91

CATHAY PACIFIC AIRWAYS, vs.

JUANITA REYES, WILFREDO REYES, MICHAEL ROY REYES, SIXTA LAPUZ, and
SAMPAGUITA TRAVEL CORP
G.R. No. 185891
June 26, 2013
FACTS:
On 12 April 1997, Wilfredo, together with his wife Juanita Reyes (Juanita), son Michael
Roy Reyes (Michael) and mother-in-law Sixta Lapuz (Sixta), flew to Adelaide, Australia without
a hitch. One week before they were scheduled to fly back home, Wilfredo reconfirmed his
familys return flight with the Cathay Pacific office in Adelaide. They were advised that the
reservation was "still okay as scheduled."
On the day of their scheduled departure from Adelaide, Wilfredo and his family arrived at the
airport on time. When the airport check-in counter opened, Wilfredo was informed by a staff
from Cathay Pacific that the Reyeses did not have confirmed reservations, and only Sixtas
flight booking was confirmed. Nevertheless, they were allowed to board the flight to HongKong
due to adamant pleas from Wilfredo. When they arrived in HongKong, they were again
informed of the same problem. Unfortunately this time, the Reyeses were not allowed to board
because the flight to Manila was fully booked. Only Sixta was allowed to proceed to Manila
from HongKong. On the following day, the Reyeses were finally allowed to board the next flight
bound for Manila.
Upon arriving in the Philippines, Wilfredo went to Sampaguita Travel to report the incident. He
was informed by Sampaguita Travel that it was actually Cathay Pacific which cancelled their
bookings. Respondents as passengers, through counsel, sent a letter to Cathay Pacific
advising the latter of the incident and demanding payment of damages. The Court of Appeals
awarded nominal damages in the amount of 25,000.00 for each of the passenger.
ISSUE:
Whether or not the award of nominal damages is correct?
HELD:
Nominal damages are recoverable where a legal right is technically violated and must
be vindicated against an invasion that has produced no actual present loss of any kind or
where there has been a breach of contract and no substantial injury or actual damages
whatsoever have been or can be shown.We however sustain the award of nominal damages
in the amount of P25,000.00 to only three of the four respondents who were aggrieved by the
last-minute cancellation of their flights. Nominal damages are recoverable where a legal right is
technically violated and must be vindicated against an invasion that has produced no actual
present loss of any kind or where there has been a breach of contract and no substantial injury
or actual damages whatsoever have been or can be shown. Under Article 2221 of the Civil
Code, nominal damages may be awarded to a plaintiff whose right has been violated or
invaded by the defendant, for the purpose of vindicating or recognizing that right, not for
indemnifying the plaintiff for any loss suffered.

92

REPUBLIC OF THE PHILIPPINES, represented by ABUSAMA M. ALID, Officer-in-Charge,

DEPARTMENT OF AGRICULTURE - REGIONAL FIELD UNIT XII (DA-RFU XII),
vs.
ABDULWAHAB A. BAYAO, OSMEA I. MONTAER, RAKMA B. BUISAN, HELEN M.
ALVAREZ, NEILA P. LIMBA, ELIZABETH B. PUSTA, ANNA MAE A. SIDENO, UDTOG B.
TABONG, JOHN S. KAMENZA, DELIA R. SUBALDO, DAYANG W. MACMOD, FLORENCE S.
TAYUAN, in their own behalf and in behalf of the other officials and employees of DA-RFU XII,
G.R. No. 179492
June 5, 2013
FACTS: On March 30, 2004, Executive Order (E.O.) No. 304 was passed designating
Koronadal City as the regional center and seat of SOCCSKSARGEN Regi. 2 It provides that all
departments, bureaus, and offices of the national government in the SOCCSKSARGEN
Region shall transfer their regional seat of operations to Koronadal City. In compliance with
the Executive Order 304, the DA Regional Director issued a Memorandum to effect the transfer
of Regional office to Koronadal City from Cotabato City.
In a Memorandum dated April 22, 2005 addressed to DA Secretary Arthur Yap, private
respondents opposed the implementation of the April 1, 2005 Memorandum. They alleged that
in 2004, former President Gloria Macapagal-Arroyo made a pronouncement during one of her
visits in Cotabato City that the regional seat of Region 12 shall remain in Cotabato City. 6 Only
three departments were not covered by the suspension of E.O. No. 304, namely, the
Department of Trade and Industry (DTI), Department of Tourism (DOT), and Department of
Labor and Employment (DOLE).7
Respondents alleged further in their Memorandum to the DA Secretary that on March
7, 2005, they appealed to the Secretary of Agriculture that the implementation of E.O. No. 304
be held in abeyance. A copy of the Petition was attached to the Memorandum. It cited reasons
such as the huge costs the physical transfer will entail and the plight of employees who have
already settled and established their homes in Cotabato City. On May 17, 2005, OIC Abusama
M. Alid held a meeting and ordered the transfer of the regional office to ATI Building in
Tantangan and Tupi Seed Farm in Tupi, both located in South Cotabato and Uptown,
Koronadal City.
This prompted respondents to file on May 18, 2005 a Complaint for Injunction with
Prayer for Issuance of Writ of Preliminary Injunction and/or Temporary Restraining Order with
the Regional Trial Court, Branch 14 of Cotabato City which the Trial court granted.
ISSUE:
Whether the present case falls within the exceptions on the requisite for filing a Motion
for Reconsideration prior to filing a Petition for Certiorari under Rule 65
HELD:
The present case falls under the second exception in that a Motion for Reconsideration
need not be filed where questions raised in the certiorari proceedings are the same as those
raised and passed upon in the lower court.
In any case, this Court disregards the presence of procedural flaws when there is necessity to
address the issues because of the demands of public interest, including the need for stability in
the public service and the serious implications the case may cause on the effective
administration of the executive department.66
The instant Petition involves the effective administration of the executive department and
would similarly warrant relaxation of procedural rules if need be. Specifically, the fourth clause
of E.O. No. 304 states as follows: "WHEREAS, the political and socio-economic conditions in
SOCCSKSARGEN Region point to the need for designating the regional center and seat of the
region to improve government operations and services
93
7K CORPORATION, vs. EDDIE ALBARICO, G.R. No. 182295

June 26, 2013

FACTS: When he was dismissed on 5 April 1993, Respondent Eddie Albarico was a regular
employee of petitioner 7K Corporation, a company selling water purifiers. He started working for the
company in 1990 as a salesman.4 Because of his good performance, his employment was
regularized. He was also promoted several times: from salesman, he was promoted to senior sales
representative and then to acting team field supervisor. In 1992, he was awarded the Presidents
Trophy for being one of the companys top water purifier specialist distributors.
He was terminated from employment allegedly for his poor sales performance. Respondent had to
stop reporting for work, and he subsequently submitted his money claims against petitioner for
arbitration before the National Conciliation and Mediation Board (NCMB). The issue for voluntary
arbitration before the NCMB as to whether party was entitled to according to the parties the
payment of separation pay and the sales commission reserved for him by the corporation.
While the NCMB arbitration case was pending, respondent Albarico filed a Complaint against
petitioner corporation with the Arbitration Branch of the National Labor Relations Commission
(NLRC) for illegal dismissal with money claims for overtime pay, holiday compensation,
commission, and food and travelling allowances. The Complaint was decided by the labor arbiter in
favor of respondent Albarico, who was awarded separation pay in lieu of reinstatement, backwages
and attorneys fees.
On appeal by petitioner, the labor arbiters Decision was vacated by the NLRC for forum shopping
on the part of respondent Albarico, because the NCMB arbitration case was still pending. 9 The
NLRC Decision, which explicitly stated that the dismissal was without prejudice to the pending
NCMB arbitration case, became final after no appeal was taken.
Petitioner corporation filed its Position Paper in the NCMB arbitration case. It denied that
respondent was terminated from work, much less illegally dismissed. The corporation claimed that
he had voluntarily stopped reporting for work after receiving a verbal reprimand for his sales
performance; hence, it was he who was guilty of abandonment of employment. Respondent made
an oral manifestation that he was adopting the position paper he submitted to the labor arbiter, a
position paper in which the former claimed that he had been illegally dismissed.
ISSUE: Whether or not the CA erred in finding that the voluntary arbitrator properly assumed
jurisdiction to decide the issue of the legality of the dismissal of respondent as well as the latters
entitlement to backwages.
HELD: Although the general rule under the Labor Code gives the labor arbiter exclusive and
original jurisdiction over termination disputes, it also recognizes exceptions. One of the exceptions
is provided in Article 262 of the Labor Code. In San Jose v. NLRC, 294 SCRA 336 (1998), we said:
The phrase Except as otherwise provided under this Code refers to the following exceptions: A.
Art. 217. Jurisdiction of Labor Arbiters . . . x x x x (c) Cases arising from the interpretation or
implementation of collective bargaining agreement and those arising from the interpretation or
enforcement of company procedure/policies shall be disposed of by the Labor Arbiter by referring
the same to the grievance machinery and voluntary arbitrator as may be provided in said
agreement. B. Art. 262. Jurisdiction over other labor disputes. The Voluntary Arbitrator or panel of
Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other labor
disputes including unfair labor practices and bargaining deadlocks.

94

ALFONSO L. FIANZA vs. NLRC (SECOND DIVISION), BINGA HYDROELECTRIC PLANT, INC.,
ANTHONY C. ESCOLAR, ROLAND M. LAUTCHANG,
G.R. No. 163061
June 26, 2013

FACTS: On 3 June 1997, petitioner Fianza was employed as Officer for Social Acceptance of
respondent Binga Hydroelectric Plant, Inc. The details of his employment are embodied in
Memorandum 97-10 dated 2 June 1997 issued by Mr. Catalino Tan, the president and chairperson
of the board at that time.
In February 1999, petitioner did not receive his salary of P15,000 for the first 15 days of the month
of February. He was advised not to report for work until his status was officially clarified by the
Manila office.5
After petitioner made several other inquiries concerning his status, he was told by a supervisor to
report for work. However, he was also told that the new management committee had to concur in
his reappointment before he could be reinstated in the payroll. It also wanted an opportunity to
determine whether his services would still be necessary to the company. Meanwhile, the chief of
the rehabilitation department of the company recommended his return.
As the management committee did not act on his inquiries for several months, on 24 May 1999
petitioner filed a Complaint for illegal dismissal before the LA. Ruling in favour of the petitioner, the
LA applied the jurisprudentially- established control test to show that the petitioner and respondent
company had a prevailing employer-employee relationship.
On appeal, the NLRC reversed the LAs Decision. It decided that the employer-employee
relationship was not sufficiently established, since the appointment letter recognized the
probationary status of petitioner. The CA affirmed the NLRCs reversal, and denied his Motion for
Reconsideration

ISSUES: 1.) Whether or not the petitioner abandoned his work;

2.) Whether or not petitioners employment was regular.

HELD:
1.) NO, It is well-settled in our jurisprudence that "For abandonment to constitute a valid
cause for termination of employment, there must be a deliberate, unjustified refusal of the
employee to resume his employment. This refusal must be clearly shown. Mere absence is not
sufficient, it must be accompanied by overt acts unerringly pointing to the fact that the employee
does not want to work anymore"
The very act of filing the Complaint for illegal dismissal should have negated any intention
on petitioners part to sever his employment. In fact, it should already have been sufficient evidence
to declare that there was no abandonment of work. Moreover, petitioner went back to the company
several times to inquire about the status of his employment. The fact that his inquiries were not
answered does not prejudice this position.
2.) Several things stand out in this appointment paper. First, its letterhead is that of
respondent company, indicating the official nature of the document. Second, there is no indication
that the employment is co-terminus with that of the appointing power, or that the position was a

confidential one. In fact, alongside the obligation of petitioner to report to Mr. Tan, is that of
reporting to those whom the latter had designated as well as to the management in case petitioner
had any suggestion. This description evinces a supervisory function, by which the employee will
carry out company policy, but can only give suggestions to management as to the creation or
implementation of a new policy.
Finally, the appointment paper recognizes that the petitioner would initially be on probation
status for two months, at the end of which he would be made a permanent employee should his
services be found satisfactory by respondent. All these circumstances are evident from the
appointment paper itself, which belies the claim of respondent that it had no employer-employee
relationship with petitioner.

95
ALI AKANG vs. MUNICIPALITY OF ISULAN, SULTAN KUDARA T PROVINCE, represented by its
MUNICIPAL MAYOR AND MUNICIPAL VICE MAYOR AND MUNICIPAL COUNCILORS
G.R. No. 186014
June 26, 2013
FACTS:
Ali Akang (petitioner) is a member of the national and cultural community belonging to the
Maguindanaon tribe of Isulan, Province of Sultan Kudarat and the registered owner of Lot 5-B-2-B14-F (LRC) Psd 1100183 located at Kalawag III, Isulan, Sultan Kudarat, covered by Transfer
Certificate of Title (TCT) No. T-3653,5 with an area of 20,030 square meters.
Sometime in 1962, a two-hectare portion of the property was sold by the petitioner to the
Municipality of Isulan, Province of Sultan Kudarat (respondent) through then Isulan Mayor Datu
Ampatuan under a Deed of Sale executed on July 18, 1962.
The respondent immediately took possession of the property and began construction of the
municipal building. Thirty-nine (39) years later or on October 26, 2001, the petitioner, together with
his wife, Patao Talipasan, filed a civil action for Recovery of Possession of Subject Property and/or
Quieting of Title thereon and Damages against the respondent, represented by its Municipal Mayor,
et al.
In his complaint, the petitioner alleged, among others, that the agreement was one to sell,
which was not consummated as the purchase price was not paid. In its answer, the respondent
denied the petitioners allegations, claiming, among others: that the petitioners cause of action was
already barred by laches; that the Deed of Sale was valid; and that it has been in open, continuous
and exclusive possession of the property for forty (40) years.
After trial, the RTC rendered judgment in favor of the petitioner. The RTC construed the
Deed of Sale as a contract to sell, based on the wording of the contract, which allegedly showed
that the consideration was still to be paid and delivered on some future date a characteristic of a
contract to sell. In addition, the RTC observed that the Deed of Sale was not determinate as to its
object since it merely indicated two (2) hectares of the 97,163 sq m lot, which is an undivided
portion of the entire property owned by the petitioner. The RTC found that segregation must first be
made to identify the parcel of land indicated in the Deed of Sale and it is only then that the
petitioner could execute a final deed of absolute sale in favor of the respondent.
The CA ruled that there was a valid contract of sale between the petitioner and the
Municipality of Isulan as represented by the Mayor.

ISSUE:
Whether or not there was a valid contract of sale.
HELD:
Yes, A contract to sell, on the other hand, is defined by Article 1479 of the Civil Code: [A]
bilateral contract whereby the prospective seller, while expressly reserving the ownership of the
subject property despite delivery thereof to the prospective buyer, binds himself to sell the said
property exclusively to the prospective buyer upon fulfillment of the condition agreed upon, that is,
full payment of the purchase price. In a contract of sale, the title to the property passes to the buyer
upon the delivery of the thing sold, whereas in a contract to sell, the ownership is, by agreement,
retained by the seller and is not to pass to the vendee until full payment of the purchase price.
Even assuming, arguendo, that the petitioner was not paid, such non payment is immaterial
and has no effect on the validity of the contract of sale. A contract of sale is a consensual contract
and what is required is the meeting of the minds on the object and the price for its perfection and
validity. In this case, the contract was perfected the moment the petitioner and the respondent
agreed on the object of the sale the two-hectare parcel of land, and the price Three Thousand
Pesos (P3,000.00). Non-payment of the purchase price merely gave rise to a right in favor of the
petitioner to either demand specific performance or rescission of the contract of sale.

96
J PLUS ASIA DEVELOPMENT CORPORATION, Petitioner,
vs.
UTILITY ASSURANCE CORPORATION, Respondent
G.R. No. 199650
June 26, 2013
FACTS
Petitioner J Plus Asia Development Corporation represented by its Chairman, Joo Han
Lee, and Martin E. Mabunay, doing business under the name and style of Seven Shades of
Blue Trading and Services, entered into a Construction Agreement 3 whereby the latter
undertook to build the former's 72-room condominium/hotel (Condotel Building 25) located at
the Fairways & Bluewaters Golf & Resort in Boracay Island, Malay, Aklan. The project,
costing P42,000,000.00, was to be completed within one year or 365 days reckoned from the
first calendar day after signing of the Notice of Award and Notice to Proceed and receipt of
down payment (20% of contract price). The P8,400,000.00 down payment was fully paid on
January 14, 2008.4 Payment of the balance of the contract price will be based on actual work
finished within 15 days from receipt of the monthly progress billings. Per the agreed work
schedule, the completion date of the project was December 2008. Mabuhay also submitted the
required Performance Bond issued by respondent Utility Assurance Corporation (UTASSCO) in
the amount equivalent to 20% down payment or P8.4 million.
On November 19, 2008, petitioner terminated the contract and sent demand letters to
Mabunay and respondent surety. As its demands went unheeded, petitioner filed a Request for
Arbitration before the Construction Industry Arbitration Commission (CIAC). Petitioner prayed
that Mabunay and respondent be ordered to pay the sums of P8,980,575.89 as liquidated
damages and P2,379,441.53 corresponding to the unrecouped down payment or overpayment
petitioner made to Mabunay, The CIAC ruled in favor of the petitioner.

ISSUE:

Whether or not the respondent liable to indemnify the petitioner.

HELD:
YES, Default or mora on the part of the debtor is the delay in the fulfillment of the
prestation by reason of a cause imputable to the former. It is the nonfulfillment of an obligation
with respect to time. Article 1169 of the Civil Code provides: ART. 1169. Those obliged to
deliver or to do something incur in delay from the time the obligee judicially or extrajudicially
demands from them the fulfillment of their obligation. x x x x It is a general rule that one who
contracts to complete certain work within a certain time is liable for the damage for not
completing it within such time, unless the delay is excused or waived.
We cannot sustain the appellate courts interpretation as it is inconsistent with the terms
of the Construction Agreement. Article 1374 of the Civil Code requires that the various
stipulations of a contract shall be interpreted together, attributing to the doubtful ones that
sense which may result from all of them taken jointly. Here, the work schedule approved by
petitioner was intended, not only to serve as its basis for the payment of monthly progress
billings, but also for evaluation of the progress of work by the contractor. Article 13.01 (g) (iii) of
the Construction Agreement provides that the contractor shall be deemed in default if, among
others, it had delayed without justifiable cause the completion of the project by more than
thirty (30) calendar days based on official work schedule duly approved by the OWNER.

97
MANILA JOCKEY CLUB, INC. vs. AIMEE O. TRAJANO
G.R. No. 160982
June 26, 2013
FACTS:
MJCI had employed Trajano as a selling teller of betting tickets since November 1989.
On April 25, 1998, she reported for work. At around 7:15 p.m., two regular bettors gave her
their respective lists of bets (rota) and money for the bets for Race 14. Although the bettors
suddenly left her, she entered their bets in the selling machine and segregated the tickets for
pick up by the two bettors upon their return. Before closing time, one of the bettors (requesting
bettor) returned and asked her to cancel one of his bets worth P2,000.00. Since she was also
operating the negative machine on that day, she obliged and immediately cancelled the bet as
requested. She gave the remaining tickets and the P2,000.00 to the requesting bettor, the
money pertaining to the canceled bet. When Race 14 was completed, she counted the bets
received and the sold tickets. She found that the bets and the tickets balanced. But then she
saw in her drawer the receipt for the canceled ticket, but the canceled ticket was not inside the
drawer. Thinking she could have given the canceled ticket to the requesting bettor, she
immediately looked for him but could not find him. It was only then that she remembered that
there were two bettors who had earlier left their bets with her. Thus, she went to look for the
other bettor (second bettor) to ask if the canceled ticket was with him. When she located the
second bettor, she showed him the receipt of the canceled ticket to counter-check the serial
number with his tickets.
To her surprise, the reliever-supervisor later approached Trajano and told her to submit
a written explanation about the ticket cancellation incident. The next day, she submitted the
handwritten explanation to Atty. Joey R. Galit, Assistant Racing Supervisor. She then resumed
her work as a selling teller, until later that day, when she received an inter-office
correspondence signed by Atty. Galit informing her that she was being placed under preventive
suspension effective April 28, 1998, for an unstated period of time. At the end of thirty days of

her suspension, Trajano reported for work. But she was no longer admitted. She then learned
that she had been dismissed when she read a copy of an inter-office correspondence6 about
her termination posted in a selling station of MJCI.
ISSUE:
1. Whether or not there was just cause when Petitioner (MJCI) dismissed Respondent
Aimee O. Trajano from the service?
HELD:
The valid termination of an employee may either be for just causes under Article 282 or
for authorized causes under Article 283 and Article 284, all of the Labor Code. Specifically, loss
of the employers trust and confidence is a just cause under Article 282 (c), a provision that
ideally applies only to cases involving an employee occupying a position of trust and
confidence, or to a situation where the employee has been routinely charged with the care and
custody of the employers money or property. But the loss of trust and confidence, to be a valid
ground for dismissal, must be based on a willful breach of trust and confidence founded on
clearly established facts. A breach is willful, according to AMA Computer College, Inc. v.
Garay, 512 SCRA 312 (2007), if it is done intentionally, knowingly and purposely, without
justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently. It must rest on substantial grounds and not on the employers arbitrariness,
whims, caprices or suspicion; otherwise, the employee would eternally remain at the mercy of
the employer. An ordinary breach is not enough.

98
MINORU FUJIKI
vs.
MARIA PAZ GALELA MARINAY, SHINICHI MAEKARA, LOCAL CIVIL REGISTRAR OF
QUEZON CITY, AND THE ADMINISTRATOR AND CIVIL REGISTRAR GENERAL OF THE
NATIONAL STATISTICS OFFICE
G.R. No. 196049
June 26, 2013
FACTS:
Petitioner Minoru Fujiki (Fujiki) is a Japanese national who married respondent Maria
Paz Galela Marinay (Marinay) in the Philippines2 on 23 January 2004. The marriage did not sit
well with petitioners parents. Thus, Fujiki could not bring his wife to Japan where he resides.
Eventually, they lost contact with each other.
In 2008, Marinay met another Japanese, Shinichi Maekara (Maekara). Without the first
marriage being dissolved, Marinay and Maekara were married on 15 May 2008 in Quezon City,
Philippines. Maekara brought Marinay to Japan. However, Marinay allegedly suffered physical
abuse from Maekara. She left Maekara and started to contact Fujiki.
Fujiki and Marinay met in Japan and they were able to reestablish their relationship. In 2010,
Fujiki helped Marinay obtain a judgment from a family court in Japan which declared the
marriage between Marinay and Maekara void on the ground of bigamy.4 On 14 January 2011,
Fujiki filed a petition in the RTC entitled: "Judicial Recognition of Foreign Judgment.

RTC immediately issued an Order dismissing the petition and withdrawing the case
from its active civil docket. The RTC took the view that only "the husband or the wife," in this
case either Maekara or Marinay, can file the petition to declare their marriage void, and not
Fujiki.
ISSUE:
1. Whether a husband or wife of a prior marriage can file a petition to recognize a
foreign judgment nullifying the subsequent marriage between his or her spouse and a foreign
citizen on the ground of bigamy.
2. Whether the Regional Trial Court can recognize the foreign judgment in a proceeding
for cancellation or correction of entries in the Civil Registry under Rule 108 of the Rules of
Court.
HELD:
1. When Section 2(a) states that [a] petition for declaration of absolute nullity of void
marriage may be filed solely by the husband or the wife it refers to the husband or the wife
of the subsisting marriage; The husband or the wife of the prior subsisting marriage is the one
who has the personality to file a petition for declaration of absolute nullity of void marriage
under Section 2(a) of A.M. No. 02-11-10-SC.Section 2(a) of A.M. No. 02-11-10-SC does not
preclude a spouse of a subsisting marriage to question the validity of a subsequent marriage
on the ground of bigamy. On the contrary, when Section 2(a) states that [a] petition for
declaration of absolute nullity of void marriage may be filed solely by the husband or the wife
it refers to the husband or the wife of the subsisting marriage. Under Article 35(4) of the
Family Code, bigamous marriages are void from the beginning. Thus, the parties in a
bigamous marriage are neither the husband nor the wife under the law. The husband or the
wife of the prior subsisting marriage is the one who has the personality to file a petition for
declaration of absolute nullity of void marriage under Section 2(a) of A.M. No. 02-11-10-SC.
2. A foreign judgment relating to the status of a marriage affects the civil status,

condition and legal capacity of its parties. However, the effect of a foreign judgment is
not automatic. To extend the effect of a foreign judgment in the Philippines, Philippine
courts must determine if the foreign judgment is consistent with domestic public policy
and other mandatory laws. Article 15 of the Civil Code provides that [l]aws relating to
family rights and duties, or to the status, condition and legal capacity of persons are
binding upon citizens of the Philippines, even though living abroad. This is the rule of
lex nationalii in private international law. Thus, the Philippine State may require, for
effectivity in the Philippines, recognition by Philippine courts of a foreign judgment
affecting its citizen, over whom it exercises personal jurisdiction relating to the status,
condition and legal capacity of such citizen.

99
PEOPLE OF THE PHILIPPINES, vs. DATU NOT ABDUL, Defendant-Appellant.
G.R. No. 186137
June 26, 2013

FACTS:
Acting on the information received via a telephone call, the PDEA-CAR conducted a buybust operation in San Vicente, Baguio City leading to the arrest of one Datu Not Abdul and the
confiscation of shabu transparent, heat-sealed plastic sachet containing a white crystalline
substance and handed it to PO2 Akia. Also, an inventory of the item seized from appellant was
made in the presence of representatives from the Department of Justice (DOJ), the media, and the
barangay council. PO2 Akia allegedly marked the plastic sachet with the initials "MKM, DEA, EMG"
and Exhibit "A.".
The plastic sachet was then forwarded to the PNP Regional Crime Laboratory Office
Cordillera Administrative Region for analysis. The forensic analyst, PO2 Juliet Valentin Albon (PO2
Albon), examined the substance inside the sachet. She issued a chemistry report numbered D-05705 which found that the plastic sachet with markings "A, MKM, DEA, EMG" contained 1.85 grams
of a white crystalline substance; and that a qualitative examination gave a positive result for the
presence of methamphetamine hydrochloride (shabu), a dangerous drug.
ISSUE:
Whether the police officer violated the Chain-ofcustody of the corpus delicti.
HELD:
YES, The chain-of-custody rule is a method of authenticating evidence, by which the corpus
delicti presented in court is shown to be one and the same as that which was retrieved from the
accused or from the crime scene. This rule, when applied to drug cases, requires a more stringent
application, because the corpus delicti the narcotic substance is not readily identifiable and
must be subjected to scientific analysis to determine its composition and nature.
Every link in the chain of custody must not show any possibility of tampering, alteration or
substitution. However, it is accepted that a perfect chain is not the standard. Nonetheless, two
crucial links must be complied with. First, the seized illegal drug must be marked in the presence of
the accused and immediately upon confiscation. This marking must be supported by details on
how, when, and where the marking was done, as well as the witnesses to the marking. Second, the
turnover of the seized drugs at every stage from confiscation from the accused, transportation to
the police station, conveyance to the chemistry lab, and presentation to the court must be shown
and substantiated.

100

G.R. No. 200507

June 26, 2013
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
PETER LINDA y GEROLAGA, Accused-Appellant

FACTS:
On February 22, 2008, the team of SPO1 Rodolfo Ramos received a reliable information
from a confidential informant regarding the illegal drug activity of accused-appellant along Ma.
Orosa Street, Malate, Manila. Thus, SPO1 Ramos ordered his team to conduct a buy-bust
operation on appellant and designated PO2 Archie Bernabe as poseurbuyer, who was given two
(2) P100 bills as buy-bust money. The money was then marked as "DAID" and a coordination with
the Philippine Drug Enforcement Agency (PDEA) was made.
After the preparation, the team, together with the confidential informant, proceeded to the target
area. Upon arrival, appellant approached PO2 Bernabe and the informant who is known to
appellant. The informant and the appellant talked to each other while PO2 Bernabe stayed two (2)
meters away. Afterwards, the informant called PO2 Bernabe and introduced him to appellant as a
friend who is buying "shabu." PO2 Bernabe told the appellant that he was buying the illegal drug
worth "P200." Appellant answered "wala pong problema" and accepted the buy bust money
tendered by PO2 Bernabe. The former then handed to the latter one transparent plastic sachet
containing white crystalline substance with the resemblance of "shabu." Thereafter, PO2 Bernabe
arrested appellant and introduced himself as police officer. The other members of the team arrived
at the scene. PO2 Bernabe informed appellant of his constitutional rights and marked the plastic
sachet with the letters "PGL" from the initials of the appellant. The former frisked appellant and
recovered the marked money form the latter. When the substance was examined by Forensic
Chemist Elisa G. Reyes, the white crystalline substance tested positive for methylamphetamine
hydrochloride.
ISSUE:
Whether or not the evidence presented sufficient to convict the accused of the offense
charge.
HELD:
YES, By upholding the credibility of the testimony of the witness for the prosecution on the
circumstances leading to the arrest of the accused-appellant, we cannot give credence to the
contrary version of the defense that the warrantless arrest was made inside the house of the
accused-appellant after the arresting officers failed to find his parents, whom he admitted were also
involved in drug-related illegal activities. The argument of the defense that the warrantless arrest
was invalid and that the item seized is inadmissible in evidence must, therefore, fail.
Proceeding from the above, we find that the essential requisites for illegal sale of shabu were all
present in the instant case. These are: "(a) the identities of the buyer and the seller, the object of
the sale, and the consideration; and (b) the delivery of the thing sold and the payment for the
thing." The prosecution has likewise complied with the following material requirements: (1) proof
that the transaction or sale actually took place and (2) presentation in court of the corpus delicti as
evidence." .

101

PEOPLE OF THE PHILIPPINES, PETITIONER,

vs.
THE HONORABLE SANDIGANBAYAN (FOURTH DIVISION), ANTONIO P. BELICENA,
ULDARICO P. ANDUTAN, JR., RAUL C. DE VERA, ROSANNA P. DIALA AND JOSEPH A.
CABOTAJE
FACTS:

The principal respondent in this case, Homero A. Mercado, was the President of JAM
Liner, Inc. The other respondents, Antonio A. Belicena, Uldarico P. Andutan Jr., Raul C. De
Vera, and Rosanna P. Diala, were Department of Finance (DOF) officials formerly assigned at
its One-Stop Shop Inter-Agency Tax Credit and Drawback Center (DOF One-Stop Shop).
Sometime in 2000, showing willingness to testify against the criminal syndicate that
allegedly ran the tax credit scam at the DOF One-Stop Shop, Mercado applied with the
Department of Justice (DOJ) for immunity as state witness under its witness protection
program. On June 5, 2000 the DOJ favorably acted on the application and granted immunity to
Mercado.
Mercado filed a motion for reconsideration or reinvestigation before the Ombudsman,
citing the DOJs grant of immunity to him. Acting favorably on the motion, on September 4,
2003 the Ombudsman executed an Immunity Agreement1 with Mercado. The agreement
provided that, in consideration for granting him immunity from suit, Mercado would produce all
relevant documents in his possession and testify against the accused in all the cases, criminal
or otherwise, that may be filed against them. Accordingly, on the same date, the Ombudsman
filed a motion to discharge Mercado2 from the information involving him. The Sandiganbayan
issued a Resolution, denying the Ombudsmans motion.
ISSUE:
Whether or not the Sandiganbayan gravely abused its discretion in refusing to
recognize the immunity from criminal prosecution that the Ombudsman granted respondent
Mercado and, as a result, in declining to discharge him from the information as a state witness.
HELD:
The criminal informations in these cases charge respondents with having conspired in
approving and issuing the fraudulent tax credit certificates. One rule of wisdom is that where a
crime is contrived in secret, the discharge of one of the conspirators is essential so he can
testify against the others. Who else outside the conspiracy can testify about the goings-on that
took place among the accused involved in the conspiracy to defraud the government in this
case? No one can underestimate Mercados testimony since he alone can provide a detailed
picture of the fraudulent scheme that went into the approval and issuance of the tax credit
certificates. The documents can show the irregularities but not the detailed events that led to
their issuance. As correctly pointed out by the prosecution, Mercados testimony can fill in the
gaps in the evidence.

102
PHILIPPINE HAMMONIA SHIP AGENCY, INC. (NOW KNOWN AS BSM CREW SERVICE
CENTRE PHILIPPINES, INC.) AND DORCHESTER MARINE LTD., PETITIONERS,
vs.
EULOGIO V. DUMADAG,
G.R. No. 194362

June 26, 2013

FACTS:
The Philippine Hammonia Ship Agency, Inc. hired respondent Eulogio V. Dumadag for four months
as Able Bodied Seaman for the vessel Al Hamra, pursuant to the Philippine Overseas Employment
Administration Standard Employment Contract (POEA-SEC).
While on board the vessel, Dumadag complained of difficulty in sleeping and changes in his
body temperature. On May 18, 2007, a physician at the Honmoku Hospital in Yokohama, Japan
examined him. He also underwent ultra-sonographic, blood and ECG examinations and was found
to be normal and "fit for duty," but was advised to have bed rest for two to three days. On July 19,
2007, his contract completed, Dumadag returned to the Philippines. Allegedly, upon his request, the
agency referred him to the company-designated physician, Dr. Wilanie Romero-Dacanay of the
Metropolitan Medical Center (MMC), for medical examination. Dumadag was not rehired by the
petitioners. He claimed that he applied for employment with other manning agencies, but was
unsuccessful.
On April 13, 2008, Dumadag consulted Dr. Nicanor F. Escutin, an orthopedic surgeon, who
certified that he had generalized muscular weakness and that "he cannot perform nor function fully
all his previous activities."12 Dr. Escutin declared Dumadag unfit for sea duty in whatever capacity
and gave him a permanent total disability assessment.
Dumadag filed a claim for permanent total disability but petitioner was denied. The Labor
Arbiter found the claim of Dumadag meritorious and ordered the petitioner jointly and severally, to
pay Dumadag US$82,500.00 in permanent total disability benefits, plus 10% attorneys fees.
ISSUE:
Whether or not the claim of Dumadag for permanent disability claim meritorious?
HELD:
The POEA-SEC and the CBA govern the employment relationship between Dumadag and
the petitioners. The two instruments are the law between them. They are bound by their terms and
conditions, particularly in relation to this case, the mechanism prescribed to determine liability for a
disability benefits claim. In Magsaysay Maritime Corp. v. Velasquez, 571 SCRA 239 (2008), the
Court said: The POEA Contract, of which the parties are both signatories, is the law between them
and as such, its provisions bind both of them. Dumadag, however, pursued his claim without
observing the laid-out procedure. He consulted physicians of his choice regarding his disability after
Dr. Dacanay, the company-designated physician, issued her fit-to-work certification for him. There
is nothing inherently wrong with the consultations as the POEA-SEC and the CBA allow him to
seek a second opinion. The problem only arose when he pre-empted the mandated procedure by
filing a complaint for permanent disability compensation on the strength of his chosen physicians
opinions, without referring the conflicting opinions to a third doctor for final determination.

103.
VIRGINIA DE LOS SANTOS-DIO, as authorized representative of H.S. EQUITIES, LTD., and
WESTDALE ASSETS, LTD., Petitioner,
vs.
THE HONORABLE COURT OF APPEALS, JUDGE RAMON S. CAGUIOA, in his capacity as
Presiding Judge of Branch 74, Regional Trial Court, Olongapo City, and TIMOTHY J.
DESMOND, Respondents.
G.R. No. 178947
June 26, 2013

FACTS:
In 2001, petitioner Virginia De Los Santos-Dio (Dio), the majority stockholder of H.S.
Equities, Ltd. (HS Equities) and authorized representative of Westdale Assets, Ltd. (Westdale), was
introduced to Desmond, the Chairman and Chief Executive Officer (CEO) of the Subic Bay Marine
Exploratorium, Inc. (SBMEI), and the authorized representative of Active Environments, Inc. and JV
China, Inc. (JV China), the majority shareholder of SBMEI. After some discussion on possible
business ventures, Dio, on behalf of HS Equities, decided to invest a total of US$1,150,000.00 in
SBMEIs Ocean Adventure Marine Park (Ocean Adventure), a theme park to be constructed at the
Subic Bay Freeport Zone which, when operational, would showcase live performances of falsekiller whales and sea lions. In this relation, Dio claimed that Desmond led her to believe that SBMEI
had a capital of US$5,500,000.00, inclusive of the value of the marine mammals to be used in
Ocean Adventure, and also guaranteed substantial returns on investment. Desmond even
presented a Business Plan, indicating that: (a) Ocean Adventures "attendance will rise from
271,192 in 2001 to just over 386,728 in 2006, with revenues rising from US$4,420,000.00 million to
US$7,290,000.00 million in the same time frame"; (b) "early investors are expected to reap an
annual return of 23% in 2001, rising to 51% in 2006"; and (c) "fully priced shares would yield a 19%
return] in 2001, rising to 42% in 2006." Thus, on January 18, 2002, a Subscription Agreement was
executed by Desmond, as representative of SBMEI and JV China, and Dio, as representative of HS
Equities.
Dio further claimed that she found out that, contrary to Desmonds representations, SBMEI
actually had no capacity to deliver on its guarantees, and that in fact, as of 2001, it was incurring
losses amounting toP62,595,216.00. She likewise claimed to have discovered false entries in the
companys books and financial statements specifically, its overvaluation of the marine animals
and its non-disclosure of the true amount of JV Chinas investment which prompted her to call for
an audit investigation. Dio discovered that, without her knowledge and consent, Desmond made
certain disbursements from Westdales special account, meant only for Miracle Beach expenditures
(special account), and diverted a total of US$72,362.78 therein for the operating expenses of
Ocean Adventure.21 When Desmond refused to execute an undertaking to return the diverted funds,
Dio, in her capacity as Treasurer of SBMEI, suspended the release of the remaining funds in the
aforesaid special account.
Eventually, after Dio was ousted as Director and Treasurer of SBMEI, 23 she filed, on April
19, 2004, two (2) criminal complaints24 (subject criminal complaints) for estafa (a) through false
pretenses under Article 315(1)(b)25of the Revised Penal Code26 (RPC); and (b) with unfaithfulness
or abuse of confidence through misappropriation or conversion under Article 315(2)(a) 27 of the RPC,
both against Desmond before the Olongapo City Prosecutors Office.
The RTC upon motion, dismissed the information filed by the prosecutor for lack of
probable cause, which was subsequently affirmed by the CA.
ISSUE: Whether or not the CA erred in finding no grave abuse of discretion on the part of the RTC
when it dismissed the subject informations for lack of probable cause

HELD: A judges discretion to dismiss a case immediately after the filing of the information in court
is appropriate only when the failure to establish probable cause can be clearly inferred from the
evidence presented and not when its existence is simply doubtful.Lest it be misconceived, trial
judges will do well to remember that when a perceived gap in the evidence leads to a neither this
nor that conclusion, a purposeful resolution of the ambiguity is preferable over a doubtful dismissal
of the case. Verily, a judges discretion to dismiss a case immediately after the filing of the
information in court is appropriate only when the failure to establish probable cause can be clearly
inferred from the evidence presented and not when its existence is simply doubtful. After all, it
cannot be expected that upon the filing of the information in court the prosecutor would have
already presented all the evidence necessary to secure a conviction of the accused, the objective
of a previously-conducted preliminary investigation being merely to determine whether there is
sufficient ground to engender a well-founded belief that a crime has been committed and that the
respondent is probably guilty thereof and should be held for trial.

104