntarily doing or
failing to do, without malice, an act from which material damage results by reason of an inexcusable
lack of precaution on the part of the person performing or failing to perform such act.
The Court aptly explained in Cruz v. Court of Appeals that: Whether or not a physician has committed
an inexcusable lack of precaution in the treatment of his patient is to be determined according to
the standard of care observed by other members of the profession in good standing under similar
circumstances bearing in mind the advanced state of the profession at the time of treatment or the
present state of medical science. In the recent case of Leonila Garcia-Rueda v. Wilfred L. Pacasio,et.
al., this Court stated that in accepting a case, a doctor in effect represents that, having the needed
training and skill possessed by physicians and surgeons practicing in the same field, he will employ
such training, care and skill in the treatment of his patients. He therefore has a duty to use at least
the same level of care that any other reasonably competent doctor would use to treat a condition
under the same circumstances. It is in this aspect of medical malpractice that expert testimony is
essential to establish not only the standard of care of the profession but also that the physicians
conduct in the treatment and care falls below such standard. Further, inasmuch as the causes of the
injuries involved in malpractice actions are determinable only in the light of scientific knowledge, it
has been recognized that expert testimony is usually necessary to support the conclusion as to
causation. Dr. Fernando P. Solidum v. People of the Philippines,G.R. No. 192123, March 10, 2014.
Negligence; Medical negligence; standard of care; an objective standard by which the conduct of a
physician sued for negligence or malpractice may be measured.In the medical profession, specific
norms or standards to protect the patient against unreasonable risk, commonly referred to
asstandards of care, set the duty of the physician to act in respect of the patient. Unfortunately, no
clear definition of the duty of a particular physician in a particular case exists. Because most medical
malpractice cases are highly technical, witnesses with special medical qualifications must provide
guidance by giving the knowledge necessary to render a fair and just verdict. As a result, the
standard of medical care of a prudent physician must be determined from expert testimony in most
cases; and in the case of a specialist (like an anesthesiologist), the standard of care by which the
specialist is judged is the care and skill commonly possessed and exercised by similar specialists
under similar circumstances. The specialty standard ofcare may be higher than that required of the

general practitioner. Dr. Fernando P. Solidum v. People of the Philippines,G.R. No. 192123, March 10,
2014.
Negligence, test to determine its existence. The test by which the existence of negligence in a
particular case is determined is aptly stated in the leading case of Picart v. Smith (G.R. No. 12219,
March 15, 1918).
According to this case, the test by which to determine the existence of negligence in a particular case
may be stated as follows:
Did the defendant in doing the alleged negligent act use that reasonable care and caution
which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of
negligence. The law here in effect adopts the standard supposed to be supplied by the imaginary
conduct of the discreet paterfamilias of the Roman law. The existence of negligence in a given case
is not determined by reference to the personal judgment of the actor in the situation before him. The
law considers what would be reckless, blameworthy, or negligent in the man of ordinary intelligence
and prudence and determines liability by that.
The question as to what would constitute the conduct of a prudent man in a given situation must of
course be always determined in the light of human experience and in view of the facts involved in the
particular case. Abstract speculation cannot here be of much value but this much can be profitably
said: Reasonable men govern their conduct by the circumstances which are before them or
known to them. They are not, and are not supposed to be, omniscient of the future. Hence they can
be expected to take care only when there is something before them to suggest or warn of danger.
Could a prudent man, in the case under consideration, foresee harm as a result of the course actually
pursued? If so, it was the duty of the actor to take precautions to guard against that harm.
Reasonable foresight of harm, followed by the ignoring of the suggestion born of this prevision, is
always necessary before negligence can be held to exist. Stated in these terms, the proper criterion
for determining the existence of negligence in a given case is this: Conduct is said to be negligent
when a prudent man in the position of the tortfeasor would have foreseen that an effect harmful to
another was sufficiently probable to warrant his foregoing the conduct or guarding against its
consequences. BJDC Construction, represented by its Manager/Proprieto Janet S. Dela Cruz v. Nena
E. Lanuzo, et al.,G.R. No. 161151, March 24, 2014.
Property; Recovery of possession of real property; three kinds of actions available. In Sps. Bonifacio R.
Valdez, Jr. et al. vs. Hon. Court of Appeals, et al. (523 Phil. 39 (2006)), the Court is instructive anent
the three kinds of actions available to recover possession of real property, viz: (a) accion interdictal;
(b)accion publiciana; and (c) accion reivindicatoria.
Accion interdictal comprises two distinct causes of action, namely, forcible entry (detentacion) and
unlawful detainer (desahuico) [sic]. In forcible entry, one is deprived of physical possession of real
property by means of force, intimidation, strategy, threats, or stealth whereas in unlawful detainer,
one illegally withholds possession after the expiration or termination of his right to hold possession
under any contract, express or implied. The two are distinguished from each other in that in forcible
entry, the possession of the defendant is illegal from the beginning, and that the issue is which party
has prior de facto possession while in unlawful detainer, possession of the defendant is originally
legal but became illegal due to the expiration or termination of the right to possess.
The jurisdiction of these two actions, which are summary in nature, lies in the proper municipal trial
court or metropolitan trial court. Both actions must be brought within one year from the date of actual
entry on the land, in case of forcible entry, and from the date of last demand, in case of unlawful
detainer. The issue in said cases is the right to physical possession.
Accion publiciana is the plenary action to recover the right of possession which should be brought in
the proper regional trial court when dispossession has lasted for more than one year. It is an ordinary
civil proceeding to determine the better right of possession of realty independently of title. In other
words, if at the time of the filing of the complaint more than one year had elapsed since defendant
had turned plaintiff out of possession or defendants possession had become illegal, the action will be,
not one of the forcible entry or illegal detainer, but an accion publiciana. On the other hand, accion
reivindicatoria is an action to recover ownership also brought in the proper regional trial court in an
ordinary civil proceeding. Carmencita Suarez v. Mr. and Mrs. Felix E. Emboy, Jr. and Marilou P. EmboyDelantar, G.R. No. 187944, March 12, 2014.
Res ipsa loquitor; a mode of proof or a mere procedural convenience.In Jarcia, Jr. v. People, the court
has underscored that the doctrine is not a rule of substantive law, but merely a mode of proof or a
mere procedural convenience. The doctrine, when applicable to the facts and circumstances of a
given case, is not meant to and does not dispense with the requirement of proof of culpable
negligence against the party charged. It merely determines and regulates what shall be prima
facie evidence thereof, and helps the plaintiff in proving a breach of the duty. The doctrine can be
invoked when and only when, under the circumstances involved, direct evidence is absent and not
readily available. Dr. Fernando P. Solidum v. People of the Philippines,G.R. No. 192123, March 10,
2014.
Res ipsa loquitor; applicability in medical negligence cases. The applicability of the doctrine of res
ipsa loquitur in medical negligence cases was significantly and exhaustively explained in Ramos v.
Court of Appeals, where the Court saidMedical malpractice cases do not escape the application of
this doctrine. Thus, res ipsa loquitur has been applied when the circumstances attendant upon the
harm are themselves of such a character as to justify an inference of negligence as the cause of that
harm. The application of resipsa loquitur in medical negligence cases presents a question of law since
it is a judicial function to determine whether a certain set of circumstances does, as a matter of law,

permit a given inference. Although generally, expert medical testimony is relied upon in malpractice
suits to prove that a physician has done a negligent act or that he has deviated from the standard
medical procedure, when the doctrine of res ipsa loquitur is availed by the plaintiff, the need for
expert medical testimony is dispensed with because the injury itself provides the proof of negligence.
The reason is that the general rule on the necessity of expert testimony applies only to such matters
clearly within the domain of medical science, and not to matters that are within the common
knowledge of mankind which may be testified to by anyone familiar with the facts. Ordinarily, only
physicians and surgeons of skill and experience are competent to testify as to whether a patient has
been treated or operated upon with a reasonable degree of skill and care. However, testimony as to
the statements and acts of physicians and surgeons, external appearances, and manifest conditions
which are observable by any one may be given by non-expert witnesses. Hence, in cases where
the res ipsa loquitur is applicable, the court is permitted to find a physician negligent upon proper
proof of injury to the patient, without the aid of expert testimony, where the court from its fund of
common knowledge can determine the proper standard of care. Where common knowledge and
experience teach that a resulting injury would not have occurred to the patient if due care had been
exercised, an inference of negligence may be drawn giving rise to an application of the doctrine of res
ipsa loquitur without medical evidence, which is ordinarily required to show not only what occurred
but how and why it occurred. When the doctrine is appropriate, all that the patient must do is prove a
nexus between the particular act or omission complained of and the injury sustained while under the
custody and management of the defendant without need to produce expert medical testimony to
establish the standard of care. Resort to res ipsa loquitur is allowed because there is no other way,
under usual and ordinary conditions, by which the patient can obtain redress for injury suffered by
him. Dr. Fernando P. Solidum v. People of the Philippines,G.R. No. 192123, March 10, 2014.
Res ipsa loquitur; applied in conjunction with the doctrine of common knowledge.It is simply a
recognition of the postulate that, as a matter of common knowledge and experience, the very nature
of certain types of occurrences may justify an inference of negligence on the part of the person who
controls the instrumentality causing the injury in the absence of some explanation by the defendant
who is charged with negligence. It is grounded in the superior logic of ordinary human experience and
on the basis of such experience or common knowledge, negligence may be deduced from the mere
occurrence of the accident itself. Hence, res ipsa loquitur is applied in conjunction with the doctrine
ofcommon knowledge. Dr. Fernando P. Solidum v. People of the Philippines,G.R. No. 192123, March
10, 2014.
Res ipsa loquitor. Res ipsa loquitur is literally translated as the thing or the transaction speaks for
itself. The doctrine res ipsa loquitur means that where the thing which causes injury is shown to be
under the management of the defendant, and the accident is such as in the ordinary course of things
does not happen if those who have the management use proper care, it affords reasonable evidence,
in the absence of an explanation by the defendant, thatthe accident arose from want of care. Dr.
Fernando P. Solidum v. People of the Philippines,G.R. No. 192123, March 10, 2014.
Res ipsa loquitur. The doctrine of res ipsa loquitur is based on the theory that the defendant either
knows the cause of the accident or has the best opportunity of ascertaining it and the plaintiff,
having no knowledge thereof, is compelled to allege negligence in general terms. In such
instance, the plaintiff relies on proof of the happening of the accident alone to establish negligence.
The principle, furthermore, provides a means by which a plaintiff can hold liable a defendant who, if
innocent, should be able to prove that he exercised due care to prevent the accident
complained of from happening. It is, consequently, the defendants responsibility to show that there
was no negligence on his part. International Container Terminal Services, Inc. v. Celeste M.
Chua, G.R. No. 195031, March 26, 2014.
Res ipsa loquitur; concept of; requirements for the doctrine to apply. In Tan v. JAM Transit, Inc. (G.R.
No. 183198, November 25, 2009), the Court noted that res ipsa loquitur is a Latin phrase that literally
means the thing or the transaction speaks for itself. It is a maxim for the rule that the fact of the
occurrence of an injury, taken with the surrounding circumstances, may permit an inference or raise a
presumption of negligence, or make out a plaintiffs prima facie case, and present a question of fact
for defendant to meet with an explanation. Where the thing that caused the injury complained of
is shown to be under the management of the defendant or his servants; and the accident, in the
ordinary course of things, would not happen if those who had management or control used
proper care, it affords reasonable evidencein the absence of a sufficient, reasonable and logical
explanation by defendantthat the accident arose from or was caused by the defendants want of
care. This rule is grounded on the superior logic of ordinary human experience, and it is on the basis
of such experience or common knowledge that negligence may be deduced from the mere
occurrence of the accident itself. Hence, the rule is applied in conjunction with the doctrine of
common knowledge.
For the doctrine to apply, the following requirements must be shown to exist, namely: (a) the accident
is of a kind that ordinarily does not occur in the absence of someones negligence; (b) it is
caused by an instrumentality within the exclusive control of the defendant or defendants; and (c)
the possibility of contributing conduct that would make the plaintiff responsible is eliminated. BJDC
Construction, represented by its Manager/Proprieto Janet S. Dela Cruz v. Nena E. Lanuzo, et al., G.R.
No. 161151, March 24, 2014.
Res ipsa loquitor; doctrine does not automatically apply to all cases of medical negligence as to
mechanically shift the burden of proof to the defendant.Despite the fact that the scope of res ipsa
loquitur has been measurably enlarged, it does not automatically apply to all cases of medical

negligence as to mechanically shift the burden of proof to the defendant to show that he is not guilty
of the ascribed negligence. Res ipsa loquitur is not a rigid or ordinary doctrine to be perfunctorily
used but a rule to be cautiously applied, depending upon the circumstances of each case. It is
generally restricted to situations in malpractice cases where a layman is able to say, as a matter of
common knowledge and observation, that the consequences of professional care were not as such as
would ordinarily have followed if due care had been exercised. A distinction must be made between
the failure to secure results, and the occurrence of something more unusual and not ordinarily found
if the service or treatment rendered followed the usual procedure of those skilled in that particular
practice. It must be conceded that the doctrine of res ipsa loquitur can have no application in a suit
against a physician or surgeon which involves the merits of a diagnosis or of a scientific treatment.
The physician or surgeon is not required at his peril to explain why any particular diagnosis was not
correct, or why any particular scientific treatment did not produce the desired result. Thus, res ipsa
loquitur is not available in a malpractice suit if the only showing is that the desired result of an
operation or treatment was not accomplished. The real question, therefore, is whether or not in the
process of the operation any extraordinary incident or unusual event outside of the routine
performance occurred which is beyond the regular scope of customary professional activity in such
operations, which, if unexplained would themselves reasonably speak to the average man as the
negligent cause or causes of the untoward consequence. If there was such extraneous intervention,
the doctrine of res ipsa loquitur may be utilized and the defendant is calledupon to explain the
matter, by evidence of exculpation, if he could. Dr. Fernando P. Solidum v. People of the
Philippines,G.R. No. 192123, March 10, 2014.
Res ipsa loquitor; essential requisites.In order to allow resort to the doctrine, therefore, the following
essential requisites must first be satisfied, to wit: (1) the accident was of a kind that does not
ordinarily occur unless someone is negligent; (2) the instrumentality or agency that caused the injury
was under the exclusive control of the person charged; and (3) the injury suffered must not have
been due to any voluntary action or contribution of the person injured. Dr. Fernando P. Solidum v.
People of the Philippines,G.R. No. 192123, March 10, 2014.
Res ipsa loquitur; when may be invoked. The doctrine can be invoked when and only when,
under the circumstances involved, direct evidence is absent and not readily available. Here, there
was no evidence as to how or why the fire in the container yard of petitioner started; hence, it was up
to petitioner to satisfactorily prove that it exercised the diligence required to prevent the fire from
happening. International Container Terminal Services, Inc. v. Celeste M. Chua, G.R. No. 195031, March
26, 2014.
Suretyship; Continuing suretyship; nature of; example of.A Continuing Suretyship, which the Court
described in Saludo, Jr. v. Security Bank Corporation as follows:
The essence of a continuing surety has been highlighted in the case of Totanes v. China Banking
Corporation in this wise: Comprehensive or continuing surety agreements are, in fact, quite
commonplace in present day financial and commercial practice. A bank or financing companywhich
anticipates entering into a series of credit transactions with a particular company, normallyrequires
the projected principal debtor to execute acontinuing surety agreement along with its sureties.
Byexecuting such an agreement, the principal places itselfin a position to enter into the projected
series oftransactions with its creditor; with such suretyshipagreement, there would be no need to
execute a separatesurety contract or bond for each financing or creditaccommodation extended to
the principal debtor.
The terms of the Continuing Suretyship executed by petitioner are very clear. It states that petitioner,
as surety, shall, without need for any notice, demand or any other act or deed, immediately become
liable and shall pay all credit accommodations extended by the Bank to the Debtor, including
increases, renewals, roll-overs, extensions, restructurings, amendments or novations thereof, as well
as (i) all obligations of theDebtor presently or hereafter owing to the Bank, as appears in
theaccounts, books and records of the Bank, whether direct or indirect, and (ii) any and all
expenses which the Bank may incur in enforcing any of its rights, powers and remedies under the
Credit Instruments as defined hereinbelow. Mariano Lim v. Security Bank Corporation,G.R. No.
188539, March 12, 2014.
Suretyship. A contract of suretyship is an agreement whereby a party, called the surety, guarantees
the performance by another party, called the principal or obligor, of an obligation or undertaking in
favor of another party, called the obligee. Although the contract of a surety is secondary only to a
valid principal obligation, the surety becomes liable for the debt or duty of another although it
possesses no direct or personal interest over the obligations nor does it receive any benefit
therefrom. This was explained in the case of Stronghold Insurance Company, Inc. v. Republic-Asahi
Glass Corporation, where it was written: The suretys obligation is not an original and direct one for
the performance of his own act, but merely accessory or collateral to the obligation contracted by the
principal. Nevertheless,although the contract of a suretyis in essence secondary only to a
valid principalobligation, his liability to the creditor or promisee of theprincipal is said to
be direct, primary and absolute; inother words, he is directly and equally bound with
theprincipal.
Thus, suretyship arises upon the solidary binding of a person deemed the surety with the principal
debtor for the purpose of fulfilling an obligation. A surety is considered in law as being the same
party asthe debtor in relation to whatever is adjudged touching the obligationof the
latter, and their liabilities are interwoven as to be inseparable. Mariano Lim v. Security Bank
Corporation,G.R. No. 188539, March 12, 2014.

SPECIAL LAWS
Comprehensive Agrarian Reform Law (CARL); Section 65 of R.A. 6657; DAR is empowered to
authorize, under certain conditions, the reclassification or conversion of agricultural lands. Under
Section 65 of R.A. No. 6657, the DAR is empowered to authorize, under certain conditions, the
reclassification or conversion of agricultural lands. Pursuant to this authority and in the exercise of its
rulemaking power under Section 49 of R.A. No. 6657, the DAR issued Administrative Order No. 12,
series of 1994 (DAR A.O. 12-94) (the then prevailing administrative order), providing the rules and
procedure governing agricultural land conversion. Item VII of DAR A.O. 12-94 enumerates the
documentary requirements for approval of an application for land conversion.35 Notably, Item VI-E
provides that no application for conversion shall be given due course if: (1) the DAR has issued a
Notice of Acquisition under the compulsory acquisition process; (2) a Voluntary Offer to Sell covering
the subject property has been received by the DAR; or (3) there is already a perfected agreement
between the landowner and the beneficiaries under Voluntary Land Transfer. Heirs of Teresita
Montoya, et al. v. National Housing Authority, et al., G.R. No. 181055, March 19, 2014.
Comprehensive Agrarian Reform Law (CARL); Section 6 of R.A. 6657; retention limits. Section 6 of R.A.
No. 6657 specifically governs retention limits. Under its last paragraph, any sale, disposition, lease,
management, contract or transfer of possession of private lands executed by the original landowner
in violation of [R.A. No. 6657] is considered null and void. A plain reading of the last paragraph
appears to imply that the CARL absolutely prohibits sales or dispositions of private agricultural lands.
The interpretation or construction of this prohibitory clause, however, should be made within the
context of Section 6, following the basic rule in statutory construction that every part of the statute
be interpreted with reference to the context, i.e., that every part of the statute must be considered
together with the other parts, and kept subservient to the general intent of the whole enactment.
Notably, nothing in this paragraph, when read with the entire section, discloses any legislative
intention to absolutely prohibit the sale or other transfer agreements of private agricultural lands
after the effectivity of the Act.
In other words, therefore, the sale, disposition, etc. of private lands that Section 6 of R.A. No. 6657
contextually prohibits and considers as null and void are those which the original owner executes in
violation of this provision, i.e., sales or dispositions executed with the intention of circumventing the
retention limits set by R.A. No. 6657. Consistent with this interpretation, the proscription in Section 6
on sales or dispositions of private agricultural lands does not apply to those that do not violate or
were not intended to circumvent the CARLs retention limits. Heirs of Teresita Montoya, et al. v.
National Housing Authority, et al., G.R. No. 181055, March 19, 2014.
Emancipation of Tenants; P.D. 27; CLT; legal effects of issuance; tenant-farmer does not acquire full
ownership of the covered landholding simply by the issuance of a CLT. A CLT is a document that the
government issues to a tenant-farmer of an agricultural land primarily devoted to rice and corn
production placed under the coverage of the governments OLT program pursuant to P.D. No. 27. It
serves as the tenant-farmers (grantee of the certificate) proof of inchoate right over the land covered
thereby.
A CLT does not automatically grant a tenant-farmer absolute ownership of the covered landholding.
Under PD No. 27, land transfer is effected in two stages: (1) issuance of the CLT to the tenant-farmer
in recognition that said person is a deemed owner; and (2) issuance of an Emancipation Patent (EP)
as proof of full ownership upon the tenant-farmers full payment of the annual amortizations or lease
rentals.
As a preliminary step, therefore, the issuance of a CLT merely evinces that the grantee thereof is
qualified to avail of the statutory mechanism for the acquisition of ownership of the land tilled by him,
as provided under P.D. No. 27. The CLT is not a muniment of title that vests in the tenant-farmer
absolute ownership of his tillage. It is only after compliance with the conditions which entitle the
tenant-farmer to an EP that the tenant-farmer acquires the vested right of absolute ownership in the
landholding. Stated otherwise, the tenant-farmer does not acquire full ownership of the covered
landholding simply by the issuance of a CLT. The tenant-farmer must first comply with the prescribed
conditions and procedures for acquiring full ownership but until then, the title remains with the
landowner. Heirs of Teresita Montoya, et al. v. National Housing Authority, et al., G.R. No. 181055,
March 19, 2014.
Land registration; Classification of land; evidence of a positive act from the government reclassifying
the lot as alienable and disposable agricultural land of the public domain. Accordingly, jurisprudence
has required that an applicant for registration of title acquired through a public land grant must
present incontrovertible evidence that the land subject of the application is alienable or disposable by
establishing the existence of a positive act of the government, such as a presidential proclamation or
an executive order; an administrative action; investigation reports of Bureau of Lands investigators;
and a legislative act or a statute. Sps. Antonio Fortuna and Erlinda Fortuna v. Republic of the
Philippines,G.R. No. 173423, March 5, 2014.
Land registration; Classification of land; Executive prerogative.Under Section 6 of the Public Land Act,
the classification and the reclassification of public lands are the prerogative of the Executive
Department. The President, through a presidential proclamation or executive order, can classify or
reclassify a land to be included or excluded from the public domain. The Department of Environment
and Natural Resources Secretary is likewise empowered by law to approve a land classification and
declare such land as alienable and disposable. Sps. Antonio Fortuna and Erlinda Fortuna v. Republic
of the Philippines,G.R. No. 173423, March 5, 2014.

Land registration; it is essential for any applicant for registration of title to land derived through a
public grant to establish foremost the alienable and disposable nature of the land. The Constitution
declares that all lands of the public domain are owned by the State. Of the four classes of public
land,i.e., agricultural lands, forest or timber lands, mineral lands, and national parks, only agricultural
lands may be alienated. Public land that has not been classified as alienable agricultural land remains
part of the inalienable public domain. Thus, it is essential for any applicant for registration of
title toland derived through a public grant to establish foremost the alienableand
disposable nature of the land. The Public Land Act provisions on the grant and disposition of
alienable public lands, specifically, Sections 11 and 48(b), will find application only from the time that
a public land has been classified as agricultural and declared as alienable and disposable. Sps.
Antonio Fortuna and Erlinda Fortuna v. Republic of the Philippines,G.R. No. 173423, March 5, 2014.
Land registration; Judicial confirmation of imperfect or incomplete title; cut-off date for applications.
As mentioned, the Public Land Act is the law that governs the grant and disposition of alienable
agricultural lands. Under Section 11 of the PLA, alienable lands of the public domain may be disposed
of, among others, by judicial confirmation of imperfect or incomplete title. This mode of
acquisition of title is governed by Section 48(b) of the PLA, the original version of which states:
Sec. 48. The following-described citizens of the Philippines, occupying lands of the public domain or
claiming to own any such lands or an interest therein, but whose titles have not been perfected or
completed, may apply to the Court of First Instance of the province where the land is located for
confirmation of their claims and the issuance of a certificate of title therefor, under the Land
Registration Act, to wit:
xxxx
(b) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive, and notorious possession and occupation of agricultural lands of the public
domain, under a bona fide claim of acquisition or ownership, except as against the
Government, since July twenty-sixth, eighteen hundred and ninety-four, except when
prevented by war or force majeure. These shall be conclusively presumed to have performed all the
conditions essential to a government grant and shall be entitled to a certificate of title under the
provisions of this chapter. [emphasis supplied]
On June 22, 1957, the cut-off date of July 26, 1894 was replaced by a 30-year period of possession
under RA No. 1942. Section 48(b) of the PLA, as amended by RA No. 1942, read:
(b) Those who by themselves or through their predecessors in interest have been in open, continuous,
exclusive and notorious possession and occupation of agricultural lands of the public domain, under a
bona fide claim of acquisition of ownership, for at least thirty years immediately preceding the
filing of the application for confirmation of title, except when prevented by war or force majeure.
On January 25, 1977, PD No. 1073 replaced the 30-year period of possession by requiring possession
since June 12, 1945. Section 4 of PD No. 1073 reads:
SEC. 4. The provisions of Section 48(b) and Section 48(c), Chapter VIII of the Public Land Act are
hereby amended in the sense that these provisions shall apply only to alienable and disposable lands
of the public domain which have been in open, continuous, exclusive and notorious possession and
occupation by the applicant himself or thru his predecessor-in-interest, under a bona fide claim of
acquisition of ownership, since June 12, 1945.
Under the P.D. No. 1073 amendment, possession of at least 32 years from 1945 up to its
enactment in 1977 is required. This effectively impairs the vested rights of applicants who had
complied with the 30-year possession required under the RA No. 1942 amendment, but whose
possession commenced only after the cut-off date of June 12, 1945 was established by the PD No.
1073 amendment. To remedy this, the Court ruled in Abejaron v. Nabasa that Filipino citizens who by
themselves or their predecessors-in-interest have been, prior to the effectivity of P.D. 1073on
January 25, 1977, in open, continuous, exclusive and notorious possession and occupation of
agricultural lands of the public domain, under a bona fide claim of acquisition of ownership, for at
least 30 years, or atleast since January 24, 1947 may apply for judicial confirmation of their
imperfect or incomplete title under Sec. 48(b) of the [PLA]. January 24,1947 was considered as
the cut off date as this was exactly 30 yearscounted backward from January 25, 1977 the
effectivity date of PDNo. 1073.
It appears, however, that January 25, 1977 was the date PD No. 1073 was enacted; based on
the certification from the National PrintingOffice, PD No. 1073 was published in Vol. 73, No. 19
of the Official Gazette, months later than its enactment or on May 9, 1977. Thisuncontroverted
fact materially affects the cut-off date for applications forjudicial confirmation of incomplete title
under Section 48(b) of the PLA.Although Section 6 of PD No. 1073 states that [the] Decree shalltake
effect upon its promulgation, the Court has declared in Taada, et al.v. Hon. Tuvera, etc., et al. that
the publication of laws is an indispensablerequirement for its effectivity. [A]ll statutes, including
those of localapplication and private laws, shall be published as a condition for theireffectivity, which
shall begin fifteen days after publication unless a differenteffectivity date is fixed by the legislature.
Accordingly, Section 6 of PDNo. 1073 should be understood to mean that the decree took effect
onlyupon its publication, or on May 9, 1977. This, therefore, moves the cut-off date for
applications for judicial confirmation of imperfect or incomplete title under Section 48(b)
of the PLA to May 8, 1947. In otherwords, applicants must prove that they have been in
open, continuous,exclusive and notorious possession and occupation of agricultural lands
ofthe public domain, under a bona fide claim of acquisition of ownership,for at least 30

years, or at least since May 8, 1947. Sps. Antonio Fortuna and Erlinda Fortuna v. Republic of the
Philippines,G.R. No. 173423, March 5, 2014.
Land registration; Possession; as a requirement for the application for registration of title.Notably,
Section 48(b) of the PLA speaks of possession and occupation. Since these words are separated by
the conjunction and, the clear intention of the law is not to make one synonymous with the other.
Possession is broader than occupation because it includes constructive possession. When, therefore,
the law adds the word occupation, it seeks to delimit the all-encompassing effect of constructive
possession. Taken together with the words open, continuous, exclusive and notorious, the
wordoccupation serves to highlight the fact that for an applicant to qualify, his possession must not
be a mere fiction. Nothing in Tax Declaration No. 8366 shows that Pastora exercised acts of
possession and occupation such as cultivation of or fencing off the land. Indeed, the lot was described
as cogonal. Sps. Antonio Fortuna and Erlinda Fortuna v. Republic of the Philippines,G.R. No. 173423,
March 5, 2014.
Public Land Act; Sec 48(b), as amended by P.D. 1073; requirements for judicial confirmation of
title.The requirements for judicial confirmation of imperfect title are found in Section 48(b) of the
Public Land Act, as amended by Presidential Decree No. 1073, as follows:
Sec. 48. The following described citizens of the Philippines, occupying lands of the public domain or
claiming to own any such lands or an interest therein, but whose titles have not been perfected or
completed, may apply to the Court of First Instance of the province where the land is located for
confirmation of their claims and the issuance of a certificate of title therefor, under the Land
Registration Act, to wit:
xxxx
(b) Those who by themselves or through their predecessors in interest have been in the open,
continuous, exclusive, and notorious possession and occupation of alienable and disposable lands of
the public domain, under a bona fide claim of acquisition or ownership, since June 12, 1945, or earlier,
immediately preceding the filing of the application for confirmation of title except when prevented by
war or force majeure. These shall be conclusively presumed to have performed all the conditions
essential to a Government grant and shall be entitled to a certificate of title under the provisions of
this chapter.
Republic of the Philippines represented by Aklan National Colleges of Fisheries (ANCF) and Dr. Elenita
R. Adrade, in her capacity as ANCF Superintendent v. Heirs of Maxima Lachica Sin, namely: Salvacion
L. Sin, Rosario S. Enriquez, Francisco L. Sin, Maria S. Yuchintat, Manuel L. Sin, Jaime Cardinal Sin,
Ramon L. Sin, and Ceferina S. Vita,G.R. No. 157485, March 26, 2014.
Regalian Doctrine; all lands of the public domain belong to the State and that lands not appearing to
be clearly within private ownership are presumed to belong to the State. As this Court held in the
fairly recent case of Valiao v. Republic (G.R. No. 170757, November 28, 2011,): Under the Regalian
doctrine, which is embodied in our Constitution, all lands of the public domain belong to the State,
which is the source of any asserted right to any ownership of land. All lands not appearing to be
clearly within private ownership are presumed to belong to the State. Accordingly, public lands not
shown to have been reclassified or released as alienable agricultural land or alienated to a private
person by the State remain part of the inalienable public domain. Unless public land is shown to have
been reclassified as alienable or disposable to a private person by the State, it remains part of the
inalienable public domain. Property of the public domain is beyond the commerce of man and not
susceptible of private appropriation and acquisitive prescription. Occupation thereof in the concept of
owner no matter how long cannot ripen into ownership and be registered as a title. The burden of
proof in overcoming the presumption of State ownership of the lands of the public domain is on the
person applying for registration (or claiming ownership), who must prove that the land subject of the
application is alienable or disposable. To overcome this presumption, incontrovertible evidence must
be established that the land subject of the application (or claim) is alienable or disposable. Republic
of the Philippines represented by Aklan National Colleges of Fisheries (ANCF) and Dr. Elenita R.
Adrade, in her capacity as ANCF Superintendent v. Heirs of Maxima Lachica Sin, namely: Salvacion L.
Sin, Rosario S. Enriquez, Francisco L. Sin, Maria S. Yuchintat, Manuel L. Sin, Jaime Cardinal Sin, Ramon
L. Sin, and Ceferina S. Vita, G.R. No. 157485, March 26, 2014.
Public Land Act; two requisites for judicial confirmation of title. The two requisites for judicial
confirmation of imperfect or incomplete title under CA No. 141, namely: (1) open, continuous,
exclusive, and notorious possession and occupation of the subject land by himself or through his
predecessors-in-interest under a bona fide claim of ownership since time immemorial or from June 12,
1945; and (2) the classification of the land as alienable and disposable land of the public
domain. Republic of the Philippines represented by Aklan National Colleges of Fisheries (ANCF) and
Dr. Elenita R. Adrade, in her capacity as ANCF Superintendent v. Heirs of Maxima Lachica Sin, namely:
Salvacion L. Sin, Rosario S. Enriquez, Francisco L. Sin, Maria S. Yuchintat, Manuel L. Sin, Jaime
Cardinal Sin, Ramon L. Sin, and Ceferina S. Vita, G.R. No. 157485, March 26, 2014.
Regalian Doctrine; failure of Republic to show competent evidence that the subject land was declared
a timberland before its formal classification as such in 1960 does not lead to the presumption that
said land was alienable and disposable prior to said date. Accordingly, in the case at bar, the failure
of petitioner Republic to show competent evidence that the subject land was declared a timberland
before its formal classification as such in 1960 does not lead to the presumption that said land
was alienable and disposable prior to said date. On the contrary, the presumption is that unclassified
lands are inalienable public lands. It is therefore the respondents which have the burden to identify a
positive act of the government, such as an official proclamation, declassifying inalienable public land

into disposable land for agricultural or other purposes. Since respondents failed to do so, the alleged
possession by them and by their predecessors-in-interest is inconsequential and could never ripen
into ownership. Republic of the Philippines represented by Aklan National Colleges of Fisheries
(ANCF) and Dr. Elenita R. Adrade, in her capacity as ANCF Superintendent v. Heirs of Maxima Lachica
Sin, namely: Salvacion L. Sin, Rosario S. Enriquez, Francisco L. Sin, Maria S. Yuchintat, Manuel L. Sin,
Jaime Cardinal Sin, Ramon L. Sin, and Ceferina S. Vita, G.R. No. 157485, March 26, 2014.

March 2014 Philippine Supreme Court Decisions on Commercial Law

Corporations; piercing the corporate veil. It has long been settled that the law vests a
corporation with a personality distinct and separate from its stockholders or members. In the same
vein, a corporation, by legal fiction and convenience, is an entity shielded by a protective mantle and
imbued by law with a character alien to the persons comprising it. Nonetheless, the shield is not
at all times impenetrable and cannot be extended to a point beyond its reason and policy.
Circumstances might deny a claim for corporate personality, under the doctrine of piercing the
veil of corporate fiction.
Piercing the veil of corporate fiction is an equitable doctrine developed to address situations
where the separate corporate personality of a corporation is abused or used for wrongful purposes.
Under the doctrine, the corporate existence may be disregarded where the entity is formed or used
for non-legitimate purposes, such as to evade a just and due obligation, or to justify a wrong, to shield
or perpetrate fraud or to carry out similar or inequitable considerations, other unjustifiable aims or
intentions, in which case, the fiction will be disregarded and the individuals composing it and the two
corporations will be treated as identical.
In the present case, we see an indubitable link between CBBs closure and Binswangers
incorporation. CBB ceased to exist only in name; it re-emerged in the person of Binswanger for an
urgent purpose to avoid payment by CBB of the last two installments of its monetary obligation to
Livesey, as well as its other financial liabilities. Freed of CBBs liabilities, especially that owing to
Livesey, Binswanger can continue, as it did continue, CBBs real estate brokerage business. Eric
Godfrey Stanley Livesey v. Binswanger Philippines, Inc. and Keith Elliot, G.R. No. 177493, March 19,
2014.
Insurance contracts; health care agreement. For purposes of determining the liability of a health
care provider to its members, jurisprudence holds that a health care agreement is in the nature of
non-life insurance, which is primarily a contract of indemnity. Once the member incurs hospital,
medical or any other expense arising from sickness, injury or other stipulated contingent, the health
care provider must pay for the same to the extent agreed upon under the contract. Fortune
Medicare, Inc. v. David Robert U. Amorin, G.R. No. 195872, March 12, 2014.
Insurance contracts; interpretation. In Philamcare Health Systems, Inc. v. CA, we ruled that a health
care agreement is in the nature of a non-life insurance. It is an established rule in insurance
contracts that when their terms contain limitations on liability, they should be construed strictly
against the insurer. These are contracts of adhesion the terms of which must be interpreted and
enforced stringently against the insurer which prepared the contract. This doctrine is equally
applicable to health care agreements. Fortune Medicare, Inc. v. David Robert U. Amorin, G.R. No.
195872, March 12, 2014.

March 2014 Philippine Supreme Court Decisions on Legal and Judicial Ethics
Attorney; Disbarment cases; Initiation. Complainants who are members of the Congressional Village
Homeowners Association, Inc. filed a Complaint for Disbarment against Atty. Jimenez for violating
Rule 12.03, Canon 12, Canon 17, Rule 18.03, and Canon 18 of the Code of Professional Responsibility
for his negligence in handling an appeal in a case involving the Association and willful violation of his
duties as an officer of the court.
The Supreme Court held that the complainants have personality to file the disbarment case. In Heck
v. Judge Santos, the Court held that [a]ny interested person or the court motu proprio may initiate
disciplinary proceedings. The right to institute disbarment proceedings is not confined to clients nor

is it necessary that the person complaining suffered injury from the alleged wrongdoing. The
procedural requirement observed in ordinary civil proceedings that only the real party-in-interest
must initiate the suit does not apply in disbarment cases. Disbarment proceedings are matters of
public interest and the only basis for the judgment is the proof or failure of proof of the charges.
Further, the Supreme Court held that a lawyer engaged to represent a client in a case bears the
responsibility of protecting the latters interest with utmost diligence. In failing to file the appellants
brief on behalf of his client, Atty. Jimenez had fallen far short of his duties as counsel as set forth in
Rule 12.04, Canon 12 of the Code of Professional Responsibility which exhorts every member of the
Bar not to unduly delay a case and to exert every effort and consider it his duty to assist in the
speedy and efficient administration of justice. However, the Supreme Court only suspended Atty.
Jimenez from the practice of law for one month. Nestor Figueras and Bienvenido Victoria, Jr. v. Atty.
Diosdado B. Jimenez,A.C. No. 9116, March 12, 2014.
Attorney; Fidelity to Client. Atty. Guaren was charged with violating the Canon of Professional
Responsibility when he accepted the titling of complainants lot and despite the acceptance of
P7,000, failed to perform his obligation and allowing 5 years to elapse without any progress in the
titling of complainants lot. The Supreme Court reiterated that the practice of law is not a business. It
is a profession in which duty to public service, not money, is the primary consideration. Lawyering is
not primarily meant to be a money-making venture, and law advocacy is not a capital that necessarily
yields profits. The gaining of a livelihood should be a secondary consideration. The duty to public
service and to the administration of justice should be the primary consideration of lawyers, who must
subordinate their personal interests or what they owe to themselves. In this case, Atty. Guaren
admitted that he accepted the amount of P7,000 as partial payment of his acceptance fee. He,
however, failed to perform his obligation to file the case for the titling of complainants lot despite the
lapse of 5 years. Atty. Guaren breached his duty to serve his client with competence and diligence
when he neglected a legal matter entrusted to him. Thus, Atty. Guaren violated Canons 17 and 18 of
the Code of Professional Responsibility and was suspended from the practice of law for six
months.Stephan Brunet and Virginia Romanillo Brunet v. Atty. Ronald L. Guaren,A.C. No. 10164,
March 10, 2014.
Attorney; Neglect of Duty. Atty. Agleron was charged with violating Rule 18.03 of the Code of
Professional Responsibility when he neglected a legal matter entrusted to him. The Supreme Court
held that once a lawyer takes up the cause of his client, he is duty bound to serve his client with
competence, and to attend to his clients cause with diligence, care and devotion regardless of
whether he accepts it for a fee or for free. He owes fidelity to such cause and must always be mindful
of the trust and confidence reposed on him.
In this case, Atty. Agleron admitted his failure to file the complaint despite the fact that it was already
prepared and signed. He attributed his non-filing of the appropriate charges on the failure of
complainant to remit the full payment of the filing fee and pay the 30% of the attorneys fee. Such
justification, however, is not a valid excuse that would exonerate him from liability. As stated, every
case that is entrusted to a lawyer deserves his full attention whether he accepts this for a fee or free.
Even assuming that complainant had not remitted the full payment of the filing fee, he should have
found a way to speak to his client and inform him about the insufficiency of the filing fee so he could
file the complaint. Atty. Agleron obviously lacked professionalism in dealing with complainant and
showed incompetence when he failed to file the appropriate charges. A lawyer should never neglect a
legal matter entrusted to him, otherwise his negligence renders him liable for disciplinary action such
as suspension ranging from three months to two years. In this case, Atty. Agleron was suspended
from the practice of law three months. Ermelinda Lad Vda. De Dominguez, represented by her
Attorney-in-Fact, Vicente A. Pichon v. Atty. Arnulfo M. Agleron Sr.,A.C. No. 5359, March 10, 2014.
Attorney; Notarization; Personal Appearance. A petition for disbarment was filed against Atty.
Cabucana, Jr. for falsification of public document. The requirement of personal appearance of the
affiant is required under the Notarial Law and Section 2 (b) of Rule IV of the Rules on Notarial Practice
of 2004. The Supreme Court held that as a notary public, Atty. Cabucana, Jr. should not notarize a
document unless the person who signs it is the same person executing it and personally appearing
before him to attest to the truth of its contents. This is to enable him to verify the genuineness of the
signature of the acknowledging party and to ascertain that the document is the partys free and
voluntary act and deed. Thus, Atty. Cabucana, Jr. was found violating Rule 1.01, Canon 1 of the Code
of Professional Responsibility and suspended from the practice of law for three months. His notarial
commission was revoked and he was prohibited from being commissioned as a notary public for two
years. Licerio Dizon v. Atty. Marcelino Cabucana, Jr.,A.C. No. 10185, March 12, 2014.
Judge; Violation of Administrative Rules; Unprofessional Conduct. Judge Larida, Jr. was charged for
committing various anomalies and irregularities. The Supreme Court held that Judge Larida, Jr.
committed several lapses, specifically the non-submission to the Court of the required inventory of
locally-funded employees, and his allowing Marticio to draft court orders. Such lapses manifested a
wrong attitude towards administrative rules and regulations issued for the governance and
administration of the lower courts, to the extent of disregarding them, as well as a laxity in the control

of his Branch and in the supervision of its functioning staff. The omission to submit the inventory
should not be blamed on Atty. Calma as the Branch Clerk of Court. Although it was very likely that
Judge Larida, Jr. had tasked Atty. Calma to do and submit the inventory in his behalf, Judge Larida, Jr.
as the Presiding Judge himself remained to be the officer directly burdened with the responsibility for
doing so. Further, for knowingly allowing detailed employees to solicit commissions from bonding
companies, Judge Larida, Jr. contravened the Code of Judicial Conduct, which imposed on him the duty
to take or initiate appropriate disciplinary measures against court personnel for unprofessional
conduct of which he would have become aware. Office of the Court Administrator v. Judge Edwin C.
Larida, Jr., RTC, Branch 18, Tagaytay City,A.M. No. RTJ-08-2151, March 11, 2014.
Judge; Gross Ignorance of the Law. An administrative complaint was filed against Judge Bitas for
fixing the accuseds bail and reducing the same motu proprio. In this case, Miralles was charged with
Qualified Trafficking, which under Section 10 (C) of R.A. No. 9208 is punishable by life imprisonment
and a fine of not less than P2,000,000 but not more than P5,000,000. Thus, by reason of the penalty
prescribed by law, the grant of bail is a matter of discretion which can be exercised only by Judge
Bitas after the evidence is submitted in a hearing. The hearing of the application for bail in capital
offenses is absolutely indispensable before a judge can properly determine whether the prosecutions
evidence is weak or strong. The Supreme Court held that not only did Judge Bitas deviate from the
requirement of a hearing where there is an application for bail, he also granted bail to Miralles without
neither conducting a hearing nor a motion for application for bail. Judge Bitas acts are not mere
deficiency in prudence, discretion and judgment on his part, but a patent disregard of well-known
rules. When an error is so gross and patent, such error produces an inference of bad faith, making
the judge liable for gross ignorance of the law. Ma. Liza M. Jorda, City Prosecutors Office, Tacloban
City v. Judge Crisologo S. Bitas, RTC, Branch 7, Tacloban City; Prosecutor Leo C. Tabao v. Judge
Crisologo S. Bitas, RTC, Branch 7, Tacloban City,A.M. No. RTJ-14-2376/A.M. No. RTJ-14-2377. March 5,
2014.

March 2014 Philippine Supreme Court Decisions on Criminal law and Procedure
1. REVISED PENAL CODE
Conspiracy; liability of conspirators. Assuming that the prosecution witnesses failed to identify exactly
who inflicted the fatal wounds on Joey during the commotion, Erwins liability is not diminished since
he and the others with him acted with concert in beating up and ultimately killing Joey. Conspiracy
makes all the assailants equally liable as co-principals by direct participation. Since about 15 men,
including accused Erwin, pounced on their one helpless victim, relentlessly bludgeoned him on the
head, and stabbed him on the stomach until he was dead, there is no question that the accused took
advantage of their superior strength. The Supreme Court thus affirmed the decision of the lower
courts finding accused Erwin guilty of murder. People of the Philippines v. Erwin Tamayo y
Bautisa, G.R. No. 196960, March 12, 2014.
Rape; rape victim with a mental disability either deprived of reason or demented. Article 266-A,
paragraph 1 of the Revised Penal Code, as amended, provides for two circumstances when having
carnal knowledge of a woman with a mental disability is considered rape, to wit: paragraph 1(b)
when the offended party is deprived of reason; and paragraph 1(d) when the offended party is
demented. Under paragraph 1(d), the term demented refers to a person who has dementia, which is
a condition of deteriorated mentality, characterized by marked decline from the individuals former
intellectual level and often by emotional apathy, madness, or insanity. On the other hand, under
paragraph 1(b), the phrase deprived of reason has been interpreted to include those suffering from
mental abnormality, deficiency, or retardation. People of the Philippines v. Ernesto Ventura Sr., G.R.
No. 205230, March 12, 2014.
Rape; when rape victim is deprived of reason but not demented. Since AAA is mentally deficient, she
should properly be classified as a person who is deprived of reason, and not one who is
demented. Hence, carnal knowledge of a mentally deficient individual is rape under subparagraph
(b) and not subparagraph (d) of Article 266-A(1) of the RPC, as amended. Nevertheless, the erroneous
reference to paragraph 1(d) in the Information will not exonerate Ventura because he failed to raise
this as an objection, and the particular facts stated in the Information were protestation sufficient to
inform him of the nature of the charge against him. From the foregoing, all that needs to be proven
are the facts of sexual congress between the rapist and his victim, and the latters mental
retardation. People of the Philippines v. Ernesto Ventura Sr., G.R. No. 205230, March 12, 2014.
Rape; exact date of rape incident not an essential element. AAAs failure to recall the exact date of
the first rape and the number of times she was sexually assaulted by Ventura prior to March 24, 2005,
does not militate against her credibility since rape victims are not expected to cherish in their
memories an accurate account of the dates, number of times and manner they were violated. This is
especially true in the case of AAA who obviously cannot be expected to act like an adult who would

have the courage and intelligence to disregard the threat to her life and complain immediately that
she had been sexually assaulted. AAAs testimony was clear that every time Ventura would rape her,
he would threaten her against revealing the offense. Given AAAs mental condition, it can well
substitute for violence and intimidation enough to cow her into submission. The Supreme Court had
repeatedly held that the exact date when the victim was sexually abused is not an essential element
of the crime of rape, for the gravamen of the offense is carnal knowledge of a woman. Indeed, the
precise time of the crime has no substantial bearing on its commission. As such, the time or place of
commission in rape cases need not be accurately stated. Inconsistencies and discrepancies as to
minor matters which are irrelevant to the elements of the crime cannot be considered grounds for
acquittal. Hence, the allegation in the information, which states that the rape was committed on or
about March 24, 2005, is sufficient to affirm the conviction of Ventura in the said case. People of the
Philippines v. Ernesto Ventura Sr., G.R. No. 205230, March 12, 2014.
Statutory rape; elements; proof of force, intimidation or consent not necessary. Statutory rape is
committed by sexual intercourse with a woman below 12 years of age regardless of her consent, or
the lack of it, to the sexual act. Proof of force, intimidation or consent is unnecessary as they are not
elements of statutory rape, considering that the absence of free consent is conclusively presumed
when the victim is below the age of 12. At that age, the law presumes that the victim does not
possess discernment and is incapable of giving intelligent consent to the sexual act. Thus, to convict
an accused of the crime of statutory rape, the prosecution carries the burden of proving: (a) the age
of the complainant; (b) the identity of the accused; and (c) the sexual intercourse between the
accused and the complainant. People of the Philippines v. Guillermo B. Candano Jr., G.R. No. 207819,
March 12, 2014.
Statutory rape; elements; proof of force, intimidation or consent not necessary. A judicious review of
the records of this case would reveal that the aforementioned elements of statutory rape are present.
First, the presentation of AAAs Certificate of Live Birth showing that she was born on July 25, 1998
has proven that she was below 12 years of age when the three (3) rape incidents happened on
December 26 and 27, 1996, and in June 2000, respectively. Second, the prosecution proved that
Cadano indeed had carnal knowledge of AAA on three (3) separate occasions through the latters
positive, categorical, and spontaneous testimony, as corroborated by the medico-legal report. People
of the Philippines v. Guillermo B. Candano Jr., G.R. No. 207819, March 12, 2014.
2. SPECIAL PENAL LAWS
Alias; defined. An alias is a name or names used by a person or intended to be used by him publicly
and habitually, usually in business transactions, in addition to the real name by which he was
registered at birth or baptized the first time, or to the substitute name authorized by a competent
authority; a mans name is simply the sound or sounds by which he is commonly designated by his
fellows and by which they distinguish him, but sometimes a man is known by several different names
and these are known as aliases. An alias is thus a name that is different from the individuals true
name, and does not refer to a name that is not different from his true name. Revelina Limson v.
Eugenio Juan Gonzalez, G.R. No. 162205, March 31, 2014.
Anti-Graft and Corrupt Practices Act; Section 3(g); private persons acting in conspiracy with public
officers may be indicted. The only question that needs to be settled in the present petition is whether
herein respondent, a private person, may be indicted for conspiracy in violating Section 3(g) of R.A.
3019 even if the public officer, with whom he was alleged to have conspired, has died prior to the
filing of the Information. Respondent contends that by reason of the death of Secretary Enrile, there is
no public officer who was charged in the Information and, as such, prosecution against respondent
may not prosper. The Supreme Court was not persuaded. It held that, it is true that by reason of
Secretary Enriles death, there is no longer any public officer with whom respondent can be charged
for violation of R.A. 3019. It does not mean, however, that the allegation of conspiracy between them
can no longer be proved or that their alleged conspiracy is already expunged. The only thing
extinguished by the death of Secretary Enrile is his criminal liability. His death did not extinguish the
crime nor did it remove the basis of the charge of conspiracy between him and private respondent.
Stated differently, the death of Secretary Enrile does not mean that there was no public officer who
allegedly violated Section 3(g) of R.A. 3019. In fact, the Office of the Deputy Ombudsman for Luzon
found probable cause to indict Secretary Enrile for infringement of Sections 3(e) and (g) of R.A. 3019.
Were it not for his death, he should have been charged. People of the Philippines v. Henry T. Go, G.R.
No. 168539, March 25, 2014.
Anti-Graft and Corrupt Practices Act; Section 3(g); private persons acting in conspiracy with public
officers may be indicted. The requirement before a private person may be indicted for violation of
Section 3(g) of R.A. 3019, among others, is that such private person must be alleged to have acted in
conspiracy with a public officer. The law, however, does not require that such person must, in all
instances, be indicted together with the public officer. If circumstances exist where the public officer
may no longer be charged in court, as in the present case where the public officer has already died,

the private person may be indicted alone. People of the Philippines v. Henry T. Go, G.R. No. 168539,
March 25, 2014.
Chain of custody rule. The Supreme Court has time and again spoken on the chain of custody rule, a
method of authenticating evidence which requires that the admission of an exhibit be preceded by
evidence sufficient to support a finding that the matter in question is what the proponent claims it to
be. This would include testimony about every link in the chain, from the moment the item was picked
up to the time it is offered in evidence, in such a way that every person who touched the exhibit
would describe how and from whom it was received, where it was and what happened to it while in
the witness possession, the condition in which it was received and the condition in which it was
delivered to the next link in the chain. These witnesses would then describe the precautions taken to
ensure that there had been no change in the condition of the item and no opportunity for someone
not in the chain to have possession of the same. People of the Philippines v. Freddie Ladip y
Rubio, G.R. No. 196146, March 12, 2014.
Chain of custody rule; buy-bust situation. From the testimonies of the police officers in the case at
bench, the prosecution established that they had custody of the drugs seized from the accused from
the moment he was arrested, during the time he was transported to the police station, and up to the
time the drugs were submitted to the crime laboratory for examination. The same witnesses also
identified the seized drugs with certainty when these were presented in court. With regard to the
handling of the seized drugs, there are no conflicting testimonies or glaring inconsistencies that would
cast doubt on the integrity thereof as evidence presented and scrutinized in court. It is therefore safe
to conclude that, to the unprejudiced mind, the testimonies show without a doubt that the evidence
seized from the accused at the time of the buy-bust operation was the same one tested, introduced,
and testified to in court. In short, there is no question as to the integrity of the evidence against the
accused. People of the Philippines v. Freddie Ladip y Rubio, G.R. No. 196146, March 12, 2014.
Chain of custody; buy-bust situation. The following links must be established in the chain of custody
in a buy-bust situation: first, the seizure and marking, if practicable, of the illegal drug recovered from
the accused by the apprehending officer; second, the turn over of the illegal drug seized by the
apprehending officer to the investigating officer; third, the turn over by the investigating officer of the
illegal drug to the forensic chemist for laboratory examination; and fourth, the turn over and
submission of the marked illegal drugs seized from the forensic chemist to the court. People of the
Philippines v. Hermanos Constantino, Jr. y Binayug, a.k.a. Jojit, G.R. No. 199689, March 12, 2014.
Chain of custody; buy-bust situation. After a careful scrutiny of the testimonies of the prosecution
witnesses, the Supreme Court found glaring inconsistencies affecting the integrity of
the shabupurportedly confiscated from Constantino. The inconsistent testimonies of PO3 Domingo,
PO3 Hernandez, and P/SInsp. Tulauan as to who, when, and where the two plastic sachets
of shabu were marked lead the court to question whether the two plastic sachets of shabu identified
in court were the very same ones confiscated from Constantino. The doubtful markings already broke
the chain of custody of the seized shabu at a very early stage. To recall, the first crucial link in the
chain of custody is seizure and marking of the illegal drug. In this case, PO3 Domingo, as poseurbuyer, received two plastic sachets of shabu from Constantino in exchange for P1,000. However, PO3
Domingo himself did not put any markings on the two plastic sachets of shabu. Instead, upon arrival
of the buy-bust team with Constantino at the police station, PO3 Domingo turned over the two plastic
sachets of shabu to the investigator, SPO2 Tamang, who was also a member of the buy-bust team.
PO3 Domingo testified that it was SPO2 Tamang who put the marking NBT on the said sachets
of shabu. However, PO3 Hernandez, another member of the buy-bust team, categorically pointed to
SPO2 Taguiam, also a member of the buy-bust team, as the one who put the marking NBT on the
plastic sachets upon the teams return to the police station. To complicate things even further,
P/SInsp Tulauan, the Forensic Chemist, also declared before the trial court that the marking NBT on
the two plastic sachets of shabuwere made by SPO3 Nelson B. Tamaray, the duty officer who received
the specimens at the crime laboratory. On cross-examination, P/SInsp. Tulauan confirmed her previous
declaration that SPO3 Tamaray had claimed making the marking on the sachets of shabu. Herein, the
prosecution is completely silent as to why PO3 Domingo, the poseur-buyer, despite having immediate
custody of the two plastic sachets of shabu purchased from Constantino, failed to immediately mark
the seized drugs before turning over the custody of the same to another police officer. This lapse in
procedure opened the door for confusion and doubt as to the identity of the drugs actually seized
from Constantino during the buy-bust and the ones presented before the trial court, especially
considering that three different people, during the interval, supposedly received and marked the
same. People of the Philippines v. Hermanos Constantino, Jr. y Binayug, a.k.a. Jojit, G.R. No. 199689,
March 12, 2014.
Illegal use of aliases. On the issue of the alleged use of illegal aliases, the Supreme Court observed
that respondents aliases involved the names Eugenio Gonzalez, Eugenio Gonzales, Eugenio Juan
Gonzalez, Eugenio Juan Gonzalez y Regalado, Eugenio C.R. Gonzalez, Eugenio J. Gonzalez, and
per Limson Eugenio Juan Robles Gonzalez. But these names contained his true names, albeit at
times joined with an erroneous middle or second name, or a misspelled family name in one instance.

The records disclose that the erroneous middle or second names, or the misspelling of the family
name resulted from error or inadvertence left unchecked and unrectified over time. What is
significant, however, is that such names were not fictitious names within the purview of the Anti-Alias
Law; and that such names were not different from each other. Considering that he was not also shown
to have used the names for unscrupulous purposes, or to deceive or confuse the public, the dismissal
of the charge against him was justified in fact and in law. Revelina Limson v. Eugenio Juan
Gonzalez, G.R. No. 162205, March 31, 2014.
Presumption of regularity in the performance of official duty; procedure lapses in handling of shabu
negates presumption of regularity in the performance of official duty. The Supreme Court ruled that
the lower courts erred in giving weight to the presumption of regularity in the performance that a
police officer enjoys in the absence of any taint of irregularity and of ill motive that would induce him
to falsify his testimony. The regularity of the performance of the police officers duties leaves much to
be desired in this case given the lapses in their handling of the allegedly confiscated shabu. The
totality of all the procedural lapses effectively produced serious doubts on the integrity and identity of
thecorpus delicti, especially in the face of allegations of frame-up. The Supreme Court had previously
held that these lapses negate the presumption that official duties have been regularly performed by
the police officers. Any taint of irregularity affects the whole performance and should make the
presumption unavailable. Indeed, the presumption of regularity in the performance of official duty
cannot by itself overcome the presumption of innocence nor constitute proof beyond reasonable
doubt. It should be noted that the presumption is precisely just that a presumption. Once challenged
by evidence, as in this case, it cannot be regarded as binding truth. People of the Philippines v. Jerry
Caranto y Propeta, G.R. No. 193768, March 5, 2014.
R.A. 3019; Section 3(e); proof of the extent of damage is not essential. The third element of the
offense that the act of the accused caused undue injury to any party, including the Government, or
gave any private party unwarranted benefit, advantage or preference in the discharge of the
functions of the accused was established here. Proof of the extent of damage is not essential, it
being sufficient that the injury suffered or the benefit received is perceived to be substantial enough
and not merely negligible. In the present case, the prosecutions evidence duly proved that
petitioners, using their official positions, by dishonesty and breach of sworn duty, facilitated the
approval and release of government funds amounting to P20,000,000 supposedly for the purchase of
combat clothing and individual equipment (CCIE) items of PNP personnel. However, the recipients of
the P20,000,000 turned out to be fictitious PNP personnel, and up to now the P20,000,000 remains
unaccounted for. Thus, petitioners should be made liable for their deceit and misrepresentation and
should compensate the government for the actual damage the government has suffered. Danilo O.
Garcia and Joven SD. Brizuela v. Sandiganbayan and People of the Philippines, G.R. No. 197204,
March 26, 2014.
R.A. 9165; Section 21(a) of the IRR of R.A. 9165; inventory and marking of seized items in
warrantless seizures. From a cursory reading of Section 21(a) of the Implementing Rules and
Regulations of RA 9165, it can be gleaned that in cases of warrantless seizures, as in this case,
inventory and marking of the seized item can be conducted at the nearest police station or office of
the apprehending authorities, whichever is practicable, and not necessarily at the place of seizure. As
held in People v. Resurreccion, marking upon immediate confiscation does not exclude the
possibility that marking can be done at the police station or office of the apprehending team. Thus, in
the present case, the apprehending team cannot be faulted if the inventory and marking were done
at their office where appellant was immediately brought for custody and further investigation. Indeed,
the fact that the inventory and marking of the subject item were not made onsite is of no moment
and will not lead to appellants exoneration. People of the Philippines v. Manuel S. Aplat, G.R. No.
191727, March 31, 2014.
3. CRIMINAL PROCEDURE
Alibi. For alibi to prosper, it must not only be shown that appellant was at another place at the time
of the commission of the crime but that it was also impossible for him to be present at the crime
scene. In this case, appellant attempted to show that he was at barangay Ananong at the time of the
rape incident. However, as found by the trial court, the distance between barangay Ananong and
barangay Ogbong is only four kilometers and could be traversed in one hour or even less. Hence,
appellants assertion that the trial court and the appellate court should have considered his alibi must
fail. People of the Philippines v. Jerry Obogne, G.R. No. 199740, March 24, 2014.
Appeal; issues not raised in the trial court cannot be raised on appeal. Petitioners anchor their
defense on the nature of their respective positions to prove that they acted within the bounds of their
functions. However, Garcia and Brizuela only raised their functions as Assistant Regional Director for
Comptrollership and Disbursing Officer, respectively, for the first time before the Sandiganbayan
when they filed their separate Supplements to Motion for Reconsideration and after a decision had
already been rendered by the Sandiganbayan. The settled rule is that issues not raised in the court a
quo cannot be raised for the first time on appeal in this case, in a motion for reconsideration for

being offensive to the basic rules of fair play, justice and due process. Points of law, theories, issues,
and arguments not brought to the attention of the trial court are barred by estoppel and cannot be
considered by a reviewing court, as these cannot be raised for the first time on appeal. Danilo O.
Garcia and Joven SD. Brizuela v. Sandiganbayan and People of the Philippines, G.R. No. 197204,
March 26, 2014.
Evidence; credibility of witnesses not affected by minor inconsistencies. Appellant here pointed out
inconsistencies in the testimonies of prosecution witnesses Espejo and Arce, to wit: (1) Espejo
testified that he found the aluminum foils and the marked money tucked on appellants waistline
while Arce testified that he saw Espejo frisk appellant and found the specimen in the latters pocket;
(2) Espejo stated that appellant was then wearing basketball shorts while Arce described him as
wearing a six-pocket short pants. Appellant argued that these inconsistent statements render Espejo
and Arce incredible witnesses. The Supreme Court was not convinced. It held that the minor
contradictions in Espejo and Arces testimonies are inconsequential and do not detract from the
proven elements of the offense of illegal sale of dangerous drugs. People of the Philippines v. Sherwin
Bis y Avellaneda, G.R. No. 191360, March 10, 2014.
Evidence; credibility of witnesses not affected by minor inconsistencies. It is now too well-settled to
require extensive documentation that inconsistencies in the testimonies of witnesses, which refer
only to minor details and collateral matters, do not affect the veracity and weight of their testimonies
where there is consistency in relating the principal occurrence and the positive identification of the
accused. Significantly, in the case at bench, the testimonies of the said witnesses for the prosecution
were in harmony with respect to their positive identification of appellant as the one who sold the
illegal drugs to Espejo, the poseur-buyer, in a planned buy-bust operation, as well as to the other
surrounding circumstances that transpired during the said operation. People of the Philippines v.
Sherwin Bis y Avellaneda, G.R. No. 191360, March 10, 2014.
Information; the court has the sole prerogative to resolve motions to withdraw an Information filed by
the Secretary of Justice. When confronted with a motion to withdraw an Information on the ground of
lack of probable cause based on a resolution of the Secretary of Justice, the bounden duty of the trial
court is to make an independent assessment of the merits of such motion. Having acquired
jurisdiction over the case, the trial court is not bound by such resolution but is required to evaluate it
before proceeding farther with the trial. Indeed, once a criminal complaint or information is filed in
court, any disposition of the case or dismissal or acquittal or conviction of the accused rests within
the exclusive jurisdiction, competence, and discretion of the trial court. The rule applies to a motion
to withdraw the Information or to dismiss the case even before or after arraignment of the accused.
When the trial court grants a motion of the public prosecutor to dismiss the case, or to quash the
Information, or to withdraw the Information in compliance with the directive of the Secretary of
Justice, or to deny the said motion, it does so not out of subservience to or defiance of the directive of
the Secretary of Justice but in the sound exercise of its judicial prerogative. Barry Lanier and Perlita
Lanier v. People of the Philippines, G.R. No. 189176, March 19, 2014.
Information; when the Information is filed in court, the ruling of the Secretary of Justice with respect
to the existence of probable cause is not binding on the court. The Regional Trial Court here clearly
deferred to the finding of probable cause by the Secretary of Justice without doing its own
independent evaluation. The trial court even expressed its apprehension that no prosecutor would be
willing to prosecute the case should the motion to withdraw be denied. The only matter discussed by
the trial court was its concurrence with the Department of Justice relative to the service and conduct
of the search for illegal drugs. The trial court declared that the evidence is inadmissible in view of the
manner the search warrant was served. Settled is the rule that the presence or absence of the
elements of the crime is evidentiary in nature and is a matter of defense, the truth of which can be
best passed upon after a full-blown trial on the merits. In the case at bar, the grounds relied upon by
petitioners should be fully explained and threshed out not in a preliminary investigation but during
trial as the same are matters of defense involving factual issues. The Supreme Court thus emphasized
that the trial court, having acquired jurisdiction over the case, is not bound by such resolution but is
required to evaluate it before proceeding further with the trial. While the Secretarys ruling is
persuasive, it is not binding on courts. Barry Lanier and Perlita Lanier v. People of the Philippines, G.R.
No. 189176, March 19, 2014.
Probation; appeal and probation are mutually exclusive remedies. Aside from the goals of according
expediency and liberality to the accused, the rationale for the treatment of appeal and probation as
mutually exclusive remedies is that they rest on diametrically opposed legal positions. An accused
applying for probation is deemed to have accepted the judgment. The application for probation is an
admission of guilt on the part of an accused for the crime which led to the judgment of conviction.
This was the reason why the Probation Law was amended: precisely to put a stop to the practice of
appealing from judgments of conviction even if the sentence is probationable for the purpose of
securing an acquittal and applying for the probation only if the accused fails in his bid. Enrique
Almero y Alcantara v. People of the Philippines, et al, G.R. No. 188191, March 12, 2014.

Probation; appeal and probation are mutually exclusive remedies. In the present case, petitioner
cannot make up his mind whether to question the judgment, or apply for probation, which is
necessarily deemed a waiver of his right to appeal. While he did not file an appeal before applying for
probation, he assailed the validity of the conviction in the guise of a petition supposedly assailing the
denial of probation. In so doing, he attempted to circumvent P.D. No. 968, as amended by P.D. 1990,
which seeks to make appeal and probation mutually exclusive remedies. The assignment of errors in
the Petition before the Supreme Court reflects the diametrically opposed positions taken by accused
petitioner. On the one hand, he bewails the defects committed by the trial court during the
promulgation of the judgment, thus casting doubt on the judgment itself. Yet in the same breath, he
persists in his application for probation, despite the waiver and admission of guilt implicit in any
procedure for probation precisely the unhealthy wager the law seeks to prevent. Enrique Almero y
Alcantara v. People of the Philippines, et al, G.R. No. 188191, March 12, 2014.

March 2014 Philippine Supreme Court Decisions on Tax Law

National Internal Revenue Code; value-added tax; zero-rated or effectively zero-rated sales; unutilized
input value-added tax; claims for tax credit or refund; period to file appeal with the Court of Tax
Appeals. Section 112 (D) of the National Internal Revenue Code provides the Commissioner of Internal
Revenue a 120-day period from submission of complete documents in support of the administrative
claim within which to act on claims for refund/applications for issuance of the tax credit certificate.
Upon denial of the claim or application, or upon expiration of the 120-day period, the taxpayer only
has 30 days within which to appeal said adverse decision or unacted claim before the CTA, otherwise,
said judicial claim shall be considered as filed out of time. Commissioner of Internal Revenue v.
Silicon Philippines, Inc. (formerly Intel Philippines Manufacturing, Inc.), G.R. No. 169778, March 12,
2014.
National Internal Revenue Code; value-added tax; unutilized input VAT; claims for tax credit or refund;
prescriptive periods. (1) An administrative claim must be filed with the Commissioner of Internal
Revenue (CIR) within two years after the close of the taxable quarter when the zero-rated or
effectively zero-rated sales were made. (2) The CIR has 120 days from the date of submission
of complete documents in support of the administrative claim within which to decide whether to grant
a refund or issue a tax credit certificate. The 120-day period may extend beyond the two-year period
from the filing of the administrative claim if the claim is filed in the later part of the two-year period.
If the 120-day period expires without any decision from the CIR, then the administrative claim may be
considered to be denied by inaction. (3) A judicial claim must be filed with the Court of Tax Appeals
(CTA) within 30 days from the receipt of the CIRs decision denying the administrative claim or from
the expiration of the 120-day period without any action from the CIR. (4) All taxpayers can rely on
Bureau of Internal Revenue Ruling No. DA-489-03 from the time of its issuance on December 10, 2003
up to its reversal by the Court in the Aichi case on October 6, 2010, as an exception to the mandatory
and jurisdictional 120+30 day periods. Commissioner of Internal Revenue v. Silicon Philippines, Inc.
(formerly Intel Philippines Manufacturing, Inc.), G.R. No. 169778, March 12, 2014.
National Internal Revenue Code; value-added tax; Section 4.108-1 of Revenue Regulations No. 7-95;
significance of imprinting the word zero-rated for zero-rated sales covered by its receipts or
invoices. The absence or non-printing of the word zero-rated in the claimants invoices is fatal to its
claim for the refund and/or tax credit representing its unutilized input value-added tax (VAT)
attributable to its zero-rated sales. The appearance of the word zero-rated on the face of
invoices covering zero-rated sales prevents buyers from falsely claiming input VAT from their
purchases when no VAT was actually paid. Further, the printing of the word zero-rated on the
invoice helps segregate sales that are subject to 12% VAT from those sales that are zerorated. Commissioner of Internal Revenue v. Silicon Philippines, Inc. (formerly Intel Philippines
Manufacturing, Inc.), G.R. No. 169778, March 12, 2014.
National Internal Revenue Code; value-added tax; imprinting BIR Authority to Print in invoices; no
law or Bureau of Internal Revenue rule or regulation requiring the taxpayer-claimants authority from
the BIR to print its sales invoices (BIR authority to print) to be reflected or indicated therein. While the
Court considers the importance of imprinting the word zero-rated in said invoices, the same does
not apply to the phrase BIR authority to print. There is no law or Bureau of Internal Revenue (BIR)
rule or regulation requiring the taxpayer-claimants authority from the BIR to print its sales invoices
(BIR authority to print) to be reflected or indicated therein. While entities engaged in business are
required to secure from the BIR an authority to print receipts or invoices and to issue duly registered
receipts or invoices, it is not required that the BIR authority to print be reflected or indicated

therein.Commissioner of Internal Revenue v. Silicon Philippines, Inc. (formerly Intel Philippines

Manufacturing, Inc.),G.R. No. 169778, March 12, 2014.

April 2014 Philippine Supreme Court Decisions on Legal and Judicial Ethics
Court personnel; simple misconduct. An administrative case was filed against Melchor Tiongson, a
Court of Appeals (CA) employee who was assigned to be the head watcher during the 2011 bar
examinations. The complaint alleged that she brought a digital camera inside the bar examination
rooms, in violation of the Instructions to Head Watchers. The Court held that in administrative
proceedings, substantial evidence is the quantum of proof required for a finding of guilt, and this
requirement is satisfied if there is reasonable ground to believe that the employee is responsible for
the misconduct. Misconduct means transgression of some established and definite rule of action,
more particularly, unlawful behavior or gross negligence by an employee. Any transgression or
deviation from the established norm of conduct, work related or not, amounts to a misconduct. In this
case, there was substantial evidence to prove that Tiongson committed a misconduct. Tiongson was
held liable for simple misconduct only, because the elements of grave misconduct were not proven
with substantial evidence, and Tiongson admitted his infraction before the Office of the Bar Confidant.
As a CA employee, Tiongson disregarded his duty to uphold the strict standards required of every
court employee, that is, to be an example of integrity, uprightness and obedience to the judiciary. Re:
Melchor Tiongson, Head Watcher, During the 2011 Bar Examinations, B.M. No. 2482, April 1, 2014.
Judges; bias and partiality must be proven by clear and convincing evidence. The Court held that the
truth about Judge Austrias alleged partiality cannot be determined by simply relying on the verified
complaint. Bias and prejudice cannot be presumed, in light especially of a judges sacred obligation
under his oath of office to administer justice without respect to the person, and to give equal
right to the poor and rich. There should be clear and convincing evidence to prove the charge; mere
suspicion of partiality is not enough. In this case, aside from being speculative and judicial in
character, the circumstances cited by the complainant were grounded on mere opinion and surmises.
The complainant also failed to adduce proof indicating the judges predisposition to decide the case in
favor of one party. Antonio M. Lorenzana v. Judge Ma. Cecilia I. Austria, RTC, Br. 2, Batangas City, A.M.
No. RTJ-09-2200, April 2, 2014.
Judges; decision-making; 90-day requirement. An administrative case was filed against Judge
Bustamante when it was found out upon judicial audit that he had a number of cases pending for
decision, some of which the reglementary period have already lapsed. The Court held that decisionmaking, among other duties, is the primordial and most important duty of a member of the bench.
The speedy disposition of cases in the courts is a primary aim of the judiciary so the ends of justice
may not be compromised and the judiciary will be true to its commitment to provide litigants their
constitutional right to a speedy trial and a speedy disposition of their cases. The Constitution, Code of
Judicial Conduct, and jurisprudence consistently mandate that a judge must decide cases within 90
days from submission. A member of the bench cannot pay mere lip service to the 90-day
requirement; he/she should instead persevere in its implementation. Heavy caseload and demanding
workload are not valid reasons to fall behind the mandatory period for disposition of cases. Having
failed to decide a case within the required period, without any order of extension granted by the
Court, Judge Bustamante was held liable for undue delay that merits administrative sanction. Office
of the Court Administrator v. Judge Borromeo R. Bustamante, Municipal Trial Court in Cities, Alaminos
City, Pangasinan,A.M. No. MTJ-12-1806, April 7, 2014.
Judges; impropriety. An administrative complaint was filed against Judge Austria for impropriety for
posting her details as judge in Friendster and posting a picture with an indecent attire for the publics
consumption. The Court held that she was guilty of impropriety. While judges are not prohibited from
becoming members of and from taking part in social networking activities, they do not shed off
their status as judges. They carry with them in cyberspace the same ethical responsibilities and
duties that every judge is expected to follow in his/her everyday activities. Judge Austria was guilty
of impropriety when she posted her pictures in a manner viewable by the public. Joining
Friendster per sedoes not violate the New Code of Judicial Conduct. However, Judge Austria
disregarded the propriety and appearance of propriety required of her when she posted Friendster
photos of herself wearing an off-shouldered suggestive dress and made this available for public
viewing. Antonio M. Lorenzana v. Judge Ma. Cecilia I. Austria, RTC, Br. 2, Batangas City, A.M. No. RTJ09-2200, April 2, 2014.
Judges; irregular or erroneous order or decision; appropriate remedy. The Court held that in
administrative cases, the complainant bears the onus of proving the averments of his complaint by
substantial evidence. In this case, the allegations of grave abuse of authority, irregularity in the
performance of duty, grave bias and partiality, and lack of circumspection are devoid of merit
because the complainant failed to establish Judge Austrias bad faith, malice or ill will. The
complainant merely pointed to circumstances based on mere conjectures and suppositions. These, by

themselves, however, are not sufficient to prove the accusations. Even granting that the judge erred
in the exercise of her judicial functions, these are legal errors correctible not by a disciplinary action,
but by judicial remedies that are readily available to the complainant. An administrative complaint is
not the appropriate remedy for every irregular or erroneous order or decision issued by a judge where
a judicial remedy is available, such as a motion for reconsideration or an appeal. Antonio M.
Lorenzana v. Judge Ma. Cecilia I. Austria, RTC, Br. 2, Batangas City, A.M. No. RTJ-09-2200, April 2,
2014.

April 2014 Philippine Supreme Court Decisions on Commercial Law

Corporate officers; liability. On the issue of the solidary obligation of the corporate officers
impleaded vis--vis the corporation for Mapuas illegal dismissal, [i]t is hornbook principle that
personal liability of corporate directors, trustees or officers attaches only when: (a) they assent to a
patently unlawful act of the corporation, or when they are guilty of bad faith or gross
negligence in directing its affairs, or when there is a conflict of interest resulting in damages
to the corporation, its stockholders or other persons; (b) they consent to the issuance of
watered down stocks or when, having knowledge of such issuance, do not forthwith file with the
corporate secretary their written objection; (c) they agree to hold themselves personally and
solidarily liable with the corporation; or (d) they are made by specific provision of law personally
answerable fortheir corporate action.SPI Technologies, Inc., et al. v. Victoria K. Mapua,G.R. No.
199022, April 7, 2014.
Corporate officers; liability. A corporation has a personality separate and distinct from its officers and
board of directors who may only be held personally liable for damages if it is proven that they acted
with malice or bad faith in the dismissal of an employee. Absent any evidence on record that
petitioner Bautista acted maliciously or in bad faith in effecting the termination of respondent, plus
the apparent lack of allegation in the pleadings of respondent that petitioner Bautistaacted in such
manner, the doctrine of corporate fiction dictates that only petitioner corporation should be held
liable for the illegal dismissal of respondent. Mirant (Philippines) Corporation, et al. v. Joselito A.
Caro,G.R. No. 181490, April 23, 2014.
Corporations; merger; concept. Merger is a re-organization of two or more corporations that results in
their consolidating into a single corpor ation, which is one of the constituent corporations, one
disappearing or dissolving and the other surviving. To put it another way, merger is the absorption of
one or more corporations by another existing corporation, which retains its identity and takes over
the rights, privileges, franchises, properties, claims, liabilities and obligations of the absorbed
corporation(s). The absorbing corporation continues its existence while the life or lives of the other
corporation(s) is or are terminated. Bank of Commerce v. Radio Philippines Network, Inc., et al.,G.R.
No. 195615, April 21, 2014.
Corporations; merger; de facto merger. A de facto merger can be pursued by one corporation
acquiring all or substantially all of the properties of another corporation in exchange of shares of
stock of the acquiring corporation. The acquiring corporation would end up with the business
enterprise of the target corporation; whereas, the target corporation would end up with basically its
only re maining assets being the shares of stock of the acquiring corporation. Bank of Commerce v.
Radio Philippines Network, Inc., et al.,G.R. No. 195615, April 21, 2014.
Corporations; merger; effectivity. It is clear that no merger took place between Bancommerce and
TRB as the requireme nts and procedures for a merger were absent. A merger does not become
effective upon the mere agreementof the constituent corporations. All the requirements specified in
the law must be complied with in order for merger to take effect. Section 79 of the Corporation Code
further provides that the merger shall be effective only upon the issuance by the Securities and
Exchange Commission (SEC) of a certificate of merger. Bank of Commerce v. Radio Philippines
Network, Inc., et al.,G.R. No. 195615, April 21, 2014.
Corporations; nationality. The control test is still the prevailing mode of determining whether or not
a corporation is a Filipino corporation, within the ambit of Sec. 2, Art. II of the 1987 Constitution,
entitled to undertake the exploration, development and utilization of the natural resources of the
Philippines. When in the mind of the Court there is doubt, based on the attendant facts and
circumstances of the case, in the 60-40 Filipino-equity ownership in the corporation, then it may apply
the grandfather rule. Narra Nickel Mining and Development Corp., et al. v. Redmont Consolidated
Mines,G.R. No. 195580, April 21, 2014.

April 2014 Philippine Supreme Court Decisions on Legal and Judicial Ethics

Court personnel; simple misconduct. An administrative case was filed against Melchor Tiongson, a
Court of Appeals (CA) employee who was assigned to be the head watcher during the 2011 bar
examinations. The complaint alleged that she brought a digital camera inside the bar examination
rooms, in violation of the Instructions to Head Watchers. The Court held that in administrative
proceedings, substantial evidence is the quantum of proof required for a finding of guilt, and this
requirement is satisfied if there is reasonable ground to believe that the employee is responsible for
the misconduct. Misconduct means transgression of some established and definite rule of action,
more particularly, unlawful behavior or gross negligence by an employee. Any transgression or
deviation from the established norm of conduct, work related or not, amounts to a misconduct. In this
case, there was substantial evidence to prove that Tiongson committed a misconduct. Tiongson was
held liable for simple misconduct only, because the elements of grave misconduct were not proven
with substantial evidence, and Tiongson admitted his infraction before the Office of the Bar Confidant.
As a CA employee, Tiongson disregarded his duty to uphold the strict standards required of every
court employee, that is, to be an example of integrity, uprightness and obedience to the judiciary. Re:
Melchor Tiongson, Head Watcher, During the 2011 Bar Examinations, B.M. No. 2482, April 1, 2014.
Judges; bias and partiality must be proven by clear and convincing evidence. The Court held that the
truth about Judge Austrias alleged partiality cannot be determined by simply relying on the verified
complaint. Bias and prejudice cannot be presumed, in light especially of a judges sacred obligation
under his oath of office to administer justice without respect to the person, and to give equal
right to the poor and rich. There should be clear and convincing evidence to prove the charge; mere
suspicion of partiality is not enough. In this case, aside from being speculative and judicial in
character, the circumstances cited by the complainant were grounded on mere opinion and surmises.
The complainant also failed to adduce proof indicating the judges predisposition to decide the case in
favor of one party. Antonio M. Lorenzana v. Judge Ma. Cecilia I. Austria, RTC, Br. 2, Batangas City, A.M.
No. RTJ-09-2200, April 2, 2014.
Judges; decision-making; 90-day requirement. An administrative case was filed against Judge
Bustamante when it was found out upon judicial audit that he had a number of cases pending for
decision, some of which the reglementary period have already lapsed. The Court held that decisionmaking, among other duties, is the primordial and most important duty of a member of the bench.
The speedy disposition of cases in the courts is a primary aim of the judiciary so the ends of justice
may not be compromised and the judiciary will be true to its commitment to provide litigants their
constitutional right to a speedy trial and a speedy disposition of their cases. The Constitution, Code of
Judicial Conduct, and jurisprudence consistently mandate that a judge must decide cases within 90
days from submission. A member of the bench cannot pay mere lip service to the 90-day
requirement; he/she should instead persevere in its implementation. Heavy caseload and demanding
workload are not valid reasons to fall behind the mandatory period for disposition of cases. Having
failed to decide a case within the required period, without any order of extension granted by the
Court, Judge Bustamante was held liable for undue delay that merits administrative sanction. Office
of the Court Administrator v. Judge Borromeo R. Bustamante, Municipal Trial Court in Cities, Alaminos
City, Pangasinan,A.M. No. MTJ-12-1806, April 7, 2014.
Judges; impropriety. An administrative complaint was filed against Judge Austria for impropriety for
posting her details as judge in Friendster and posting a picture with an indecent attire for the publics
consumption. The Court held that she was guilty of impropriety. While judges are not prohibited from
becoming members of and from taking part in social networking activities, they do not shed off
their status as judges. They carry with them in cyberspace the same ethical responsibilities and
duties that every judge is expected to follow in his/her everyday activities. Judge Austria was guilty
of impropriety when she posted her pictures in a manner viewable by the public. Joining
Friendster per sedoes not violate the New Code of Judicial Conduct. However, Judge Austria
disregarded the propriety and appearance of propriety required of her when she posted Friendster
photos of herself wearing an off-shouldered suggestive dress and made this available for public
viewing. Antonio M. Lorenzana v. Judge Ma. Cecilia I. Austria, RTC, Br. 2, Batangas City, A.M. No. RTJ09-2200, April 2, 2014.
Judges; irregular or erroneous order or decision; appropriate remedy. The Court held that in
administrative cases, the complainant bears the onus of proving the averments of his complaint by
substantial evidence. In this case, the allegations of grave abuse of authority, irregularity in the
performance of duty, grave bias and partiality, and lack of circumspection are devoid of merit
because the complainant failed to establish Judge Austrias bad faith, malice or ill will. The
complainant merely pointed to circumstances based on mere conjectures and suppositions. These, by
themselves, however, are not sufficient to prove the accusations. Even granting that the judge erred
in the exercise of her judicial functions, these are legal errors correctible not by a disciplinary action,
but by judicial remedies that are readily available to the complainant. An administrative complaint is
not the appropriate remedy for every irregular or erroneous order or decision issued by a judge where
a judicial remedy is available, such as a motion for reconsideration or an appeal. Antonio M.
Lorenzana v. Judge Ma. Cecilia I. Austria, RTC, Br. 2, Batangas City, A.M. No. RTJ-09-2200, April 2,
2014.

April 2014 Philippine Supreme Court Decisions on Tax Law

National Internal Revenue Code; income tax; creditable withholding tax; refund; requisites. There are
three essential conditions for the grant of a claim for refund of creditable withholding income tax, to
wit: (1) the claim is filed with the Commissioner of Internal Revenue within the two-year period from
the date of payment of the tax; (2) it is shown on the return of the recipient that the income payment
received was declared as part of the gross income; and (3) the fact of withholding is established by a
copy of a statement duly issued by the payor to the payee showing the amount paid and the amount
of the tax withheld therefrom. Commissioner of Internal Revenue v. Team (Philippines) Operations
Corporation (formerly Mirant Phils., Operation Corporation), G.R. No. 179260, April 2, 2014.
National Internal Revenue Code; income tax; tax credit or refund; corporations; irrevocability rule. In
case the corporation is entitled to a tax credit or refund of the excess estimated quarterly income
taxes paid, the excess amount shown on its final adjustment return may be carried over and credited
against the estimated quarterly income tax liabilities for the taxable quarters of the succeeding
taxable years. Once the option to carry-over and apply the excess quarterly income tax against
income tax due for the taxable quarters of the succeeding taxable years has been made, such option
shall be considered irrevocable for that taxable period and no application for cash refund or issuance
of a tax credit certificate shall be allowed therefor. Commissioner of Internal Revenue v. Team
(Philippines) Operations Corporation (formerly Mirant Phils., Operation Corporation), G.R. No. 179260,
April 2, 2014.
Court of Tax Appeals; findings and conclusions of the CTA are accorded highest respect. The findings
and conclusions of the Court of Tax Appeals (CTA) are accorded the highest respect and will not be
lightly set aside. The CTA, by the very nature of its functions, is dedicated exclusively to the resolution
of tax problems and has accordingly developed an expertise on the subject unless there has been an
abusive or improvident exercise of authority. Consequently, its conclusions will not be overturned
unless there has been an abuse or improvident exercise of authority. Its findings can only be
disturbed on appeal if they are not supported by substantial evidence or there is a showing of gross
error or abuse on the part of the Tax Court. In the absence of any clear and convincing proof to the
contrary, the Court must presume that the CTA rendered a decision which is valid in every
respect. Commissioner of Internal Revenue v. Team (Philippines) Operations Corporation (formerly
Mirant Phils., Operation Corporation), G.R. No. 179260, April 2, 2014.

June 2014 Philippine Supreme Court Decisions on Legal and Judicial Ethics
Attorney; Disbarment; Effect of withdrawal. A disbarment case was filed by Quiachon against her
lawyer Atty. Ramos who represented her in a labor case before NLRC and a special proceeding case
before the RTC. During the pendency of the proceedings, complainant withdrew the disbarment case.
The Supreme Court held that the withdrawal of a disbarment case against a lawyer does not
terminate or abate the jurisdiction of the IBP and of this Court to continue an administrative
proceeding against a lawyer-respondent as a member of the Philippine Bar. The complainant in a
disbarment case is not a direct party to the case, but a witness who brought the matter to the
attention of the Court. In this case, Atty. Ramos violated Canon Rules 18.03 and 18.04 of the Code of
Professional Responsibility. Thus, the appropriate penalty should be imposed despite the desistance of
complainant or the withdrawal of the charges. Adelia V. Quiachon v. Atty. Joseph Ador A. Ramos, A.C.
No. 9317, June 4, 2014.
Attorney; Quantum of proof in administrative cases. An administrative complaint for dishonesty was
filed against Atty. Molina for having advised his clients to enforce a contract on complainants client
who was never a party to the agreement. The Supreme Court in dismissing the complaint held that
when it comes to administrative cases against lawyers, two things are to be considered: quantum of
proof, which requires clearly preponderant evidence; and burden of proof, which is on the
complainant. Here, the complaint was without factual basis. The allegation of giving legal advice was
not substantiated in this case, either in the complaint or in the corresponding hearings. Bare
allegations are not proof. Even if Atty. Molina did provide his clients legal advice, he still cannot be
held administratively liable without any showing that his act was attended with bad faith or malice.
The default rule is presumption of good faith. Atty. Alan F. Paguia v. Atty. Manuel T. Molina, A.C. No.
9881, June 4, 2014.
Court personnel; Dishonesty. Ampong was dismissed from the Civil Service Commission for
dishonesty, however, remained employed in the RTC. The Supreme Court has already held in its
August 26, 2008 Decision that Ampong was administratively liable for dishonesty in impersonating
and taking the November 1991 Civil Service Eligibility Examination for Teachers on behalf of one

Decir. Under section 58(a) of the Uniform Rules on Administrative Cases in the Civil Service (URACCS),
the penalty of dismissal carries with it the following administrative disabilities: (a) cancellation of civil
service eligibility; (b) forfeiture of retirement benefits; and (c) perpetual disqualification from reemployment in any government agency or instrumentality, including any government-owned and
controlled corporation or government financial institution. Ampong should be made to similarly suffer
the same. Every employee of the Judiciary should be an example of integrity, uprightness, and
honesty. Court personnel are enjoined to adhere to the exacting standards of morality and decency in
their professional and private conduct in order to preserve the good name and integrity of the courts
of justice. Here, Ampong failed to meet these stringent standards set for a judicial employee and does
not, therefore, deserve to remain with the Judiciary. Office of the Court Administrator v. Sarah P.
Ampong, etc., A.M. No. P-13-3132, June 4, 2014.
Court personnel; Simple neglect of duty. Sheriff Macusi was charged with misfeasance, nonfeasance
or conduct prejudicial to the best interest of the service for failing to act on a writ of execution. The
Supreme Court held that the 30-day period imposed for the execution of the writ after the judgment
has been received by the sheriff, as well as the periodic report every 30 days, is mandatory. Contrary
to such rule, Sheriff Macusi submitted only one return of writ of execution in his Partial Report and did
not file any other report to the court. Sheriffs play an important part in the administration of justice
because they are tasked to execute the final judgment of courts. Thus, Sheriff Macusi was held to be
remiss in his duties and thus liable for simple neglect of duty which is the failure to give attention to a
task, or the disregard of a duty due to carelessness or indifference. Alberto Valdez v. Desiderio W.
Macusi, Jr., Sheriff IV, RTC, Branch 25, Tabuk, Kalinga, A.M. No. P-13-3123, June 10, 2014.
Judge; Time within which certain acts must be done; Exception. An administrative complaint was filed
against MCTC Judge Regencia. The Supreme Court held that pursuant to Rule 3.05, Canon 3 of the
Code of Judicial Conduct, prompt disposition of cases is attained basically through the efficiency and
dedication to duty of judges. If judges do not possess those traits, delay in the disposition of cases is
inevitable to the prejudice of the litigants. In this case, the civil case was already submitted for
resolution. Being an ejectment case, it is governed by the Rules of Summary Procedure which clearly
sets a period of 30 days from the submission of the last affidavit or position paper within which a
decision must be issued. Despite this, Judge Regencia rendered judgment only more than 2 years
later. While rules prescribing the time within which certain acts must be done are indispensable to
prevent needless delays in the orderly and speedy disposition of cases and, thus, should be regarded
as mandatory, the Court has nevertheless been mindful of the plight of judges and has been
understanding of circumstances that may hinder them from promptly disposing of their businesses
and, as such, has allowed extensions of time due to justifiable reasons. However, Judge Regencia
failed to proffer any acceptable reason in delaying the disposition of the ejectment case, thus, making
her administratively liable for undue delay in rendering a decision. Gershon N. Dulang v. Judge Mary
Jocylen G. Regencia, MCTC, Asturias-Balamban, Cebu, A.M. No. MTJ-14-1841, June 2, 2014.

June 2014 Philippine Supreme Court Decisions on Commercial Law

Corporations; capacity to sue of dissolved corporations. The trustee of a corporation may continue to
prosecute a case commenced by the corporation within three years from its dissolution until rendition
of the final judgment, even if such judgment is rendered beyond the three-year period allowed by
Section 122 of the Corporation Code. However, there is nothing in the said cases which allows an
already defunct corporation to initiate a suit after the lapse of the said three-year period. On the
contrary, the factual circumstances in the abovecited cases would show that the corporations
involved therein did not initiate any complaint after the lapse of the three-year period. In fact, as
stated above, the actions were already pending at the time that they lost their corporate existence.
In the present case, petitioner filed its complaint not only after its corporate existence was terminated
but also beyond the three-year period allowed by Section 122 of the Corporation Code. Thus, it is
clear that at the time of the filing of the subject complaint petitioner lacks the capacity to sue as a
corporation. To allow petitioner to initiate the subject complaint and pursue it until final judgment, on
the ground that such complaint was filed for the sole purpose of liquidating its assets, would be to
circumvent the provisions of Section 122 of the Corporation Code. Alabang Development Corporation
v. Alabang Hills Village Association and Rafael Tinio, G.R. No. 187456, June 2, 2014.
Corporations; refusal to allow inspection is a criminal offense. We find inaccurate the pronouncement
of the RTC that the act of refusing to allow inspection of the stock and transfer book is not a
punishable offense under the Corporation Code. Such refusal, when done in violation of Section 74( 4)
of the Corporation Code, properly falls within the purview of Section 144 of the same code and thus
may be penalized as an offense. Aderito Z. Yujuico and Bonifacio C. Sumbilla v. Cezar T. Quiambao
and Eric C. Pilapil, G.R. No. 180416, June 2, 2014.

Corporations; persons who may be held liable under Section 74. A perusal of the second and fourth
paragraphs of Section 74, as well as the first paragraph of the same section, reveal that they are
provisions that obligates a corporation: they prescribe what books or records a corporation is required
to keep; where the corporation shall keep them; and what are the other obligations of the corporation
to its stockholders or members in relation to such books and records. Hence, by parity of reasoning,
the second and fourth paragraphs of Section 74, including the first paragraph of the same section,
can only be violated by a corporation. It is clear then that a criminal action based on the violation of
the second or fourth paragraphs of Section 74 can only be maintained against corporate officers or
such other persons that are acting on behalf of the corporation. Violations of the second and fourth
paragraphs of Section 74 contemplates a situation wherein a corporation, acting thru one of its
officers or agents, denies the right of any of its stockholders to inspect the records, minutes and the
stock and transfer book of such corporation.
The problem with the petitioners complaint and the evidence that they submitted during preliminary
investigation is that they do not establish that respondents were acting on behalf of STRADEC. Quite
the contrary, the scenario painted by the complaint is that the respondents are merely outgoing
officers of STRADEC who, for some reason, withheld and refused to tum-over the company records of
STRADEC; that it is the petitioners who are actually acting on behalf of STRADEC; and that STRADEC
1s actually merely trying to recover custody of the withheld records. In other words, petitioners are
not actually invoking their right to inspect the records and the stock and transfer book of STRADEC
under the second and fourth paragraphs of Section 74. What they seek to enforce is the proprietary
right of STRADEC to be in possession of such records and book. Such right, though certainly legally
enforceable by other means, cannot be enforced by a criminal prosecution based on a violation of the
second and fourth paragraphs of Section 74. That is simply not the situation contemplated by the
second and fourth paragraphs of Section 74 of the Corporation Code. Aderito Z. Yujuico and Bonifacio
C. Sumbilla v. Cezar T. Quiambao and Eric C. Pilapil, G.R. No. 180416, June 2, 2014.

DE CASTRO, J.
GSIS; retirement plan. Section 41(n) of Republic Act No. 8291 contemplates a situation wherein GSIS, due to a reorganization,
a streamlining of its organization, or some other circumstance, which calls for the termination of some of its employees, must
design a plan to encourage, induce, or motivate these employees, who are not yet qualified for either optional or compulsory
retirement under our laws, to instead voluntarily retire. Such is not the case with the GSIS RFP. Its very objective, to motivate
and reward employees for meritorious, faithful, and satisfactory service, contradicts the nature of an early retirement incentive
plan, or a financial assistance plan, which involves a substantial amount that is given to motivate employees to
retire early. Instead, it falls exactly within the purpose of a retirement benefit, which is a form of reward for an employees
loyalty and lengthy service, in order to help him or her enjoy the remaining years of his life. Without a doubt, the GSIS RFP is a
supplementary retirement plan, which is prohibited by the Teves Retirement Law. Government Service Insurance System
(GSIS), et al. vs. Commission on Audit, et al., G.R. No. 162372. October 19, 2011.