Updated Case Digest for Atty.

Rabuyas Syllabus

CIR vs Primetown Property Group, Inc.

August 28, 2007

Topic: Article 13 of the Civil Code as Amended by the Administrative Code

DOCTRINE: Article 13 of the Civil Code is deemed superseded by Section 31, Chapter VIII,
Book I of the Administrative Code of 1987, which thus means a year is equivalent to 12 calendar
months.

Facts: On March 11, 1999, Gilbert Yap, vice chair of respondent Primetown Property Group,
Inc., applied for the refund or credit of income tax respondent paid in 1997. In Yap's letter to
petitioner revenue district officer Arturo V. Parcero of the BIR, he explained that the increase in
the cost of labor and materials and difficulty in obtaining financing for projects and collecting
receivables caused the real estate industry to slowdown. As a consequence, while business was
good during the first quarter of 1997, respondent suffered losses amounting to P71,879,228 that
year.

According to Yap, because respondent suffered losses, it was not liable for income
taxes.[7] Nevertheless, respondent paid its quarterly corporate income tax and remitted
creditable withholding tax from real estate sales to the BIR in the total amount of
P26,318,398.32.[8] Therefore, respondent was entitled to tax refund or tax credit.

XXX Revenue officer Elizabeth Y. Santos required respondent to submit additional

documents to support its claim. Respondent complied but its claim was not acted upon. Thus,
on April 14, 2000, it filed a petition for review in the Court of Tax Appeals (CTA).

CTA dismissed the petition as it was filed beyond the two-year prescriptive period for filing a
judicial claim for tax refund or tax credit. It invoked Section 229 of the National Internal
Revenue Code (NIRC):

Sec. 229. Recovery of Taxes Erroneously or Illegally Collected- XXX In any case, no
such suit or proceeding shall be filed after the expiration of two (2) years from the date of
payment of the tax or penalty regardless of any supervening cause that may arise after payment
XXX

The CTA found that respondent filed its final adjusted return on April 14, 1998. Thus, its right
to claim a refund or credit commenced on that date.

The tax court applied Article 13 of the Civil Code which states:
Art. 13. When the law speaks of years, months, days or nights, it shall be understood that years
are of three hundred sixty-five days each; months, of thirty days; days, of twenty-four hours,
and nights from sunset to sunrise.

If the months are designated by their name, they shall be computed by the number of days
which they respectively have.

In computing a period, the first day shall be excluded, and the last included.

Thus, according to the CTA, the two-year prescriptive period under Section 229 of the NIRC for
the filing of judicial claims was equivalent to 730 days. Because the year 2000 was a leap year,
respondent's petition, which was filed 731 days[14] after respondent filed its final adjusted
return, was filed beyond the reglementary period.

The CA reversed and set aside the decision of the CTA.[18] It ruled that Article 13 of the Civil
Code did not distinguish between a regular year and a leap year. According to the CA:

The rule that a year has 365 days applies, notwithstanding the fact that a particular year is a
leap year

In other words, even if the year 2000 was a leap year, the periods covered by April 15, 1998 to
April 14, 1999 and April 15, 1999 to April 14, 2000 should still be counted as 365 days each or a
total of 730 days. A statute which is clear and explicit shall be neither interpreted nor construed

ISSUE: WON respondents petition was still filed within the reglementary period?

HELD: YES.

As already quoted, Article 13 of the Civil Code provides that when the law speaks of a year, it is
understood to be equivalent to 365 days. In National Marketing Corporation v. Tecson,[25] we
ruled that a year is equivalent to 365 days regardless of whether it is a regular year or a leap
year.

However, in 1987, EO[27] 292 or the Administrative Code of 1987 was enacted. Section 31,
Chapter VIII, Book I thereof provides:

Sec. 31. Legal Periods. Year shall be understood to be twelve calendar months; month of thirty
days, unless it refers to a specific calendar month in which case it shall be computed according
to the number of days the specific month contains; day, to a day of twenty-four hours and; night
from sunrise to sunset.

A law may be repealed expressly (by a categorical declaration that the law is revoked and
abrogated by another) or impliedly (when the provisions of a more recent law cannot be
reasonably reconciled with the previous one).[31] Section 27, Book VII (Final Provisions) of the
Administrative Code of 1987 states:
Sec. 27. Repealing clause. All laws, decrees, orders, rules and regulation, or portions thereof,
inconsistent with this Code are hereby repealed or modified accordingly.

A repealing clause like Sec. 27 above is not an express repealing clause because it fails to
identify or designate the laws to be abolished.[32] Thus, the provision above only impliedly
repealed all laws inconsistent with the Administrative Code of 1987.

Implied repeals, however, are not favored. An implied repeal must have been clearly and
unmistakably intended by the legislature. The test is whether the subsequent law encompasses
entirely the subject matter of the former law and they cannot be logically or reasonably
reconciled.[33]

Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of the Administrative
Code of 1987 deal with the same subject matter the computation of legal periods. Under the
Civil Code, a year is equivalent to 365 days whether it be a regular year or a leap year. Under
the Administrative Code of 1987, however, a year is composed of 12 calendar months. Needless
to state, under the Administrative Code of 1987, the number of days is irrelevant.

There obviously exists a manifest incompatibility in the manner of computing legal periods
under the Civil Code and the Administrative Code of 1987. For this reason, we hold that Section
31, Chapter VIII, Book I of the Administrative Code of 1987, being the more recent law, governs
the computation of legal periods. Lex posteriori derogat priori.

Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this case, the
two-year prescriptive period (reckoned from the time respondent filed its final adjusted return
on April 14, 1998) consisted of 24 calendar months, computed as follows:

Year 1 1st calendar month April 15, 1998 to May 14, 1998
2nd calendar month May 15, 1998 to June 14, 1998
3rd calendar month June 15, 1998 to July 14, 1998
4th calendar month July 15, 1998 to August 14, 1998
5th calendar month August 15, 1998 to September 14, 1998
6th calendar month September 15, 1998 to October 14, 1998
7th calendar month October 15, 1998 to November 14, 1998
8th calendar month November 15, 1998 to December 14, 1998
9th calendar month December 15, 1998 to January 14, 1999
10th calendar month January 15, 1999 to February 14, 1999
11th calendar month February 15, 1999 to March 14, 1999
12th calendar month March 15, 1999 to April 14, 1999
Year 2 13th calendar month April 15, 1999 to May 14, 1999
14th calendar month May 15, 1999 to June 14, 1999
15th calendar month June 15, 1999 to July 14, 1999
16th calendar month July 15, 1999 to August 14, 1999
17th calendar month August 15, 1999 to September 14, 1999
18th calendar month September 15, 1999 to October 14, 1999
19th calendar month October 15, 1999 to November 14, 1999
20th calendar month November 15, 1999 to December 14, 1999
21st calendar month December 15, 1999 to January 14, 2000
22nd calendar month January 15, 2000 to February 14, 2000
 23rd calendar month February 15, 2000 to March 14, 2000
24th calendar month March 15, 2000 to April 14, 2000

We therefore hold that respondent's petition (filed on April 14, 2000) was filed on the last day of
the 24th calendar month from the day respondent filed its final adjusted return. Hence, it was
filed within the reglementary period.

Orion Savings bank vs Shigekane Suzuki

November 12, 2014

Doctrine: Matters concerning the title and disposition of real property

shall be governed by Philippine law while issues pertaining to the conjugal
nature of the property shall be governed by South Korean law, provided it is
proven as a fact.

Facts: In the first week of August 2003, respondent Shigekane Suzuki

(Suzuki), a Japanese national, met with Ms. Helen Soneja (Soneja) to
inquire about a condominium unit and a parking slot at Cityland Pioneer,
Mandaluyong City, allegedly owned by Yung Sam Kang (Kang), a Korean
national and a Special Resident Retiree's Visa (SRRV) holder.
At the meeting, Soneja informed Suzuki that Unit No. 536 and Parking Slot No. 42 were for sale
for P3,000,000.00. Soneja likewise assured Suzuki that the titles to the unit and the parking slot
were clean. After a brief negotiation, the parties agreed to reduce the price to P2,800,000.00.

Suzuki issued Kang a Bank of the Philippine Island (BPI) Check for One Hundred Thousand
Pesos (P100,000.00) as reservation fee. Suzuki issued Kang another check, this time for
P2,700,000.00 representing the remaining balance of the purchase price. Suzuki and Kang then
executed a Deed of Absolute Sale, covering Unit No. 536 and Parking Slot No. 42.

Kang thereafter made several representations with Suzuki to deliver the titles to the properties,
which were then allegedly in possession of Alexander Perez (Perez, Orion's Loans Officer) for
safekeeping. Despite several verbal demands, Kang failed to deliver the documents. Suzuki
later on learned that Kang had left the country, prompting Suzuki to verify the status of the
properties with the Mandaluyong City Registry of Deeds.

Suzuki learned that CCT representing the title to the Parking Slot No. 42 contained no
annotations although it remained under the name of Cityland Pioneer. This notwithstanding,
Cityland Pioneer, certified that Kang had fully paid the purchase price of Unit. No. 536 and
Parking Slot No. 42.

To protect his interests, Suzuki then executed an Affidavit of Adverse Claim with the Registry
of Deeds of Mandaluyong City. Suzuki then demanded the delivery of the titles. Orion,
(through Perez), however, refused to surrender the titles, and cited the need to consult Orion's
legal counsel as its reason.

Suzuki received a letter from Orion's counsel stating that Kang obtained another loan in the
amount of P1,800,000.00. When Kang failed to pay, he executed a Dacion en Pago in favor of
Orion.

Suzuki filed a complaint for specific performance and damages against Kang and Orion

RTC Ruling: ruled in favor of Suzuki and ordered Orion to deliver the CCT Nos. 18186 and 9118
to Suzuki.

The court found that Suzuki was an innocent purchaser for value whose rights over the
properties prevailed over Orion's.

The RTC further ordered Orion and Kang to jointly and severally pay Suzuki moral damages,
exemplary damages, attorney's fees, appearance fees, expenses for litigation and cost of suit.
Orion timely appealed the RTC decision with the CA.

CA Ruling: the CA partially granted Orion's appeal and sustained the RTC insofar as it upheld
Suzuki's right over the properties. It deviated from the RTC ruling, however, by deleting the
award for moral damages, exemplary damages, attorney's fees, expenses for litigation and cost
of suit.

The Petition and Comment: 1.The Deed of Sale executed by Kang in favor of Suzuki is null and
void. Under Korean law, any conveyance of a conjugal property should be made with the
consent of both spouses; XXX

ISSUE: WON the Deed of Sale executed by Kang in favor of Suzuki is null and void on the
ground that spousal consent was absent under the Korean Law.

HELD: NO. Philippine Law governs the transfer of real property.

Orion believes that the CA erred in not ruling on the issue of spousal consent. We cannot
uphold this position, however, because the issue of spousal consent was only raised on appeal
to the CA. It is a well-settled principle that points of law, theories, issues, and arguments not
brought to the attention of the trial court cannot be raised for the first time on appeal and
considered by a reviewing court. To consider these belated arguments would violate basic
principles of fair play, justice, and due process.
Having said these, we shall nonetheless discuss the issues Orion belatedly raised, if only to put
an end to lingering doubts on the correctness of the denial of the present petition.

It is a universal principle that real or immovable property is exclusively subject to the laws of
the country or state where it is located. The reason is found in the very nature of immovable
property its immobility. Immovables are part of the country and so closely connected to it that
all rights over them have their natural center of gravity there.

Thus, all matters concerning the title and disposition of real property are determined by what is
known as the lex loci rei sitae, which can alone prescribe the mode by which a title can pass
from one person to another, or by which an interest therein can be gained or lost. This general
principle includes all rules governing the descent, alienation and transfer of immovable
property and the validity, effect and construction of wills and other conveyances.

This principle even governs the capacity of the person making a deed relating to immovable
property, no matter what its nature may be. Thus, an instrument will be ineffective to transfer
title to land if the person making it is incapacitated by the lex loci rei sitae, even though under
the law of his domicile and by the law of the place where the instrument is actually made, his
capacity is undoubted.

On the other hand, property relations between spouses are governed principally by the national
law of the spouses. However, the party invoking the application of a foreign law has the burden
of proving the foreign law. The foreign law is a question of fact to be properly pleaded and
proved as the judge cannot take judicial notice of a foreign law. He is presumed to know only
domestic or the law of the forum.

Accordingly, matters concerning the title and disposition of real property shall be governed
by Philippine law while issues pertaining to the conjugal nature of the property shall be
governed by South Korean law, provided it is proven as a fact.

In the present case, Orion, unfortunately failed to prove the South Korean law on the conjugal
ownership of property. It merely attached a "Certification from the Embassy of the Republic of
Korea"[29] to prove the existence of Korean Law. This certification, does not qualify as sufficient
proof of the conjugal nature of the property for there is no showing that it was properly
authenticated by the seal of his office, as required under Section 24 of Rule 132.[30]

Accordingly, the International Law doctrine of presumed-identity approach or processual

presumption comes into play, i.e., where a foreign law is not pleaded or, even if pleaded, is not
proven, the presumption is that foreign law is the same as Philippine Law.

Accordingly, we see no reason to declare as invalid Kang's conveyance in favor of Suzuki for
the supposed lack of spousal consent.
Del Soccoro vs Van Wilsem

December 10, 2014

Doctrine: foreign law should not be applied when its application would work undeniable injustice to the
citizens or residents of the forum.

Facts: Norma A. Del Socorro and Ernst Van Wilsem contracted marriage in Holland. They were blessed
with a son named Roderigo Norjo Van Wilsem. Unfortunately, their marriage bond ended by virtue of a
Divorce Decree issued by the appropriate Court of Holland. Thereafter, Norma and her son came home
to the Philippines. According to Norma, Ernst made a promise to provide monthly support to their son.
However, since the arrival of petitioner and her son in the Philippines, Ernst never gave support to
Roderigo. Norma filed a complaint against Ernst for violation of R.A. No. 9262 for the latters unjust
refusal to support his minor child with petitioner.

The trial court dismissed the complaint since the facts charged in the information do not constitute an
offense with respect to the accused, he being an alien.

ISSUE: Does a foreign national have an obligation to support his minor child under Philippine law?

HELD: Yes, since Ernst is a citizen of Holland or the Netherlands, we agree with the RTC that he is subject
to the laws of his country, not to Philippine law, as to whether he is obliged to give support to his child,
as well as the consequences of his failure to do so. This does not, however, mean that Ernst is not
obliged to support Normas son altogether. In international law, the party who wants to have a foreign
law applied to a dispute or case has the burden of proving the foreign law. In the present case, Ernst
hastily concludes that being a national of the Netherlands, he is governed by such laws on the matter of
provision of and capacity to support. While Ernst pleaded the laws of the Netherlands in advancing his
position that he is not obliged to support his son, he never proved the same. It is incumbent upon Ernst
to plead and prove that the national law of the Netherlands does not impose upon the parents the
obligation to support their child. Foreign laws do not prove themselves in our jurisdiction and our courts
are not authorized to take judicial notice of them. Like any other fact, they must be alleged and proved.

Moreover, foreign law should not be applied when its application would work undeniable injustice to
the citizens or residents of the forum. To give justice is the most important function of law; hence, a law,
or judgment or contract that is obviously unjust negates the fundamental principles of Conflict of Laws.
Applying the foregoing, even if the laws of the Netherlands neither enforce a parents obligation to
support his child nor penalize the non-compliance therewith, such obligation is still duly enforceable in
the Philippines because it would be of great injustice to the child to be denied of financial support when
the latter is entitled thereto.

Willaware Products Corporation vs jesichris manufacturing Corp.

September 3, 2014
Doctrine: What is being sought to be prevented is not competition per se but the use of unjust, oppressive
or high handed methods which may deprive others of a fair chance to engage in business or to earn a
living. Plainly,what the law prohibits is unfair competition and not competition where the means use dare
fair and legitimate.

Facts: Jesichris Manufacturing Company the respondent filed this present complaint for
damages for unfair competition with prayer for permanent injunction to enjoin Willaware
Products Corporation the petitioner from manufacturing and distributing plastic-made
automotive parts similar to Jesichris Manufacturing Company. The respondent, alleged that it is
a duly registered partnership engaged in the manufacture and distribution of plastic and metal
products, with principal office at No. 100 Mithi Street, Sampalukan, Caloocan City. Since its
registration in 1992, Jesichris Manufacturing Company has been manufacturing in its Caloocan
plant and distributing throughout the Philippines plastic-made automotive parts. Willaware
Products Corporation, on the other hand, which is engaged in the manufacture and distribution
of kitchenware items made of plastic and metal has its office near that of the Jesichris
Manufacturing Company. Respondent further alleged that in view of the physical proximity of
petitioners office to respondents office, and in view of the fact that some of the respondents
employees had transferred to petitioner, petitioner had developed familiarity with respondents
products, especially its plastic-made automotive parts.

That sometime in November 2000, [respondent] discovered that [petitioner] had been
manufacturing and distributing the same automotive parts with exactly similar design, same
material and colors but was selling these products at a lower price as [respondents] plastic-
made automotive parts and to the same customers.

Respondent alleged that it had originated the use of plastic in place of rubber in the
manufacture of automotive under chassis parts such as spring eye bushing, stabilizer bushing,
shock absorber bushing, center bearing cushions, among others. [Petitioners] manufacture of
the same automotive parts with plastic material was taken from respondents idea of using
plastic for automotive parts. Also, [petitioner] deliberately copied [respondents] products all of
which acts constitute unfair competition, is and are contrary to law, morals, good customs and
public policy and have caused [respondent] damages in terms of lost and unrealized profits in
the amount of 2,000,000 as of the date of respondents complaint.

Issues: (1) Whether or not there is unfair competition under human relations when the parties
are not competitors and there is actually no damage on the part of Jesichris?

(2) Consequently, if there is no unfair competition, should there be moral damages and
attorneys fees?

(3) Whether or not the addition of nominal damages is proper although no rights have been
established?
(4) If ever the right of Jesichris refers to its copyright on automotive parts, should it be
considered in the light of the said copyrights were considered to be void by no less than this
Honorable Court in SC GR No. 161295?

(5) If the right involved is goodwill then the issue is: whether or not Jesichris has established
goodwill?

Held: Prefatorily, we would like to stress that the instant case falls under Article 28 of the Civil
Code on human relations, and not unfair competition under Republic Act No. 8293, 1 as the
present suit is a damage suit and the products are not covered by patent registration. A fortiori,
the existence of patent registration is immaterial in the present case.

The concept of unfair competition under Article 28 is very much broader than that covered by
intellectual property laws. Under the present article, which follows the extended concept of
unfair competition in American jurisdictions, the term covers even cases of discovery of trade
secrets of a competitor, bribery of his employees, misrepresentation of all kinds, interference
with the fulfillment of a competitors contracts, or any malicious interference with the latters
business. 2

With that settled, we now come to the issue of whether or not petitioner committed acts
amounting to unfair competition under Article 28 of the Civil Code.

We find the petition bereft of merit.

Article 28 of the Civil Code provides that unfair competition in agricultural, commercial or
industrial enterprises or in labor through the use of force, intimidation, deceit, machination or
any other unjust, oppressive or high-handed method shall give rise to a right of action by the
person who thereby suffers damage.

From the foregoing, it is clear that what is being sought to be prevented is not competition
per se but the use of unjust, oppressive or high- handed methods which may deprive others
of a fair chance to engage in business or to earn a living. Plainly, what the law prohibits is
unfair competition and not competition where the means used are fair and legitimate.

In order to qualify the competition as unfair, it must have two characteristics: (1) it must
involve an injury to a competitor or trade rival, and (2) it must involve acts which are
characterized as contrary to good conscience, or shocking to judicial sensibilities, or
otherwise unlawful; in the language of our law, these include force, intimidation, deceit,
machination or any other unjust, oppressive or high-handed method. The public injury or
interest is a minor factor; the essence of the matter appears to be a private wrong perpetrated by
unconscionable means 3.

Here, both characteristics are present.

First, both parties are competitors or trade rivals, both being engaged in the manufacture of
plastic-made automotive parts. Second, the acts of the petitioner were clearly contrary to good
conscience as petitioner admitted having employed respondents former employees,
deliberately copied respondents products and even went to the extent of selling these products
to respondents customers. 4

To bolster this point, the CA correctly pointed out that petitioners hiring of the former
employees of respondent and petitioners act of copying the subject plastic parts of respondent
were tantamount to unfair competition, viz.:

The testimonies of the witnesses indicate that [petitioner] was in bad faith in competing with
the business of [respondent]. [Petitioners] acts can be characterized as executed with
mischievous subtle calculation. To illustrate, in addition to the findings of the RTC, the Court
observes that [petitioner] is engaged in the production of plastic kitchenware previous to its
manufacturing of plastic automotive spare parts, it engaged the services of the then mold setter
and maintenance operator of [respondent], De Guzman, while he was employed by the latter.
De Guzman was hired by [petitioner] in order to adjust its machinery since quality plastic
automotive spare parts were not being made. It baffles the Court why [petitioner] cannot rely
on its own mold setter and maintenance operator to remedy its problem. [Petitioners]
engagement of De Guzman indicates that it is banking on his experience gained from working
for [respondent].

Another point we observe is that Yabut, who used to be a warehouse and delivery man of
[respondent], was fired because he was blamed of spying in favor of [petitioner]. Despite this
accusation, he did not get angry. Later on, he applied for and was hired by [petitioner] for the
same position he occupied with [respondent]. These sequence of events relating to his
employment by [petitioner] is suspect too like the situation with De Guzman 5.

Thus, it is evident that petitioner is engaged in unfair competition as shown by his act of
suddenly shifting his business from manufacturing kitchenware to plastic-made automotive
parts; his luring the employees of the respondent to transfer to his employ and trying to
discover the trade secrets of the respondent. 6

Moreover, when a person starts an opposing place of business, not for the sake of profit to
himself, but regardless of loss and for the sole purpose of driving his competitor out of business
so that later on he can take advantage of the effects of his malevolent purpose, he is guilty of
wanton wrong 7. As aptly observed by the court a quo, the testimony of petitioners witnesses
indicate that it acted in bad faith in competing with the business of respondent, to wit:

[Petitioner], thru its General Manager, William Salinas, Jr., admitted that it was never engaged
in the business of plastic-made automotive parts until recently, year 2000:
Atty. Bautista: The business name of Willaware Product Corporation is kitchenware, it is (sic)
not? Manufacturer of kitchenware and distributor of kitchenware, is it not?

Mr. Salinas: Yes, sir.

Atty. Bautista: And you said you have known the [respondent] Jesichris Manufacturing Co.,
you have known it to be manufacturing plastic automotive products, is it not?

Mr. Salinas: Yes, sir.

Atty. Bautista: In fact, you have been (sic) physically become familiar with these products,
plastic automotive products of Jesichris?

Mr. Salinas: Yes, sir.

How [petitioner] was able to manufacture the same products, in terms of color, size, shape and
composition as those sold by Jesichris was due largely to the sudden transfer of Jesichris
employees to Willaware.

Atty. Bautista: Since when have you been familiar with Jesichris Manufacturing Company?

Mr. Salinas: Since they transferred there (sic) our place.

Atty. Bautista: And that was in what year?

Mr. Salinas: Maybe four (4) years. I dont know the exact date.

Atty. Bautista: And some of the employees of Jesichris Manufacturing Co. have transferred to
your company, is it not?

Mr. Salinas: Yes, sir.

Atty. Bautista: How many, more or less?

Mr. Salinas: More or less, three (3).

Atty. Bautista: And when, in what year or month did they transfer to you?

Mr. Salinas: First, November 1.

Atty. Bautista: Year 2000?

Mr. Salinas: Yes sir. And then the other maybe February, this year. And the other one, just one
month ago.

That [petitioner] was clearly out to take [respondent] out of business was buttressed by the
testimony of [petitioners] witness, Joel Torres:
Q: Are you familiar with the [petitioner], Willaware Product Corporation?

A: Yes, sir.

Q: Will you kindly inform this court where is the office of this Willaware Product Corporation
(sic)?

A: At Mithi Street, Caloocan City, sir.

Q: And Mr. Witness, sometime second Saturday of January 2001, will you kindly inform this
court what unusual even (sic) transpired between you and Mr. Salinas on said date?

A: There was, sir.

Q: What is that?

A: Sir, I was walking at that time together with my wife going to the market and then I passed
by the place where they were having a drinking spree, sir.

Q: You mentioned they, who were they who were drinking at that time?

A: I know one Jun Molina, sir.

Q: And who else was there?

A: William Salinas, sir.

Q: And will you kindly inform us what happened when you spotted upon them drinking?

A: Jun Molina called me, sir.

Q: And what happened after that?

A: At that time, he offered me a glass of wine and before I was able to drink the wine, Mr.
Salinas uttered something, sir.

Q: And what were those words uttered by Mr. Salinas to you?

A: O, ano naapektuhan na kayo sa ginaya (sic) ko sa inyo?

Q: And what did you do after that, after hearing those words?

A: And he added these words, sir. sabihin mo sa amo mo, dalawang taon na lang
pababagsakin ko na siya.

Q: Alright, hearing those words, will you kindly tell this court whom did you gather to be
referred to as your amo?
A: Mr. Jessie Ching, sir. 8

In sum, petitioner is guilty of unfair competition under Article 28 of the Civil Code.

However, since the award of Two Million Pesos (P2,000,000.00) in actual damages had been
deleted and in its place Two Hundred Thousand Pesos (P200,000.00) in nominal damages was
awarded, the attorneys fees should concomitantly be modified and lowered to Fifty Thousand
Pesos (P50,000.00).

WHEREFORE, the instant petition is DENIED. The Decision dated November 24, 2010 and
Resolution dated February 10, 2011 of the Court of Appeals in CA-G.R. CV No. 86744 are
hereby AFFIRMED with MODIFICATION that the award of attorneys fees be lowered to Fifty
Thousand Pesos (P50,000.00).

SO ORDERED.

Vinzons-Chato vs Fortune Tobacco Corp.

June 19, 2007

Doctrine: A public officer may be validly sued in his/her private capacity for acts done in the
course of the performance of the functions of the office, where said public officer: (1) acted with
malice, bad faith, or negligence; or (2) where the public officer violated a constitutional right of
the plaintiff.

FACTS: This is a case for damages under Article 32 of the Civil Code filed by Fortune against
Liwayway as CIR.

On June 10, 1993, the legislature enacted RA 7654, which provided that locally manufactured
cigarettes which are currently classified and taxed at 55% shall be charged an ad valorem tax of
55% provided that the maximum tax shall not be less than Five Pesos per pack. Prior to
effectivity of RA 7654, Liwayway issued a rule, reclassifying Champion, Hope, and More
(all manufactured by Fortune) as locally manufactured cigarettes bearing foreign brand subject
to the 55% ad valorem tax. Thus, when RA 7654 was passed, these cigarette brands were
already covered.

In a case filed against Liwayway with the RTC, Fortune contended that the issuance of the rule
violated its constitutional right against deprivation of property without due process of law and
the right to equal protection of the laws.

For her part, Liwayway contended in her motion to dismiss that respondent has no cause of
action against her because she issued RMC 37-93 in the performance of her official function and
within the scope of her authority. She claimed that she acted merely as an agent of the Republic
and therefore the latter is the one responsible for her acts. She also contended that the complaint
states no cause of action for lack of allegation of malice or bad faith.

The order denying the motion to dismiss was elevated to the CA, who dismissed the case on the
ground that under Article 32, liability may arise even if the defendant did not act with malice or
bad faith.

Hence this appeal.

ISSUES: 1.) Whether or not a public officer may be validly sued in his/her private capacity for
acts done in connection with the discharge of the functions of his/her office

2.) Whether or not Article 32, NCC, should be applied instead of Sec. 38, Book I, Administrative
Code

HELD: On the first issue, the general rule is that a public officer is not liable for damages which
a person may suffer arising from the just performance of his official duties and within the scope
of his assigned tasks. An officer who acts within his authority to administer the affairs of the
office which he/she heads is not liable for damages that may have been caused to another, as it
would virtually be a charge against the Republic, which is not amenable to judgment for
monetary claims without its consent. However, a public officer is by law not immune from
damages in his/her personal capacity for acts done in bad faith which, being outside the scope
of his authority, are no longer protected by the mantle of immunity for official actions.

Specifically, under Sec. 38, Book I, Administrative Code, civil liability may arise where there is
bad faith, malice, or gross negligence on the part of a superior public officer. And, under Sec. 39
of the same Book, civil liability may arise where the subordinate public officers act is
characterized by willfulness or negligence. In Cojuangco, Jr. V. CA, a public officer who directly
or indirectly violates the constitutional rights of another, may be validly sued for damages
under Article 32 of the Civil Code even if his acts were not so tainted with malice or bad faith.

Thus, the rule in this jurisdiction is that a public officer may be validly sued in his/her private
capacity for acts done in the course of the performance of the functions of the office, where said
public officer: (1) acted with malice, bad faith, or negligence; or (2) where the public officer
violated a constitutional right of the plaintiff.

On the second issue, SC ruled that the decisive provision is Article 32, it being a special law,
which prevails over a general law (the Administrative Code).

Article 32 was patterned after the tort in American law. A tort is a wrong, a tortious act which
has been defined as the commission or omission of an act by one, without right, whereby
another receives some injury, directly or indirectly, in person, property or reputation. There are
cases in which it has been stated that civil liability in tort is determined by the conduct and not
by the mental state of the tortfeasor, and there are circumstances under which the motive of the
defendant has been rendered immaterial. The reason sometimes given for the rule is that
otherwise, the mental attitude of the alleged wrongdoer, and not the act itself, would determine
whether the act was wrongful. Presence of good motive, or rather, the absence of an evil motive,
does not render lawful an act which is otherwise an invasion of anothers legal right; that is,
liability in tort in not precluded by the fact that defendant acted without evil intent.

Continental Steel v. Montao

October 13, 2009

Doctrines: Life is not synonymous with civil personality. One need not acquire civil personality
first before he/she could die. Even a child inside the womb already has life.

In case of doubt in the interpretation of any law or provision affecting labor, such should be
interpreted in favor of labor.

Facts: Hortillano, an employee of petitioner Continental Steel Manufacturing Corporation

(Continental Steel) filed a claim for Paternity Leave, Bereavement Leave and Death and
Accident Insurance for dependent, pursuant to the Collective Bargaining Agreement (CBA).

The claim was based on the death of Hortillanos unborn child. Hortillanos wife had a
premature delivery while she was in the 38th week of pregnancy. The female fetus died during
labor due to fetal Anoxia secondary to uteroplacental insufficiency.

Petitioner immediately granted Hortillanos claim for paternity leave but denied his claims for
bereavement leave and other death benefits.

It was maintained by Hortillano, through the Labor Union, that the provisions of the CBA did
not specifically state that the dependent should have first been born alive or must have acquired
juridical personality so that his/her subsequent death could be covered by the CBA death
benefits.

Petitioner argued that the express provision of the CBA did not contemplate the death of an
unborn child, a fetus, without legal personality. It claimed that there are two elements for the
entitlement to the benefits, namely: (1) death and (2) status as legitimate dependent, none of
which existed in Hortillanos case. Continental Steel contended that only one with civil
personality could die, relying on Articles 40, 41 and 42 of the Civil Code which provides:

Article 40. Birth determines personality; but the conceived child shall be considered born for all
purposes that are favorable to it, provided it be born later with the conditions specified in the
following article.
Article 41. For civil purposes, the fetus is considered born if it is alive at the time it is completely
delivered from the mothers womb. However, if the fetus had an intra-uterine life of less than
seven months, it is not deemed born if it dies within twenty-four hours after its complete
delivery from the maternal womb.

Article 42. Civil personality is extinguished by death. The effect of death upon the rights and
obligations of the deceased is determined by law, by contract and by will.

Hence according to the petitioner, the unborn child never died because it never acquired
juridical personality. Proceeding from the same line of thought, Continental Steel reasoned that
a fetus that was dead from the moment of delivery was not a person at all. Hence, the term
dependent could not be applied to a fetus that never acquired juridical personality.

Labor arbiter Montao argued that the fetus had the right to be supported by the parents from
the very moment he/she was conceived. The fetus had to rely on another for support; he/she
could not have existed or sustained himself/herself without the power or aid of someone else,
specifically, his/her mother.

Petitioner appealed with the CA, who affirmed the Labor Arbiters resolution. Hence this
petition.

Issues:

1. Whether or not only one with juridical personality can die

2. Whether or not a fetus can be considered as a dependent

3. Whether or not any ambiguity in CBA provisions shall be settled in favor of the employee

Held:

1. No. The reliance of Continental Steel on Articles 40, 41 and 42 of the Civil Code for the legal
definition of death is misplaced. Article 40 provides that a conceived child acquires personality
only when it is born, and Article 41 defines when a child is considered born. Article 42 plainly
states that civil personality is extinguished by death. The issue of civil personality is not
relevant in this case.

The above provisions of the Civil Code do not provide at all a definition of death. Moreover,
while the Civil Code expressly provides that civil personality may be extinguished by death, it
does not explicitly state that only those who have acquired juridical personality could die.

Life is not synonymous with civil personality. One need not acquire civil personality first before
he/she could die. Even a child inside the womb already has life.
No less than the Constitution recognizes the life of the unborn from conception, that the State
must protect equally with the life of the mother. If the unborn already has life, then the
cessation thereof even prior to the child being delivered, qualifies as death.

2. Yes. Even an unborn child is a dependent of its parents. Hortillanos child could not have
reached 38-39 weeks of its gestational life without depending upon its mother, Hortillanos
wife, for sustenance. The CBA did not provide a qualification for the child dependent, such that
the child must have been born or must have acquired civil personality. Without such
qualification, then child shall be understood in its more general sense, which includes the
unborn fetus in the mothers womb.

3. Time and again, the Labor Code is specific in enunciating that in case of doubt in the
interpretation of any law or provision affecting labor, such should be interpreted in favor of
labor. In the same way, the CBA and CBA provisions should be interpreted in favor of labor. As
decided by this Court, any doubt concerning the rights of labor should be resolved in its favor
pursuant to the social justice policy. (Terminal Facilities and Services Corporation v. NLRC [199
SCRA 265 (1991)])

Bereavement leave and other death benefits are granted to an employee to give aid to, and if
possible, lessen the grief of, the said employee and his family who suffered the loss of a loved
one. It cannot be said that the parents grief and sense of loss arising from the death of their
unborn child, who, in this case, had a gestational life of 38-39 weeks but died during delivery, is
any less than that of parents whose child was born alive but died subsequently.