Professional Documents
Culture Documents
3. Mortgages over assets listed in APT Specific During the pre-trial, the respective counsels of
catalogue GC-031 for MMC, a copy of which the parties manifested that the issue involved in
Catalogue is hereby made an integral part hereof the case was one of law and submitted the case
by way of reference, as well as assets presently in for decision. On June 11, 1996, the trial court
use by MMC but which are not listed or included in rendered its decision. It ruled in favor of G
paragraphs 1 and 2 above and shall include all Holdings and held:
assets that may hereinafter be acquired by
MMC.[42] In line with the foregoing, this Court having been
convinced that the Purchase and Sale Agreement
It is difficult to conceive that these mortgages, is indeed subject to the final closing conditions
already existing in 1992, almost four (4) years prescribed by Stipulation No. 5.02 and
before NAMAWU filed its notice of strike, were a conformably to Rule 39, Section 10 of the Rules of
fictitious arrangement intended to defraud Court, accordingly orders that the Asset
NAMAWU. After all, they were agreed upon long Privatization Trust execute the corresponding
before the seeds of the labor dispute germinated. Document of Transfer of the subject shares and
financial notes and cause the actual delivery of
While it is true that the Deed of Real Estate and subject shares and notes to G Holdings, Inc.,
Chattel Mortgage was executed only on September within a period of thirty (30) days from receipt of
5, 1996, it is beyond cavil that this formal this Decision, and after G Holdings Inc., shall have
document of mortgage was merely a derivative of paid in full the entire balance, at its present value
the original mortgage stipulations contained in the of P241,702,122.86, computed pursuant to the
Promissory Notes of October 2, 1992. The prepayment provisions of the Agreement. Plaintiff
execution of this Deed in 1996 does not detract shall pay the balance simultaneously with the
from, but instead reinforces, the manifest delivery of the Deed of Transfer and actual
intention of the parties to establish and constitute delivery of the shares and notes.
the mortgages on MMCs real and personal
properties.
SO ORDERED.
Apparently, the move to execute a formal
document denominated as the Deed of Real Estate The Solicitor General filed a notice of appeal on
and Chattel Mortgage came about after the behalf of the Republic on June 28, 1996. Contrary
decision of the RTC of Manila in Civil Case No. 95- to the rules of procedure, however, the notice of
76132 became final in mid-1996. This conclusion appeal was filed with the Court of Appeals (CA),
not with the trial court which rendered the provide a sufficient basis to invalidate this public
judgment appealed from. document. To say otherwise, and to invalidate the
mortgage deed on this pretext, would furnish MMC
No other judicial remedy was resorted to until a convenient excuse to absolve itself of its
July 2, 1999 when the Republic, through the APT, mortgage obligations by adopting the simple
filed a petition for annulment of judgment with strategy of not including the obligations in its
the CA. It claimed that the decision should be financial statements. It would ignore our ruling in
annulled on the ground of abuse of discretion Republic, etc. v. G Holdings, Inc., which obliged
amounting to lack of jurisdiction on the part of APT to deliver the MMC shares and financial notes
the trial court. x x x to GHI. Besides, the failure of the mortgagor to
record in its financial statements its loan
Finding that the grounds necessary for the obligations is surely not an essential element for
annulment of judgment were inexistent, the the validity of mortgage agreements, nor will it
appellate court dismissed the petition. x x x x[43] independently affect the right of the mortgagee
to foreclose.
With the RTC decision having become final owing
to the failure of the Republic to perfect an Contrary to the CA decision, Tanongon v.
appeal, it may have become necessary to execute Samson[44] is not on all fours with the instant
the Deed of Real Estate and Chattel Mortgage on case. There are material differences between the
September 5, 1996, in order to enforce the trial two cases. At issue in Tanongon was a third-party
courts decision of June 11, 1996. This appears to claim arising from a Deed of Absolute Sale
be the most plausible explanation for the executed between Olizon and Tanongon on July
execution of the Deed of Real Estate and Chattel 29, 1997, after the NLRC decision became final
Mortgage only in September 1996. Even as the and executory on April 29, 1997. In the case at
parties had already validly constituted the bar, what is involved is a loan with mortgage
mortgages in 1992, as explicitly provided in the agreement executed on October 2, 1992, well
Promissory Notes, a specific deed of mortgage in a ahead of the unions notice of strike on August 23,
separate document may have been deemed 1996. No presumption of regularity inheres in the
necessary for registration purposes. Obviously, deed of sale in Tanongon, while the participation
this explanation is more logical and more sensible of APT in this case clothes the transaction in 1992
than the strained conjecture that the mortgage with such a presumption that has not been
was executed on September 5, 1996 only for the successfully rebutted. In Tanongon, the conduct
purpose of defrauding NAMAWU. of a full-blown trial led to the finding─duly
supported by evidence─that the voluntary sale of
It is undeniable that the Deed of Real Estate and the assets of the judgment debtor was made in
Chattel Mortgage was formally documented two bad faith. Here, no trial was held, owing to the
weeks after NAMAWU filed its notice of strike motion to dismiss filed by NAMAWU, and the CA
against MMC on August 23, 1996. However, this failed to consider the factual findings made by
fact alone cannot give rise to an adverse inference this Court in Republic, etc. v. G Holdings, Inc.
for two reasons. First, as discussed above, the Furthermore, in Tanongon, the claimant did not
mortgages had already been established and exercise his option to file a separate action in
constituted as early as October 2, 1992 in the court, thus allowing the NLRC Sheriff to levy on
Promissory Notes, showing the clear intent of the execution and to determine the rights of third-
parties to impose a lien upon MMCs properties. party claimants.[45] In this case, a separate
Second, the mere filing of a notice of strike by action was filed in the regular courts by GHI, the
NAMAWU did not, as yet, vest in NAMAWU any third-party claimant. Finally, the questioned
definitive right that could be prejudiced by the transaction in Tanongon was a plain, voluntary
execution of the mortgage deed. transfer in the form of a sale executed by the
judgment debtor in favor of a dubious third-party,
The fact that MMCs obligation to GHI is not resulting in the inability of the judgment creditor
reflected in the formers financial statements─a to satisfy the judgment. On the other hand, this
circumstance made capital of by NAMAWU in order case involves an involuntary transfer (foreclosure
to cast doubt on the validity of the mortgage of mortgage) arising from a loan obligation that
deed─is of no moment. By itself, it does not
well-existed long before the commencement of In addition to these presumptions, the design to
the labor claims of the private respondent. defraud creditors may be proved in any other
manner recognized by law and of evidence.
Three other circumstances have been put forward
by the CA to support its conclusion that the This article presumes the existence of fraud made
mortgage contract is a sham. First, the CA by a debtor. Thus, in the absence of satisfactory
considered it highly suspect that the Deed of Real evidence to the contrary, an alienation of a
Estate and Chattel Mortgage was registered only property will be held fraudulent if it is made after
on February 4, 2000, three years after its a judgment has been rendered against the debtor
execution, and almost one month after the making the alienation. This presumption of fraud
Supreme Court rendered its decision in the labor is not conclusive and may be rebutted by
dispute.[46] Equally suspicious, as far as the CA is satisfactory and convincing evidence. All that is
concerned, is the fact that the mortgages were necessary is to establish affirmatively that the
foreclosed on July 31, 2001, after the DOLE had conveyance is made in good faith and for a
already issued a Partial Writ of Execution on May sufficient and valuable consideration.
9, 2001.[47] To the appellate court, the timing of
the registration of the mortgage deed was too The Assignment Agreement and the Deed of
coincidental, while the date of the foreclosure Assignment were executed for valuable
signified that it was effected precisely to prevent considerations. Patent from the Assignment
the satisfaction of the judgment awards.[48] Agreement is the fact that petitioner assumed the
Furthermore, the CA found that the mortgage payment of US$18,453,450.12 to ADB in
deed itself was executed without any satisfaction of Marcoppers remaining debt as of
consideration, because at the time of its March 20, 1997. Solidbank cannot deny this fact
execution, all the assets of MMC had already been considering that a substantial portion of the said
transferred to GHI.[49] payment, in the sum of US$13,886,791.06, was
remitted in favor of the Bank of Nova Scotia, its
These circumstances provided the CA with major stockholder.
sufficient justification to apply Article 1387 of the
Civil Code on presumed fraudulent transactions, The facts of the case so far show that the
and to declare that the mortgage deed was void assignment contracts were executed in good faith.
for being simulated and fictitious.[50] The execution of the Assignment Agreement on
March 20, 1997 and the Deed of Assignment on
We do not agree. We find this Courts ruling in MR December 8,1997 is not the alpha of this case.
Holdings, Ltd. v. Sheriff Bajar[51] pertinent and While the execution of these assignment contracts
instructive: almost coincided with the rendition on May 7,
1997 of the Partial Judgment in Civil Case No. 96-
Article 1387 of the Civil Code of the Philippines 80083 by the Manila RTC, however, there was no
provides: intention on the part of petitioner to defeat
Art. 1387. All contracts by virtue of which the Solidbanks claim. It bears reiterating that as early
debtor alienates property by gratuitous title are as November 4, 1992, Placer Dome had already
presumed to have been entered into in fraud of bound itself under a Support and Standby Credit
creditors, when the donor did not reserve Agreement to provide Marcopper with cash flow
sufficient property to pay all debts contracted support for the payment to ADB of its obligations.
before the donation. When Marcopper ceased operations on account of
disastrous mine tailings spill into the Boac River
Alienations by onerous title are also presumed and ADB pressed for payment of the loan, Placer
fraudulent when made by persons against whom Dome agreed to have its subsidiary, herein
some judgment has been rendered in any instance petitioner, pay ADB the amount of
or some writ of attachment has been issued. The US$18,453,450.12.
decision or attachment need not refer to the
property alienated, and need not have been Thereupon, ADB and Marcopper executed,
obtained by the party seeking rescission. respectively, in favor of petitioner an Assignment
Agreement and a Deed of Assignment. Obviously,
the assignment contracts were connected with
transactions that happened long before the favorable ruling. To paraphrase MR Holdings, we
rendition in 1997 of the Partial Judgment in Civil cannot see how NAMAWUs right was prejudiced by
Case No. 96-80083 by the Manila RTC. Those the Deed of Real Estate and Chattel Mortgage, or
contracts cannot be viewed in isolation. If we may by its delayed registration, when substantially all
add, it is highly inconceivable that ADB, a of the properties of MMC were already mortgaged
reputable international financial organization, will to GHI as early as October 2, 1992. Given this
connive with Marcopper to feign or simulate a reality, the Court of Appeals had no basis to
contract in 1992 just to defraud Solidbank for its conclude that this Deed of Real Estate and Chattel
claim four years thereafter. And it is equally Mortgage, by reason of its late registration, was a
incredible for petitioner to be paying the huge simulated or fictitious contract.
sum of US$18,453,450.12 to ADB only for the
purpose of defrauding Solidbank of the sum of The importance of registration and its binding
P52,970,756.89. effect is stated in Section 51 of the Property
Registration Decree or Presidential Decree (P.D.)
It is said that the test as to whether or not a No. 1529,[54] which reads:
conveyance is fraudulent is ― does it prejudice
the rights of creditors? We cannot see how SECTION 51. Conveyance and other dealings by
Solidbanks right was prejudiced by the assignment registered owner.An owner of registered land may
contracts considering that substantially all of convey, mortgage, lease, charge or otherwise deal
Marcoppers properties were already covered by with the same in accordance with existing laws.
the registered Deed of Real Estate and Chattel He may use such forms, deeds, mortgages, leases
Mortgage executed by Marcopper in favor of ADB or other voluntary instrument as are sufficient in
as early as November 11, 1992. As such, Solidbank law. But no deed, mortgage, lease or other
cannot assert a better right than ADB, the latter voluntary instrument, except a will purporting to
being a preferred creditor. It is basic that convey or effect registered land, shall take effect
mortgaged properties answer primarily for the as a conveyance or bind the land, but shall
mortgaged credit, not for the judgment credit of operate only as a contract between the parties
the mortgagors unsecured creditor. Considering and as evidence of authority to the Registry of
that petitioner assumed Marcoppers debt to ADB, Deeds to make registration.
it follows that Solidbanks right as judgment
creditor over the subject properties must give way The act of registration shall be the operative act
to that of the former.[52] to convey or affect the land insofar as third
persons are concerned, and in all cases under this
From this ruling in MR Holdings, we can draw Decree, the registration shall be made in the
parallel conclusions. The execution of the Office of the Register of Deeds for the province or
subsequent Deed of Real Estate and Chattel the city where the land lies.[55]
Mortgage on September 5, 1996 was simply the
formal documentation of what had already been Under the Torrens system, registration is the
agreed in the seminal transaction (the Purchase operative act which gives validity to the transfer
and Sale Agreement) between APT and GHI. It or creates a lien upon the land. Further,
should not be viewed in isolation, apart from the entrenched in our jurisdiction is the doctrine that
original agreement of October 2, 1992. And it registration in a public registry creates
cannot be denied that this original agreement was constructive notice to the whole world.[56] Thus,
supported by an adequate consideration. The APT Section 51 of Act No. 496, as amended by Section
was even ordered by the court to deliver the 52 of P.D. No. 1529, provides:
shares and financial notes of MMC in exchange for
the payments that GHI had made. SECTION 52. Constructive notice upon
registration.Every conveyance, mortgage, lease,
It was also about this time, in 1996, that NAMAWU lien, attachment, order, judgment, instrument or
filed a notice of strike to protest non-payment of entry affecting registered land shall, if registered,
its rightful labor claims.[53] But, as already filed or entered in the Office of the Register of
mentioned, the outcome of that labor dispute was Deeds for the province or city where the land to
yet unascertainable at that time, and NAMAWU which it relates lies, be constructive notice to all
could only have hoped for, or speculated about, a
persons from the time of such registering, filing or appealed to the CA; that when the appeal was
entering. dismissed by the CA on January 24, 2002, it
eventually became the subject of a review
But, there is nothing in Act No. 496, as amended petition before this Court, docketed as G.R. No.
by P.D. No. 1529, that imposes a period within 157696; and that G.R. No. 157696 was decided by
which to register annotations of conveyance, this Court only on February 9, 2006.
mortgage, lease, lien, attachment, order,
judgment, instrument or entry affecting This chronology of subsequent events shows that
registered land. If liens were not so registered, February 9, 2006 would have been the earliest
then it shall operate only as a contract between date for the unimpeded enforcement of the
the parties and as evidence of authority to the Partial Writ of Execution, as it was only then that
Registry of Deeds to make registration. If this Court resolved the issue. This happened four
registered, it shall be the operative act to convey and a half years after July 31, 2001, the date
or affect the land insofar as third persons are when GHI foreclosed on the mortgaged properties.
concerned. The mere lapse of time from the Thus, it is not accurate to say that the foreclosure
execution of the mortgage document to the made on July 31, 2001 was effected [only] to
moment of its registration does not affect the prevent satisfaction of the judgment award.
rights of a mortgagee.
We also observe the error in the CAs finding that
Neither will the circumstance of GHIs foreclosure the 1996 Deed of Real Estate and Chattel
of MMCs properties on July 31, 2001, or after the Mortgage was not supported by any consideration
DOLE had already issued a Partial Writ of since at the time the deed was executed, all the
Execution on May 9, 2001 against MMC, support real and personal property of MMC had already
the conclusion of the CA that GHIs act of been transferred in the hands of G Holdings.[58] It
foreclosing on MMCs properties was effected to should be remembered that the Purchase and Sale
prevent satisfaction of the judgment award. GHIs Agreement between GHI and APT involved large
mortgage rights, constituted in 1992, antedated amounts (P550M) and even spawned a subsequent
the Partial Writ of Execution by nearly ten (10) court action (Civil Case No. 95-76132, RTC of
years. GHIs resort to foreclosure was a legitimate Manila). Yet, nowhere in the Agreement or in the
enforcement of a right to liquidate a bona fide RTC decision is there any mention of real and
debt. It was a reasonable option open to a personal properties of MMC being included in the
mortgagee which, not being a party to the labor sale to GHI in 1992. These properties simply
dispute between NAMAWU and MMC, stood to served as mortgaged collateral for the 1992
suffer a loss if it did not avail itself of the remedy Promissory Notes.[59] The Purchase and Sale
of foreclosure. Agreement and the Promissory Notes themselves
are the best evidence that there was ample
The well-settled rule is that a mortgage lien is consideration for the mortgage.
inseparable from the property mortgaged.[57]
While it is true that GHIs foreclosure of MMCs Thus, we must reject the conclusion of the CA
mortgaged properties may have had the effect to that the Deed of Real Estate and Chattel Mortgage
prevent satisfaction of the judgment award executed in 1996 was a simulated transaction.
against the specific mortgaged property that first
answers for a mortgage obligation ahead of any
subsequent creditors, that same foreclosure does On the issue of whether therehad been an
not necessarily translate to having been effected effective levy upon the properties of GHI.
to prevent satisfaction of the judgment award
against MMC. The well-settled principle is that the rights of a
mortgage creditor over the mortgaged properties
Likewise, we note the narration of subsequent are superior to those of a subsequent attaching
facts contained in the Comment of the Office of creditor. In Cabral v. Evangelista,[60] this Court
the Solicitor General. Therein, it is alleged that declared that:
after the Partial Writ of Execution was issued on
May 9, 2001, a motion for reconsideration was Defendants-appellants purchase of the mortgaged
filed by MMC; that the denial of the motion was chattels at the public sheriff's sale and the
delivery of the chattels to them with a certificate properties were already mortgaged to GHI, the
of sale did not give them a superior right to the only interest remaining in the mortgagor was its
chattels as against plaintiffs-mortgagees. Rule 39, right to redeem said properties from the
Section 22 of the old Rules of Court (now Rule 39, mortgage. The right of redemption was the only
Section 25 of the Revised Rules), cited by leviable or attachable property right of the
appellants precisely provides that the sale conveys mortgagor in the mortgaged real properties. We
to the purchaser all the right which the debtor have held that
had in such property on the day the execution or
attachment was levied. It has long been settled by The main issue in this case is the nature of the
this Court that The right of those who so acquire lien of a judgment creditor, like the petitioner,
said properties should not and can not be superior who has levied an attachment on the judgment
to that of the creditor who has in his favor an debtor's (CMI) real properties which had been
instrument of mortgage executed with the mortgaged to a consortium of banks and were
formalities of the law, in good faith, and without subsequently sold to a third party, Top Rate.x x x
the least indication of fraud. This is all the more x
true in the present case, because, when the
plaintiff purchased the automobile in question on The sheriff's levy on CMI's properties, under the
August 22, 1933, he knew, or at least, it is writ of attachment obtained by the petitioner,
presumed that he knew, by the mere fact that the was actually a levy on the interest only of the
instrument of mortgage, Exhibit 2, was registered judgment debtor CMI on those properties. Since
in the office of the register of deeds of Manila, the properties were already mortgaged to the
that said automobile was subject to a mortgage consortium of banks, the only interest remaining
lien. In purchasing it, with full knowledge that in the mortgagor CMI was its right to redeem said
such circumstances existed, it should be presumed properties from the mortgage. The right of
that he did so, very much willing to respect the redemption was the only leviable or attachable
lien existing thereon, since he should not have property right of CMI in the mortgaged real
expected that with the purchase, he would properties. The sheriff could not have attached
acquire a better right than that which the vendor the properties themselves, for they had already
then had. In another case between two been conveyed to the consortium of banks by
mortgagees, we held that As between the first mortgage (defined as a conditional sale), so his
and second mortgagees, therefore, the second levy must be understood to have attached only
mortgagee has at most only the right to redeem, the mortgagor's remaining interest in the
and even when the second mortgagee goes mortgaged property the right to redeem it from
through the formality of an extrajudicial the mortgage.[62]x x x x
foreclosure, the purchaser acquires no more than
the right of redemption from the first mortgagee. There appears in the record a factual
The superiority of the mortgagee's lien over that contradiction relating to whether the foreclosure
of a subsequent judgment creditor is now by GHI on July 13, 2001[63] over some of the
expressly provided in Rule 39, Section 16 of the contested properties came ahead of the levy
Revised Rules of Court, which states with regard thereon, or the reverse. NAMAWU claims that the
to the effect of levy on execution as to third levy on two trucks was effected on June 22,
persons that The levy on execution shall create a 2001,[64] which GHI disputes as a misstatement
lien in favor of the judgment creditor over the because the levy was attempted on July 18, 2002,
right, title and interest of the judgment debtor in and not 2001[65] What is undisputed though is
such property at the time of the levy, subject to that the mortgage of GHI was registered on
liens or encumbrances then existing. February 4, 2000,[66] well ahead of any levy by
NAMAWU. Prior registration of a lien creates a
Even in the matter of possession, mortgagees over preference, as the act of registration is the
chattel have superior, preferential and paramount operative act that conveys and affects the
rights thereto, and the mortgagor has mere rights land,[67] even against subsequent judgment
of redemption.[61] creditors, such as respondent herein. Its
registration of the mortgage was not intended to
Similar rules apply to cases of mortgaged real defraud NAMAWU of its judgment claims, since
properties that are registered. Since the even the courts were already judicially aware of
its existence since 1992. Thus, at that moment in by law to which it owes its being. This is
time, with the registration of the mortgage, particularly true when the fiction is used to
either NAMAWU had no properties of MMC to defeat public convenience, justify wrong, protect
attach because the same had been previously fraud, defend crime, confuse legitimate legal or
foreclosed by GHI as mortgagee thereof; or by judicial issues, perpetrate deception or otherwise
virtue of the DOLEs levy to enforce NAMAWUs circumvent the law. This is likewise true where
claims, the latters rights are subject to the notice the corporate entity is being used as an alter ego,
of the foreclosure on the subject properties by a adjunct, or business conduit for the sole benefit
prior mortgagees right. GHIs mortgage right had of the stockholders or of another corporate entity.
already been registered by then, and it is basic In all these cases, the notion of corporate entity
that mortgaged properties answer primarily for will be pierced or disregarded with reference to
the mortgaged credit, not for the judgment credit the particular transaction involved.
of the mortgagors unsecured creditor.[68]
Given this jurisprudential principle and the factual
circumstances obtaining in this case, we now ask:
On the issue of piercing the veil of corporate Was the CA correct in piercing the veil of
fiction. corporate identity of GHI and MMC?
The CA found that: In our disquisition above, we have shown that the
Ordinarily, the interlocking of directors and CAs finding that there was a simulated mortgage
officers in two different corporations is not a between GHI and MMC to justify a wrong or
conclusive indication that the corporations are protect a fraud has struggled vainly to find a
one and the same for purposes of applying the foothold when confronted with the ruling of this
doctrine of piercing the veil of corporate fiction. Court in Republic v. G Holdings, Inc.
However, when the legal fiction of the separate
corporate personality is abused, such as when the The negotiations between the GHI and the
same is used for fraudulent or wrongful ends, the Government--through APT, dating back to 1992--
courts have not hesitated to pierce the corporate culminating in the Purchase and Sale Agreement,
veil (Francisco vs. Mejia, 362 SCRA 738). In the cannot be depicted as a contrived transaction. In
case at bar, the Deed of Real Estate and Chattel fact, in the said Republic, etc., v. G Holdings,
Mortgage was entered into between MMC and G Inc., this Court adjudged that GHI was entitled to
Holdings for the purpose of evading the its rightful claims─ not just to the shares of MMC
satisfaction of the legitimate claims of the itself, or just to the financial notes that already
petitioner against MMC. The notion of separate contained the mortgage clauses over MMCs
personality is clearly being utilized by the two disputed assets, but also to the delivery of those
corporations to perpetuate the violation of a instruments. Certainly, we cannot impute to this
positive legal duty arising from a final judgment Courts findings on the case any badge of fraud.
to the prejudice of the petitioners right.[69] Thus, we reject the CAs conclusion that it was
right to pierce the veil of corporate fiction,
Settled jurisprudence[70] has it that because the foregoing circumstances belie such an
inference. Furthermore, we cannot ascribe to the
(A) corporation, upon coming into existence, is Government, or the APT in particular, any undue
invested by law with a personality separate and motive to participate in a transaction designed to
distinct from those persons composing it as well as perpetrate fraud. Accordingly, we consider the CA
from any other legal entity to which it may be interpretation unwarranted.
related. By this attribute, a stockholder may not,
generally, be made to answer for acts or liabilities We also cannot agree that the presumption of
of the said corporation, and vice versa. This fraud in Article 1387 of the Civil Code relative to
separate and distinct personality is, however, property conveyances, when there was already a
merely a fiction created by law for convenience judgment rendered or a writ of attachment
and to promote the ends of justice. For this issued, authorizes piercing the veil of corporate
reason, it may not be used or invoked for ends identity in this case. We find that Article 1387
subversive to the policy and purpose behind its finds less application to an involuntary alienation
creation or which could not have been intended such as the foreclosure of mortgage made before
any final judgment of a court. We thus hold that N.Y.S.2d 234) and the matter proceeded to a
when the alienation is involuntary, and the nonjury trial. Supreme Court thereafter rendered
foreclosure is not fraudulent because the judgment in favor of defendant upon its findings
mortgage deed has been previously executed in that, although defendant dominated LGV, it did
accordance with formalities of law, and the not use that domination to commit a fraud or
foreclosure is resorted to in order to liquidate a wrong on plaintiffs. Plaintiffs appealed.
bona fide debt, it is not the alienation by onerous
title contemplated in Article 1387 of the Civil The trial evidence showed that LGV was
Code wherein fraud is presumed. incorporated in November 1985. Defendant's
principal, Francesco Galesi, initially held 90% of
Since the factual antecedents of this case do not the stock and all of the stock was ultimately
warrant a finding that the mortgage and loan transferred to defendant. Initial project funding
agreements between MMC and GHI were was provided through a $2.5 million loan from
simulated, then their separate personalities must Chemical Bank, secured by defendant's guarantee
be recognized. To pierce the veil of corporate of repayment of the loan and completion of the
fiction would require that their personalities as project. The loan proceeds were utilized to
creditor and debtor be conjoined, resulting in a purchase the real property upon which the project
merger of the personalities of the creditor (GHI) was to be established. Chemical Bank thereafter
and the debtor (MMC) in one person, such that the loaned an additional $3.5 million to LGV, again
debt of one to the other is thereby extinguished. guaranteed by defendant, and the two loans were
But the debt embodied in the 1992 Financial Notes consolidated into a first mortgage loan of $6
has been established, and even made subject of million. In 1989, the loan was modified by
court litigation (Civil Case No. 95-76132, RTC splitting the loan into a $1.9 term note on which
Manila). This can only mean that GHI and MMC defendant was primary obligor and a $4.1 million
have separate corporate personalities. project note on which LGV was the obligor and
defendant was a guarantor.
Neither was MMC used merely as an alter ego,
adjunct, or business conduit for the sole benefit Due to LGV's lack of success in marketing the
of GHI, to justify piercing the formers veil of project's townhouses and in order to protect itself
corporate fiction so that the latter could be held from the exercise of Chemical Bank's enforcement
liable to claims of third-party judgment creditors, remedies, defendant was forced to make monthly
like NAMAWU. In this regard, we find American installments of principal and interest on LGV's
jurisprudence persuasive. In a decision by the behalf. Ultimately, defendant purchased the
Supreme Court of New York[71] bearing upon project note from Chemical Bank for $3.1 million,
similar facts, the Court denied piercing the veil of paid the $1.5 million balance on the term note
corporate fiction to favor a judgment creditor who and took an assignment of the first mortgage on
sued the parent corporation of the debtor, the project's realty. After LGV failed to make
alleging fraudulent corporate asset-shifting payments on the indebtedness over the course of
effected after a prior final judgment. Under a the succeeding two years, defendant brought an
factual background largely resembling this case at action to foreclose its mortgage. Ultimately,
bar, viz: defendant obtained a judgment of foreclosure and
sale in the amount of $6,070,246.50. Defendant
In this action, plaintiffs seek to recover the bid in the property at the foreclosure sale and
balance due under judgments they obtained thereafter obtained a deficiency judgment in the
against Lake George Ventures Inc. (hereinafter amount of $3,070,246.50.
LGV), a subsidiary of defendant that was formed
to develop the Top O the World resort community Following the foreclosure sale, LGV transferred to
overlooking Lake George, by piercing the defendant all of the shares of Top of the World
corporate veil or upon the theory that LGV's Water Company, a separate entity that had been
transfer of certain assets constituted fraudulent organized to construct and operate the water
transfers under the Debtor and Creditor Law. We supply and delivery system for the project, in
previously upheld Supreme Court's denial of exchange for a $950,000 reduction in the
defendant's motion for summary judgment deficiency judgment.
dismissing the complaint (252 A.D.2d 609, 675
the U.S. Supreme Court of New York held defendant. We are equally unpersuaded by
Based on the foregoing, and accepting that plaintiffs' continued reliance upon defendant's
defendant exercised complete domination and December 1991 unilateral conversion of its
control over LGV, we are at a loss as to how intercompany loans with LGV from debt to equity,
plaintiffs perceive themselves to have been which constituted nothing more than a
inequitably affected by defendant's foreclosure bookkeeping transaction and had no apparent
action against LGV, by LGV's divestiture of the effect on LGV's obligations to defendant or
water company stock or the sports complex defendant's right to foreclose on its mortgage.[72]
property, or by defendant's transfer to LGV of a
third party's uncollectible note, accomplished This doctrine is good law under Philippine
solely for tax purposes. It is undisputed that LGV jurisdiction.
was, and for some period of time had been,
unable to meet its obligations and, at the time of In Concept Builders, Inc. v. National Labor
the foreclosure sale, liens against its property Relations Commission,[73] we laid down the test
exceeded the value of its assets by several million in determining the applicability of the doctrine of
dollars, even including the water company and piercing the veil of corporate fiction, to wit:
sports complex at the values plaintiffs would
assign to them. In fact, even if plaintiffs' analysis 1. Control, not mere majority or complete
were utilized to eliminate the entire $3 million control, but complete domination, not only of
deficiency judgment, the fact remains that finances but of policy and business practice in
subordinate mortgages totaling nearly an respect to the transaction attacked so that the
additional $2 million have priority over plaintiffs' corporate entity as to this transaction had at the
judgments. time no separate mind, will or existence of its
own.
As properly concluded by Supreme Court, absent a
finding of any inequitable consequence to 2. Such control must have been used by the
plaintiffs, both causes of action pleaded in the defendant to commit fraud or wrong, to
amended complaint must fail. Fundamentally, a perpetuate the violation of a statutory or other
party seeking to pierce the corporate veil must positive legal duty, or dishonest and, unjust act in
show complete domination and control of the contravention of plaintiffs legal rights; and,
subsidiary by the parent and also that such
domination was used to commit a fraud or wrong 3. The aforesaid control and breach of duty must
against the plaintiff that resulted in the plaintiff's proximately cause the injury or unjust loss
injury ( 252 A.D.2d 609, 610, 675 N.Y.S.2d 234, complained of.x x x x
supra; see, Matter of Morris v. New York State
Dept. of Taxation & Fin., 82 N.Y.2d 135, 141, 603 Time and again, we have reiterated that mere
N.Y.S.2d 807, 623 N.E.2d 1157). Notably, ownership by a single stockholder or by another
[e]vidence of domination alone does not suffice corporation of all or nearly all of the capital stock
without an additional showing that it led to of a corporation is not, by itself, a sufficient
inequity, fraud or malfeasance (TNS Holdings v. ground for disregarding a separate corporate
MKI Sec. Corp., 92 N.Y.2d 335, 339, 680 N.Y.S.2d personality.[74] It is basic that a corporation has a
891, 703 N.E.2d 749).x x x x personality separate and distinct from that
composing it as well as from that of any other
In reaching that conclusion, we specifically reject legal entity to which it may be related. Clear and
a number of plaintiffs' assertions, including the convincing evidence is needed to pierce the veil
entirely erroneous claims that our determination of corporate fiction.[75]
on the prior appeal (252 A.D.2d 609, 675 N.Y.S.2d
234, supra) set forth a roadmap for the proof In this case, the mere interlocking of directors
required at trial and mandated a verdict in favor and officers does not warrant piercing the
of plaintiffs upon their production of evidence separate corporate personalities of MMC and GHI.
that supported the decision's listed facts. To the Not only must there be a showing that there was
contrary, our decision was predicated upon the majority or complete control, but complete
existence of such evidence, absent which we domination, not only of finances but of policy and
would have granted summary judgment in favor of business practice in respect to the transaction
attacked, so that the corporate entity as to this respondents are not parties to the said NLRC case.
transaction had at the time no separate mind, will Civil Case No. 2749 does not put in issue either
or existence of its own. The mortgage deed the fact or validity of the proceeding in theNLRC
transaction attacked as a basis for piercing the case nor the decision therein rendered, much less
corporate veil was a transaction that was an the writ of execution issued thereunder. It does
offshoot, a derivative, of the mortgages earlier not seek to enjoin the execution of the decision
constituted in the Promissory Notes dated October against the properties of the judgment debtor.
2, 1992. But these Promissory Notes with What is sought to be tried in Civil Case No. 2749 is
mortgage were executed by GHI with APT in the whether the NLRC's decision and writ of
name of MMC, in a full privatization process. It execution, above mentioned, shall be permitted
appears that if there was any control or to be satisfied against properties of private
domination exercised over MMC, it was APT, not respondents, and not of the judgment debtor
GHI, that wielded it. Neither can we conclude named in the NLRC decision and writ of execution.
that the constitution of the loan nearly four (4) Such a recourse is allowed under the provisions of
years prior to NAMAWUs notice of strike could Section 17, Rule 39 of the Rules of Court.
have been the proximate cause of the injury of
NAMAWU for having been deprived of MMCs To sustain petitioners' theory will inevitably lead
corporate assets. to disastrous consequences and lend judicial
imprimatur to deprivation of property without due
On the propriety of injunction to prevent process of law. Simply because a writ of execution
execution by the NLRC on the properties of third- was issued by the NLRC does not authorize the
party claimants sheriff implementing the same to levy on
anybody's property. To deny the victim of the
It is settled that a Regional Trial Court can validly wrongful levy, the recourse such as that availed of
issue a Temporary Restraining Order (TRO) and, by the herein private respondents, under the
later, a writ of preliminary injunction to prevent pretext that no court of general jurisdiction can
enforcement of a writ of execution issued by a interfere with the writ of execution issued in a
labor tribunal on the basis of a third-partys claim labor dispute, will be sanctioning a greater evil
of ownership over the properties levied upon.[76] than that sought to be avoided by the Labor Code
While, as a rule, no temporary or permanent provision in question. Certainly, that could not
injunction or restraining order in any case have been the intendment of the law creating the
involving or growing out of a labor dispute shall be NLRC. For well-settled is the rule that the power
issued by any court--where the writ of execution of a court to execute its judgment extends only
issued by a labor tribunal is sought to be enforced over properties unquestionably belonging to the
upon the property of a stranger to the labor judgment debtor.
dispute, even upon a mere prima facie showing of Likewise, since the third-party claimant is not one
ownership of such claimant--a separate action for of the parties to the action, he cannot, strictly
injunctive relief against such levy may be speaking, appeal from the order denying his
maintained in court, since said action neither claim, but he should file a separate reivindicatory
involves nor grows out of a labor dispute insofar as action against the execution creditor or the
the third party is concerned.[77] Instructively, purchaser of the property after the sale at public
National Mines and Allied Workers Union v. auction, or a complaint for damages against the
Vera[78] bond filed by the judgment creditor in favor of
the sheriff.[79]
Petitioners' reliance on the provision of Art. 254 of
the New Labor Code (herein earlier quoted) which A separate civil action for recovery of ownership
prohibits injunctions or restraining orders in any of the property would not constitute interference
case involving or growing out of a 'labor dispute' is with the powers or processes of the labor tribunal
not well-taken. This has no application to the case which rendered the judgment to execute upon the
at bar. Civil Case No. 2749 is one which neither levied properties. The property levied upon being
"involves" nor "grows out" of a labor dispute. What that of a stranger is not subject to levy. Thus, a
'involves' or 'grows out' of a labor dispute is the separate action for recovery, upon a claim and
NLRC case between petitioners and the judgment prima facie showing of ownership by the
debtor, Philippine Iron Mines. The private
petitioner, cannot be considered as A final word
interference.[80]
The Court notes that the case filed with the lower
Upon the findings and conclusions we have court involves a principal action for injunction to
reached above, petitioner is situated squarely as prohibit execution over properties belonging to a
such third-party claimant. The questioned third party not impleaded in the legal dispute
restraining order of the lower court, as well as the between NAMAWU and MMC. We have observed,
order granting preliminary injunction, does not however, that the lower court and the CA failed
constitute interference with the powers or to take judicial notice of, or to consider, our
processes of the labor department. The Decisions in Republic, etc., v. G Holdings, Inc.,
registration of the mortgage document operated and Maricalum Mining Corporation v. Brion and
as notice to all on the matter of the mortgagees NAMAWU, in which we respectively recognized the
prior claims. Official proceedings relative to the entitlement of GHI to the shares and the company
foreclosure of the subject properties constituted a notes of MMC (under the Purchase and Sale
prima facie showing of ownership of such claimant Agreement), and the rights of NAMAWU to its
to support the issuance of injunctive reliefs. labor claims. At this stage, therefore, neither the
lower court nor the CA, nor even this Court, can
As correctly held by the lower court: depart from our findings in those two cases
The subject incidents for TRO and/or Writ of because of the doctrine of stare decisis.
Injunction were summarily heard and in resolving
the same, the Court believes, that the petitioner
has a clear and unmistakable right over the levied
properties. The existence of the subject Deed of From our discussion above, we now rule that the
Real Estate and Chattel Mortgage, the fact that trial court, in issuing the questioned orders, did
petitioner initiated a foreclosure of said not commit grave abuse of discretion, because its
properties before the Clerk of Court and Ex- issuance was amply supported by factual and legal
Officio Sheriff, RTC Branch 61, Kabankalan City on bases.
July 13, 2001, the fact that said Ex-Officio Sheriff
and the Clerk of Court issue a Notice of We are not unmindful, however, of the fact that
Foreclosure, Possession and Control over said the labor claims of NAMAWU, acknowledged by
mortgaged properties on July 19, 2001 and the this Court in Maricalum, still awaits final
fact that a Sheriffs Certificate of Sale was issued execution. As success fades from NAMAWUs efforts
on December 3, 2001 are the basis of its to execute on the properties of MMC, which were
conclusion. Unless said mortgage contract is validly foreclosed by GHI, we see that NAMAWU
annulled or declared null and void, the always had, and may still have, ample
presumption of regularity of transaction must be supplemental remedies found in Rule 39 of the
considered and said document must be looked Rules of Court in order to protect its rights against
[upon] as valid. MMC. These include the examination of the
judgment obligor when judgment is
Notably, the Office of the Solicitor General also unsatisfied,[82] the examination of the obligors of
aptly observed that when the respondent judgment obligors,[83] or even the resort to
maintained that the Deed of Real Estate and receivership.[84]
Chattel mortgage was entered into in fraud of
creditors, it thereby admitted that the mortgage While, theoretically, this case is not ended by this
was not void, but merely rescissible under Article decision, since the lower court is still to try the
1381(3) of the Civil Code; and, therefore, an case filed with it and decide it on the merits, the
independent action is needed to rescind the matter of whether the mortgage and foreclosure
contract of mortgage.[81] We, however, hold that of the assets that are the subject of said
such an independent action cannot now be foreclosure is ended herein, for the third and final
maintained, because the mortgage has been time. So also is the consequential issue of the
previously recognized to exist, with a valid separate and distinct personalities of GHI and
consideration, in Republic, etc., v. G Holdings, MMC. Having resolved these principal issues with
Inc. certainty, we find no more need to remand the
case to the lower court, only for the purpose of
resolving again the matter of whether GHI owns Bldg., signed by Rosalie, as lessor, and by Spouses
the properties that were the subject of the latters Latip, as lessees thereof.
foreclosure.
The contract of lease reads:
WHEREFORE, the Petition is GRANTED. The
Decision of the Court of Appeals dated October CONTRACT OF LEASE
14, 2003 is SET ASIDE. The Omnibus Order dated
December 4, 2002 of the Regional Trial Court, KNOW ALL MEN BY THESE PRESENTS:
Branch 61 of Kabankalan City, Negros Occidental
is AFFIRMED. No costs. This Contract of Lease is entered into by and
between:
WITNESSETH
1. That the LESSOR is the owner of the
commercial building erected at the lot of the
Toribio G. Reyes Realty, Inc. situated at 158
SPOUSES OMAR and MOSHIERA LATIP, Petitioners, - Quirino Ave. corner Redemptorist Road, Barangay
versus - ROSALIE PALAA CHUA, Respondent. Baclaran in Paraaque Ctiy;
G.R. No. 177809 2. That LESSOR hereby leases two (2) cubicles
located at the 1st & 2nd Floor, of said building
Challenged in this petition for review on certiorari with an area of 56 square meters under the
is the Court of Appeals (CA) Decision in CA-G.R. SP following terms and conditions, to wit:
No. 89300:[1] (1) reversing the decision of the a. That the monthly rental of the two (2) cubicles
Regional Trial Court (RTC), Branch 274, Paraaque in PESOS, SIXTY THOUSAND (P60,000.00),
City in Civil Case No. 04-0052;[2] and (2) Philippine Currency. However, due to unstable
reinstating and affirming in toto the decision of power of the peso LESSEES agrees to a yearly
the Metropolitan Trial Court (MeTC), Branch 78, of increase of ten (10%) percent of the monthly
the same city in Civil Case No. 2001-315.[3] rental;
b. That any rental in-arrears shall be paid before
First, we sift through the varying facts found by the expiration of the contract to the LESSOR;
the different lower courts. c. That LESSEES agree to pay their own water and
electric consumptions in the said premises;
The facts parleyed by the MeTC show that d. That the LESSEES shall not sub-let or make any
respondent Rosalie Chua (Rosalie) is the owner of alteration in the cubicles without a written
Roferxane Building, a commercial building, permission from the LESSOR. Provided, however,
located at No. 158 Quirino Avenue corner that at the termination of the Contract, the lessee
Redemptorist Road, Barangay Baclaran, Paraaque shall return the two cubicles in its original
City. conditions at their expenses;
e. That the LESSEES agree to keep the cubicles in
On July 6, 2001, Rosalie filed a complaint for a safe and sanitary conditions, and shall not keep
unlawful detainer plus damages against any kinds of flammable or combustible materials.
petitioners, Spouses Omar and Moshiera Latip f. That in case the LESSEES fail to pay the monthly
(Spouses Latip). Rosalie attached to the complaint rental every time it falls due or violate any of the
a contract of lease over two cubicles in Roferxane above conditions shall be enough ground to
terminate this Contract of Lease. Provided,
further, that, if the LESSEES pre-terminate this cubicles, Rosalie, through counsel, sent the
Contract they shall pay the rentals for the unused spouses a letter demanding payment of back
month or period by way of liquidated damages in rentals and should they fail to do so, to vacate the
favor of the LESSOR. leased cubicles. When Spouses Latip did not heed
3. That this Contract of Lease is for six (6) yrs. Rosalies demand, she instituted the aforesaid
only starting from December _____, 1999 or up to complaint.
December ______, 2005.
IN WITNESS WHEREOF, the parties have hereunto In their Answer, Spouses Latip refuted Rosalies
affixed their hands this ___th day of December, claims. They averred that the lease of the two (2)
1999 at City of Manila, Philippines. cubicles had already been paid in full as
(sgd.) (sgd.) evidenced by receipts showing payment to Rosalie
of the total amount of P2,570,000.00. The three
ROSALIE PALAA-CHUA MOSHIERA LATIEF L E S S O R (3) receipts, in Rosalies handwriting, read:
LESSEE
1. I received the amount of P2,000,000.00 (two
(sgd.) OMAR LATIEF L E S S E E million pesos) from [O]mar Latip & Moshi[e]ra
Latip for the payment of 2 cubicles located at 158
SIGNED IN THE PRESENCE OF: Quirino Ave. corner Redemptorist Rd.[,] Baclaran
P[ara]aque City. ROFERLAND[5] Bldg. with the
(sgd.) (sgd.) terms 6 yrs. Contract.
Doc. No. _____ ATTY. CALIXTRO B. RAMOS Thereafter, in December 1999, as soon as two (2)
Page No. _____ NOTARY PUBLIC cubicles were finished, Spouses Latip occupied
Book No. LXV Until December 31, 2000 them without waiting for the completion of five
Series of 1999 PTR # 374145-1/11/99/-Mla. (5) other stalls. Spouses Latip averred that the
IBP # 00262-Life Member[4] contract of lease they signed had been novated by
their purchase of lease rights of the subject
A year after the commencement of the lease and cubicles. Thus, they were surprised to receive a
with Spouses Latip already occupying the leased
demand letter from Rosalies counsel and the supplemented; and the entire lease rentals for the
subsequent filing of a complaint against them. two (2) cubicles for six (6) years had already been
paid by Spouses Latip in the amount of
The MeTC ruled in favor of Rosalie, viz.: P2,570,000.00. As to Rosalies claim that her
WHEREFORE, premises considered, the [Spouses receipt of P2,570,000.00 was simply goodwill
Latip] and all persons claiming rights under them payment by prospective lessees to their lessor,
are hereby ordered to VACATE the property and not payment for the purchase of lease rights,
subject of this case located at the 1st and 2nd the RTC shot this down and pointed out that,
floors of a Roferxane Building situated at No. 158 apart from her bare allegations, Rosalie did not
Quirino Avenue corner Redemptorist Road, adduce evidence to substantiate this claim. On
Barangay Baclaran, Paraaque City. The [Spouses the whole, the RTC declared an existent lease
Latip] are also ordered to PAY [Rosalie] the between the parties for a period of six (6) years,
amount of SEVEN HUNDRED TWENTY THOUSAND and already fully paid for by Spouses Latip. Thus,
PESOS (P720,000.00) as rent arrearages for the Spouses Latip could not be ejected from the
period of December 1999 to December 2000 and leased premises until expiration of the lease
thereafter to PAY [Rosalie] the amount of period.
SEVENTY TWO THOUSAND PESOS (P72,000.00) per
month from January 2001 to December 2002, plus The RTC disposed of the appeal, viz.:
ten percent (10%) increase for each and every WHEREFORE, all the foregoing considered, the
succeeding years thereafter as stipulated in appealed decision of the [MeTC] dated January
paragraph 2(a) of the Contract of Lease x x x, 13, 2004 is reversed as judgment is hereby
until the [Spouses Latip] have completely vacated rendered for the [Spouses Latip] and against
the leased premises subject of this lease. [Rosalie], ordering the latter to pay the former
Finally[,] the [Spouses Latip] are hereby ordered (1) the sum of PhP1,000,000.00 as moral damages;
to PAY [Rosalie] the amount of TWENTY (2) the sum of PhP500,000.00 as exemplary
THOUSAND PESOS (P20,000.00) as attorneys fees damages;
and TWO THOUSAND PESOS (P2,000.00) per (3) the sum of PhP250,000.00 plus PhP3,000.00
[Rosalies] appearance in Court as appearance fee per court appearance as and for attorneys fees;
and to PAY the cost of this suit. and
(4) costs of suit. SO ORDERED.[8]
[Spouses Latips] counterclaim is hereby DISMISSED
for lack of merit. SO ORDERED.[7] In yet another turn of events, the CA, as
previously mentioned, reversed the RTC and
In stark contrast, the RTC reversed the MeTC and reinstated the decision of the MeTC. The CA ruled
ruled in favor of Spouses Latip. The RTC did not that the contract of lease, albeit lacking the
give credence to the contract of lease, ruling that signature of Ferdinand and not notarized,
it was not notarized and, in all other substantial remained a complete and valid contract. As the
aspects, incomplete. Further on this point, the MeTC had, the CA likewise found that the alleged
RTC noted that the contract of lease lacked: (1) defects in the contract of lease did not render the
the signature of Ferdinand Chua, Rosalies contract ineffective. On the issue of whether the
husband; (2) the signatures of Spouses Latip on amount of P2,570,000.00 merely constituted
the first page thereof; (3) the specific dates for payment of goodwill money, the CA took judicial
the term of the contract which only stated that notice of this common practice in the area of
the lease is for six (6) y[ea]rs only starting from Baclaran, especially around the Redemptorist
December 1999 or up to December 2005; (4) the Church. According to the appellate court, this
exact date of execution of the document, albeit judicial notice was bolstered by the Joint Sworn
the month of December and year 1999 are Declaration of the stallholders at Roferxane Bldg.
indicated therein; and (5) the provision for that they all had paid goodwill money to Rosalie
payment of deposit or advance rental which is prior to occupying the stalls thereat. Thus, ruling
supposedly uncommon in big commercial lease on Rosalies appeal, the CA disposed of the case:
contracts.
WHEREFORE, in view of the foregoing, the Petition
The RTC believed the claim of Spouses Latip that for Review is hereby GRANTED. The assailed
the contract of lease was modified and decision of RTC Paraaque City Branch 274 dated
September 24, 2004 is hereby REVERSED and SET
ASIDE, and the January 13, 2004 decision of the Generally speaking, matters of judicial notice
MeTC is REINSTATED and AFFIRMED en toto. SO have three material requisites: (1) the matter
ORDERED.[9] must be one of common and general knowledge;
(2) it must be well and authoritatively settled and
Not surprisingly, Spouses Latip filed the present not doubtful or uncertain; and (3) it must be
appeal. known to be within the limits of the jurisdiction of
the court. The principal guide in determining what
The singular issue for our resolution is whether facts may be assumed to be judicially known is
Spouses Latip should be ejected from the leased that of notoriety. Hence, it can be said that
cubicles. judicial notice is limited to facts evidenced by
public records and facts of general notoriety.
As previously adverted to, the CA, in ruling for
Rosalie and upholding the ejectment of Spouses To say that a court will take judicial notice of a
Latip, took judicial notice of the alleged practice fact is merely another way of saying that the usual
of prospective lessees in the Baclaran area to pay form of evidence will be dispensed with if
goodwill money to the lessor. knowledge of the fact can be otherwise acquired.
This is because the court assumes that the matter
We disagree. is so notorious that it will not be disputed. But
judicial notice is not judicial knowledge. The
Sections 1 and 2 of Rule 129 of the Rules of Court mere personal knowledge of the judge is not the
declare when the taking of judicial notice is judicial knowledge of the court, and he is not
mandatory or discretionary on the courts, thus: authorized to make his individual knowledge of a
fact, not generally or professionally known, the
SECTION 1. Judicial notice, when mandatory. A basis of his action. Judicial cognizance is taken
court shall take judicial notice, without the only of those matters which are commonly known.
introduction of evidence, of the existence and Things of common knowledge, of which courts
territorial extent of states, their political history, take judicial notice, may be matters coming to
forms of government and symbols of nationality, the knowledge of men generally in the course of
the law of nations, the admiralty and maritime the ordinary experiences of life, or they may be
courts of the world and their seals, the political matters which are generally accepted by mankind
constitution and history of the Philippines, the as true and are capable of ready and unquestioned
official acts of the legislative, executive and demonstration. Thus, facts which are universally
judicial departments of the Philippines, the laws known, and which may be found in encyclopedias,
of nature, the measure of time, and the dictionaries or other publications, are judicially
geographical divisions. noticed, provided they are of such universal
notoriety and so generally understood that they
SEC. 2. Judicial notice, when discretionary. A may be regarded as forming part of the common
court may take judicial notice of matters which knowledge of every person.[11]
are of public knowledge, or are capable of
unquestionable demonstration or ought to be We reiterated the requisite of notoriety for the
known to judges because of their judicial taking of judicial notice in the recent case of
functions. Expertravel & Tours, Inc. v. Court of Appeals,[12]
which cited State Prosecutors:
On this point, State Prosecutors v. Muro[10] is
instructive: Generally speaking, matters of judicial notice
have three material requisites: (1) the matter
I. The doctrine of judicial notice rests on the must be one of common and general knowledge;
wisdom and discretion of the courts. The power to (2) it must be well and authoritatively settled and
take judicial notice is to be exercised by courts not doubtful or uncertain; and (3) it must be
with caution; care must be taken that the known to be within the limits of the jurisdiction of
requisite notoriety exists; and every reasonable the court. The principal guide in determining what
doubt on the subject should be promptly resolved facts may be assumed to be judicially known is
in the negative. that of notoriety. Hence, it can be said that
judicial notice is limited to facts evidenced by judicial notice, is to dispense with the taking of
public records and facts of general notoriety. the usual form of evidence on a certain matter so
Moreover, a judicially noticed fact must be one notoriously known, it will not be disputed by the
not subject to a reasonable dispute in that it is parties.
either: (1) generally known within the territorial
jurisdiction of the trial court; or (2) capable of However, in this case, the requisite of notoriety is
accurate and ready determination by resorting to belied by the necessity of attaching documentary
sources whose accuracy cannot reasonably be evidence, i.e., the Joint Affidavit of the
questionable. stallholders, to Rosalies appeal before the CA. In
short, the alleged practice still had to be proven
Things of common knowledge, of which courts by Rosalie; contravening the title itself of Rule
take judicial notice, may be matters coming to 129 of the Rules of Court What need not be
the knowledge of men generally in the course of proved.
the ordinary experiences of life, or they may be
matters which are generally accepted by mankind Apparently, only that particular division of the CA
as true and are capable of ready and unquestioned had knowledge of the practice to pay goodwill
demonstration. Thus, facts which are universally money in the Baclaran area. As was held in State
known, and which may be found in encyclopedias, Prosecutors, justices and judges alike ought to be
dictionaries or other publications, are judicially reminded that the power to take judicial notice
noticed, provided, they are such of universal must be exercised with caution and every
notoriety and so generally understood that they reasonable doubt on the subject should be ample
may be regarded as forming part of the common reason for the claim of judicial notice to be
knowledge of every person. As the common promptly resolved in the negative.
knowledge of man ranges far and wide, a wide
variety of particular facts have been judicially Ultimately, on the issue of whether Spouses Latip
noticed as being matters of common knowledge. ought to be ejected from the leased cubicles,
But a court cannot take judicial notice of any fact what remains in evidence is the documentary
which, in part, is dependent on the existence or evidence signed by both parties the contract of
non-existence of a fact of which the court has no lease and the receipts evidencing payment of
constructive knowledge. P2,570,000.00.
From the foregoing provisions of law and our We need not be unduly detained by the issue of
holdings thereon, it is apparent that the matter which documents were executed first or if there
which the appellate court took judicial notice of was a novation of the contract of lease. As had
does not meet the requisite of notoriety. To begin been found by the RTC, the lease contract and the
with, only the CA took judicial notice of this receipts for the amount of P2,570,000.00 can be
supposed practice to pay goodwill money to the reconciled or harmonized. The RTC declared:
lessor in the Baclaran area. Neither the MeTC nor
the RTC, with the former even ruling in favor of Definitely, the parties entered into a lease
Rosalie, found that the practice was of common agreement over two (2) cubicles of the 1st and
knowledge or notoriously known. 2nd floors of Roferxane (Roferland) Building, a
commercial building located at 158 Quirino
We note that the RTC specifically ruled that Avenue, corner Redemptorist Road, Baclaran,
Rosalie, apart from her bare allegation, adduced Paraaque City and belonging to [Rosalie]. The
no evidence to prove her claim that the amount of lease agreement is for a term of six (6) years
P2,570,000.00 simply constituted the payment of commencing in December 1999 up to December
goodwill money. Subsequently, Rosalie attached 2005. This agreement was embodied in a Contract
an annex to her petition for review before the CA, of Lease x x x. The terms of this lease contract,
containing a joint declaration under oath by other however, are modified or supplemented by
stallholders in Roferxane Bldg. that they had paid another agreement between the parties executed
goodwill money to Rosalie as their lessor. On this and or entered into in or about the time of
score, we emphasize that the reason why our execution of the lease contract, which exact date
rules on evidence provide for matters that need of execution of the latter is unclear.[13]
not be proved under Rule 129, specifically on
We agree with the RTCs holding only up to that However, it made a quantum leap when it ruled
point. There exists a lease agreement between that the amount was payment for rentals of the
the parties as set forth in the contract of lease two (2) cubicles for the entire six-year period. We
which is a complete document. It need not be cannot subscribe to this finding. To obviate
signed by Ferdinand Chua as he likewise did not confusion and for clarity, the contents of the
sign the other two receipts for P500,000.00 and receipts, already set forth above, are again
P70,000.00, respectively, which contained only reproduced:
the signature of Rosalie. Besides, it is undisputed
that Rosalie owns and leases the stalls in 1. I received the amount of P2,000,000.00 (two
Roferxane Bldg.; thus, doing away with the need million pesos) from [O]mar Latip & Moshi[e]ra
for her husbands consent. The findings of the Latip for the payment of 2 cubicles located at 158
three lower courts concur on this fact. Quirino Ave. corner Redemptorist Rd.[,] Baclaran
P[ara]que City. ROFERLAND Bldg. with the terms 6
The contract of lease has a period of six (6) years yrs. Contract.
commencing in December 1999. This fact is again
buttressed by Spouses Latips admission that they P2,000,000.00 ______(sgd.)______ CHECK #
occupied the property forthwith in December 3767924 Rosalie Chua FAR EAST
1999, bearing in mind the brisk sales during the BANK______(sgd.)______ Ferdinand Chua
holiday season. 2. Received cash
On the conflicting interpretations by the lower P500,000.00 From Moshiera Latip (sgd.) 12/10/99
courts of the receipts amounting to Rosalie Chua Received by
P2,570,000.00, we hold that the practice of
payment of goodwill money in the Baclaran area is 3. Received cash P70,000.00 froM Moshiera LatiP
an inadequate subject of judicial notice. Neither 12-11-99 ___(sgd.) ____ Received by:[14]
was Rosalie able to provide sufficient evidence
that, apart from the belatedly submitted Joint There is nothing on the receipts and on record
Affidavit of the stallholders of Roferxane Bldg., that the payment and receipt of P2,570,000.00
the said amount was simply for the payment of referred to full payment of rentals for the whole
goodwill money, and not payment for advance period of the lease. All three receipts state
rentals by Spouses Latip. Rosalies receipt of cash in varying amounts. The
first receipt for P2,000,000.00 did state payment
In interpreting the evidence before us, we are for two (2) cubicles, but this cannot mean full
guided by the Civil Code provisions on payment of rentals for the entire lease period
interpretation of contracts, to wit: when there are no words to that effect. Further,
two receipts were subsequently executed pointing
Art. 1371. In order to judge the intention of the to the obvious fact that the P2,000,000.00 is not
contracting parties, their contemporaneous and for full payment of rentals. Thus, since the
subsequent acts shall be principally considered. contract of lease remained operative, we find
that Rosalies receipt of the monies should be
Art. 1372. However general the terms of a considered as advanced rentals on the leased
contract may be, they shall not be understood to cubicles. This conclusion is bolstered by the fact
comprehend things that are distinct and cases that Rosalie demanded payment of the lease
that are different from those which the parties rentals only in 2000, a full year after the
intended to agree. commencement of the lease.
Art. 1373. If some stipulation of any contract Finally, we note that the lease ended in 2005.
should admit of several meanings, it shall be Consequently, Spouses Latip can be ejected from
understood as bearing that import which is most the leased premises. They are liable to Rosalie for
adequate to render it effectual. unpaid rentals on the lease of the two (2) cubicles
in accordance with the stipulations on rentals in
The RTC was already on the right track when it the Contract of Lease. However, the amount of
declared that the receipts for P2,570,000.00 P2,570,000.00, covering advance rentals, must be
modified or supplemented the contract of lease.
deducted from this liability of Spouses Latip to The Antecedents:
Rosalie.
Respondents-spouses Reynaldo and Maria Luisa
WHEREFORE, premises considered, the petition is Tanjangco (the Tanjangcos) own Lots 68 and 69
hereby GRANTED. The decision of the Court of covered by Transfer Certificates of Title (TCT) No.
Appeals in CA-G.R. SP No. 89300 is REVERSED. The 242245[4] and 282961[5] respectively, located at
petitioners, spouses Omar and Moshiera Latip, are Corinthian Gardens Subdivision, Quezon City,
liable to respondent Rosalie Chua for unpaid which is managed by petitioner Corinthian
rentals minus the amount of P2,570,000.00 Gardens Association, Inc. (Corinthian). On the
already received by her as advance rentals. No other hand, respondents-spouses Frank and
costs. Teresita Cuaso (the Cuasos) own Lot 65 which is
adjacent to the Tanjangcos lots.
SO ORDERED.
Before the Cuasos constructed their house on Lot
65, a relocation survey was necessary. As
Geodetic Engineer Democrito De Dios (Engr. De
Dios), operating under the business name D.M. De
Dios Realty and Surveying, conducted all the
previous surveys for the subdivision's developer,
Corinthian referred Engr. De Dios to the Cuasos.
Before, during and after the construction of the
said house, Corinthian conducted periodic ocular
inspections in order to determine compliance with
the approved plans pursuant to the Manual of
Rules and Regulations of Corinthian.[6]
Unfortunately, after the Cuasos constructed their
house employing the services of C.B. Paraz &
Construction Co., Inc. (C.B. Paraz) as builder,
their perimeter fence encroached on the
Tanjangcos Lot 69 by 87 square meters.
Under the same parity of reasoning, the payment Citing Sia v. Court of Appeals [272 SCRA 141, May
by the appellants-Cuasos to the appellee 5, 1997], petitioners argue that the MTC may take
Corinthian of pre-construction and membership judicial notice of the reasonable rental or the
fees in the Association must necessarily entail the general price increase of land in order to
creation of certain obligations on the part of determine the amount of rent that may be
Corinthian. For duties and responsibilities always awarded to them. In that case, however, this
go hand in hand with rights and privileges. That is Court relied on the CA's factual findings, which
the law of life - and that is the law of every were based on the evidence presented before the
civilized society. It is an axiom of equity that he trial court. In determining reasonable rent, the
who receives the benefits must share the RTC therein took account of the following factors:
burdens.[40] 1) the realty assessment of the land, 2) the
increase in realty taxes, and 3) the prevailing rate
By its Manual of Rules and Regulations, it is of rentals in the vicinity. Clearly, the trial court
reasonable to assume that Corinthian, through its relied, not on mere judicial notice, but on the
representative, in the approval of building plans, evidence presented before it.
and in the conduct of periodic inspections of on-
going construction projects within the subdivision, Indeed, courts may fix the reasonable amount of
is responsible in insuring compliance with the rent for the use and occupation of a disputed
approved plans, inclusive of the construction of property. However, petitioners herein erred in
perimeter walls, which in this case is the subject assuming that courts, in determining the amount
of dispute between the Tanjangcos and the of rent, could simply rely on their own
Cuasos.[41] It is not just or equitable to relieve appreciation of land values without considering
Corinthian of any liability when, by its very own any evidence. As we have said earlier, a court
rules, it imposes its authority over all its members may fix the reasonable amount of rent, but it
to the end that no new construction can be must still base its action on the evidence adduced
started unless the plans are approved by the by the parties.
Association and the appropriate cash bond and
pre-construction fees are paid. Moreover, In Herrera v. Bollos [G.R. No. 138258, January 18,
Corinthian can impose sanctions for violating 2002], the trial court awarded rent to the
these rules. Thus, the proposition that the defendants in a forcible entry case. Reversing the
inspection is merely a table inspection and, RTC, this Court declared that the reasonable
therefore, should exempt Corinthian from amount of rent could be determined not by mere
liability, is unacceptable. After all, if the judicial notice, but by supporting evidence:x x x A
supposed inspection is merely a table inspection court cannot take judicial notice of a factual
and the approval granted to every member is a matter in controversy. The court may take judicial
mere formality, then the purpose of the rules notice of matters of public knowledge, or which
would be defeated. Compliance therewith would are capable of unquestionable demonstration, or
not be mandatory, and sanctions imposed for ought to be known to judges because of their
violations could be disregarded. Corinthian's judicial functions. Before taking such judicial
imprimatur on the construction of the Cuasos' notice, the court must allow the parties to be
perimeter wall over the property of the heard thereon. Hence, there can be no judicial
Tanjangcos assured the Cuasos that everything notice on the rental value of the premises in
was in order. question without supporting evidence.
In sum, Corinthians failure to prevent the Truly, mere judicial notice is inadequate, because
encroachment of the Cuasos perimeter wall into evidence is required for a court to determine the
proper rental value. But contrary to Corinthian's
arguments, both the RTC and the CA found that
indeed rent was due the Tanjangcos because they
were deprived of possession and use of their
property. This uniform factual finding of the RTC
and the CA was based on the evidence presented
below. Moreover, in Spouses Catungal v. Hao,[43]
we considered the increase in the award of rentals
as reasonable given the particular circumstances
of each case. We noted therein that the
respondent denied the petitioners the benefits,
including rightful possession, of their property for
almost a decade.
CORONA, J.:
Ordinance No. 8027 reclassified the area The City of Manila and the DOE, on the other
described therein from industrial to commercial hand, committed to do the following:
and directed the owners and operators of
businesses disallowed under Section 1 to cease Section 1. - The City Mayor shall endorse to the
and desist from operating their businesses within City Council this MOU for its appropriate action
six months from the date of effectivity of the with the view of implementing the spirit and
ordinance. Among the businesses situated in the intent thereof.
area are the so-called "Pandacan Terminals" of the
oil companies Caltex (Philippines), Inc., Petron Section 2. - The City Mayor and the DOE shall,
Corporation and Pilipinas Shell Petroleum consistent with the spirit and intent of this MOU,
Corporation. enable the OIL COMPANIES to continuously
operate in compliance with legal requirements,
However, on June 26, 2002, the City of Manila and within the limited area resulting from the joint
the Department of Energy (DOE) entered into a operations and the scale down program.
memorandum of understanding (MOU)6 with the
oil companies in which they agreed that "the Section 3. - The DOE and the City Mayor shall
scaling down of the Pandacan Terminals [was] the monitor the OIL COMPANIES’ compliance with the
most viable and practicable option." Under the provisions of this MOU.
MOU, the oil companies agreed to perform the
following: Section 4. - The CITY OF MANILA and the national
government shall protect the safety buffer and
Section 1. - Consistent with the objectives stated green zones and shall exert all efforts at
above, the OIL COMPANIES shall, upon signing of preventing future occupation or encroachment
this MOU, undertake a program to scale down the into these areas by illegal settlers and other
Pandacan Terminals which shall include, among unauthorized parties.
others, the immediate removal/decommissioning
process of TWENTY EIGHT (28) tanks starting with The Sangguniang Panlungsod ratified the MOU in
the LPG spheres and the commencing of works for Resolution No. 97.7 In the same resolution, the
the creation of safety buffer and green zones Sanggunian declared that the MOU was effective
surrounding the Pandacan Terminals. xxx only for a period of six months starting July 25,
2002.8 Thereafter, on January 30, 2003, the
Sanggunian adopted Resolution No. 139 extending
the validity of Resolution No. 97 to April 30, 2003 performance of the act and it must be the clear
and authorizing Mayor Atienza to issue special and imperative duty of respondent to do the act
business permits to the oil companies. Resolution required to be done.17
No. 13, s. 2003 also called for a reassessment of
the ordinance.10 Mandamus will not issue to enforce a right, or to
compel compliance with a duty, which is
Meanwhile, petitioners filed this original action questionable or over which a substantial doubt
for mandamus on December 4, 2002 praying that exists. The principal function of the writ of
Mayor Atienza be compelled to enforce Ordinance mandamus is to command and to expedite, not to
No. 8027 and order the immediate removal of the inquire and to adjudicate; thus, it is neither the
terminals of the oil companies.11 office nor the aim of the writ to secure a legal
right but to implement that which is already
The issues raised by petitioners are as follows: established. Unless the right to the relief sought is
unclouded, mandamus will not issue.18
1. whether respondent has the mandatory legal
duty to enforce Ordinance No. 8027 and order the To support the assertion that petitioners have a
removal of the Pandacan Terminals, and clear legal right to the enforcement of the
ordinance, petitioner SJS states that it is a
2. whether the June 26, 2002 MOU and the political party registered with the Commission on
resolutions ratifying it can amend or repeal Elections and has its offices in Manila. It claims to
Ordinance No. 8027.12 have many members who are residents of Manila.
The other petitioners, Cabigao and Tumbokon, are
Petitioners contend that respondent has the allegedly residents of Manila.
mandatory legal duty, under Section 455 (b) (2) of
the Local Government Code (RA 7160),13 to We need not belabor this point. We have ruled in
enforce Ordinance No. 8027 and order the previous cases that when a mandamus proceeding
removal of the Pandacan Terminals of the oil concerns a public right and its object is to compel
companies. Instead, he has allowed them to stay. a public duty, the people who are interested in
the execution of the laws are regarded as the real
Respondent’s defense is that Ordinance No. 8027 parties in interest and they need not show any
has been superseded by the MOU and the specific interest.19 Besides, as residents of
resolutions.14 However, he also confusingly argues Manila, petitioners have a direct interest in the
that the ordinance and MOU are not inconsistent enforcement of the city’s ordinances. Respondent
with each other and that the latter has not never questioned the right of petitioners to
amended the former. He insists that the ordinance institute this proceeding.
remains valid and in full force and effect and that
the MOU did not in any way prevent him from On the other hand, the Local Government Code
enforcing and implementing it. He maintains that imposes upon respondent the duty, as city mayor,
the MOU should be considered as a mere guideline to "enforce all laws and ordinances relative to the
for its full implementation.15 governance of the city.">20 One of these is
Ordinance No. 8027. As the chief executive of the
Under Rule 65, Section 316 of the Rules of Court, city, he has the duty to enforce Ordinance No.
a petition for mandamus may be filed when any 8027 as long as it has not been repealed by the
tribunal, corporation, board, officer or person Sanggunian or annulled by the courts.21 He has no
unlawfully neglects the performance of an act other choice. It is his ministerial duty to do so. In
which the law specifically enjoins as a duty Dimaporo v. Mitra, Jr.,22 we stated the reason for
resulting from an office, trust or station. this:
Mandamus is an extraordinary writ that is
employed to compel the performance, when These officers cannot refuse to perform their duty
refused, of a ministerial duty that is already on the ground of an alleged invalidity of the
imposed on the respondent and there is no other statute imposing the duty. The reason for this is
plain, speedy and adequate remedy in the obvious. It might seriously hinder the transaction
ordinary course of law. The petitioner should have of public business if these officers were to be
a well-defined, clear and certain legal right to the permitted in all cases to question the
constitutionality of statutes and ordinances TOSHIBA INFORMATION EQUIPMENT (PHILS.), INC.,
imposing duties upon them and which have not Petitioner, - versus - COMMISSIONER OF INTERNAL
judicially been declared unconstitutional. Officers REVENUE Respondent.
of the government from the highest to the lowest
are creatures of the law and are bound to obey
it.23 In this Petition for Review on Certiorari[1] under
Rule 45 of the Rules of Court, petitioner Toshiba
The question now is whether the MOU entered Information Equipment (Philippines), Inc.
into by respondent with the oil companies and the (Toshiba) seeks the reversal and setting aside of
subsequent resolutions passed by the Sanggunian (1) the Decision[2] dated August 29, 2002 of the
have made the respondent’s duty to enforce Court of Appeals in CA-G.R. SP No. 63047, which
Ordinance No. 8027 doubtful, unclear or found that Toshiba was not entitled to the
uncertain. This is also connected to the second credit/refund of its unutilized input Value-Added
issue raised by petitioners, that is, whether the Tax (VAT) payments attributable to its export
MOU and Resolution Nos. 97, s. 2002 and 13, s. sales, because it was a tax-exempt entity and its
2003 of the Sanggunian can amend or repeal export sales were VAT-exempt transactions; and
Ordinance No. 8027. (2) the Resolution[3] dated February 19, 2003 of
the appellate court in the same case, which
We need not resolve this issue. Assuming that the denied the Motion for Reconsideration of Toshiba.
terms of the MOU were inconsistent with The herein assailed judgment of the Court of
Ordinance No. 8027, the resolutions which ratified Appeals reversed and set aside the Decision[4]
it and made it binding on the City of Manila dated October 16, 2000 of the Court of Tax
expressly gave it full force and effect only until Appeals (CTA) in CTA Case No. 5762 granting the
April 30, 2003. Thus, at present, there is nothing claim for credit/refund of Toshiba in the amount
that legally hinders respondent from enforcing of P1,385,282.08.
Ordinance No. 8027.24
Toshiba is a domestic corporation
Ordinance No. 8027 was enacted right after the principally engaged in the business of
Philippines, along with the rest of the world, manufacturing and exporting of electric
witnessed the horror of the September 11, 2001 machinery, equipment systems, accessories,
attack on the Twin Towers of the World Trade parts, components, materials and goods of all
Center in New York City. The objective of the kinds, including those relating to office
ordinance is to protect the residents of Manila automation and information technology and all
from the catastrophic devastation that will surely types of computer hardware and software, such as
occur in case of a terrorist attack25 on the but not limited to HDD-CD-ROM and personal
Pandacan Terminals. No reason exists why such a computer printed circuit board.[5] It is registered
protective measure should be delayed. with the Philippine Economic Zone Authority
(PEZA) as an Economic Zone (ECOZONE) export
WHEREFORE, the petition is hereby GRANTED. enterprise in the Laguna Technopark, Inc., as
Respondent Hon. Jose L. Atienza, Jr., as mayor of evidenced by Certificate of Registration No. 95-99
the City of Manila, is directed to immediately dated September 27, 1995.[6] It is also registered
enforce Ordinance No. 8027. with Regional District Office No. 57 of the Bureau
of Internal Revenue (BIR) in San Pedro, Laguna, as
SO ORDERED. a VAT-taxpayer with Taxpayer Identification No.
(TIN) 004-739-137.[7]
8. In an action for tax refund, the burden is Whether or not input taxes incurred by [Toshiba]
on the taxpayer to establish its right to refund, for the first two quarters of 1997 have not been
and failure to sustain the burden is fatal to the offset against any output tax[.]
claim for refund;
Whether or not input taxes incurred by [Toshiba] (Exh. I) P 242,491.45
for the first two quarters of 1997 are properly P154,391.13 P 396,882.58
substantiated by official receipts and invoices.[23]
b. Per this court’s further
Amount of claimed input taxes filed SECTION 24. Exemption from Taxes Under
the National Internal Revenue Code. – Any
with the DOF One Stop Shop Center provision of existing laws, rules and regulations to
P3,268,682.34 P416,764.39 P3,685,446.73 the contrary notwithstanding, no taxes, local and
national, shall be imposed on business
Less: 1) Input taxes not properly establishments operating within the ECOZONE. In
lieu of paying taxes, five percent (5%) of the gross
supported by VAT invoices income earned by all businesses and enterprises
within the ECOZONE shall be remitted to the
and official receipts national government. x x x.
On January 17, 2001, the CTA issued a (a) Income Tax Holiday. —
Resolution[28] denying both Motions for
Reconsideration of Toshiba and the CIR. (1) For six (6) years from commercial operation
for pioneer firms and four (4) years for non-
The CTA took note that the pieces of evidence pioneer firms, new registered firms shall be fully
referred to by Toshiba in its Motion for exempt from income taxes levied by the national
Reconsideration were insufficient substantiation, government. Subject to such guidelines as may be
being mere schedules of input VAT payments it prescribed by the Board, the income tax
had purportedly paid for the first and second
exemption will be extended for another year in Republic Act No. 7916. As a PEZA-registered
each of the following cases: corporation, Toshiba was liable for remitting to
the national government the five percent (5%)
(i) The project meets the prescribed ratio of preferential rate on its gross income earned
capital equipment to number of workers set by within the ECOZONE, in lieu of all other national
the Board; and local taxes, including VAT.
(ii) Utilization of indigenous raw materials at rates
set by the Board; The Court of Appeals further adjudged that the
(iii) The net foreign exchange savings or earnings export sales of Toshiba were VAT-exempt, not
amount to at least US$500,000.00 annually during zero-rated, transactions. The appellate court
the first three (3) years of operation. found that the Answer filed by the CIR in CTA Case
No. 5762 did not contain any admission that the
The preceding paragraph notwithstanding, no export sales of Toshiba were zero-rated
registered pioneer firm may avail of this incentive transactions under Section 100(a)(2)(A) of the Tax
for a period exceeding eight (8) years. Code of 1977, as amended. At the least, what
was admitted by the CIR in said Answer was that
(2) For a period of three (3) years from the Tax Code provisions cited in the Petition for
commercial operation, registered expanding firms Review of Toshiba in CTA Case No. 5762 were
shall be entitled to an exemption from income correct. As to the Joint Stipulation of Facts and
taxes levied by the National Government Issues filed by the parties in CTA Case No. 5762,
proportionate to their expansion under such terms which stated that Toshiba was subject to zero
and conditions as the Board may determine: percent (0%) VAT on its export sales, the appellate
Provided, however, That during the period within court declared that the CIR signed the said
which this incentive is availed of by the expanding pleading through palpable mistake. This palpable
firm it shall not be entitled to additional mistake in the stipulation of facts should not be
deduction for incremental labor expense. taken against the CIR, for to do otherwise would
result in suppressing the truth through falsehood.
(3) The provision of Article 7(14) notwithstanding, In addition, the State could not be put in estoppel
registered firms shall not be entitled to any by the mistakes or errors of its officials or agents.
extension of this incentive.
Given that Toshiba was a tax-exempt entity under
The CTA pointed out that Toshiba availed itself of Republic Act No. 7916, a special law, the Court of
the income tax holiday under the Omnibus Appeals concluded that the export sales of
Investments Code of 1987, so Toshiba was exempt Toshiba were VAT-exempt transactions under
only from income tax but not from other taxes Section 109(q) of the Tax Code of 1997, formerly
such as VAT. As a result, Toshiba was liable for Section 103(q) of the Tax Code of 1977.
output VAT on its export sales, but at zero Therefore, Toshiba could not claim refund of its
percent (0%) rate, and entitled to the input VAT payments on its domestic purchases of
credit/refund of the input VAT paid on its goods and services.
purchases of goods and services relative to such
zero-rated export sales. The Court of Appeals decreed at the end of its
August 29, 2002 Decision – WHEREFORE, premises
Unsatisfied, the CIR filed a Petition for Review[29] considered, the appealed decision of the Court of
with the Court of Appeals, docketed as CA-G.R. SP Tax Appeals in CTA Case No. 5762, is hereby
No. 63047. REVERSED and SET ASIDE, and a new one is hereby
rendered finding [Toshiba], being a tax exempt
In its Decision dated August 29, 2002, the Court of entity under R.A. No. 7916, not entitled to refund
Appeals granted the appeal of the CIR, and the VAT payments made in its domestic purchases
reversed and set aside the Decision dated October of goods and services.[30]
16, 2000 and the Resolution dated January 17,
2001 of the CTA. The appellate court ruled that Toshiba filed a Motion for Reconsideration[31] of
Toshiba was not entitled to the refund of its the aforementioned Decision, anchored on the
alleged unused input VAT payments because it following arguments: (a) the CIR never raised as
was a tax-exempt entity under Section 24 of an issue before the CTA that Toshiba was tax-
exempt under Section 24 of Republic Act No. PURPOSES, WERE BASED MERELY ON THE
7916; (b) Section 24 of Republic Act No. 7916, ADMISSIONS MADE BY [CIR’S] COUNSEL AND NOT
subjecting the gross income earned by a PEZA- SUPPORTED BY SUBSTANTIAL EVIDENCE.
registered enterprise within the ECOZONE to a
preferential rate of five percent (5%), in lieu of all
taxes, did not apply to Toshiba, which availed 5.4 THE HONORABLE COURT OF APPEALS
itself of the income tax holiday under Section 23 ERRED WHEN IT REVERSED THE DECISION OF THE
of the same statute; (c) the conclusion of the CTA COURT OF TAX APPEALS GRANTING [TOSHIBA’S]
that the export sales of Toshiba were zero-rated CLAIM FOR REFUND[;][32]
was supported by substantial evidence, other than
the admission of the CIR in the Joint Stipulation of and the following prayer –
Facts and Issues; and (d) the judgment of the CTA
granting the refund of the input VAT payments WHEREFORE, premises considered, Petitioner
was supported by substantial evidence and should TOSHIBA INFORMATION EQUIPMENT (PHILS.), INC.
not have been set aside by the Court of Appeals. most respectfully prays that the decision and
resolution of the Honorable Court of Appeals,
In a Resolution dated February 19, 2003, the Court reversing the decision of the CTA in CTA Case No.
of Appeals denied the Motion for Reconsideration 5762, be set aside and further prays that a new
of Toshiba since the arguments presented therein one be rendered AFFIRMING AND UPHOLDING the
were mere reiterations of those already passed Decision of the CTA promulgated on October 16,
upon and found to be without merit by the 2000 in CTA Case No. 5762.
appellate court in its earlier Decision. The Court
of Appeals, however, mentioned that it was Other reliefs, which the Honorable Court may
incorrect for Toshiba to say that the issue of the deem just and equitable under the circumstances,
applicability of Section 24 of Republic Act No. are likewise prayed for.[33]
7916 was only raised for the first time on appeal
before the appellate court. The said issue was The Petition is impressed with merit.
adequately raised by the CIR in his Motion for
Reconsideration before the CTA, and was even The CIR did not timely raise before the CTA the
ruled upon by the tax court. issues on the VAT-exemptions of Toshiba and its
export sales.
Hence, Toshiba filed the instant Petition for
Review with the following assignment of errors – Upon the failure of the CIR to timely plead and
5.1 THE HONORABLE COURT OF APPEALS prove before the CTA the defenses or objections
ERRED WHEN IT RULED THAT [TOSHIBA], BEING A that Toshiba was VAT-exempt under Section 24 of
PEZA-REGISTERED ENTERPRISE, IS EXEMPT FROM Republic Act No. 7916, and that its export sales
VAT UNDER SECTION 24 OF R.A. 7916, AND were VAT-exempt transactions under Section
FURTHER HOLDING THAT [TOSHIBA’S] EXPORT 103(q) of the Tax Code of 1977, as amended, the
SALES ARE EXEMPT TRANSACTIONS UNDER SECTION CIR is deemed to have waived the same.
109 OF THE TAX CODE.
During the pendency of CTA Case No. 5762, the
5.2 THE HONORABLE COURT OF APPEALS proceedings before the CTA were governed by the
ERRED WHEN IT FAILED TO DISMISS OUTRIGHT AND Rules of the Court of Tax Appeals,[34] while the
GAVE DUE COURSE TO [CIR’S] PETITION Rules of Court were applied suppletorily.[35]
NOTWITHSTANDING [CIR’S] FAILURE TO
ADEQUATELY RAISE IN ISSUE DURING THE TRIAL IN Rule 9, Section 1 of the Rules of Court provides:
THE COURT OF TAX APPEALS THE APPLICABILITY
OF SECTION 24 OF R.A. 7916 TO [TOSHIBA’S] SECTION 1. Defenses and objections not pleaded.
CLAIM FOR REFUND. – Defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed
5.3 THE HONORABLE COURT OF APPEALS waived. However, when it appears from the
ERRED WHEN [IT] RULED THAT THE COURT OF TAX pleadings or the evidence on record that the court
APPEALS’ FINDINGS, WITH REGARD [TOSHIBA’S] has no jurisdiction over the subject matter, that
EXPORT SALES BEING ZERO RATED SALES FOR VAT there is another action pending between the same
parties for the same cause, or that the action is and circumstances. While it is true that litigation
barred by a prior judgment or by statute of is not a game of technicalities, it is equally true
limitations, the court shall dismiss the claim. that every case must be prosecuted in accordance
with the prescribed procedure to ensure an
The CIR did not argue straight away in his Answer orderly and speedy administration of justice.
in CTA Case No. 5762 that Toshiba had no right to Party litigants and their counsel are well advised
the credit/refund of its input VAT payments to abide by, rather than flaunt, procedural rules
because the latter was VAT-exempt and its export for these rules illumine the path of the law and
sales were VAT-exempt transactions. The Pre- rationalize the pursuit of justice.[41]
Trial Brief[36] of the CIR was equally bereft of
such allegations or arguments. The CIR passed up The CIR judicially admitted that Toshiba was VAT-
the opportunity to prove the supposed VAT- registered and its export sales were subject to
exemptions of Toshiba and its export sales when VAT at zero percent (0%) rate.
the CIR chose not to present any evidence at all
during the trial before the CTA.[37] He missed More importantly, the arguments of the CIR that
another opportunity to present the said issues Toshiba was VAT-exempt and the latter’s export
before the CTA when he waived the submission of sales were VAT-exempt transactions are
a Memorandum.[38] The CIR had waited until the inconsistent with the explicit admissions of the
CTA already rendered its Decision dated October CIR in the Joint Stipulation of Facts and Issues
16, 2000 in CTA Case No. 5762, which granted the (Joint Stipulation) that Toshiba was a registered
claim for credit/refund of Toshiba, before VAT entity and that it was subject to zero percent
asserting in his Motion for Reconsideration that (0%) VAT on its export sales.
Toshiba was VAT-exempt and its export sales were
VAT-exempt transactions. The Joint Stipulation was executed and submitted
by Toshiba and the CIR upon being advised to do
The CIR did not offer any explanation as to why he so by the CTA at the end of the pre-trial
did not argue the VAT-exemptions of Toshiba and conference held on June 23, 1999.[42] The
its export sales before and during the trial held by approval of the Joint Stipulation by the CTA, in its
the CTA, only doing so in his Motion for Resolution[43] dated July 12, 1999, marked the
Reconsideration of the adverse CTA judgment. culmination of the pre-trial process in CTA Case
Surely, said defenses or objections were already No. 5762.
available to the CIR when the CIR filed his Answer
to the Petition for Review of Toshiba in CTA Case Pre-trial is an answer to the clarion call for the
No. 5762. speedy disposition of cases. Although it was
discretionary under the 1940 Rules of Court, it
It is axiomatic in pleadings and practice that no was made mandatory under the 1964 Rules and
new issue in a case can be raised in a pleading the subsequent amendments in 1997. It has been
which by due diligence could have been raised in hailed as “the most important procedural
previous pleadings.[39] The Court cannot simply innovation in Anglo-Saxon justice in the
grant the plea of the CIR that the procedural rules nineteenth century.”[44]
be relaxed based on the general averment of the
interest of substantive justice. It should not be The nature and purpose of a pre-trial have been
forgotten that the first and fundamental concern laid down in Rule 18, Section 2 of the Rules of
of the rules of procedure is to secure a just Court:
determination of every action.[40] Procedural
rules are designed to facilitate the adjudication of SECTION 2. Nature and purpose. – The pre-trial is
cases. Courts and litigants alike are enjoined to mandatory. The court shall consider:
abide strictly by the rules. While in certain
instances, the Court allows a relaxation in the (a) The possibility of an amicable settlement
application of the rules, it never intends to forge or of a submission to alternative modes of dispute
a weapon for erring litigants to violate the rules resolution;
with impunity. The liberal interpretation and
application of rules apply only in proper cases of
demonstrable merit and under justifiable causes
(b) The simplification of the issues; accordingly dispensed with further proof of the
fact already admitted. An admission made by a
party in the course of the proceedings does not
require proof.[46]
(c) The necessity or desirability of
amendments to the pleadings;
(i) Such other matters as may aid in the The Court disagrees with the Court of Appeals
prompt disposition of the action. (Emphasis ours.) when it ruled in its Decision dated August 29, 2002
that the CIR could not be bound by his admissions
in the Joint Stipulation because (1) the said
admissions were “made through palpable
mistake”[49] which, if countenanced, “would
result in falsehood, unfairness and injustice”;[50]
The admission having been made in a stipulation and (2) the State could not be put in estoppel by
of facts at pre-trial by the parties, it must be the mistakes of its officials or agents. This ruling
treated as a judicial admission.[45] Under Section of the Court of Appeals is rooted in its conclusion
4, Rule 129 of the Rules of Court, a judicial that a “palpable mistake” had been committed by
admission requires no proof. The admission may the CIR in the signing of the Joint Stipulation.
be contradicted only by a showing that it was However, this Court finds no evidence of the
made through palpable mistake or that no such commission of a mistake, much more, of a
admission was made. The Court cannot lightly set palpable one.
aside a judicial admission especially when the
opposing party relied upon the same and
The CIR does not deny that his counsel, Atty.
Joselito F. Biazon, Revenue Attorney II of the BIR,
signed the Joint Stipulation, together with the x x x x”
counsel of Toshiba, Atty. Patricia B. Bisda.
Considering the presumption of regularity in the
performance of official duty,[51] Atty. Biazon is
presumed to have read, studied, and understood And paragraph 5 of the petition for review filed by
the contents of the Joint Stipulation before he [Toshiba] before the CTA states:
signed the same. It rests on the CIR to present
evidence to the contrary.
Scrutinizing the Answer filed by [the CIR], we rule The Court of Appeals provided no explanation as
that the Joint Stipulation of Facts and Issues to why the admissions of the CIR in his Answer in
signed by [the CIR] was made through palpable CTA Case No. 5762 deserved more weight and
mistake. Quoting paragraph 4 of its Answer, [the credence than those he made in the Joint
CIR] states: Stipulation. The appellate court failed to
appreciate that the CIR, through counsel, Atty.
Biazon, also signed the Joint Stipulation; and that
absent evidence to the contrary, Atty. Biazon is
“4. He ADMITS the allegations contained in presumed to have signed the Joint Stipulation
paragraph 5 of the petition only insofar as the willingly and knowingly, in the regular
cited provisions of Tax Code is concerned, but performance of his official duties. Additionally,
SPECIFICALLY DENIES the rest of the allegations the Joint Stipulation[53] of Toshiba and the CIR
therein for being mere opinions, arguments or was a more recent pleading than the Answer[54]
gratuitous assertions on the part of [Toshiba] of the CIR. It was submitted by the parties after
and/or because they are mere erroneous the pre-trial conference held by the CTA, and
conclusions or interpretations of the quoted law subsequently approved by the tax court. If there
involved, the truth of the matter being those was any discrepancy between the admissions of
stated hereunder the CIR in his Answer and in the Joint Stipulation,
the more logical and reasonable explanation SEC. 106. Refunds or tax credits of creditable
would be that the CIR changed his mind or input tax. – (a) Any VAT-registered person,
conceded some points to Toshiba during the pre- whose sales are zero-rated or effectively zero-
trial conference which immediately preceded the rated, may, within two (2) years after the close of
execution of the Joint Stipulation. To the taxable quarter when the sales were made,
automatically construe that the discrepancy was apply for the issuance of a tax credit certificate or
the result of a palpable mistake is a wide leap refund of creditable input tax due or paid
which this Court is not prepared to take without attributable to such sales, except transitional
substantial basis. input tax, to the extent that such input tax has
not been applied against output tax: Provided,
however, That in the case of zero-rated sales
under Section 100(a)(2)(A)(i),(ii) and (b) and
The judicial admissions of the CIR in the Joint Section 102(b)(1) and (2), the acceptable foreign
Stipulation are not intrinsically false, wrong, or currency exchange proceeds thereof has been duly
illegal, and are consistent with the ruling on the accounted for in accordance with the regulations
VAT treatment of PEZA-registered enterprises in of the Bangko Sentral ng Pilipinas (BSP):
the previous Toshiba case. Provided, further, That where the taxpayer is
engaged in zero-rated or effectively zero-rated
sale and also in taxable or exempt sale of goods or
properties of services, and the amount of
creditable input tax due or paid cannot be directly
and entirely attributed to any one of the
There is no basis for believing that to bind the CIR transactions, it shall be allocated proportionately
to his judicial admissions in the Joint Stipulation – on the basis of the volume sales.
that Toshiba was a VAT-registered entity and its
export sales were zero-rated VAT transactions –
would result in “falsehood, unfairness and
injustice.” The judicial admissions of the CIR are SEC. 100. Value-added tax on sale of goods or
not intrinsically false, wrong, or illegal. On the properties. – (a) Rate and base of tax. – x x x
contrary, they are consistent with the ruling of
this Court in a previous case involving the same
parties, Commissioner of Internal Revenue v.
Toshiba Information Equipment (Phils.) Inc.[55] xxxx
(Toshiba case), explaining the VAT treatment of
PEZA-registered enterprises.
(b) Sale of service. – This shall be treated subject This Circular shall serve as a sufficient basis to
to zero percent (0%) VAT under the “cross border entitle such supplier of goods, property or services
doctrine” of the VAT System, pursuant to VAT to the benefit of the zero percent (0%) VAT for
Ruling No. 032-98 dated Nov. 5, 1998. sales made to the aforementioned ECOZONE
enterprises and shall serve as sufficient
compliance to the requirement for prior approval
of zero-rating imposed by Revenue Regulations
(2) If Buyer is a PEZA registered enterprise which No. 7-95 effective as of the date of the issuance
is not embraced by the 5% special tax regime, of this Circular.
hence, subject to taxes under the NIRC, e.g.,
Service Establishments which are subject to taxes
under the NIRC rather than the 5% special tax
regime: Indubitably, no output VAT may be passed on to
an ECOZONE enterprise since it is a VAT-exempt
entity. x x x.[58]
The Court will not lightly set aside the conclusions SO ORDERED.
reached by the CTA which, by the very nature of
its functions, is dedicated exclusively to the SOCIAL JUSTICE SOCIETY G.R. No. 156052
resolution of tax problems and has accordingly
developed an expertise on the subject unless (SJS), VLADIMIR ALARIQUE T.
there has been an abuse or improvident exercise
of authority.[65] In Barcelon, Roxas Securities, CABIGAO and BONIFACIO S.
Inc. (now known as UBP Securities, Inc.) v.
Commissioner of Internal Revenue,[66] this Court TUMBOKON,
more explicitly pronounced –
Petitioners, Present:
x----------------------x
WHEREFORE, the assailed Decision dated August
29, 2002 and the Resolution dated February 19,
2003 of the Court of Appeals in CA-G.R. SP No.
63047 are REVERSED and SET ASIDE, and the
Decision dated October 16, 2000 of the Court of
Tax Appeals in CTA Case No. 5762 is REINSTATED. CHEVRON PHILIPPINES INC.,
Respondent Commissioner of Internal Revenue is
ORDERED to REFUND or, in the alternative, to PETRON CORPORATION and
ISSUE a TAX CREDIT CERTIFICATE in favor of
PILIPINAS SHELL PETROLEUM petroleum products in the Philippines while Shell
and Petron are engaged in the business of
CORPORATION, manufacturing, refining and likewise importing,
distributing and marketing of petroleum products
Movants-Intervenors. in the Philippines.[2] The DOE is a governmental
agency created under Republic Act (RA) No.
7638[3] and tasked to prepare, integrate,
coordinate, supervise and control all plans,
programs, projects and activities of the
government relative to energy exploration,
x----------------------x development, utilization, distribution and
conservation.[4]
DEPARTMENT OF ENERGY,
Meanwhile, in civil case no. 03-106379, the parties Before we resolve these issues, a brief review of
filed a joint motion to withdraw complaint and the history of the Pandacan Terminals is called for
counterclaim on February 20, 2007.[24] In an to put our discussion in the proper context.
order dated April 23, 2007, the joint motion was
granted and all the claims and counterclaims of
the parties were withdrawn.[25]
We agree that the oil companies have a direct and The Injunctive Writs Are Not Impediments To The
immediate interest in the implementation of Enforcement Of Ordinance No. 8027
Ordinance No. 8027. Their claim is that they will
need to spend billions of pesos if they are
compelled to relocate their oil depots out of
Manila. Considering that they admitted knowing
about this case from the time of its filing on
December 4, 2002, they should have intervened Under Rule 65, Section 3[59] of the Rules of
long before our March 7, 2007 decision to protect Court, a petition for mandamus may be filed when
their interests. But they did not.[57] Neither did any tribunal, corporation, board, officer or person
they offer any worthy explanation to justify their unlawfully neglects the performance of an act
late intervention. which the law specifically enjoins as a duty
resulting from an office, trust or station.
According to the oil companies, respondent did
not unlawfully fail or neglect to enforce
Be that as it may, although their motion for Ordinance No. 8027 because he was lawfully
intervention was not filed on time, we will allow prevented from doing so by virtue of the
it because they raised and presented novel issues injunctive writs and status quo order issued by the
and arguments that were not considered by the RTC of Manila, Branches 39 and 42.
Court in its March 7, 2007 decision. After all, the
allowance or disallowance of a motion to
intervene is addressed to the sound discretion of
the court before which the case is pending.[58] First, we note that while Chevron and Shell still
Considering the compelling reasons favoring have in their favor the writs of preliminary
intervention, we do not think that this will unduly injunction and preliminary mandatory injunction,
delay or prejudice the adjudication of rights of the status quo order in favor of Petron is no longer
the original parties. In fact, it will be expedited in effect since the court granted the joint motion
since their intervention will enable us to rule on of the parties to withdraw the complaint and
the constitutionality of Ordinance No. 8027 counterclaim.[60]
instead of waiting for the RTCs decision.
Second, the original parties failed to inform the SEC. 3. Grounds for issuance of preliminary
Court about these injunctive writs. Respondent injunction. ― A preliminary injunction may be
(who was also impleaded as a party in the RTC granted when it is established:
cases) defends himself by saying that he informed
the court of the pendency of the civil cases and
that a TRO was issued by the RTC in the
consolidated cases filed by Chevron and Shell. It is (a) That the applicant is entitled to the relief
true that had the oil companies only intervened demanded, and the whole or part of such relief
much earlier, the Court would not have been left consists in restraining the commission or
in the dark about these facts. Nevertheless, continuance of the act or acts complained of, or
respondent should have updated the Court, by in requiring the performance of an act or acts,
way of manifestation, on such a relevant matter. either for a limited period or perpetually;
In his memorandum, respondent mentioned the (b) That the commission, continuance or
issuance of a TRO. Under Section 5 of Rule 58 of nonperformance of the act or acts complained of
the Rules of Court, a TRO issued by the RTC is during the litigation would probably work injustice
effective only for a period of 20 days. This is why, to the applicant; or
in our March 7, 2007 decision, we presumed with
certainty that this had already lapsed.[61]
Respondent also mentioned the grant of injunctive
writs in his rejoinder which the Court, however, (g) IThat a party, court, agency or a person
expunged for being a prohibited pleading. The is doing, threatening, or is attempting to do, or is
parties and their counsels were clearly remiss in procuring or suffering to be done, some act or
their duties to this Court. acts probably in violation of the rights of the
applicant respecting the subject of the action or
proceeding, and tending to render the judgment
ineffectual.
In resolving controversies, courts can only
consider facts and issues pleaded by the
parties.[62] Courts, as well as magistrates
presiding over them are not omniscient. They can
only act on the facts and issues presented before
them in appropriate pleadings. They may not even There are two requisites for the issuance of a
substitute their own personal knowledge for preliminary injunction: (1) the right to be
evidence. Nor may they take notice of matters protected exists prima facie and (2) the acts
except those expressly provided as subjects of sought to be enjoined are violative of that right. It
mandatory judicial notice. must be proven that the violation sought to be
prevented will cause an irreparable injustice.
Xxx
The March 7, 2007 decision did not take into
consideration the passage of Ordinance No. 8119
entitled An Ordinance Adopting the Manila
There can be no doubt that the City of Manila has Comprehensive Land Use Plan and Zoning
the power to divide its territory into residential Regulations of 2006 and Providing for the
and industrial zones, and to prescribe that Administration, Enforcement and Amendment
offensive and unwholesome trades and thereto which was approved by respondent on
occupations are to be established exclusively in June 16, 2006. The simple reason was that the
the latter zone. Court was never informed about this ordinance.
Xxx xxx xxx While courts are required to take judicial notice
of the laws enacted by Congress, the rule with
respect to local ordinances is different.
Ordinances are not included in the enumeration of
Likewise, it cannot be denied that the City of matters covered by mandatory judicial notice
Manila has the authority, derived from the police under Section 1, Rule 129 of the Rules of
power, of forbidding the appellant to continue the Court.[73]
manufacture of toyo in the zone where it is now
Although, Section 50 of RA 409[74] provides that: the failure of respondent, who was an original
party here, inexcusable.
This is opposed to Ordinance No. 8027 which Enumerated below are the allowable uses:
compels affected entities to vacate the area
within six months from the effectivity of the 1. all uses allowed in all zones where it
ordinance: is located
Section 18. Legislative powers. The [City Council] Ordinance No. 8027 was enacted for the purpose
shall have the following legislative powers: of promoting sound urban planning, ensuring
health, public safety and general welfare[123] of
the residents of Manila. The Sanggunian was
impelled to take measures to protect the
xxx xxx xxx residents of Manila from catastrophic devastation
in case of a terrorist attack on the Pandacan
Terminals. Towards this objective, the Sanggunian
reclassified the area defined in the ordinance
from industrial to commercial.
They further assert that the terminals are Indeed, ordinances should not contravene existing
necessary for the delivery of immediate and statutes enacted by Congress. The rationale for
this was clearly explained in Magtajas vs. Pryce large, however, the national legislature is still the
Properties Corp., Inc.:[154] principal of the local government units, which
cannot defy its will or modify or violate it.[155]
(g) IThe general welfare provisions in this Code [Supervision] means overseeing or the power or
shall be liberally interpreted to give more powers authority of an officer to see that subordinate
to local government units in accelerating officers perform their duties. If the latter fail or
economic development and upgrading the quality neglect to fulfill them, the former may take such
of life for the people in the community xxxx action or step as prescribed by law to make them
perform their duties. Control, on the other hand,
means the power of an officer to alter or modify
or nullify or set aside what a subordinate officer
ha[s] done in the performance of his duties and to
The least we can do to ensure genuine and substitute the judgment of the former for that of
meaningful local autonomy is not to force an the latter.[163]
interpretation that negates powers explicitly
granted to local governments. To rule against the
power of LGUs to reclassify areas within their Supervisory power, when contrasted with control,
jurisdiction will subvert the principle of local is the power of mere oversight over an inferior
autonomy guaranteed by the Constitution.[160] As body; it does not include any restraining authority
we have noted in earlier decisions, our national over such body.[164] It does not allow the
officials should not only comply with the supervisor to annul the acts of the
constitutional provisions on local autonomy but subordinate.[165] Here, what the DOE seeks to do
should also appreciate the spirit and liberty upon is to set aside an ordinance enacted by local
which these provisions are based.[161] officials, a power that not even its principal, the
President, has. This is because:
Conclusion
Xxx xxx xxx
Essentially, the oil companies are fighting for It is not enough for the city government to be told
their right to property. They allege that they by these oil companies that they have the most
stand to lose billions of pesos if forced to sophisticated fire-fighting equipments and have
relocate. However, based on the hierarchy of invested millions of pesos for these equipments.
constitutionally protected rights, the right to life The city government wants to be assured that its
enjoys precedence over the right to residents are safe at any time from these
property.[171] The reason is obvious: life is installations, and in the three public hearings and
irreplaceable, property is not. When the state or in their position papers, not one statement has
LGUs exercise of police power clashes with a few been said that indeed the absolute safety of the
individuals right to property, the former should residents from the hazards posed by these
prevail.[172] installations is assured.[173]
Petitioners and their counsel, Atty. Samson
Alcantara, submitted a four-page memorandum
We are also putting an end to the oil companies that clearly contained either substance nor
determination to prolong their stay in Pandacan research. It is absolutely insulting to this Court.
despite the objections of Manilas residents. As
early as October 2001, the oil companies signed a
MOA with the DOE obliging themselves to:
We have always tended towards judicial leniency,
... undertake a comprehensive and comparative temperance and compassion to those who suffer
study ... [which] shall include the preparation of a from a wrong perception of what the majesty of
Master Plan, whose aim is to determine the scope the law means. But for a member of the bar, an
and timing of the feasible location of the officer of the court, to file in this Court a
Pandacan oil terminals and all associated facilities memorandum of such unacceptable quality is an
and infrastructure including government support entirely different matter.
essential for the relocation such as the necessary
transportation infrastructure, land and right of
way acquisition, resettlement of displaced
residents and environmental and social It is indicative less of a personal shortcoming or
acceptability which shall be based on mutual contempt of this Court and more of a lawyers
benefit of the Parties and the public.[174] sorry descent from a high sense of duty and
responsibility. As a member of the bar and as an
officer of the court, a lawyer ought to be keenly
aware that the chief safeguard of the body politic
Now that they are being compelled to discontinue is respect for the law and its magistrates.
their operations in the Pandacan Terminals, they
cannot feign unreadiness considering that they
had years to prepare for this eventuality.
There is nothing more effective than the written
word by which counsel can persuade this Court of
the righteousness of his cause. For if truth were
Just the same, this Court is not about to provoke a self-evident, a memorandum would be completely
crisis by ordering the immediate relocation of the unnecessary and superfluous.
Pandacan Terminals out of its present site. The
enforcement of a decision of this Court, specially
one with far-reaching consequences, should
always be within the bounds of reason, in The inability of counsel to prepare a memorandum
accordance with a comprehensive and well- worthy of this Courts consideration is an ejemplo
coordinated plan, and within a time-frame that malo to the legal profession as it betrays no
complies with the letter and spirit of our genuine interest in the cause he claims to
resolution. To this end, the oil companies have no espouse. Or did counsel think he can earn his
choice but to obey the law. moment of glory without the hard work and
dedication called for by his petition?
A Final Word
A Warning To Petitioners Counsel
Chairperson,
Treble costs against petitioners counsel, Atty.
Samson Alcantara. AUSTRIA-MARTINEZ,
AZCUNA, *
CHICO-NAZARIO, and
NACHURA, JJ.
Under the Contract of Lease,[1] it was stipulated
that petitioner shall, like a good father of the
family, maintain in good condition the furniture,
chattels and all other equipment and shall, at all
times, keep the leased premises clean and
Promulgated: sanitary. For this purpose, petitioner would allow
the respondents building supervisor or his
authorized representative to make a regular spot
inspection of the leased premises to see to it that
October 17, 2008 these stipulations are strictly implemented.[2]
Any damage caused to the furniture, chattels,
equipment and parts of the leased premises shall
be the responsibility of petitioner to repair and
x------------------------------------------------------------ compensate.[3] Furthermore, petitioner would
------------------------x give a deposit equivalent to six (6) months rental
to answer for whatever damages may be caused to
the premises during the period of the lease.[4]
I need to know immediately if I still have other Finally, on August 18, 1998, petitioner, thru his
things to comply with as pre-condition for the counsel, wrote respondents a final demand letter
release of the deposit. As far as I know, I have as follows:
already done my part.
Dear Mr. Aznar:
3. [Petitioner] sends (sic) several letters of On August 11, 1999, the RTC rendered a
demand to [respondents] but said letters were not Decision[20] in favor of petitioner, the dispositive
answered. portion of which reads:
The CA ruled in favor of respondents on the basis We rule in the affirmative. Respondents failed to
of: (1) Coronados testimony that petitioner present sufficient proof to warrant the retention
continued to hold cockfights two months after the of the full amount of the deposit given by
expiration of the lease contract which was not petitioner.
refuted by petitioner; (2) the summary of repairs
made on the property showing that respondents
spent the amount of P573,710.17 immediately The Supreme Court is not a trier of facts, and as a
prior to the expiration of the lease contract and rule, does not weigh anew the evidence presented
shortly thereafter; and (3) the new lessor incurred by the parties. However, the instant case is one of
expenses amounting to over P3 million when he the exceptions to the rule because of the
shouldered the rest of the repair and renovation conflicting decisions of the RTC and the CA based
of the subject property.[25] on contradictory factual findings. Thus, we have
reviewed the records in order to arrive at a
judicious resolution of the case at bench.
Q Board of what?
Q In your earlier testimony, you said that part of
your function is to conduct routine inspection of
the complex. Now, was there a routine inspection
A Of the Aznar Brothers Realty Corporation. conducted during the period of the lease contract
between plaintiff and the defendant?
A Yes, sir.
Q For what purpose was that inspection?
Q W[h]y did you not take photographs of the SEC. 4. Judicial admissions. An admission, verbal
damage sustained by the complex? or written, made by a party in the course of the
proceedings in the same case, does not require
proof. The admission may be contradicted only by
a showing that it was made through palpable
A We did not take pictures, Your Honor, because mistake or that no such admission was made.
in fact their personnel were in our presence (sic)
during the inspection, they were accompanied by
us, because we can not conduct inspection
without the presence of the personnel of Jesus A party may make judicial admissions in (1) the
Cuenco, Your Honor, the lessee. pleadings, (2) during the trial, by verbal or
written manifestations or stipulations, or (3) in
other stages of the judicial proceeding.[30] The
stipulation of facts at the pre-trial of a case
Q Did the personnel of Jesus Cuenco sign any constitutes judicial admissions. The veracity of
paper acknowledging receipt of any report? judicial admissions require no further proof and
may be controverted only upon a clear showing
that the admissions were made through palpable
mistake or that no admissions were made. Thus,
A There was no refusal, but we did not initiate to the admissions of parties during the pre-trial, as
let them sign and confirm. embodied in the pre-trial order, are binding and
conclusive upon them.
COURT
Respondents did not deny the admission made by
their counsel, neither did they claim that the
same was made through palpable mistake. As Yet, upon perusal of the receipts presented by
such, the stipulation of facts is incontrovertible respondents, we found that majority of the
and may be relied upon by the courts. The pre- receipts are under the name of Southwestern
trial forms part of the proceedings and matters University. In their Memorandum,[34] respondents
dealt therein may not be brushed aside in the aver that Southwestern University and respondent
process of decision-making. Otherwise, the real corporation are sister companies.[35] Even if true,
essence of compulsory pre-trial would be this matter is of no consequence because
rendered inconsequential and worthless.[31] respondent company and Southwestern University
Furthermore, an act performed by counsel within have distinct and separate legal personalities, and
the scope of a general or implied authority is Southwestern University is not a party to this
regarded as an act of the client which renders case. Thus, we cannot just accept respondents
respondents in estoppel. By estoppel is meant that argument that the receipts paid in the name of
an admission or representation is conclusive upon Southwestern University should be credited to
the person making it and cannot be denied or respondent company. In any event, they were not
disproved as against the person relying able to prove that those receipts were in fact
thereon.[32] used for the repair or maintenance of the
respondents complex.
A Yes, he took over that repair and renovation Q You mean to say that they still use the complex
were no longer included in this presentation, that for the purpose for which it was intended, which
is at his own expense. is for cockfighting?
A Yes, sir.[36]
ATTY. VASQUEZ
2. When an obligation, not constituting a loan or (1) Talisay Sports Complex, Inc. is solely liable to
forbearance of money, is breached, an interest on return the amount of the deposit after deducting
the amount of damages awarded may be imposed the amount of the two-months arrears in rentals;
at the discretion of the court at the rate of 6% per and
annum. No interest, however, shall be adjudged
on unliquidated claims or damages except when or (2) The rate of legal interest to be paid is SIX
until the demand can be established with PERCENT (6%) on the amount due computed from
reasonable certainty. Accordingly, where the October 21, 1998, and TWELVE PERCENT (12%)
demand is established with reasonable certainty, interest, thereon upon finality of this decision
the interest shall begin to run from the time the until full payment thereof.
claim is made judicially or extrajudicially (Art.
1169, Civil Code) but when such certainty cannot
be so reasonably established at the time the
demand is made, the interest shall begin to run SO ORDERED.
only from the date of the judgment of the court is
made (at which time the quantification of SOCIAL JUSTICE SOCIETY G.R. No. 156052
damages may be deemed to have been reasonably
ascertained). The actual base for the computation (SJS), VLADIMIR ALARIQUE T.
of legal interest shall, in any case, be on the
amount of finally adjudged. CABIGAO and BONIFACIO S.
TUMBOKON,
3. When the judgment of the court awarding a
sum of money becomes final and executory, the Petitioners, Present:
rate of legal interest, whether the case falls under
paragraph 1 or paragraph 2, above, shall be 12%
per annum from such finality until its satisfaction,
this interim period being deemed to be by then an PUNO, C.J., Chairperson,
equivalent to a forbearance of credit.[44]
SANDOVAL-GUTIERREZ,
- v e r s u s - CORONA,
AZCUNA and
Concerning the solidary liability of respondents,
we hold that respondent Matias Aznar III is not LEONARDO-DE CASTRO, JJ.
solidarily liable with respondent company. His
function as the President of the company does not
make him personally liable for the obligations of
the latter. A corporation, being a juridical entity, HON. JOSE L. ATIENZA, JR.,
may act only through its directors, officers and
employees. Obligations incurred by them while in his capacity as Mayor of the
acting as corporate agents, are not their personal
City of Manila,
Respondent.
DEPARTMENT OF ENERGY,
Oil Terminals
We now discuss the first issue: whether movants- (a) in the matter in controversy; or
intervenors should be allowed to intervene in this
case. (b) in the success of either of the parties; or
Intervention Of The Oil Companies And The DOE (d) person is so situated as to be adversely
Should Be Allowed In The Interest of Justice affected by a distribution or other disposition of
property in the custody of the court or of an
officer thereof;
We agree that the oil companies have a direct and The Injunctive Writs Are Not Impediments To The
immediate interest in the implementation of Enforcement Of Ordinance No. 8027
Ordinance No. 8027. Their claim is that they will
need to spend billions of pesos if they are
compelled to relocate their oil depots out of
Manila. Considering that they admitted knowing
about this case from the time of its filing on
December 4, 2002, they should have intervened Under Rule 65, Section 3[59] of the Rules of
long before our March 7, 2007 decision to protect Court, a petition for mandamus may be filed when
their interests. But they did not.[57] Neither did any tribunal, corporation, board, officer or person
unlawfully neglects the performance of an act presiding over them are not omniscient. They can
which the law specifically enjoins as a duty only act on the facts and issues presented before
resulting from an office, trust or station. them in appropriate pleadings. They may not even
According to the oil companies, respondent did substitute their own personal knowledge for
not unlawfully fail or neglect to enforce evidence. Nor may they take notice of matters
Ordinance No. 8027 because he was lawfully except those expressly provided as subjects of
prevented from doing so by virtue of the mandatory judicial notice.
injunctive writs and status quo order issued by the
RTC of Manila, Branches 39 and 42.
Second, the original parties failed to inform the SEC. 3. Grounds for issuance of preliminary
Court about these injunctive writs. Respondent injunction. ― A preliminary injunction may be
(who was also impleaded as a party in the RTC granted when it is established:
cases) defends himself by saying that he informed
the court of the pendency of the civil cases and
that a TRO was issued by the RTC in the
consolidated cases filed by Chevron and Shell. It is (a) That the applicant is entitled to the relief
true that had the oil companies only intervened demanded, and the whole or part of such relief
much earlier, the Court would not have been left consists in restraining the commission or
in the dark about these facts. Nevertheless, continuance of the act or acts complained of, or
respondent should have updated the Court, by in requiring the performance of an act or acts,
way of manifestation, on such a relevant matter. either for a limited period or perpetually;
In his memorandum, respondent mentioned the (b) That the commission, continuance or
issuance of a TRO. Under Section 5 of Rule 58 of nonperformance of the act or acts complained of
the Rules of Court, a TRO issued by the RTC is during the litigation would probably work injustice
effective only for a period of 20 days. This is why, to the applicant; or
in our March 7, 2007 decision, we presumed with
certainty that this had already lapsed.[61]
Respondent also mentioned the grant of injunctive
writs in his rejoinder which the Court, however, (g) IThat a party, court, agency or a person
expunged for being a prohibited pleading. The is doing, threatening, or is attempting to do, or is
parties and their counsels were clearly remiss in procuring or suffering to be done, some act or
their duties to this Court. acts probably in violation of the rights of the
applicant respecting the subject of the action or
proceeding, and tending to render the judgment
ineffectual.
In resolving controversies, courts can only
consider facts and issues pleaded by the
parties.[62] Courts, as well as magistrates
the City of Manila. Its operations have not been
declared illegal or contrary to law or morals. In
There are two requisites for the issuance of a fact, because of its vital importance to the
preliminary injunction: (1) the right to be national economy, it was included in the
protected exists prima facie and (2) the acts Investment Priorities Plan as mandated under the
sought to be enjoined are violative of that right. It Downstream Oil Industry Deregulation Act of 1988
must be proven that the violation sought to be (R.A. 8479). As a lawful business, the
prevented will cause an irreparable injustice. plaintiff/petitioners have a right, therefore, to
continue their operation in the Pandacan Terminal
and the right to protect their investments. This is
a clear and unmistakable right of the
The act sought to be restrained here was the plaintiff/petitioners.
enforcement of Ordinance No. 8027. It is a settled
rule that an ordinance enjoys the presumption of
validity and, as such, cannot be restrained by
injunction.[63] Nevertheless, when the validity of The enactment, therefore, of City Ordinance No.
the ordinance is assailed, the courts are not 8027 passed by the City Council of Manila
precluded from issuing an injunctive writ against reclassifying the area where the Pandacan
its enforcement. However, we have declared that Terminal is located from Industrial II to
the issuance of said writ is proper only when: Commercial I and requiring the
plaintiff/petitioners to cease and desist from the
operation of their business has certainly violated
the rights of the plaintiff/petitioners to continue
... the petitioner assailing the ordinance has made their legitimate business in the Pandacan Terminal
out a case of unconstitutionality strong enough to and deprived them of their huge investments they
overcome, in the mind of the judge, the put up therein. Thus, before the Court, therefore,
presumption of validity, in addition to a showing determines whether the Ordinance in question is
of a clear legal right to the remedy sought....[64] valid or not, a Writ of Preliminary Injunction and a
(Emphasis supplied) Writ of Mandatory Injunction be issued to prevent
serious and irreparable damage to
plaintiff/petitioners.[65]
Xxx
The March 7, 2007 decision did not take into any discretion a court might have in determining
consideration the passage of Ordinance No. 8119 whether or not to take notice of an ordinance.
entitled An Ordinance Adopting the Manila Such a statute does not direct the court to act on
Comprehensive Land Use Plan and Zoning its own in obtaining evidence for the record and a
Regulations of 2006 and Providing for the party must make the ordinance available to the
Administration, Enforcement and Amendment court for it to take notice.[77]
thereto which was approved by respondent on
June 16, 2006. The simple reason was that the
Court was never informed about this ordinance.
In its defense, respondent claimed that he did not
inform the Court about the enactment of
Ordinance No. 8119 because he believed that it
While courts are required to take judicial notice was different from Ordinance No. 8027 and that
of the laws enacted by Congress, the rule with the two were not inconsistent with each
respect to local ordinances is different. other.[78]
Ordinances are not included in the enumeration of
matters covered by mandatory judicial notice
under Section 1, Rule 129 of the Rules of
Court.[73] In the same way that we deem the intervenors
late intervention in this case unjustified, we find
Although, Section 50 of RA 409[74] provides that: the failure of respondent, who was an original
party here, inexcusable.
Section 4. Judicial admissions. ― An admission, According to the oil companies, Ordinance No.
verbal or written, made by a party in the course 8119 reclassified the area covering the Pandacan
of the proceedings in the same case, does not Terminals to High Density Residential/Mixed Use
require proof. The admission may be contradicted Zone (R-3/MXD)[87] whereas Ordinance No. 8027
only by showing that it was made through reclassified the same area from Industrial II to
palpable mistake or that no such admission was Commercial I:
made. (Emphasis supplied)
This is opposed to Ordinance No. 8027 which Enumerated below are the allowable uses:
compels affected entities to vacate the area
within six months from the effectivity of the 1. all uses allowed in all zones where it
ordinance: is located
The law may treat and regulate one class They further assert that the terminals are
differently from another class provided there are necessary for the delivery of immediate and
real and substantial differences to distinguish one adequate supply of oil to its recipients in the most
class from another.[144] Here, there is a economical way.[149] Local legislation such as
reasonable classification. We reiterate that what Ordinance No. 8027 (which effectively calls for
the ordinance seeks to prevent is a catastrophic the removal of these terminals) allegedly
devastation that will result from a terrorist frustrates the state policy of ensuring a
attack. Unlike the depot, the surrounding continuous, adequate, and economic supply of
community is not a high-value terrorist target. energy expressed in RA 7638, a national law.[150]
Any damage caused by fire or explosion occurring Likewise, the ordinance thwarts the
in those areas would be nothing compared to the determination of the DOE that the terminals
damage caused by a fire or explosion in the depot operations should be merely scaled down and not
itself. Accordingly, there is a substantial discontinued.[151] They insist that this should not
distinction. The enactment of the ordinance which be allowed considering that it has a nationwide
provides for the cessation of the operations of economic impact and affects public interest
these terminals removes the threat they pose. transcending the territorial jurisdiction of the City
Therefore it is germane to the purpose of the of Manila.[152]
ordinance. The classification is not limited to the
conditions existing when the ordinance was
enacted but to future conditions as well. Finally,
the ordinance is applicable to all businesses and According to them, the DOEs supervision over the
industries in the area it delineated. oil industry under RA 7638 was subsequently
underscored by RA 8479, particularly in Section 7
thereof:
Ordinance No. 8027 is Not Inconsistent With RA
7638 And RA 8479
(g) IThe general welfare provisions in this Code [Supervision] means overseeing or the power or
shall be liberally interpreted to give more powers authority of an officer to see that subordinate
to local government units in accelerating officers perform their duties. If the latter fail or
economic development and upgrading the quality neglect to fulfill them, the former may take such
of life for the people in the community xxxx action or step as prescribed by law to make them
perform their duties. Control, on the other hand,
means the power of an officer to alter or modify
or nullify or set aside what a subordinate officer
ha[s] done in the performance of his duties and to
substitute the judgment of the former for that of
the latter.[163] The oil companies argue that zoning ordinances of
LGUs are required to be submitted to the
Metropolitan Manila Development Authority
Supervisory power, when contrasted with control, (MMDA) for review and if found to be in
is the power of mere oversight over an inferior compliance with its metropolitan physical
body; it does not include any restraining authority framework plan and regulations, it shall endorse
over such body.[164] It does not allow the the same to the Housing and Land Use Regulatory
supervisor to annul the acts of the Board (HLURB). Their basis is Section 3 (e) of RA
subordinate.[165] Here, what the DOE seeks to do 7924:[168]
is to set aside an ordinance enacted by local
officials, a power that not even its principal, the
President, has. This is because:
Under our present system of government, SECTION 3. Scope of MMDA Services. ― Metro-wide
executive power is vested in the President. The services under the jurisdiction of the MMDA are
members of the Cabinet and other executive those services which have metro-wide impact and
officials are merely alter egos. As such, they are transcend local political boundaries or entail huge
subject to the power of control of the President, expenditures such that it would not be viable for
at whose will and behest they can be removed said services to be provided by the individual
from office; or their actions and decisions [LGUs] comprising Metropolitan Manila. These
changed, suspended or reversed. In contrast, the services shall include:
heads of political subdivisions are elected by the
people. Their sovereign powers emanate from the
electorate, to whom they are directly
accountable. By constitutional fiat, they are xxx xxx xxx
subject to the Presidents supervision only, not
control, so long as their acts are exercised within
the sphere of their legitimate powers. By the
same token, the President may not withhold or (g) Urban renewal, zoning, and land use
alter any authority or power given them by the planning, and shelter services which include the
Constitution and the law.[166] formulation, adoption and implementation of
policies, standards, rules and regulations,
Thus, the President and his or her alter egos, the programs and projects to rationalize and optimize
department heads, cannot interfere with the urban land use and provide direction to urban
activities of local governments, so long as they act growth and expansion, the rehabilitation and
within the scope of their authority. Accordingly, development of slum and blighted areas, the
the DOE cannot substitute its own discretion for development of shelter and housing facilities and
the discretion exercised by the sanggunian of the the provision of necessary social services thereof.
City of Manila. In local affairs, the wisdom of local (Emphasis supplied)
officials must prevail as long as they are acting
within the parameters of the Constitution and the
law.[167] Reference was also made to Section 15 of its
implementing rules:
Petitioners, Present:
We reiterate our order to respondent Mayor of the
City of Manila to enforce Ordinance No. 8027. In
coordination with the appropriate agencies and PANGANIBAN, C.J., Chairperson,
other parties involved, respondent Mayor is
hereby ordered to oversee the relocation and YNARES-SANTIAGO,
transfer of the Pandacan Terminals out of its
present site. - versus - AUSTRIA-MARTINEZ,
SO ORDERED.
Associate Justice