CIVIL LAW

Credit Transactions
Interests- The legal interest at 12% per annum under Central Bank (CB) Circular No. 416 shall
be adjudged only in cases involving the loan or forbearance of money, and for transactions
involving payment of indemnities in the concept of damages arising from default in the
performance of obligations in general and/or for money judgment not involving a loan or
forbearance of money,goods, or credit, the governing provision is Art. 2209 of the Civil Code
prescribing a yearly 6% interest; The term forbearance, within the context of usury law, has
been described as a contractual obligation of a lender or creditor to refrain, during a given period
of time, from requiring the borrower or debtor to repay the loan or debt then due and payable.
(Sunga-Chan vs. Court of Appeals, 555 SCRA 275, June 25, 2008) [S]
Persons and Family Relations
Absolute Community Property Regime, FC- The records show that spouses Sunga-Chan and
Norberto were married on February 4, 1992, or after the effectivity of the Family Code on
August 3, 1988. Withal, their absolute community property may be held liable for the obligations
contracted by either spouse. Specifically, Art. 94 of said Code pertinently provides: Art. 94. The
absolute community property shall be liable for: (1) x x x x (2) All debts and obligations
contracted during the marriage by the designated administrator-spouse for the benefit of the
community, or by both spouses, or by one spouse with the consent of the other. (3) Debts and
obligations contracted by either spouse without the consent of the other to the extent that the
family may have been benefited. (Emphasis ours.) Absent any indication otherwise, the use and
appropriation by petitioner Sunga-Chan of the assets of Shellite even after the business was
discontinued on May 30, 1992 may reasonably be considered to have been used for her and her
husbands benefit. (Sunga-Chan vs. Court of Appeals, 555 SCRA 275, June 25, 2008)[P]

LABOR LAW
Labor Relations
Loss of Trust and Confidence- Loss of confidence should ideally apply only to cases involving
employees occupying positions of trust and confidence or to those situations where the employee
is routinely charged with the care and custody of the employers money or property(Aromin vs.
National Labor Relations Commission, 553 SCRA 273, April 30, 2008) [S]
Managerial Employees-But while employers are given a wide latitude of discretion in the
termination of services of managerial employees for loss of confidence, there must be substantial
proof thereof. This means that the employer must clearly and convincinglyestablish the charges,
or, in fine, the facts and incidents upon which the loss of confidence may fairly be made to rest,
that is, it must be based on a willful breach of trust and founded on clearly established or proven
facts. Moreover, loss of confidence, as a ground for termination, should not be (1) simulated; (2)
used as a subterfuge for causes which are improper, illegal, or unjustified; (3) arbitrarily asserted;
and (4) a mere afterthought to justify earlier action taken in bad faith. (Aromin vs. National
Labor Relations Commission, 553 SCRA 273, April 30, 2008) [S]

Due Process- Due process, under the Implementing Rules of the Labor Code, specifically Book
VI, Rule I on Termination of Employment and Retirement, requires two written notices and a
hearing or conference before a valid and legal termination of employees can be implemented.
The first notice is intended to apprise the concerned employees of the particular acts or
omissions for which their dismissal is sought, and the second is to inform them of the decision to
terminate them. (Aromin vs. National Labor Relations Commission, 553 SCRA 273, April 30,
2008) [S]
Separation Pay- We therefore find that in addition to serious misconduct, in dismissal based on
other grounds under Art. 282 like willful disobedience, gross and habitual neglect of duty, fraud
or willful breach of trust and commission of a crime against the employer or his family,
separation pay should not be conceded to the dismissed employee(Aromin vs. National Labor
Relations Commission, 553 SCRA 273, April 30, 2008) [P]
Twin Notice Requirement To clarify, the following should be considered in terminating the
services of employees: (1) The first written notice to be served on the employees should contain
the specific causes or grounds for termination against them, and a directive that the employees
are given the opportunity to submit their written explanation within a reasonable period.
Reasonable opportunity under the Omnibus Rules means every kind of assistance that
management must accord to the employees to enable them to prepare adequately for their
defense. This should be construed as a period of at least five (5) calendar days from receipt of the
notice to give the employees an opportunity to study the accusation against them, consult a union
official or lawyer, gather data and evidence, and decide on the defenses they will raise against the
complaint. Moreover, in order to enable the employees to intelligently prepare their explanation
and defenses, the notice should contain a detailed narration of the facts and circumstances that
will serve as basis for the charge against the employees. A general description of the charge will
not suffice. Lastly, the notice should specifically mention which company rules, if any, are
violated and/or which among the grounds under Art. 282 is being charged against the employees.
(2) After serving the first notice, the employers should schedule and conduct
a hearing or conferencewherein the employees will be given the opportunity to: (1) explain and
clarify their defenses to the charge against them; (2) present evidence in support of their
defenses; and (3) rebut the evidence presented against them by the management. During the
hearing or conference, the employees are given the chance to defend themselves personally, with
the assistance of a representative or counsel of their choice. Moreover, this conference or hearing
could be used by the parties as an opportunity to come to an amicable settlement. (3) After
determining that termination of employment is justified, the employers shall serve the employees
a written notice of termination indicating that: (1) all circumstances involving the charge
against the employees have been considered; and (2) grounds have been established to justify the
severance of their employment. (Genuino vs. National Labor Relations Commission, 539 SCRA
342, December 04, 2007) [S]
Due process in dismissal of employee- While the bank gave Genuino an opportunity to deny
the truth of the allegations in writing and participate in the administrative investigation, the fact
remains that the charges were too general to enable Genuino to intelligently and adequately

prepare her defense. The two-notice requirement of the Labor Code is an essential part of due
process. The first notice informing the employee of the charges should neither be pro forma nor
vague. It should set out clearly what the employee is being held liable for. The employee should
be afforded ample opportunity to be heard and not mere opportunity. As explained in King of
Kings Transport, Inc., ample opportunity to be heard is especially accorded the employees
sought to be dismissed after they are specifically informed of the charges in order to give them
an opportunity to refute such accusations leveled against them. Since the notice of charges given
to Genuino is inadequate, the dismissal could not be in accordance with due process. (Genuino
vs. National Labor Relations Commission, 539 SCRA 342, December 04, 2007) [P]
Loss of Confidence in Dismissal cases- Art. 282(c) of the Labor Code provides that an
employer may terminate an employment for fraud or willful breach by the employee of the trust
reposed in him/her by his/her employer or duly authorized representative. In order to constitute
as just cause for dismissal, loss of confidence should relate to acts inimical to the interests of the
employer. Also, the act complained of should have arisen from the performance of the
employees duties. For loss of trust and confidence to be a valid ground for an employees
dismissal, it must be substantial and not arbitrary, and must be founded on clearly established
facts sufficient to warrant the employees separation from work. We also held that: [L]oss of
confidence is a valid ground for dismissing an employee and proof beyond reasonable doubt of
the employees misconduct is not required. It is sufficient if there is some basis for such loss of
confidence or if the employer has reasonable ground to believe or to entertain the moral
conviction that the employee concerned is responsible for the misconduct and that the nature of
his participation therein rendered him unworthy of the trust and confidence demanded by his
position. (Genuino vs. National Labor Relations Commission, 539 SCRA 342, December 04,
2007) [S]
Agabon Doctrine- In view of Citibanks failure to observe due process, however, nominal
damages are in order but the amount is hereby raised to PhP 30,000 pursuant to Agabon v. NLRC,
442 SCRA 573 (2004). The NLRCs order for payroll reinstatement is set aside. In Agabon, we
explained: The violation of the petitioners right to statutory due process by the private
respondent warrants the payment of indemnity in the form of nominal damages. The amount of
such damages is addressed to the sound discretion of the court, taking into account the relevant
circumstances.Considering the prevailing circumstances in the case at bar, we deem it proper to
fix it at P30,000.00. We believe this form of damages would serve to deter employers from future
violations of the statutory due process rights of employees. At the very least, it provides a
vindication or recognition of this fundamental right granted to the latter under the Labor Code
and its Implementing Rules. (Genuino vs. National Labor Relations Commission, 539 SCRA
342, December 04, 2007) [S]
Payroll Reinstatement- Ordinarily, the employer is required to reinstate the employee during
the pendency of the appeal pursuant to Art. 223, paragraph 3 of the Labor Code, which states: In
any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee,
insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending
appeal. The employee shall either be admitted back to work under the same terms and conditions
prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated

in the payroll. The posting of a bond by the employer shall not stay the execution for
reinstatement provided herein. If the decision of the labor arbiter is later reversed on appeal upon
the finding that the ground for dismissal is valid, then the employer has the right to require the
dismissed employee on payroll reinstatement to refund the salaries s/he received while the case
was pending appeal, or it can be deducted from the accrued benefits that the dismissed employee
was entitled to receive from his/her employer under existing laws, collective bargaining
agreement provisions, and company practices. However, if the employee was reinstated to work
during the pendency of the appeal, then the employee is entitled to the compensation received for
actual services rendered without need of refund. (Genuino vs. National Labor Relations
Commission, 539 SCRA 342, December 04, 2007) [P]

REMEDIAL LAW
CIVIL PROCEDURE
How is the Jurisdiction over the defendant acquired-Jurisdiction over the defendant is
acquired either upon a valid service of summons or the defendants voluntary appearance in
court. When the defendant does not voluntarily submit to the courts jurisdiction or when there is
no valid service of summons, any judgment of the court which has no jurisdiction over the
person of the defendant is null and void. In an action strictly in personam, personal service on
the defendant is the preferred mode of service, that is, by handing a copy of the summons to the
defendant in person. If defendant, for excusable reasons, cannot be served with the summons
within a reasonable period, then substituted service can be resorted to. While substituted service
of summons is permitted, it is extraordinary in character and in derogation of the usual method
of service. Hence, it must faithfully and strictly comply with the prescribed requirements and
circumstances authorized by the rules. Indeed, compliance with the rules regarding the service
of summons is as much important as the issue of due process as of jurisdiction. (Manotoc vs.
Court of Appeals, 499 SCRA 21, August 16, 2006) [P]

Service of Summons- The party relying on substituted service or the sheriff must show that
defendant cannot be served promptly or there is impossibility of prompt service; Reasonable
time is defined as so much time as is necessary under the circumstances for a reasonably
prudent and diligent man to do, conveniently, what the contract or duty requires that should be
done, having a regard for the rights and possibility of loss, if any, to the other party;One month
from the issuance of summons can be considered reasonable time with regard to personal
service on the defendant. . (Manotoc vs. Court of Appeals, 499 SCRA 21, August 16, 2006) [S]

Duties of the Sheriffs- Sheriffs are asked to discharge their duties on the service of summons
with due care, utmost diligence, and reasonable promptness and speed so as not to prejudice the
expeditious dispensation of justice. Thus, they are enjoined to try their best efforts to accomplish
personal service on defendant. On the other hand, since the defendant is expected to try to avoid
and evade service of summons, the sheriff must be resourceful, persevering, canny, and diligent
in serving the process on the defendant. For substituted service of summons to be available, there
must be several attempts by the sheriff to personally serve the summons within a reasonable
period [of one month] which eventually resulted in failure to prove impossibility of prompt
service. Several attempts means at least three (3) tries, preferably on at least two different
dates. In addition, the sheriff must cite why such efforts were unsuccessful. It is only then that
impossibility of service can be confirmed or accepted. (Manotoc vs. Court of Appeals, 499 SCRA
21, August 16, 2006) [S]

The sheriff must describe in the Return of Summons the facts and circumstances surrounding the
attempted personal servicethe efforts made to find the defendant and the reasons behind the
failure must be clearly narrated in detail in the Return. (Manotoc vs. Court of Appeals, 499 SCRA
21, August 16, 2006) [P]

Substituted Service-If the substituted service will be done at defendants office or regular place
of business, then it should be served on a competent person in charge of the place. Thus, the
person on whom the substituted service will be made must be the one managing the office or
business of defendant, such as the president or manager; and such individual must have sufficient
knowledge to understand the obligation of the defendant in the summons, its importance, and the
prejudicial effects arising from inaction on the summons. Again, these details must be contained
in the Return. (Manotoc vs. Court of Appeals, 499 SCRA 21, August 16, 2006) [P]

Substituted Service-A meticulous scrutiny of the aforementioned Return readily reveals the
absence of material data on the serious efforts to serve the Summons on petitioner Manotoc in
person. There is no clear valid reason cited in the Return why those efforts proved inadequate, to
reach the conclusion that personal service has become impossible or unattainable outside the
generally couched phrases of on many occasions several attempts were made to serve the
summons x x x personally, at reasonable hours during the day, and to no avail for the reason
that the said defendant is usually out of her place and/or residence or premises. . (Manotoc vs.
Court of Appeals, 499 SCRA 21, August 16, 2006) [S]

Substituted Service-Apart from the allegation of petitioners address in the Complaint, it has not
been shown that respondent Trajano or Sheriff Caelas, who served such summons, exerted
extraordinary efforts to locate petitioner. Certainly, the second paragraph of the Complaint only
states that respondents were informed, and so [they] allege about the address and whereabouts
of petitioner. Before resorting to substituted service, a plaintiff must demonstrate an effort in
good faith to locate the defendant through more direct means. More so, in the case in hand, when
the alleged petitioners residence or house is doubtful or has not been clearly ascertained, it
would have been better for personal service to have been pursued persistently. (Manotoc vs.
Court of Appeals, 499 SCRA 21, August 16, 2006) [P]

Substituted Service-In view of the numerous claims of irregularities in substituted service

which have spawned the filing of a great number of unnecessary special civil actions of certiorari
and appeals to higher courts, resulting in prolonged litigation and wasteful legal expenses, the
narration of the efforts made to find the defendant and the fact of failure written in broad and
imprecise words will not sufficethe facts and circumstances should be stated with more
particularity and detail on the number of attempts made at personal service, dates and times of
the attempts, inquiries to locate defendant, names of occupants of the alleged residence, and the
reasons for failure should be included in the Return to satisfactorily show the efforts
undertaken; To allow sheriffs to describe the facts and circumstances in inexact terms would
encourage routine performance of their precise duties relating to substituted servicefor it
would be quite easy to shroud or conceal carelessness or laxity in such broad terms. (Manotoc
vs. Court of Appeals, 499 SCRA 21, August 16, 2006) [P]

Substituted Service-There are two requirements under the Rules regarding leaving summons
with a person of suitable age and discretion residing in defendants house or residence, namely,
(1) recipient must be a person of suitable age and discretion, and, (2) recipient must reside in the
house or residence of defendant; To protect a defendants right to due process by being accorded
proper notice of a case against her, the substituted service of summons must be shown to clearly
comply with the rules(Manotoc vs. Court of Appeals, 499 SCRA 21, August 16, 2006) [S]

Substituted Service- Even assuming that the indicated address is defendants actual residence,
such fact would not make an irregular and void substituted service valid and effective. (Manotoc
vs. Court of Appeals, 499 SCRA 21, August 16, 2006) [S]

Sheriffs; Presumption of Regularity - The court a quoheavily relied on the presumption of

regularity in the performance of official duty. It reasons out that [t]he certificate of service by
the proper officer is prima facieevidence of the facts set out herein, and to overcome the
presumption arising from said certificate, the evidence must be clear and convincing. The Court
acknowledges that this ruling is still a valid doctrine. However, for the presumption to apply, the
Sheriffs Return must show that serious efforts or attempts were exerted to personally serve the
summons and that said efforts failed. These facts must be specifically narrated in the Return. To
reiterate, it must clearly show that the substituted service must be made on a person of suitable
age and discretion living in the dwelling or residence of defendant. Otherwise, the Return is
flawed and the presumption cannot be availed of. As previously explained, the Return of Sheriff
Caelas did not comply with the stringent requirements of Rule 14, Section 8 on substituted
service. (Manotoc vs. Court of Appeals, 499 SCRA 21, August 16, 2006) [P]

Certiorari; Exceptions- Section 1, Rule 65 of the Revised Rules of Court provides that a writ of
certiorari lies when any tribunal, board or officer exercising judicial or quasi-judicial functions
has acted without or in excess of its or his [/her] jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law. We have consistently held that where the error
sought to be corrected neither relates to the courts jurisdiction nor involves grave abuse of
discretion, review [of the error] through certiorari will not be allowed. This rule, however, admits
exceptions such as (1) when it is necessary to prevent irreparable damages and injury to a party,
(2) where the trial judge capriciously and whimsically exercised his [/her] judgment, (3) where
there may be danger of failure of justice, (4) where an appeal would be slow, inadequate, and
insufficient, (5) where the issue raised is one purely of law, (6) where public interest is involved,
and (7) in case of urgency. (Francisco Motors Corporation vs. Court of Appeals, 505 SCRA 8,
October 23, 2006) [S]

Certiorari as a Remedy -The number of years alone that the private respondent had devoted in
enforcing his claim, that is, almost half a century to date, exceptionally calls for certiorari as a
more speedy and adequate remedy. The availability of other legal remedies cannot prevent the
recourse to certiorari when these remedies would be slow and inadequate to effectively dispense
justice in favor of the private respondent. (Francisco Motors Corporation vs. Court of Appeals,
505 SCRA 8, October 23, 2006) [P]

Extraordinary writ of certiorari - Technicalities should be disregarded if only to render to the

respective parties that which is their due. Thus, although We have said that certiorari cannot be a
substitute for a lapsed appeal, We have, time and again, likewise held that where a rigid
application of that rule will result in a manifest failure or miscarriage of justice, the rule may be
relaxed. Hence, considering the broader and primordial interests of justice, particularly
when there is grave abuse of discretion, thus impelling occasional departure from the
general rule that the extraordinary writ of certiorari cannot substitute for a lost appeal,
respondent appellate court may legally entertain the special civil action for certiorari.
(Francisco Motors Corporation vs. Court of Appeals, 505 SCRA 8, October 23, 2006) [S]

Judgments can be revived by Motions- There is no dispute that the judgment sought to be
enforced by private respondent was the January 17, 1980 Decision of the CA which became final
on July 13, 1981. Petitioner asserts, however, that judgments can be enforced by mere motion
within five years from finality and since private respondents Motion to Enforce the Motion to
Execute was filed only on June 10, 1987, said Motion had already prescribed. Section 6, Rule 39
of the Revised Rules of Court states: SEC. 6. Execution by motion or by independent action.
A final and executory judgment or order may be executed on motion within five (5) years from
the date of its entry. After the lapse of such time, and before it is barred by the statute of
limitations, a judgment may be enforced by action. The revived judgment may also be enforced
by motion within five (5) years from the date of its entry and thereafter by action before it is
barred by the statute of limitations. (Francisco Motors Corporation vs. Court of Appeals, 505
SCRA 8, October 23, 2006) [P]

ActionsThe purpose of the law in prescribing time limitations for enforcing judgments or
actions is to prevent obligors from sleeping on their rights. Private respondent, on the contrary,
persistently sought the execution of the judgment in his favor. . (Francisco Motors Corporation
vs. Court of Appeals, 505 SCRA 8, October 23, 2006) [S]

Lis Pendens-The annotation of lis pendens is done on the original certificate of title which is on
file with the Register of Deeds. . (Francisco Motors Corporation vs. Court of Appeals, 505
SCRA 8, October 23, 2006) [S]

Effect of cancellation of a notice of pendency.In Spouses Po Lam v. Court of Appeals, 347

SCRA 86 (2000), we held that the filing of a notice of lis pendens in effect (1) keeps the subject
matter of the litigation within the power of the court until the entry of the final judgment so as to
prevent the defeat of the latter by successive alienations; and (2) binds the purchaser of the land
subject of the litigation to the judgment or decree that will be promulgated there on whether such
a purchaser is a bona fidepurchaser or not; but (3) does not create a non-existent right or lien.

The cancellation of a notice of pendency terminates the effects of such notice; thus, the buyers of
the property cannot be considered transferees pendente lite and purchasers in bad faith. This
ruling holds true for petitioner FMC. Similar to the aforementioned case, petitioner FMC bought
the property pending appeal. The title carried no notice of lis pendens and the private respondent
did not cause the reannotation of or the attorneys lien. Thus, petitioner FMC could not be
considered a transferee pendente lite and buyer in bad faith. . (Francisco Motors Corporation vs.
Court of Appeals, 505 SCRA 8, October 23, 2006) [S]

Jurisdiction over the subject matterIn Speed Distributing Corp. v. Court of Appeals, 425
SCRA 691 (2004), we held that: Jurisdiction over the subject matter is conferred by law. The
nature of an action, as well as which court or body has jurisdiction over it, is determined based
on the allegations contained in the complaint of the plaintiff, irrespective of whether or not
plaintiff is entitled to recover upon all or some of the claims asserted therein. It cannot depend on
the defenses set forth in the answer, in a motion to dismiss, or in a motion for reconsideration by
the defendant (citations omitted). In the case at bench, the BF Homes Complaint for
reconveyance was filed on January 23, 1996 against LSFSIPI and Florencio B. Orendain, in
Civil Case No. LP96-002. (Orendain vs. BF Homes, Inc., 506 SCRA 348, October 31, 2006) [P]

Factors in determining which body has jurisdiction.The controversy involves matters

purely civil in character and is beyond the ambit of the limited jurisdiction of the SEC. As held
in Viray v. Court of Appeals, 191 SCRA 308 (1990), [t]he better policy in determining which
body has jurisdiction over a case would be to consider not only [1] the status or relationship of
the parties but also [2] the nature of the question that is the subject of their controversy.
(Orendain vs. BF Homes, Inc., 506 SCRA 348, October 31, 2006) [S]

Jurisdiction over the case for reconveyance -Jurisdiction over the case for reconveyance is
clearly vested in the RTC as provided in paragraph (2), Section 19, B.P. Blg. 129, to
wit:Jurisdiction in civil cases.Regional Trial Courts shall exercise exclusive [and] original
jurisdiction (1) In all civil actions in which the subject of the litigation is incapable of pecuniary
estimation; and (2) In all civil actions which involve the title to, or possession of, real property or
any interest therein, where the assessed value of the property involved exceeds Twenty Thousand
pesos (P20,000.00) or for civil actions in Metro Manila, where such value exceeds Fifty
Thousand pesos (P50,000.00) x x x . (Orendain vs. BF Homes, Inc., 506 SCRA 348, October
31, 2006) [S]

Doctrine of Res Judicata.There are two (2) aspects to the doctrine of res judicata: The first,
known as bar by prior judgment, is the effect of a judgment as a bar to the prosecution of a
second action upon the same claim, demand or cause of action. The second, known as
conclusiveness of judgment, issues actually and directly resolved in a former suit cannot again
be raised in any future case between the same parties involving a different cause of action. A case
is barred by prior judgment when the following requisites are present: (1) the former judgment
is final; (2) it is rendered by a court having jurisdiction over the subject matter and the parties;
(3) it is a judgment or an order on the merits; and (4) there isbetween the first and second
actionsidentity of parties, of subject matter, and causes of action. . (Orendain vs. BF Homes,
Inc., 506 SCRA 348, October 31, 2006) [S]

When is a judgment considered on the merits- While the said SEC order denied the motion
for intervention filed by intervenor Eduardo S. Rodriguez, it did not, however, resolve the issues
raised in the motion on the merits. A judgment is on the merits when it amounts to a legal
declaration of the respective rights and duties of the parties based upon the disclosed facts
(emphasis supplied and citation omitted). It is apparent that the SEC order in question merely
acknowledged the Closing Report for inclusion in the records of the case. It did not, however,
pass upon the merits and veracity of the reports contents. As such, it cannot, in any wise, be
considered as an adjudication of the rights and obligations of the parties relating to the subject
matter of the action. . (Orendain vs. BF Homes, Inc., 506 SCRA 348, October 31, 2006) [P]
Conclusivesness of judgment0 The second type of res judicata is conclusiveness of judgment.
In Francisco v. Co, 481 SCRA 241 (2006), this Court elucidated the nature of this principle, thus:
Conclusiveness of judgment operates as a bar even if there is no identity as between the first
and second causes of judgment. Under the doctrine, any right, fact, or matter in issue directly
adjudicated or necessarily involved in the determination of an action before a competent court in
which judgment is rendered on the merits is conclusively settled by the judgment therein and
cannot again be litigated between the parties and their privies whether or not the claim, demand,
purpose, or subject matter of the two actions is the same. Evidently, conclusiveness of
judgment may operate to bar the second case even if there is no identity of causes of action. The
judgment is conclusive in the second case, only as to those matters actually and directly
controverted and determined, and not as to matters merely involved therein. . (Orendain vs. BF
Homes, Inc., 506 SCRA 348, October 31, 2006) [S]

General Powers of receiver- Petitioner argues that the Committee of Receivers should have
sought prior clearance from the SEC before instituting the action for reconveyance before the
RTC, because it does not have the legal capacity to sue. This is incorrect. One of the general
powers of a receiver under Rule 59, Section 6 of the Rules of Court is the power to bring and
defend suits in such capacity. . (Orendain vs. BF Homes, Inc., 506 SCRA 348, October 31,
2006) [S]

Receivership- The rule talks of the current receiver of the company and not the previous
receiver like petitioner Orendain. The reason behind Rule 59, Section 6, which requires leave of
court for all suits by or against the present receiver, is to forestall any undue interference with the
receivers performance of duties through improvident suits. Apparently, such situation cannot
apply to Orendain who is no longer BF Homes receiver. . (Orendain vs. BF Homes, Inc., 506
SCRA 348, October 31, 2006) [P]

Transfer of Jurisdiction under Section 5.2 of RA 8799Section 5.2 of RA 8799 transferred

exclusive and original jurisdiction of the SEC over actions involving intracorporate controversies
to the courts of general jurisdiction or the appropriate RTC. In the transition, all intra-corporate
cases pending in the SEC, which were not ripe for adjudication as of August 8, 2000, were turned
over to the RTC. Congress thereby recognized the expertise and competence of the RTC to take
cognizance of and resolve cases involving intra-corporate controversies. Thus, whether or not
the issue is intra-corporate, it is now the [RTC] and no longer the SEC that takes cognizance of
[and resolves cases involving intracorporate controversies]. (Orendain vs. BF Homes, Inc., 506
SCRA 348, October 31, 2006) [P]

Transfer of jurisdiction of cases decided by SEC- It is unequivocal that the jurisdiction to try
and decide cases originally assigned to the SEC under Section 5 of PD 902-A has been
transferred to the RTC. For clarity, we quote those cases under Section 5, PD 902-A, which now
fall within the RTCs jurisdiction, as follows: (a) Devices or schemes employed by or any acts of
the board of directors, business associates, its officers or partners, amounting to fraud and
misrepresentation which may be detrimental to the interest of the public and/or stockholders,
partners, members of associations registered with the Commission; (b) Controversies arising out
of intra-corporate or partnership relations, between and among stockholders, members, or
associates; between any or all of them and the corporation, partnership or association and the
State insofar as it concerns their individual franchise or right as such entity; (c) Controversies in
the election or appointment of directors, trustees, officers or managers of such corporations,
partnerships, or associations; (d) Petitioners of corporations, partnerships or associations to be
declared in the state of suspension of payment in cases where the corporation, partnership or
association possesses sufficient property to cover all its debts but foresees the impossibility of
meeting them when they fall due or in cases where the corporation, partnership or association has
no sufficient assets to cover its liabilities but is under the management of a rehabilitation receiver
or management committee created pursuant to this Decree. (Orendain vs. BF Homes, Inc., 506
SCRA 348, October 31, 2006) [S]

Jurisdiction of SEC- Juxtaposing the jurisdiction of the RTC under RA 8799 and the powers
that were retained by the SEC, it is clear that the SEC retained its administrative, regulatory, and
oversight powers over all corporations, partnerships, and associations who are grantees of
primary franchises, and/or a license or permit issued by the Government. However, theSecurities

Regulations Code (SRC) is clear that when there is a controversy arising out of intra-corporate
relations, between and among stockholders, members or associates, and between, any, or all of
them and the corporation, it is the RTC, not SEC, which has jurisdiction over the case. (Orendain
vs. BF Homes, Inc., 506 SCRA 348, October 31, 2006) [S]

When the issue requires the jurisdiction of RTC- When the complaint involves an active
antagonistic assertion of a legal right on one side and a denial thereof on the other concerning a
real, and not a mere theoretical question or issue, a cause of action involving a delict or
wrongful act or omission committed by a party in violation of the primary right of another, or an
actual controversy involving rights which are legally demandable or enforceable, the jurisdiction
over this complaint is lodged with the RTC and not the SEC. (Orendain vs. BF Homes, Inc., 506
SCRA 348, October 31, 2006) [P]
Petitions for Review; Certiorari- In view of the significance of the issues raised in this petition,
because this case involves the expenditure of public funds for a clear public purpose, this Court
will overlook the fact that petitioner did not file a Motion for Reconsideration of the CA
November 18, 2002 Decision, and brush aside this technicality in favor of resolving this case on
the merits. (National Power Corporation vs. Dela Cruz, 514 SCRA 56, February 02, 2007) [S]

Expropriation-The appointment of commissioners to ascertain just compensation for the

property sought to be taken is a mandatory requirement in expropriation cases. In the instant
expropriation case, where the principal issue is the determination of just compensation, a hearing
before the commissioners is indispensable to allow the parties to present evidence on the issue of
just compensation. While it is true that the findings of commissioners may be disregarded and
the trial court may substitute its own estimate of the value, the latter may only do so for valid
reasons, that is, where the commissioners have applied illegal principles to the evidence
submitted to them, where they have disregarded a clear preponderance of evidence, or where the
amount allowed is either grossly inadequate or excessive. Thus, trial with the aid of the
commissioners is a substantial right that may not be done away with capriciously or for no
reason at all. In this case, the fact that no trial or hearing was conducted to afford the parties the
opportunity to present their own evidence should have impelled the trial court to disregard the
commissioners findings.
(National Power Corporation vs. Dela Cruz, 514 SCRA 56, February 02, 2007) [P]

Basis for determination of Just Compensation.Therefore, it is clear that in this case, the sole
basis for the determination of just compensation was the commissioners ocular inspection of the
properties in question, as gleaned from the commissioners October 5, 1999 report. The trial

courts reliance on the said report is a serious error considering that the recommended
compensation was highly speculative and had no strong factual moorings. For one, the report did
not indicate the fair market value of the lots occupied by the Orchard Golf and Country Club,
Golden City Subdivision, Arcontica Sports Complex, and other business establishments cited.
Also, the report did not show how convenience facilities, public transportation, and the
residential and commercial zoning could have added value to the lots being expropriated.
(National Power Corporation vs. Dela Cruz, 514 SCRA 56, February 02, 2007) [S]

Highest and best Use Method- The trial court did not amply explain the nature and application
of the highest and best use method to determine the just compensation in expropriation cases.
No attempt was made to justify the recommended just price in the subject report through other
sufficient and reliable means such as the holding of a trial or hearing at which the parties could
have had adequate opportunity to adduce their own evidence, the testimony of realtors in the area
concerned, the fair market value and tax declaration, actual sales of lots in the vicinity of the lot
being expropriated on or about the date of the filing of the complaint for expropriation, the
pertinent zonal valuation derived from the Bureau of Internal Revenue, among others. (National
Power Corporation vs. Dela Cruz, 514 SCRA 56, February 02, 2007) [P]

Determination of just compensation- The commissioners report itself is flawed considering

that its recommended just compensation was pegged as of October 5, 1999, or the date when the
said report was issued, and not the just compensation as of the date of the filing of the complaint
for expropriation, or as of November 27, 1998. The period between the time of the filing of the
complaint (when just compensation should have been determined), and the time when the
commissioners report recommending the just compensation was issued (or almost one [1] year
after the filing of the complaint), may have distorted the correct amount of just compensation.
(National Power Corporation vs. Dela Cruz, 514 SCRA 56, February 02, 2007) [P]
Rule 43 - Rule 43 of the 1997 Rules of Civil Procedure provides the authority of the CA to
review resolutions and decisions of quasi-judicial bodies on questions of fact. Thus, it is the
appellate court which must determine if substantial evidence is extant on record to support the
findings of fact of the quasi-judicial bodies. Such review is however guided by the longsettled
doctrine that factual findings of administrative officials and agencies who have acquired
expertise in the performance of their official duties and the exercise of their primary jurisdiction
are generally accorded not only respect but at times, even finality if such findings are supported
by substantial evidence. (Taguinod vs. Court of Appeals, 533 SCRA 403, September 14, 2007) [S]

Land Registration; Homestead.Settled in this jurisdiction is the rule that the rights of a
holder of a homestead patent are superior over the rights of the tenants guaranteed by the
Agrarian Reform Law, as enunciated in Alita: We agree with the petitioners in saying that P.D. 27
decreeing the emancipation of tenants from the bondage of the soil and transferring to them
ownership of the land they till is a sweeping social legislation, a remedial measure promulgated
pursuant to the social justice precepts of the Constitution. However, such contention cannot be
invoked to defeat the very purpose of the enactment of the Public Land Act or Commonwealth
Act No. 141. (Taguinod vs. Court of Appeals, 533 SCRA 403, September 14, 2007) [S]

Criminal Procedure
Trial Courts- Trial courts are reminded to be extremely cautious in crafting the decretal portion
of the decision considering that the dispositive portion or the fallo is what actually constitutes the
judgment of the court in a particular case. The body of the decision which contains the discussion
and resolution of factual and legal issues may be relied upon to know the basis for the decision
but nevertheless, it is still the fallo that is the actual determinant of the rights of the parties and
sole basis for execution. Because the fallo is the only repository of the dispositions in the case, it
has to be clear without equivocation and complete as to its contents. (People vs. Buban, 512
SCRA 500, January 24, 2007)[S]
Factual Findings of the trial court are entitled to greater weight; Exceptions.It is a wellrecognized principle that factual findings of the trial court are entitled to great weight and respect
by this Court, more so when they are affirmed by the appellate court. However, the rule is not
without exceptions, such as: (1) when the conclusion is a finding grounded entirely on
speculations, surmises, and conjectures; (2) the inferences made are manifestly mistaken; (3)
there is grave abuse of discretion; and (4) the judgment is based on misapprehension of facts or
premised on the absence of evidence on record. Especially in criminal cases where the accused
stands to lose
his liberty by virtue of his conviction, the Court must be satisfied that the factual findings and
conclusions of the lower courts leading to his conviction must satisfy the standard of proof
beyond reasonable doubt. (Ng vs. People, 619 SCRA 291, April 23, 2010) [S]
Evidence
Witnesses AAAs testimony remains credible despite the inconsistencies. In People v. Antonio,
333 SCRA 201 (2000), we held that: The alleged inconsistencies are inconsequential considering
that they refer to trivial matters which have nothing to do with the essential fact of the
commission of rape, that is carnal knowledge through force or intimidation. Discrepancies and

inconsistencies in the testimony of a witness referring to minor details, and not in actuality
touching upon the central fact of the crime, do not impair her credibility. If at all, they serve as
proof that the witness is not coached or rehearsed. (People vs. Buban, 512 SCRA 500, January
24, 2007)[S]
When the testimony of a rape victim is consistent with the medical findingsAAAs
testimony was corroborated by the medico-legal officer, Dr. Marcelito B. Abas, who examined
her. The findings of fresh hymenal and deep lacerations cannot be denied. The experts opinion
that the lacerations could only be caused by an erect penis was not refuted. We have held that
when the testimony of a rape victim is consistent with the medical findings, there is sufficient
basis to conclude that there was carnal knowledge. (People vs. Buban, 512 SCRA 500, January
24, 2007)[P]
Alibi; Requisites- As his defense, appellant mainly relied on alibi and simply denied the
charges. Alibi is commonly treated as a defense although it is more of a challenge or attack on
the States evidence intended to prove the guilt of the accused. It merely aims to disprove one of
the essential factors necessary for a strong case for the prosecutionthe presence of the accused
at the time and place of the commission of the alleged offense. It can indeed raise a reasonable
doubt on the guilt of the accused. Since alibi can easily be fabricated or concocted, such
allegation is always regarded with suspicion. For alibi to prosper, the accused must establish, by
clear and convincing evidence, (a) his presence at another place at the time of the perpetration of
the offense, and (b) the physical impossibility of his presence at the scene of the crime. Physical
impossibility means that the accused was at such other place [for] such a length of time that it
was impossible for him to have been at the [crime scene], either before or after the time he was at
such other place. The trial court subsequently found that the appellant failed to prove this
physical impossibility because the appellants house where AAA resided could easily be reached
within 30 minutes using a motorized banca from the fishpond of Gaudencio Jeves where he
worked. Moreover, the positive identification of the appellant as the rapist prevails over the
defense of alibi. (People vs. Buban, 512 SCRA 500, January 24, 2007)[S]

CRIMINAL LAW
Rape;Elements- The elements of rape under the aforequoted provision are: 1) The offender is a
man; 2) The offender had carnal knowledge of a woman; and 3) The said act was committed with
the use of force or intimidation, or the woman is deprived of reason or otherwise unconscious, or
the woman is under 12 years of age or is demented. (People vs. Buban, 512 SCRA 500, January
24, 2007)[S]
Rape committed by father to daughter- The unique treatment of rape by a father against his
daughter is explicated in People v. Matrimonio, 215 SCRA 613 (1992): In a rape committed by a
father against his own daughter, the formers moral ascendancy and influence over the latter
substitutes for violence or intimidation. That ascendancy or influence necessarily flows from the
fathers parental authority, which the Constitution and laws recognize, support and enhance, as
well as from the childrens duty to obey and observe reverence and respect towards their parents.
Such reverence and respect are deeply ingrained in the minds of Filipino children and are

recognized by law. Abuse of both by a father can subjugate his daughters will, thereby forcing
her to do whatever he wants. (People vs. Buban, 512 SCRA 500, January 24, 2007)[S]
When precise date and time of the commission of rape are not essential elements -Anent the
issue of whether the rapes were committed during nighttime or daytime, the Informations stated
that the first four rapes were committed in the evening while the fifth rape was committed in the
morning. On cross-examination, AAA testified that the fourth rape was committed during
daytime. To reiterate, the precise date and time of the commission of rape are not essential
elements of it. The gravamen of the offense is sexual intercourse without consent. Also, it is
easy to understand how private complainant can confuse one rape for the other since there were
five (5) occasions of rape done to her. The inconsistency, therefore, is negligible. (People vs.
Buban, 512 SCRA 500, January 24, 2007)[P]

Estafa; Essential Elements of EstafaThe essential elements of Estafa are: (1) that money,
goods or other personal property is received by the offender in trust or on commission, or for
administration, or under any obligation involving the duty to make delivery of or to return it; (2)
that there be misappropriation or conversion of such money or property by the offender, or denial
on his part of such receipt; (3) that such misappropriation or conversion or denial is to the
prejudice of another; and (4) there is demand by the offended party to the offender. (Ng vs.
People, 619 SCRA 291, April 23, 2010) [S]

Trust receipt transactionin estafaA trust receipt transaction is one where the entrustee has
the obligation to deliver to the entruster the price of the sale, or if the merchandise is not sold, to
return the merchandise to the entruster. There are, therefore, two obligations in a trust receipt
transaction: the first refers to money received under the obligation involving the duty to turn it
over (entregarla) to the owner of the merchandise sold, while the second refers to the
merchandise received under the obligation to return it (devolvera) to the owner. A violation of
any of these undertakings constitutes Estafa defined under Art. 315, par. 1(b) of the RPC, as
provided in Sec. 13 of PD 115. (Ng vs. People, 619 SCRA 291, April 23, 2010) [S]

Essence of estafa- This is the very essence of Estafaunder Art. 315, par. 1(b). The words
convert and misappropriated connote an act of using or disposing of anothers property as if
it were ones own, or of devoting it to a purpose or use different from that agreed upon. To
misappropriate for ones own use includes not only conversion to ones personal advantage, but

also every attempt to dispose of the property of another without a right. (Ng vs. People, 619
SCRA 291, April 23, 2010) [S]

MERCANTILE LAW

Nature of Trust Receipt Transaction- The true nature of a trust receipt transaction can be found
in the whereas clause of PD 115 which states that a trust receipt is to be utilized as a
convenient business device to assist importers and merchants solve their financing problems.
Obviously, the State, in enacting the law, sought to find a way to assist importers and merchants
in their financing in order to encourage commerce in the Philippines. (Ng vs. People, 619 SCRA
291, April 23, 2010) [S]

Trust receipt is considered a security transaction -As stressed in Samo v. People, 5 SCRA 354
(1962), a trust receipt is considered a security transaction intended to aid in financing importers
and retail dealers who do not have sufficient funds or resources to finance the importation or
purchase of merchandise, and who may not be able to acquire credit except through utilization,
as collateral, of the merchandise imported or purchased. Similarly, American Jurisprudence
demonstrates that trust receipt transactions always refer to a method of financing importations
or financing sales. The principle is of course not limited in its application to financing
importations, since the principle is equally applicable to domestic transactions. Regardless of
whether the transaction is foreign or domestic, it is important to note that the transactions
discussed in relation to trust receipts mainly involved sales. (Ng vs. People, 619 SCRA 291, April
23, 2010) [S]