POLITICAL LAW (2013-2014)

Curata vs Philippine Ports Authority

Case Digest GR 154211-12 June 22 2009
Facts:
EO 385 and EO 431 Series of 1990 delineated the Batangas Port Zone and placed it under the
Philippine Ports Authority for administrative jurisdiction of its proper zoning, planning, development,
and utilization. Pursuant thereto, the PPA instituted a complaint for expropriation of 185 lots before
the RTC. Owned by some 231 individuals or entities, the 185 lots, with a total area of about
1,298,340 sqm, were intended for the development of Phase II of the BPZ. The PPA alleged that, per
evaluation of the Land Acquisition Committee for Phase II of the BPZ project, the lots had a fair
market value of P 336.83 per sqm. Prior to the filing of the complaint, PPA offered PhP 336.40 per
sqm as just compensation, but the lot owners rejected the offer. PPA prayed to be placed in
possession upon its deposit of the amount equivalent to the assessed value for real estate taxation
of the lots in question.
After proceedings, the RTC issued a compensation order directing PPA to pay the lot owners the
amount of P 5,500 per sqm as just compensation. Upon motion, the RTC granted the issuance of a
writ of execution pending appeal and issued the writ of execution thereafter. Subsequently, the sheriff
served the Notice of Garnishment to the LBP Batangas City Branch.
Issue 1: W/N execution pending appeal is applicable to expropriation proceedings
No. Discretionary execution of judgments pending appeal under Sec. 2(a) of Rule 39 simply does
not apply to eminent domain proceedings. Since PPAs monies, facilities and assets are government
properties, they are exempt from execution whether by virtue of a final judgment or pending appeal.
It is a universal rule that where the State gives its consent to be sued by private parties either by
general or special law, it may limit the claimants action only up to the completion of proceedings
anterior to the stage of execution and that the power of the Courts ends when the judgment is
rendered, since government funds and properties may not be seized under writs of execution or
garnishment to satisfy such judgments. This is based on obvious considerations of public policy.
Disbursements of public funds must be covered by the corresponding appropriation as required by
law. The functions and public services rendered by the State cannot be allowed to be paralyzed or
disrupted by the diversion of public funds from their legitimate and specific objects, as appropriated
by law. (Commissioner of Public Highways vs San Diego, 1970)
Issue 2: W/N RA 8974 is a substantial law that cannot be reapplied retroactively
Yes. The appropriate standard of just compensation inclusive of the manner of payment thereof and
the initial compensation to the lot owners is a substantive, not merely a procedural, matter. This is
because the right of the owner to receive just compensation prior to acquisition of possession by the

State of the property is a proprietary right. RA 8974, which specifically prescribes the new standards
in determining the amount of just compensation in expropriation cases relating to national
government infrastructure projects, as well as the payment of the provisional value as a prerequisite
to the issuance of a writ of possession, is a substantive law.
Further, there is nothing in RA No. 8974 which expressly provides that it should have retroactive
effect. Neither is retroactivity necessarily implied from RA No. 8974 or in any of its provisions.
Hence, it cannot be applied retroactively in relation to this case.
Jardeleza vs Sereno
GR 213181 August 19, 2014
Facts:
Following Justice Abads compulsory retirement, the JBC announced the application or
recommendations for the position left by the Associate Justice. Jardeleza, the incumbent Sol-Gen at
the time, was included in the list of candidates. However, he was informed through telephone call
from some Justices that the Chief Justice herself CJ Sereno, will be invoking Sec 2, Rule 10 of
JBC-009 or the so-called unanimity rule against him. Generally, the rule is that an applicant is
included in the shortlist when s/he obtains affirmative vote of at least a majority of all the members of
the JBC. When Section 2, Rule 10 of JBC-009, however, is invoked because an applicants integrity
is challenged, a unanimous vote is required. Jardeleza was then directed to make himself available
on June 30, 2014 before the JBC during which he would be informed of the objections to his integrity.
Jardeleza wrote a letter-petition asking the SC to exercise its supervisory power and direct the JBC
to, among others, give Jardeleza a written notice and sworn written statements of his oppositors or
any documents in the JBC hearings, and to disallow CJ Sereno from participating in the voting
process for nominees on June 30, 2014.
During the June 30, 2014 meeting of the JBC, Justice Carpio appeared and disclosed a confidential
information which, to CJ Sereno, characterized Jardelezas integrity as dubious. Jardeleza
demanded that CJ Sereno execute a sworn statement specifying her objections and that he be
afforded the right to cross-examine her in a public hearing. He also requested deferment of the JBC
proceedings, as the SC en banc has yet to decide in his letter-petition.
However, the JBC continued its deliberations and proceeded to vote for the nominees to be included
in the shortlist. Thereafter, the JBC released the shortlist of 4 nominees. It was revealed later that
there were actually 5 nominees who made it to the JBC shortlist, but 1 nominee could not be
included because of the invocation of the unanimity rule..

Jardeleza filed for certiorari and mandamus via Rule 65 with prayer for TRO to compel the JBC to
include him in the list of nominees on the grounds that the JBC and CJ Sereno acted with grave
abuse of discretion in excluding him, despite having garnered a sufficient number of votes to qualify
for the position.
Political Law
Issue: W/N the right to due process is demandable as a matter of right in JBC proceedings
Yes. While it is true that the JBC proceedings are sui generis, it does not mean that an applicants
access to the rights afforded under the due process clause is discretionary on the part of JBC.
The Court does not brush aside the unique and special nature of JBC proceedings. Notwithstanding
being a class of its own, the right to be heard and to explain ones self is availing. In cases where
an objection to an applicants qualifications is raised, the observance of due process neither
contradicts the fulfillment of the JBCs duty to recommend. This holding is not an encroachment on
its discretion in the nomination process. Actually, its adherence to the precepts of due process
supports and enriches the exercise of its discretion. When an applicant, who vehemently denies the
truth of the objections, is afforded the chance to protest, the JBC is presented with a clearer
understanding of the situation it faces, thereby guarding the body from making an unsound and
capricious assessment of information brought before it. The JBC is not expected to strictly apply the
rules of evidence in its assessment of an objection against an applicant. Just the same, to hear the
side of the person challenged complies with the dictates of fairness because the only test that an
exercise of discretion must surmount is that of soundness.
Consequently, the Court is compelled to rule that Jardeleza should have been included in the
shortlist submitted to the President for the vacated position of Associate Justice Abad. This
consequence arose not from the unconstitutionality of Section 2, Rule 10 of JBC-009 per se, but
from the violation by the JBC of its own rules of procedure and the basic tenets of due process. By
no means does the Court intend to strike down the unanimity rule as it reflects the JBCs policy
and, therefore, wisdom in its selection of nominees. Even so, the Court refuses to turn a blind eye on
the palpable defects in its implementation and the ensuing treatment that Jardeleza received before
the Council. True, Jardeleza has no vested right to a nomination, but this doesnot prescind from the
fact that the JBC failed to observe the minimum requirements of due process. ##
Remedial Law
Issue 1: W/N the Supreme Court has jurisdiction over the case

Yes. Jardelezas allegations in his petitions merits the exercise of the Courts supervisory authority
over the JBC. Under Sec 8, Art VIII of the Constitution, the JBC shall function under the supervision
of the SC. It follows that such supervisory authority covers the overseeing of whether the JBC
complies with its own rules or not.
Issue 2: W/N a writ of mandamus is available against the JBC
No. The JBCs duty to nominate is discretionary and it may not be compelled to do something.
Mandamus lies to compel the performance, when refused, of a ministerial duty, but not to compel the
performance of a discretionary duty. Mandamus will not issue to control or review the exercise of
discretion of a public officer where the law imposes upon said public officer the right and duty to
exercise his judgment in reference to any matter in which he is required to act. It is his judgment that
is to be exercised and not that of the court.
Issue 3: W/N a writ of certiorari under Sec 1, Rule 65 of the Rules of Court is available against the
JBC (which is not exercising quasi-judicial functions)
Yes. Under the expanded jurisdiction or expanded power of judicial review vested to the SC by the
1987 Constitution, a petition for certiorari is a proper remedy to question the act of any branch or
instrumentality of the government on the ground of grave abuse of discretion amounting to lack or
excess of jurisdiction by any branch or instrumentality of the government, even if the latter does not
exercise judicial, quasi-judicial or ministerial functions. ##
Funa vs Agra
Case Digest GR 191644 Feb 19 2013
Facts:
Agra was then the Government Corporate Counsel when Pres Arroyo designated him as the Acting
Solicitor General in place of former Sol Gen Devanadera, who has been appointed as the Secretary
of Justice. Again, Agra was designated as the Acting Secretary in place of Secretary Devanadera
when the latter resigned. Agra then relinquished his position as Corporate Counsel and continued to
perform the duties of an Acting Solicitor General.
Funa, a concerned citizen, questioned his appointment. Agra argued that his concurrent
designations were merely in atemporary capacity. Even assuming that he was holding multiple
offices at the same time, his designation as an Acting Sol Gen is merely akin to a hold-over, so that
he never received salaries and emoluments for being the Acting Sol Gen when he was appointed as
the Acting Secretary of Justice.

Issue 1: W/N Agras designation as Acting Secretary of Justice is valid

No. The designation of Agra as Acting Secretary of Justice concurrently with his position of Acting
Solicitor General violates the constitutional prohibition under Article VII, Section 13 of the 1987
Constitution.
It is immaterial that Agras designation was in an acting or temporary capacity. Section 13 plainly
indicates that the intent of the Framers of the Constitution is to impose a stricter prohibition on the
President and the Cabinet Members in so far as holding other offices or employments in the
Government or in GOCCs is concerned. The prohibition against dual or multiple offices being held by
one official must be construed as to apply to all appointments or designations, whether permanent or
temporary, because the objective of Section 13 is to prevent the concentration of powers in
the Executive Department officials, specifically the President, the Vice-President, the Cabinet
Members and their deputies and assistants.
Issue 2: W/N Agra may concurrently hold the positions by virtue of the hold-over principle
No. Agras designation as the Acting Secretary of Justice was not in an ex officio capacity, by which
he would have been validly authorized to concurrently hold the two positions due to the holding of
one office being the consequence of holding the other.
Being included in the stricter prohibition embodied in Section 13, Agra cannot liberally apply in his
favor the broad exceptions provided in Article IX-B, Sec 7 (2) of the Constitution to justify his
designation as Acting Secretary of Justice concurrently with his designation as Acting Solicitor
General, or vice versa. It is not sufficient for Agra to show that his holding of the other office was
allowed by law or the primary functions of his position. To claim the exemption of his concurrent
designations from the coverage of the stricter prohibition under Section 13, he needed to establish
that his concurrent designation was expressly allowed by the Constitution.
Issue 3: W/N the offices of the Solicitor General and Secretary of Justice is in an ex officio capacity
in relation to the other
No. The powers and functions of the Solicitor General are neither required by the primary functions
nor included in the powers of the DOJ, and vice versa. The OSG, while attached to the DOJ, is not a
constituent of the latter, as in fact, the Administrative Code of 1987 decrees that the OSG is
independent and autonomous. With the enactment of RA 9417, the Solicitor General is now vested
with a cabinet rank, and has the same qualifications for appointment, rank, prerogatives, allowances,
benefits and privileges as those of Presiding Judges of the Court of Appeals.

LABOR LAW
Visayas Community Medical Center vs Yballe
Case Digest: GR 196156 Jan 15, 2014
Facts:
The NFL is the exclusive bargaining representative of the rank-and-file employees of MCCH (now
VCMC). NAMA-MCCH-NFL is a local affiliate whose union leaders proceeded to strike despite the
fact that it is not a legitimate labor organization. The respondents in this case are staff nurses and
midwives of MCCH who actively joined and were believed to have took part in committing illegal acts
during the strike. Consequently, MCCH terminated the union leaders of NAMA-MCCH-NFL as well
as the respondents. The CA, however, found that respondents cannot be considered to have
committed illegal acts since their participation was limited to the wearing of arm bands.
Issue 1: W/N the dismissal of the respondents is valid
Held:
No. Article 263 (a)(par 3) provides that any union officer who knowingly participated in an illegal
strike and any union officer or union member who knowingly participates in the commission of illegal
acts during a strike may be declared to have lost his employment status. Here, the respondents
merely participated in the illegal strike but did not commit any of the illegal acts. Hence, their
termination is not valid.
Issue 2: W/N the respondents are entitled to backwages
No. The principle of a fair days wage for a fair days labor remains as the basic factor in
determining the award of backwages. If there is no work performed by the employee there can be
no wage or pay unless the laborer was able, willing and ready to work but was illegally locked out,
suspended or dismissed or otherwise illegally prevented from working. For this exception to apply, it
is required that the strike be legal. Since the strike in this case was illegal, the respondents cannot
be awarded with backwages.
Issue 3: W/N the respondents are entitled to reinstatement
No. Considering that strained relations ensued, the grant of separation pay to respondents is the
alternative in lieu of reinstatement.

Jurisprudence states that 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.

CIVIL LAW
BPI vs Sanchez
Case Digest GR 179518 Nov 19 2014

Facts:
The Sanchezes entered into an agreement with Garcia (doing business in the name of TSEI) to sell
for P 1.850 million their parcel of land, with an earnest money of 50k. They agreed that Garcia shall
pay the purchase price in cash once the property is vacated. The Sanchezes entrusted to Garcia the
owners copy of TCT because it was agreed that he shall take care of all the documentations
necessary for the transaction.
Immediately after the property was vacated, Garcia took possession and began constructing
townhouses thereon without the Sanchezes knowledge and consent. While these developments
were ongoing, Garcia failed to pay the purchase price. Subsequently, the Sanchezes were given six
checks representing the amount of the purchase price. Four of these checks were postdated, thus
further delaying their overdue payment. To properly document the check payments, they made an
agreement stipulating that if one of the checks were dishonored, the Sanchezes may rescind the
contract.
The last two checks were dishonored, so the Sanchezes rescinded the contract and demanded from
Garcia the return of the TCT. However, Garcia refused to return the documents and vacate the
property.
Meanwhile, the Sanchezes found out that Garcia/TSEI were selling townhouses situated in the
property. So they informed the HLURB, the City Building Official and the RD in Quezon City, of the
illegal constructions being made thereon. The HLURB issued a Cease and Decease Order enjoining
Garcia / TSEI from further developing and selling the townhouses. Such orders were left unheeded.

In fact, Garcia were already able to sell many of the units to different individuals and entities, and
even mortgaged the property. Consequently, the Sanchezes filed before the RTC a complaint for
rescission, restitution and damages with TRO.
The purchasers and mortgagee who are the intervenors in this case were found by the court to be in
bad faith. On the other hand, the Sanchezes were held to be in good faith and not negligent.
Issue 1: W/N rescission of the contract was barred by the subsequent transfer of the property
No. Under Article 1191 of the Civil Code, rescission is available to a party in a reciprocal obligation
where one party fails to comply with it. As an exception to this rule, Article 1385 provides that
rescission shall not take place if the subject matter of the prior agreement is already in the hands of a
third party who did not act in bad faith.
Here, the failure of Garcia/TSEI to pay the consideration for the sale of the property entitled the
Sanchezes to rescind the Agreement. And in view of the finding that the intervenors acted in bad
faith in purchasing the property from Garcia, the subsequent transfer in their favor did not and cannot
bar rescission.
Issue 2: W/N Article 449 450 of the Civil Code is applicable to the Sanchezes
Yes. Bad faith on the part of the purchasers leads to the application of Art 449-450.
Consequently, the Sanchezes have the following options: (1) acquire the property with the
townhouses and other buildings and improvements that may be thereon without indemnifying TSEI
or the intervenors; (2) demand from TSEI or the intervenors to demolish what has been built on
the property at the expense of TSEI or the intervenors; or (3) ask the intervenors to pay the price of
the land.
As such, the Sanchezes must choose from among these options within 30 days from finality of the
decision. Should the Sanchezes opt to ask from the intervenors the value of the land, the case shall
be remanded to the RTC for the sole purpose of determining the fair market value of the lot at the
time the same were taken from the Sanchezes. If the Sanchezes decide to appropriate the
townhouses, other structures and improvements as their own pursuant to Art 449, then the
intervenors-purchasers shall be ordered to vacate said premises within a reasonable time from
notice of the finality of the decision by the Sanchezes. They have a right to recover their investment
in the townhouses from Garcia and TSEI. If the Sanchezes do not want to make use of the
townhouses and improvements on the subject lot, then the purchasers can be ordered to demolish
said townhouses or if they dont demolish the same within a reasonable time, then it can be
demolished at their expense. On the 3rd option, if the Sanchezes do not want to appropriate the

townhouses or have the same demolished, then they can ask that the townhouse purchasers pay
to them the fair market value of the respective areas allotted to their respective townhouses subject
of their deeds of sale. ##
Republic vs Heirs of Donato Sanchez
Case Digest GR 212388 Dec 10 2014

Facts:
When Spouses Sanchez died intestate, their Heirs executed a deed of extrajudicial partition over a
lot of which owners copy of the OCT is missing. Since they cannot register the Deed without the
OCT, they sought for the reconstitution, pursuant to RA 26, of the said OCT. They alleged in their
petition that OCT 45361 covers a lot that was issued in the name of their predecessors-in-interest
Spouses Sanchez pursuant to Decree 418121 which was in relation to a court decision in 1930.
Among the evidences presented are: (1) a certification from the RD that the copies of the OCT and
the decree which issued it cannot be found among its records, (2) the court decision in 1930
adjudicating the lot in the name of spouses Sanchez, and (3) certified true copy of the Registrars
Index Card containing the notation that the OTC was listed under the name of one of the spouse
Sanchez. Since there is no copy of the OCT in the RD records, there was no certification from the
RD that the OCT was eitherlost or destroyed.
Issue 1: W/N reconstitution of OCT 45361 should be granted
No. Under RA 26, a petition for reconstitution of lost or destroyed title requires, as a condition
precedent, that a certificate of title has indeed been issued. Here, the court decision and the
Registrars Index Card containing the notation on OCT No. 45361 do not cite nor mention that
Decree No. 418121 was issued to support the issuance of the said OCT. Since there was no clear
and convincing evidence adduced to prove the existence of the OTC, RA 26 cannot apply.
For obvious reasons, reconstitution cannot be made on a title that never existed in the first place.
Issue 2: W/N reconstitution of OCT is proper when the only evidences presented to support its
existence are derivative titles
No. Assuming that there was sufficient evidence to prove the existence of the OCT considering the
totality of evidence presented, still, reconstitution of the OCT is not warranted. Under Sec 15 of RA
26, before a certificate of title which has been lost or destroyed may be reconstituted, it must first be
proved by the claimants that the certificate of title was still in force at the time it was lost or destroyed,
among others.

First, the mere existence of the derivative titles which contain the notations that the name of the
registered owner of OCT 45361 is not available as per certification of the RD clearly shows that the
OCT which the Heirs seek to be reconstituted is no longer in force, rendering the procedure, if
granted, a mere superfluity
Second, the necessary certification from the RD that said OCT was in force at the time it was lost or
destroyed is lacking. The presentation of alleged derivative titles will not suffice to replace this
certification because the titles do not authenticate the issuance of OCT No. 45361 having been
issued by the RD without any basis from its official records. Hence, the OCT cannot be reconstituted
because clearly it was no longer in force.

Taxation Law
Team Energy Corp vs CIR
Case Digest GR 197760 Jan 13 2014

Facts:
Team Energy, formerly Mirant Pagbilao, is a registered VAT taxpayer, filed on December 20 2006, an
administrative claim for cash refund or issuance of tax credit certificate for the input VAT it paid for
the first three quarters of 2005. TEC appealed the CIRs inaction before the CTA on April 18, 2007.
(The CTA Division took cognizance of the judicial claim even if it was filed within the 120-day period,
pursuant to DA-489-03 which states that the taxpayer-claimant need not wait for the lapse of 120-day
period before it could seek judicial relief with the CTA. During that time, it was the rule applicable
from its issuance on December 3, 2003 before the promulgation of the Aichi case on October 6,
2010.)
However, on Nov 26, 2010, the CTA Division reversed its earlier decision on the ground that the CTA
has no jurisdiction over the case for being prematurely filed. It based its ruling on the Aichi
case which held that the 120-30 day rule in case of inaction under Section 112 (C) of the NIRC is
mandatory and jurisdictional.
Issue 1: W/N the CTA has jurisdiction over the claim even if it was prematurely filed
Yes. As a rule laid down by the SC in the San Roque case, the CTA may take cognizance of judicial
claims filed during the interim period from the promulgation of the BIR RR DA-489-03 on Dec 3 2003
until the adoption of the Aichi case on Oct 6 2010.

Since the Commissioner 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
Commissioner interpreting tax laws, should such interpretation later turn out to be erroneous and be
reversed by the Commissioner or by the SC. Section 246 of the Tax Code 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.
Here, TEC filed its judicial claim on April 18, 2007 or after the issuance of BIR Ruling No. DA-489-03
on December 10, 2003 but before October 6, 2010, the date when the Aichi case was promulgated.
Thus, even though TECs judicial claim was prematurely filed without waiting for the expiration of the
120-day mandatory period, the CTA may still take cognizance of case as it was filed within the period
exempted from the 120-30-day mandatory period.
Issue 2: W/N DA-489-03 is a general interpretative rule applicable to all taxpayers
Yes. 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-489-03. Thus, while this government agency mentions in its query to the
Commissioner the administrative claim of Lazi Bay Resources Development, Inc., the agency was, in
fact, asking the Commissioner 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.
Clearly, BIR Ruling No. DA-489-03 is a general interpretative rule. Thus, all taxpayers 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, where this Court held that the 120-130 day periods are
mandatory and jurisdictional.
CIR vs Mindanao II Geothermal Partnership
Case Digest GR 191498 Jan 15 2014

Facts:
Mindanao II is a registered taxpayer whose sales to NAPOCOR are all zero-rated pursuant to the
EPIRA Law. On Oct 6 2005, it filed with the BIR an application for the refund or credit of
accumulated unutilized creditable input taxes for the second, third, and fourth taxable quarters of the
taxable year 2004. The administrative claim was not acted upon until Feb 3 2006, or 120 days after
Oct 6 2005. Believing that a judicial claim must be filed within the 2-year prescriptive period provided

under Sec 112 (A) and that it must be reckoned from the date of filing of its VAT returns, Mindanao
filed on July 26 2006 a petition for review before the CTA claiming inaction on the part of the CIR.
On Aug 12 2008, the CTA Division granted Mindanao IIs claim for refund/credit and held that
its judicial claim was timely filed within the 2-year prescriptive period. The CIR opposed the rulings
claiming that prescription had already set in when Mindanao II filed its judicial claim beyond the 30day period fixed in Section 112 (C).
CTA En Banc's Contentions
Issue 1: W/N Mindanao IIs administrative claim for refund/credit was timely filed
Yes. Pursuant to Section 112 (A) of the 1997 Tax Code, it is only the administrative claim which is to
be filed within the two-year prescriptive period, and the two-year prescriptive period begins to run
from the close of the taxable quarter when the sales were made. Here, Mindanao II filed its claim for
refund/credit for the second, third, and fourth quarters of 2004 on Oct 6 2005. Such date is well
within the two-year prescriptive period which runs from June 30 2004 (2nd Quarter), Sept 30 2004
(3rd Quarter) and Dec 31 2004 (4th Quarter).
[The Atlas and Mirant rulings are simply not applicable in this case because Mindanao IIs
application for refund/credit on Oct 6 2005 was filed before their promulgation. The Atlas ruling is
held to be applicable only on cases filed from June 8 2007, the date of its promulgation, and up to
Sept 12 2008, the date when the Mirant case was promulgated.
In Atlas, the court laid down a rule that the 2-year prescriptive period is reckoned from the date of
filing of the return and payment of taxes. In Mirant, such rule was abandoned. Following the verba
legis doctrine, Mirant held that in administrative claims for refund/credit of unutilized input VAT, the 2year prescriptive period begins to run from the close of taxable quarter when the relevant sales were
made. This rule, which is obviously consistent with the plain wordings of Section 112 (A), was also
affirmed in the recent case of San Roque.]
Issue 2: W/N Mindanao IIs judicial claim for refund/credit was timely filed
No. Under Section 112 (C), the judicial claim must be filed by the taxpayer within 30 days after the
120-day waiting period if its administrative claim was not acted upon by CIR. Here, Mindanao II filed
its application for refund on Oct 6 2005. When it was not acted upon, it filed a judicial claim but only
on July 21 2006, or 138 days after the lapse of the 30-day period on 5 March 2006. Its petition for
review before the CTA was therefore filed late.

Contrary to the erroneous contentions of the CTA En Banc, the correct interpretation of Section 112,
as held in San Roque, is that 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. Also, following
the verba legis doctrine, the 30-day period to appeal is both mandatory and jurisdictional. Section
112 (C) is clear, plain and unequivocal in expressly providing that the taxpayer has a 30-day period
to appeal the decision or inaction of the Commissioner. ##
***When reading the full text of this case, please note the difference in letterings of Section 112
particularly Section 112 (C) and (D) of the NIRC as amended by RA 9337 of 2005. In this digested
version, Section 112 (C) is used to refer to Section 112 (D) of the old NIRC. ***
Summary of Rules on Prescriptive Periods for Claiming Refund or Credit of
Input Tax
Two-Year Prescriptive Period
1.

It is only the administrative claim that must be filed within the two-year
prescriptive period. (Aichi)

2.

The proper reckoning date for the two-year prescriptive period is the close of the
taxable quarter when the relevant sales were made. (San Roque)

3.

The only other rule is the Atlas ruling, which applied only from 8 June 2007 to12
September 2008. Atlas states that the two-year prescriptive period for filing a claim for
tax refund or credit of unutilized input VAT payments should be counted from the
date of filing of the VAT return and payment of the tax. (San Roque)
120 + 30 Day Period

1.

The taxpayer can file an 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) file 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.

2.

The 30-day period always applies, whether there is a denial or inaction on the
part of the CIR.

3.

As a general rule, the 30-day period to appeal is both mandatory and

jurisdictional. (Aichi and San Roque)

4.

As an exception to the general rule, premature filing is allowed only if filed

between 10 December 2003 and 5 October 2010, when BIR Ruling No. DA-489-03 was
still in force. (San Roque)

5.

Late filing is absolutely prohibited, even during the time when BIR Ruling No. DA489-03 was in force. (San Roque)

*** See also: BIR Revenue Regulation 54-2014 (RR 54-2014) ***

Fort Bonifacio vs CIR

Case Digest GR 173425 Jan 22 2013

Facts:
In 1995, Fort Bonifacio Development Corporation purchased from the national government a portion
of the Fort Bonifacio reservation. On January 1, 1996, the enactment of RA 7716 extended the
coverage of VAT to real properties held primarily for sale to customers or held for lease in the
ordinary course of trade or business. Thus, FBDC sought to register by submitting to BIR an
inventory of all its real properties, the book value of which aggregated to about P71 B.
In October 1996, FBDC started selling Global City lots to interested buyers. For the first quarter of
1997, it paid the output VAT by making cash payments to the BIR and credited its unutilized input tax
credit on purchases of goods and services. Realizing that its 8% transitional input tax credit was not
applied in computing its output VAT for the first quarter of 1997, FBDC filed with the BIR a claim for
refund of the amount erroneously paid as output VAT for the said period.
The CTA denied refund on the ground that the benefit of transitional input tax credit comes with the
condition that business taxes should have been paid first. It contends that since FBDC acquired the
Global City property under a VAT-free sale transaction, it cannot avail of the transitional input tax
credit. The CTA likewise pointed out that under RR 7-95, implementing Section 105 of the old
NIRC, the 8% transitional input tax credit should be based on the value of the improvements on land
such as buildings, roads, drainage system and other similar structures, constructed on or after
January 1, 1998, and not on the book value of the real property.
Issue 1: W/N prior payment of taxes is required in availing of the transitional input tax credit
No. First, nothing in Sec 105 of the NIRC indicates that prior payment of taxes is necessary to avail
of the transitional input tax credit. Clearly, all it requires is for the taxpayer to file a beginning
inventory with the BIR. Courts cannot limit the application or coverage of a law nor can it impose
conditions not provided therein because to do so constitutes judicial legislation.
Second, prior payment of taxes is not required to avail of the transitional input tax credit because it is
not a tax refund per se but a tax credit. Tax credit is not synonymous to tax refund. Tax refund is
defined as the money that a taxpayer overpaid and is thus returned by the taxing authority. Tax

credit, on the other hand, is an amount subtracted directly from ones total tax liability. It is any
amount given to a taxpayer as a subsidy, a refund, or an incentive to encourage investment. Thus,
unlike a tax refund, prior payment of taxes is not a prerequisite to avail of a tax credit.
Lastly, the fact that FBDC acquired the Global City property under a tax-free transaction makes no
difference as prior payment of taxes is not a pre-requisite.
Issue 2: W/N the transitional input tax credit applies only to the value of improvements
No. Section 4.105-1 of RR 7-95, insofar as it limits the transitional input tax credit to the value of
the improvement of the real properties, is a nullity. The 8% transitional input tax credit should not be
limited to the value of the improvements on the real properties but should include the value of the
real properties as well.
Hence, since FBDC is entitled to the 8% transitional input tax credit which is more than sufficient to
cover its output tax for the first taxable quarter, the amount of VAT output taxes erroneously paid
must be refunded.
Issue 3: W/N the Tax Code allows either a cash refund or a tax credit for input VAT
Yes. First, a careful reading of Section 112 of the Tax Code shows that it does not prohibit cash
refund or tax credit of transitional input tax in the case of zero-rated or effectively zero-rated VAT
registered taxpayers, who do not have any output VAT.
The phrase except transitional input tax in Section 112 of the Tax Code was inserted to
distinguish creditable input tax fromtransitional input tax credit. Transitional input tax credits are input
taxes on a taxpayers beginning inventory of goods, materials, and supplies equivalent to 8% (then
2%) or the actual VAT paid on such goods, materials and supplies, whichever is higher. It may only
be availed of once by first-time VAT taxpayers. Creditable input taxes, on the other hand, are input
taxes of VAT taxpayers in the course of their trade or business, which should be applied within two
years after the close of the taxable quarter when the sales were made.
As regards Section 110, while the law only provides for a tax credit, a taxpayer who erroneously or
excessively pays his output tax is still entitled to recover the payments he made either as a tax credit
or a tax refund.
Here, since FBDC still has available transitional input tax credit, it filed a claim for refund to recover
the output VAT it erroneously or excessively paid for the 1st quarter of 1997. Thus, there is no reason
for denying its claim for tax refund/credit.

Narra Nickel Mining vs Redmont

Case Digest GR 185590, Apr 21 2014
Facts:
Redmont is a domestic corporation interested in the mining and exploration of some areas in
Palawan. Upon learning that those areas were covered by MPSA applications of other three
(allegedly Filipino) corporations Narra, Tesoro, and MacArthur, it filed a petition before the Panel of
Arbitrators of DENR seeking to deny their permits on the ground that these corporations are in reality
foreign-owned. MBMI, a 100% Canadian corporation, owns 40% of the shares of PLMC (which
owns 5,997 shares of Narra), 40% of the shares of MMC (which owns 5,997 shares of McArthur) and
40% of the shares of SLMC (which, in turn, owns 5,997 shares of Tesoro).
Aside from the MPSA, the three corporations also applied for FTAA with the Office of the President.
In their answer, they countered that (1) the liberal Control Test must be used in determining the
nationality of a corporation as based on Sec 3 of the Foreign Investment Act which as they
claimed admits of corporate layering schemes, and that (2) the nationality question is no longer
material because of their subsequent application for FTAA.
Commercial / Political Law
Issue 1: W/N the Grandfather Rule must be applied in this case
Remedial Law
Issue 2: W/N the case has become moot as a result of the MPSA conversion to FTAA

Remedial Law
Lourdes Suites vs Binaro
Case Digest GR 2047129 Aug 6 2014

Facts:
Lourdes Suites filed before the MeTC a small-claims complaint against Binaro for nonpayment of
penalty charges on its rented rooms. Binaro responded with a counterclaim. Lourdes Suites
impugned the validity of Binaros pleading stating that it did not comply with the form of an Answer as
required in Rule 11, Sec 1 of the Rules of Court.
The MeTC, after evaluating the evidence, dismissed the complaint with prejudice for lack of cause of
action. Lourdes Suites filed a certiorari before the RTC arguing that lack of cause of action is not a

valid ground for dismissal of cases, much more a dismissal with prejudice. It contends that a
complaint even after the presentation of evidence cannot be dismissed on ground of lack of cause of
action because it is not expressly provided for under the Rules on Small Claims Cases and the Rules
of Civil Procedure, and that if there was a failure to prove a cause of action the only available remedy
would be a demurrer filed by the defendant.
The RTC ruled that there was no grave of abuse of discretion on the part of the MeTC. The MR was
also denied. Hence, Lourdes Suites brought the issue to the SC via petition for review under Rule
45.
Issue: W/N dismissal on the ground of lack of cause of action is proper under the Rules of Court
Yes. The courts are not precluded from dismissing a case for lack of cause of action such as
insufficiency of evidence. In civil cases, courts must determine if the plaintiff was able to prove his
case by a preponderance of evidence.
The basis of the MeTC in dismissing the complaint for lack of cause of action is the failure of plaintiff
to preponderantly establish its claim by clear and convincing evidence. Hence, MeTC did not commit
grave abuse of discretion when it dismissed the Complaint for lack of cause of action, as it referred
to the evidence presented and not to the allegations in the Complaint.
The dismissal of the complaint with prejudice is likewise not an exercise of wanton or palpable
discretion. This case is an action for small claims where decisions are rendered final and
unappealable; hence, a decision dismissing it is necessarily with prejudice.
Conrado Nicart, as Gov of Eastern Samar vs Titong and Abrugar
Case Digest GR 207682 Dec 10 2014

Facts:
Titong and Abrugar, together with 93 others, were appointed as department heads by the then
Governor Evardone of Samar a few days before the end of his term. Upon submission to the CSC
Regional Office, their appointments were disapproved for violation of CSC rules and for not having
met the requirements laid down in Nazareno vs City of Dumaguete. Titong and Abrugar appealed via
petition for review before the CSC proper, which granted and declared their appointments as valid.
The new Governor Nicart sought for reconsideration, but it was denied. Before the CA, he appealed
arguing that their appointments cannot be valid since there was no need to fill up the positions and
that their appointments were en masse.

Meanwhile, the CSC proper issued a writ of execution ordering Gov Nicart and the provincial
government to pay the salaries and emoluments of Titong and Abrugar. Because of Gov Nicarts
refusal to do so, they filed a petition for mandamus before the RTC even while the case before the
CA was still pending. The RTC decided on the petition on the basis of the CSC memo circular 82
which states that the non-issuance of a restraining order or injunction would make the CSC
resolution executory pending appeal. Since there was no TRO or injunction, and its opinion that
the CA decision would not constitute res judicata or in any way affect the petition for mandamus, the
RTC issued a writ of mandamus and went even further in deciding that the appointments were valid.
Issue: W/N the cognizance by the RTC of the petition for mandamus even while the issues involved
is still pending resolution before the CA was proper
Held:
No. First, it is erroneous for the RTC to opine that the CA decision would not affect the petition
before it because clearly, the mandamus petition heavily relies on the validity or invalidity of the
appointments which issue is yet to be resolved by the CA. Second, even while there is no preliminary
injunction or TRO issued by the higher court, ordinarily it would be proper for a lower court or a court
of origin to suspend the proceedings on the precept of judicial courtesy. Hence, the RTC erred
when it decided on the mandamus petition for disregarding such principle.

Lourdes Suites vs Binaro

Case Digest GR 2047129 Aug 6 2014

Facts:
Lourdes Suites filed before the MeTC a small-claims complaint against Binaro for nonpayment of
penalty charges on its rented rooms. Binaro responded with a counterclaim. Lourdes Suites
impugned the validity of Binaros pleading stating that it did not comply with the form of an Answer as
required in Rule 11, Sec 1 of the Rules of Court.
The MeTC, after evaluating the evidence, dismissed the complaint with prejudice for lack of cause of
action. Lourdes Suites filed a certiorari before the RTC arguing that lack of cause of action is not a
valid ground for dismissal of cases, much more a dismissal with prejudice. It contends that a
complaint even after the presentation of evidence cannot be dismissed on ground of lack of cause of
action because it is not expressly provided for under the Rules on Small Claims Cases and the Rules

of Civil Procedure, and that if there was a failure to prove a cause of action the only available remedy
would be a demurrer filed by the defendant.
The RTC ruled that there was no grave of abuse of discretion on the part of the MeTC. The MR was
also denied. Hence, Lourdes Suites brought the issue to the SC via petition for review under Rule
45.
Issue: W/N dismissal on the ground of lack of cause of action is proper under the Rules of Court
Yes. The courts are not precluded from dismissing a case for lack of cause of action such as
insufficiency of evidence. In civil cases, courts must determine if the plaintiff was able to prove his
case by a preponderance of evidence.
The basis of the MeTC in dismissing the complaint for lack of cause of action is the failure of plaintiff
to preponderantly establish its claim by clear and convincing evidence. Hence, MeTC did not commit
grave abuse of discretion when it dismissed the Complaint for lack of cause of action, as it referred
to the evidence presented and not to the allegations in the Complaint.
The dismissal of the complaint with prejudice is likewise not an exercise of wanton or palpable
discretion. This case is an action for small claims where decisions are rendered final and
unappealable; hence, a decision dismissing it is necessarily with prejudice