ARTICLE VIII JUDICIAL DEPARTMENT Section 1 Santiago v.

. Bautista (32 SCRA 188 {1970}) Ricardo Santiago vs Commissioner Bautista of Immigrations ON OCTOBER 30, 2011 Constitutional Law Judicial Power Justiciable Controversy Citizenship Santiago was considered an alien as evidenced by his alien certificate of registration. He averred that this is erroneous. He was born of a Filipino mother and a Chinese father here in the Philippines. He was sent to China when he was 4 years old by his dad. He returned in 1925 and in his Landing Certificate he was already labeled as a Filipino. Hence, he would like to cancel the alien certificate that was issued by the Bureau of Immigrations. In his original petition however in the lower court he was praying for a declaratory relief for him to be declared as a Filipino. He was favored by the court. The fiscal appealed averring that a declaratory relief is not the proper remedy. The lower court amended the decision not stating the declaratory statement but rather focusing on the cancellation of the alien certificate. The fiscal appealed before the SC. ISSUE: Whether or not declaratory relief is a proper remedy to have a judicial declaration of citizenship. HELD: The SC ruled against Santiago. Although amended, the proceeding initiated and originally prayed for is a declaratory relief to have him be declared as a Filipino. Under our laws, there can be no action or proceeding for the judicial declaration of the citizenship of an individual. Courts of justice exist for the settlement of justifiable controversies, which imply a given right, legally demandable and enforceable, an act or omission violative of said right, and a remedy, granted or sanctioned by law, for said breach of right. As an accident only of the adjudication of the rights of the parties to a controversy, the court may pass upon, and make a pronouncement relative to, their status. Otherwise, such a pronouncement is beyond judicial power. Thus, for instance, no

action or proceeding may be instituted for a declaration to the effect that plaintiff or petitioner is married, or single, or a legitimate child, although a finding thereon may be made as a necessary premise to justify a given relief available only to one enjoying said status. At times, the law permits the acquisition of a given status, such as naturalization, by judicial decree. But, there is no similar legislation authorizing the institution of a judicial proceeding to declare that a given person is part of our citizenry.

Daza v. Singson (180 SCRA 496 {1989}) ON NOVEMBER 25, 2010 Tribunal and its Composition The Laban ng Demokratikong Pilipino (LDP) was reorganized resulting to a political realignment in the lower house. LDP also changed its representation in the Commission on Appointments. They withdrew the seat occupied by Daza (LDP member) and gave it to the new LDP member. Thereafter the chamber elected a new set of representatives in the CoA which consisted of the original members except Daza who was replaced by Singson. Daza questioned such replacement. ISSUE: Whether or not a change resulting from a political realignment validly changes the composition of the Commission on Appointments. HELD: As provided in the constitution, there should be a Commission on Appointments consisting of twelve Senators and twelve members of the House of Representatives elected by each House respectively on the basis of proportional representation of the political parties therein, this necessarily connotes the authority of each house of Congress to see to it that the requirement is duly complied with. Therefore, it may take appropriate measures, not only upon the initial organization of the Commission but also subsequently thereto NOT the court.

Malaga v. Penachaos, Jr. (213 SCRA 516 {1992}) FACTS: The Iloilo State College of Fisheries (ISCOF) through its Pre-qualifications, Bids and Awards Committee (PBAC) caused the publication in the November 25, 26 and 28, 1988 issues of the Western Visayas Daily an Invitation to Bid for the construction of a Micro Laboratory Building at ISCOF. The notice announced that the last day for the submission of pre-qualification requirements was on December 2, 1988, and that the bids would be received and opened on December 12, 1988 at 3 o'clock in the afternoon. Petitioners Malaga and Najarro, doing business under the name of BE Construction and Best Built Construction, respectively, submitted their pre-qualification documents at two o'clock in the afternoon of December 2, 1988. Petitioner Occeana submitted his own PRE-C1 on December 5, 1988. All three of them were not allowed to participate in the bidding as their documents were considered late. On December 12, 1988, the petitioners filed a complaint with the Iloilo RTC against the officers of PBAC for their refusal without just cause to accept them resulting to their non-inclusion in the list of prequalified bidders. They sought to the resetting of the December 12, 1988 bidding and the acceptance of their documents. They also asked that if the bidding had already been conducted, the defendants be directed not to award the project pending resolution of their complaint. On the same date, Judge Lebaquin issued a restraining order prohibiting PBAC from conducting the bidding and award the project. The defendants filed a motion to lift the restraining order on the ground that the court is prohibited from issuing such order, preliminary injunction and preliminary mandatory injunction in government infrastructure project under Sec. 1 of P.D. 1818. They also contended that the preliminary injunction had become moot and academic as it was served after the bidding had been awarded and closed. On January 2, 1989, the trial court lifted the restraining order and denied the petition for preliminary injunction. It declared that the building sought to be constructed at the ISCOF was an infrastructure

project of the government falling within the coverage of the subject law. ISSUE: Whether or not ISCOF is a government instrumentality subject to the provisions of PD 1818? RULING: The 1987 Administrative Code defines a government instrumentality as follows: Instrumentality refers to any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. This term includes regulatory agencies, chartered institutions, and government-owned or controlled corporations. (Sec. 2 (5) Introductory Provisions). The same Code describes a chartered institution thus: Chartered institution - refers to any agency organized or operating under a special charter, and vested by law with functions relating to specific constitutional policies or objectives. This term includes the state universities and colleges, and the monetary authority of the state. (Sec. 2 (12) Introductory Provisions). It is clear from the above definitions that ISCOF is a chartered institution and is therefore covered by P.D. 1818. There are also indications in its charter that ISCOF is a government instrumentality. First, it was created in pursuance of the integrated fisheries development policy of the State, a priority program of the government to effect the socio-economic life of the nation. Second, the Treasurer of the Republic of the Philippines shall also be the exofficio Treasurer of the state college with its accounts and expenses to be audited by the Commission on Audit or its duly authorized representative. Third, heads of bureaus and offices of the National Government are authorized to loan or transfer to it, upon request of the president of the state college, such apparatus, equipment, or supplies and even the services of such employees as can be spared without serious detriment to public service. Lastly, an additional amount of P1.5M had been appropriated out of the funds of the National Treasury and it was also decreed in its charter that the funds and maintenance of the state college would henceforth be included in the General Appropriations Law.

Nevertheless, it does not automatically follow that ISCOF is covered by the prohibition in the said decree as there are irregularities present surrounding the transaction that justified the injunction issued as regards to the bidding and the award of the project (citing the case of Datiles vs. Sucaldito). Tocao v. CA (G.R. No. 127405, September 20, 2001) William Belo introduced Nenita Anay to his girlfriend, Marjorie Tocao. The three agreed to form a joint venture for the sale of cooking wares. Belo was to contribute P2.5 million; Tocao also contributed some cash and she shall also act as president and general manager; and Anay shall be in charge of marketing. Belo and Tocao specifically asked Anay because of her experience and connections as a marketer. They agreed further that Anay shall receive the following: 1. 2. 3. 4. 10% share of annual net profits 6% overriding commission for weekly sales 30% of sales Anay will make herself 2% share for her demo services

They operated under the name Geminesse Enterprise, this name was however registered as a sole proprietorship with the Bureau of Domestic Trade under Tocao. The joint venture agreement was not reduced to writing because Anay trusted Belos assurances. The venture succeeded under Anays marketing prowess. But then the relationship between Anay and Tocao soured. One day, Tocao advised one of the branch managers that Anay was no longer a part of the company. Anay then demanded that the company be audited and her shares be given to her. ISSUE: Whether or not there is a partnership. HELD: Yes, even though it was not reduced to writing, for a partnership can be instituted in any form. The fact that it was registered as a sole proprietorship is of no moment for such registration was only for the companys trade name. Anay was not even an employee because when they ventured into the agreement, they explicitly agreed to profit sharing this is even though Anay was receiving commissions because this is only incidental to her efforts as a head marketer.

The Supreme Court also noted that a partner who is excluded wrongfully from a partnership is an innocent partner. Hence, the guilty partner must give him his due upon the dissolution of the partnership as well as damages or share in the profits realized from the appropriation of the partnership business and goodwill. An innocent partner thus possesses pecuniary interest in every existing contract that was incomplete and in the trade name of the copartnership and assets at the time he was wrongfully expelled. An unjustified dissolution by a partner can subject him to action for damages because by the mutual agency that arises in a partnership, the doctrine of delectus personae allows the partners to have the power, although not necessarily the right to dissolve the partnership. Tocaos unilateral exclusion of Anay from the partnership is shown by her memo to the Cubao office plainly stating that Anay was, as of October 9, 1987, no longer the vice-president for sales of Geminesse Enterprise. By that memo, petitioner Tocao effected her own withdrawal from the partnership and considered herself as having ceased to be associated with the partnership in the carrying on of the business. Nevertheless, the partnership was not terminated thereby; it continues until the winding up of the business. NOTE: Motion for Reconsideration filed by Tocao and Belo decided by the SC on September 20, 2001. Belo is not a partner. Anay was not able to prove that Belo in fact received profits from the company. Belo merely acted as a guarantor. His participation in the business meetings was not as a partner but as a guarantor. He in fact had only limited partnership. Tocao also testified that Belo received nothing from the profits. The Supreme Court also noted that the partnership was yet to be registered in the Securities and Exchange Commission. As such, it was understandable that Belo, who was after all petitioner Tocaos good friend and confidante, would occasionally participate in the affairs of the business, although never in a formal or official capacity. Section 2 Man truste System v. CA (179 SCRA 136 {1989}) Facts: Mantruste Systems, Inc. (MSI) entered into an interim lease agreement dated August 26, 1986 with the Development Bank of the Philippines, the owner of Bayview Plaza Hotel. The agreement

provides that MSI would operate the hotel for a minimum of three months or until such time that the said properties are sold to MSI or other third parties by DBP. During the said period, the President issued Proclamation No. 50 entitled Launching a Program for the Expeditious Disposition or Privatization of certain Government Corporations and/or the (acquired) assets thereof and creating a Committee on Privatization and the Asset Privatization Trust. The Bayview Hotel has been one of the identified assets for privatization and it was transferred from DBP to APT for disposition. The DBP notified MSI that it was terminating the interim lease agreement. It has been agreed that 30 days from the signing of the Certification, the lease contract will be considered as terminated; the Bayview Hotel will be made available for inspection at all times by other bidders; and said property will be ready for delivery to any new owners 30 days from signing the Certification. A letter granting an extension of 30 days was sent by APT to MSI. This is to allow the latter to wind up affairs and to facilitate a smooth turn-over of the facilities to its new owners without necessarily interrupting the hotels regular operation. After 15 days, MSI informed APT that since its lease on the hotel properties has been for more than one year now, its lessee status has taken the character of a long term one. As such MSI as the lessee has acquired certain rights and privileges under the law and equity. It also contends that it has acquired a priority right to purchase said properties above other interested parties. APT, on a reply said that it has not found any stipulation tending to support MSIs claim and since the Pre-Bidding Conference has been conducted, for APT to consider the request of MSI would not be in consonance with law, equity and fair play. The MSI then wrote a letter to APT informing the latter of the alleged legal lien over the hotel which amounts to P10,000,000 . It also demanded that APT consider MSI as very preferred bidder. MSI also submit its bid to APT for P95,000,000 in cash or P120,000,000 in installment terms. MSI also asked APT to clarify the following: 10 whether APT has a clean title over the property; 2) whether the Trust knew the hotel had back taxes; 3) who should pay the tax arrears; and 4) whether MSIs advances made in behalf of DBP would be treated as part of the bid offer.

In the view that MSI has been disqualified from the public bidding, the property was eventually awarded to Makati Agro Trading and La Filipina Uy Gongco Corporation. MSI filed a petition for preliminary injunction with the lower court. The said court granted the petition but the Court of Appeals nullified the lower courts ruling for being violative to Section 1 of Proclamation No. 50 which provides: No court or administrative agency shall issue any restraining order or injunction against the trust in connection with the acquisition, sale or disposition of assets transferred to it. Nor shall such order or injunction be issued against any purchaser of assets sold by the Trust to prevent such purchaser from taking possession of any assets purchased by him. The CA rejected the lower courts opinion that said proclamation is unconstitutional, rather it upheld that it continues to be operative after the effectivity of the 1987 Constitution by virtue of Section 3 Art. XVIII. It also noted that MSI has not been deprived of its property rights since those rights are non-existent and its only property right was the alleged reimbursable advances made to DBP, which it may sue to collect in a separate action. It further held that the issuance of writ of preliminary injunction by the lower court against APT may not be justified as a valid exercise of judicial power for MSI does not have a legally demandable and enforceable right of retention over the said property. The MSI then filed this petition for certiorari with this Court. Issue: Whether or not the CA erred in holding that MSIs rights to the property are non-existent except its right to use the refund of its alleged advances; and in not declaring unconstitutional Section 31 of Proclamation No. 50. Ruling: The Court upheld the ruling of the CA. It affirmed the Court of appeals finding that MSIs claim to a patent contractual right to retain possession of the Bayview Hotel until all its advances are paid is non-existent; and as the right of retention does not exist, neither does the right to the relief demanded. A mere lessee like MSI is not a builder in good faith, hence the right of retention given to a possessor in good faith pending reimbursement of his advances for necessary repairs and useful improvements on anothers property is not available to a lessee whose possession is not that of an owner. The Court stated that it is a settled rule that lessees are not possessor in good faith because they know that their occupancy of

the premises continue only during the life of the lease, hence they cannot recover, as a matter of right, the value of their improvements from the lessor, much less retain the premises until they are reimbursed thereof. The Court also ruled that Section 31 of Proclamation No. 50 does not impair the inherent powers of the courts to settle actual controversies which are legally demandable and enforceable and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government. It also noted that the power of the courts over the other branches and instrumentalities of the government is limited only to the determination of whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction in the exercise of their authority and in the performance of their assigned tasks. There can be no justification on judicial interference in the business of an administrative agency except when it violates a citizens constitutional rights, or commits a grave abuse of discretion, or acts in excess of, or without jurisdiction. The petition is dismissed.

the repeal of existing laws. The veto is unconstitutional since the power of the president to disapprove any item or items in the appropriations bill does not grant the authority to veto part of an item and to approve the remaining portion of said item. Section 5 Fabian v. Desierto (G.R. No. 129742, September 16, 1998) Facts: Petitioner Teresita Fabian was the major stockholder and President of PROMAT Construction Development Corporation which was engaged in the construction business. Private respondent Nestor Agustin was the District Engineer of the First Metro Manila Engineering District. PROMAT participated in the bidding for government construction projects, and private respondent, reportedly taking advantage of his official position, inveigled petitioner into an amorous relationship. Their affair lasted for some time, in the course of which, private respondent gifted PROMAT with public works contracts and interceded for it in problems concerning the same in his office. When petitioner tried to terminate their relationship, private respondent refused and resisted her attempts to do so to the extent of employing acts of harassment, intimidation and threats. Petitioner filed an administrative complaint against private respondent. Ombudsman found private respondent guilty of misconduct and meted out the penalty of suspension without pay for 1 year. After private respondent moved for reconsideration, the Ombudsman discovered that the private respondents new counsel had been his classmate and close associate, hence, he inhibited himself. The case was transferred to respondent Deputy Ombudsman who exonerated private respondent from the administrative charges. Petitioner appealed to the SC by certiorari under Rule 45 of the Rules of Court.

Section 3 Bengzon v. Drilon (208 SCRA 133 {1992}) Political Law Veto Power of the President On 15 Jan 1992, some provisions of the Special Provision for the Supreme Court and the Lower Courts General Appropriations were vetoed by the President because a resolution by the Court providing for appropriations for retired justices has been enacted. The vetoed bill provided for the increase of the pensions of the retired justices of the Supreme Court, and the Court of Appeals as well as members of the Constitutional Commission. ISSUE: Whether or not the veto of the President on that portion of the General Appropriations bill is constitutional. HELD: The Justices of the Court have vested rights to the accrued pension that is due to them in accordance to Republic Act 1797. The president has no power to set aside and override the decision of the Supreme Court neither does the president have the power to enact or amend statutes promulgated by her predecessors much less to

Issue: Whether or not Section 27 of RA 6770 which provides for appeals in administrative disciplinary cases from the Office of the Ombudsman to the SC in accordance with Rule 45 of the Rules of Court is valid

Held: The revised Rules of Civil Procedure preclude appeals from quasi-judicial agencies to the SC via a petition for review on certiorari under Rule 45. Under the present Rule 45, appeals may be brought through a petition for review on certiorari but only from judgments and final orders of the courts enumerated in Sec. 1 thereof. Appeals from judgments and final orders of quasi-judicial agencies are now required to be brought to the CA on a verified petition for review, under the requirements and conditions in Rule 43 which was precisely formulated and adopted to provide for a uniform rule of appellate procedure for quasi-judicial agencies. Section 27 of RA 6770 cannot validly authorize an appeal to the SC from decisions of the Office of the Ombudsman in administrative disciplinary cases. It consequently violates the proscription in Sec. 30, Art. VI of the Constitution against a law which increases the appellate jurisdiction of the SC.

They contend that Circular No. 191 (a rule of procedure) cannot be deemed to have superseded Art 82 of EO 226 (a legislation). Issue: Was the Court correct in sustaining the appellate jurisdiction of the CA in decisions from the Board of Investments? Held: Yes. EO 226 was promulgated after the 1987 Constitution took effect February 2, 1987. Thus, Art 82 of EO 226, which provides for increasing the appellate jurisdiction of the SC, is invalid and therefore never became effective for the concurrence of the Court was no sought in its enactment. Thus, the Omnibus Investments Code of 1981 as amended still stands. The exclusive jurisdiction on appeals from decisions of the BOI belongs to the CA.

Echegaray v. Sec. Of Justice (G.R. No. 132601, January 19, 1999) Facts: On January 4, 1999, the SC issued a TRO staying the execution of petitioner Leo Echegaray scheduled on that same day. The public respondent Justice Secretary assailed the issuance of the TRO arguing that the action of the SC not only violated the rule on finality of judgment but also encroached on the power of the executive to grant reprieve.

First Lepanto Ceramics, Inc. v. CA (237 SCRA 519) Facts: The Omnibus Investments Code of 1981 as amended provided that appeals from decisions of the Board of Investments (BOI) shall be the exclusive jurisdiction of the CA. Just a few months after the 1987 Constitution took effect (July 17, 1987), the Omnibus Investments Code of 1987 (EO 226) was promulgated which provided in Art 82 thereof that such appeals be directly filed with the SC. The SC later promulgated, under its rule-making power, Circular No. 1-91 which confirmed that jurisdiction of the CA over appeals from the decisions of the BOI. SCs Second Division, relying on said Circular, accordingly sustained the appellate jurisdiction of the CA in this present case. Petitioner now move to reconsider and question the Second Divisions ruling which provided: .although the right to appeal granted by Art 82 of EO 226 is a substantive right which cannot be modified by a rule of procedure, nonetheless, questions concerning where and in what manner the appeal can be brought are only matters of procedure which this Court hast he power to regulate.

Issue: Whether or not the SC, after the decision in the case becomes final and executory, still has jurisdiction over the case

Held: The finality of judgment does not mean that the SC has lost all its powers or the case. By the finality of the judgment, what the SC loses is its jurisdiction to amend, modify or alter the same. Even after the judgment has become final, the SC retains its jurisdiction to execute and enforce it. The power to control the execution of the SCs decision is an essential aspect of its jurisdiction. It cannot be the subject of substantial subtraction for the Constitution vests the entirety of judicial power in one SC and in such lower courts as may be established by law. The important part of a litigation, whether civil or

criminal, is the process of execution of decisions where supervening events may change the circumstance of the parties and compel courts to intervene and adjust the rights of the litigants to prevent unfairness. It is because of these unforeseen, supervening contingencies that courts have been conceded the inherent and necessary power of control of its processes and orders to make them comform to law and justice. The Court also rejected public respondents contention that by granting the TRO, the Court has in effect granted reprieve which is an executive function under Sec. 19, Art. VII of the Constitution. In truth, an accused who has been convicted by final judgment still possesses collateral rights and these rights can be claimed in the appropriate courts. For instance, a death convict who becomes insane after his final conviction cannot be executed while in a state of insanity. The suspension of such a death sentence is indisputably an exercise of judicial power. It is not a usurpation of the presidential power of reprieve though its effects are the same as the temporary suspension of the execution of the death convict. In the same vein, it cannot be denied that Congress can at any time amend the Death Penalty Law by reducing the penalty of death to life imprisonment. The effect of such an amendment is like that of commutation of sentence. But the exercise of Congress of its plenary power to amend laws cannot be considered as a violation of the power of the President to commute final sentences of conviction. The powers of the Executive, the Legislative and the Judiciary to save the life of a death convict do not exclude each other for the simple reason that there is no higher right than the right to life. To contend that only the Executive can protect the right to life of an accused after his final conviction is to violate the principle of co-equal and coordinate powers of the 3 branches of the government. Section 6 Maceda v. Vasquez (221 SCRA 464) Facts: Respondent Napoleon Abiera of PAO filed a complaint before the Office of the Ombudsman against petitioner RTC Judge Bonifacio Sanz Maceda. Respondent Abiera alleged that petitioner Maceda has falsified his certificate of service by certifying that all civil

and criminal cases which have been submitted for decision for a period of 90 days have been determined and decided on or before January 31, 1989, when in truth and in fact, petitioner Maceda knew that no decision had been rendered in 5 civil and 10 criminal cases that have been submitted for decision. Respondent Abiera alleged that petitioner Maceda falsified his certificates of service for 17 months.

Issue: Whether or not the investigation made by the Ombudsman constitutes an encroachment into the SCs constitutional duty of supervision over all inferior courts

Held: A judge who falsifies his certificate of service is administratively liable to the SC for serious misconduct and under Sec. 1, Rule 140 of the Rules of Court, and criminally liable to the State under the Revised Penal Code for his felonious act. In the absence of any administrative action taken against him by the Court with regard to his certificates of service, the investigation being conducted by the Ombudsman encroaches into the Courts power of administrative supervision over all courts and its personnel, in violation of the doctrine of separation of powers. Art. VIII, Sec. 6 of the Constitution exclusively vests in the SC administrative supervision over all courts and court personnel, from the Presiding Justice of the CA down to the lowest municipal trial court clerk. By virtue of this power, it is only the SC that can oversee the judges and court personnels compliance with all laws, and take the proper administrative action against them if they commit any violation thereof. No other branch of government may intrude into this power, without running afoul of the doctrine of separation of powers. Where a criminal complaint against a judge or other court employee arises from their administrative duties, the Ombudsman must defer action on said complaint and refer the same to the SC for determination whether said judge or court employee had acted within the scope of their administrative duties.

Section 10 Nitafan v. Commissioner of Internal Revenue (152 SCRA 284) FACTS: Petitioners, the duly appointed and qualified Judges presiding over Branches 52, 19 and 53, respectively, of the Regional Trial Court, National Capital Judicial Region, all with stations in Manila, seek to prohibit and/or perpetually enjoin respondents, the Commissioner of Internal Revenue and the Financial Officer of the Supreme Court, from making any deduction of withholding taxes from their salaries. They submit that "any tax withheld from their emoluments or compensation as judicial officers constitutes a decrease or diminution of their salaries, contrary to the provision of Section 10, Article VIII of the 1987 Constitution mandating that during their continuance in office, their salary shall not be decreased," even as it is anathema to the Ideal of an independent judiciary envisioned in and by said Constitution." It may be pointed out that, early on, the Court had dealt with the matter administratively in response to representations that the Court shall direct its Finance Officer to discontinue the withholding of taxes from salaries of members of the Bench. Thus, on June 4, 1987, it was reaffirmed by the Court en banc. ISSUE: Whether or not members of the Judiciary are exempt from income taxes. HELD: No. The debates, interpellations and opinions expressed regarding the constitutional provision in question until it was finally approved by the Commission disclosed that the true intent of the framers of the 1987 Constitution, in adopting it, was to make the salaries of members of the Judiciary taxable. The ascertainment of that intent is but in keeping with the fundamental principle of constitutional construction that the intent of the framers of the organic law and of the people adopting it should be given effect. The primary task in constitutional construction is to ascertain and thereafter assure the

realization of the purpose of the framers and of the people in the adoption of the Constitution. It may also be safely assumed that the people in ratifying the Constitution were guided mainly by the explanation offered by the framers. The ruling that "the imposition of income tax upon the salary of judges is a dimunition thereof, and so violates the Constitution", in Perfecto vs. Meer, as affirmed in Endencia vs. David must be declared discarded. The framers of the fundamental law, as the alter ego of the people, have expressed in clear and unmistakable terms the meaning and import of Section 10, Article VIII, of the 1987 Constitution that they have adopted Stated otherwise, we accord due respect to the intent of the people, through the discussions and deliberations of their representatives, in the spirit that all citizens should bear their aliquot part of the cost of maintaining the government and should share the burden of general income taxation equitably. Therefore, the petition for Prohibition is hereby dismissed

Section 11 De la Llana v. Alba (112 SCRA 294) FACTS: De La Llana, et. al. filed a Petition for Declaratory Relief and/or for Prohibition, seeking ti enjoin the Minister of the Budget, the Chairman of the Commission on Audit, and the Minister of Justice from taking any action implementing BP 129 which mandates that Justices and judges of inferior courts from the CA to MTCs, except the occupants of the Sandiganbayan and the CTA, unless appointed to the inferior courts established by such act, would be considered separated from the judiciary. It is the termination of their incumbency that for petitioners justify a suit of this character, it being alleged that thereby the security of tenure provision of the Constitution has been ignored and disregarded. ISSUES: W/N BP 129 is unconstitutional for impairing the security of tenure of the justices and judges in this case?

RULING: It is a well-known rule that valid abolition of offices is neither removal nor separation of the incumbents. Of course, if the abolition is void, the incumbent is deemed never to have ceased to hold office. The rule that the abolition of an office does not amount to an illegal removal of its incumbent is the principle that, in order to be valid, the abolition must be made in good faith. Removal is to be distinguished from termination by virtue of valid abolition of the office. There can be no tenure to a non-existent office. After the abolition, there is in law no occupant. In case of removal, there is an office with an occupant who would thereby lose his position. It is in that sense that from the standpoint of strict law, the question of any impairment of security of tenure does not arise.

therein intended that all administrative disciplinary cases should be heard and decided by the whole Court since it would result in an absurdity. The second clause, which refers to the second situation contemplated therein and is intentionally separated from the first by a comma, declares on the other hand that the Court en banc can order their dismissal by a vote of a majority of the Members who actually took part in the deliberations on the issues in the case and voted therein. In this instance, the administrative case must be deliberated upon and decided by the full Court itself. Pursuant to the first clause which confers administrative disciplinary power to the Court en banc, a decision en banc is needed only where the penalty to be imposed is the dismissal of a judge, officer or employee of the Judiciary, disbarment of a lawyer, or either the suspension of any of them for a period of more than 1 year or a fine exceeding P10, 000.00 or both. Indeed, to require the entire Court to deliberate upon and participate in all administrative matters or cases regardless of the sanctions, imposable or imposed, would result in a congested docket and undue delay in the adjudication of cases in the Court, especially in administrative matters, since even cases involving the penalty of reprimand would require action by the Court en banc. Caoibes v. Ombudsman (G.R. No. 132177, July 17, 2001)

People v. Judge Gacott (246 SCRA 52) Facts: For failure to check the citations of the prosecution, the order of respondent RTC Judge Eustaquio Gacott, Jr. dismissing a criminal case was annulled by the SC. The respondent judge was also sanctioned with a reprimand and a fine of P10,000.00 for gross ignorance of the law. The judgment was made by the Second Division of the SC.

Issue: Whether or not the Second Division of the SC has the competence to administratively discipline respondent judge Held: To support the Courts ruling, Justice Regalado relied on his recollection of a conversation with former Chief Justice Roberto Concepcion who was the Chairman of the Committee on the Judiciary of the 1986 Constitutional Commission of which Regalado was also a member. The very text of the present Sec. 11, Art. VIII of the Constitution clearly shows that there are actually two situations envisaged therein. The first clause which states that the SC en banc shall have the power to discipline judges of lower courts, is a declaration of the grant of that disciplinary power to, and the determination of the procedure in the exercise thereof by, the Court en banc. It was not

Under Section 6, Article VIII of the Constitution, it is the Supreme Court which is vested with exclusive administrative supervision over all courts and its personnel. The Ombudsman cannot determine for itself and by itself whether a criminal complaint against a judge, or court employee, involves an administrative matter. The Ombudsman is duty bound to have all cases against judges and court personnel filed before it, referred to the Supreme Court for determination as to whether and administrative aspect is involved therein.

Facts: On May 23, 1997, respondent Florentino M. Alumbres, Presiding Judge of Branch 255 of the Regional Trial Court of Las Pinas City, filed before the Office of the Ombudsman, a Criminal Complaint for physical injuries, malicious mischief for the destruction of complainants eyeglasses, and assault upon a person in authority. Alumbres alleged that on May 20, 1997, at the hallway on the third floor of the Hall of Justice, Las Pinas City, he requested petitioner Judge Caoibes (Presiding Judge of RTC 253) to return the executive table he borrowed from respondent; that petitioner did not answer so respondent reiterated his request but before he could finish talking, petitioner blurted "Tarantado ito ah," and boxed him at his right eyebrow and left lower jaw so that the right lens of his eyeglasses was thrown away, rendering his eyeglasses unserviceable. He prayed that criminal charges be filed before the Sandiganbayan against the petitioner. On June 13, 1997, Respondent Judge lodged an administrative case with the SC praying for the dismissal of petitioner from the judiciary on the ground of grave misconduct or conduct unbecoming a judicial officer using the same facts as above. On June 25, 1997, the Office of the Ombudsman required petitioner to file a counter-affidavit within 10 days from receipt thereof. Instead of filing a counter-affidavit, petitioner filed on an "Ex-Parte Motion for Referral to the Honorable Supreme Court," praying that the Office of the Ombudsman hold its investigation of the case, and refer the same to the SC which is already investigating the case. Petitioner contended that the SC, not the Office of the Ombudsman, has the authority to make a preliminary determination of the respective culpability of petitioner and respondent Judge who, both being members of the bench, are under its exclusive supervision and control. On August 22, 1997, the Office of the Ombudsman denied the motion for referral to the SC stating that under Section 15 (1) of Republic Act No. 6770, it is within its jurisdiction to investigate on the criminal charges. It likewise denied petitioners motion for reconsideration. Issue: Whether or not the Office of the Ombudsman should defer action on the case pending resolution of the administrative case

Held: It appears that the present case involves two members of the judiciary who were entangled in a fight within court premises over a piece of office furniture. Under Section 6, Article VIII of the Constitution, it is the Supreme Court which is vested with exclusive administrative supervision over all courts and its personnel. Prescinding from this premise, the Ombudsman cannot determine for itself and by itself whether a criminal complaint against a judge, or court employee, involves an administrative matter. The Ombudsman is duty bound to have all cases against judges and court personnel filed before it, referred to the Supreme Court for determination as to whether and administrative aspect is involved therein. This rule should hold true regardless of whether an administrative case based on the act subject of the complaint before the Ombudsman is already pending with the Court. For, aside from the fact that the Ombudsman would not know of this matter unless he is informed of it, he should give due respect for and recognition of the administrative authority of the Court, because in determining whether an administrative matter is involved, the Court passes upon not only administrative liabilities but also other administrative concerns, as is clearly conveyed in the case of Maceda vs. Vasquez. The Ombudsman cannot dictate to, and bind the Court, to its findings that a case before it does or does not have administrative implications. To do so is to deprive the Court of the exercise of its administrative prerogatives and to arrogate unto itself a power not constitutionally sanctioned. This is a dangerous policy which impinges, as it does, on judicial independence. Maceda is emphatic that by virtue of its constitutional power of administrative supervision over all courts and court personnel, from

the Presiding Justice of the Court of Appeals down to the lowest municipal trial court clerk, it is only the Supreme Court that can oversee the judges and court personnels compliance with all laws, and take the proper administrative action against them if they commit any violation thereof. No other branch of government may intrude into this power, without running afoul of the doctrine of separation of powers. WHEREFORE, the petition for certiorari is hereby GRANTED. The Ombudsman is hereby directed to dismiss the complaint filed by respondent Judge Florentino M. Alumbres and to refer the same to this Court for appropriate action. (Caoibes vs. Ombudsman, G.R. No. 132177, July 19, 2001) Section 14 Nicos Industrial Corp. v. Court of Appeals (206 SCRA 127) FACTS: On January 24, 1980, NICOS Industrial Corporation obtained a loan of P2,000,000.00 from private respondent United Coconut Planters Bank and to secure payment thereof executed a real estate mortgage on two parcels of land located at Marilao, Bulacan On July 11, 1983, the mortgage was foreclosed for non-payment of the loan, a sheriffs sale was held without re-publication of the required notices after the original date for the auction was changed without the knowledge or consent of the mortgagor. UCPB was the highest and lone bidder and the mortgaged lands were sold to it for P3,558,547.64. On August 29, 1983, UCPB sold all its rights to the properties to private respondent Manuel Co, who on the same day transferred them to Golden Star Industrial Corporation, another private respondent, a writ of possession was issued to it on November 4, 1983.

On September 6, 1984, NICOS and the other petitioners, filed their action for "annulment of sheriff's sale, recovery of possession, and damages, with prayer for the issuance of a preliminary prohibitory and mandatory injunction." On April 30, 1986, Golden Star and Evangelista filed a 7-page demurrer to the evidence where they argued that the action was a derivative suit that came under the jurisdiction of the Securities and Exchange Commission; that the mortgage had been validly foreclosed; that the sheriff's sale had been held in accordance with Act 3135; that the notices had been duly published in a newspaper of general circulation; and that the opposition to the writ of possession had not been filed on time. No opposition to the demurrer having been submitted despite notice thereof to the parties, Judge Nestor F. Dantes considered it submitted for resolution. The petitioners claim that it is not a reasoned decision and does not clearly and distinctly explain how it was reached by the trial court. They also stress that the sheriff's sale was irregular because the notices thereof were published in a newspaper that did not have general circulation and that the original date of the sheriff's sale had been changed without its consent, the same having been allegedly given by a person not authorized to represent NICOS. Complaint was dismissed. June 6, 1986, the petitioners complaint was dismissed. A careful perusal of the challenged order will show that the complaint was dismissed notably for lack of jurisdiction but also because of the insufficiency of the evidence to prove the invalidity of the sheriff's sale. Regarding this second ground, all the trial court did was summarily conclude "from the very evidence adduced by the plaintiff" that the sheriffs sale "was in complete accord with the requirements of Section 3, Act 3135." It did not bother to discuss what that evidence was or to explain why it believed that the legal requirements had been observed . HELD: It is a requirement of due process that the parties to litigation be informed of how it was decided, with an explanation of the factual

and legal reasons that led to the conclusions of thecourt. The losing party is entitled to know why he lost, so he may appeal to a higher court, if permitted, should he believe that the decision should be reversed WHEREFORE, the decision of the Court of Appeals is SET ASIDE for lack of basis. The case is REMANDED to the Regional Trial Court of Bulacan for revision, within 30 days from notice, of the

per annum, in line with Central Bank's Monetary Board Resolution No. 2126 dated November 29, 1979. On March 9, 1981, he wrote a letter to respondent PNB requesting for the restructuring of his past due accounts into a five-year term loan and for an additional LC/TR line of Two Million Pesos (P2,000,000.00). According to the letter, because of the shut-down of his end-user companies and the huge amount spent for the expansion of his business, petitioner failed to pay to respondent bank his LC/TR accounts as they became due and demandable. Ceferino D. Cura, Branch Manager of PNB Mandaluyong replied on behalf of the respondent bank and required petitioner to submit the following documents before the bank would act on his request: 1) Audited Financial Statements for 1979 and 1980; 2) Projected cash flow (cash in - cash out) for five (5) years detailed yearly; and 3) List of additional machinery and equipment and proof of ownership thereof. Cura also suggested that petitioner reduce his total loan obligations to Three Million Pesos (P3,000,000.00). On September 25, 1981, petitioner sent another letter addressed to PNB Vice-President Jose Salvador, regarding his request for restructuring of his loans. He offered respondent PNB the following proposals: 1) the disposal of some of the mortgaged properties, more particularly, his house and lot and a vacant lot in order to pay the overdue trust receipts; 2) capitalization and conversion of the balance into a 5-year term loan payable semi-annually or on annual installments; 3) a new Two Million Pesos (P2,000,000.00) LC/TR line in order to enable Atlantic Exchange Philippines to operate at full capacity; 4) assignment of all his receivables to PNB from all domestic and export sales generated by the LC/TR line; and 5) maintenance of the existing Five Hundred Thousand Pesos (P500,000.00) credit line. The petitioner testified that respondent PNB Mandaluyong Branch found his proposal favorable and recommended the implementation of the agreement. However, Fernando Maramag, PNB Executive Vice-President, disapproved the proposed release of the mortgaged properties and reduced the proposed new LC/TR line to One Million Pesos (P1,000,000.00). Petitioner claimed he was forced to agree to

Mendoza v. CFI (51 SCRA 369) FACTS: Petitioner Danilo D. Mendoza is engaged in the domestic and international trading of raw materials and chemicals. He operates under the business name Atlantic Exchange Philippines (Atlantic), a single proprietorship registered with the Department of Trade and Industry (DTI). Sometime in 1978 he was granted by respondent Philippine National Bank (PNB) a Five Hundred Thousand Pesos (P500,000.00) credit line and a One Million Pesos (P1,000,000.00) Letter of Credit/Trust Receipt (LC/TR) line. As security for the credit accommodations and for those which may thereinafter be granted, petitioner mortgaged to respondent PNB the following: 1) three (3) parcels of land with improvements in F. Pasco Avenue, Santolan, Pasig; 2) his house and lot in Quezon City; and 3) several pieces of machinery and equipment in his Pasig cocochemical plant. Petitioner executed in favor of respondent PNB three (3) promissory notes covering the Five Hundred Thousand Pesos (P500,000.00) credit line, one dated March 8, 1979 for Three Hundred Ten Thousand Pesos (P310,000.00); another dated March 30, 1979 for Forty Thousand Pesos (P40,000.00); and the last dated September 27, 1979 for One Hundred Fifty Thousand Pesos (P150,000.00). Petitioner made use of his LC/TR line to purchase raw materials from foreign importers. He signed a total of eleven (11) documents denominated as "Application and Agreement for Commercial Letter of Credit," on various dates In a letter dated January 3, 1980 and signed by Branch Manager Fil S. Carreon Jr., respondent PNB advised petitioner Mendoza that effective December 1, 1979, the bank raised its interest rates to 14%

these changes and that he was required to submit a new formal proposal and to sign two (2) blank promissory notes. In a letter dated July 2, 1982, petitioner offered the following revised proposals to respondent bank: 1) the restructuring of past due accounts including interests and penalties into a 5-year term loan, payable semi-annually with one year grace period on the principal; 2) payment of Four Hundred Thousand Pesos (P400,000.00) upon the approval of the proposal; 3) reduction of penalty from 3% to 1%; 4) capitalization of the interest component with interest rate at 16% per annum; 5) establishment of a One Million Pesos (P1,000,000.00) LC/TR line against the mortgaged properties; 6) assignment of all his export proceeds to respondent bank to guarantee payment of his Petitioner failed to pay the subject two (2) Promissory Notes Nos. 127/82 and 128/82 as they fell due. Respondent PNB extra-judicially foreclosed the real and chattel mortgages, and the mortgaged properties were sold at public auction to respondent PNB, as highest bidder, for a total of Three Million Seven Hundred Ninety Eight Thousand Seven Hundred Nineteen Pesos and Fifty Centavos (P3,798,719.50). The petitioner filed a complaint for specific performance, nullification of the extra-judicial foreclosure and damages against respondents PNB. He alleged that the Extrajudicial Foreclosure Sale of the mortgaged properties was null and void since his loans were restructured to a five-year term loan; hence, it was not yet due and demandable. On March 16, 1992, the trial court rendered judgment in favor of the petitioner and ordered the nullification of the extrajudicial foreclosure of the real estate mortgage, the Sheriffs sale of the mortgaged real properties by virtue of consolidation thereof and the cancellation of the new titles issued to PNB; that PNB vacate the subject premises in Pasig and turn the same over to the petitioner; and also the nullification of the extrajudicial foreclosure and sheriff's sale of the mortgaged chattels, and that the chattels be returned to petitioner Mendoza if they were removed from his Pasig premises or be paid for if they were lost or rendered unserviceable.

The trial court decided for the petitioner. Upon appeal, the Court of Appeals reversed the decision of the trial court and dismissed the complaint. ISSUE: Whether or not respondent promised to be bound by the proposal of the petitioner for a five-year restructuring of his overdue loan. RULING: No. Respondent Court of Appeals held that there is no evidence of a promise from respondent PNB, admittedly a banking corporation, that it had accepted the proposals of the petitioner to have a five-year restructuring of his overdue loan obligations. It found and held, on the basis of the evidence adduced, that "appellee's (Mendoza) communications were mere proposals while the bank's responses were not categorical that the appellee's request had been favorably accepted by the bank." Nowhere in those letters presented by the petitioner is there a categorical statement that respondent PNB had approved the petitioners proposed five-year restructuring plan. It is stretching the imagination to construe them as evidence that his proposed five-year restructuring plan has been approved by the respondent PNB which is admittedly a banking corporation. Only an absolute and unqualified acceptance of a definite offer manifests the consent necessary to perfect a contract. If anything, those correspondences only prove that the parties had not gone beyond the preparation stage, which is the period from the start of the negotiations until the moment just before the agreement of the parties. The doctrine of promissory estoppel is an exception to the general rule that a promise of future conduct does not constitute an estoppel. In some jurisdictions, in order to make out a claim of promissory estoppel, a party bears the burden of establishing the following elements: (1) a promise reasonably expected to induce action or forebearance; (2) such promise did in fact induce such action or forebearance, and (3) the party suffered detriment as a result. It is clear from the forgoing that the doctrine of promissory estoppel presupposes the existence of a promise on the part of one against whom estoppel is claimed. The promise must be plain and

unambiguous and sufficiently specific so that the Judiciary can understand the obligation assumed and enforce the promise according to its terms. For petitioner to claim that respondent PNB is estopped to deny the five-year restructuring plan, he must first prove that respondent PNB had promised to approve the plan in exchange for the submission of the proposal. As discussed earlier, no such promise was proven, therefore, the doctrine does not apply to the case at bar. A cause of action for promissory estoppel does not lie where an alleged oral promise was conditional, so that reliance upon it was not reasonable. It does not operate to create liability where it does not otherwise exist.

Borromeo v. Court of Appeals (186 SCRA 1) Facts: The truck of petitioner Roberto Tan Ting driven by Abelardo Bautista, the other petitioner, and the Volkswagen delivery panel truck owned by respondent Federico O. Borromeo, Inc. were involved in a traffic accident along Epifanio de los Santos Avenue. In said traffic accident, Quintin Delgado, a helper in Borromeos delivery panel truck, sustained injuries which resulted in his instantaneous death. Borromeo had to pay Delgados widow the sum of P4,444 representing the compensation (death benefit) and funeral expenses due Delgado under the Workmens Compensation Act. Upon the averment that the said vehicular accident was caused by petitioners negligence, Borromeo started suit to recover from petitioners the compensation and funeral expenses it paid to the widow of Quintin Delgado. At the scheduled hearing, neither petitioners nor their counsel appeared. Borromeo was thus allowed to present its evidence ex parte. On the same day, the municipal court rendered judgment in favor of Borromeo and against the petitioners in the principal sum of P4,444, and P500 attorneys fees, and costs. Issues: 1. Is the petition for relief from judgment under Rule 38 of the Rules of Court unavailable to petitioners? 2. Is there excusable negligence for counsels non-attendance at the hearing?

3. Is there obligation on the part of Borromeo, Inc. to pay Delgados widow death benefits? Held: 1. Yes. A basic precept is that when another remedy at law is open to a party, he cannot sue out a petition for relief under Rule 38. Thus, a petition for relief is not a substitute for appeal. It has been held that where a defendant could have appealed but did not appeal from the decision of the inferior court to the Court of First Instance but instead filed a petition for relief, his petition was inappropriate as it would amount to reviving his right to appeal which he had irretrievably lost through the gross inaction of his counsel. 2. No. Petitioners failed to make out a case of excusable negligence for counsels non-attendance at the July 23, 1965 hearing. Their counsel, Atty. Leopoldo V. Repotente, Jr., explains his failure to attend the hearing was his reliance on the assurance of his associate, Atty. Lucenito N. Tagle, that the latter will attend to the case for him since on that same date he (Atty. Repotente) had another case before the City Court of Quezon City. Atty. Tagle in turn stated that he was unable to attend the hearing despite his promise to do so because when he transferred to his new office at A & T Building, Escolta, Manila, the record of the case was misplaced, mislaid or otherwise lost by the helpers and was not among those turned over to his possession and it was only a few days after the date of hearing on July 23, 1965, that he found the record of the case in one of the drawers of his table in his former office and it was only then that he realized his failure to attend the hearing on July 23, 1965. We cannot view such negligence of petitioners two attorneys as excusable. There was no plausible reason for Repotente to entrust the hearing of the case to another lawyer. His lame excuse was that he requested Tagle to attend the hearing of said case for him because he had another hearing at the City Court of Quezon City. This is unworthy of serious consideration. For, as respondents aver and this is not denied by petitioners the hearing of July 23, 1965 before the municipal court was set in open court during the initial date of hearing held on July 1, 1965 after Atty. Repotente consulted his calendar. When Repotente agreed in open court to set the trial of the case for July 23, 1965, it may very well be presumed that his other case in Quezon City was not yet calendared for hearing. He could not have, in good faith, agreed to set the case for hearing on

the day on which he had another previously scheduled trial. Further, he failed to notify his clients of the hearing set for July 23, 1965; they also failed to appear thereat. Nor may Atty. Tagle offer as excuse the fact that the record of the case was misplaced, mislaid or otherwise lost. This is a stereotyped excuse. It is resorted to by lawyers in order to win new trial of the case and thereby move farther away the day of reckoning. To be remembered is that the life of each case is in its record. If the record of the case was misplaced, mislaid or lost, he should have nevertheless attended the scheduled hearing and requested for a postponement by reason thereof. But he did not. Appropriate it is to recall here that a prudent lawyer keeps a separate record or diary of hearings of cases he handles and of his professional engagements. A lawyers schedules of hearings intended as reminder are not noted by the lawyer in his record of the case. That would be useless for the purpose. 3. Borromeo paid the widow of its employee, Quintin Delgado, compensation (death benefit) and funeral expenses for the latters death while in the course of employment. This obligation arises from law Section 2 of the Workmens Compensation Act. The same law in its Section 6 also provides that [i]n case an employee suffers an injury for which compensation is due under this Act by any other person besides his employer, it shall be optional with such injured employee either to claim compensation from his employer, under this Act, or sue such other person for damages, in accordance with law; and in case compensation is claimed and allowed in accordance with this Act, the employer who paid such compensation or was found liable to pay the same, shall succeed the injured employee to the right of recovering from such person what he paid: It is evident from the foregoing that if compensation is claimed and awarded, and the employer pays it, the employer becomes subrogated to and acquires, by operation of law, the workers righ ts against the tortfeasor. No need then there is to establish any contractual relationship between Quintin Delgado and herein petitioners. Indeed, there is none. The cause of action of respondent corporation is one which does not spring from a creditor-debtor relationship. It arises by virtue of its subrogation to the right of Quintin Delgado to sue the guilty party. Such subrogation is sanctioned by the Workmens Compensation Law aforesaid. It is as a subrogee to the rights of its

deceased employee, Quintin Delgado, that Borromeo filed a suit against petitioners.

Prudential Bank v. Castro (158 SCRA 646) Fr. Martinez v. CA (G.R. No. 123547, May 21, 2001) FACTS: Sometime in February 1981, private respondents Godofredo Dela Paz and his sister Manuela Dela Paz entered into an oral contract with petitioner Fr. Dante Martinez, then Assistant Parish Priest of Cabanatuan City for the sale of a certain lot located at Villa Fe Subdivision. At the time of the sale, the lot was still registered under the name of Claudia Dela Paz, private respondents mother although the latter had already sold it to private respondent Manuela Dela Paz by virtue if a Deed of Absolute Sale. Private respondent subsequently registered the lot under her name and was issued a Transfer Certificate Title. When the land was offered for sale to petitioner, private respondents Dela Paz were accompanied by their mother since petitioner dealt with the Dela Pazes as a family and not individually. He was assured by them that the lot belonged to Manuela. It was agreed that petitioner will pay 3000 downpayment and the balance would be payable in installments. Petitioner started the construction of a house on the lot with the written consent if the then registered owner, Claudia. Construction on the house was completed and since them, petitioner and his family have maintained their residence there. On January 1983, petitioner completed payment of the lot for which private respondents Dela Paz executed two documents. The first document was a promise that the Deed of Sale shall be delivered to petitioner on February 25, 1983 and the second document was a certification that Freddie Dela Paz has agreed to sign the affidavit of sale of lot sold to petitioner. However, private respondents Dela Paz never delivered the Deed of Sale as they promised to petitioner.

In the meantime, in a Deed of Absolute Sale with right to repurchase, private respondents Dela Paz sold three lots with right to repurchase the same within one year to private respondents spouses Veneracion. One of the lots sold was the lot previously sold to petitioner. Spouses Veneracion never took actual possession of any of these lots during the period of redemption, but all the titles to the lots were given to him. Before the expiration of the one year period, private respondet Godofredo Dela Paz informed private respondent Reynaldo Veneracion that he was selling the three lots to another person. Indeed, Veneracion received a call from Mr. Tecson verifying if he had the titles ti the properties as the Dela Pazes were offering to sell the two lots. The offer included the lot purchased by petitioner. Private respondent Veneracion offered to purchase the same two lots from Dela Paz and so a Deed of Absolute Sale was executed over these lots. Sometime in January 1984, Reynaldo Veneracion asked a certain Renato Reyes, petitioners neighbor, who the owner of the building erected on the subject lot was. Reyes told him that it was Feliza Martines, petitioners mother, who was in possession of the property. Veneracion told Godofredo about the matter and was assured by the latter that he would talk to Feliza. Based on that assurance, private respondents Veneracion registered the lots with the Register of Deeds. Petitioner discovered that the lot he was occupying with his family had been sold to the spouses Veneracion after receiving a letter from private respondent Reynaldo Veneracion, claiming ownership of the land and demanding that they vacate the property and remove their improvements thereon. Petitioner, in turn, demanded through counsel the execution of the deed of sale from private respondents Dela Paz and informed Reynaldo Veneracion that he was the owner of the property as he had previously purchased the same from private respondents Dela Paz. The matter was then referred to the Katarungang Pambarangay for conciliation but the parties failed to reach an agreement.

As a consequence, private respondent Reynaldo Veneracion brought an action for ejectment in the MTC against petitioner and his mother. On the other hand, petitioner caused a notice of lis pendens to be recorded in the TCT. The TC rendered a decision in favor of petitioner. The TCs decision where objected by the private respondents Veneracion and these cases were forwarded to the RTC. RTC rendered a decision finding private respondents Veneracion as the true owner of the lot in dispute by virtue of their prior registration with the Register of Deeds. Meanwhile, while the ejectment case was pending before the MTC, petitioner Martinez filed a complaint for annulment of sale with damages against the Veneracions and Dela Pazez with the RTC. RTC rendered a decision finding private respondents Veneracion owners of the land in dispute. Petitioner then filed a petition for review for the ejectment case before the CA. As to the case for annulment of sale and damages, the petitioner likewise appealed the TCs decision before the CA. CA rendered a decision in favor of respondents. Petitioner filed a motion for reconsideration but was denied. Hence, this case.

ISSUE Whether or not private respondents Veneracion are buyers in good faith of the lot in dispute as to make them the absolute owners thereof. HELD The CA based its ruling that private respondents are the owner of the disputed lot on their reliance on private respondent Godofredo Dela Pazs assurance that he would take care of the matter concerning petitioners occupancy of the disputed lot as constituting good faith. This case, however, involves double sale and, on this matter, Article 1544 of the CC which provides two requirements acquisition in good faith and recording in good faith. The

presence of good faith shall be ascertained from the circusmtances surrounding the purchase of the land and the SC ruled in three ways. First, with regard to the first sale to private respondents Veneracion, Reynaldo Veneracion testified that before the execution of the sale with right to repurchase, he inspected the lot and it was vacant. However, this is belied by the testimony of Engr. Minor who was the building inspector and when he conducted an ocular inspection of the lot in dispute, he found that the building was 100% completed. Thus, private respondents already knew that there was a construction being made on the property they purchased. Second, the parties entered into an equitable mortgage and not contract of sale. The requisites were all present: a. Private respondents Veneracion never took actual possession of the three lots; b. Private respondents Dela Paz remained possession of the third lot which was co-owned by them and where they resided; c. During the first sale and second sale, Veneracion never made any effort to take possession of the properties; and d. When the period of redemption expired and when they were informed that the Dela Pazes are offering the lots for sale, they never objected and instead, offered to purchase the two lots. Third, the appellate courts reliance on Articles 1357 and 1358 of the Civil Code to determine private respondents Vener actions lack of knowledge of petitioners ownership of the disputed lot is erroneous. a. Art. 1357 and Art. 1358, in relation to Art. 1403(2) of the Civil Code, requires that the sale of real property must be in writing for it to be enforceable. b. It need not be notarized. c. If the sale has not been put in writing, either of the contracting parties can compel the other to observe such requirement. d. This is what petitioner did when he repeatedly demanded that a Deed of Absolute Sale be executed in his favor by private respondents De la Paz.

e. There is nothing in the above provisions which require that a contract of sale of realty must be executed in a public document. f. In any event, it has been shown that private respondents Veneracion had knowledge of facts which would put them on inquiry as to the nature of petitioners occupancy of the disputed lot. Finally, the SC reversed the decision of the Court of Appeals and: a. Declared the deed of sale executed by private respondents Godofredo and Veneracion null and void; b. Ordered private respondents Godofredo and Manuela to execute a Deed of Absolute Sale in favor of petitioner Rev. Fr. Dante Martinez; c. Ordered private respondents Dela Pazes to reimburse spouses Veneracion the amount the latter may have paid; d. Ordered the Register of Deeds to cancel the TCT in favor of the Veneracion spouses and issue a new one in the name of petitioner and e. Ordered private respondents to pay petitioner jointly and severally the sum as attorneys fees and to pay the cosrs of the suit.

Section 16 Valdez v. CA (194 SCRA 360 {1991})