Professional Documents
Culture Documents
MENDOZA, J.:
FACTS
Supreme Marine Company, Inc. (SMCI) and MGG Marine Services, Inc. (MGG)
obtained from Philippine National Bank (PNB) a 5-year FCDU term loan of not
exceeding US$4,000,000.00 and a domestic bills purchase line (DBP line) not
exceeding P10,000,000.00.This agreement was embodied in a Credit
Agreement, signed by Robert S. Jaworski (Jaworski), President of SMCI and
petitioner Doroteo Gaerlan (Gaerlan), President and General Manager of MGG,
as borrowers, and Inocencio Deza, Jr., Executive Vice-President of PNB, as
lender. The loan had an annual interest rate equivalent to 90-day London
inter-bank offered rate plus spread of 2.5% from initial drawdown until its full
payment. The loan proceeds would be utilized to finance the construction of a
double hull oil tanker called Arabian Horse II, a joint business venture of SMCI
and MGG.
To secure the loan, Gaerlan and Jaworski executed the Chattel Mortgage with
Power of Attorney over the vessel and, as additional security and by way of
payment to the loan, Gaerlan, as president of MGG, executed the Deed of
Assignment in favor of PNB, pertaining to its monthly income of at least
P6,000,000.00 arising from the proceeds of the Consecutive Voyage Charter
Party between Petron Corporation (Petron) and MGG. To personally guarantee
the loan, Jaworski and his wife, Evelyn (Spouses Jaworski), together with
Gaerlan and his wife Marilen (Spouses Gaerlan), executed the Joint and
Solidary Agreement (JSA), whereby the parties absolutely, unconditionally
and irrevocably bound themselves, jointly and severally, to pay PNB in case
the principal debtors defaulted in the payment of the loan.
On May 29, 1998, SMCI and MGG obtained another P40,000,000.00 one-year
omnibus line and a grace period to pay the loan for six (6) months. As
additional security for the loan, Spouses Gaerlan, as accommodation
mortgagor, executed in favor of PNB, the Real Estate Mortgage over their
parcel of land located on Arguelles Street, Sta. Mesa, Manila, covered by TCT
No. RT-10565 (247945).
On January 4, 1999, PNB again granted SMCI and MGG an additional three
(3) year and six (6) month term loan in the amount of Ten Million Pesos
(P10,000,000.00) which would be secured continuously by the existing Real
Estate Mortgage, the JSA and the 5-year Consecutive Voyage Contract.
When SMCI and MGG defaulted in the payment of their loan obligation, PNB
sent a demand letter but it was unheeded.
To protect its interest, PNB instituted a petition for the extrajudicial foreclosure
sale of Spouses Gaerlan's real property. The public auction sale was held on
February 20, 2001, with PNB as the winning and highest bidder. The bid price
amounting to P35,875,000.00 was applied as partial payment of the loan
obligation of SMCI and MGG, which amounted to P520,647,758.55.
On January 3, 2002, Gaerlan filed a complaint before the RTC-QC for the
nullification of contracts of loan, real estate mortgage and extrajudicial
foreclosure sale.
Meanwhile, Spouses Jaworski filed an action for declaratory relief before the
RTC, Branch 24, Manila (RTC-Manila), docketed as Civil Case No. 02-104294,
contending that in August 1998, Jaworski and Gaerlan had executed a
Memorandum of Agreement (MOA) whereby the parties had entered into a
"business divorce" and agreed that the ownership of the vessel, Arabian Horse
II, would be transferred to Gaerlan in favor of the latter's assumption of all
the loans extended by PNB to finance the construction of the said vessel; and
that PNB had been informed of the said agreement. Spouses Jaworski prayed
that their liability under the JSA executed on February 25, 1997 be
extinguished by reason of the said business divorce.
In an Order, the RTC-Manila granted the action for declaratory relief and
released the spouses Jaworski from their duties and responsibilities under the
Joint and Solidary Agreement. The RTC-Manila explained that the business
divorce and the agreement of Jaworski and Gaerlan which was conveyed and
approved by PNB per Board Resolution, dated May 13, 1999, had the effect of
extinguishing the liability of Spouses Jaworski in their personal capacities and
as principal officers of SMCI. On appeal, the said order was affirmed in toto by
the CA in its Decision dated June 23, 2005. The said CA decision became final
and executory and the Entry of Judgment was issued on July 20, 2005.
The RTC-QC rendered its judgment in Civil Case No. Q-02-45873, declaring
the contracts of loan and extrajudicial foreclosure sale null and void and
releasing Gaerlan from liability. The RTC-QC stated that because the JSA was
declared void in the January 13, 2004 Order of the RTC-Manila, the principal
obligation, guaranteed by the said agreement, and the real estate mortgage
were likewise void pursuant to the principle of res judicata in the concept of
conclusiveness of judgment.
The doctrine of res judicata provides that a final judgment or decree on the
merits by a court of competent jurisdiction is conclusive of the rights of the
parties or their privies in all later suits on points and matters determined in
the former suit. It embraces two concepts as enunciated in Section 47, Rule
39 of the Revised Rules of Court, namely: (1) bar by prior judgment and (2)
conclusiveness of judgment. Both concepts are founded on public "(1) policy
and necessity which makes it to the interest of the State that there should be
an end to litigation, interest reipublicae ut sit finis litium, and (2) the hardship
on the individual that he should be vexed twice for the same cause, nemo
debet bis vexari et eadem causa."
There is bar by former judgment when, between the first case where the
judgment was rendered and the second case where such judgment was
invoked, there was identity of parties, subject matter and cause of action. But
where there is identity of parties and subject matter in the first and second
cases, but no identity of causes of action, the judgment is conclusive in the
second case, only as to those matters actually and directly controverted and
determined, and not as to matters merely involved therein. This is what is
termed conclusiveness of judgment. Bar by prior judgment is the effect of a
judgment barring to the prosecution of a second action upon the same claim,
demand or cause of action while conclusiveness of judgment precludes the
relitigation of a particular fact of issue in another action between the same
parties on a different claim or cause of action.
In the present case, neither of the two concepts of res judicata finds relevant
application. While there may be substantial identity of parties in Civil Case No.
02-104294 and the subject petition, there is no identity of subject matter and
cause of action. Civil Case No. 02-104294 was a complaint for declaratory
relief filed by Spouses Jaworski for the extinguishment of their liability under
the JSA on the basis of the MOA stating their business divorce; whereas the
present case stemmed from a complaint for nullification of loan contracts, real
estate mortgage and extrajudicial foreclosure sale questioning the alleged
usurious interest imposed by PNB and the latter's non-compliance with the
requirements of publication and posting of notices. The decision of the RTC-
Manila in Civil Case No. 02-104294 was neither determinative nor conclusive
on the matters raised in the present case. The two cases, Civil Case No. 02-
104294 and the present action, are entirely different as to the form of action,
relief sought and the evidence required to substantiate their claims.
As enunciated by the Court in Nabus v. Court of Appeals, it has been held that
in order that a judgment in one action can be conclusive as to a particular
matter in another action between the same parties or their privies, it is
essential that the issues be identical. If a particular point or question is in
issue in the second action, and the judgment will depend on the determination
of that particular point or question, a former judgment between the same
parties will be final and conclusive in the second if that same point or question
was in issue and adjudicated in the first suit; but the adjudication of an issue
in the first case is not conclusive of an entirely different and distinct issue
arising in the second. In order that this rule may be applied, it must clearly
and positively appear, either from the record itself or by the aid of competent
extrinsic evidence that the precise point or question in issue in the second suit
was involved and decided in the first. And in determining whether a given
question was an issue in the prior action, it is proper to look behind the
judgment to ascertain whether the evidence necessary to sustain a judgment
in the second action would have authorized a judgment for the same party in
the first action.
BRION, J.:
FACTS
The cost of the project was allegedly paid out of the Economic Development
Fund (EDF) allocation in the provincial budget for calendar years (CY) 2001
and 2002. The EDF is the 20% portion of the province's internal revenue
allotment (IRA) required by law to be spent on development projects.
On February 4, 2003, the COA Audit Team Leader issued an Audit Observation
Memorandum (AOM), finding that Verceles should have sought prior authority
from the SP pursuant to Sections 22 (c) and 465 (b) (1) (vi) of Republic Act
No. 7160 or the Local Government Code (LGC) before executing any MOA after
the issuance of Resolution No. 104-A-2001.
In his petition before the COA, Verceles mainly argued that the payments for
the project were covered by appropriations under the EDF allocation of the
provincial budget for CYs 2001 and 2002. Verceles argued that the local chief
executive need not secure express or specific authorization from the SP as
long as a budget for a contract is already appropriated. He claimed that
the first and third MOAs were funded by the EDF allocation in the CYs 2001
and 2002 budgets, and that, the second, fourth, and fifth MOAs were funded
by valid augmentations from other items also under the EDF allocation.
ISSUE: Whether the COA gravely abused its discretion when it disallowed the
payments for the questioned MOAs and held Verceles liable for the amount
disallowed?
Section 16 of the LGC, also known as the general welfare clause, empowers
the local government units (LGUs) to act for the benefit of their constituents.
The LGUs exercise powers that are: (1) expressly granted; (2) necessarily
implied from the power that is expressly granted; (3) necessary, appropriate,
or incidental for its efficient and effective governance; and (4) essential to the
promotion of the general welfare of the inhabitants.
As the chief executive of the province, the governor exercises powers and
performs duties and functions that the LGC and other pertinent laws
provide. These include the power to enter into contracts on behalf of the
province.
In support of their competing claims, it is notable that both Verceles and the
COA invoke the same provisions of the LGC: Section 22 (c) and Section 465
(b) (1) (vi).
Section 22 (c) of the LGC provides that "[u]nless otherwise provided in this
Code, no contract may be entered into by the local chief executive in behalf
of the local government unit without prior authorization by
the sanggunian concerned."
Section 465 (b) (1) (vi) of the LGC, on the other hand, states that ". . . the
Chief Executive . . . [shall] [r]epresent the province in all its business
transactions and sign in its behalf all bonds, contracts, and obligations, and
such other documents upon authority of the sangguniang panlalawigan or
pursuant to law or ordinance."
The prior authorization for the local chief executive to enter into contracts on
behalf of the local government unit may be in the form of an appropriation
ordinance passed for the year which specifically covers the project, cost, or
contract to be entered into by the local government unit.
Explained simply, the LGC requires the local chief executive to secure prior
authorization from the sanggunian before he can enter into contracts on
behalf of the LGU. A separate prior authorization is no longer required if the
specific projects are covered by appropriations in the annual budget of the
LGU. The appropriation ordinance passed by the sanggunian is the local chief
executive's authority to enter into a contract implementing the project.
In summary and to harmonize the two provisions: Section 22 (c) of the LGC
requires the local chief executive to obtain prior authorization from
the sanggunian before he can enter into contracts in behalf of the LGU.
Section 465 (b) (1) (vi), on the other hand, allows the local chief executive to
implement specific or specified projects with corresponding appropriations
without securing a separate authority from the sanggunian. In the latter
provision, the appropriation ordinance is the authority from
the sanggunian required in the former provision.
The SP, as the legislative organ of the province, exercises the power of the
purse in much the same way as the Congress does at the national level.
The SP decides how the provincial budget will be spent; what projects,
activities and programs to fund; and the amounts of money to be spent for
each project, activity or program. On the other hand, the governor, as the
local chief executive tasked to enforce ordinances, is expected to faithfully
execute the appropriation ordinance and to spend the budget in accordance
with its provisions.
In the landmark case of Belgica v. Secretary Ochoa, the Court had the
opportunity to discuss the characteristics of the Priority Development
Assistance Fund (PDAF) as a lump-sum amount of money given to individual
legislators. We held that - [w]hat beckons constitutional infirmity are
appropriations which merely provide for a singular lump-sum amount to be
tapped as a source of funding for multiple purposes. Since such appropriation
type necessitates the further determination of both the actual amount to be
expended and the actual purpose of the appropriation which must still
be chosen from the multiple purposes stated in the law, it cannot be said
that the appropriation law already indicates a "specific appropriation
of money" and hence, without a proper line-item which the President may
veto.
Using this as parameter, we note that the CY 2001 EDF is akin to the PDAF as
they are both singular lump-sum amounts to be tapped as a funding source
for multiple purposes. They are both described in generic terms ("economic
development fund" and "priority development assistance fund"), which
requires the further determination of the actual amount to be spent and the
actual purpose of the appropriation.
We employ the above analogy to emphasize that the 2001 EDF was not a
specific appropriation of money as Verceles would want the Court to believe
in his attempt to justify the first MOA. In other words, the SP had not yet
completely exercised its power of the purse such that all the governor had to
do was to implement the projects identified in the appropriation ordinance.
Article 454 of the Rules and Regulations Implementing the LGC states that
augmentation implies the existence in the budget of an item, project, activity,
or purpose with an appropriation which upon implementation or subsequent
evaluation of needed resources is determined to be deficient.
In the case of Araullo v. Sec. Aquino III, construing Section 25(5), Article VI
of the 1987 Constitution, the Court laid down the requisites for a valid transfer
of appropriated funds at the national level, namely:
(1) There is a law authorizing the President, the President of the Senate, the
Speaker of the House of Representatives, the Chief Justice of the Supreme
Court, and the heads of the Constitutional Commissions to transfer funds
within their respective offices;
(2) The funds to be transferred are savings generated from the appropriations
for their respective offices; and
Still in Araullo, we ruled that Section 25(5) Article VI of the 1987 Constitution,
not being a self-executing provision of the Constitution, must have an
implementing law for it to be operative. That law, generally, is the general
appropriation act (GAA) of a given fiscal year. To comply with the first
requisite, the GAA should expressly authorize the transfer of funds.
Araullo suggests that for augmentations to be valid, the GAA of a given fiscal
year must expressly authorize the transfer of funds in the same year. At the
very least, a law must first be passed authorizing the transfer of savings in
the year that realignments are to be made.
On the local level, Section 336 of the LGC requires an implementing ordinance
so that the local chief executive can augment items in the annual budget of
the LGU. Applying Araullo, the appropriation ordinance of a given fiscal year
must expressly authorize the local chief executive before he can make
augmentations in that particular year, or at the very least, he must be
authorized by ordinance before he can make augmentations.
Verceles posits that the authority to augment items in the approved annual
budget may be given retroactively, that is, after the augmentations have been
made. He cites Section 8 of the CY 2003 appropriation ordinance of the
province, which states, Section 8. Authority to Augment Items and Figures in
the Budget and Ratification of Previous Acts of the Provincial Governor. — The
Provincial Governor is hereby authorized to effect and is
hereby considered to have been authorized, and the Sangguniang
Panlalawigan hereby approves and ratifies all augmentations of items
and figures in the CY 2003 Budget that includes the 20% Economic
Development Fund (EDF) for CY 2003, and previous budgets and 20%
[EDFs], and all modifications, revisions, thereof that may be considered as
augmentations, all which may be or have been warranted due to, but not
limited to, actual or possible shortfall in the revenue collections of the province
and the IRA due it xxx.
The power of the local chief executive to augment items under Section 336 of
the LGC is a mere exception to the general rule that funds shall be available
exclusively for the specific purpose for which they have been appropriated.
Exceptions are strictly construed and apply only so far as their language fairly
warrants, with all doubts being resolved in favor of the general proviso rather
than the exception. As an exception to the general rule, all the requirements
for a valid augmentation must be strictly complied with. One such requirement
is that the local chief executive must be authorized by an ordinance.
Consistent with the strict construction approach, we raue that the requisite
"authorized by ordinance" does not necessarily and automatically include
"ratified by ordinance."
The exception clause of Section 336 states: "the local chief executive . . . may,
by ordinance, be authorized to augment any item in the approved annual
budget . . . ." The key phrase is "by ordinance, be authorized to augment."
We must therefore interpret this phrase in a manner that does not easily erode
the basic principle that funds shall be available exclusively for the specific
purpose for which they have been appropriated.
Thus, strictly speaking, the governor must be duly authorized before he can
make augmentations. We highlight the words "to augment" suggesting that
what is being authorized is an act that has yet to happen.
Nevertheless, our ruling in the present case should not be taken to mean that
the LGC prohibits the ratification of previously unauthorized augmentations.
We only want to underscore the necessity of an existing authority before the
local chief executive can make augmentations. The Court recognizes that
there may be narrow instances where past augmentations can be shown to
have fully complied with all the requisites (except for the authority by
ordinance requisite) for a valid augmentation, in which cases, ratification is
allowed.
SERENO, C.J.:
FACTS
On 30 March 2012, she took her Oath of Allegiance before the Vice Consul of
the Philippine Consulate in Los Angeles, California.
On 2 May 2012, petitioner went to Sevilla to apply for voter's
registration. Eight days later, she went back to the US and stayed there until
28 September 2012. She claims that she went there to wind up her affairs,
particularly to sell her house in Stockton, California, as well as her shares of
stock in various companies.
On 4 October 2012, she filed her COC for mayor of Sevilla. She represented
herself therein as one who had been a resident of Sevilla for 1 year and 11
days prior to the elections of 13 May 2013, or from 2 May 2012.
On 10 October 2012, private respondent Marie Karen Joy Digal filed a petition
with the COMELEC for the cancellation of petitioner's COC. Private respondent
was the daughter of Ernesita Digal, whom petitioner would later best for the
mayoralty position in the 2013 elections by a margin of 668 votes.
On 8 May 2013, five days before the elections, the COMELEC First Division
issued a Resolution cancelling the COC of petitioner. It highlighted that even
if she had reacquired her Filipino citizenship, registered as a voter in Sevilla,
and executed her sworn renunciation, her prolonged absence resulted in her
failure to reestablish her domicile in her hometown for the purpose of abiding
by the one-year residence requirement.
Considering that the only material issue before COMELEC was the
completeness of the period of residence, it should not have disregarded the
following evidence showing specific acts performed by petitioner one year
before the elections, or by 13 May 2012, which clearly demonstrated
her animus manendi et revertendi:
1. She made public her intention to run for the mayoralty position. In
preparation for this aspiration, and in order to qualify for the position,
she went through the reacquisition process under Republic Act No.
9225.
2. She started to reside in her ancestral home, and even obtained a CTC,
during the first quarter of 2012.
3. She applied for voter's registration in Sevilla.
4. She went back to the US to dispose of her properties located there.
REYES, J.:
FACTS:
On July 16, 2008, Atty. Mejica filed a criminal action for grave oral defamation
against Lim, then incumbent Vice Mayor of Oras, Eastern Samar, before the
Office of the Assistant Provincial Prosecutor (OAPP) of Oras, Eastern Samar.
He alleged that Lim uttered against him the following slanderous words at the
Session Hall of the Sangguniang Bayan of Oras. Mr. Agus Baldado filed a case
against Atty. Mejica before the Integrated Bar of the Philippines (IBP) and now
Atty. Mejica is suspended from practice of his profession as a lawyer for a
period of six (6) months, you relay this information.
While Atty. Mejica's MR was still pending before the Office of the Provincial
Prosecutor (OPP), he filed on March 31, 2009, for the second time, the same
complaint before the Municipal Circuit Trial Court (MCTC) of Oras, Eastern
Samar.
The MCTC issued an Order7 dismissing the complaint of Atty. Mejica on the
ground that the same had already prescribed.
Consequently, Lim filed the instant case alleging that Atty. Mejica deliberately
committed forum shopping when he filed the same complaint with the same
attachments with the MCTC during the pendency of his MR to the dismissal of
his complaint before the OPP.
The IBP Board of Governors, however, after considering this Court's previous
sanctions imposed against Atty. Mejica, increased his suspension to five (5)
years.
ISSUE: Whether the instant disbarment complaint constitutes a sufficient
basis to suspend Atty. Mejica from the practice of law for five (5) years for
violation of the CPR?
In the present case, the Court finds that the second requisite of forum
shopping does not exist since there is no identity of relief in I.S. No. 08-90-0
filed before the OAPP of Oras, Eastern Samar and in Criminal Case No.
(0)2009-03 filed before the MCTC of the same place.
In I.S. No. 08-90-0, the complaint seeks for the finding by the prosecutor of
probable cause against Lim for Grave Oral Defamation so that the latter could
be held for trial. Meanwhile, in Criminal Case No. (0)2009-03, the complaint
seeks for the conviction of Lim.
In Co v. Lim, et al., the Court, for the purpose of determining the existence of
forum shopping, held that the determination made by the Secretary of Justice
on whether there is a prima facie case for the prosecution of the case is
distinct from the judicial determination of the RTC that there is no probable
cause for the continued hearing of the criminal case. Moreover, the Court held
that these are two distinct actions which should be independently assailed.
The former is pursuant to the powers and functions of the Department of
Justice as provided for under the Revised Administrative Code while the latter
is in accord to the judicial powers conferred by Section 1, Article VIII of the
1987 Constitution.
Applying the foregoing, it is clear that in the present case, the exercise of the
OPP of its investigative power to determine the existence of probable cause to
the complaint filed by Arty. Mejica is likewise different and distinct from the
power of the court to hold Lim for trial for the offense charged.
Nonetheless, the Court finds that Atty; Mejica failed to exercise candor and
courtesy to the court when he failed to inform the same of the pendency of
his MR before the OPP in connection with the same cause of action. Likewise,
records show that he failed to withdraw his MR before the OPP despite the
subsequent filing of his complaint before the MCTC.
Although it is the MCTC that has jurisdiction over the complaint filed by Atty.
Mejica, he made a mockery of the judicial process and further eroded public
confidence in lawyers when he ignored the proceedings he initiated in the OPP.
For these acts, the Court finds Atty. Mejica liable under Canon 10 of the CPR
for violating the lawyer's duty to observe candor and fairness in his dealings
with the court. It states: CANON 10. A lawyer owes candor, fairness and good
faith to the Court.
Under the circumstances, considering that there was no bad faith or malice on
the part of Atty. Mejica and that it was merely a result of his wrong notion
that the complaint for oral defamation is within the jurisdiction of the OPP, the
Court finds it appropriate to impose upon him the penalty of suspension from
the practice of law for six (6) months. This serves the purpose of protecting
the interest of the court, the legal profession and the public.
BRION, J.:
FACTS:
The project is allegedly being carried out without the necessary Environmental
Compliance Certificate (ECC) or Environmental Impact Statements required
under Presidential Decree No. (P.D.) 1586 and P.D. 1151. The project also
allegedly failed to conduct local consultation and to secure
prior sanggunianapproval as required by the Local Government Code.
ISSUE: Whether there is a need for an issuance of a writ of kalikasan?
The IRR of the EIS System simply designates the responsible party as the
proponent. Ordinarily, the proponent is easy to identify - it is the natural or
juridical person intending to implement the project. But who are the
proponents in PPP Projects which are a collaborative effort between the
government and the private sector?
Considering that the Project is still in the bidding stage, the petition or
continuing mandamus to compel the respondents to submit an EIS and secure
an ECC is premature. It is also misplaced because the public respondents DO
NOT have the duty to submit the EIS or secure an ECC.
Also, The LGC requires the lead agency to conduct local consultation and
secure the approval of the concerned sanggunian prior to the implementation
of the project.
The Sasa Wharf Modernization Project has not yet reached the construction
stage. The bidding process had not even been concluded when the present
petition was filed. On this account, the petition is also premature for the
purpose of compelling the respondents to comply with Sections 26 and 27 of
the LGC.
The writ cannot be resorted to when the respondent is not the person obliged
to perform the duty under the law (as is the case under the EIS System) or
when the period for the respondent to perform its legal duty has not yet
expired (as is. the case with the consultation requirements of the LGC).
Accordingly, we cannot issue a writ of continuing mandamus.
The Court cannot issue a writ of kalikasan based on the petition. The writ is a
remedy to anyone whose constitutional right to a balanced and healthful
ecology is violated or threatened with violation by an lawful act or omission.
However, the violation must involve environmental damage of such
magnitude as to prejudice the life, health, or property of inhabitants in two
or more cities or provinces in order to arrant the issuance of the writ.
First, the petition failed to identify the particular threats from the Project itself.
All it does is cite the negative impacts of operating a port inside a city based
on the Synthesis Report. However, these impacts already exist because the
Port of Davao has been operating since 1900. The Project is not for the
creation of a new port but the modernization of an existing one. At best, the
allegations in support of the application for the writ of kalikasan are hazy and
speculative.
PERALTA, J.:
FACTS:
On March 24, 1992, Republic Act (R.A.) No. 7277, entitled "An Act Providing
for the Rehabilitation, Self-Development and Self-Reliance of Disabled Persons
and their Integration into the Mainstream of Society and for Other Purposes,"
otherwise known as the "Magna Carta for Disabled Persons," was passed into
law.
On April 30, 2007, Republic Act No. 94427 was enacted amending R.A. No.
7277. Specifically, R.A. No. 9442 granted the PWDs a twenty (20) percent
discount on the purchase of medicine, and a tax deduction scheme was
adopted wherein covered establishments may deduct the discount granted
from gross income based on the net cost of goods sold or services.
The law is a legitimate exercise of police power which, similar to the power of
eminent domain, has general welfare for its object. Police power is not capable
of an exact definition, but has been purposely veiled in general terms to
underscore its comprehensiveness to meet all exigencies and provide enough
room for an efficient and flexible response to conditions and circumstances,
thus assuring the greatest benefits. Accordingly, it has been described as the
most essential, insistent and the least limitable of powers, extending as it does
to all the great public needs. It is [t]he power vested in the legislature by the
constitution to make, ordain, and establish all manner of wholesome and
reasonable laws, statutes, and ordinances, either with penalties or without,
not repugnant to the constitution, as they shall judge to be for the good and
welfare of the commonwealth, and of the subjects of the same.
Police power is the power of the state to promote public welfare by restraining
and regulating the use of liberty and property. On the other hand, the power
of eminent domain is the inherent right of the state (and of those entities to
which the power has been lawfully delegated) to condemn private property to
public use upon payment of just compensation. In the exercise of police
power, property rights of private individuals are subjected to restraints and
burdens in order to secure the general comfort, health, and prosperity of the
state. A legislative act based on the police power requires the concurrence of
a lawful subject and a lawful method. In more familiar words, (a) the interests
of the public generally, as distinguished from those of a particular class, should
justify the interference of the state; and (b) the means employed are
reasonably necessary for the accomplishment of the purpose and not unduly
oppressive upon individuals.
R.A. No. 7277 was enacted primarily to provide full support to the
improvement of the total well-being of PWDs and their integration into the
mainstream of society. The priority given to PWDs finds its basis in Section 6,
Article XII of the Constitution.
Further, petitioners aver that Section 32 of R.A. No. 7277 as amended by R.A.
No. 9442 is unconstitutional and void for violating the due process clause of
the Constitution since entitlement to the 20% discount is allegedly merely
based on any of the three documents mentioned in the provision, namely: (i)
an identification card issued by the city or municipal mayor or the barangay
captain of the place where the PWD resides; (ii) the passport of the PWD; or
(iii) transportation discount fare identification card issued by NCDA.
Petitioners, thus, maintain that none of the said documents has any relation
to a medical finding of disability, and the grant of the discount is allegedly
without any process for the determination of a PWD in accordance with law.
Section 32 of R.A. No. 7277, as amended by R.A. No. 9442, must be read with
its IRR which stated that upon its effectivity, NCWDP (which is the government
agency tasked to ensure the implementation of RA 7277), would adopt the
IDC issued by the local government units for purposes of uniformity in the
implementation. Thus, NCDA A.O. No. 1 provides the reasonable guidelines in
the issuance of IDCs to PWDs as proof of their entitlement to the privileges
and incentives under the law and fills the details in the implementation of the
law.
As stated in NCDA A.O. No. 1, before an IDC is issued by the city or municipal
mayor or the barangay captain, or the Chairman of the NCDA, the applicant
must first secure a medical certificate issued by a licensed private or
government physician that will confirm his medical or disability condition. If
an applicant is an employee with apparent disability, a "certificate of disability"
issued by the head of the business establishment or the head of the non-
governmental organization is needed for him to be issued a PWD-IDC. For a
student with apparent disability, the "school assessment" issued by the
teacher and signed by the school principal should be presented to avail of a
PWD-ID.
Furthermore, DOH A.O. No. 2009-11 prescribes additional guidelines for the
20% discount in the purchase of all medicines for the exclusive use of
PWD.44 To avail of the discount, the PWD must not only present his I.D. but
also the doctor's prescription stating, among others, the generic name of the
medicine, the physician's address, contact number and professional license
number, professional tax receipt number and narcotic license number, if
applicable. A purchase booklet issued by the local social/health office is also
required in the purchase of over-the-counter medicines. Likewise, any single
dispensing of medicine must be in accordance with the prescription issued by
the physician and should not exceed a one (1) month supply. Therefore, as
correctly argued by the respondents, Section 32 of R.A. No. 7277 as amended
by R.A. No. 9442 complies with the standards of substantive due process.
Lastly, petitioners contend that R.A. No. 7227, as amended by R.A. No. 9442,
violates the equal protection clause of the Constitution because it fairly singles
out drugstores to bear the burden of the discount, and that it can hardly be
said to "rationally" meet a legitimate government objective which is the
purpose of the law. The law allegedly targets only retailers such as petitioners,
and that the other enterprises in the drug industry are not imposed with
similar burden. This same argument had been raised in the case of Carlos
Superdrug Corp., et al. v. DSWD, et al., and the Court reaffirms and applies
the ruling therein in the case at bar.
The Court is not oblivious of the retail side of the pharmaceutical industry and
the competitive pricing component of the business. While the Constitution
protects property rights, petitioners must accept the realities of business and
the State, in the exercise of police power, can intervene in the operations of
a business which may result in an impairment of property rights in the process.
Moreover, the right to property has a social dimension. While Article XIII of
the Constitution provides the precept for the protection of property, various
laws and jurisprudence, particularly on agrarian reform and the regulation of
contracts and public utilities, continuously serve as a reminder that the right
to property can be relinquished upon the command of the State for the
promotion of public good.
Under the equal protection clause, all persons or things similarly situated must
be treated alike, both in the privileges conferred and the obligations imposed.
Conversely, all persons or things differently situated should be treated
differently.
SERENO, C.J.:
This case involves a money claim filed by an insurance company against the
ship agent of a common carrier. The dispute stemmed from an alleged
shortage in a shipment of fertilizer delivered by the carrier to a consignee.
Before this Court, the ship agent insists that the shortage was caused by bad
weather, which must be considered either a storm under Article 1734 of the
Civil Code or a peril of the sea under the Carriage of Goods by Sea Act
(COGSA).1chanrobleslaw
In the Decision2 and the Resolution3 assailed in this Petition for Review
on Certiorari,4 the Court of Appeals (CA) affirmed the Decision5 of the
Regional Trial Court (RTC). The RTC ordered petitioner Transimex Co.
(Transimex) to pay respondent Mafre Asian Insurance Corp.6 the amount of
P1,617,527.37 in addition to attorney's fees and costs. Petitioner is the local
ship agent of the vessel, while respondent is the subrogee of Fertiphil
Corporation (Fertiphil),7 the consignee of a shipment of Prilled Urea Fertilizer
transported by M/V Meryem Ana.
FACTUAL ANTECEDENTS
On 20 June 1996, M/V Meryem Ana arrived at Poro Point, La Union, and
discharged 14,339.507 metric tons of fertilizer under the first bill of
lading.11 The ship sailed on to Tabaco, Albay, to unload the remainder of the
cargo. The fertilizer unloaded at Albay appeared to have a gross weight of
7,700 metric tons.12 The present controversy involves only this second
delivery.
As soon as the vessel docked at the Tabaco port, the fertilizer was bagged and
stored inside a warehouse by employees of the consignee.13 When the cargo
was subsequently weighed, it was discovered that only 7,350.35 metric tons
of fertilizer had been delivered.14 Because of the alleged shortage of 349.65
metric tons, Fertiphil filed a claim with respondent for P1,617,527.37,15 which
was found compensable.16chanrobleslaw
Petitioner, on the other hand, denied that there was loss or damage to the
cargo.24 It submitted survey certificates and presented the testimony of a
marine surveyor to prove that there was, in fact, an excess of 3.340 metric
tons of fertilizer delivered to the consignee.25cralawred Petitioner also alleged
that defendants had exercised extraordinary diligence in the transport and
handling of the cargo.26chanrobleslaw
THE RTC RULING
The RTC ruled in favor of respondent and ordered petitioner to pay the claim
of P1,617,527.37. In its Decision,27 the trial court found that there was indeed
a shortage in the cargo delivered, for which the common carrier must be held
responsible under Article 1734 of the Civil Code. The RTC also refused to give
credence to petitioner's claim of overage and noted that the presumption of
fault and/or negligence on the part of the carrier remained unrebutted. The
trial court explained:ChanRoblesVirtualawlibrary
The defendants' defense is that there was no loss/damage to the cargo
because instead of a shortage there was an overage of 3.340, invoking the
findings of Raul Pelagio, a marine surveyor connected with Survey Specialists,
Inc. whose services were engaged by the defendants. However, the Court
notes that what was loaded in the vessel M/V Meryem Ana at Odessa, Ukraine
on May 21, 1996 was 21,857 metric tons of prilled urea fertilizer (Draft Survey
Report, Exhibit F). How the quantity loaded had increased to 21,860.34 has
not been explained by the defendants. Thus, the Court finds incredible the
testimony of Raul Pelagio that he found an overage of 3.340 metric tons. The
Court is inclined to give credence to the testimonies of witness Jaime David,
the cargo surveyor engaged by consignee Fertiphil Corporation, and witness
Fabian Bon, a cargo surveyor of Adjustment Standards Corporation, whose
services were engaged by plaintiff Mafre Asian Insurance Corporation, there
being no reason for the Court to disregard their findings which jibe with one
another.
Thus, it appears crystal clear that on the vessel M/V Meryem Ana was loaded
in bulk on May 21, 1996 at Odessa, Ukraine a cargo consisting of 21,857
metric tons of prilled urea fertilizer bound for delivery at Poro Point, San
Fernando, La Union and at Tabaco, Albay; that the cargo unloaded at said
ports of destination had a shortage of 349.65 metric tons.
x x x x
The CA affirmed the ruling of the RTC and denied petitioner's appeal.29 After
evaluating the evidence presented during trial, the appellate court found no
reason to disturb the trial court's conclusion that there was indeed a shortage
in the shipment.30chanrobleslaw
The CA also rejected the assertion that petitioner was not a common
carrier.31 Because the latter offered services to the public for the transport of
goods in exchange for compensation, it was considered a common carrier in
accordance with Article 1732 of the Civil Code. The CA further noted that
petitioner had already admitted this fact in the Answer32 and even raised the
defenses usually invoked by common carriers during trial and on appeal, i.e.,
the exercise of extraordinary care and diligence, and fortuitous event.33 These
defenses were, however, found unmeritorious:ChanRoblesVirtualawlibrary
Defendants-appellants claim that the loss was due to a fortuitous event as the
Survey Report of Jaime David stated that during its voyage, the vessel
encountered bad weather. But to excuse a common carrier fully of any liability,
Article 1739 of the Civil Code requires that the fortuitous event must have
been the proximate and only cause of the loss. Moreover, it should have
exercised due diligence to prevent or minimize the loss before, during and
after the occurrence of the fortuitous event.
x x x x
In the present case, defendants-appellants did not present proof that the "bad
weather" they encountered was a "storm" as contemplated by Article 1734(1).
String winds are the ordinary vicissitudes of a sea voyage. Even if the weather
encountered by the ship was to be deemed a natural disaster under Article
1739 of the Civil Code, defendants-appellants failed to show that such natural
disaster or calamity was the proximate and only cause of the loss. The
shortage must not have been caused or worsened by human participation.
The defense of fortuitous event or natural disaster cannot be successfully
made when the injury could have been avoided by human
precaution.34chanroblesvirtuallawlibrary
Petitioner moved for reconsideration of the CA Decision, but the motion was
denied.35 Not only did the Motion for Reconsideration lack meit according to
the appellate court; it was also filed out of time.36chanrobleslaw
PROCEEDINGS BEFORE THIS COURT
Petitioner, in its Reply,45 takes a position different from its initial stance as to
the law applicable to the dispute. It concedes that the Civil Code primarily
governs its liability as a carrier, with COGSA as a suppletory source. 46 Under
both laws, petitioner contends that it is exempt from liability, because damage
to the cargo was caused by the bad weather encountered by the vessel while
at sea. This kind of weather supposedly qualifies as a violent storm under the
Civil Code; or as a peril, danger or accident of the sea under
COGSA.47chanrobleslaw
ISSUES
In the assailed Resolution, in which the CA ruled that petitioner's Motion for
Reconsideration was filed late, it explained:ChanRoblesVirtualawlibrary
Defendants-appellants' motion for reconsideration of the Court's Decision
dated August 7, 2009 was filed out of time, as based on the reply letter dated
October 13, 2009 of the Chief, Administrative Unit, Office of the Postmaster,
Makati City, copy of said Decision was received by defendants-appellants'
counsel on September 4, 2009, not September 14, 2009 as alleged in the
motion for reconsideration. Consequently, the subject Decision dated August
27, 2009 had become final and executory considering that the motion for
reconsideration was filed only on September 29, 2009, beyond the fifteen
(15)-day reglementary period which lasted until September 19,
2009.48chanroblesvirtuallawlibrary
The Court agrees. The Certification issued by the Office of the Postmaster of
Makati, which states that the Decision was received by respondent's counsel
on 4 September 2009, is entitled to full faith and credence. In the absence of
contradictory evidence, the presumption is that the postmaster has regularly
performed his duty.49 In this case, there is no reason to doubt his statement
as to the date respondent received the CA Decision.
In any event, this Court has decided to review the merits of this case in the
interest of justice. After a judicious evaluation of the arguments interposed by
the parties, we find no reason to reverse the CA Decision and Resolution.
This Court upholds the ruling of the CA with respect to the applicable law. As
expressly provided in Article 1753 of the Civil Code, "[t]he law of the country
to which the goods are to be transported shall govern the liability of the
common carrier for their loss, destruction or deterioration." Since the cargo in
this case was transported from Odessa, Ukraine, to Tabaco, Albay, the liability
of petitioner for the alleged shortage must be determined in accordance with
the provisions of the Civil Code on common carriers. In Eastern Shipping
Lines, Inc. v. BPI/MS Insurance Corp., the Court
declared:ChanRoblesVirtualawlibrary
According to the New Civil Code, the law of the country to which the goods
are to be transported shall govern the liability of the common carrier for their
loss, destruction or deterioration. The Code takes precedence as the primary
law over the rights and obligations of common carriers with the Code of
Commerce and COGSA applying suppletorily.52chanroblesvirtuallawlibrary
Besides, petitioner itself later conceded in its Reply that the Civil Code
provisions on common carriers are primarily applicable to the present dispute,
while COGSA only applies in a suppletory manner.53chanrobleslaw
Having settled the foregoing preliminary issues, the only argument left for this
Court to resolve is petitioner's assertion that it is exempt from liability for the
loss or damage to the cargo. As grounds for this exemption, petitioner cites
both the Civil Code and COGSA, particularly the provisions absolving a carrier
from loss or damage sustained as the result of a "storm" or a "peril of the
sea."
In its Petition, Transimex summarizes the testimony of one witness for
respondent supposedly proving that the shortage in the shipment was caused
by inclement weather encountered by the vessel at sea. Petitioner claims that
this testimony proves that damage to the cargo was the result of the melting
of the fertilizer after seawater entered Hatch No. 1 of the vessel as a result of
the bad weather conditions at sea:ChanRoblesVirtualawlibrary
The evidence for the respondent clearly proves that the loss/damage/shortage
[suffered by] the cargo was caused by the bad weather encountered by the
vessel during the voyage from Odessa, Ukraine to Poro Point, San Fernando,
La Union, wherein due to bad weather[,] sea water found its way inside Hatch
No. 1 resulting in the wetting, melting and discoloration of the prilled urea
fertilizer. The fact that sea water found its way inside Hatch No. 1 was clearly
testified to by the witness for the respondent. Jaime R. Davis testified
that:ChanRoblesVirtualawlibrary
"He was present during the discharging operation, that he saw the hatches
opened whereupon he noticed the presence of water thereat;
accordingly, he informed the master of the vessel of the presence of
water at the hatches to which the master of the vessel replied that on
the way they encountered bad weather."54 (Emphasis in the original)
Petitioner also cites a portion of the Adjustment Report submitted by
respondent during trial as proof that damage to the cargo was caused by a
storm:ChanRoblesVirtualawlibrary
How the sea water found its way inside Hatch No. 1 was clearly explained by
another witness for the respondent by the name of Fabian Bon who stated in
his Adjustment as follows:ChanRoblesVirtualawlibrary
Our inquiries disclosed that the master of the vessel interviewed by the
consignee's surveyor (David Cargo Survey Services) that during sailing from
Odessa (Ukraine) bound to Poro Point, San Fernando, La Union,
Philippines, the vessel encountered bad weather on June 3, 1996 and
was rolling from starboard to portside top of the 1, 2, 3, 4, 5, 6 & 7
hatch covers and sea water were washing over all main deck.
With respect to storms, this Court has explained the difference between a
storm and ordinary weather conditions in Central Shipping Co. Inc. v.
Insurance Company of North America:56
Nonetheless, to our mind it would not be sufficient to categorize the weather
condition at the time as a "storm" within the absolutory causes enumerated
in the law. Significantly, no typhoon was observed within the Philippine area
of responsibility during that period.
As a side note, we observe that there are no definite statutory standards for
determining the existence of a "storm" or "peril of the sea" that would exempt
a common carrier from liability. Hence, in marine insurance cases, courts are
constrained to rely upon their own understanding of these terms of art, or
upon imprecise accounts of the speed of the winds encountered and the
strength of the waves experienced by a vessel. To obviate uncertainty, it may
be time for Congress to lay down specific rules to distinguish "storms" and
other "perils of the sea" from the ordinary action of the wind and waves. While
uniform measures of severity may prove difficult to establish, the legislature
may consider providing more detailed standards to be used by the judiciary in
resolving maritime cases. These may include wind velocity, violence of the
seas, the height of the waves, or even the expected weather conditions in the
area involved at the time of the incident.
Under these circumstances, the Court cannot absolve petitioner from liability
for the shortage incurred by the shipment.
SO ORDERED.chanRoblesvirtualLawlibrary
Appellant, together with one Jonery Arabaca y Salufraña (Jonery) are charged
with rape in the following Information:ChanRoblesVirtualawlibrary
Criminal Case No. 03-884
That on or about 11th day of May, 2003, at around 1:00 o'clock in the morning
in [XXX] and within the jurisdiction of this Honorable Court, the above-named
accused, conspiring, confederating and mutually helping one another, willfully,
unlawfully and feloniously through force and intimidation had carnal
knowledge with [AAA],2 fourteen years old, against her will, and to he damage
and prejudice.3chanrobleslaw
Criminal Case No. 03-884
That on or about 11th day of May, 2003, around 1:00 o'clock in the morning
in [XXX] and within the jurisdiction of this Honorable Court, the above-named
accused, conspiring, confederating and mutually helping one another, willfully,
unlawfully and feloniously through force and intimidation had carnal
knowledge with [AAA], fourteen years old, against her will, and to her damage
and prejudice.
Bugate is AAA's neighbor. Her house is located at about two (2) meters away
from AAA's house. Bugate testified that on even date and time, she heard AAA
calling for "Alex" numerous times. On the following morning, AAA told her that
Jonery and appellant raped her.7chanrobleslaw
Appellant testified on his behalf. He claimed that on the alleged date of the
crime, he was in the public market of Naga City with his mother. They waited
for the arrival of fruits until 12:00 o'clock midnight of 10 May 2003. When the
fruits arrived, they inspected them before buying. They then hired a tricycle
and arrived at the jeepney terminal at 2:00 a.m of 11 May 2003. They slept
at the terminal until 9:00 a.m.9On 12 May 2003, AAA confronted appellant
and accused him of spreading stories about her relationship with Jonery.
Appellant surmised that he was falsely accused of rape because AAA held a
grudge against him.10chanrobleslaw
In a Decision11 dated 24 June 2008, the trial court found appellant guilty
beyond reasonable doubt of two counts of rape. The dispositive portion of the
decision reads:ChanRoblesVirtualawlibrary
WHEREFORE, in view of the foregoing, the prosecution having proven the guilt
of the accused Darwin Gito y Corlin beyond reasonable doubt of the offense
of rape as charged, defined and penalized under Article 266-A I relation to
Article 266-B, as amended by Republic Act 8353, accused Darwin Gito y Corlin
is hereby sentenced to suffer the following penalties:
1. In Crim. Case No. RTC'03-884, accused Darwin Gito y Corlin is
hereby sentenced to suffer the penalty of reclusion perpetua. He
is likewise ordered to pay the victim [AAA] civil indemnity in the
amount of P50,000.00 and moral damages in the amount of
P50,000.00 and to pay the costs.
2. In Crim. Case No. RTC'03-885, accused Darwin Gito y Corlin is
hereby sentenced to suffer the penalty of reclusion perpetua. He
is likewise ordered to pay the victim [AAA] civil indemnity in the
amount of P50,000.00 and moral damages in the amount of
P50,000.00 and to pay the costs.
Considering that accused Darwin Gito y Corlin has undergone preventive
imprisonment, he shall be credited in the service of his sentence with the time
he has undergone preventive imprisonment subject to the conditions provided
for by law. Accused is likewise meted the accessory penalty of perpetual
absolute disqualification as provided for under Article 41 of the Revised Penal
Code.
On 26 May 2011, the Court of Appeals affirmed the decision of the trial court.
It ruled that AAA was able to positively identify the perpetrators.
In his Brief,13 appellant reiterates that he was at the Naga City public market
buying fruits with his mother at around 1:00 a.m. making it impossible for
him to have committed the crime charged. Appellant claims that AAA's
testimony is fraught with incredulity as evidenced by her behavior before and
during the rape incident. First, appellant argues that if AAA was certain that
he and Jonery raped her, then she could have easily told Alexander to run
after them. Second, AAA could have easily shouted for help from her
grandmother and cousins, who were also sleeping inside the same house.
Third, it was impossible for Alexander not to wake up when AAA tried to wake
him up by calling for him and touching his feet.
A: While we were already asleep, Darwin and Jonery arrived and this
Jonery tried to wake me up.
Q: You said Darwin and Jonery, will you please tell us what is the
surname of this Darwin?
A: Gito.
A: Arabaca.
Q: Will you please describe to us that place where you were sleeping?
A: The walls of the room are only made of sacks and it is only open. One
of the portiom of the room is open.
PROS. CARINO:
A: Yes, ma'am.
Q: You said that Jonery woke you up and you said that his surname is
Arabaca. How is he related to Alexander Arabaca whom you said your
common-law husband?
Q: What did he do after he called you and told you that he wanted to
talk to you?
Q: Where was he when he called you, how far was he from the place
where you were sleeping with Alex?
xxxx
Q: When Jonery pulled you, what did you do, if any?
A: Because they were forcing me and Alex then was dr[u]nk that's why
he did not wake up.
xxxx
Q: After Jonery pulled you and you said you were trying to fight him and
calling the name [of] Alex, what happened next?
Q: After Darwin has pushed you, what happened next after that?
Q: Will you please point to us the distance from the bed to the place
where you [were] brought?
INTERPRETER:
The witness pointed to the door of the courtroom.
PROS. CARINO:
COURT:
A: It was Darwin who was holding me until he made me lie down on the
ground.
Q: After Darwin laid you down on the ground, what happened next?
Q: When Darwin laid you down on the ground, what did you do, if any?
A: To my vagina.
Q: After he inserted his penis into your vagina, what happened next, if
any?
COURT:
A: Him.
PROS. CARINO:
Q: After you said you were trying to pull your panty but Darwin pricked
you with his long fingernails, what happened next after he pricked
your wrist with that long fingernails?
A: I felt very weak. Even I wanted to stand up but I was not able to do
so because he immediately pulled down my panty.
Q: After he pulled down your panty, what did Darwin do next, if any?
Q: After he inserted his penis into your vagina, what did he do next, if
any?
The trial court correctly favored AAA's account as her testimony jived with
other testimonial and physical evidence, thus:ChanRoblesVirtualawlibrary
In the instant case, [AAA] had testified that she was raped on May 11, 2003
at about 1:00 o'clock in the early morning, first by Jonery Arabaca and
afterwards by Darwin Gito. According to her, she was dragged from the place
where she was then sleeping together with her common-law husband Alex
who is the brother of Jonery Arabaca. A knife was poked at her and
immediately Jonery Arabaca had removed her pants, shorts and panty and
inserted his penis into her vagina and made a push and pull movement.
Afterwards, Darwin Gito also followed wherein he also sexually molested her.
This happened at the back of their house where she was dragged by the two
accused. This testimony of [AAA] was clear, straightforward and she never
faltered even on cross, as a matter of fact, the following morning after the
incident, she told her Tia Lita Bugate, one of their neighbors about the incident
that she was raped on that night in the early morning of May 11, 2003 by the
two accused and that she then called Alex, her common-law husband but he
had not waken up because at that time he was dr[u]nk. This testimony of
[AAA] that she was calling Alex was corroborated by her Tia Lita Bugate that
she had heard her calling Alex at about 1:00 o'clock early morning of May 11,
2003 while she was at their residence drinking coffee together with her
husband but they did not mind when they heard [AAA] calling her husband
because they thought they were just having a discussion. Immediately she
made a report to the barangay authorities and on May 15, 2003, she reported
for medical examination and having examined by Dr. Ursolino Primavera and
then on May 19, she reported to the police authorities of what happened to
her. Dr. Pimavera then corroborated the testimony of [AAA] that indeed she
had examined [AAA] on May 15, 2003 and in his examination, he found out
that her vagina admits two fingers, meaning there were lacerations on the
hymen and healed laceration. He further explained that what he had stated in
his findings was that the healed laceration could be either an old or fresh
laceration. Old healed laceration could be already a month ago while fresh
healed laceration could be two weeks below. He concluded that when he had
examined the patient she has a menstrual cycle usually last from 5 to 7 days.
This therefore, corroborated the testimony of [AAA] that indeed she had
immediately submitted herself to medical examination. The reporting made
by [AAA] of what happened to her shows that indeed she was telling the truth
that she was allegedly raped by both accused Darwin Gito and Jonery Arabaca
who is still at large.18chanroblesvirtuallawlibrary
Appellant points out to incredulities in AAA's statements such as her failure to
shout for help; the failure of Alexander to wake up to her aid; and the fact
that AAA's relatives did not notice anything when they were sleeping in the
same house as AAA.
AAA's failure to shout for help can be attributed to the fact that she was
threatened by Jonery with a knife while she was being ravished. This
continuing intimidation had certainly cowed AAA into submission. The failure
of Alexander to wake up to come to AAA's aid was sufficiently explained by his
intoxication. Alexander had in fact admitted that he drank gin before going to
the house of AAA to sleep. Finally, we have repeatedly held that lust is no
respecter of time and place. Rape may even be committed in the same room
where other family members also sleep.19chanrobleslaw
Based on the testimony of AAA, there was carnal knowledge first, between her
and Jonery and second, between her and appellant. Conspiracy was correctly
appreciated by the trial court when it ruled in this
wise:ChanRoblesVirtualawlibrary
In these particular cases, it was proven by the prosecution that [AAA] was
being dragged by Jonery Arabaca and pushed by Darwin Gito at about 1:00
O'clock in the morning of May 11, 2003 towards the back of their kitchen and
upon reaching outside of the house where [AAA] was staying at that time,
Jonery Arabaca poked a knife at her and pushed her down and removed her
panty and shorts and laid on top of her, inserted his penis into her vagina and
make a push and pull movement while Darwin Gito was watching Jonery
Arabaca doing the act and after Jonery Arabaca had finished doing the act
Darwin Gito also laid on top of her and inserted his penis into her vagina.
These acts therefore of the two accused connotes the existence of conspiracy.
There was an intentional participation on the part of the two accused to
furtherance of their common design and purpose of raping [AAA]. An
aggravating circumstances of using deadly weapon was duly proven by the
prosecution as well as stated in the information
itself. chanroblesvirtuallawlibrary
20
Appellant's alibi and denial did not escape the trial court's scrutiny and it found
that they cannot stand against the overwhelming evidence of the prosecution.
The "sweetheart" theory of appellant cannot prosper. The alleged love letter
presented by the defense was disregarded by the lower court in view of AAA's
denial of writing the same. Moreover, we emphasized the doctrine that being
sweethearts does not negate the commission of rape because such fact does
not give appellant license to have sexual intercourse against her will, and will
not exonerate him from the criminal charge of rape. Being sweethearts does
not prove consent to the sexual act.21chanrobleslaw
SO ORDERED.chanRoblesvirtualLawlibrary
On 18 May 2007, an Information for the violation of Sec. 6 of R.A. 9208 was
filed against accused-appellant. The accusatory portion of the Information
reads:ChanRoblesVirtualawlibrary
That sometime during the period from April 25, 2007 up to May 17, 2007, in
the city of Las Pinas, Philippines and within the jurisdiction of this Honorable
Court, the above-named accused, being the owner/manager of ON TAP
VIDEOKE, did then and there willfully, unlawfully and feloniously recruit and
hire [AAA],3 a 13- year old minor, to work as a Guest Relations Officer (GRO)
of said establishment, thereby exploiting and taking advantage of her
vulnerability as a child.4chanroblesvirtuallawlibrary
On arraignment, accused-appellant entered a plea of NOT GUILTY.5 A Petition
for Bail was granted and accused-appellant was allowed to post bail. The public
prosecutor manifested that they will adopt the evidence presented during the
hearing of the Petition for Bail as the same evidence in the main case, with
the further manifestation that other witnesses will be presented by the
prosecution.6 Trial on the merits ensued thereafter.
The Facts
The antecedent facts as culled from the CA decision and records of the case
are summarized as follows:
On 17 May 2007, accused-appellant and the five (5) employees were referred
to the inquest prosecutor with charges for violation of R.A. No. 76107 and
working without Mayor's/ Health Permit, respectively. The Office of the City
Prosecutor charged accused-appellant with human trafficking under R.A.
9208, instead of violation of R.A. 7610 for the reason that accused-appellant
"recruited and exploited AAA, a 13-year old minor, to work as a GRO in her
bar by taking advantage of her vulnerability as a child."8chanrobleslaw
PO2 Abas testified as to the filing of the complaint and the entrapment and
rescue operation conducted. He narrated that during the operation, he was
stationed a couple of blocks from the videoke bar;11 and that upon the
execution of the pre-arranged signal, he and his companion officers rushed to
the bar to take custody of AAA and other girls working without permits. 12 On
cross-examination, PO2 Abas admitted that he was only acting based on the
preliminary complaint filed by private complainant;13 and that he was not
aware of why AAA was in the viedoke bar or who had custody over
AAA.14 When asked about the other details of the investigation and the
operation, he failed to give coherent answers and insisted that his only
designation was to secure the GROs and the other persons in the videoke
bar.15chanrobleslaw
The Petition for Bail was granted by the court and accused-appellant was
allowed to post bail. To supplement the testimonies of the witnesses presented
during the bail hearing, the prosecution offered the testimony of P/Chief Insp.
Jerome Balbontin (PCI Balbontin). He narrated that on May 16, 2007, the
private complainant, accompanied by the TV crew, reported that her missing
13-year old daughter was seen working as a GRO at the On Tap Videoke
Bar.20 According to the witness, he was not present during the operation21 but
he sent SPO1 Camaliga, PO2 Andador, PO1 Sullano, PO2 Abas, PO2 Espinosa,
among others, to conduct the surveillance and rescue.22 He further narrated
that after the rescue operation, the TV crew interviewed the child at the police
station;23 and that unfortunately, the footage of said interview and the rescue
operation could not be obtained.24chanrobleslaw
The defense presented Wilfred Aquino (Aquino), the videoke bar waiter, as
first witness. He testified as to the events which transpired during the rescue
operation. He narrated that two male individuals asked him to call AAA; that
AAA approached their table to speak with them; and that after five minutes,
the policemen announced the rescue operation.25cralawred The witness
insisted that accused-appellant was not aware of AAA's stay in the videoke
bar because it was her father, Rosito Villanueva, Sr., who allowed AAA to stay
in the videoke bar.26 Wilfred also insisted that AAA has been staying in the
videoke bar for two weeks before the rescue operation; and that during such
stay; she was always in the kitchen helping therh wash glasses.27 On cross-
examination, he testified that his immediate superior was Rosito Villanueva,
Jr., (Villanueva, Jr.) accused-appellant's brother, who was the one managing
the videoke bar.28chanrobleslaw
Villanueva, Jr. was the second witness for the defense. He testified as to the
circumstances surrounding AAA's stay in the videoke bar. He claimed that
while he was on vacation, his father took over the management of the videoke
bar and allowed the temporary stay of AAA, upon the request of their
employee.29 Like Aquino, Villanueva, Jr. claimed that accused-appellant was
unaware of AAA's stay in the videoke' bar because accused-appellant had no
hand in the daily operations and management. On cross-examination, he
testified that the videoke bar was merely registered under his sister's name;
and that all earnings belonged to him because the videoke bar was put up by
his sister for him.30chanrobleslaw
Accused-appellant maintained that at the time the raid was conducted, she
was at her sister's house. Her brother called her to apprise her of the situation,
prompting her to rush to the bar to handle the situation. She went with the
authorities to the SPD Headquarters and presented herself as the registered
owner of the videoke bar. Accused-appellant vehemently denied hiring and/or
recruiting AAA as a GRO, insisting that she was not involved in the day-to-day
operations. Asserting that she was unaware that AAA was staying at the bar,
accused-appellant explained that she merely provided capital for the business
and that her brother, Villanueva, Jr., was the one managing the same. Both
accused-appellant and her brother aver that it was their father who allowed
AAA to stay at the videoke bar upon the request of one of the waiters.
Ruling of the Regional Trial Court
The appellate court found the appeal bereft of merit. Enumerating the different
circumstantial evidence presented, the CA ruled that the conviction was
warranted. The appellate court held that the "[affidavit of desistance is] not
the sole consideration that can result to an acquittal"33 hence, in view of the
lack of circumstances to support the Affidavit of Desistance, acquittal was not
warranted. The pertinent and dispositive portions of the decision
read:ChanRoblesVirtualawlibrary
Thus, the trial court did not err in imposing upon accused-appellant the
penalty of life imprisonment and fine of P3,000,000.00. The order for the
cancellation of her permit to operate the ON TAP VIDEOKE BAR is also correct,
x x x
x x x x
Qualified Trafficking
(2) The means used include "by means of threat, or use of force, or other
forms of coercion, abduction, fraud, deception, abuse of power or of position,
taking advantage of the vulnerability of the person, or, the giving or receiving
of payments or benefits to achieve the consent of a person having control over
another person;" and
In an attempt to prove the first element, the prosecution stresses the fact that
accused-appellant is the registered owner of the On Tap Videoke Bar. The
prosecution insists that by merely being the registered owner, accused-
appellant necessarily committed the act of recruiting, maintaining or harboring
AAA. Such contention is misplaced. Recruiting, harboring, or maintaining a
person for the purpose of exploitation are acts performed by persons who may
or may not be registered owners of establishments. Thus, being the registered
owner per se does not make one criminally liable for the acts of trafficking
committed in the establishment. What the prosecution should have done was
to prove the act of trafficking by other means, and not by mere showing that
accused-appellant was the registered owner. The defense, on the other hand,
countered the allegation by presenting testimonies of Aquino, an employee of
the videoke bar; Villanueva, Jr., manager of the videoke bar and brother of
accused-appellant; and accused-appellant herself. The RTC found accused-
appellant's denial and the corroborating testimonies as unavailing and
incredible, for the reason that such testimonies did not come from
disinterested witnesses. This Court is not unaware of the longstanding doctrine
that findings of facts and assessment of credibility of witnesses are matters
best left to the trial court, which is in the best position to observe the
witnesses' demeanor while being examined.39 However, we take exception
from such rule, considering that there are facts and circumstances which if
properly appreciated, could alter the outcome of the case. That the defense
witnesses are closely related to accused-appellant —one being the brother and
manager of the videoke bar and the other being an employee—is not a
sufficient reason to disregard their testimonies. The declaration of interested
witnesses is not necessarily biased and incredible.40 More importantly, there
was no evidence suggesting that the testimonies of the witnesses were
untruthful to begin with.
The prosecution likewise failed to prove the third element—that the recruiting,
maintaining or harboring of persons is for the purpose of exploitation.
Curiously, AAA was seen by the prosecution witnesses at the videoke bar only
on the day the rescue operation was conducted. That AAA was exploited could
not be proven by her mere presence at the videoke bar during the rescue
operation. The prosecution should have presented evidence as to the nature
of work done by AAA, if any. Testimonies as to how often AAA was seen in the
bar while entertaining customers could have also lent credence to the
prosecution's contention that she was in the videoke bar because she was
being exploited.
Since AAA was not presented in court, the prosecution was not able to offer
direct evidence showing that accused-appellant actually recruited, harbored
or maintained AAA in the videoke bar for the purpose of exploiting her. Neither
can private complainant's testimony which merely revolved around the filing
of the complaint be considered direct evidence. Private complainant's
testimony, if considered in light of all the other evidence, is weak. Private
complainant testified roughly a month after the Affidavit of Desistance was
executed and filed; thus, she had every opportunity to deny the execution of
the Affidavit during the cross-examination. Instead of denying the veracity of
such Affidavit, private complainant confirmed its truthfulness and
accuracy.41 Though it can be said that private complainant's affirmative
answers were only prompted by the leading questions asked by the defense
lawyer during cross-examination, it cannot be denied that the prosecution did
not even bother to rebuild its case during re-direct examination. On re-direct
examination, private complainant merely testified as to matters regarding
AAA's adoption.42 She also claimed that she came to know of accused-
appellant's trafficking activities through AAA's friends whose identities she
cannot remember.43 However, on re-cross examination, private complainant
admitted that she did not validate such information before she reached out to
the TV program and the authorities.44chanrobleslaw
chanRoblesvirtualLawlibrary
During trial, PO1 Luardo and PO1 Velosa testified that their conversation
with accused went as follows:
chanRoblesvirtualLawlibrary
Accused: Naa, hulal kay magkuha ko. (Yes, just wait and I'll get them)
At that point, PO1 Luardo sent a text message to PSI Ylanan that they
found prospective subject.
After a few minutes, accused returned with AAA and BBB, private
complainants in this case.
Accused: Kining duha kauyon mo anil? (Are you satisfied with these
two?)
Similarly, the prosecution in the case at bar built their case around the
entrapment operation and the successful rescue of AAA; but unfortunately for
the prosecution, both PO2 Abas and PCI Balbontin are incompetent to testify
as to matters which occurred during the actual execution of the rescue and
entrapment because both witnesses were not present during the operation.
The testimonies of PO2 Abas and the Chief Inspector pale in comparison with
the testimonies of the police operatives in Casio.48Oddly, the prosecution
failed to present witnesses who could testify as to the actual conversation that
transpired between the undercover authorities and AAA. The testimony of
defense witness Aquino, the waiter, is the only evidence on record which
narrated certain details surrounding the unfolding of the rescue operation.
Aquino merely observed that upon being called by the two men, who turned
out to be undercover policemen, AAA approached their table and after five
minutes, policemen announced the operation.49 AAA's act of approaching the
table of the customers after being called is not unequivocal enough as to dispel
any other possible scenarios that could have occurred during their 5-minute
conversation. In the absence of any evidence categorically showing that a
crime was being committed in flagrante delicto or that AAA was performing
the tasks of a GRO when she approached the table, this Court cannot uphold
accused-appellant's conviction based on the rescue operation alone.
x x x x
Fourthly, it appeared that AAA was doing some kind of work at the videoke
bar. As testified by defense witness Willfred Aquino and Rosito Villanueva, Jr.:
chanRoblesvirtualLawlibrary
Q:
What was she doing there aside from
staying there, Mr. Witness?
chanRoblesvirtualLawlibrary
A:
She was helping in the washing of
the glasses in the kitchen, Sir.
chanRoblesvirtualLawlibrary
xxxx
Q:
When the police arrived, AAA was
there inside the Videoke Bar?
chanRoblesvirtualLawlibrary
Witness:
chanRoblesvirtualLawlibrary
A:
She was at the back of the kitchen.
chanRoblesvirtualLawlibrary
COURT:
chanRoblesvirtualLawlibrary
That AAA was wearing skimpy clothing similar to those worn by the GROs at
the videoke bar during the rescue operation is not inconsistent with the
defense's position that AAA merely sought refuge and shelter at the bar after
she ran away from home. It is highly possible that AAA borrowed clothes from
the videoke bar employees, considering that she ran away from home and
was unable to take all her belongings with her. That accused-appellant showed
propensity for hiring workers without permits is irrelevant in the case at bar.
One may be equipped with the proper permits and yet still be guilty of
trafficking. Accused-appellant's propensity for not following ordinances does
not necessarily prove commission of the crime of human trafficking. Lastly,
even if it be conceded that AAA was washing dishes at the back of the kitchen,
such circumstance is still not inconsistent with the defense's position. As a
token of gratitude for allowing her to temporarily stay at the bar, AAA could
have voluntarily done the chores. From the foregoing, it is obvious that the
totality of circumstantial evidence will not lead to an inescapable conclusion
that accused-appellant committed the crime charged. It bears stressing that
"where the inculpatory facts and circumstances are capable of two or more
explanations, one of which is consistent with the innocence of the accused and
the other consistent with his guilt, then the evidence does not meet or hurdle
the test of moral certainty required for conviction."54chanrobleslaw
The prosecution manifested that they will adopt the evidence presented during
the hearing of the Petition for Bail as the same evidence in the main case, with
a further manifestation that other witnesses will be presented during the trial.
In fact, a side by side comparison of the RTC Order granting accused-
appellant's petition for bail and the RTC Decision convicting accused-appellant
would reveal that summaries of witnesses' testimonies contained in the former
were merely lifted and copied verbatim in the latter.
After an evaluation of the evidence and after hearing the testimonies of PO2
Abas and private complainant, the Petition for Bail was granted by the RTC,
to wit:ChanRoblesVirtualawlibrary
At this moment the prosecution failed to substantiate the allegations in the
information that accused recruited and hired minor [AAA] to work as Guest
Relations Officer (GRO) of her establishment, thereby exploiting and taking
advantage of her vulnerability as a child. The mere presence of the minor at
the establishment, cannot by itself, prove the fact of hiring and recruitment.
It is unfortunate at this juncture, none of the prosecution witnesses was able
to testify on this regard, and was only able to confirm the minor's presence at
the videoke bar. Even the alleged mother of the minor testified that she never
saw [AAA] drinking, smoking or singing at the establishment. She further
testified that the minor admitted to her that she was never hired to work at
the establishment and the she was only there in order for her to have a place
to stay and reside.
xxx This court is bound by the principle that in all criminal cases, all doubts
should be resolved in favor of the accused, xxx From the evidence presented
so far, without touching on the actual merits and proceedings of the instant
case, this court cannot at this point say that the evidence against the accused
is strong."55
It should be noted that when the prosecution witnesses were presented during
the bail hearing, they were subjected to cross, re-direct and re-cross-
examinations, as well as inquiries by the court; thus, as expected, the court
no longer recalled the witnesses for additional examination during the trial.
Unfortunately for the prosecution, they were only able to present one more
witness, PCI Balbontin, before they finally rested their case.
While the Court is aware that a bail hearing is merely for the purpose if
determining whether the evidence of guilt is strong and that the same is not
an adjudication upon the merits, we note that in the case at bar, the RTC
Order granting the petition for bail casts doubt upon accused-appellant's
conviction. In its Order granting the petition for bail, the RTC noted that none
of the prosecution witnesses testified as to the fact of hiring and recruitment.
Considering that the only additional witness the prosecution presented during
trial was PCI Balbontin, it baffles this Court why the RTC found accused-
appellant guilty beyond reasonable doubt when the Chief Inspector's
testimony was limited to procedural details regarding the filing of the
complaint, forming of the task force and the interview conducted by the TV
crew. If the Chief Inspector's additional testimony was only limited to those
matters, it follows that when the prosecution rested its case, not one of their
witnesses testified as to the fact of hiring and recruitment and neither did the
documentary evidence submitted establish the same. Before this Court is
essentially the same set of evidence that was evaluated by the RTC when it
ruled that the evidence of guilt was not strong; we thus see no reason why
the same set of evidence, only supplemented by a testimony regarding
irrelevant procedural matters, would warrant a finding of guilt beyond
reasonable doubt.
On 15 May 2004 at around 3:30 p.m., upon a tip-off received by Senior Police
Officer 2 Rito A. Montederamos (SPO2 Montederamos), Senior Police Officer 1
Allan B. Balingit (SPO1 Balingit), and Police Officer 1 Jesicar L. Maglacion (PO1
Maglacion) of the Philippine Drug Enforcement Agency (PDEA), Police Senior
Inspector Christine S. Tan (S/Insp. Tan) formed a team of agents to conduct
a buy-bust operation to entrap accused-appellant Zacaria.
The police officers brought Zacaria to the PDEA Office for booking and
documentation. SPO2 Montederamos turned over the seized items to Police
Officer 1 Janmark V. Malibiran (PO1 Malibiran), the Desk Officer, for recording.
After the recording, the seized items were returned to SPO2 Montederamos
who taped, initialed, wrote the name of Zacaria, and placed it inside a
cellophane before placing them in his locker in their office.
On the other hand, the defense presented the following witnesses: (1)
accused-appellant Zacaria, (2) Bai Norma Saluang Al Hadja, and (3) Zacaria's
wife, Guiaria Ingo Zacaria.6chanrobleslaw
The RTC rejected Zacaria's contention that the allegations against him were
baseless because the prosecution failed to prove that there was indeed a sale
of shabu as there was no simultaneous actual exchange of the money and
the shabu. According to Zacaria, the charges against him must fail because
the prosecution failed to present the buy-bust money. Contrary to the
averments of Zacaria, the RTC held that it is not necessary to present the buy-
bust money.7 As already held, proof of actual payment of the buy-bust money
is not necessary.8 Mere delivery of the drug purchased is sufficient.
Anent the non-compliance with Section 21 of R.A. No. 9165, the RTC ruled
that the procedure laid down is hot iron-clad. The implementing rules
provide:ChanRoblesVirtualawlibrary
xxxx. Provided, further, that non-compliance with these requirements under
justifiable grounds, as long as the integrity and the evidentiary value of the
seized items are properly preserved by the apprehending officer/team, shall
not render void and invalid such seizures of and custody over said
items.9chanroblesvirtuallawlibrary
While the RTC acknowledged the presence of inconsistencies in some details
of the prosecution's witnesses, the RTC resolved that it is by these
inconsistencies which make the prosecution evidence more compelling. In any
case, the RTC held that these inconsistencies are minor details which do not
divest the substantial accuracy of the testimonies.
With regard to the defense's allegation of extortion and violence against the
arresting officers, the RTC held that the defense's bare allegation cannot
prevail over the prosecution evidence. The defense did not file any case
against the arresting officers or present any medical certificate to prove any
maltreatment.
Based on the totality of evidence, the RTC found Zacaria guilty beyond
reasonable doubt of violations of Sections 5 and 11 of R.A. No. 9165. On 5
January 2009, the RTC convicted Zacaria. The dispositive portion of the RTC
Decision reads:ChanRoblesVirtualawlibrary
WHEREFORE, in view of the foregoing premises, the Court declares ESMAEL
WANGI ZACARIA, Filipino, 40 years old, and a resident of SK Pindatun (sic),
Cotabato City, GUIILTY beyond reasonable doubt of the crime for Violation of
Section 11, Article II of RA 9165 in Criminal Case No. 54,425-2004 and for
Violation of Section 5, Article II of RA 9165 in Criminal Case No. 54,426-2004.
ACCORDINGLY, said accused is hereby sentenced to
wit:ChanRoblesVirtualawlibrary
CRIMINAL CASE NO. 54,425-2004
To suffer the penalty of an Imprisonment of TWELVE (12) YEARS and one (1)
day to twenty (20) years and a fine of Three Hundred Thousand Pesos
(Php300,000.00) Philippine Currency; and in
CRIMINAL CASE NO. 54,426-2004
If the prosecution finds that the substances involved in these cases will still
be used by them in some other case/s, they must inform the Court
immediately after the promulgation of the decision, but not later than five (5)
days, otherwise the turn-over and destruction of the substances involved in
these cases shall be carried out.
SO ORDERED.10chanroblesvirtuallawlibrary
Ruling of the Court of Appeals
The CA affirmed the RTC Decision. The CA rejected Zacaria's contention that
because there was no simultaneous actual exchange of the money and shabu,
and the prosecution failed to present in evidence the buy-bust money, an
acquittal is in order. The CA held that contrary to the defense's averments, it
is enough that the prosecution was able to present evidence that the
transaction or sale actually took place, coupled with presentation in court of
the corpus delicti as evidence. "What is material in prosecutions for illegal sale
of shabu is the proof that the transaction or sale actually took place, coupled
with the presentation in court of the corpus delicti as evidence."11 This has
been complied with by the prosecution. As borne by the records, SPO2
Montederamos testified on the sale transaction and identified the shabu in
court—SPO2 Montederamos identified Zacaria as the seller.
The CA averred that the fact that no money changed hands is not a fatal
defect. There is no requirement that in buy-bust operations, there must be a
simultaneous exchange of the marked money and the prohibited drug between
the poseur-buyer and the pusher.
The failure to present the buy-bust money is likewise not fatal. "The marked
money used in the buy-bust operation is not indispensable[,] but merely
corroborative in nature, xxx Neither law nor jurisprudence requires the
presentation of any money used in the buy-bust operation."12chanrobleslaw
While the arresting officers failed to strictly comply with Section 21, the seized
items were marked and kept to preserve their integrity before their inventory.
There is nothing to indicate that the seized items were tampered.
Finding no reversible error in the findings of fact and conclusions of law of the
lower courts, the Court resolves to AFFIRM in toto the Decision of the Court
of Appeals.
SO ORDERED.chanRoblesvirtualLawlibrary
Factual Antecedents
On April 19, 2010, PIRRA tiled with the CIAC a Complaint6 for Damages
against PSHS relative to the construction contracts for PSHS' Project A
(Academic Building I - Phases IV and V, and Girls' Dormitory Building I - Phase
IV); and its Project C (Academic Building II - Phase I, Boys' Dormitory Building
- Phase I, and School Canteen - Phase I).
On Project A
On October 27, 2008, PIRRA participated in and won the bidding for Project A
for a total contract price of P24,290,854.10. On December 8, 2008, PSHS
issued a Notice of Award7 to PIRRA. Thereafter, the parties entered into a
Contract Agreement8 and a Notice to Proceed9 was issued to PIRRA. The
duration of Project A was for 180 days from December 20, 2008,10 with
approved 65-day extension until August 22, 2009.11 As mobilization fee, PSHS
paid PIRRA 15% of the contract price.12 Thereafter, it paid PIRRA its Partial
Billing (PB) Nos. 1 to 413 amounting to P23,194,020.95.14chanrobleslaw
On July 29, 2009, PIRRA requested payment for its PB No. 5. 15 On August 6,
2009, it sent PSHS a letter16 requesting for substantial acceptance and
completion of Project A and submitted its Summary of Accomplishment
Report17 stating that as of July 24, 2009, the accomplishment for Project A
was already at 94.09%. In its reply,18 PSHS reminded PIRRA that the due date
of the contract was August 22, 2009 but the power distribution activities had
not yet been installed.
On October 30, 2009, PSHS informed PIRRA that its PB No. 5 could not be
processed yet as it was awaiting the C0A Report.25cralawred On the same day,
the COA sent its Inspection Report dated October 7, 2009 to
PSHS.26chanrobleslaw
On January 6, 2010, PSHS informed PIRRA that it would take over Project A
in the interest of the government, and to prepare for its occupancy for School
Year 2010-2011. It also stated that it would implement the repair of the
identified defects through a third party, the expenses of which would be
deducted from PIRRA's final billing. It declared that the disallowances
indicated in the COA Report (particularly its Findings Nos. 3 and 7) and its
construction materials, which PIRRA allegedly used without permission would
also be deducted from the final billing.28 Said COA Findings Nos. 3 and 7 are
as follows:ChanRoblesVirtualawlibrary
FINDINGS #3
The steel awning windows which were replaced by glass framed sliding
windows were not presented during the course of the inspection, thereby
disallowing it[s] cost equivalent computed as follows:
x x x x
FINDINGS #7
The item for Power distribution lines amounting to Php1,955,000.00 were not
implemented at the time of the inspection, the contract time have elapsed on
August 22, 2009, no request for time extension has been requested/presented
hence, liquidated damages should be imposed with computation as shown
below:
chanRoblesvirtualLawlibrary
1 of 1%
(1,955,000.00) Php76,245.0029
(39 days)
10
In a letter dated January 25, 2010, PIRRA questioned PSHS' takeover of the
project; it pointed out that the parties already agreed to jointly request the
COA for the re-inspection of Phase IV of Project A.30PIRRA claimed that PSHS'
takeover of Project A is violative of its rights as the winning contractor. It
argued that COA's inspection on Project A was conducted without the presence
of PIRRA; and, the findings of the COA are subject to protest for being one-
sided. It added that PSHS agreed to having a COA re-inspection done as it
was aware mat the September 29, 2009 COA Inspection was invalid31 since
PIRRA was not properly notified thereof.
On Project C
On December 2, 2008, PIRRA participated in and won the bidding for Project
C for a contract price of P9,945,361.85. On January 29, 2009, PSHS issued a
Notice of Award32 to PIRRA. On June 22,2009, the parties entered into a
Contract Agreement.33 On July 9, 2009, PIRRA, received a Notice to
Proceed.34The project duration was 150 days, from July 20, 2009 until
December 17, 2009.35 PSHS paid PIRRA 15% of the contract price as
mobilization fee.36chanrobleslaw
On July 24, 2009, PIRRA requested the suspension of the construction of the
canteen because PSHS decided to relocate the canteen site to a difficult place
of construction.37 PSHS granted this request.38chanrobleslaw
As cited above, on October 2, 2009, the parties entered into a Joint Inspection
Agreement.41 As regards Project C, they agreed that PIRRA shall submit to the
Consultant the shop drawing for the foundation; in turn, the Consultant shall
submit the cross-sections of the foundation and evaluate PIRRA's claim.
On October 12, 2009, PIRRA sent a letter42 to PSHS stating that delay was
incurred on Project C because it received no response from PSHS or from the
Consultant on its request for time suspension. In the same letter, PIRRA
requested a total time suspension on Project C. In its reply,43 PSHS alleged
that it found out that as of October 12, 2009, PIRRA suspended work on
Project C without its approval.
As previously stated, on November 20, 2009, the parties entered into a Joint
Agreement.44 As regards Project C, they agreed, among others, that PSHS,
along with the Consultant, would visit the site and that the Consultant will
prepare a detailed drawing (for the VO) to be submitted to PIRRA. After more
than two months from said Joint Agreement, and through a letter 45 dated
February 8, 2010, PSHS informed PIRRA that it was terminating the Project C
contract because of the latter's delay, default, and abandonment. On February
23, 2010, it issued an Order of Termination against PIRRA.46chanrobleslaw
For its part, PSHS countered that it a) validly took over Project A, and b)
validly terminated the contract for Project C.
On Project A
PSHS explained that it put on hold PB No. 5 as there were still works that must
first be resolved and final inspection must first be carried out on the
project.48 It further alleged that after signing the November 20, 2009 Joint
Agreement, PSHS received no communication from PIRRA so that they could
jointly prepare a communication addressed to COA; thereafter, upon inquiry
to the COA, PSHS learned that if there was no subsequent accomplishment or
rectification in Project A, then there was no more reason for a re-
inspection.49 It stated that the contract for Project A ended on August 22,
2009 but only at about 92% completion;50 thus, it took over the same.
On Project C
PSHS claimed that after inspecting Project C and evaluating the scope of a
supposed VO, the shop drawings were finished and ready for submission to
PIRRA but it did not release it as PIRRA's owner and even his representative
no longer communicated with them, as well as refused to receive
communication from PSHS. Despite the meeting before the DOST, PIRRA still
filed a complaint against PSHS' officers with the Ombudsman, among other
reasons.51chanrobleslaw
PSHS insisted that it validly terminated the contract for Project C since PIRRA
had abandoned its work thereon since October 12, 2009; on December 17,
2009, the contract for Project C expired and through PIRRA's own fault, it
incurred a negative slippage of 75.99%. PSHS added that the continued
refusal of PIRRA to receive communication from PSHS was a clear showing of
abandonment and sabotage of a government project.52chanrobleslaw
On July 30, 2010, the CIAC appointed Engr. Potenciano A. Leoncio, Jr. as
Technical Expert who would conduct ocular and technical inspection on
Projects A and C.53chanrobleslaw
On January 26, 2011, the CIAC rendered its Final Award, the dispositive
portion of which reads:ChanRoblesVirtualawlibrary
WHEREFORE, the Tribunal renders its award in favor of Claimant (PIRRA) and
against Respondent (PSHS), (a) holding it liable for delay in paying partial
Billing No. 5 and in taking over Project A without any legal basis; (b) holding
it liable for delay in submitting the revised drawings and extra work order to
Claimant the following sums:
1. P1,273,001.64 as residual value of Partial Billing No. 5 for Project
A;
2. P2,050,176.59 as reasonable compensation and actual damages
due for the wrong termination of the Project C Contract;
3. P300,000.00 in moral damages;
4. P200,000.00 in exemplary damages;
5. P100,000.00 as attorney's fees; and cralawlawlibrary
6. Costs of arbitration, including professional fee of the Technical
Expert and transcription costs.
Within five (5) working days from his receipt of the Final Award, Claimant shall
deliver to Respondent the following finished or fabricated items due to
Respondent:
(b) fabricated steel bars, steel awnings, windows with security grills and steel
railings for Academic Building II, Phase I with a total value of P202,925.18.
Claimant shall submit his Compliance within five (5) working days from notice
of this Final Award, showing proof of delivery to or receipt by Respondent of
the finished or fabricated items. Respondent shall receive the same items upon
delivery by the Claimant.
SO ORDERED.56chanroblesvirtuallawlibrary
The CIAC decreed that PSHS had no basis in taking over Project A. It stressed
that during the pendency of said project, PIRRA requested payment of its PB
No. 5 based on substantial acceptance and completion with 94.09%
accomplishment; in turn, PSHS created an Inspectorate Team for the turnover
of the project. It noted that the punch listings of the Inspectorate Team, the
COA inspection and its Report, were all made beyond the project completion
date on August 22, 2009.
The CIAC also stressed that the COA inspection is not a condition precedent
for the payment of any progress billing or for the acceptance of Project A;
thus, the COA Report cannot be used to refuse or delay payment of PB No. 5.
It likewise declared that the contract for Project A did not specify that the
completion date on August 22, 2009 was due to the opening of classes in June
2010, and the notice of takeover did not elite PIRRA's purported delay as the
cause of the takeover.
As regards Project C, the CIAC stated that PSHS failed to comply with the
November 20, 2009 Joint Agreement that PSHS would submit revised
drawings and issue a VO on Project C. It thus held that PSHS breached its
obligations and invalidly terminated the contract for Project C. However,
despite such invalid termination, the CIAC explained that PSHS may withdraw
at will the construction of work, subject to indemnification for the expenses,
work, and the uselessness PIRRA may have obtained, and damages.
The CIAC held that PIRRA was also entitled to moral damages as PSHS
committed bad faith in refusing to submit the revised drawings and to issue
the VO for Project C. It likewise awarded exemplary damages because of
PSHS' bad faith in refusing to perform its obligations under Project A and C
contracts, in challenging the CIAC's jurisdiction, and in objecting to arbitrate.
Lastly, it awarded attorney's fees on the ground that PIRRA was compelled to
arbitrate to protect its interests; and that since exemplary damages was
awarded, the costs of the arbitration, including the fee of the Technical Expert,
and the transcription costs were granted to PIRRA.
Unsatisfied, PSHS filed with the CA a Petition for Review assailing the CIAC's
Final Award.
Moreover, PSHS argued that it is not liable for moral and exemplary damages
as it had legal bases for refusing to pay PB No. 5 for Project A, and for
terminating the contract for Project C. It likewise insisted mat it is not liable
for attorney's fees, and it should be PIRRA which should pay arbitration costs,
the fee of the Technical Expert, and transcription costs.
Furthermore, PIRRA alleged that PSHS did not validly terminate the contract
for Project C. It maintained that PSHS breached the contract when it failed to
submit the revised drawing and issue a VO on Project C, giving rise to PIRRA's
entitlement to damages.
On January 20, 2012, the CA rendered the assailed Decision, the dispositive
portion of which reads:ChanRoblesVirtualawlibrary
WHEREFORE, premises considered, the instant petition for review is
PARTIALLY GRANTED. Accordingly, the January 26, 2011 Final Award of the
Construction Industry Arbitration Commission (CIAC) is MODIFIED as follows:
1. Petitioner (PSHS) is ordered to pay respondent (PIRRA) the
residual value of Partial Billing No. 5 in the amount of
P706,077.28;
2. Petitioner is ordered to pay respondent the amounts of
P1,019,399.59 representing the value of the 25.25%
accomplishment of Project C, and P202,925.18 representing the
value of fabricated steel bars, steel awnings, windows with
security grills and steel railings;
3. The awards for rental income and lost profits from project C are
deleted;
4. The awards for moral and exemplary damages are deleted;
5. The award for attorney's fees in the amount of P100,000.00 is
affirmed; and cralawlawlibrary
6. Petitioner is exempt from payment of the cost of filing fee and
transcription cost; however, it shall jointly pay with the
respondent the fees for the arbitrator and the technical expert.
In all other respects, the Final Award is hereby AFFIRMED.
SO ORDERED.57chanroblesvirtuallawlibrary
With regard to Project A, the CA ruled that when PSHS created an Inspectorate
Team and ordered an inspection for punch listing, it treated Project A as
substantially completed. It noted that even the COA Report indicated that
Project A was practically 100% complete, save for some minor deficiencies.
Thus, it held that PSHS should be held liable for the PB No. 5 less the defective
works.
Anent Project C, the CA decreed that PSHS validly terminated the contract for
it. It held that during the pendency of Project C contract, PIRRA requested the
suspension of work due to the relocation of the canteen site; PSHS approved
this request. PIRRA requested another suspension, this time, for time
suspension; PSHS denied this second request.
The CA reasoned that since there was no showing that the affected work fell
on critical path, there was no reason for the second suspension of work. It
noted that without PSHS' approval, PIRRA suspended work on Project C on
October 12, 2009; thus, even before the November 20, 2009 Agreement
(which CIAC used as basis in justifying PIRRA's work suspension), PIRRA
already incurred delay on Project C. The CA added that PIRRA not only
incurred delay but was also guilty of refusing to accept correspondences from
PSHS and of failing to comply with the requirements for a VO.
Furthermore, the CA ruled that the CIAC erred in awarding rental income for
PIRRA's equipment. It explained that PIRRA was the one which proceeded with
the suspension of work on Project C; if its equipment became idle, PIRRA
should bear the loss caused by their use or non-use. Also, it found PSHS not
guilty of any act that would support the grant of moral and exemplary
damages. It likewise held that both parties were liable for the fees of the
Arbitrator arid the Technical Expert as their respective claims were partly
meritorious.
Nonetheless, the CA affirmed that PSHS is liable for the value of the work done
on Project C because otherwise there would be unjust enrichment on the part
of PSHS. It also sustained the award of the value of fabricated steel bars, steel
awnings, windows with grills and steel ratings to PIRRA as there was no
showing that the CIAC misappreciated facts in arriving at this technical finding.
Lastly, it agreed that PIRRA was entitled to attorney's fees since it was
compelled to litigate to protect its rights.
As regards Project C, PSHS assorts that it already paid the value of the work
done for Project C. It likewise claims that it is not liable for the value of the
fabricated steel bars, steel awning windows with security grills and steel
railings being claimed by PIRRA.
Finally, PSHS alleges that attorney's fees should not be awarded to PIRRA
since the latter has no valid claim as far as PB No. 5 on Project A is concerned;
and PSHS already paid the value of work done on Project C. It also posits that
even if it is ultimately held liable for the residual value of PB No. 5 for Project
A, and of the value of the work done on Project C, its funds, being government
funds, cannot be seized under a writ of execution.
Respondent's Arguments
PIRRA counters that PSHS should be held liable for PB No. 5 because when
PSHS created the Inspectorate Team, PSHS treated Project A as substantially
completed. It also questions PSHS5 belated submission of the Summary of
Progress Billings when it filed a Motion for Reconsideration with the CA, and
argues that PSHS' claim for overpayment is without merit. In fine, PIRRA
argues that PSHS never contested its Monthly Certificate of Payment attached
to its letter dated July 29, 2009, and which was submitted during the
proceedings with the CIAC.
With regard to Project C, PIRRA maintains that PSHS invalidly terminated the
contract as the latter failed to submit the required drawings and to issue a VO
for the project. It insists that it was PSHS which incurred delay and breached
the contract for Project C.
The Petition seeks a review of the factual findings of the CIAC and the CA on:
a) whether PSHS treated Project A as substantially completed such that it is
liable for the residual value of PB No. 5; b) whether PSHS validly terminated
the contract for Project C; c) whether PSHS is liable for the value of the steel
bars, awning windows with security grills ana railings fabricated by PIRRA;
and for attorney's fees.
Our Ruling
Settled is the rule that the findings of fact of quasi-judicial bodies, which have
acquired expertise on specific matters within their jurisdiction, are generally
accorded respect and finality, especially when affirmed by the CA.60 As such,
in this case, the Court upholds the factual findings of the CIAC, a quasi-judicial
body that has jurisdiction over construction disputes, that are affirmed by the
CA and are fully supported by the evidence on record.61chanrobleslaw
First, the Court sustains the finding that PSHS accepted and treated Project A
as a substantially completed project, and for which reason, PSHS' takeover
thereof is of no moment.
In addition, as provided for under Article 1234 of the Civil Code, if the
obligation had been substantially performed in good faith, the obligor, in this
case, PIRRA, may recover as if it had strictly and completely fulfilled its
obligation, less the damages suffered by the obligee or in this instance,
PSHS.63chanrobleslaw
More importantly, consistent with the foregoing rule that the Court accords
respect and finality on the factual findings of the CIAC, as affirmed by the CA,
the Court sustains the finding that PSHS treated Project A as substantially
completed; thus, it is liable to pay PIRRA the residual value of PB No. 5,
computed by the CA as follows:ChanRoblesVirtualawlibrary
The foregoing computation is consistent with that contained in the body of the
CIAC's Final Award. However, as noted by the CA, in the dispositive portion of
its Final Award, the CIAC indicated the value of PB No. 5 without deductions.
As a result, the CA correctly modified the amount due, which is the Net Value
of PB No. 5 amounting to P706,077.29.
Second, the Court affirms the finding that PSHS is liable to pay the value of
the steel bars, steel awning windows with security grills and steel railings
fabricated by PIRRA. It being apparent that the CIAC arrived at this finding
only after a thorough consideration of the adduced evidence, and which finding
was in fact duly affirmed by the CA, the same may no longer be reviewed by
the Court.65chanrobleslaw
Third, the Court agrees with the CA that the contract for Project C was validly
terminated.
It is worth stressing that the CIAC and the CA arrived at varying conclusions
on whether PSHS validly terminated the contract for Project C. On one hand,
the CIAC opined that PSHS breached its obligation under this contract when it
failed to submit the revised drawings and to issue the VO per the parties'
Agreement on November 20, 2009. On the other hand, the CA ruled that PSHS
validly terminated the contract because PIRRA suspended work on the project
as early as October 12, 2009 without any approval from PSHS, and as such,
PIRRA was in default even prior to the November 20, 2009 Agreement.
In the November 20, 2009 Agreement, the parties agreed on how to proceed
with the contract for Project C, and the pertinent portions of their Agreement
read:ChanRoblesVirtualawlibrary
1. [PSHS] together with its consultant shall visit the project site and the latter
shall prepare a detailed drawing for the variation order to be submitted to
[PIRRA].
2. [PIRRA], based on the detailed drawing submitted by Consultant, shall
prepare a proposal for variation order.
4. [PIRRA] shall submit revised payment schedule (Bar Chart) for [PSHS]'s
approval.
15.1. The Procuring Entity shall terminate this Contract for default when any
of the following conditions attend it is implementation:
15.3 Due to its own fault and after this Contact time has expired, the
Contractor incurs delay in the completion of the Work after this Contact has
expired; or
x x x x
x x x x
17.2 The Procuring Entity or the Contractor may terminate this contract if the
other party causes a fundamental breach of this Contract:
The Court, nonetheless, agrees with the CA that PIRRA is entitled to the value
of the work done on Project C pursuant to the principle of quantum meruit and
to avoid unjust enrichment on the part of PIRRA. "Quantum meruit means
that, in an action for work and labor, payment shall be made in such amount
as the plaintiff reasonably deserves x x x as it is unjust for a person to retain
any benefit without paying for it."71 Here, records show that PIRRA had a
25.25 % accomplishment on Project C. To deny payment thereof would result
in unjust enrichment of PSHS at the expense of PIRRA. Hence, PSHS must pay
PIRRA the value of the work done on Project C.
Fourth, the Court affirms the award of attorney's fees since PIRRA was
compelled to file this case to recover what is rightfully due to it and to protect
its interests relating to its contracts with PSHS.72chanrobleslaw
Finally, the Court holds that PSHS,' contention - that even if it is held iable for
the residual value of PB No. 5 for Project A, and of the value of the work done
on Project C, its funds cannot be seized as they are government funds - is
untenable. The State, through PSHS, had received and accepted the services
rendered by PIRRA. It should therefore be held liable to pay the latter for
otherwise a grave injustice would be caused to PIRRA, and there would be
unjust enrichment on the part of the State. Indeed, justice and equity demand
that contractors be duly paid for the construction work they had done on
government projects.73chanrobleslaw
In view of the foregoing, the Court finds that the CA committed no reversible
error in ruling that PSHS is liable to pay PIRRA (a) the residual value of PB No.
5 for Project A; (b) the value of the fabricated steel bars, steel awning windows
with security grills and steel railings, and of the work done for Project C; and
(c) attorney's fees. Pursuant to prevailing jurisprudence, the Court imposes
interest on all monetary awards at six percent (6%) per annum computed
from the time they attained finality until full payment thereof.74chanrobleslaw
WHEREFORE, the Petition is DENIED. The Decision dated January 20, 2012
and Resolution dated July 23, 2012 of the Court of Appeals in CA-G.R. SP No.
118152 are AFFIRMED with MODIFICATION that the monetary awards
shall earn interest at the rate of 6% per annum from the time the awards
become final until their full satisfaction.
SO ORDERED.chanRoblesvirtualLawlibrary
In a Decision13 dated June 29, 2012, the Labor Arbiter (LA) ruled in petitioner's
favor and, accordingly, ordered respondent to pay the aggregate sum of
P80,145.52 representing his backwages and separation pay.14chanrobleslaw
In a Decision23 dated July 10, 2015, the CA set aside the NLRC ruling and,
instead, dismissed petitioner's complaint for illegal dismissal with money
claims for lack of merit.24 Contrary to the findings of the LA and the NLRC, the
CA held that the elements of payment of wages and control in determining an
employer-employee relationship were absent, considering that petitioner was
not paid wages, but commissions only, which amounts varied depending on
the kind of cargo, length of trip, and fuel consumption. The CA observed that
there was no evidence to show that respondent exercised control over the
means and methods by which petitioner was to perform his duties. Further,
petitioner failed to refute the claims that: (a) the payment of his commission
was dependent on his efficiency, discipline, and industry, which factors were
beyond respondent's control; (b) he was not required to regularly report for
work and may make himself available to other companies; and (c) the
company ID was merely issued to him for the purpose of apprising
respondent's clients that he was the authorized
driver. cralawredchanrobleslaw
25
Guided by the foregoing considerations, the Court finds that the CA committed
reversible error in granting respondent's certiorari petition since the NLRC did
not gravely abuse its discretion in ruling that petitioner was respondent's
regular employee and, hence, was illegally dismissed by the latter. In this
case, respondent disclaims any liability for illegal dismissal, considering that,
in the first place, no employer-employee relationship existed between him and
petitioner.
Contrary to respondent's submission, which was upheld by the CA, the Court
agrees with the labor tribunals that all the four (4) elements are present in
this case:
Fourth. The presence of the element of control, which is the most important
element to determine the existence or absence of employment relationship,
can be safely deduced from the fact that: (a) respondent owned the trucks
that were assigned to petitioner; (b) the cargoes loaded in the said trucks
were exclusively for respondent's clients; and (c) the schedule and route to
be followed by petitioner were exclusively determined by respondent. The
latter's claim that petitioner was permitted to render service to other
companies was not substantiated and there was no showing that he indeed
worked as truck driver for other companies. Given all these considerations,
while petitioner was free to carry out his duties as truck driver, it cannot be
pretended that respondent, nonetheless, exercised control over the means
and methods by which the former was to accomplish his work. To reiterate,
the power of control refers merely to the existence of the power. It is not
essential for the employer to actually supervise the performance of duties of
the employee, as it is sufficient that the former has a right to wield the
power,37 as in this case.
For a dismissal to be valid, the rule is that the employer must comply with
both the substantive and procedural due process requirements. Substantive
due process requires that the dismissal must be pursuant to either a just or
an authorized cause under Articles 297, 298, and 299 (formerly Articles 282,
283 or 284)38 of the Labor Code, as amended.39chanrobleslaw
Procedural due process, on the other hand, mandates that the employer must
observe the twin requirements of notice and hearing before a dismissal can
be effected.40chanrobleslaw
In this case, suffice it to say that aside from respondent's averment that
petitioner committed "serious transgressions and misconduct" resulting in the
former's loss of trust and confidence, no other evidence was shown to
substantiate the same. Such averment should be properly deemed as a self
serving assertion that deserves no weight in law.41 Neither was petitioner
accorded procedural due process as he was merely informed by respondent's
helper that he was already terminated from his job. Clearly, respondent
illegally dismissed petitioner, and as such, the latter is entitled to backwages
and separation pay in lieu of reinstatement, as correctly ruled by the labor
tribunals.
WHEREFORE, the petition is GRANTED. The Decision dated July 10, 2015
and the Resolution dated October 21, 2015 of the Court of Appeals in CA-G.R.
SP No. 129784 are hereby REVERSED and SET ASIDE. The Decision dated
November 16, 2012 and the Resolution dated February 28, 2013 of the
National Labor Relations Commission in NLRC LAC No. 08-002277-12 / NLRC
NCR Case No. 12-18409-11 are REINSTATED.
SO ORDERED.chanRoblesvirtualLawlibrary
On March 26, 2015, however, respondent belatedly filed his Answer10 praying
for the dismissal of the instant complaint. Respondent averred that he had no
lawyer-client relationship with complainant as his client was the latter's wife,
Reposo. Further, while respondent admitted the receipt of P100,000.00 and
that no petition for annulment was filed, he denied being remiss in his duties
as a lawyer, explaining that such non-filing was due to, inter alia, Reposo's
failure to pay the full acceptance fee amounting to P150,000.00, as well as to
produce her psychiatric evaluation report. Finally, respondent claimed that his
failure to return the P100,000.00 fee he collected was due to the fact that he
lost most of his assets due to Typhoon Yolanda. Nevertheless, he signified his
intention to return said fee as soon as he recovers from his dire financial
condition.11chanrobleslaw
The IBP's Report and Recommendation
In its Report and Recommendation12 dated April 21, 2015, the IBP-CBD found
respondent administratively liable and, accordingly, recommended that he be
meted the penalty of suspension from the practice of law for a period of six
(6) months and ordered to return the amount of P100,000.00 with legal
interest from April25, 2014 to complainants. It was likewise recommended
that respondent show compliance with such directives within thirty (30) days
from the finality of the suspension order by the Court.13 Essentially, the IBP-
CBD found respondent guilty of violating Canon 18 of the CPR for neglecting
a legal matter entrusted to him (i.e., the filing of the petition for annulment
of marriage), and Canon 16 of the same for his failure to hold in trust all the
money he received from complainant.14chanrobleslaw
In a Resolution15 dated June 20, 2015, the IBP Board of Governors adopted
and approved the aforesaid report and recommendation with modification
deleting the imposition of legal interest.
The Issue Before the Court
The essential issue in this case is whether or not respondent should be held
administratively liable for violating the CPR.
The Court's Ruling
Once a lawyer takes up the cause of his client, he is duty-bound to serve the
latter with competence, and to attend to such client's cause with diligence,
care, and devotion whether he accepts it for a fee or for free. He owes fidelity
to such cause and must always be mindful of the trust and confidence reposed
upon him.18 This is commanded by Rule 18.03, Canon 18 of the CPR, which
reads:ChanRoblesVirtualawlibrary
CANON 18 - A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND
DILIGENCE.
x x x x
Rule 18.03- A lawyer shall not neglect a legal matter entrusted to him, and
his negligence in connection therewith shall render him liable.
However, respondent admittedly breached this duty when he failed to prepare,
much less file, the appropriate pleading to initiate complainant and Reposo's
case. before the proper court. Respondent's additional contention that his
failure to file the petition was due to complainant and Reposo's failure to remit
the full acceptance fee of P150,000.00 is not an excuse to abandon his client's
cause considering that his duty to safeguard his client's interests commences
from his retainer until his effective discharge from the case or the final
disposition of the entire subject matter of litigation. To reiterate, respondent's
act of agreeing to handle complainant's case, coupled with his acceptance of
the partial payment of P100,000.00, already established an attorney-client
relationship that gave rise to his duty of fidelity to the client's
cause.19 Indubitably, respondent's neglect of a legal matter entrusted him by
complainant and Reposo constitutes inexcusable negligence for which he must
be held administratively liable.
Further, respondent also violated Rules 16.01 and 16.03, Canon 16 of the CPR
when he failed to return the amount of P100,000.00 representing the legal
fees that complainant paid him, viz.:ChanRoblesVirtualawlibrary
CANON 16 - A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES
OF HIS CLIENT THAT MAY COME INTO HIS POSSESSION.
Rule 16.01 - A lawyer shall account for all money or property collected or
received for or from the client.
x x x x
Rule 16.03 -A lawyer shall deliver the funds and property of his client when
due or upon demand. x x x.
"The relationship between a lawyer and his client is highly fiduciary and
prescribes on a lawyer a great fidelity and good faith. The highly fiduciary
nature of this relationship imposes upon the lawyer the duty to account for
the money or property collected or received for or from his client. Thus, a
lawyer's failure to return upon demand the funds held by him on behalf of his
client, as in this case, gives rise to the presumption that he has appropriated
the same for his own use in violation of the trust reposed in him by his client.
Such act is a gross violation of general morality, as well as of professional
ethics."20chanrobleslaw
Case law provides that in similar instances where lawyers neglected their
client's affairs and at the same time failed to return the latter's money and/or
property despite demand, the Court imposed upon them the penalty of
suspension from the practice of law. In Segovia-Ribaya v. Lawsin,21 the Court
suspended the lawyer for a period of one (1) year for his failure to perform
his undertaking under his retainership agreement with his client and to return
the money given to him by the latter.22 Similarly, in Meneses v.
Macalino,23 the same penalty was imposed on a lawyer who failed to render
any legal service to his client, as well as to return the money he received for
such purpose.24 These pronouncements notwithstanding, there have been
instances where the Court tempered the penalty imposed upon a lawyer due
to humanitarian and equitable considerations.25cralawred In view of the
foregoing, and taking into consideration respondent's dire financial condition
brought by Typhoon Yolanda and his willingness to return the money he
received from complainant as soon as he recovers from such economic status,
the Court finds it appropriate to sustain the recommended suspension from
the practice of law for a period of six (6) months.
Let a copy of this Decision be furnished the Office of the Bar Confidant to be
appended to respondent's personal record as a member of the Bar. Likewise,
let copies of the same be served on the Integrated Bar of the Philippines and
the Office of the Court Administrator, which is directed to circulate them to all
courts in the country for their information and guidance.
SO ORDERED.chanRoblesvirtualLa
Albert, an American citizen, was the registered owner of a parcel of land with
an approximate area of 18,589 square meters, covered by OCT No. (-2645-)
M-5565 situated in the Province of Rizal (subject property). Due to non-
payment of realty taxes, the Provincial Government of Rizal sold the subject
property at public auction to one Amelita A. De Serra (De Serra), the highest
bidder, as evidenced by the Certificate of Sale6 dated June 29,
2004.7 Respondent UTNAI, an association representing the actual occupants
of the subject property, subsequently redeemed8 the same from De
Sena.9chanrobleslaw
Efforts to serve summons upon Albert proved futile as he was not a resident
of the Philippines. Thus, summons was served through
publication.13 Nonetheless, Albert still failed to file his answer. Hence, upon
the motion of UTNAI, Albert was declared in default and UTNAI was allowed
to present evidence ex parte.14chanrobleslaw
The RTC Ruling and Subsequent Proceedings
In a Decision15 dated March 30, 2009, the RTC found that UTNAI was able to
prove, by a preponderance of evidence, that it is the owner of the subject
property after having legally redeemed the same from De Serra, the highest
bidder at a public auction. Accordingly, it directed Cas to: (1) annotate its
Decision on OCT No. (-2645-) M-556; (2) cancel the same; and (3) issue a
new title in the name of UTNAI.16chanrobleslaw
In an Order17 dated June 16, 2009, the RTC clarified that its March 30, 2009
Decision directing the cancellation of OCT No. (-2645-) M-556 and the
issuance of a new one in its stead in the name of UTNAI necessarily includes
a declaration that the owner's duplicate copy of OCT No. (-2645-) M-556 is
void and of no effect.
The RTC Decision lapsed into finality. As a consequence, TCT No. B-9655 was
issued in favor of UTNAI.18chanrobleslaw
Later, Michael filed an Omnibus Motion:26 (1) to recall and/or set aside the
Certification of Finality of Judgment; (2) to set aside the Order dated June 16,
2009; and (3) to cancel TCT No. B-9655 and reinstate OCT No. (-2645-) M-
556. He maintained that, based on the records, the Decision dated March 30,
2009 of the RTC was not served upon the defendant, Albert, by publication,
as required under Section 9,27 Rule 13 of the Rules of Court; hence, the same
has not yet attained finality.28 Accordingly, the Certification of Finality of the
said Decision was prematurely issued and must therefore be set aside.29 In
addition, TCT No. B-9655 in favor of UTNAI must be cancelled and OCT No. (-
2645-) M-556 in the name of Albert should be reinstated.
Treating the Petition for Relief as a motion for reconsideration30 of its Decision,
the RTC, in an Order31dated January 3, 2012, denied the same and ruled that
UTNAI, having legal interest in the subject property and having redeemed the
same from the highest bidder in a tax auction, must be issued a new title in
its name. It added that the matters raised by Michael are best ventilated in a
separate case for reconveyance. However, while the RTC denied the petition,
it found that its March 30, 2009 Decision never attained finality for not having
been served upon Albert by publication in accordance with Section 9, Rule 13
of the Rules of Court. Thus, the issuance of the certificate of finality was
erroneous. Consequently, the cancellation of OCT No. (-2645-) M-556 in
Albert's name and the issuance of TCT No. B-9655 in UTNAI's name were
premature; hence, it directed the Register of Deeds to cancel TCT No. B-9655
and to reinstate OCT No. (-2645-) M-556.32chanrobleslaw
Dissatisfied, both parties separately appealed33 to the CA. In its appeal, UTNAI
ascribed error to the RTC in finding that its March 30, 2009 Decision never
attained finality for failure to publish the same and that it also erred in
declaring that the cancellation of OCT No. (-2645-) M-556 in Albert's name
and the issuance of TCT No. B-9655 in its name were
premature. chanrobleslaw
34
On the other hand, Michael insisted that at the time of the filing of the instant
case in 2008, Albert was already dead, which means that the ownership of the
subject property had already devolved to his compulsory heirs. Consequently,
the latter should have been impleaded as defendants, failing which, the
Decision rendered by the RTC was null and void for lack of jurisdiction.
Moreover, he asserted that his mother Josephine was an indispensable party
to this case, being a compulsory heir and the owner of the half portion of the
subject property, which he claimed was conjugal in nature. He reiterated that
UTNAI had no legal interest to redeem the subject property.35chanrobleslaw
The CA Ruling
On the other hand, the CA dismissed Michael's appeal and rejected his theory
that his mother Josephine was an indispensable party to the complaint filed
by UTNAI against Albert. It found that the subject property was registered in
the name of "Albert Onstott, American citizen, married to Josephine Arrastia"
which is merely descriptive of the civil status of Albert and does not show that
Josephine co-owned the subject property. Hence, contrary to Michael's stance,
the subject property was not conjugal in nature and it cannot be presumed to
be conjugal in the absence of evidence showing that it was acquired during
their marriage.38chanrobleslaw
Meanwhile, it appears that UTNAI published a copy of the March 30, 2009
Decision of the RTC for two (2) consecutive weeks in a newspaper of general
circulation.40chanrobleslaw
In view of its findings, the CA reversed and set aside the Order dated January
3, 2012 rendered by the RTC, insofar as it directed the Register of Deeds to
cancel TCT No. B-9655 issued in UTNAI's name and reinstate OCT No. (-2645-
) M-556 in the name of Albert. It likewise declared the March 30, 2009
Decision of the RTC final and executory.41chanrobleslaw
Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint.
On the other hand, jurisdiction over the defendants in a civil case is acquired
either through the service of summons upon them or through their voluntary
appearance in court and their submission to its authority.44chanrobleslaw
chanRoblesvirtualLawlibrary
(1) Special appearance operates as an exception to the general rule on
voluntary appearance;
(2) Accordingly, objections to the jurisdiction of the court over the person of
the defendant must be explicitly made, i.e., set forth in an unequivocal
manner; and cralawlawlibrary
In this case, records show that Albert, the defendant in UTNAI's complaint,
died in the United States of America in 2004.47 Thus, on the strength of his
right as Albert's compulsory heir who has an interest in the subject property,
Michael filed the Petition for Relief before the RTC, assailed the proceedings
therein for failure to implead him and his mother, Josephine, as an
indispensable party, and sought affirmative relief, i.e., the reversal of the
RTC's March 30, 2009 Decision and the reinstatement of OCT No. (-2645-) M-
556.48 The RTC, holding that its own Decision never attained finality for failure
to publish the same, treated the Petition for Relief as a motion for
reconsideration and after due proceedings, ruled upon its merits.
Based on the foregoing factual milieu, the Court finds that although it may be
true that jurisdiction was not initially acquired over the person of the
defendant,49i.e., Albert in this case whose death, notably, was never brought
to the attention of the RTC until after it rendered judgment the defect in the
lack of jurisdiction over his person was effectively cured by the voluntary
appearance of his successor-in-interest/compulsory heir, Michael, who sought
affirmative relief before the RTC through the filing of the Petition for Relief
which the RTC treated as a motion for reconsideration of its judgment. Michael
voluntarily submitted to the jurisdiction of the RTC when, without any
qualification, he directly and squarely challenged the RTC's March 30, 2009
Decision as aforementioned. Having sought positive relief from an unfavorable
judgment, the RTC, therefore, acquired jurisdiction over his person, and the
due process requirements of the law have been satisfied.
That the RTC Decision was null and void for failure to implead an indispensable
party, Josephine, on the premise that the subject property is conjugal in
nature, is likewise specious. Michael posits that Josephine, being Albert's wife,
was entitled to half of the portion of the subject property, which was registered
as "Albert Onstott, American citizen, married to Josephine Arrastia."
Article 160 of the New Civil Code50 provides that all property of the marriage
is presumed to belong to the conjugal partnership, unless it is proved that it
pertains exclusively to the husband or to the wife. However, the p who invokes
this presumption must first prove that the property in controversy was
acquired during the marriage. Proof of acquisition during the coverture is a
condition sine qua non for the operation of the presumption in favor of the
conjugal partnership. The party who asserts this presumption must first prove
the said time element. Needless to say, the presumption refers only to the
property acquired during the marriage and does not operate when
there is no showing as to when the property alleged to be conjugal
was acquired. Moreover, this presumption in favor of conjugality is
rebuttable, but only with strong, clear and convincing evidence; there must
be a strict proof of exclusive ownership of one of the spouses.51chanrobleslaw
With respect, however, to the question of whether UTNAI has legal interest to
redeem the subject property from the highest bidder at the tax delinquency
public auction sale, the Court finds that the CA erred in its disquisition. Section
261 of RA 7160 provides:ChanRoblesVirtualawlibrary
Section 261. Redemption of Property Sold. - Within one (1) year from the
date of sale, the owner of the delinquent real property or person
having legal interest therein, or his representative, shall have right to
redeem the property upon payment to the local treasurer of the
amount of the delinquent tax, including the interest due thereon, and the
expenses of sale from the date of delinquency to the date of sale, plus interest
of not more than two percent (2%) per month on the purchase price from the
date of the sale to the date of redemption. Such payment shall invalidate the
certificate of sale issued to the purchaser and the owner of the delinquent real
property or person having legal interest therein shall be entitled to a certificate
of redemption which shall be issued by the local treasurer or his deputy.
From the date of sale until expiration of the period of redemption, the
delinquent real property shall remain in the possession of the owner or person
having legal interest therein who shall be entitled to the income and other
fruits thereof.
The local treasurer or his deputy, upon receipt from the purchaser of the
certificate of sale, shall forthwith return to the latter the entire amount paid
by him plus interest of not more than two percent (2%) per month. Thereafter,
the property shall be free from the lien of such delinquent tax, interest due
thereon and expenses of sale. (Emphasis supplied)
"Legal interest" is defined as interest in property or a claim cognizable at
law, equivalent to that of a legal owner who has legal title to the property.53 It
must be one that is actual and material, direct and immediate, not simply
contingent or expectant.54 Moreover, although the taxable person who has
actual and beneficial use and possession of a property may be charged with
the payment of unpaid realty tax due thereon, such assumption of liability
does not clothe the said person with the legal title or interest over the
property.55chanrobleslaw
In this case and based on the above-given definition, UTNAI, whose members
are the occupants of the subject property, has no legal interest to redeem the
same. Mere use or possession of the subject property alone does not vest
them with legal interest therein sufficient to clothe them with the legal
personality to redeem it, in accordance with Section 261 above-quoted. To
rule otherwise would be to defeat the true owner's rights by allowing lessees
or other occupants of a property to assert ownership by the simple expedient
of redeeming the same at a tax delinquency sale. Consequently, UTNAI's
redemption of the subject property as well as the issuance of a Certificate of
Redemption56 in its favor was erroneous. Since the redemption is of no legal
effect, the said Certificate of Redemption must therefore be cancelled, without
prejudice to the right of UTNAI to recover the full amount of the redemption
price paid by it in the appropriate proceeding therefor.
SO ORDERED.chanRoblesvirtualLawlibrary
During the first quarter of CY 2008, HHPI received income for services
rendered within the Philippines for clients abroad. On April 25, 2008, it filed
its original Quarterly VAT Return with the BIR through the BIR Electronic Filing
and Payment System. The return was amended on May 29, 2008 showing that
HHPI had no output VAT liability for the first quarter of CY 2008 as it had no
local sales subject to 12% VAT but it has unutilized input VAT of
P3,167,402.34 on its domestic purchases of goods and services on its zero-
rated sales of services.5chanrobleslaw
On March 23, 2010, HHPI filed a claim for refund of its unutilized input VAT of
P3,167,402.34 before the BIR. Asserting that there was inaction on the part
of the Commissioner of Internal Revenue (CIR) and in order to toll the running
of the two-year period prescribed by law, HHPI elevated its claim to the CTA
on March 30, 2010.6chanrobleslaw
On May 25, 2010, the CIR sought the dismissal of HHPI's claim for refund due
to the prematurity of the appeal. According to the CIR, the 120-day period
under Section 112(C)7 of the National Internal Revenue Code (NIRC) of 1997
for the CIR to act on the matter had not yet lapsed. Therefore, HHPI failed to
exhaust administrative remedies before it appealed before the
CTA.8chanrobleslaw
On July 14, 2010, HHPI filed its comment praying for the denial of the motion
to dismiss because: (1) it was procedurally infirm for having been addressed
to the Clerk of Court instead of the party litigant; (2) it lacked basis that HHPI
failed to exhaust administrative remedies; (3) the two-year prescriptive period
under Section 2299 of the 1997 NIRC was not applicable; (4) the duty imposed
in Section 112(C) of the 1997 NIRC was upon the CIR and not upon HHPI; (5)
the motion was violative of HHPI's right to seek refund within the two-year
period; and (6) HHPI failed to take action on its administrative
claim.10chanrobleslaw
In a Resolution11 dated November 30, 2010, the CTA Third Division granted
the motion to dismiss in view of the prematurity of the petition. Citing the
case of CIR v. Aichi Forging Company of Asia, Inc.,12the CTA explained the
mandatory 120-day period under Section 112(D) of the 1997 NIRC reckoned
from the date of submission of the complete documents in support of the
application for refund, and the 30-day period to appeal to be reckoned either
from the lapse of the 120-day period without any decision rendered by the
CIR on the application or, upon receipt of the CIR's decision before or after
the 120-day period has expired. The CTA Third Division also stressed that the
two-year period refers to the period for the filing of the claim before the CIR
and was never intended to include the period for filing the judicial
claim.13chanrobleslaw
Undaunted, HHPI filed a petition for review16 before the CTA en banc which,
however, denied the same in the assailed Decision17 dated September 7,
2012, and accordingly, affirmed the resolution of the CTA Third Division. It
was declared that the crucial nature of the mandatory 120 and 30-day periods
and that non-observance thereof will deprive the court of competence to
entertain the appeal;18 that the 120 and 30-day periods in Section 112(C) of
the 1997 NIRC refer to the taxpayer's discretion on whether or not to appeal
the CIR's decision or inaction with the CTA; and, that the said periods are
indispensable even if the claim is lodged within the two-year prescriptive
period.19chanrobleslaw
HHPI sought for reconsideration but the same was denied in the
Resolution20 dated February 4, 2013.
It should be noted that the petition for review was filed before the CTA on
March 30, 2010, or merely seven days after the administrative claim for refund
was filed before the BIR on March 23, 2010. Evidently, HHPI failed to wait for
the lapse of the 120-day period which is expressly provided for by law for the
CIR to grant or deny the application for refund.
In San Roque,27 it has been held that the compliance with the 120-day waiting
period is mandatory and jurisdictional. The waiting period, originally fixed
at 60 days only, was part of the provisions of the first VAT law, Executive
Order No. 273, which took effect on January 1, 1988. The waiting period was
extended to 120 days effective January 1, 1998 under Republic Act No. 8424
or the Tax Reform Act of 1997. The 120-day period under Section 112(C)
has been in the statute books for more than 15 years before
respondent San Roque filed its judicial claim.28chanrobleslaw
The CTA, being a court of special jurisdiction, has the judicial power to review
the decisions of the CIR. Concomitantly, the CTA also has the power to decide
an appeal because the CIR's inaction30 within the 120-day waiting period shall
be deemed a denial of the taxpayer's application for refund or tax credit.
In the instant case, the petition for review is considered premature because
the 120-day mandatoryperiod was not observed before an appeal was
elevated to the CTA. Either the CTA or this Court could also legitimize such
procedural infirmity because it would run counter to Article 5 31 of the Civil
Code unless a law exists that would authorize the validity of said petition.
Regrettably, such law is wanting in the instant case.
Tax refunds or credits, just like tax exemptions, are strictly construed against
the taxpayer.32 A refund is not a matter of right by the mere fact that a
taxpayer has undisputed excess input VAT or that such tax was admittedly
illegally, erroneously or excessively collected. Corollarily, a taxpayer's non-
compliance with the mandatory 120-day period is fatal to the petition even if
the CIR does not assail the numerical correctness of the tax sought to be
refunded. Otherwise, the mandatory and jurisdictional conditions impressed
by law would be rendered useless.
Additionally, the 30-day appeal period to the CTA "was adopted precisely to
do away with the old rule,33so that under the VAT System the taxpayer will
always have 30 days to file the judicial claim even if the CIR acts only on the
120th day, or does not act at all during the 120-day period."34 In effect, the
taxpayer should wait for the 120th day before the 30-day prescriptive period
to appeal can be availed of. Hence, the non-observance of the 120-day period
is fatal to the filing of a judicial claim to the CTA, the non-observance of which
will result in the dismissal of the same due to prematurity. In fine, the
premature filing of the judicial claim for refund of the excess input VAT of HHPI
in the amount of P3,167,402.34 warrants a dismissal of the petition because
the latter acquired no jurisdiction over the same.
SO ORDERED.chanRoblesvirtualLawlibrary
Emelita Basilio Gan (petitioner) was born on December 21, 1956 out of
wedlock to Pia Gan, her father who is a Chinese national, and Consolacion
Basilio, her mother who is a Filipino citizen.3 The petitioner's birth
certificate,4 which was registered in the Office of the Local Civil Registrar (LCR)
of Libmanan, Camarines Sur, indicates that her full name is Emelita Basilio.
On June 29, 2010, the petitioner filed a Petition5 for correction of name with
the Regional Trial Court (RTC) of Libmanan, Camarines Sur. The petitioner
sought to change the full name indicated in her birth certificate from "Emelita
Basilio" to "Emelita Basilio Gan." She claimed that she had been using the
name "Emelita Basilio Gan" in her school records from elementary until
college, employment records, marriage contract, and other government
records.6chanrobleslaw
Ruling of the RTC
On July 15, 2010, the RTC issued an Order, which noted that the petition filed
sought not merely a correction of entry in the birth certificate, but a change
of name. Accordingly, the RTC ordered the petitioner to make the necessary
amendment to her petition to conform to the requirements of Rule 103 of the
Rules of Court.7chanrobleslaw
The petitioner filed with the RTC an Amended Petition8 dated August 3, 2010
for change of name. The amended petition contained substantially the same
allegations as in the petition for correction of entry in the birth certificate. On
August 10, 2010, the RTC set the initial hearing of the petition in a newspaper
of general circulation. The Office of the Solicitor General (OSG), as counsel of
the Republic of the Philippines (respondent), filed its notice of appearance.
The OSG authorized the Office of the Provincial Prosecutor of Libmanan,
Camarines Sur to appear and assist the OSG in the proceedings before the
RTC.9chanrobleslaw
On July 19, 2011, after due proceedings; the RTC of Libmanan, Camarines
Sur, Branch 29, issued an Order10 granting the petition for change of name.
The RTC, thus, directed the LCR of Libmanan, Camarines Sur to change the
petitioner's name in her birth certificate from "Emelita Basilio" to "Emelita
Basilio Gan." The RTC opined that, from the evidence presented, the said
petition was filed solely to put into order the records of the petitioner and that
changing her name in her birth certificate into Emelita Basilio Gan would avoid
confusion in her personal records.11chanrobleslaw
The respondent sought a reconsideration12 of the RTC Order dated July 19,
2011, alleging that the petitioner, who is an illegitimate child, failed to adduce
evidence that she was duly recognized by her father, which would have
allowed her to use the surname of her father.13 On October 17, 2011, the RTC
issued an Order14 denying the respondent's motion for reconsideration.
Ruling of the CA
On appeal, the CA, in its Decision15 dated April 26, 2013, reversed and set
aside the RTC Orders dated July 19, 2011 and October 17, 2011. The CA
opined that pursuant to Article 176 of the Family Code, as amended by
Republic Act No. 9255,16 the petitioner, as an illegitimate child, may only use
the surname of her mother; she may only use the surname of her father if
their filiation has been expressly recognized by her father.17 The CA pointed
out that the petitioner has not adduced any evidence showing that her father
had recognized her as his illegitimate child and, thus, she may not use the
surname of her father.18chanrobleslaw
In this petition for review, the petitioner maintains that the RTC correctly
granted her petition since she only sought to have her name indicated in her
birth certificate changed to avoid confusion as regards to her personal
records.19 She insists that her failure to present evidence that her father
recognized her as his illegitimate child is immaterial; a change of name is
reasonable and warranted, if it is necessary to avoid
confusion.20chanrobleslaw
Ruling of the Court
After a judicious review of the records of this case, the Court agrees with the
CA that the reason cited by the petitioner in support of her petition for change
of name, i.e. that she has been using the name "Emelita Basilio Gan" in all of
her records, is not a sufficient or proper justification to allow her petition.
When the petitioner was born in 1956, prior to the enactment and effectivity
of the Family Code, the pertinent provisions of the Civil Code then regarding
the petitioner's use of surname provide:ChanRoblesVirtualawlibrary
Article 366. A natural child acknowledged by both parents shall principally use
the surname of the father. If recognized by only one of the parents, a natural
child shall employ the surname of the recognizing parent.
Article 368. Illegitimate children referred to in Article 287 shall bear the
surname of the mother.
In her amended petition for change of name, the petitioner merely stated that
she was born out of wedlock;23 she did not state whether her parents, at the
time of her birth, were not disqualified by any impediment to marry each
other, which would make her a natural child pursuant to Article 269 of the
Civil Code. If, at the time of the petitioner's·birth, either of her parents had
an impediment to marry the other, she may only bear the surname of her
mother pursuant to Article 368 of the Civil Code. Otherwise, she may use the
surname of her father provided that she was acknowledged by her father.
However, the petitioner failed to adduce any evidence that would show that
she indeed was duly acknowledged by his father. The petitioner's evidence
consisted only of her birth certificate signed by her mother, school records,
employment records, marriage contract, certificate of baptism, and other
government records. Thus, assuming that she is a natural child pursuant to
Article 269 of the Civil Code, she could still not insist on using her father's
surname. It was, thus, a blatant error on the part of the RTC to have allowed
the petitioner to change her name from "Emelita Basilio" to "Emelita Basilio
Gan."
position is misplaced.
In Alfon, the name of the petitioner therein which appeared in her birth
certificate was Maria Estrella Veronica Primitiva Duterte; she was a legitimate
child of her father and mother. She filed a petition for change of name, seeking
that she be allowed to use the surname "Alfon," her mother's surname, instead
of "Duterte." The trial court denied the petition, ratiocinating that under Article
364 of the Civil Code, legitimate children shall principally use the surname of
the father. The Court allowed the petitioner therein to use the surname of her
mother since Article 364 of the Civil Code used the word "principally" and not
"exclusively" and, hence, there is no legal obstacle if a legitimate child should
choose to use the mother's surname to which he or she is legally
entitled.27chanrobleslaw
In contrast, Articles 366 and 368 of the Civil Code do not give to an illegitimate
child or a natural child not acknowledged by the father the option to use the
surname of the father. Thus, the petitioner cannot insist that she is allowed to
use the surname of her father.
Finally, Lim likewise finds no application in this case. In Lim, the petition that
was filed was for correction of entries under Rule 108 of the Rules of Court;
the petition sought, among others, is the correction of the surname of the
respondent therein from "Yo" to "Yu." Further, the respondent therein,
although an illegitimate child, had long been using the surname of her father.
It bears stressing that the birth certificate of the respondent therein indicated
that her surname was the same as her father albeit misspelled. Thus, a
correction of entry in her birth certificate is appropriate.29chanrobleslaw
Here, the petitioner filed a petition for change of name under Rule 103 and
not a petition for correction of entries under Rule 108. Unlike in Lim, herein
petitioner's birth certificate indicated that she bears the surname of her
mother and not of her father.
SO ORDERED.chanRoblesvirtualLawlibrary
Subsequent to the sale, the respondents sought to take possession of the lots
but the petitioners refused to vacate the premises notwithstanding a monetary
offer for their relocation by the respondents. This prompted the respondents
to institute ejectment suits with the Metropolitan Trial Court (MeTC) of Pasig
City, although these were dismissed by the MeTC.6chanrobleslaw
Thereafter, the respondents filed with the RTC of Pasig City an action for
recovery of possession with damages against the petitioners, along with their
co-defendants Placido "Eddie" Cagalingan (Cagalingan) and Avelino Flores
(Flores) who also occupied the subject lots.7chanrobleslaw
In their answer to the complaint, the petitioners contended that they had been
occupying the lots for more than 50 years. The properties had been declared
part of the Areas for Priority Development under Presidential Decree (P.D.)
No. 1517, otherwise known as the Urban Land Reform Act. The issuance of
the certificates of title under the respondents' names violated Sections 6 and
7 of P.D. No. 1517 and Section 2 of P.D. No. 2016,8 which
read:ChanRoblesVirtualawlibrary
P.D. No. 1517
PROCLAIMING URBAN LAND REFORM IN THE PHILIPPINES AND PROVIDING
FOR THE IMPLEMENTING MACHINERY THEREOF
Section 6. Land Tenancy in Urban Land Reform Areas. Within the Urban Zones
legitimate tenants who have resided on the land for ten years or more who
have built their homes on the land and residents who have legally occupied
the lands by contract, continuously for the last ten years shall not be
dispossessed of the land and shall be allowed the right of first refusal to
purchase the same within a reasonable time and at reasonable prices, under
terms and conditions to be determined by the Urban Zone Expropriation and
Land Management Committee created by Section 8 of this Decree.
xxxx
P.D. No. 2016
PROHIBITING THE EVICTION OF OCCUPANT FAMILIES FROM LAND
IDENTIFIED AND PROCLAIMED AS AREAS FOR PRIORITY DEVELOPMENT
(APD) OR AS URBAN LAND REFORM ZONES AND EXEMPTING SUCH LAND
FROM PAYMENT OF REAL PROPERTY TAXES
The respondents presented their witnesses during trial. When it was the
petitioners' turn to present their evidence, their counsel failed to appear and
to submit a judicial affidavit, prompting the RTC to issue on November 11,
2013 an Order declaring the petitioners to have waived their right to present
evidence. Only Cagalingan and Flores were able to present additional evidence
to support their claims as possessors of the lots.10chanrobleslaw
Ruling of the RTC
On June 11, 2014, the RTC rendered its Decision11 against the defendants.
The dispositive portion of the RTC decision reads:
SO ORDERED.12chanrobleslaw
The petitioners moved to reconsider, but their motion was denied by the RTC,
in its Order13 dated August 27, 2014. Dissatisfied, the petitioners appealed to
the CA.
Ruling of the CA
The CA, in its Decision14 dated April 6, 2016, denied the appeal and affirmed
the decision of the RTC.
The CA explained that while the petitioners were the occupants of the
properties within an urban land reform zone, they failed to establish that they
were legitimate tenants thereof. Section 3(f) of P.D. No. 1517 defines a tenant
as the rightful occupant of land and its structures, but does not include those
whose presence on the land is merely tolerated and without the benefit of
contract, those who enter the land by force or deceit, or those whose
possession is under litigation.15chanrobleslaw
The mere fact that the petitioners had been the occupants of the disputed lots
for more than 50 years failed to suffice. They had to provide evidence that
could establish a valid contract of lease with the lots' former owners, with
proof of payment of rentals as tenants. Otherwise, it could be inferred that
the petitioners' possession was by mere tolerance.16chanrobleslaw
The petitioners insist that their possession of the disputed lots is by virtue of
a contract of lease with the person under whose name the disputed properties
were formerly registered, specifically Carlos L. Asuncion, his heirs and
successors-in-interest. Their possession under such nature has spanned more
than 50 years already.17 Pursuant to pertinent statutes, the lots should have
been first offered for sale to them and in case a sale was not concluded, the
government was to expropriate the properties.
Ruling of the Court
In any case, the Court finds no compelling reason to deviate from the factual
findings of the RTC, as affirmed by the CA. The law that applies to the issue
on the petitioners' entitlement to a right of first refusal over the disputed
properties is P.D. No. 1517, which grants legitimate tenants in urban land
reform areas certain benefits affecting land acquisition and ownership.
In Estreller, et al. v. Ysmael, et al.,19 the Court reiterated the rationale and
the parameters that render P.D. No. 1517, along with P.D. No. 2016,
applicable, to wit:ChanRoblesVirtualawlibrary
Section 6 of P.D. No. 1517 grants preferential rights to landless
tenants/occupants to acquire land within urban land reform areas, while
Section 2 of P.D. No. 2016 prohibits the eviction of qualified
tenants/occupants.
x x x x
(f) Tenant refers to the rightful occupant of land and its structures, but does
not include those whose presence on the land is merely tolerated and without
the benefit of contract, those who enter the land by force or deceit, or those
whose possession is under litigation.
xxxx
There is no dispute that the subject properties fall within the scope of P.D. No.
1517, after the petitioners and their co-defendants, Cagalingan and Flores,
supplied sufficient proof on the lots' nature. Maps and certifications issued by
the Housing and Land Use Regulatory Board were presented before the RTC.
However, unlike Cagalingan and Flores who were able to submit proofs of their
respective tenancy arrangements with the lots' previous owners, the
petitioners opted not to present their own contracts with the owners. Such
failure was critical to their defense because proof of tenancy is a vital condition
that could render P.D. No. 1517 applicable to a case.
The basic rule is that he who alleges a fact has the burden of proving
it.21 Based on the records, the petitioners were only able to prove that they
were the lots' possessors. Their possession, however, could be based on the
other modes specifically excluded by P.D. No. 1517 from its cover, namely,
tolerance, force or deceit. In Medina v. Mayor Asistio, Jr.,22 the Court
emphasized that "only legitimate tenants may be extended the protective
mantle of the decree cited to the exclusion of others."23 Where no contracts
are presented to qualify persons as legitimate tenants, the protection afforded
therein cannot be rightfully invoked.24chanrobleslaw
The petitioners could not have simply relied on the testimonial and
documentary evidence presented by Cagalingan and Flores to prove their
tenancy. The nature of their possession was independent of the other
defendants' own agreement or lease with the previous landowners.
Given the foregoing, the CA was correct in ruling in favor of the respondents.
Their rights to possess, use and occupy the subject parcels of land, being the
present registered owners thereof, have been sufficiently established. Not
even the petitioners' reference to the prior dismissal by the MeTC of the
ejectment suits first filed against them by the respondents supports their
assertion.25cralawred The principle of res judicata does not apply because the
ejectment suits and the present complaint covered different causes of action.
Moreover, the ejectment suits were not decided on the merits. These were
dismissed mainly on the ground that the ownership issue was raised by the
respondents, a matter that was beyond the scope of the MeTC's
jurisdiction.26 The issue on the petitioners' tenancy was not resolved in the
said cases.
SO ORDERED.chanRoblesvirtualLawlibrary
Consequently, the complainant filed the following cases: (i) a criminal case
against Garcia for Reckless Imprudence Resulting in Damage to Property with
Serious Physical Injuries docketed as Criminal Case No. 025403 before the
Metropolitan Trial Court of Quezon City, Branch 36; (ii) a civil case for
Damages against Garcia and NATI docketed as Ci Case No. Q-09-64558 before
the Regional Trial Court of Quezon City, Branch 105. In both instances, the
respondent is the counsel of record for Garcia and NATI.3chanrobleslaw
The complainant, however, claimed that the respondent's reply letter5 dated
March 20, 2009, was couched in abusive, disrespectful language, malicious
and unfounded accusations and besmirched his reputation.6 The reply letter
in part stated:ChanRoblesVirtualawlibrary
With reference to said Criminal Case No. 09-025403, we received information
that [the complainant] allegedly used his "influence" in persuading the former
handling Prosecutor of Inquest Case No. 09-388, not to allow the release of
the Passenger Bus with Plate No. TWL-653, unless our client agrees to
immediately pay the mercenary claim of Php 2 Million as demanded by [the
complainant]. Fortunately, our client heeded our Law Office's persistent advice
not to fall prey to such hustler tactic.7chanroblesvirtuallawlibrary
Due to the insinuations made by the respondent in his reply letter, the
complainant was constrained to file a libel case against the former before the
Office of the City Prosecutor of Quezon City.8chanrobleslaw
On April 6, 2011, the IBP-CBD issued an Order13 declaring the case submitted
for resolution due to the respondent's failure to attend the mandatory
conference and to file his brief.
Resolutions of the IBP
The respondent, on May 16, 2013, filed his motion tor reconsideration16 but
the same was denied by the IBP Board of Governors in a Resolution 17 dated
September 27, 2014 it being a mere reiteration of the matters which had
already been threshed out and taken into consideration. The IBP Board of
Governors, however, modified the penalty by increasing it from censure to
reprimand.
Undaunted, the respondent filed a Motion for Leave to File and to Admit Motion
for Reconsideration18 on April 15, 2015 praying that second motion for
reconsideration19 be given due course.
Issue
Essentially, the sole issue in the present case is whether or not there is
sufficient evidence on record to hold the respondent liable for violation of the
CPR.
Ruling of the Court
The rule does not recognize the filing of a second Motion for
Reconsideration
In Bar Matter No. 1755, the Court emphasized the application of Section 12,
Rule 139-B of the Rules of Court, thus:ChanRoblesVirtualawlibrary
In case a decision is rendered by the [Board of Governors] that exonerates
the respondent or imposes a sanction less than suspension or disbarment, the
aggrieved party can file a motion for reconsideration within the 15-day period
from notice. If the motion is denied, said party can file a petition for review
under Rule 45 of the Rules of Court with this Court within fifteen (15) days
from notice of the resolution resolving the motion. If no motion for
reconsideration is filed, the decision shall become final and executory and a
copy of said decision shall be furnished this
Court.20chanroblesvirtuallawlibrary
Clearly, the rule does not recognize the filing of a second motion for
reconsideration. In fact, the rule expressly provides that the proper remedy
of the losing party is to file a Petition for Review under Rule 45 with this Court.
In accordance, however, with the liberal spirit pervading the Rules of Court
and in the interest of substantial justice, the Court treats the second Motion
for Reconsideration filed by the respondent as a petition for review under Rule
45. This is consistent with the sui generis nature of disbarment proceedings
which focuses on the qualification and fitness of a lawyer to continue
membership in the bar and not the procedural technicalities in filing the
case.21chanrobleslaw
Nonetheless, after a careful perusal of the records of the case, the Court
agrees with the findings of the IBP-CBD and the Board of Governors that the
respondent violated the CPR when he used intemperate language in his letter
to the complainant.
Canon 8 of the CPR directs all members of the bar to conduct themselves with
courtesy, fairness, and candor towards their fellow lawyers and avoid
harassing tactics against opposing counsel. Specifically, in Rule 8.01, the CPR
provides:ChanRoblesVirtualawlibrary
Rule 8.01. A lawyer shall not, in his professional dealings, use language which
is abusive, offensive or otherwise improper.
In the present case, the respondent's actions failed to measure up to this
Canon. Records show that he imputed to the complainant the use of his
influence as a former public prosecutor to harass his clients during the inquest
proceedings without sufficient proof or evidence to support the same.
As an officer of the court, the respondent could have aired his charge against
the complainant in a proper forum and without using offensive and abusive
language. He should refrain from being tempted by the adversarial nature of
our legal system to use strong language in pursuit of his duty to advance the
interest of his client.22 Commissioner Cachapero's Report and
Recommendation in part stated:ChanRoblesVirtualawlibrary
Indeed, there is a strong showing that the Respondent had failed to conduct
himself toward his fellow lawyer with that courtesy that all have the right to
expect. When he mentioned that Complainant had used his influence in
persuading the fiscal, he used a language which was abusive, offensive or
otherwise improper. He showed ill-feelings toward Complainant and allowed
such feeling to influence him in his conduct and demeanor towards the
latter.23chanroblesvirtuallawlibrary
The Court has consistently reminded lawyers that though they are entitled to
present their case with vigor and courage, such enthusiasm does not justify
the use of offensive and abusive language. Language abounds with countless
possibilities for one to be emphatic but respectful, convincing but not
derogatory, illuminating but not offensive.24chanrobleslaw
Moreover, the Court ADOPTS and AFFIRMS the Resolution No. XXI-2014-
597 dated September 27, 2014 of the Integrated Bar of the Philippines Board
of Governors meting out the penalty of REPRIMANDagainst Atty. Jose A.
Diño, Jr. for breach of his ethical duties as a lawyer.
SO ORDERED.
G.R. No. 172507, September 14, 2016
NATIONAL POWER CORPORATION, Petitioner, v. SPS. MARGARITO
ASOQUE AND TARCINIA ASOQUE, Respondents.
DECISION
LEONEN, J.:
Article III, Section 91 of the Constitution provides a substantive guarantee that
private property that is taken by the state for public use should be paid for
with just compensation. If the state does not agree with the property owner
on a price, the state, through the competent government agency, should file
the proper expropriation action under Rule 67 of the Revised Rules of Court.
In case of a taking without the proper expropriation action filed, the property
owner may file its own action to question the propriety of the taking or to
compel the payment of just compensation. Among these inverse
condemnation actions is a complaint for payment of just compensation and
damages.
This resolves a Petition for Review on Certiorari2 filed by the National Power
Corporation to nullify and set aside the November 21, 2005 Decision3 and May
3, 2006 Resolution4 of the Court of Appeals in CA-G.R. CV No. 76313. The
assailed Decision affirmed with modification the judgment of Branch 31 of the
Regional Trial Court, Calbayog City, which, in turn, directed the National Power
Corporation to pay the value of the 4,352-square-meter portion of Spouses
Margarito and Tarcinia Asoque's (Spouses Asoque) land utilized in its Leyte-
Luzon Transmission Line Project.5 The assailed Resolution denied the National
Power Corporation's Motion for Reconsideration.6chanrobleslaw
Spouses Asoque are the registered owners of a parcel of coconut land located
in Barangay Bugtong, Calbayog City. The parcel of land has an area of 59,099
square meters and is covered by Original Certificate of Title No.
2376.7chanrobleslaw
Spouses Asoque allege that beforehand, they were made to understand that
the National Power Corporation would pay them the value of the portion of the
land used and all improvements that would be destroyed for the National
Power Corporation's project.10 Spouses Asoque incurred actual damages as a
result of the National Power Corporation's cutting off some coconut trees and
other fruit- and non-fruit-bearing plants during the construction.11 They were
also prohibited from introducing on the 4,352-square-meter area any
improvement that could rise by a few meters from the ground.12chanrobleslaw
Upon Spouses Asoque's demand for just compensation, the National Power
Corporation only paid for the improvements destroyed and refused to pay for
the actual value of the 4,352-square-meter area utilized for the project.13 The
National Power Corporation claimed that it was only liable to pay for right of
way at 10% of the market value under Section 3-A of Republic Act No.
6395,14 as amended.15chanrobleslaw
On September 20, 1999, Spouses Asoque filed before the Regional Trial Court
of Calbayog City a Complaint16 for payment of just compensation and
damages against the National Power Corporation. The case was docketed as
Civil Case No. 737 and was raffled to Branch 31.
When Civil Case No. 737 was called for pre-trial on May 8, 2000, the case was
ordered dismissed by the trial court due to the non-appearance of both parties
and their counsel.21 However, the case was reinstated after Spouses Asoque's
counsel explained to the trial court the reason why he arrived late. The pre-
trial of the case was reset to May 24, 2000.22chanrobleslaw
On May 24, 2000, the trial court, noting the absence of the National Power
Corporation and its counsel, allowed Spouses Asoque to present their evidence
ex parte before a court-appointed Commissioner. It simultaneously dismissed
the National Power Corporation's counterclaim.23chanrobleslaw
On June 6, 2000, the trial court denied National Power Corporation's Urgent
Manifestation and Motion to Reset Pre-trial, finding it to have been filed out of
time and also moot and academic.24 National Power Corporation's subsequent
Motion for Reconsideration was denied in the trial court's Order dated June
21, 2000.25cralawredchanrobleslaw
"On June 22, July 24[,] and August 28, 2000, Spouses Asoque presented
evidence ex parte before Atty. Ferdinand S. Arpon, Branch Clerk of Court, who
was appointed Commissioner by the trial court."26Spouses Asoque then filed
their Formal Offer of Documentary Exhibits27 on September 6, 2000, to which
the National Power Corporation filed its Comment/Objection28 on October 13,
2000, citing the inadmissibility of the exhibits presented.29chanrobleslaw
On July 20, 2001, the Commissioner submitted to the trial court his
Commissioner's Report dated July 19, 2001.30 He recommended that the fair
market value of the land be placed at P800.00 per square meter and that the
schedule of prevailing market value of the trees, plants, and crops prepared
by the Office of the Provincial Agriculturist, Catbalogan, Samar be adopted to
compute the amount of compensation for the damaged
improvements. chanrobleslaw
31
On August 21, 2001, the trial court received the National Power Corporation's
Comment/Opposition to Commissioner's Report, to which Spouses Asoque
filed their Rejoinder on September 20, 2001.32chanrobleslaw
The National Power Corporation and Spouses Asoque filed their respective
memoranda on February 5, 2002 and April 1, 2002. Thereafter, the case was
deemed submitted for decision.33chanrobleslaw
On June 25, 2002, the Regional Trial Court rendered the Decision34 in favor of
Spouses Asoque and ordered the National Power Corporation to pay them the
amounts of:
chanRoblesvirtualLawlibrary
Aggrieved, the National Power Corporation filed an appeal before the Court of
Appeals.35chanrobleslaw
The Court of Appeals denied36 the National Power Corporation's appeal in its
Decision dated November 21, 2005. It affirmed with modification the Regional
Trial Court Decision by deleting the amount of P158,369.00 as compensation
for the damaged improvements for lack of legal and factual
basis.37chanrobleslaw
The Court of Appeals found no impropriety on the part of the Regional Trial
Court in allowing Spouses Asoque to present their evidence ex parte and in
appointing the Branch Clerk of Court as Commissioner to receive Spouses
Asoque's evidence ex parte.38 It also found no irregularity in the trial court's
adoption of the Commissioner's report/recommendation, which was found to
be comprehensive and supported by evidence.39chanrobleslaw
Finally, the Court of Appeals found that Spouses Asoque have already been
properly compensated for the damaged improvements per disbursement
vouchers in the total amount of P17,133.50, and Spouses Asoque failed to
present competent proof that they were entitled to an additional award of
actual damages.41chanrobleslaw
The National Power Corporation moved for reconsideration, but the Motion
was denied in the Resolution dated May 3, 2006.
evidence ex parte[;]
3The appellate court erred in affirming the trial court's directive to petitioner
NPC to compensate respondents for the value of the land notwithstanding that
only an easement thereon was acquired[;] [and]
4 Assuming that petitioner NPC is liable to pay just compensation for the
subject property and the improvements thereon, the trial court nonetheless
erred in the determination of the values thereof.42chanroblesvirtuallawlibrary
This Court outright denied the Petition for lack of a verified statement of
material date of filing of the Motion for Reconsideration of the assailed
judgment under Rule 45, Sections 4(b) and 5, in relation to Rule 56, Section
5(d).43 However, on petitioner's Motion for Reconsideration,44 this Court
reinstated45the Petition and required respondents to comment.
The May 24, 2000 pre-trial setting was allegedly too close to May 8, 2000, the
date of the Order that set it, as to afford petitioner a reasonable opportunity
to make arrangements for it.55 The May 8, 2000 Order, which was served by
registered mail, was received by petitioner only on May 22, 2000, just two (2)
days before the pre-trial on May 24, 2000.56 By then, both of petitioner's
lawyers were out of town (one was in Manila and the other was in San Isidro,
Northern Samar) on official business.57 Petitioner contends that despite
having been informed through the Urgent Manifestation and Motion to Reset
Pre-trial dated May 24, 2000 and the Motion for Reconsideration dated June
8, 2000 of the reason for the failure of petitioner's counsel to appear at the
May 24, 2000 pre-trial, the trial court refused to reconsider its default order;
thus, the trial court deprived petitioner of its right to due
process.58chanrobleslaw
As to the third and fourth assigned errors, petitioner claims that it is liable to
pay only an easement fee under Section 3-A of its Charter, which is computed
as 10% of the fair market value of the affected portion of respondents' land
based on the valuation (P3.31 per square meter) specified in Tax Declaration
No. 96-03023-00104.63 Petitioner contends that the three (3) expropriation
cases decided in 1997 by other branches of the Regional Trial Court of
Catbalogan City, which were cited by the trial court in adopting the
Commissioner's recommendation, were not reliable bases for determining the
fair market value of respondents' property. This is because the parcels of land
in the three (3) expropriation cases were located in other barangays of
Calbayog City and there is no showing that the decisions therein have attained
finality.64 Finally, petitioner submits that the City Assessor's valuation of the
subject property appearing in Tax Declaration No. 96-03023-00104 should
prevail over that determined by the Commissioner—the Branch Clerk of
Court—who does not have the expertise or competence to conduct property
appraisals as required under Rule 67, Section 5.65chanrobleslaw
Respondents aver that the trial court was justified in allowing them to present
evidence ex parte because (1) petitioner and its counsel failed to appear at
the pre-trial on May 24, 2000; and (2) petitioner's Urgent Manifestation and
Motion to postpone the pre-trial setting on May 24, 2000 was filed late.66 They
add that due process was satisfied in the court a quo as petitioner was afforded
the fair and reasonable opportunity to defend its side and to move for the
reconsideration of the trial court ruling.67chanrobleslaw
Lastly, respondents contend that Section 3-A of Republic Act No. 6395 cannot
defeat the trial court's determination of the just compensation of their
property; that the determination of just compensation is a judicial function;
and that it has been ruled in previous cases that the acquisition of right-of-
way easement is a taking under the power of eminent domain and the owner
is entitled to the money equivalent of the property
expropriated. chanrobleslaw
69
Second, whether the appraisal of the property was valid and the court-
appointed Commissioner exceeded his authority when he conducted an
appraisal of the property and recommended a valuation for just compensation;
Third, whether petitioner should be made to pay simple easement fee or full
compensation for the land traversed by its transmission lines;
and cralawlawlibrary
Lastly, whether the trial court erred in its determination of the amount of just
compensation to be paid to respondents.
The Regional Trial Court did not err in allowing respondents to present their
evidence ex parte. The action of the trial court is expressly allowed under Rule
18, Section 5 of the 1997 Rules of Civil Procedure. Section 5 provides that if
it is the defendant who fails to appear, then the plaintiff may be allowed "to
present his evidence ex parte and the court to render judgment on the basis
thereof." Petitioner's stance that it was deprived of due process because it was
not given the reasonable opportunity to attend the second pre-trial setting is
likewise untenable.
Petitioner and its counsel were absent during the first pre-trial setting on May
8, 2000. Respondents' counsel attended, although he was late. Had petitioner
and its counsel appeared on the first setting, they would have been reasonably
notified then and there of the second pre-trial resetting on May 24, 2000 and
would have had the opportunity to ask for a later date. Nonetheless,
petitioner's counsel should have tried to inquire from the court the next
schedule of the pre-trial.
Petitioner does not refute respondents' argument that its Urgent Manifestation
and Motion, although dated May 24, 2000, was filed only one (1) day after the
scheduled pre-trial sought to be postponed, on May 25, 2000. The trial court
was, therefore, justified in denying petitioner's motion for postponement for
having been filed out of time. A motion for postponement should be filed on
or before the lapse of the day sought to be postponed.72 In any case, "the
matter of postponement of a hearing is addressed to the sound discretion of
the court [and] unless there is a grave abuse of discretion in the exercise
thereof the same should not be disturbed on review."73chanrobleslaw
Petitioner's counsel received the Regional Trial Court Order resetting the pre-
trial to May 24, 2000 on May 22, 2000. Assuming its counsel was unable to
appear at the second pre-trial setting, petitioner could and should have sent
a representative on May 24, 2000 to ask for postponement of the second pre-
trial setting. During the second pre-trial setting, it was not only petitioner's
counsel who failed to appear, but petitioner as well.
Under the circumstances, petitioner cannot claim that it was denied due
process. "Parties are presumed to have known the governing rules and the
consequences for the violation of such rules."74 Moreover, the essence of due
process is an opportunity to be heard. Petitioner was given that opportunity.
Yet, it failed to appear at the two (2) pre-trial settings. A pre-trial cannot be
taken for granted for it serves a vital objective: the simplification and
expedition of the trial, if not its dispensation. Non-appearance of a party may
only be excused for a valid cause. We see none in this case.
. . . .
. . . .
Besides, the proceedings before the Regional Trial Court were not for
expropriation—for which petitioner itself claims that there is no need—but
were for recovery of just compensation and damages initiated by respondents.
Hence, Rule 67, Section 5 on the ascertainment of the just compensation to
be paid was no longer applicable. A trial before commissioners, for instance,
was dispensable.78chanrobleslaw
. . . .
Rule 67, however, presupposes that NIA exercised its right of eminent domain
by filing a complaint for that purpose before the appropriate court. Judicial
determination of the propriety of the exercise of the power of eminent domain
and the just compensation for the subject property then follows. The
proceedings give the property owner the chance to object to the taking of his
property and to present evidence on its value and on the consequential
damage to other parts of his property.
Respondent was not given these opportunities, as NIA did not observe the
procedure in Rule 67. Worse, NIA refused to pay respondent just
compensation. The seizure of ones property without payment, even though
intended for public use, is a taking without due process of law and a denial of
the equal protection of the laws. NIA, not respondent, transgressed the
requirements of due process.
There is taking in the context of the state's power of eminent domain when
the following elements are present:
chanRoblesvirtualLawlibrary
(3) There is color of legal authority in the entry into the property;
(5) The use of property for public use removed from the owner all
beneficial enjoyment of the property.83
. . . .
chanRoblesvirtualLawlibrary. . . .
IMPROVEMENTS AFFECTED
4. 110 bananas
chanRoblesvirtualLawlibrary. . . .
The evidence suggests that NPCs transmission line project that traverses the
respondents' property is perpetual, or at least indefinite, in nature. Moreover,
not to be discounted is the fact that the high-tension current to be conveyed
through said transmission lines evidently poses a danger to life and limb;
injury, death or destruction to life and property within the vicinity. As the
Court held in NPC v. Chiong, it is not improper to assume that NPC will erect
structures for its transmission lines within the property. What is sought to be
expropriated in this case is, at its longest extent, 326.34 meters, and through
it may be built several structures, not simply one[.]95 (Emphasis supplied,
citations omitted)
Hence, due to the nature of the easement, which will deprive the normal use
of the land for an indefinite period and expose the property owners' lives and
limbs to danger, just compensation must be based on the full market value of
the affected property.96chanrobleslaw
Section 3(a) of Republic Act No. 6395, as amended, states that only 10% of
the market value of the property is due the owner of the property subject to
a right-of-way easement. However, this rule is not binding on the Court. Well-
settled is the rule that the determination of just compensation for property
taken in expropriation is a judicial prerogative.97 Such discretion cannot be
curtailed by legislation.
Just compensation has been defined as the "fair and fall equivalent of the
loss."102 In National Power Corporation v. YCLA Sugar Development
Corporation:103
The word "just" is used to intensify the meaning of the word "compensation"
and to convey thereby the idea that the equivalent to be rendered for the
property to be taken shall be real, substantial, full and ample. The
constitutional limitation of "just compensation" is considered to be a sum
equivalent to the market value of the property, broadly defined as the price
fixed by the seller in open market in the usual and ordinary course of legal
action and competition; or the fair value of the property; as between one who
receives and one who desires to sell it, fixed at the time of the actual taking
by the government.104chanroblesvirtuallawlibrary
The value and character of the land at the time it was taken by government
are the criteria for determining just compensation.105 "All the facts as to the
condition of the property and its surroundings, as well as its improvements
and capabilities, must thus be considered."106chanrobleslaw
Some factors that have been previously considered by the courts were
acquisition cost, current value of like properties, its actual or potential uses,
its size, shape, and location, and the tax declarations on the property.107 In
this regard, the standards enumerated in statutes such as Section 5108 of
Republic Act No. 8974109 are merely recommendatory, and courts are not
bound to consider all of them.110chanrobleslaw
Furthermore, the Branch Clerk of Court as Commissioner stated that one high-
ranking personnel of the City Assessor's Office of Calbayog observed that the
market value of respondents' land in the Tax Declaration is a very low
appraisal.113 As such, when he made the recommendation, he considered
other factors such as the accessibility of the property, availability of basic
services in the area, land valuation trend in the City of Calbayog (which was
somewhere between P600.00 and P3,000.00 per square meter),114 and
interviews with some landowners of the adjacent lots stating that they would
not sell their lands lower than P500.00 per square meter.115chanrobleslaw
chanRoblesvirtualLawlibrary
After trial on the merits, the [CTA] in Division rendered the assailed Decision
affirming the assessments but in the reduced amount of P2,804,920.36
(inclusive of surcharge and deficiency interest) representing [PMFC's] Income,
VAT and Withholding Tax deficiencies for the taxable year 1996 plus 20%
delinquency interest per annum until fully paid. The [CTA] in Division ruled as
follows:ChanRoblesVirtualawlibrary
"However, [PMFC's] contention that the NIRC of 1977 did not impose
substantiation requirements on deductions from gross income is bereft of
merit. Section 238 of the 1977 Tax Code [now Section 237 of the National
Internal Revenue Code of 1997] provides:ChanRoblesVirtualawlibrary
SEC. 238. Issuance of receipts or sales or commercial invoices. - All
persons, subject to an internal revenue tax shall for each sale or transfer of
merchandise or for services rendered valued at P25.00 or more, issue receipts
or sales or commercial invoices, prepared at least in duplicate, showing the
date of transaction, quantity, unit cost and description of merchandise or
nature of service: Provided, That in the case of sales, receipts or transfers in
the amount of P100.00 or more, or, regardless of amount, where the sale or
transfer is made by persons subject to value-added tax to other persons, also
subject to value-added tax; or, where the receipt is issued to cover payment
made as rentals, commissions, compensations or fees, receipts or invoices
shall be issued which shall show the name, business style, if any, and address
of the purchaser, customer, or client. The original of each receipt or
invoice shall be issued to the purchaser, customer or client at the time
the transaction is effected, who, if engaged in business or in the
exercise of profession, shall keep and preserve the same in his place
of business for a period of three (3) years from the close of the taxable
year in which such invoice or receipt was issued, while the duplicate
shall be kept and preserved by the issuer, also in his place of business for a
like period. x x x
From the foregoing provision of law, a person who is subject to an internal
revenue tax shall issue receipts, sales or commercial invoices, prepared at
least in duplicate. The provision likewise imposed a responsibility upon the
purchaser to keep and preserve the original copy of the invoice or receipt for
a period of three years from the close of the taxable year in which such invoice
or receipt was issued. The rationale behind the latter requirement is the duty
of the taxpayer to keep adequate records of each and every transaction
entered into in the conduct of its business. So that when their books of
accounts are subjected to a tax audit examination, all entries therein, could
be shown as adequately supported and proven as legitimate business
transactions. Hence, [PMFC's] claim that the NIRC of 1977 did not require
substantiation requirements is erroneous.
chanRoblesvirtualLawlibrary
Exhibit
Invoic Gross
Numbe Date 10% VAT Net Amount
e No. Amount
r
B-7,
The mere fact that [PMFC] submitted the foregoing sales invoices belies [its]
claim that the NIRC of 1977 did not require that deductions must be
substantiated by adequate records.
From the total purchases of P5,893,694.64 which have been disallowed, it
seems that a portion thereof amounting to P1,280,268.19 (729,663.64 +
550,604.55) has no supporting sales invoices because of [PMFC's] failure to
present said invoices.
chanRoblesvirtualLawlibrary
a) In Sales Invoice No. 2072 marked as Exhibit B-3, the name Pilmico
Foods Corporation was erased and on top of it the name [PMFC] was
inserted but with a counter signature therein;
b) For undated Sales Invoice No. 2026, [PMFC] presented two exhibits
marked as Exhibits B-7 and B-11. Exhibit B-11 is the original sales
invoice whereas Exhibit B-7 is a photocopy thereof. Both exhibits
contained the word Mauri which was inserted on top and between the
words Pilmico and Foods. The only difference is that in the original
copy (Exhibit B-11), there was a counter signature although the ink
used was different from that used in the rest of the writings in the
said invoice; while in the photocopied invoice (Exhibit B-7), no such
counter signature appeared. [PMFC] did not explain why the said
countersignature did not appear in the photocopied invoice
considering it was just a mere reproduction of the original copy.
The sales invoices contain alterations particularly in the name of the purchaser
giving rise to serious doubts regarding their authenticity and if they were really
issued to [PMFC]. Exhibit B-11 does not even have any date indicated therein,
which is a clear violation of Section 238 of the NIRC of 1977 which required
that the official receipts must show the date of the transaction.
Besides, in order to support its claim, [PMFC] should have presented the
following vital documents, namely, 1) Written Offsetting Agreement; 2) proof
of payment by [PMFC] to Pilmico Foods Corporation; and 3) Financial
Statements for the year 1996 of Pilmico Foods Corporation to establish the
fact that Pilmico Foods Corporation did not deduct the amount of raw materials
being claimed by [PMFC].
Considering that the official receipts and sales invoices presented by [PMFC]
failed to comply with the requirements of Section 238 of the NIRC of 1977,
the disallowance by the [CIR] of the claimed deduction for raw materials is
proper.
[PMFC] filed a Motion for Partial Consideration on January 21, 2005 x x x but
x x x [PMFC's] Motion for Reconsideration was denied in a Resolution dated
May 19, 2005 for lack of merit, x x x.8 (Citation omitted, italics ours and
emphasis in the original)
Unperturbed, PMFC then filed a petition for review before the CTA en banc,
which adopted the CTA First Division's ruling and ratiocinations. Additionally,
the CTA en banc declared that:ChanRoblesVirtualawlibrary
The language of [Section 238] of the 1977 NIRC, as amended, is clear. It
requires that for each sale valued at P100.00 or more, the name, business
style and address of the purchaser, customer or client shall be indicated and
that the purchaser is required to keep and preserve the same in his place of
business. The purpose of the law in requiring the preservation by the
purchaser of the official receipts or sales invoices for a period of three years
is two-fold: 1) to enable said purchaser to substantiate his claimed
deductions from the gross income, and 2) to enable the Bureau of Internal
Revenue to verify the accuracy of the gross income of the seller from external
sources such as the customers of said seller. Hence, [PMFC's] argument that
there was no substantiation requirement under the 1977 NIRC is without
basis.
Moreover, the Supreme Court had ruled that in claiming deductions for
business expenses [,] it is not enough to prove the business test but a claimant
must substantially prove by evidence or records the deductions claimed under
the law, thus:ChanRoblesVirtualawlibrary
The principle is recognized that when a taxpayer claims a deduction, he must
point to some specific provision of the statute in which that deduction is
authorized and must be able to prove that he is entitled to the deduction which
the law allows. As previously adverted to, the law allowing expenses as
deduction from gross income for purposes of the income tax is Section 30 (a)
(l) of the National Internal Revenue which allows a deduction of "all the
ordinary and necessary expenses paid or incurred during the taxable year in
carrying on any trade or business.["] An item of expenditure, in order to be
deductible under this section of the statute must fall squarely within its
language.
x x x x
The irregularities found on the official receipts and sales invoices submitted in
evidence by [PMFC], i.e. not having been issued in the name of [PMFC] as the
purchaser and the fact that the same were not issued by the alleged seller
himself directly to the purchaser, rendered the same of no probative value.
x x x x
In the Joint Stipulation of Facts filed on March 7, 2001, the parties have agreed
that with respect to the deficiency income tax assessment, the following are
the issues to be resolved:
Whether or not the P5,895,694.66 purchases of raw materials are
unsupported;
x x x x
Clearly, the issue of proper substantiation of the deduction from gross income
pertaining to the purchases of raw materials was properly raised even before
[PMFC] began presenting its evidence. [PMFC] was aware that the [CIR]
issued the assessment from the standpoint of lack of supporting documents
for the claimed deduction and the fact that the assessments were not based
on the deductibility of the cost of raw materials. There is no difference in the
basis of the assessment and the issue presented to the [CTA] in Division for
resolution since both pertain to the issue of proper supporting documents for
ordinary and necessary business expenses.9(Citation omitted, italics ours and
emphasis in the original)
PMFC moved for reconsideration. Pending its resolution, the CIR issued
Revenue Regulation (RR) No. 15-2006,10 the abatement program of which was
availed by PMFC on October 27, 2006. Out of the total amount of
P2,804,920.36 assessed as income, value-added tax (VAT) and withholding
tax deficiencies, plus surcharges and deficiency interests, PMFC paid the CIR
P1,101,539.63 as basic deficiency tax. The PMFC, thus, awaits the CIR's
approval of the abatement, which can render moot the resolution of the instant
petition.11chanrobleslaw
Meanwhile, the CTA en banc denied the motion for reconsideration12 of PMFC,
in its Resolution13 dated December 4, 2006.
Issues
In the instant petition, what is essentially being assailed is the CTA en banc's
concurrence with the CTA First Division's ruling, which affirmed but reduced
the CIR's income deficiency tax assessment against PMFC. More specifically,
the following errors are ascribed to the CTA:ChanRoblesVirtualawlibrary
I
The Honorable CTA First Division deprived PMFC of due process of law and the
CTA assumed an executive function when it substituted a legal basis other
than that stated in the assessment and pleading of the CIR, contrary to law.
II
The decision of the Honorable CTA First Division must conform to the pleadings
and the theory of the action under which the case was tried. A judgment going
outside the issues and purporting to adjudicate something on which the parties
were not heard is invalid. Since the legal basis cited by the CTA supporting
the validity of the assessment was never raised by the CIR, PMFC was deprived
of its constitutional right to be apprised of the legal basis of the assessment.
III
In support of the instant petition, PMFC claims that the deficiency income tax
assessment issued against it was anchored on Sect on 34(A)(l)(b)16 of the
1997 NIRC. In disallowing the deduction of the purchase of raw materials from
PMFC's gross income, the CIR never m any reference to Section 238 of the
1977 NIRC relative to the mandatory requirement of keeping records of official
receipts, upon which the CTA had misplaced reliance. Had substantiation
requirements under Section 23 the 1977 NIRC been made an issue during the
trial, PMFC could have presented official receipts or invoices, or could have
compelled its suppliers to issue the same.17chanrobleslaw
In its Comment,19 the Office of the Solicitor General (OSG) counters that the
arguments advanced by PMFC are mere reiterations of those raised in the
proceedings below. Further, PMFC was fully apprised of the assailed tax
assessments and had all the opportunities to prove its claims.20chanrobleslaw
The OSG also avers that in the Joint Stipulation of Facts filed before the CTA
First Division on March 7, 2001, it was stated that one of the issues for
resolution was "whether or not the Php5,895,694.66 purchases of raw
materials are unsupported." Hence, PMFC was aware that the CIR issued the
assessments due to lack of supporting documents for the deductions claimed.
Essentially then, even in the proceedings before the CIR, the primary issue
has always been the lack or inadequacy of supporting documents for ordinary
and necessary business expenses.21chanrobleslaw
The OSG likewise points out that PMFC failed to satisfactorily discharge the
burden of proving the propriety of the tax deductions claimed. Further, there
were discrepancies in the names of the sellers and purchasers i indicated in
the receipts casting doubts on their authenticity.22chanrobleslaw
Ruling of the Court
The Court affirms but modifies the herein assailed decision and resolution.
Preliminary matters
On December 19, 2006, PMFC filed before the Court a motion for extension of
time to file a petition for review.23 In the said motion, PMFC informed the Court
that it had availed of the CIR's tax abatement program, the details of which
were provided for in RR No. 15-2006. PMFC paid the CIR the amount of
P1,101,539.63 as basic deficiency tax. PMFC manifested that if the abatement
application would be approved by the CIR, the instant petition filed before the
Court may be rendered superfluous.
In the Joint Stipulation of Facts, dated March 7, 2001, filed before CTA First
Division, the CIR and PMFC both agreed that among the issues for resolution
was "whether or not the P5,895,694.66 purchases of raw materials are
unsupported."26 Estoppel, thus, operates against PMFC anent its argument
that the issue of lack or inadequacy of documents to justify the costs of
purchase of raw materials as deductions from the gross income had not been
presented in the proceedings below, hence, barred for being belatedly raised
only on appeal.
Further, in issuing the assessments, the CIR had stated the material facts and
the law upon which they were based. In the petition for review filed by PMFC
before the CTA, it was the former's burden to properly invoke the applicable
legal provisions in pursuit of its goal to reduce its tax liabilities. The CTA, on
the other hand, is not bound to rule solely on the basis of the laws cited by
the CIR. Were it otherwise, the tax court's appellate power of review shall be
rendered useless. An absurd situation would arise leaving the CTA with only
two options, to wit: (a) affirming the CIR's legal findings; or (b) altogether
absolving the taxpayer from liability if the CIR relied on misplaced legal
provisions. The foregoing is not what the law intends.
To reiterate, PMFC was at the outset aware that the lack or inadequacy of
supporting documents to justify the deductions claimed from the gross income
was among the issues raised for resolution before the CTA. With PMFC's
acquiescence to the Joint Stipulation of Facts filed before the CTA and
thenceforth, the former's participation in the proceedings with all
opportunities it was afforded to ventilate its claims, the alleged deprivation of
due process is bereft of basis.
The third issue raised by PMFC is substantive in nature. At its core is the
alleged application of Section 29 of the 1977 NIRC as regards the deductibility
from the gross income of the cost of raw materials purchased by PMFC.
It bears noting that while the CIR issued the assessments on the basis of
Section 34 of the 1997 NIRC, the CTA and PMFC are in agreement that the
1977 NIRC finds application.
However, while the CTA ruled on the basis of Section 238 of the 1977 NIRC,
PMFC now insists that Section 29 of the same code should be applied instead.
Citing Atlas Consolidated Mining and Development Corporation v. CIR,27 PMFC
argues that Section 29 imposes less stringent requirements and the
presentation of official receipts as evidence of the claimed deductions
dispensable. PMFC further posits that the mandatory nature of the submission
of official receipts as proof is a mere innovation in the 19 NIRC, which cannot
be applied retroactively.28chanrobleslaw
The Court finds that the alleged differences between the requirements of
Section 29 of the 1977 NIRC invoked by PMFC, on one hand, and Section 238
relied upon by the CTA, on the other, are more imagined than real.
PMFC cites Atlas31 to contend that the statutory test, as provided in Section
29 of the 1977 NIRC, is sufficient to allow the deductibility of a business
expense from the gross income. As long as the expense is: (a) both ordinary
and necessary; (b) incurred in carrying a business or trade; and (c) paid or
incurred within the taxable year, then, it shall be allowed as a deduction from
the gross income.32chanrobleslaw
Let it, however, be noted that in Atlas, the Court likewise declared
that:ChanRoblesVirtualawlibrary
In addition, not only must the taxpayer meet the business test, he must
substantially prove by evidence or records the deductions claimed under the
law, otherwise, the same will be disallowed. The mere allegation of the
taxpayer that an item of expense is ordinary and necessary does not justify
its deduction.33 (Citation omitted and italics ours)
It is, thus, clear that Section 29 of the 1977 NIRC does not exempt the
taxpayer from substantiating claims for deductions. While official receipts are
not the only pieces of evidence which can prove deductible expenses, if
presented, they shall be subjected to examination. PMFC submitted official
receipts as among its evidence, and the CTA doubted their veracity. PMFC
was, however, unable to persuasively explain and prove through other
documents the discrepancies in the said receipts. Consequently, the CTA
disallowed the deductions claimed, and in its ruling, invoked Section 238 of
the 1977 NIRC considering that official receipts are matters provided for in
the said section.
Conclusion
The Court recognizes that the CTA, which by the very nature of its function is
dedicated exclusively to the consideration of tax problems, has necessarily
developed an expertise on the subject, and its conclusions will not be
overturned unless there has been an abuse or improvident exercise of
authority. Such findings can only be disturbed on appeal if they are not
supported by substantial evidence or there is a showing of gross error or abuse
on the part of the tax court. In the absence of any clear and convincing proof
to the contrary, the Court must presume that the CTA rendered a decision
which is valid in every respect.34chanrobleslaw
Further, revenue laws are not intended to be liberally construed. Taxes are
the lifeblood of the government and in Holmes' memorable metaphor, the
price we pay for civilization; hence, laws relative thereto must be faithfully
and strictly implemented.35 While the 1977 NIRC required substantiation
requirements for claimed deductions to be allowed, PMFC insists on leniency,
which is not warranted under the circumstances.
Lastly, the Court notes too that PMFC's tax liabilities have been me than
substantially reduced to P2,804,920.36 from the CIR's initial assessment of
P9,761,750.02.36chanrobleslaw
However, the Court finds it proper to modify the herein assail decision and
resolution to conform to the interest rates prescribed in Nacar v. Gallery
Frames, et al.37 The total amount of P2,804,920.36 to be paid PMFC to the
CIR shall be subject to an interest of six percent (6%) per annum to be
computed from the finality of this Resolution until full payment.
WHEREFORE, the instant petition is DENIED. The Decision dated August 29,
2006 and Resolution dated December 4, 2006 of the Court of Tax Appeals en
banc in C.T.A. EB No. 97 are AFFIRMED.
However, MODIFICATION thereof, the legal interest of six percent (6%) per
annum reckoned from the finality of this Resolution until full satisfaction, is
here imposed upon the amount of P2,804,920.36 to be paid by Pilmico-Mauri
Foods Corporation to the Commissioner of Internal Revenue.
SO ORDERED.chanRoblesvirtualLawlibrary